Category: Events

Dear Friends,

Tangents:

September 2, 1666: Great fire of London.

And so begins the last long weekend of the summer of ’16 – enjoy!
PHOTOS OF THE DAY

The Catacomb of Veils is burned as approximately 70,000 people from all over the world gather for the 30th annual Burning Man arts and music festival in the Black Rock Desert of Nevada on Friday. Jim Urquhart/Reuters

 

Visitors take pictures at the IFA Electronics show in Berlin on Friday. Stefanie Loos/Reuters

 

A man hikes in the western Austrian village of Grinzens, Austria on Friday. Dominic Ebenbichler/Reuters
Market Closes for September 2^nd, 2016

Market Index	Close	Change
Dow Jones	18491.96	+72.66   +0.39%
S&P 500	2178.73	+7.87   +0.36
NASDAQ	5249.898	+22.692   +0.43%
TSX	14793.80	+109.89
		+0.75%

International Markets

Market Index	Close	Change
NIKKEI	16925.68	-1.16
		-0.01%
HANG SENG	23266.70	+104.36
		+0.45%
SENSEX	28532.11	+108.63
		+0.38%
FTSE 100	6894.60	+148.63
		+2.20%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.063	1.006
CND. 30 Year Bond	1.658	1.620
U.S.    10 Year Bond	1.5989	1.5663
U.S. 30 Year Bond	2.2731	2.2292

Currencies

BOC Close	Today	Previous
Canadian $	0.76999	0.76376
US $	1.29872	1.30931
Euro Rate 1 Euro=		Inverse
Canadian $	1.44908	0.69009
US $	1.11577	0.89624

Commodities

Gold	Close	Previous
London Gold Fix	1324.70	1309.50
Oil	Close	Previous
WTI Crude Future	44.44	43.16

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks rose the most in four weeks as commodity producers rallied, joining a lift in U.S. equities after American payrolls posted steady gains in August.
     The S&P/TSX Composite Index rose 0.8 percent to 14,801.25 at 10:57 a.m. in Toronto, headed toward the highest close since Aug. 9. The benchmark gauge advanced for the sixth time in seven days in trading volume 30 percent higher than the 30-day average at this time of the day.
     The U.S. economy added 151,000 jobs in August, short of a 180,000 median forecast in a survey of economists by Bloomberg. That follows a 275,000 gain in July that was larger than previously estimated, according to a Labor Department report Friday. The jobless rate held steady at 4.9 percent. Canada’s August jobs figures will be released on Sept. 9.
      “The revision in the upside in July plus the miss in August leaves us pretty much right on target,” said Kevin Headland, senior investment strategist at Manulife Investments in Toronto. Manulife’s asset management unit manages about $334 billion. “It’s still positive, there’s definitely no reason to be negative on it.”
     Raw-materials and energy producers surged at least 1.1 percent to lead gains in the S&P/TSX as commodities prices rose. Kinross Gold Corp. and Goldcorp Inc. rallied more than 2.2 percent, with gold climbing for a second day after capping the first monthly loss in seven years. A gauge of the dollar swung between gains and losses.
     Suncor Energy Inc. and Canadian Natural Resources Ltd. rose at least 1.4 percent. Oil snapped four days of declines, climbing as much as 3 percent in New York. Russian President Vladimir Putin said in an interview with Bloomberg he’d like Russia and OPEC to reach an output freeze while exempting Iran as it raises production to pre-sanctions levels.
     A surge in the commodity sector has boosted the Canadian equity benchmark to an almost 14 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The S&P/TSX is also the second- best performing developed market in the world, just behind New Zealand. Canadian stocks are more expensive than their U.S. peers, with a price-earnings ratio of 23.5 for the S&P/TSX, opening up a 15 percent premium over the S&P 500 Index.
     The yearlong rally in Canadian equities hit a bump in the road in August, capping the narrowest one-month climb since June 2009 as gains in raw-materials producers faltered with gold. The drop cut the group’s rally this year to 50 percent, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 21 percent in 2016, on pace for the strongest in seven years.
     Valeant Pharmaceuticals International Inc. pared an early 4.4 percent drop sparked by Democratic presidential nominee Hillary Clinton’s plan for proposals to curb drug prices, including penalties for unjustified increases. Valeant shares have plunged some 90 percent from an August 2015 peak amid increased scrutiny over the industry’s pricing practices.

US
By Anna-Louise Jackson and Joseph Ciolli
     (Bloomberg) — U.S. stocks climbed as August payroll data signaled steady labor-market growth, though not enough to force the Federal Reserve to raise interest rates.
     A report showed fewer jobs than forecast were added last month, tempering increased speculation that policy makers could boost borrowing costs as soon as this month. That brought a measure of relief to investors, who boosted utilities, raw- materials and energy shares the most. Crude oil rebounded from a four-day slide. The odds for a rate hike this month briefly dipped as low as 20 percent before climbing back to levels held before the data.
     The S&P 500 Index rose 0.4 percent to 2,179.95 at 4 p.m. in New York, halting a three-day decline. Stocks wavered at midday, trimming most of an early rally before recovering in the late afternoon. U.S. equity markets are closed on Monday for Labor Day.
     “This number is important in whether the Fed hikes in September, and along with the ISM report helps push a September rate hike off the table,” said Jeffrey Kleintop, Charles Schwab Corp.’s chief global investment strategist. “The move in the market is probably related to a little sense of relief that a rate hike will be pushed off. Given the ISM was weaker, some people would’ve been concerned if the Fed went in September.”
     Payrolls climbed by 151,000 last month following a 275,000 gain in July that was larger than previously estimated, according to the Labor Department. The median forecast in a Bloomberg survey called for 180,000. The jobless rate and labor participation rate held steady, while wage gains moderated.
     While Fed Chair Janet Yellen left the timing of an interest-rate hike open in a speech last week, she said the central bank’s decisions depend on the degree that data “continues to confirm” the outlook. That, and other recent remarks by Fed officials, suggest that job gains need to be merely solid — rather than extraordinary — to warrant raising borrowing costs for the first time in 2016.
     Richmond Fed President Jeffrey Lacker said Friday the message he took from the August data was that “labor markets are continuing to tighten.” He called the report “reasonably strong.”
     Even as some saw the lower-than-forecast payroll gains as reason enough for the Fed to stand pat, traders weren’t so sure. Fed-funds futures reflected a 32 percent chance the central bank will boost rates at its September meeting, according to data compiled by Bloomberg. Odds of a December hike are 59 percent.
     “There’s no question that the number lowers the odds of a September rate hike, but I wouldn’t say it’s been completely taken off the table,” said Matt Maley, an equity strategist in New York at Miller Tabak & Co LLC. “It doesn’t seem like currency and credit markets have taken September off the table yet.”
     With today’s climb, the S&P 500 gained 0.5 percent this week, after ending in the red for the prior two. Since the gauge reached a record in mid-August, it’s been stuck in neutral amid Fed rate-hike speculation and lackluster economic data, including a reading yesterday showing manufacturing activity contracted last month. The benchmark index hasn’t seen a 1 percent move in either direction for 40 days, the longest such streak in more than two years.
     August employment reports tend to miss economist estimates, and that’s typically been bad news for equities. Since 1996, 15 out of 19 releases have trailed forecasts, data compiled by Bloomberg show. When they did, the S&P 500 Index fell an average 0.4 percent, compared with a mean increase of 0.1 percent for all payrolls days.

 

Have a wonderful weekend everyone.

 

Be magnificent!

To find God, you must welcome everything.
Rabindranath Tagore

As ever,

 

Carolann

 

Friendship multiplies the good of life and divides the evil.
                                       -Baltasar Gracian, 1601-1658

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

Dear Friends,

Tangents:

SEPTEMBER
Birthstone: Sapphire
Flower: Aster
Summer wanes, autumn approaches.  Swallows swoop and gather in the sky.  The air smells of fallen apples.  Goldenrod is everywhere.  The sunlight, too, is golden, like the stubble in the fields.  Liquid and tender, now it warms our backs, not our heads.  Amid the late ripeness, nature begins the process of withering and fading away.  At night, a chill is in the air.  Flies die.  Outer growth turns inward and an inner sun replaces the outer one.  Self-consciousness rises, filling us with courage, initiative, and will.  The future lies before us, requiring a sensitive, respectful heart.  Therefore, at the equinox, when the days and nights are again of equal length, we celebrate Michaelmas, the feast of Michael and the Archangels.  As St. Michael overcomes the dragon, we, too, may overcome all that hardens us – our past, our habits, our fixed ways of thinking and feeling – so as to become free to create a truly human, earth-caring, loving future.

Youth is like spring, an over praised season more remarkable for biting winds than genial breezes.
Autumn is the mellower season, and what we lose in flowers we more than gain in fruits. ~Samuel Butler.

On Sept. 1, 1939, World War II began as Nazi Germany invaded Poland.
PHOTOS OF THE DAY

A visitor pauses to look at “The Last Column” in front of the World Trade Center’s original slurry wall at the National September 11 Memorial and Museum in Manhattan, New York, on Thursday. Andrew Kelly/Reuters

Seven-year old cadets listen to their teacher on their first day in school at a cadet lyceum in Kiev, Ukraine on Thursday. Ukraine marks Sept. 1 as Knowledge Day, a traditional launch of the academic year. Efrem Lukatsky/AP
Market Closes for September 1^st, 2016

Market Index	Close	Change
Dow Jones	18419.30	+18.42   +0.10%
S&P 500	2170.86	-0.09   —
NASDAQ	5227.207	+13.988   +0.27%
TSX	14683.91	+85.96
		+0.59%

International Markets

Market Index	Close	Change
NIKKEI	16926.84	+39.44
		+0.23%
HANG SENG	23162.34	+185.46
		+0.81%
SENSEX	28423.48	-28.69
		-0.10%
FTSE 100	6745.97	-35.54
		-0.52%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.006	1.022
CND. 30 Year Bond	1.620	1.626
U.S.    10 Year Bond	1.5663	1.5766
U.S. 30 Year Bond	2.2292	2.2292

Currencies

BOC Close	Today	Previous
Canadian $	0.76376	0.76334
US $	1.30931	1.31003
Euro Rate 1 Euro=		Inverse
Canadian $	1.46621	0.68203
US $	1.11983	0.89299

Commodities

Gold	Close	Previous
London Gold Fix	1309.50	1309.25
Oil	Close	Previous
WTI Crude Future	43.16	44.70

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks rose the most in three weeks, rebounding from the lowest level in almost a month, as raw-materials producers rallied with the price of precious metals as investors cut the odds for higher U.S. interest rates.
     The S&P/TSX Composite Index rose 0.6 percent to 14,683.91 at 4 p.m. in Toronto, reversing a loss of as much as 0.2 percent. The benchmark gauge closed yesterday at a four-week low, but managed to eke out a 0.1 percent increase in August. Trading volume was 25 percent higher than the 30-day average on Thursday.
     Raw-materials producers added 2.4 percent, for the strongest rally since July. The group surged as the dollar erased gains after a weaker-than-forecast reading on U.S. manufacturing in August. That damped wagers on a Federal Reserve interest-rate increase this month. Gold edged higher after capping the first August decline in seven years, ahead of Friday’s U.S. jobs report. Barrick Gold Corp. rallied 4.6 percent, and Silver Wheaton Corp. added 3.3 percent.
     Dollarama Inc. added 4.4 percent, closing at a record after second-quarter earnings and revenue topped estimates, driving a 0.9 percent gain in consumer discretionary stocks. The dollar- store retailer maintained plans to open 60 to 70 net new stores by the fiscal year-end.
     Meanwhile, Canadian Western Bank ended 0.3 percent higher after a whipsaw day, reporting a narrow beat in adjusted earnings. Chief Executive Chris Fowler said in a statement the company will continue to “conservatively manage” exposure to the oil and gas industry in Alberta. All six of Canada’s largest lenders beat analysts’ estimates in the current reporting period. Financial stocks added 0.1 percent Thursday, clawing back earlier losses.
     Energy producers rose 0.2 percent, even as oil tumbled, on track for the biggest weekly decline in eight months. Government data Wednesday showed crude supplies at the highest seasonal level in more than 20 years. Crude futures in New York have slumped 9.3 percent in four days and sank below $44 a barrel.
     The rally in the commodity sector has boosted the Canadian equity benchmark to an almost 13 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. Canadian stocks are more expensive than their U.S. peers, with a price-earnings ratio of 23.3 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.
     The yearlong rally in Canadian equities fizzled in August, capping the narrowest one-month climb since June 2009 as gains in raw-materials producers faltered with gold. The drop cut the group’s rally this year to 49 percent, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 20 percent in 2016, on pace for the strongest in seven years.

