August 4, 2015 Newsletter

Dear Friends,

Tangents:

What a fabulous weekend we just spent in Vancouver.…when we arrived on Saturday morning, the streets downtown were buzzing with people.  Many visitors had descended on the city to take part in the gay pride parade which took place on Sunday – one of the largest in the world.  Taylor Swift was in town to perform Saturday night.  The last of the fireworks in English Bay Saturday night too (Canada won!).

We walked the seawall to Stanley Park –  it’s amazing how the area from the Harbour Air sea terminal to the beginning of Stanley Park has been transformed in the past decade with restaurants, seating benches for sea-gazing, marinas….Thank you Lord Stanley for the foresight to create Stanley Park – it is so wonderful to walk through on a brilliant summer’s day.

One of the highlights of the weekend was attending the 2015 Araxi Long Table dinner last night which was held at Bard on the Beach in Vanier Park.  There were 250 people dining together outside  at one long communal table set up outside on the lawn overlooking Vancouver’s West End and downtown.  The four course dinner was designed by all of Toptable Groups five executive chefs from Araxi, West, Blue Water Café, Cin Cin, with wine pairings selected by Araxi’s wine director, Samantha Rahn.  The food was amazing and the way the evening went off flawlessly truly remarkable.  There is going to be another Araxi long table dinner on August 17^th at North Arm Farm in Pemberton, north of Whistler.   If you can get there, I can highly recommend it; in fact I’m sure the outdoor setting in Pemberton will best Vanier Park; the food  and wines were fantastic and the service was also fantastic and it was wonderful to meet and speak with so many new faces and interesting people.  Needless to say, it is worth every cent and effort – it was truly a spectacular summer evening event.  I’m already looking forward to next year’s Long Table evening.  I came home with a copy of Araxi’s cook book, which I so look forward to mastering.

On Aug. 4, 1914, Britain declared war on Germany while the United States proclaimed its neutrality.

PHOTOS OF THE DAY

A girl cools off under a fountain during hot weather on Sechselaeutenplatz Square in Zurich, Switzerland, Monday. Arnd Wiegmann/Reuters

Passersby take photos of a rainbow at sunset in Beijing, Monday. Beijing has pledged to continue to improve air quality as part of its bid for the 2022 Winter Olympics, which the city was awarded on Friday. Mark Schiefelbein/AP

Market Closes for August 4, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, after posting the best weekly advance since April, as a rise in consumer shares overshadowed a drop in commodities producers.

     Martinrea International Inc. and Dollarama Inc. gained at least 2.8 percent to lead consumer-discretionary shares higher. Brookfield Property Partners LP climbed a record 5.6 percent after it said it was in the process of selling assets. Energy producers tumbled after crude sank on Monday to a six-month low while Canadian equity markets were shut for a holiday.

     The Standard & Poor’s/TSX Composite Index rose 22.61 points, or 0.2 percent, to 14,491.05 at 4 p.m. in Toronto. The S&P/TSX rallied 2 percent last week to trim its slide in July to 0.6 percent.

     Miners and energy producers slumped around the world on Monday as Brent oil dipped below $50 for the first time since January and the Bloomberg Commodity Index slipped to a 13-year low. Crude rebounded Tuesday as the rout in commodities paused.

     That wasn’t enough to spare resource producers in Canada from catch-up selling. Energy shares slid 0.6 percent. Yamana Gold Inc. fell 8.5 percent and Iamgold Corp. retreated 7.5 percent as raw-materials producers declined 0.9 percent as a group.

     Raw-materials and energy companies are the worst performers in the S&P/TSX this year, down at least 14 percent, amid a rout in commodities prices that has driven oil into a bear market and gold to a five-year low.

     Saputo Inc. climbed 4.9 percent, the most in five years, after reporting fiscal first-quarter earnings in line with estimates and said it will be able to navigate any regulatory changes that result from a Trans-Pacific Partnership deal. 

US

By Emma O’Brien and Adam Haigh

     (Bloomberg) — The dollar held gains at a four-month high after a Federal Reserve official stoked speculation interest rates will be raised next month. Japanese index futures climbed amid the yen’s retreat, while oil solidified its rebound.

     The greenback was steady at 124.34 yen by 8:04 a.m. in Tokyo as the Bloomberg Dollar Spot Index held at its highest closing level since March 17. Nikkei 225 Stock Average futures rose 0.2 percent, while contracts on the Standard & Poor’s 500 Index were little changed after Apple Inc. drove stock losses Tuesday. U.S. oil gained following Brent’s 0.9 percent rebound back toward $50 a barrel. Copper fell. New Zealand’s dollar was near a two-week low after jobs data and a slump in dairy prices.

     Treasuries retreated from their highest levels in two months after Fed Bank of Atlanta chief Dennis Lockhart said it would take significant deterioration in economic data to convince him that a rate hike in September should be put off.

Oil’s rebound steadied commodity markets, quelling losses among energy and mining stocks ahead of a swag of services industry data from China to Japan and the U.S. Thailand is projected to keep borrowing costs on hold at a review Wednesday.

