August 28, 2015 Newsletter

Dear Friends,

Tangents:

Full Moon this weekend – last in August.

Summer con’t
       -V. Sackville West

This is the tranquil, ancient, wise, sedate
Counsellor yew, not briskly eloquent
But, to the listener, with much to say;
As much as glades that whisper in a wood
But neater and more orderly than they.
But if in lighter mood
You would plant hedges, think upon the gay
Frivolous boundaries that toss their spray In colour on beholden air. 
Seemingly wild, yet not too wild, too rough; 
An art in wildness, even in the bluff
And thorny branches of the hedgerow in May,
Red, rose, or white; or in the cloudy puff
Of ceanothus, blue and powdery;
Or hedge of roses, growing devil-care
-Rose of the World; th’ embroidered Tuscany;
The scented Cabbage, and the Damascene;
Sweet-briar, lovelier named the eglantine;
But above all the Musk
With classic names, Thisbe, Penelope,
Whose nectarous load grows heavier with the dusk
And like a grape too sweetly muscadine.

On this day in 1996, Princess Diana and Prince Charles formally divorced after four years of separation.

PHOTOS OF THE DAY

Morning fog floats during sunrise near village of Sormas, west of Budapest, Hungary, Friday. Gyorgy Varga/MTI/AP

A group of hikers are seen silhouetted against the moon in Tijuana, Mexico, Thursday. On Saturday a perigee moon coincides with a full moon creating a ‘supermoon’ when it will pass by the earth at its closest point, local media reported. Jorge Duenes/Reuters

Market Closes for August 28^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose to cap the biggest four-day rally since 2011 as the benchmark index continued to climb back from an almost two-year low.

     Equities have jumped 6.2 percent in four days after plunging the most in almost four years Monday. Investor sentiment has swung wildly amid concern China’s growth is slowing while the U.S. economy unexpectedly advanced more than analysts’ estimates.

     The Standard & Poor’s/TSX Composite Index is up 2.9 percent for the week, the most since January. Raw-materials and energy producers jumped at least 2.3 percent Friday. The Bloomberg Commodity Index, a basket of 22 major resource prices, advanced for a second day with crude soaring 6.3 percent after Thursday’s 10 percent rally to cap the biggest two-day gain since 2009.

     The benchmark equities index rose 98.40 points, or 0.7 percent, to 13,865.07 at 4 p.m. in Toronto. The S&P/TSX is still down 4.2 percent for the month, headed for a fourth straight monthly decline, the longest such streak since September 2011.

     A volatility gauge for 60 of the largest, most liquid stocks in Canada fell 5.7 percent to 23.12. The measure touched an all-time high of 38.15 on Monday.

     The resource-rich Canadian benchmark equity gauge has been one of the worst-performing developed markets in the world this year amid a collapse in crude prices. China unexpectedly devalued the yuan on Aug. 11, further fueling concerns about global growth and the demand for commodities from oil to copper.

     Teck Resources Ltd. climbed 3 percent. The diversified miner has soared 27 percent in two days, the most since 2009, after announcing a plan to combine its copper-and-gold projects in Chile with Goldcorp Inc. to cut costs.

     Barrick Gold Corp. jumped 4.3 percent as gold producers surged. The group has rallied 8.2 percent in two days, rebounding from a 2001 low Wednesday.

     Canadian Natural Resources Ltd. and Suncor Energy Inc. increased more than 1 percent. Energy producers have surged 6.9 percent this week, the best performance since December. Oil in New York sustained a rebound above $40 a barrel, after a 10 percent rally Thursday that was the biggest in more than six years, recovering from the lowest level since February 2009 on Monday.

     Bank of Nova Scotia slipped 0.6 percent after posting quarterly profit less than year-ago figures, while adjusted earnings topped estimates by a penny. Canadian banks have climbed 3.9 percent this week, the most since February, as the nation’s six largest lenders all beat profit estimates.

US

By Oliver Renick and Lu Wang

     (Bloomberg) — U.S. stocks ended little changed, with the Standard & Poor’s 500 Index on track for its worst month since May 2012, as equities found some respite from the wide swings prevalent earlier this week.

     Energy companies advanced as oil capped its biggest two-day gain since 2009, with Chevron Corp. and Transocean Ltd rising more than 3.5 percent. Intel Corp. and Facebook Inc. gained at least 1.4 percent to boost technology shares. Wal-Mart Stores Inc. lost 1.7 percent, leading consumer staples lower amid a weaker consumer confidence reading. Pfizer Inc. and Johnson & Johnson slumped at least 1 percent to weigh on the health-care group. Freeport-McMoRan Inc. gained 3 percent after Carl Icahn took a stake in the company.

     The S&P 500 rose 0.1 percent to 1,988.87 at 4 p.m. in New York, with the gauge posting its best three-day advance since November 2011. The Dow Jones Industrial Average lost 11.76 points, or 0.1 percent, to 16,643.01. The Nasdaq Composite Index added 0.3 percent, and the Russell 2000 Index climbed 0.8 percent. About 7.9 billion shares changed hands on U.S. exchanges, 13 percent above the three-month average.