US
By Lu Wang
     (Bloomberg) — If you’re a trader who’s been fed up with U.S. stocks doing nothing for weeks, Friday’s payrolls report may be the solution.
     In short, August employment reports are usually bad, and that’s normally bad news for equities. Since 1996, 15 out of 19 releases have trailed economists’ estimates, data compiled by Bloomberg show. When they did, the S&P 500 Index fell an average 0.4 percent, compared with an average increase of 0.1 percent for all payrolls days.
     While a shortfall this time could be framed as bullish, prompting the Federal Reserve to hold off raising interest rates in September, weakness would also undermine confidence that a second-half pickup will stem a decline in corporate profits. The S&P 500 slipped less than a point to 2,170.86 at 4 p.m. in New York, squarely within the same 1.5 percent band it has now occupied for 36 straight days. That’s the tightest trading range since 1964.
     “When the market moves within a narrow range, it’s getting tightly wound and looking for news, and Friday’s number is a big number,” said Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, which manages $7.4 billion. “Because there is a lot of optimism built in, it’s going to be a show-me market.”
     American companies are forecast to have added 180,000 jobs last month, an increase that if matched would be the best initial reading for any August since 1998. The odds of that happening aren’t promising: August ranks No. 1 among all calendar months for the frequency of disappointments. On average, it produced 36,000 fewer jobs than economists predicted in the last two decades.
     Disappointing jobs data hasn’t boded well for stock returns historically. Since 1996, the S&P 500 is flat on average for the days when payrolls reports trail estimates, compared with a 0.3 percent gain when they beat. The performance gap is more pronounced for August, where miss days saw the equity benchmark falling 0.4 percent versus a 1.2 percent advance for positive surprises.
     Momentum is already fading in U.S. stocks after a rally added almost $4 trillion to U.S. equity values from the February bottom. Since a slew of all-time highs ended a 14-month drought in mid July, the S&P 500 has been stuck in neutral amid mixed economic reports and speculation over the timing of the next Fed rate increase.
     The benchmark index on Thursday briefly fell to 2,157.09, near the lower bound where it’s found support in the past month, as crude oil sold off and data showed an unexpected contraction in manufacturing activity. The gauge rebounded in afternoon trading to all but erase losses, as gains in technology and consumer-discretionary shares offset declines in banks and energy producers. The Dow Jones Industrial Average rose 18.42 points to 18,419.30, after falling more than 100.
     “A ‘headline miss’ would come as little surprise this time around, although nothing can really be said to be expected with this erratic data-set,” Michael Shaoul, chief executive officer of Marketfield Asset Management in New York, wrote in a note this week. “With the FOMC increasingly split between those who wish to raise the policy rate and those that wish to wait a while longer, the quality of U.S. labor market metrics is likely to be a key determinant as to what actually transpires in the coming weeks.”
     To Leo Grohowski, who helps manage more than $197 billion in client assets as chief investment officer of BNY Mellon Wealth Management in New York, a stronger jobs report could spark a selloff as the prospect of higher borrowing costs is seen as outweighing the benefit from economic strength. Prices for Fed funds futures imply a 34 percent chance of a rate hike in September.
     “You’re seeing the nervousness around the employment number and the Fed creep back into the market,” said Grohowski. “It’s frustrating when there’s so much riding on a number.”
     A recent surge in the CBOE Volatility Index reflects some of that anxiety. After reaching a two-year low on Aug. 19, the measure of market turbulence known as the VIX has climbed in eight of nine sessions while capping its biggest monthly gain in a year. The gauge rose 0.5 percent Thursday. About 6.4 billion shares traded hands on U.S. exchanges, 6 percent below the three-month average.
     Investors have ample reason to be apprehensive. The weakest economic recovery since World War II, along with lower oil prices and a stronger dollar, has taken its toll on corporate profits. S&P 500 earnings dropped for a fifth straight quarter during the April-June period, the longest decline since the global financial crisis. As the index hovers near record highs and analysts’ profit forecasts keep falling, stocks are trading at the highest multiple in more than a decade.
     Among shares moving today, Wal-Mart Stores Inc. advanced 2 percent as the retailer plans plans to move about 7,000 back- office workers in its supercenters to other parts of the store in a push to streamline operations. Campbell Soup Co. sank to an almost seven-month low after a disappointing forecast, hurt by a product recall and a poor carrot harvest at its Bolthouse Foods unit.

Have a wonderful evening everyone.

 

Be magnificent!

In music, I am melody.
The Bhagavad Gita

As ever,

 

Carolann

 

Dear Ike, Today I spat in the Seine.
    -General George Patton, 1885-1945
[Message to Eisenhower after Patton crossed the Seine in World War II]

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

Dear Friends,

Tangents:

Growing Older, and Happier

  Older people tend to be happier than younger people, and their happiness increases with age, a study in the Journal of Clinical Psychiatry reports.
  Researchers contacted 1,546 people ages 21 to 99 via random telephone calls and found that older age was, not surprisingly, tied to declines in physical and cognitive function. But it was also associated with higher levels of overall satisfaction, happiness and well­being, and lower levels of anxiety, depression and stress. The older the person, the study found, the better his or her mental health tended to be.
  Other studies have found similar results linking advancing age and higher levels of happiness. The reasons for the effect remain unclear, but the senior author, Dr. Dilip V. Jeste, a professor of psychiatry at the University of California, San Diego, had some suggestions.
  “Brain studies show that the amygdala in older people responds less to stressful or negative images than in a younger person,” he said. “We become wise. Peer pressure loses its sting. Better decision­ making, more control of emotions, doing things that are not just for yourself, knowing oneself better, being more studious and yet more decisive.
   “This is good news for young people, too,” he added. “You have something to look forward to.”  -New York Times, August, 2016.

On August 31, 1997, Britain’s Princess Diana died in a car crash in Paris at age 36.
August 31, 1896, gold discovered in the Klondike.

PHOTOS OF THE DAY
Waterfowls land in a quarry pond during sunrise in Isernhagen, Hannover region, northern Germany, on Wednesday. Holger Hollemann/dpa/AP

Malaysian students wave the Malaysian flag during the 59th National Day celebrations at Independence Square in Kuala Lumpur on Wednesday. Malaysia gained independence on August 31, 1957. Joshua Paul/AP

Market Closes for August 31^st, 2016

Market Index	Close	Change
Dow Jones	18400.88	-53.42   -0.29%
S&P 500	2170.95	-5.17   -0.24%
NASDAQ	5213.219	-9.771   -0.19%
TSX	14597.15	-87.70
		-0.60%

International Markets

Market Index	Close	Change
NIKKEI	16887.40	+162.04
		+0.97%
HANG SENG	22976.88	-39.23
		-0.17%
SENSEX	28452.17	+109.16
		+0.39%
FTSE 100	6781.51	-39.28
		-0.58%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.022	1.022
CND. 30 Year Bond	1.626	1.630
U.S.    10 Year Bond	1.5766	1.5680
U.S. 30 Year Bond	2.2292	2.2320

Currencies

BOC Close	Today	Previous
Canadian $	0.76334	0.76350
US $	1.31003	1.30975
Euro Rate 1 Euro=		Inverse
Canadian $	1.46154	0.68421
US $	1.11564	0.89635

Commodities

Gold	Close	Previous
London Gold Fix	1309.25	1318.15
Oil	Close	Previous
WTI Crude Future	44.70	46.98

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks fell for the first time in five sessions, all but wiping out a monthly advance, as energy producers slipped with the price of crude and lenders dropped amid data showing the nation’s economy contracted in the second quarter by the most since 2009.
     The S&P/TSX Composite Index fell 0.6 percent to 14,597.15 at 4 p.m. in Toronto, the lowest close in almost four weeks. The equity gauge capped a 0.1 percent climb in August, the narrowest one-month gain since June 2009. Trading volume Wednesday was 32 percent higher than the 30-day average.
     The yearlong rally in Canadian equities has lost steam in August as surging commodities producers have faltered. The raw- materials group has been the worst performer among 10 industries this month, slumping 9.9 percent on a decline in gold. The drop cut the group’s rally this year to 45 percent, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 19 percent in 2016, on pace for the strongest in seven years.
     Meanwhile, health-care stocks surged 14 percent in August, led by Valeant Pharmaceuticals International Inc.’s 31 percent rally. The drugmaker affirmed its 2016 outlook earlier this month, restoring some confidence in analysts and investors in its turnaround strategy.
     The rally in the commodity sector has boosted the Canadian equity benchmark to a 12 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. Canadian stocks are more expensive than their U.S. peers, with a price-earnings ratio of 23.1 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.
     A rout in crude prices and data showing that Canada’s economy contracted by a 1.6 percent annualized pace in the second quarter set the tone on the month’s final day. Suncor Energy Inc. and Canadian Natural Resources Ltd. lost at least 1.9 percent, with losses growing after data showed an increase in U.S. oil inventories. 
    Energy producers slipped 1.1 percent as a group to lead declines across seven of 10 industries in the S&P/TSX. Raw- materials producers lost 0.7 percent for a second straight decline. Gold capped a monthly decline in August for the first time in seven years, with futures down more than 3 percent this month as the Federal Reserve inches closer to raising interest rates. A U.S. private jobs report showed firms added workers in August in line with estimates.
     Financial shares fell 0.5 percent, paring a loss as investors found a glimmer of hope in the economy data. Gross domestic product grew 0.6 percent in June, exceeding expectations of a 0.4 percent expansion. Economists often put more weight on the last month of a quarter as a sign of future growth.
     National Bank of Canada dropped 3.1 percent today, the biggest slide in more than two months even after reporting third-quarter results that exceeded expectations. National Bank is the sixth major Canadian lender to beat analysts’ estimates in the current reporting period, joining Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Toronto-Dominion Bank, Royal Bank of Canada and Bank of Montreal.

US
By Anna-Louise Jackson
     (Bloomberg) — Never mind the tepid move in U.S. equity benchmarks this month, there’s been plenty going on below the surface.
     At first glance it’s been a month of anemic trading, marked by the lowest daily volume in almost two years, while the S&P 500 Index failed to budge more than 1 percent in either direction for a 38th day. But that tranquility belies a more significant shift in sentiment, where investors are once again embracing stocks that benefit from a stronger economy even as they prepare for a interest-rate increase as soon as next month.
     The S&P 500 wiped out gains for August on Wednesday as energy producers dropped with crude oil. The gauge fell 0.2 percent to 2,170.95 as of 4 p.m. in New York, halting the longest monthly winning streak in two years. The Dow Jones Industrial Average lost 53.42 points, or 0.3 percent, to 18,400.88. About 6.8 billion shares traded hands on U.S. exchanges, in line with the three-month average.
     Be it a second-straight jump in hiring, a spike in consumer confidence or signs of promise at U.S. factories, August signaled “a little bit of an improvement in the U.S. economy,” said Eric Green, director of research and senior managing partner at Penn Capital, which has more than $6 billion under management in Philadelphia. “It makes a lot of sense the rotation we’re seeing. It’s long overdue.”
     As confidence in the economy built, comments from Federal Reserve policy makers at last week’s symposium in Jackson Hole, Wyoming helped solidify a risk-on mentality, Green said. That’s because an increased probability of rising rates makes high- dividend defensive industries less attractive. Prices for Fed funds futures imply a 61 percent chance of a rate hike by year- end, up from 36 percent at the start of the month, according to data compiled by Bloomberg.
     Utilities stocks tumbled 6.1 percent in August, the biggest monthly decline in more than a year, while phone companies slipped 5.7 percent, their worst since 2014. Technology and financial shares both rose for a second month, adding at least 1.8 percent, with banks capping their best performance since February.
     Compared with a wild August in 2015 when the main U.S. benchmark tumbled 6.3 percent, this year’s late-summer season was calm. The lightest day of the year, this past Monday, saw less than 5 billion shares traded, while daily average volume fell 8 percent this month from July.
     Meanwhile, subdued price swings typify a market that lacks commitment either way, Green said. “People are sitting and waiting to get a little more clarity,” he added. The CBOE Volatility Index waited until August’s final week to surge to it biggest monthly jump in a year, though it remains more than 30 percent below its 10-year average.
     After reaching a record on Aug. 15, the S&P 500 has failed to maintain its momentum amid lukewarm economic reports and speculation over the timing of the next Fed rate increase. Equities have wobbled this week, with investors sharpening their focus on the August employment report as its outcome has the potential to cement policy makers’ decisions on borrowing costs at the central bank’s meeting in three weeks.
     “There is some amount of optimism that the statements from the Fed imply that the economy is in much better shape, and if the economy is in much better shape, they should move out of the defensive sector and move on to the risk-on sectors,” said Komal Sri-Kumar, president of Sri-Kumar Global Strategies Inc. in Santa Monica, California. “It is a very short-term phenomenon and it is not likely to last, and in that case it is going to be reversed.”
     Sri-Kumar points to second-quarter gross domestic product that grew less than previously estimated, along with the five- quarter recession in corporate profits as evidence the economy isn’t strong enough to sustain another rate increase. Rather, he says the next move by the Fed could be a rate cut or another round of quantitative easing. 
     Commodity shares led a retreat Wednesday amid a report showing crude stockpiles rose more than predicted. Energy companies trimmed their August advance to 0.6 percent from 4 percent two weeks ago. Chevron Corp. sank 1.1 percent, while copper miner Freeport-McMoRan Inc. posted its worst month since May.
     Among shares moving on corporate news, H&R Block Inc. tumbled the most since April after reporting a wider-than- estimated quarterly loss. Apparel retailer Chico’s FAS Inc. jumped 12 percent near a four-month high on better-than-forecast quarterly results. 
     “I think the market is coming to grips with a higher probability that the Fed may move in September,” said Robert Pavlik, who helps oversee $9.1 billion as chief market strategist at Boston Private Wealth. “A possible Fed rate hike creates some near-term worries — that’s what you’re seeing play out today.”

