August 17, 2015 Newsletter

Dear Friends,

Tangents:

So passes Summer, still without one brief
Respite from labour, simply to enjoy;
Never that empty moment of relief
When every task is done, no urgent ploy.
Martha not Mary bustles to her chares
Living, not saying, her creative prayers…

       -Vita Sackville- West

PHOTOS OF THE DAY

Supporters look at jockey Jonathan Bartoletti (c.) and his horse, Bened of the Lupa (Wolf), during a blessing ceremony in a church before the Palio race in Siena, Italy, Monday. Every year on July 2 and August 16, almost without fail since the mid-1600s, 10 riders compete bareback around Siena’s shell-shaped central square in a bid to win the Palio, a silk banner depicting the Madonna and child. The race was postponed to Aug. 17 due to rain. Fabio Muzzi/Reuters

Stevie Wonder performs a surprise, free, 5-song concert outside the D.C. Armory in Washington Monday. Wonder also planned free pop-up concerts later in Philadelphia and New York. Jonathan Ernst/Reuters

A lobsterman motors through a channel as he leaves Cape Porpoise Harbor at sunrise Monday in Kennebunkport, Maine. Robert F. Bukaty/AP

Market Closes for August 17^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks resumed their slide, falling for the fourth time in five sessions, as crude prices traded at the lowest in more than six years and financial shares slumped.

     Energy producers paced a decline in equities as crude futures dropped 1.5 percent in New York amid an increase in U.S. drilling and the prospect OPEC production may rise to a record after sanctions on Iran are lifted. Concerns grew that demand for oil may slip as manufacturing in New York unexpectedly shrank and Japan’s economy contracted last quarter.

     The Standard & Poor’s/TSX Composite Index fell 26.35 points, or 0.2 percent, to 14,251.53 at 4 p.m. in Toronto, paring a loss of as much as 0.7 percent in the final half hour of trading. The benchmark Canadian equity gauge has fallen 2.6 percent this year.

     Commodities producers are the worst-performing industries in the S&P/TSX this year as crude has slumped more than 30 percent from this year’s June peak into a bear market and metals from copper to gold have declined amid concern global growth is slowing. Energy and raw-materials account for about 30 percent of the benchmark equity gauge.

     Trican Well Service Ltd. plunged 11 percent, extending a 2000 low, after plunging a record 32 percent Aug. 14. The company warned there’s a risk it won’t emerge from the oil slump. The stock has slumped 78 percent this year, the worst- performing stock in the S&P/TSX.

     Trican forecasts breaching a covenant with lenders by the end of September that may trigger its debt to become due on demand.

     Financial shares dropped 0.5 percent. Royal Bank of Canada and Bank of Montreal retreated at least 0.7 percent. The nation’s largest lenders are scheduled to report third-quarter earnings beginning Aug. 25.

US

By Callie Bost and Joseph Ciolli

     (Bloomberg) — U.S. stocks rose, following last week’s gain in the Standard & Poor’s 500 Index, with homebuilders pacing the advance amid light volume before further clues from the Federal Reserve on the path for interest rates.

     The S&P 500 gained 0.5 percent to 2,102.44 at 4 p.m. in New York, climbing above its average price for the past 100 days. The Dow Jones Industrial Average climbed 67.78 points, or 0.4 percent, to 17,545.18. The Nasdaq Composite Index jumped 0.9 percent. About 5.5 billion shares changed hands on U.S. exchanges, 15 percent below the three-month average.

     “We kind of felt the tide turning last week on Wednesday’s reversal with managers getting long, not short,” said Rick Fier, director of equity trading at Conifer Securities LLC in New York. “Traders are positioned to the upside.”

     The S&P 500 advanced 0.7 percent last week, continuing to trade in the tightest range in nine decades. The benchmark gauge briefly erased its gain for the year on Aug. 12 amid China’s currency devaluation, coming within 10 points of the low end of the trading range before staging the biggest intraday turnaround in three years.

     U.S. stocks have shown resiliency characteristic of the 6 1/2-year bull market even as China’s move touched off financial turmoil that ravaged emerging-market currencies and deepened a rout in commodities from oil to copper.

     As concerns over China have eased, investors are refocusing attention on the strength of the U.S. economy and its implications for Fed interest-rate policy.                         

     Equities fell early Monday as a report showed manufacturing in the New York region slumped at the fastest pace since the depths of the last recession. Stocks reversed losses as separate data showed confidence among U.S. homebuilders climbed in August to the highest level in almost a decade, indicating the residential real-estate market is making strides.

     “It’s a quiet Monday and the market is fairly easy to move around right now,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “We’re in this tug of war where we’ve reached a stalemate and we’re not going to break out until we see something from the Fed.”

     The Fed releases minutes from its July meeting on Aug. 19. Traders have raised their expectations for a September rate increase, with the probability rising to 46 percent from 40 percent Tuesday, according to futures trading data compiled by Bloomberg.

     The Chicago Board Options Exchange Volatility Index increased 1.5 percent to 13.02, paring an earlier gain of 13 percent. The gauge known as the VIX slid 4.2 percent last week.                      

     Nine of 10 major groups in the S&P 500 advanced, with health-care and consumer-discretionary companies climbing the most. Energy shares had the only loss as a group as oil prices slid 1.5 percent. Chevron Corp. tumbled 2 percent.

     Homebuilder stocks in the S&P 500 climbed 2.1 percent as TopBuild Corp. and KB Home gained more than 3.1 percent. The National Association of Home Builders/Wells Fargo builder sentiment gauge rose to 61, the highest since November 2005, from 60 in the prior two months. Readings greater than 50 mean more respondents report good market conditions.

     Airlines also rallied, with the Bloomberg U.S. Airlines Index reaching the highest level since May. Southwest Airlines Co. jumped 2.8 percent while American Airlines Group Inc. and United Continental Holdings Inc. increased more than 1.8 percent.

     Tesla Motors Inc. climbed 4.9 percent. Morgan Stanley analyst Adam Jonas boosted his price target on Tesla to $465, 91 percent higher than its close Friday, citing potential rewards in shifting driving from humans to robots and sharing cars.

     Zulily Inc. soared 49 percent after Liberty Interactive Corp., owner of the QVC home-shopping service, agreed to buy the online retailer for $2.4 billion. Zulily, which operates daily flash sales of items ranging from maternity clothes to bibs and toys, is bringing a younger clientele and expertise in personalizing offers to the QVC network.

     Estee Lauder Cos. slid 6.8 percent for the worst performance in the S&P 500. The fragrance manufacturer posted fourth-quarter revenue that missed analysts’ estimates.

     The results come as the earnings season nears its end. Out of 464 S&P 500 companies that have reported earnings so far, about 74 percent have beaten profit estimates, while almost half topped sales projections.

Have a wonderful evening everyone.

Be magnificent!

Find the Unique and possess the Whole.

This truly is our highest, most sublime privilege.

It is in the law of this unity that is, as long as we understand it,

our immutable force.  Its living principle is the force that resides in truth –

Truth is one.

Swami Prajnanpad

As ever,

Carolann

A promise made is a debt unpaid.

    -Robert W. Service, 1874-1958

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7