     “The market just may be tired,” said Cam Albright, head of investment strategy at Wilmington Trust in Baltimore. The firm oversees $76 billion. “Perhaps we’re due for a day less traumatic than what we’ve had. There has been a lot of price action in both directions, perhaps traders just made a chance to catch their breath.”

     The Chicago Board Options Exchange Volatility Index slipped 0.2 percent to 26.05 Friday. The measure of market turbulence known as the VIX has dropped 36 percent in four days, after a record six-day jump sent the gauge to its highest level since October 2011.

     The S&P 500 traded Friday in the narrowest range in almost two weeks. The index’s 0.9 percent gain for the week masks a volatile period in which the benchmark plunged the most since 2011 to enter a correction, only to rally more than 6 percent over two days. The gauge is down 5.5 percent for the month.

     The benchmark index yesterday capped its best two-day rally since the beginning of the bull market in 2009, helped by data showing stronger-than-expected U.S. economic growth. The Dow had its strongest back-to-back advance since December 2008. Global equities had lost as much as $8.4 trillion in value after China’s unexpected devaluation of the yuan earlier this month spurred concern the world’s second-biggest economy was on the brink of a deeper slowdown.

     “We’re not done with all the volatility in equities,” said Andrew Brenner, the head of international fixed income for National Alliance Capital Markets. “I think the worst is over, but are we out of the woods yet? No — we’re still going to have a lot of volatility.”

     U.S. data today showed consumer spending climbed in July as incomes grew, showing the biggest part of the U.S. economy was off to a good start to the quarter. Wages rose by the most this year, and the report showed inflation remained tame. A separate report showed consumer confidence declined in August to a three- month low as recent stock-market turbulence weighed on Americans’ outlook for the economy in the coming year.

     Inflation is the theme at an annual symposium in Jackson Hole, Wyoming this week where Federal Reserve officials and economists have also been discussing market fallout from China’s slowdown that has cast doubt on whether the Fed will raise rates next month. Traders are now pricing in a 38 percent chance the central bank will act in September, up from a one-in-four chance two days ago.

     St. Louis Fed Bank President James Bullard said in a Bloomberg Television interview Friday that while world financial markets are volatile, U.S. fundamentals are good and the interest rate-setting Federal Open Market Committee shouldn’t alter its forecast for the economy. Cleveland Fed President Loretta Mester also told Bloomberg TV she thinks the economy is strong enough to withstand higher interest rates.

     Fed Vice Chairman Stanley Fischer, speaking on CNBC, said the central bank hadn’t decided on whether to raise its target at the next meeting.                       

     Five of the S&P 500’s 10 main groups rose Friday, with energy shares the top performers while stretching their three- day rally to almost 11 percent, the most since November 2011.

West Texas Intermediate crude surged more than 6 percent after rising 10 percent Thursday. Health-care and financial companies lost the most today.

     Raw-materials companies climbed for a third day as commodities rallied. Alcoa Inc. surged 6.2 percent, bringing its three-day advance to 16 percent, the most in more than six years. Newmont Mining Corp. added 2.8 percent, while International Paper Co. rose 1.3 percent.

     United Continental Holdings Inc. rallied 7.1 percent, the most since November, while Activision Blizzard Inc. gained 4.6 percent after the two companies were added to the S&P 500.

     Baxalta Inc. led a slide in the health-care group, losing 3.2 percent. People with knowledge of the matter said the drugmaker is in talks to make an acquisition to bolster its status as an independent company as it tries to fend off a $30 billion takeover offer from Shire Plc. Mylan NV slumped 2.2 percent after shareholders voted in favor of moving forward with a $33 billion hostile bid for over-the-counter drugmaker Perrigo Co.

     Kroger Co. joined Wal-Mart to pace the retreat in consumer staples, falling 1.7 percent. Wal-Mart is down 9.8 percent in August, and on track for its worst monthly slide since the depths of the recession in January 2009.

     Insurers were the biggest drag on financial companies in the S&P 500. Hartford Financial Services Group Inc., Principal Financial Group Inc. and Travelers Cos. slumped at least 1 percent. Wells Fargo & Co. decreased 0.9 percent to lead a pullback among banks.

Have a fabulous weekend everyone.

Be magnificent!

Perceive the souls through the soul and you will become the Supreme soul.

There are two sides of the consciousness: the soul and the Supreme Soul…

one the seed and the other, entirety.  You must have seen how small the seed of the banyan tree is.

You must also have seen how expansive the tree is.

It is difficult to even imagine that such a small seed can become so big.

The soul is the seed of a banyan tree and the Supreme Soul its development.

Acharya Mahaprajna

As ever,
 

Carolann

Life itself is the proper binge.

      -Julia Child, 1912-2004

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