 

Have a wonderful evening everyone.

 

Be magnificent!

Silence is a great benediction, it cleanses the brain, gives vitality to it,
and this silence builds up great energy, not the energy of thought or the energy of machines,
but unpolluted energy, untouched by thought.
It is the energy that has incalculable capacity, skills.
And this is a place where the brain, being very active, can be silent.
That very intense activity of the brain has the quality and the depth
and the beauty of silence.
Krishnamurti

As ever,

 

Carolann

 

Good people are good because they’ve come
to wisdom through failure.
                      -William Saroyan,  1908-1981

 

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

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

Marguerites are about to wake up on a field in Frankfurt, Germany, early Tuesday. Michael Probst/AP

A 360-foot-long sculpture of a 17th-century London skyline is completed for an event where it will be set alight, re-telling the story of the 1666 Great Fire of London, in London, Tuesday.Peter Nicholls/Reuters

Market Closes for August 30^th, 2016

Market Index	Close	Change
Dow Jones	18454.30	-48.69   -0.26%
S&P 500	2176.12	-4.26   -0.20%
NASDAQ	5222.988	-9.339   -0.18%
TSX	14684.85	+2.88
		+0.02%

International Markets

Market Index	Close	Change
NIKKEI	16725.36	-12.13
		-0.07%
HANG SENG	23016.11	+194.77
		+0.85%
SENSEX	28343.01	+440.35
		+1.58%
FTSE 100	6820.79	-17.26
		-0.25%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.022	1.024
CND. 30 Year Bond	1.630	1.628
U.S.    10 Year Bond	1.5680	1.5595
U.S. 30 Year Bond	2.2320	2.2106

Currencies

BOC Close	Today	Previous
Canadian $	0.76350	0.76819
US $	1.30975	1.30177
Euro Rate 1 Euro=		Inverse
Canadian $	1.45929	0.68527
US $	1.11417	0.89753

Commodities

Gold	Close	Previous
London Gold Fix	1318.15	1318.75
Oil	Close	Previous
WTI Crude Future	46.35	46.98

Market Commentary:
Canada
     (Bloomberg) — Canadian stocks ended the day little-changed after erasing an advance, as gold producers tumbled with the metal to all but wipe out gains sparked by talks of a merger among fertilizer giants Potash Corp. of Saskatchewan Inc. and Agrium Inc.
     The S&P/TSX Composite Index rose less than 0.1 percent to 14,684.85 at 4 p.m. in Toronto, paring an earlier increase of as much as 0.7 percent. The equity gauge is still on track for a 0.7 percent climb in August. Trading volume today was 6.4 percent higher than the 30-day average at this time of the day.
     Raw-materials producers slumped 2 percent, the biggest contributor to losses in the S&P/TSX as Barrick Gold Corp. and Goldcorp Inc. tumbled at least 4.7 percent. Gold is set for a monthly decline in August for the first time in seven years, with futures down 3 percent this month as the Federal Reserve inches closer to raising interest rates.
     Potash Corp., the world’s second-largest producer of the fertilizer, soared 11 percent for the biggest gain in six years while Agrium climbed 7.4 percent. The two companies are in talks for a potential merger, as reported by Bloomberg News and subsequently confirmed by the companies. A combination could be announced as soon as next week, people familiar with the matter said.
     Bank of Nova Scotia added 1.6 percent, for the highest close since November 2014 to boost financial-services firms. The nation’s third-largest lender posted earnings that beat analysts’ estimates, led by gains in capital markets and international banking. The bank also raised its dividend.
     Scotiabank joins CIBC, Toronto-Dominion Bank, Royal Bank of Canada and Bank of Montreal topping analysts’ expectations in the past week. Financial services stocks rose 0.6 percent, for an eighth straight day of gains, the longest in more than a month.
     Ritchie Bros. Auctioneers Inc. surged 24 percent, the biggest one-day advance ever for a record close, after agreeing yesterday to buy online heavy equipment marketplace IronPlanet for $758.5 million.
     Energy companies added 0.1 percent Tuesday, after paring a 0.9 percent climb as crude oil erased an advance.
     Raw-materials producers remain the worst performers among 10 industries in the S&P/TSX this month, slumping 9.3 percent on the weakness in gold. Meanwhile, health-care stocks are up 17 percent, led by Valeant Pharmaceuticals International Inc.’s 36 percent rally in August. The drugmaker affirmed its 2016 outlook earlier this month, restoring some confidence in analysts and investors in its turnaround strategy.
     Valeant rose 0.5 percent today after agreeing to acquire the Canadian rights to obesity drug Contrave. Valeant plans to file with Canadian regulators for approval of the drug in January. Terms of the agreement were not disclosed. 
     The materials group is up 46 percent this year, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 21 percent in the same period, on pace for the strongest in seven years.
     That’s boosted the Canadian equity benchmark to an almost 13 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.3 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.

US
By Rita Nazareth, Dani Burger and Phil Kuntz
     (Bloomberg) — This month’s gains in U.S. stocks almost vanished as Apple Inc. slumped ahead of Friday’s jobs report. The dollar rose, while oil fell.
     The S&P 500 Index dropped from near a record high as the iPhone maker was ordered to pay 13 billion euros ($14.5 billion) plus interest in a European Union tax crackdown. The gauge was still set for its sixth monthly advance, while emerging-market equities headed toward their best August since 2004. The dollar rose against most of its major peers, while Treasuries held onto gains as traders assessed U.S. interest-rate outlook. Oil dropped before a government report that’s projected to show American crude stockpiles increased.
     U.S. stocks have struggled to make further headway after reaching an all-time high this month amid a spate of mixed economic data and as remarks from policy makers spurred increased speculation over the timing of the next rate hike. Fed rhetoric has put the spotlight on August’s labor report, which is projected to show the U.S. added 180,000 jobs, following more robust gains in June and July. Meantime, Apple was ordered to pay the money after the EU’s executive arm said Ireland illegally reduced the company’s tax bill. 
     “This isn’t a positive development with the EU, but you can see it as an initial volley in  what’s likely to be a continuing conversation,” said Peter Jankovskis, who helps oversee $1.9 billion as co-chief investment officer of Lisle, Illinois-based OakBrook Investments. “We’re just waiting on the Fed, looking ahead to the September meeting and parsing every new data point in that context.”
     Consumer confidence increased to an almost one-year high in August as Americans became more optimistic about the labor market, according to a report from the New York-based Conference Board on Tuesday. Fed fund futures indicate a 34 percent chance that the Federal Open Market Committee will raise rates next month, according to data compiled by Bloomberg. The probability dropped to zero in June after the U.K. voted to leave the EU.
     Fed Vice Chairman Stanley Fischer told Bloomberg Television Tuesday that rate increases will be data dependent, without giving a specific timeline. He also said that the U.S. is close to full employment even as the dollar has strengthened, and while there’s some pessimism about the pace of expansion, “that problem is largely about productivity growth, something which is very hard to control by policy makers. It depends enormously on what private individuals are doing in their companies, and it’s very slow at the moment.”
     The S&P 500 dropped 0.2 percent to 2,176.12 as of 4 p.m. in New York amid trading volumes that were 11 percent below the 30- day average. The benchmark is still up 0.1 percent in August, set for its longest stretch of monthly gains since May 2013. Apple slumped 0.8 percent to an almost four-week low.
     Abercrombie & Fitch Co. sank 20 percent after slow sales at flagship locations weighed on the clothing retailer’s latest results and outlook. Mondelez International Inc. rallied after saying it’s walking away from takeover discussions with Hershey Co. two months after the company’s $23 billion bid was rejected by the chocolate maker. Potash Corp. of Saskatchewan Inc., the world’s second-largest producer of its namesake fertilizer, and Agrium Inc. surged after both companies confirmed they are in talks about a merger of equals.
     European stocks climbed, extending gains in the month as a weaker euro boosted exporters. The Stoxx Europe 600 Index rose 0.5 percent, with almost all of its industry groups climbing. Commodity producers bucked the trend as metal prices fell and Citigroup Inc. analysts turned bearish on mining shares.
     The MSCI Emerging Market Index rebounded from a three-week low, extending its August rally to 2.9 percent. Most Brazilian stocks declined after Supreme Court chief Ricardo Lewandowski said an impeachment vote of suspended President Dilma Rousseff will likely occur Wednesday, disappointing some traders who had expected it late Tuesday.
     Futures on most Asian indexes signaled gains, following a day of fluctuations Tuesday. Nikkei 225 Stock Average futures climbed 0.7 percent in Osaka, while contracts on benchmarks in Australia and Hong Kong gained 0.1 percent. Kospi index futures slipped 0.2 percent in Seoul.     The Bloomberg Dollar Spot Index, which tracks the currency against 10 peers, advanced 0.6 percent, as the U.S. currency strengthened 0.4 percent to $1.1143 per euro, and added 1 percent to 102.96 yen.
     Sentiment around the dollar has oscillated in recent weeks amid speculation over the Fed’s tightening plans after it raised rates in December for the first time since 2006. The speculation has helped the greenback trim its loss this year to 3.6 percent.
     “The dollar is likely to stay on a firm footing into the Friday payrolls report, but we’ll need to see a solid set of numbers for gains to be sustained beyond that,” said Ned Rumpeltin, the European head of currency strategy at TD in London.
     South Korea’s won rose 0.5 percent versus the dollar, the best performance among 16 major currencies. Brazil’s real declined amid speculation banks were seeking to weaken the currency before the monetary authority determines a key rate used in settling some financial contracts.
     Yields on U.S. government debt due in a decade increased one basis point, or 0.01 percentage point, to 1.57 percent, after dropping seven basis points on Monday.
     Comments from central bankers during and in the run-up to the Kansas City Fed’s annual symposium last week in Jackson Hole, Wyoming have split the market. Treasury bull Morgan Stanley predicts the Fed will forgo raising interest rates next month, while Goldman Sachs Group Inc. and Mitsubishi UFJ Securities Holdings Co. saw them as hawkish enough to raise the odds of action next month.
     The August payrolls data have missed the median of economists’ estimates in each of the past five years, JPMorgan Chase & Co. analysts led by Jay Barry in New York wrote in a report. The policy-setting Federal Open Market Committee meets next on Sept. 20-21 in Washington. The meeting will be followed by a press conference with Fed Chair Janet Yellen and by a fresh set of economic projections by policy makers.
     West Texas Intermediate for October delivery declined 1.3 percent to settle at $46.35 a barrel on the New York Mercantile Exchange, the lowest close since Aug. 15. 
     Crude supplies probably climbed by 1.3 million barrels last week, a Bloomberg survey showed before an Energy Information Administration report on Wednesday. The dollar rose to its highest level in more than three weeks, curbing the appeal of raw materials denominated in the currency to investors. Iran aims to raise oil output to 4 million barrels a day by the end of 2016, Mansour Moazami, deputy minister of industry, mines and trade said in Norway.
     Gold futures for December delivery slid 0.8 percent to settle at $1,316.50 an ounce, headed for their first August decline since 2009. In the decade to 2015, bullion added 2.2 percent on average during August, the best month after January.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“If you change the way you look at things, the things you look at change.” Wayne Dyer

 

As ever,

 

Karen

 

“Very little is needed to make a happy life; it is all within yourself, in your way of thinking.” Marcus Aurelius

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

Dear Friends,

Tangents:

On August 29, 1991, the Supreme Soviet, the parliament of the USSR, suspended all activities of the Communist Party, bringing an end to the institution.
Also on this day in 2005, Hurricane Katrina makes landfall near New Orleans.