     “The U.S. dollar will continue to rise and remain strong,” Mark Lister, head of private wealth research at Craigs Investment Partners Ltd. in Wellington, which manages about $7.2 billion, said by phone. “We’ve got more cautious on China of late. The real growth rate is a little bit below what’s being reported. We’re quite cautious on emerging markets across the board. It looks like it’ll get worse before it gets better.”

     Lockhart told the Wall Street Journal there is “a high bar right now to not acting, speaking for myself.” While talking up the economy’s recovery from a first-quarter slump, the central banker acknowledged the downward pressure on inflation exercised by the drop in oil prices. Much anticipated monthly payrolls data is due later this week as the Fed mulls whether to raise rates for the first time since 2006.

     The comments saw traders boost bets on a September increase, with the probability of a hike at the Fed’s next meeting at 48 percent, based on the assumption that the effective Fed funds rate will average 0.375 percent after the first increase. That compared with the 38 percent chance priced in earlier on Tuesday.

     “Lockhart is both a centrist and a 2015 voter on the FOMC, making this assertion important,” Raiko Shareef, a markets strategist in Wellington at Bank of New Zealand Ltd., wrote in a client note, referring to the Fed Open Market Committee which sets policy. “It changes the burden of proof -– data no longer has to improve materially for the Fed to move in September. It simply has to avoid worsening.” 

     Bloomberg’s dollar gauge was up 0.1 percent in a third day of gains. Yields on 10-year Treasury notes climbed seven basis points, or 0.07 percentage point, to 2.22 percent Tuesday after three days of declines.

     Nikkei 225 futures were bid for 20,500 in the Osaka pre- market, from 20,450 in Japan Tuesday, while yen-denominated contracts traded in Chicago were little changed at 20,515 after rising 0.1 percent in the previous session. A private gauge of Japan’s services sector is due Wednesday, ahead of the central bank’s monetary policy review later this week.

     Futures on indexes elsewhere in Asia were mixed, with contracts on Australia’s S&P/ASX 200 Index down 0.3 percent in most recent trading, while Kospi index futures in Seoul were little changed. Futures on Hong Kong’s Hang Seng and Hang Seng China Enterprises gauges increased 0.4 percent. Contracts on the FTSE China A50 Index, which tracks the biggest mainland shares, dropped 0.1 percent in Singapore as futures on the Shanghai Shenzhen CSI 300 Index jumped 6 percent.

    Chinese stocks listed in the U.S. rallied Tuesday after a 3.7 percent climb in the Shanghai Composite Index. Chinese equities climbed for only the second time in eight days last session after local authorities imposed restrictions on short selling, their latest salvo in a bid to stem gyrations in the stock market. Some brokerages halted their short-selling businesses entirely.

     The kiwi dropped as much as 0.2 percent in a sixth straight day of losses, after touching its weakest level since July 20 last session.

     Prices for whole milk powder fell to the lowest in at least seven years at a global auction Tuesday, and December powder futures traded in Wellington slid 6 percent early Wednesday. New Zealand, the world’s biggest dairy exporter, also saw smaller- than-expected growth in employment last quarter, government data showed.

     Some sense of calm returned to commodities markets following their slump to a 13-year low on Monday.

     West Texas Intermediate crude added 0.3 percent to $45.86 a barrel following last session’s 1.3 percent bounce. WTI and Brent both slid more than 4 percent on Monday after Iran indicated it could bolster crude output as early as a week after international sanctions against it are lifted. Concern over a global supply glut has sent oil down 14 percent this year.

     Copper futures for September delivery on the Comex lost 0.4 percent to $2.3515 a pound after rallying 0.7 percent Tuesday, its first increase in four days. The Bloomberg Industrial Metals Subindex rose 0.6 percent to 102.5656 Tuesday, snapping three days of losses. The measure has tumbled 17 percent this year amid signs of slowing momentum in China, the world’s biggest metals consumer.

     Gold was little changed at $1,087.35 an ounce after erasing losses of as much as 0.5 percent last session.

     Apple slid below its 200-day moving average for the first time since 2013 on Monday, and the stock is down more than 10 percent from its February high, meeting the common definition of a correction. The highest volume of shares since January were traded Tuesday. Apple has been falling since reporting disappointing iPhone sales in late July, stoking concern over whether the company can keep making must-have products.

Have a wonderful evening everyone.

Be magnificent!

This glorious soul we must believe in.  Out of that will come power.

Whatever you think, that you will be.  If you think yourselves weak, weak you will be;

if you think yourselves strong, strong you will be; if you think yourselves impure, impure you will be;

if you think yourselves pure, pure you will be.  This teaches us not to think ourselves as weak, but as strong,

omnipotent, omniscient.  No matter that I have not expressed it yet, it is in me.

All knowledge is in me, all power, all purity, and all freedom.  Why cannot I express this knowledge?

Because I do not believe in it.  Let me believe in it, and it must and will come out.

This is what the idea of the Impersonal teaches.

Swami Vivekananda

As ever,

Carolann

Too much rest is rust.

 -Walter Scott, 1771-1832

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