5 Tips to Become a Better Influencer
Source: Dale Carnegie

1. Personally I am very fond of strawberries and cream, but I have found that for some strange reason, fish prefer worms.  So when I went fishing, I didn’t think about what I wanted.  I thought about what they wanted.  I didn’t bait the hook with strawberries and cream.  Rather, I dangled a worm or grasshopper in front of the fish and said:   Wouldn’t you like to have that?
2. Don’t be afraid of enemies who attack you.  Be afraid of the friends who flatter you.
3. You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.
4. Any fool can criticize, complain, and condemn – and most fools do.  But it takes character and self-control to be understanding and forgiving.
5. When dealing with people, remember you are not dealing with creatures of logic, but with creatures bristling with prejudice and motivated by pride and vanity.

PHOTOS OF THE DAY

Citizens have the chance to row “Olympias”, a reconstruction of an ancient Athenian trireme, a ship commissioned in the Greek Navy, in the southern suburb of Faliro in Athens, Greece, Sunday. Michalis Karagiannis/Reuters

Burners play on an interactive wild boar sculpture on a dusty morning at Burning Man in the Black Rock Desert near Gerlach, Nev. on Saturday. The annual festival is dedicated to community, art, self-expression, and self-reliance. Andy Barron /The Reno Gazette-Journal/AP

A farmer checks hot peppers laid out on a road to dry under the sun before selling them to factories producing pepper products in Kilis province, Turkey, Monday. Umit Bektas/Reuters
Market Closes for August 29^th, 2016

Market Index	Close	Change
Dow Jones	18502.99	+107.59   +0.58%
S&P 500	2180.38	+11.34   +0.52%
NASDAQ	5232.328	+13.412   +0.26%
TSX	14681.12	+41.24
		+0.28%

International Markets

Market Index	Close	Change
NIKKEI	16737.49	+376.78
		+2.30%
HANG SENG	22821.34	-88.20
		-0.38%
SENSEX	27902.66	+120.41
		+0.43%
FTSE 100	6838.05	+21.15
		+0.31%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.024	1.088
CND. 30 Year Bond	1.628	1.684
U.S.    10 Year Bond	1.5595	1.6193
U.S. 30 Year Bond	2.2106	2.2832

Currencies

BOC Close	Today	Previous
Canadian $	0.76819	0.76893
US $	1.30177	1.30051
Euro Rate 1 Euro=		Inverse
Canadian $	1.45635	0.68665
US $	1.11875	0.89385

Commodities

Gold	Close	Previous
London Gold Fix	1318.75	1318.75
Oil	Close	Previous
WTI Crude Future	46.98	47.64

Market Commentary:
Canada
By Joseph Ciolli
     (Bloomberg) — Canadian stocks rose for a third day as a rally in metals and mining companies overshadowed decline in energy shares fueled by a slump in crude.
     The S&P/TSX Composite Index added 0.3 percent to 14,682.01 at 4 a.m. in Toronto, giving the benchmark index its longest advance in three weeks. Trading volume was 20 percent lower than the 30-day average. The Canadian measure is the second-best performing developed market in the world this year with a 13 percent gain, trailing only New Zealand.
     Five of 10 industries in the S&P/TSX advanced, with raw- material producers rising 1.2 percent to pace gains. The group tumbled 6.5 percent last week, the biggest five-day decline since October. Copper producer Teck Resources Ltd. surged 8.2 percent to the highest level since September 2014. New Gold Inc., Goldcorp Inc. and Iamgold Corp. climbed more than 2.4 percent to lead gold producers higher.
     Phone companies and industrial stocks in the S&P/TSX increased 0.5 percent, with BCE Inc. rallying 1 percent to lead the advance. Energy producers lost 0.3 percent as crude slumped 1.4 percent in New York.
     Mining and materials companies remain the top gainers this year with a 49 percent advance. That’s boosted the Canadian equity benchmark to a 13 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 24 for the S&P/TSX, about 14 percent higher than the S&P 500 Index.

US
By Rita Nazareth and Anna-Louise Jackson
     (Bloomberg) — U.S. stocks closed near a record high after an increase in consumer spending underscored the strength of the world’s largest economy as traders assessed the outlook for interest rates. The dollar rose, while oil fell.
     The S&P 500 Index rebounded from a three-day slide, and the dollar advanced against most of its major peers. The extra yield that 30-year bonds offer over two-year notes shrank to the lowest closing level since 2007, indicating traders are betting on higher borrowing costs. Oil sank amid doubts that producers will agree on a deal to stabilize the market when suppliers meet in September. Brazil’s Ibovespa extended the world’s biggest gain this year on speculation President Dilma Rousseff will be permanently removed from office.
     Traders pushed up the value of American equities after a report showed consumer spending rose for a fourth straight month in July, bolstered by stronger income gains. The data highlighting strength in the world’s largest economy followed disappointing retail sales and sluggish growth figures. The monthly jobs report due this Friday may provide more clues on whether policy makers will have room to boost interest rates after Federal Reserve Chair Janet Yellen said the case for a hike is getting stronger.
     “There are good indicators that incomes are improving and consumption is going to continue to stay strong, which points to a resilient U.S. economy,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242 billion. “The big question is whether inflation is going to break higher or continue like this — it puts more emphasis on Friday’s employment report. It’s still a pretty murky picture right now.”
     Fed fund futures indicate a 36 percent chance that the central bank will raise rates next month, up from 22 percent Aug. 19 and zero in late June after the U.K. voted to leave the European Union. The odds of an increase by December have risen to 61 percent from a low of 8 percent reached June 27.
     The S&P 500 rose 0.5 percent at 4 p.m. in New York, halting the longest slide since June. Wells Fargo & Co. and Facebook Inc. contributed the most to the gauge’s advance. Herbalife Ltd. climbed after billionaire Carl Icahn bought more than 2.3 million shares in the embattled nutrition company, a high- profile target of fellow billionaire activist investor Bill Ackman.
     The Stoxx Europe 600 Index retreated 0.2 percent, paring earlier losses. A gauge of auto makers posted the biggest decline, while sliding oil prices dragged energy producers lower. The volume of shares changing hands was 73 percent lower than the 30-day average as U.K. markets closed for a holiday.
     Japanese shares led gains among the world’s biggest equity markets after central bank chief Haruhiko Kuroda reiterated a pledge to boost stimulus if needed.
     The MSCI Emerging Markets Index fell 0.4 percent as Turkish and Russian shares slumped. The Ibovespa jumped amid optimism that Acting President Michel Temer, who will stay on as the nation’s leader if the Senate decides to impeach Rousseff, will be able to restore confidence in Latin America’s biggest economy.
     The extra yield that 30-year bonds offer over two-year notes shrank to 1.40 percentage points. History suggests that a Fed rate increase supports longer-maturity bonds more than short-dated obligations as higher borrowing costs help stem inflation and keep the economy from overheating.
     The two-year Treasury yield fell four basis points, or 0.04 percentage points, to 0.81 percent Monday, according to Bloomberg Bond Trader data. The 30-year yield dropped seven basis points to 2.21 percent. The yield on the benchmark 10-year notes slumped to 1.56 percent.
     Yellen’s speech on Friday put the spotlight on Friday’s August labor report, which is projected to show employers added 180,000 jobs, following a gain of 255,000 in July.
     “They’re likely to tighten in September, at least as long as the jobs number comes in OK,” Michael Pond, head of global inflation market strategy at Barclays Capital Inc. in New York, said on Bloomberg Television. “Hawkish Fed rhetoric has certainly increased recently. It’ll take a decent number, like 200,000, for them to go.”
     The Bloomberg Dollar Spot Index, which tracks the currency against 10 peers, gained 0.1 percent. The dollar added 0.1 percent to $1.1187 per euro, and was little changed at 101.87 yen.
     The dollar’s advance trimmed its loss this year to 4.2 percent. Currency investors’ sentiment has shifted back and forth in recent weeks on how aggressive the Fed will be at a time when central banks in developed economies increase stimulus measures.
     “Dollar appreciation is likely to resume over the balance of the year,” Atul Lele, who manages $2 billion as chief investment officer of Nassau, Bahamas-based Deltec International Group, wrote in a note to clients. “The factors that are contributing to the strong cyclical and secular U.S. dollar outlook remain,” including economic growth and the nation’s divergent monetary policy from other central banks.
     The MSCI Emerging Markets Currency Index fell 0.6 percent, with South Korea’s won sliding 1 percent. The rand slipped to a six-week low against the dollar as increased political risk in South Africa weighed on the currency. Brazil’s real advanced, leading gains among its major counterparts.
     The Bloomberg Commodity Index retreated for a fourth day as the dollar’s advance curbed the appeal of raw materials as an investment.
     West Texas Intermediate crude for October delivery dropped 1.4 percent to $46.98 a barrel on the New York Mercantile Exchange.
     Oil entered a bull market Aug. 18, less than three weeks after tumbling into a bear market, as prices surged partly on speculation that discussions among members of the Organization of Petroleum Exporting Countries may lead to action to stabilize the market. An output freeze was proposed in February, but talks in April ended with no final accord. For a second week, money managers slashed bets on falling WTI prices by a record.
     “The short-covering rally has come to an end,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “There are two reasons for this: the likelihood of an agreement to freeze output is becoming less- and-less likely all the time and the dollar’s relative strength.”

 

Have a wonderful evening everyone.

 

Be magnificent!

Meditation is to be aware of every thought and of every feeling,
never to say it is right or wrong, but just to watch it and move with it.
In that watching you begin to understand the whole movement of thought and feeling.
And out of this awareness comes silence.
Krishnamurti

As ever,

 

Carolann

 

Your chances for success in any undertaking can be measured
by your belief in yourself.
                      -Robert Collier, 1885-1950

 

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

Dear Friends,

Tangents:
August 26, 1883: Krakatoa erupts, killing 36,000.
On Aug. 26, 1920, the 19th Amendment to the U.S. Constitution, guaranteeing women the right to vote, was declared in effect

It’s the last weekend in August, so enjoy….which is what I’m just headed out to do.

After all, tomorrow is another day. –Margaret Mitchell, 1900-1949.

PHOTOS OF THE DAY

Pokeburgs, hamburgers in the form of Pokemon characters, are seen at Down N’ Out Burger restaurant in Sydney, Australia on Friday. The restaurant sells a limited number of Pokeburgs per day, with the names (L-R) Chugmander, Peakachu and Bulboozaur, capitalizing on fans’ appetite for Pokemon Go, the location-based augmented reality game. Jason Reed/Reuters

Two-time World Medieval Jousting champion Rod Walker poses for a photograph on his horse ‘Crusader’ in Sydney, Australia on Friday. Walker is in Sydney training for the jousting tournament at the upcoming St Ives Medieval Faire, the only solid wood lance joust tournament in the southern hemisphere, which will take place September 24-25. Dan Himbrech/AAP/Reuters
Market Closes for August 26^th, 2016

Market Index	Close	Change
Dow Jones	18395.40	-53.01   -0.29%
S&P 500	2169.04	-3.43   -0.16%
NASDAQ	5218.918	+6.714   +0.13%
TSX	14637.64	+6.92
		+0.05%

International Markets

Market Index	Close	Change
NIKKEI	16360.71	-195.24
		-1.18%
HANG SENG	22909.54	+94.59
		+0.41%
SENSEX	27782.25	-53.66
		-0.19%
FTSE 100	6838.05	+21.15
		+0.31%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.088	1.061
CND. 30 Year Bond	1.684	1.670
U.S.    10 Year Bond	1.6193	1.5748
U.S. 30 Year Bond	2.2832	2.2673

Currencies

BOC Close	Today	Previous
Canadian $	0.76893	0.77395
US $	1.30051	1.29208
Euro Rate 1 Euro=		Inverse
Canadian $	1.45600	0.68682
US $	1.11956	0.89321

Commodities

Gold	Close	Previous
London Gold Fix	1318.75	1321.30
Oil	Close	Previous
WTI Crude Future	47.64	46.93

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks edged higher, as speculation the U.S. Federal Reserve could raise interest rates as soon as September lifted banks, offsetting declines in raw-materials producers.
     The S&P/TSX Composite Index rose 0.1 percent to 14,639.88 at 4 p.m. in Toronto, paring a second-straight weekly decline. Trading volume today was in line with the 30-day average.
     The case to raise interest rates is getting stronger in the U.S. as the economy approaches the central bank’s goals, Fed Chair Janet Yellen said in the text of a speech Friday in Jackson Hole, Wyoming. Fed Vice Chairman Stanley Fischer said Yellen’s comments leave the door open for an interest-rate hike in September, which helped boost the dollar and weighed on commodities.
     Raw-materials stocks ended 0.4 percent lower after wiping out a 2.2 percent climb. Commodities producers from Potash Corp. of Saskatchewan Inc. and Methanex Corp. declined at least 1.8 percent, while precious metals companies held onto gains. Detour Gold Corp. added 1.8 percent. The group rose Thursday after capping a four-day slide and the biggest drop in more than three months on Aug. 24. Energy companies pared gains after rising 1.1 percent. Gold futures in New York settled little changed after swinging between gains and losses.
     “Rates aren’t going to above 2 percent, so even if there is a hike, they’re retaining maximum flexibility for the rest of the year and into the next,” said Frank Maeba, managing partner at Breton Hill Capital in Toronto. His firm manages C$1.4 billion. “What she’s doing is quelling future uncertainty. Even if we do hike, you guys are being a little bit myopic.”
     Canadian Imperial Bank of Commerce added 0.5 percent for a sixth-straight gain, the longest streak in more than two months, as financial services stocks increased 0.2 percent, one of five industries to advance in the S&P/TSX.
     CIBC, Toronto-Dominion Bank, Royal Bank of Canada and Bank of Montreal all topped analysts’ expectations this week, driving a 1.5 percent weekly advance for financial service stocks that’s the most in six weeks. Bank of Nova Scotia, the nation’s third- largest lender, is on deck to report on Aug. 30.
     After a first-half rally, raw-materials producers have lost steam in August, with the group the worst performer among 10 industries in the S&P/TSX, slumping 8.5 percent. Meanwhile health-care stocks are up 19 percent for the biggest advance, led by Valeant Pharmaceuticals International Inc.’s 38 percent rally in August. The drugmaker affirmed its 2016 outlook earlier this month, restoring some confidence in analysts and investors in its turnaround strategy.
     The materials group remains on track for the first annual advance in six years, up 47 percent this year, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 21 percent in the same period, on pace for the strongest in seven years.
     That’s boosted the Canadian equity benchmark to a more than 12 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.2 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.
     Torstar Corp., owner of the Toronto Star, Canada’s largest circulation newspaper, jumped 7.7 percent, the biggest increase in a month. Fairfax Financial Holdings Ltd. bought 3.5 million shares of the company, boosting its stake to more than 27 percent.

US
By Anna-Louise Jackson, Dani Burger and Oliver Renick
     (Bloomberg) — U.S. stocks slipped in a volatile session, as remarks from Federal Reserve officials lifted optimism on the economy while also bolstering speculation interest rates could rise as soon as next month.
     A speech by Fed Chair Janet Yellen sparked an early surge in equities amid a bullish economic assessment, which included a lack of clear guidance on when a rate boost may come. Equities then tumbled after Vice Chairman Stanley Fischer said Yellen’s comments were consistent with a possible September increase, only to recover much of their losses in a final-hour rebound.
     Utilities and phone companies led the declines, while banks, technology and health-care shares climbed.
     “Fischer wants to make September still on the table,” said Mark Kepner, managing director and equity trader at Themis Trading LLC in Chatham, New Jersey. “He mentioned he’s not concerned about the low growth we have had the first six months. He’s saying growth is more a productivity and investment story. There are light volumes, lightly staffed desks and these moves can easily happen.”
     The S&P 500 Index fell 0.2 percent to 2,169.04 at 4 p.m. in New York, after rising as much as 0.7 percent. The gauge extended a monthly slide and capped its first back-to-back weekly drop in two months. The Dow Jones Industrial Average lost 53.01 points, or 0.3 percent, to 18,395.40, after wiping out a 123-point gain. The Nasdaq Composite Index rose 0.1 percent. About 6.6 billion shares traded hands on U.S. exchanges, 3 percent below the three-month average.
    Expectations for a rate increase climbed after Fischer spoke, with traders pricing in a 42 percent probability of a move next month, from 32 percent after Yellen’s remarks. Odds are now nearly 63 percent the central bank will act by December, up from 42 percent two weeks ago, based on fed fund futures data compiled by Bloomberg.
     “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months,” Yellen said in the text of a speech to central bankers and economists in Jackson Hole, Wyoming.
     Wagers on higher borrowing costs had increased amid a chorus arguing the case for policy tightening. Kansas City Fed President Esther George yesterday reiterated her call that higher rates are warranted, while Dallas Fed chief Robert Kaplan said “the case is strengthening” for another increase. They joined New York Fed chief William Dudley and his San Francisco counterpart John Williams who signaled last week a rate increase could be on the table in coming months.
     “At the end of the day, headlines weren’t as dramatic as people were scared they might be,” said Walter Todd, who oversees about $1.1 billion as chief investment officer for Greenwood Capital Associates LLC in South Carolina. “It doesn’t appear she’s pounding the table saying rates are going up next month.”
     The rally that drove the S&P 500 to a series of records since early July lost momentum amid the recent hawkish remarks from Fed officials and uneven economic data. The benchmark posted its first three-day slide in two months, interrupting a period of calm that had the CBOE Volatility Index on track for its lowest mean level for any August since 1994. The measure of market turbulence known as the VIX held at a seven-week high, little changed Friday after swinging between an 11 percent drop and a nearly 10 percent jump.
     With policy makers assessing data to guide their rate decisions, a report today showed the U.S. economy grew less than previously reported last quarter, capping a sluggish first-half performance propped up mainly by consumer spending. A separate measure showed consumer confidence eased in August to a four- month low as Americans become less optimistic about their finances for the year ahead.
     As the earnings season wraps up, almost 80 percent of S&P 500 companies have beaten profit estimates, while 55 percent topped sales expectations. Analysts estimate third-quarter income for the gauge’s members will contract for a sixth- straight quarter, forecasting a 1.3 percent decline.
     In Friday’s trading, seven of the S&P 500’s 10 main industries retreated. Stocks perceived as defensive were hardest hit, continuing a recent about-face among this year’s leaders as utilities and phone companies slumped more than 1 percent, while consumer staples lost 0.5 percent. Raw-materials producers lost 0.6 percent as a gauge of the dollar surged the most in two months.
     Among shares moving on corporate news, Autodesk Inc. jumped 8.1 percent to a record after surprising investors with a quarterly profit, and forecasting a narrower-than-estimated loss in the current period. Ulta Salon Cosmetics & Fragrance Inc. sank 6.1 percent, the most since November, as its current- quarter outlook disappointed.
     Herbalife Ltd. declined 2.3 percent to a six-week low, after losing as much as 7.8 percent. Hedge fund manager Bill Ackman told CNBC that top investor Carl Icahn is trying to sell his stake in the nutrition company. Herbalife declined to respond to Ackman’s comments, while representatives for Icahn and Ackman didn’t immediately respond to requests for comment.
     Alere Inc. slipped 2.8 percent after suing Abbott Laboratories to compel the completion of their pending $5.8 billion takeover deal, claiming the medical-device maker failed to get U.S. antitrust clearance in an effort to scuttle the contentious transaction. Abbott was little changed.

Have a wonderful weekend everyone.

 

Be magnificent!

When the life of a man, freed from all distractions, finds its unity in the spirit,
the knowledge of the infinite comes to him immediately and naturally,
like a light from a flame.
Rabindranth Tagore

As ever,

 

Carolann

One is happy as a result of one’s own efforts, once one knows the necessary ingredients of happiness –
simple tastes, a certain degree of courage, self denial to a a point, love of work, and above all,
a clear conscience.
Happiness is no vague dream, of that I now feel certain.
                          -George Sand, 1804-1876

 

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

Dear Friends,

Tangents:
On Aug. 25, 1944, Paris was liberated by Allied forces after four years of Nazi occupation.
August 25^TH, 1939: The Wizard of Oz released.

From Summer with Monika
            -Roger McGough

Away from you
i feel a great emptiness
a gnawing loneliness

with you
i get that reassuring feeling
of wanting to escape
 

If you want to change the world, go home and love your family. – Mother Teresa.

PHOTOS OF THE DAY

Auction house employee Lindsay Hoadley prepares an almost complete Dodo skeleton as it is displayed at Summers Place Auctions in Billingshurst, southern England on Thursday, where It will be the first of its kind to come up for sale in nearly 100 years.Gareth Fuller/PA/AP

Devotees form a human pyramid to celebrate the festival of Janmashtami, marking the birth anniversary of Hindu Lord Krishna, in Mumbai, India on Thursday. Shailesh Andrade/Reuters
Market Closes for August 25^th, 2016

Market Index	Close	Change
Dow Jones	18448.41	-33.07   -0.18%
S&P 500	2172.48	-2.96   -0.14%
NASDAQ	5212.203	-5.492   -0.11%
TSX	14625.21	-1.03
		-0.01%

International Markets

Market Index	Close	Change
NIKKEI	16555.95	-41.35
		-0.25%
HANG SENG	22814.95	-5.83
		-0.03%
SENSEX	27835.91	-224.03
		-0.80%
FTSE 100	6816.90	-18.88
		-0.28%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.061	1.033
CND. 30 Year Bond	1.670	1.643
U.S.    10 Year Bond	1.5748	1.5577
U.S. 30 Year Bond	2.2673	2.2464

Currencies

BOC Close	Today	Previous
Canadian $	0.77395	0.77357
US $	1.29208	1.29270
Euro Rate 1 Euro=		Inverse
Canadian $	1.45801	0.68587
US $	1.12842	0.88620

Commodities

Gold	Close	Previous
London Gold Fix	1321.30	1327.25
Oil	Close	Previous
WTI Crude Future	46.93	46.47

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Gold miners rebounded after their steepest selloff in more than a year, while energy producers slipped, leaving Canadian stocks little changed before a hotly anticipated speech from Federal Reserve Chair Janet Yellen.
     The S&P/TSX Composite Index rose less than 0.1 percent to 14,630.72 at 4 p.m. in Toronto, after the benchmark fell Wednesday by the most in almost two months. Trading volume today was about 4 percent lower than the 30-day average.
     Energy producers lost 0.4 percent, despite crude futures in New York bouncing 1.2 percent from a one-week low. Enbridge Inc and Imperial Oil Ltd. declined at least 1.7 percent.
     Canadian Imperial Bank of Commerce climbed 1.3 percent to the highest in two months. CIBC’s quarterly profit surged 47 percent, lifted by the sale of its minority stake in a U.S. money manager. Toronto-Dominion Bank, the nation’s second- largest lender, slipped 0.1 percent despite higher profit from its U.S. retail operations and wholesale banking.
     Toronto-Dominion and CIBC join Royal Bank of Canada and Bank of Montreal in besting analysts’ expectations so far this week, weathering concerns about over-indebted consumers, a sluggish economy and rising impaired loans in the oil and gas industry. Bank of Nova Scotia, the nation’s third-largest lender, is on deck to report on Aug. 30.
     Raw-materials producers, meanwhile, rebounded as Kinross Gold Corp. and B2Gold Corp. gained more than 2.7 percent. The group posted a fourth-straight decline and the biggest drop in more than three months Wednesday.
     Gold futures in New York slipped 0.4 percent as investors await more clarity from the Federal Reserve on its intentions for interest-rate moves this year. Fed Chair Janet Yellen is set to speak Friday at an annual symposium in Jackson Hole, Wyoming. Traders have priced in 59 percent odds of a U.S. rate increase in December.
     Valeant Pharmaceuticals International Inc. added 2 percent, closing near the highest in three months to lift health-care companies. The shares recovered after losing 2.1 percent yesterday amid a selloff in U.S. drugmakers sparked by criticism from lawmakers and Democratic presidential candidate Hillary Clinton over drug prices.
     Raw-materials have trimmed their climb this year to 48 percent as the first-half surge in gold prices has stalled amid the uncertainty over central-bank policy. Gold is headed for a monthly drop that would cut gains this year to 25 percent. The materials group remains on track for the first annual advance in six years, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 21 percent in the same period, on pace for the strongest in seven years.
     That’s boosted the Canadian equity benchmark to a more than 12 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.3 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.

 US
By Anna-Louise Jackson
     (Bloomberg) — Sentiment is turning against defensive companies in the U.S. stock market alarmingly quickly.
     Shares of soapmakers, utility providers and phone companies are falling out of favor and fast, marking one of the S&P 500 Index’s biggest reversals of the year. The latest to fade are consumer-staples stocks, which just slumped below the 50-day moving average monitored by chart watchers. A selloff in drugmakers Wednesday also sent health-care shares below that level. The only other industries within the benchmark that have breached deeper short-term technical thresholds? Utilities and telecom stocks.
     It’s an about-face for investors who spent the 10 months after last August’s market meltdown clinging to those industries’ high-dividend, low-volatility shares as bond yields plunged and the outlook for economic growth dimmed. That appetite has evaporated since the selloff that followed the U.K. secession vote, with leadership in the S&P 500 shifting to technology, financial and industrial shares.
     “As the market broke out, the defensives have been underperforming and it’s just a continuation of that,” said Jonathan Krinsky, chief market technician at MKM Partners LLC in New York, who last month recommended investors begin selling the shares. “These sectors should continue to underperform the market as their relative trends have been rolling over and continue to be in medium-term downtrends.”
     Krinsky’s bearish take isn’t unique. Bets are piling up against the industries, particularly in an ETF that tracks consumer-staples companies in the S&P 500. Short interest as a percentage of shares outstanding — now at 9.6 percent — is the highest since June 2015, data compiled by IHS Markit Ltd. show, and has nearly tripled since mid-June.
     U.S. stocks slipped for a second day while investors awaited a speech by Federal Reserve Chair Janet Yellen Friday for clues on the trajectory of borrowing costs. The S&P 500 fell 0.1 percent to 2,172.47 at 4 p.m. in New York, to a three-week low. The Dow Jones Industrial Average lost 33.07 points to 18,448.41, and the Nasdaq Composite Index declined 0.1 percent.
     Consumer-staples shares slipped for a third-straight session, the longest stretch in four weeks, while utilities were little changed and phone companies edged higher for the second time in six days. About 5.5 billion shares traded hands on U.S. exchanges, 19 percent below the three-month average.
     “You know that Janet Yellen is going to come out and say something, and you have no idea what,” said Ben Kumar, an investment manager at Seven Investment Management LLP in London. His firm manages 10 billion pounds ($13 billion). “Your sensible move would be to be a bit nervous. So there seems to be some sensible profit taking, or moving to cash, or just sitting on the sidelines.”
     The rally that drove the S&P 500 to a series of fresh records since early July has lost momentum amid hawkish remarks from Fed officials and uneven economic data. Pharmaceutical companies slumped for a second session, after leading declines yesterday as comments by lawmakers and Democratic presidential candidate Hillary Clinton renewed concern about potential changes in drug pricing. CVS Health Corp. and Express Scripts Holding Co. dropped at least 3.4 percent.
     The main U.S. equity benchmark has held within a roughly 30-point range for three weeks, while a two-day slide interrupted a period of tranquility that had the CBOE Volatility Index on track for its calmest August since 1994. The measure of market turbulence known as the VIX rose to a seven-week high after back-to-back gains, sending it toward the biggest monthly increase in a year.
     Investors are watching for signs of strengthening U.S. growth. A report today showed orders for business equipment in July climbed the most since January, while the number of Americans filing applications for unemployment benefits fell to the lowest level in five weeks, according to another measure.
     “The durable goods number came in better than expected, so that’s a positive,” Quincy Krosby, a market strategist at Prudential Financial Inc. in Newark, New Jersey, said by phone.“Whether or not the market takes every positive data point as a chance for Janet Yellen to be more hawkish, I can’t say. The market, especially in a deep part of the summer with low volume, is absolutely focused on that speech and rightly so.”
     Following the data, traders further pushed forward their expectations for a rate increase, pricing in a 30 percent probability of a move next month. They’re betting on a 57 percent chance the Fed will act by December, up from 36 percent at the end of July.
     Among shares moving on corporate news, Dollar General Corp. and Dollar Tree Inc. tumbled the most since 2009 after the discount retailers posted disappointing sales. Tiffany & Co. rallied 6.4 percent to a four-month high, as the luxury jewelry retailer’s quarterly profit topped analysts’ estimates. A clampdown on costs helped it weather sluggish demand from its affluent customers.

 

Have a wonderful evening everyone.

 

Be magnificent!

But if you are not connected with all living beings on earth,
you risk losing your relationship with humanity, with human beings.
We never truly look at a tree’s qualities; we never touch it to feel how solid it is, how rough its bark is,
to listen to the sound it makes.  Not the sound of the wind in the leaves,
nor the morning breeze that makes them rustle, but its own sound, the sound of the trunk,
the silent sound of the roots.  You have to be extremely sensitive to hear this sound.
It is not the noise people make, the chattering of thoughts, nor that of human quarrels and wars,
but the very sound of the universe.
Krishnamurti

As ever,

 

Carolann

 

Reading is to the mind what exercise is to the body.
                           -Sir Richard Steele, 1672-1729

 

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

Dear Friends,

Tangents:
On this day in 2011, Steve Jobs resigns as CEO of Apple.

Recent Numbers of Note:
129.2
Temperature (in degrees F.) in Mitribah, Kuwait, July 22, a record high for the Eastern Hemisphere and perhaps the world.

4.8
Billion (in dollars) paid by  Verizon to acquire Yahoo, one  of the pioneer internet portals.  In 2008, Yahoo turned down an offer of $44.6 billion from Microsoft.

20.2
Height gain (in centimeters; 7.95 inches) by South Korean women, on average, over the past 100 years, the most of any global group.

0
Videocassette recorders to be made worldwide this month, since Japanese company Sanyo ceased production in July.  At the peak of the company’s production, Sanyo made 15 million VCRs per month.

98
Billion packets of instant ramen noodles consumed globally in 2015.  In a lighthearted 2000 poll, Japanese ranked instant ramen as their nation’s most important 20^th century innovation.
PHOTOS OF THE DAY

A bee feeds on a lavender plant in Dublin, Ireland, on Wednesday. Clodagh Kilcoyne/Reuters

Swimmers take part in the annual Lake Zurich swimming event in Zurich, Switzerland, on Wednesday. Participants swim across the lake, a distance of 1,500 meters (4,921 ft.) Arnd Wiegmann/Reuters

People cool off in a fountain in a park as hot summer temperatures hit Paris on Wednesday. Pascal Rossignol/Reuters
Market Closes for August 24^th, 2016

Market Index	Close	Change
Dow Jones	18481.48	-65.82   -0.35%
S&P 500	2175.69	-11.21   -0.51%
NASDAQ	5217.695	-42.382   -0.81%
TSX	14627.80	-136.97
		-0.93%

International Markets

Market Index	Close	Change
NIKKEI	16597.30	+99.94
		+0.61%
HANG SENG	22820.78	-178.15
		-0.77%
SENSEX	28059.94	+69.73
		+0.25%
FTSE 100	6835.78	-32.73
		-0.48%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.033	1.023
CND. 30 Year Bond	1.643	1.639
U.S.    10 Year Bond	1.5577	1.5441
U.S. 30 Year Bond	2.2464	2.2306

Currencies

BOC Close	Today	Previous
Canadian $	0.77357	0.77440
US $	1.29270	1.29132
Euro Rate 1 Euro=		Inverse
Canadian $	1.45604	0.68679
US $	1.12635	0.88782

Commodities

Gold	Close	Previous
London Gold Fix	1327.25	1342.00
Oil	Close	Previous
WTI Crude Future	46.47	47.65

Market Commentary:
Canada
By Eric Lam
    (Bloomberg) — Canadian stocks tumbled the most in almost two months, as commodities producers sold off with metals prices and crude oil.
    The S&P/TSX Composite Index fell 0.9 percent to 14,626.24 at 4 p.m. in Toronto, its first decline in three days. Trading volume was 4.6 percent higher than the 30-day average. The S&P/TSX remains the second-best performing developed market in the world behind New Zealand.
     Barrick Gold Corp. and Goldcorp Inc. tumbled more than 9.3 percent as raw-materials producers fell 5.8 percent, a fourth- straight decline and the biggest drop in more than three months. Kinross Gold Corp. sank 11 percent, to the lowest close since April.
     Gold futures in New York lost 1.2 percent for the biggest drop in two weeks as investors await more clarity from the Federal Reserve on its intentions for interest-rate moves this year. Fed Chair Janet Yellen is set to speak Friday at an annual symposium in Jackson Hole, Wyoming. Traders have priced in 54 percent odds of a U.S. rate increase in December.
     Canadian Imperial Bank of Commerce and Toronto-Dominion Bank added at least 0.6 percent to lead financial services stocks higher. The two are set to report results on Thursday. Bank of Nova Scotia, which is on deck for Aug. 30, rose 1.8 percent.
     Royal Bank of Canada slipped 0.5 percent, even after third quarter profit jumped 7.5 percent from a year ago. Its City National purchase in the U.S. bolstered wealth management and capital markets earnings surged.
     Raw-materials producers have trimmed their climb this year to 47 percent during the current slide, still the top gainers among 10 industries in the S&P/TSX. The group is on track for the first annual advance in six years, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 21 percent in the same period, on pace for the strongest in seven years.
     That’s boosted the Canadian equity benchmark to a 12 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.3 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.
     Energy producers tumbled 1.1 percent Wednesday as oil dropped to the lowest in a week after government data showed U.S. crude inventories unexpectedly rose last week. Enbridge Inc. and TransCanada Corp. fell more than 1.3 percent.
     Valeant Pharmaceuticals International Inc. lost 2.1 percent, joining a late-day selloff among U.S. drugmakers, spurred by criticism over drug prices, that dragged the S&P 500 Index to its biggest decline in more than two weeks.

US
By Rita Nazareth, Joseph Ciolli and Anna-Louise Jackson
     (Bloomberg) — Stocks fell as heightened political and security risks rattled emerging markets, oil tumbled and U.S. biotechnology stocks had their biggest drop in two months as politicians decried drug price hikes.
     Developing-nation shares slid after Turkey launched a military operation in Syria, while North Korea conducted a missile test. South Africa’s rand sank as the nation’s finance minister refused to report to police amid a probe. Drugmakers dragged the S&P 500 Index lower as Mylan NV drew the ire of lawmakers over a price increase of a life-saving allergy shot, which Democratic presidential candidate Hillary Clinton dubbed “outrageous.” Oil sank on data showing U.S. stockpiles rose. Investors including foreign central banks and mutual funds bought a record amount at a Treasury debt sale.
     Market sentiment has seesawed in recent weeks amid wagers on how aggressive the Federal Reserve will be in its approach to monetary tightening as traders awaited Chair Janet Yellen’s speech on Friday. The angst was amplified by the recent flare- ups in emerging markets, which exposed the frailty of a rally spurred in part by investors seeking refuge from low or negative rates in developed economies. The late-session slide disrupted a recent period of tranquility that has seen the U.S. stock volatility gauge on track this month for its lowest mean level for any August since 1994.
     “You have the news about drug pricing, and you had oil come down a bit,” said Matt Maley, an equity strategist in New York at Miller Tabak & Co LLC. “I don’t know why we reacted to them later in the day, other than we’re getting close to Yellen’s speech on Friday.”
     The probability of a U.S. rate hike next month rose to 28 percent from 24 percent at the start of this week, and the chances by the end of the year increased to 54 percent, according to data compiled by Bloomberg from fed fund futures.
     In another sign of mixed U.S. economic data, the National Association of Realtors said sales of previously owned homes dropped more than forecast in July from a nine-year high. The report came a day after the Commerce Department said purchases of new homes unexpectedly jumped.
     MSCI’s global stock index dropped 0.5 percent at 4 p.m. in New York, erasing this week’s gains. A measure of emerging- market shares lost 1.1 percent. Turkish equities slumped 1.6 percent as the nation aims to force Islamic State militants away from its border and deter further advances by Syrian Kurds allied with separatists.
     The S&P 500 fell 0.5 percent, with losses accelerating in afternoon trading, led by Mylan NV’s 5.4 percent slide. Investors were spooked by Clinton’s comments, a reminder of critical remarks she made last year on drug prices which helped spur a 20 percent selloff in the Nasdaq Biotechnology Index.
     “The healthcare and biotech selloff was pretty significant — the comments from Hillary slapped these stocks all the way down,” said Dave Lutz, the head of ETF trading for JonesTrading Institutional Services. “Biotech is what took the wind out of the sails; nobody saw that coming. It reminds investors of the headline risk going into the election in this sector.”
     Teva Pharmaceutical Industries Ltd. also slumped after a U.S. agency invalidated two of the patents protecting Copaxone, a multiple sclerosis drug that generates 20 percent of its revenue.
     European equities climbed for a third day as a gauge of banks reached its highest level since the U.K. referendum on European Union membership. Italy’s UniCredit SpA surged 8 percent, while Commerzbank AG and UBS Group AG added at least 2.9 percent. At the same time, a measure of volatility is recording its lowest monthly average since March 2015.
     Strong demand at Wednesday’s Treasury five-year note auction added to evidence that markets aren’t yet wholly convinced that the Fed is poised to tighten policy this year.
     The lack of clarity on the timing of the Fed’s next move has confined Treasuries to tight trading ranges this month. Officials project the policy rate will rise this year, even as some have expressed longer-term concern that it may not climb to levels seen in previous economic cycles. Chair Yellen speaks Friday at a symposium in Jackson Hole, Wyoming.
      “The conditions for the Fed to hike rates again — above- trend growth, improved financial conditions, and rising inflation expectations — have not been met,” John Bellows, a money manager at Pasadena, California-based Western Asset Management Co., which oversees $460 billion of fixed-income assets, wrote Wednesday. “Yellen is likely to avoid the question of the timing of the next hike and focus instead on the bigger picture considerations.”
     Treasury five-year note yields were little changed at 1.14 percent, according to Bloomberg Bond Trader data. The yield on two-year securities was 0.76 percent, while the benchmark 10- year note yield was 1.56 percent.
     South Africa’s benchmark government bond yields due December 2026 surged 53 basis points to 9.05 percent. Finance Minister Pravin Gordhan said that he had done nothing wrong by authorizing the establishment of a special investigative unit when he headed the national tax agency and he wouldn’t obey a police instruction to present himself for questioning.
     The JPMorgan Chase & Co. gauge of currency price swings rose to 10.31, the highest since July 25.
     The Bloomberg Dollar Spot Index, which tracks the currency against 10 peers, rose 0.2 percent. The U.S. currency strengthened 0.4 percent to $1.1264 per euro, and 0.2 percent to 100.45 yen. The pound rose to a three-week high as data continued to suggest the U.K. economy is proving resilient to the secession vote.
     Most emerging-market currencies fell as South Africa’s rand sank to the lowest level in a month. South Korea’s won led losses in Asia after North Korea’s missile launch added to the mounting geopolitical tension in the region. Both Mexico’s peso and Brazil’s real rose.
     West Texas Intermediate for October delivery dropped 2.8 percent to close at $46.77 a barrel on the New York Mercantile Exchange.
     Crude inventories climbed by 2.5 million barrels in the week ended Aug. 19, according to an Energy Information Administration report. A Bloomberg survey ahead of the data had forecast inventories would fall by 850,000 barrels. Iran’s oil ministry said the country hasn’t yet decided whether to join informal OPEC talks next month in Algiers following a Reuters report that the nation had confirmed its attendance at the gathering.
     “We’re still in a fundamentally oversupplied market,” said Adam Wise, who helps run a $7 billion oil and natural gas bond and private equity portfolio at John Hancock in Boston. “The build was unexpected and comes amid a lot of OPEC chatter making for a sloppy, if range-bound market.”
     Copper fell for a fourth day, erasing its gains for the year, on surging inventories and signs of weak demand in China, the biggest consumer. Gold and silver also retreated.

Have a wonderful evening everyone.

 

Be magnificent!

We encounter this surprising paradox between us:
he Whole appears as a multitude,
the appearance is opposite to the truth,
and yet it is inseparably linked.
Rabindranath Tagore

As ever,

 

Carolann

 

Whenever and wherever human beings endure suffering and humiliation,
take sides.  Neutrality helps the oppressor, never the victim.  Silence
encourages the tormentor, never the tormented.
                                                  -Elie Wiesel, 1928-2016

 

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

Dear Friends,

Tangents:
August 23:
Nicola Sacco and Bartolomeo Vanzetti, two Italian-born anarchists, were sentenced to death for murder and robbery in America in 1927.  The public outcry against their conviction and execution is reflected in Vanzetti’s unforgettable words.
If it had not been for these things, I might have lived out my life talking at street corners to scorning men.  I might have died, unmarked, unknown, a failure.  Now we [Sacco and himself] are not a failure.  This is our career and our triumph.  Never in our full life could we hope to do such work for tolerance, for justice, for man’s understanding of man as now we do by accident.  Our words – our lives – our pains – nothing!  The taking of our lives – lives of a good shoemaker and a poor fish-pedlar – all!  The last moment belongs to us – that agony is our triumph.

Something I read this morning, thought it worth passing on:

10 THINGS THAT REQUIRE ZERO TALENT

BEING ON TIME
WORK ETHIC
EFFORT
BODY LANGUAGE
ENERGY
ATTITUDE
PASSION
BEING COACHABLE
DOING EXTRA
BEING PREPARED

PHOTOS OF THE DAY

The sun sets over the northern Gaza Strip as seen from the Israeli border, Israel on Tuesday. Amir Cohen/Reuters

Cows are driven down to the valley during the traditional ‘Alpfahrt’ – the ceremonial driving down of cattle from the alps to the valleys in autumn – from the ‘Soll’ alp, in Ruete, canton of Appenzell Innerrhoden, Switzerland on Tuesday. Gian Ehrenzeller/Keystone/AP
Market Closes for August 23^rd, 2016

Market Index	Close	Change
Dow Jones	18547.30	+17.88   +0.10%
S&P 500	2187.33	+4.69   +0.21%
NASDAQ	5260.078	+15.475   +0.30%
TSX	14763.26	+15.07
		+0.10%

International Markets

Market Index	Close	Change
NIKKEI	16497.36	-100.83
		-0.61%
HANG SENG	22998.93	+1.02
		—
SENSEX	27990.21	+4.67
		+0.02%
FTSE 100	6868.51	+39.97
		+0.59%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.023	1.024
CND. 30 Year Bond	1.639	1.639
U.S.    10 Year Bond	1.5441	1.5407
U.S. 30 Year Bond	2.2306	2.2349

Currencies

BOC Close	Today	Previous
Canadian $	0.77440	0.77219
US $	1.29132	1.29502
Euro Rate 1 Euro=		Inverse
Canadian $	1.45971	0.68507
US $	1.13040	0.88465

Commodities

Gold	Close	Previous
London Gold Fix	1342.00	1335.90
Oil	Close	Previous
WTI Crude Future	47.65	48.52

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks edged higher, overcoming a drag from falling raw-materials shares, as Bank of Montreal led gains in lenders after its quarterly results beat estimates.
     The S&P/TSX Composite Index rose 0.1 percent to 14,764.77 at 4 p.m. in Toronto, after rising as much as 0.3 percent, for the first back-to-back gains in two weeks. Trading volume Tuesday was 7.7 percent lower than the 30-day average. The S&P/TSX remains the second-best performing developed market in the world behind New Zealand.
     Bank of Montreal, Canada’s fourth-largest lender, added 2.3 percent to reach a record as third-quarter adjusted profit was C$1.94 a share, beating the C$1.81 average estimate of 15 analysts surveyed by Bloomberg. Net income climbed 4.4 percent from year-ago figures as U.S. banking and capital markets trading revenue rose. Royal Bank of Canada rose 1.7 percent to a 20-month high.
     Royal Bank is scheduled to report Wednesday, followed by Canadian Imperial Bank of Commerce and Toronto-Dominion Bank on Thursday. Bank of Nova Scotia is set for Aug. 30, and National Bank of Canada on Aug. 31. Financial services stocks increased 0.8 percent as only three of 10 main industries in the S&P/TSX advanced.
     Barrick Gold Corp. and Goldcorp Inc. each drifted to a loss of 1.8 percent as raw-materials producers fell 1.1 percent, erasing a morning increase. Gold futures in New York ended the day with a 0.2 percent climb, after swinging between gains and losses, as investors remain uncertain of the Federal Reserve’s plans for interest rates this year. Fed Chair Janet Yellen is set to speak Friday at an annual symposium in Jackson Hole, Wyoming. Traders have priced in nearly 54 percent odds of a U.S. rate increase in December.
     Raw-materials producers trimmed their climb this year to 56 percent, the biggest contributors to the rally in Canadian equities in 2016, as the top gainers among 10 industries in the S&P/TSX. The group is on track for the first annual advance in six years, an increase that would halt the longest yearly losing streak since 1988. Energy producers have gained 22 percent in the same period, on pace for the strongest in seven years. That’s boosted the Canadian equity benchmark to a 13 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S. peers, with a price-earnings ratio of 23.5 for the S&P/TSX, opening up a 15 percent premium over the S&P 500 Index.
     Energy producers rose 0.2 percent Tuesday, reversing an earlier decline as oil bounced back on speculation Iran may be more willing to cooperate with other producers seeking to freeze output. Reuters reported Iran is sending “positive signals” it may support joint action, according to unidentified OPEC and industry sources.
     TMX Group Ltd. lost 1.6 percent, capping a three-day slide of 7.5 percent that’s the worst since December. Three of Canada’s largest pension funds sold a combined 10 percent stake in the operator of the Toronto Stock Exchange for about C$312 million, cutting by almost half their holdings in the stock.

US
By Joseph Ciolli
     (Bloomberg) — What do you do when volatility dissipates and the stock market gets mired in its sleepiest stretch since before the internet bubble? Buy momentum, of course.
     An exchange-traded fund tracking shares that have risen the most in recent months has absorbed more than $400 million since the start of June, the most ever for a period of that length. The ETF has gained 4.7 percent over the 12 weeks, outpacing more popular smart-beta strategies like low-volatility and value, as well as the S&P 500. The benchmark gauge added 0.2 percent to 2,186.90 at 4 p.m. in New York, after briefly topping its record closing high of 2,190.15 reached on Aug. 15.
     The flows are another example of bullish positioning in a market that, while up almost 20 percent since reaching lows in February, lately has refused to budge. They join bears covering short bets and hedge funds speculating on declines in the CBOE Volatility Index in the ranks of investors wagering against an imminent collapse in equity prices.
     “The move into momentum is affirmation that investors see an upward trend,” said John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York. “Market fears are evaporating. Investors that have sat on the sideline are finally gaining confidence and deciding they want to participate.”
     The iShares MSCI USA Momentum Factor ETF, which tracks the biggest stock-market gainers of the last six to 12 months, was little changed on Tuesday. The Dow Jones Industrial Average rose 17.88 points, or 0.1 percent, to 18,547.30, erasing most of an early 102-point jump. The Nasdaq Composite Index increased 0.3 percent, and also briefly exceeded its closing record. About 5.6 billion shares traded hands on U.S. exchanges, 18 percent below the three-month average.
     Among stocks in the iShares ETF, none have rallied more than Newmont Mining Corp. and Nvidia Corp. over the past 12 weeks. Already having surged more than 40 percent in 2016 through May, both companies added at least 33 percent over the period. AT&T Inc., which has the biggest weighting in the iShares ETF, has climbed 4.3 percent since the end of May, bringing its year-to-date increase to almost 19 percent.
     The S&P 500 has barely moved in the past four sessions while options traders have pushed the average level of the VIX to around 12 through yesterday, making this the calmest August since 1994. Outside of a jump that took equities to an all-time high on Aug. 15, the benchmark index has wobbled around the 2,180 level for two weeks. The measure trades at 18.6 times estimated earnings, at its highest levels in more than a decade.
     Investors will get more policy information on Friday when Federal Reserve Chair Janet Yellen gives a speech at the annual monetary policy symposium in Jackson Hole, Wyoming. In recent days, Fed Vice Chairman Stanley Fisher signaled that a 2016 rate hike is still under consideration, saying the U.S. economy is close to meeting the central bank’s goals. San Francisco Fed President John Williams said a hike in September is “in play,” while New York’s William Dudley warned that investors are underestimating the likelihood of a rate increase.
     “The earnings season is largely over and the only thing we can look at is Fed-speak, which is antagonizing,” Brian Frank, portfolio manager at Key Biscayne, Florida-based Frank Capital Partners LLC, said by phone. “We’re in the most aggressive dip- buying market I’ve ever seen. I wouldn’t even call the last two days a dip, but any little tiny decline seems to be an excuse to buy and talk about the Fed.”
     Traders are pricing in a 28 percent chance the central bank will raise its benchmark rate in September. December is now the first month showing at least even odds of an increase, from June about two weeks ago. A report today showed purchases of new homes unexpectedly jumped in July to the highest level in almost nine years, led by soaring demand in the nation’s south and adding to signs of persistent housing-market strength.
     Among shares moving, Monsanto Co. led gains in raw materials as it’s said to be closer to a merger with Bayer AG. Chipmakers extended their recent rally to boost the technology group, and Best Buy Co. surged almost 20 percent, the most in more than 15 years, after better-than-estimated quarterly results. J.M. Smucker Co. posted the steepest drop since 2012 after the company cut its annual sales forecast.
     HP Inc. and Tiffany & Co. are among the few remaining companies to report this week. Among S&P 500 members that have announced results so far, 79 percent have topped profit projections, while 56 percent beat sales estimates. Analysts predict net income fell 2.3 percent in the second quarter, and that it will slide 0.9 percent in the current period. That would mark a sixth consecutive quarterly drop, the longest since the financial crisis.

 

Have a wonderful evening everyone.

 

Be magnificent!

Amidst this chaos there is harmony, throughout these discordant sounds there is a note of concord,
and he who is prepared to listen to it will catch the tone.
Swami Vivekananda

As ever,

 

Carolann

 

Our revels now are ended.  These our
actors, / As I foretold  you, were all
spirits, and / Are melted into air,
into thin air, / And, like the baseless
fabric of this vision, / The cloud-
capped tower, the gorgeous
palaces, / The solemn temples, the
great globe itself –
Yea, all which it inherit – shall
dissolve And, like this insubstantial
pageant faded, / Leave not a  rack
behind.  We are such stuff / As
dreams are made on, and our little
life / Is rounded with a sleep.
      The Tempest, Act 4, Scene1.
 

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

Dear Friends,

Tangents:

Wasn’t that a fantastic finale to the Olympic games last night?  Wow!  Can hardly wait four more years until Tokyo.

We went to Seattle on Saturday to see Seattle Opera’s performance of Rossini’s Count Ory.  It was superb – from the talent to the choreography.  The story had the audience chuckling throughout the performance.  The visuals achieved with the help of holography were breathtaking.  And the costumes were simply perfect.

   In Encore, Jessica Murphy Moo writes, “Oh, to have been a fly on the wall when librettist Eugène Scribe delivered the final draft of Count Ory to Rossini.  Just imagine the scene.  It is merely four months before the 1828 premiere, hardly enough time to get the music written.  The two men sit in an office at the Paris Opera where much Is riding on this collaboration between two of the leading theater artists of the day.  Rossini reads the libretto intently.
   Scribe starts talking a little nervously, giving a quick overview.  ‘…And so then it ends with all three leads in the same bed together and no one knows who is who.’
   Rossini scratches his head.  He doesn’t look up.
   ‘Great opportunity for a love trio,’  Scribe says.
   ‘Not a love duet/’
   ‘I was really thinking trio.’
   Rossini keeps reading and somewhere realizes that Count Ory has some fun not only with sex but also with religion, and his Italian-Catholic-guilt-pulse quickens.  ‘Are you sure we can do this?’  he asks.
   ‘Bien sûr!’  Scribe replies.
   Rossini thinks on it for a moment, and then smiles.

On August 22, 1902, President Theodore Roosevelt became the first United States chief executive to ride in an automobile in public.
PHOTOS OF THE DAY

Prime Minister of Japan Shinzo Abe is seen on stage dressed as Super Mario at the closing ceremony of the Rio Olympics on Sunday. Stoyan Nenov/Reuters

Uniformed soldiers of the King of Norway’s Guard parade for inspection by their mascot, king penguin Nils Olav, at Edinburgh Zoo on Monday. It was announced that the penguin who had previously been knighted has been promoted and given the new title of ‘Brigadier Sir Nils Olav.’ Jane Barlow/PA/AP
Market Closes for August 22^nd, 2016

Market Index	Close	Change
Dow Jones	18529.42	-23.15   -0.12%
S&P 500	2182.42	-1.45   -0.07%
NASDAQ	5244.602	+6.223   +0.12%
TSX	14745.09	+57.63
		+0.39%

International Markets

Market Index	Close	Change
NIKKEI	16598.19	+52.37
		+0.32%
HANG SENG	22997.91	+60.69
		+0.26%
SENSEX	27985.54	-91.46
		-0.33%
FTSE 100	6828.54	-30.41
		-0.44%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.024	1.078
CND. 30 Year Bond	1.639	1.687
U.S.    10 Year Bond	1.5407	1.5781
U.S. 30 Year Bond	2.2349	2.2847

Currencies

BOC Close	Today	Previous
Canadian $	0.77219	0.77783
US $	1.29502	1.28562
Euro Rate 1 Euro=		Inverse
Canadian $	1.46632	0.68198
US $	1.13228	0.88318

Commodities

Gold	Close	Previous
London Gold Fix	1335.90	1346.40
Oil	Close	Previous
WTI Crude Future	47.05	48.52

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks rose, rebounding from early declines to halt a four-day slide, as advances in consumer and health-care companies overcame losses in natural-resource producers.
     The S&P/TSX Composite Index rose 0.4 percent to 14,748.19 at 4 p.m. in Toronto, after the benchmark fell as much as 0.5 percent. A rising U.S. dollar weighed on commodities, with the currency climbing after a Federal Reserve official signaled interest rates may rise this year. Trading volume was 10 percent lower than the 30-day average. 
     Consumer staples and health-care stocks jumped on corporate news, driving the S&P/TSX higher. Alimentation Couche-Tard Inc. climbed 7.5 percent to a record after the convenience store operator agreed to buy San Antonio-based CST Brands in a cash deal valued at almost $4 billion, its biggest-ever acquisition to expand its foothold in Texas and eastern Canada.
     In a separate transaction Couche-Tard has also agreed to sell the majority of CST’s Canadian business and assets to Parkland Fuel Corp. for C$965 million. Parkland shares jumped 16 percent to an all-time high.
     Valeant Pharmaceuticals International Inc. rallied 9.7 percent to its highest close in three months, after hiring Paul Herendeen as its new chief financial officer in the latest shakeup at the drugmaker attempting to turn around its business. It’s been a volatile August for Valeant, which has seen its wide swings in its shares amid a lawsuit from T. Rowe Price Group Inc., investigations from U.S. prosecutors and regulators, as well as an earnings outlook that cheered investors and resulted in several analyst upgrades.
     Raw-materials and energy producers were the only two of the S&P/TSX’s 10 main industries to end the day lower. Crude futures dropped 3 percent in New York to halt the longest run of gains in four years on concerns of increased supplies from Iraq and Nigeria. Gold fell a second day while copper led industrial metals lower on a growing chorus of hawkish comments from Fed officials.
     Crescent Point Energy Corp. and Cenovus Energy Inc. fell more than 1.3 percent, while Goldcorp Inc. lost 1.4 percent. Raw-materials producers remain the biggest contributors to the rally in Canadian equities in 2016, surging 57 percent as the top gainers among 10 industries in the S&P/TSX. It’s the best year-to-date performance for the category in at least 20 years, according to data compiled by Bloomberg. Energy producers have gained 22 percent in the same period.
     That’s boosted the Canadian equity benchmark to a 13 percent jump in 2016, rebounding from a slump last year that was the worst for the S&P/TSX since the 2008 financial crisis. The rally has made Canadian stocks more expensive than their U.S peers, with a price-earnings ratio of 23.5 for the S&P/TSX, opening up a 15 percent premium over the S&P 500 Index.
     U.S. stocks slipped and the dollar strengthened on rising speculation of an rate hike before the end of the year. Fed Vice Chairman Stanley Fischer said Sunday the U.S. economy is close to meeting the central bank’s goals and growth will pick up. Fischer’s remarks follow similar comments last week from policy makers Dennis Lockhart and William Dudley. Traders are now pricing in a 51 percent chance of a rate increase in December.

US
By Lu Wang
     (Bloomberg) — A rally in chip stocks is one of the only things to get excited about in a market that is indifferent to just about everything.
     Gains in the Philadelphia Stock Exchange Semiconductor Index are starting to take on historic dimensions. The gauge is up 20 percent this year after capping an eighth-straight weekly gain, the longest in two years; a ninth would be the most since 1995. Its 4 percent jump this month has occurred even as the broader market was flat, and the S&P 500 Index continued to drift Monday, slipping less than 0.1 percent to 2,182.64 at 4 p.m. in New York.
     Amid the calmest August since 1994, Strategas Research Partners LLC sees reason for optimism, going so far as to frame the rally in semiconductors as part of a “Dow Theory” for the electronic age. According to the New York-based firm, an argument can be made that the pervasiveness of microchips makes them the same kind of bellwether for growth that railroad stocks were when Dow Theory was formulated a century ago.
     One of the philosophy’s tenets was that gains in the Dow Jones Industrial Average were unlikely to last unless matched by strength in the Dow Jones Transportation Average.
      “We know this may vex traditionalists and we are not advocating a complete replacement of the traditional heuristic,” Jason Trennert, the firm’s chief investment strategist, wrote in a note to clients Monday. “But we wonder whether a better measure of market health in an economy increasingly based on the storage and transport of information technology might not be better based on the Nasdaq and the Philly Semiconductor Index.”
     Strength in chip stocks has boded well for future performance in the stock market. Based on a study by Sundial Capital Research on data going back to 1928 through June this year, there have been 11 times semiconductor shares broke higher when the S&P 500 was within 1 percent of its one-year high. All but one saw the market going up in the following three months, with the broad benchmark measure rising 2.5 percent on average.
     Semiconductors aren’t the only tech companies whose potency is on display. Fueled by three-year rallies in which Microsoft Corp. and Alphabet Inc. doubled, Amazon.com Inc. tripled and Facebook Inc. surged fivefold, computer and software stocks have increased to almost 21 percent of the S&P 500 Index’s value, near a 15-year high.
     The rally comes amid warnings from bears such as billionaire investor George Soros that stocks are at risk for a repeat of the 2008 crisis and turbulence have plunged. At an average of 12.03, the CBOE Volatility Index is trading lower than any August except for 1993 and 1994.
     In a year where widening valuations and demand for safety trades such as utilities and low-volatility shares have stirred anxiety, the resurgence in tech shows one cornerstone of the seven-year bull market is behaving as it normally does. The industry just delivered the biggest earnings beat among 10 S&P 500 groups and while third-quarter growth estimates just turned negative for the broad measure, tech companies are expected to expand profit by 2.8 percent.
     S&P 500 tech shares edged lower Monday, weighed by Apple Inc.’s 0.8 percent slide. The Dow slipped 23.15 points, or 0.1 percent, to 18,529.42, while the Nasdaq Composite Index rose 0.1 percent. Energy producers sank on crude’s biggest drop in three weeks, and biotechnology stocks rallied on Pfizer Inc.’s $14 billion buyout of Medivation Inc. While major indexes were little changed, they saw a series of whipsaw moves in light volume.
     “If tech gets to the point where they’re not growing at all, then it would be really a red flag — that would signal one of the strongest and fastest growing area of the economy is stalled out,” said Curtis Holden, a senior investment officer in Houston at Tanglewood Wealth Management, which oversees $870 million. “There is probably some realization in the market that ultimately for stock values to go up, there’s got to be some growth and tech has a little bit of edge.”
     A rally that brought equities to a series of all-time highs since early July has lost some momentum as investors mull extended valuations, skepticism over a recovery in corporate profits and mixed signals from policy makers over the timing for higher rates. The S&P 500’s price relative to future earnings has climbed to 18.6, the highest since 2002. In Monday’s trading, about 5.3 billion shares changed hands on U.S. exchanges, the lowest since March, and 22 percent below the three-month average.
     Attention will now turn to Fed Chair Janet Yellen’s Aug. 26 address in Jackson Hole, Wyoming. Focus is shifting back to the Fed as the earnings season ends. While most companies in the S&P 500 beat profit and sales forecasts last quarter, analysts project income for the September-ending period will fall 0.9 percent. That would mark a sixth consecutive drop, the longest since the financial crisis.
      “Clearly there is a battle going on between what seems to be a perfectly reasonable macro environment on the one hand, against the lack of positive earnings growth,” said Daniel Murray, head of research at EFG Asset Management in London. “Although earnings growth is beating expectations, in absolute terms, earnings growth has been quiet muted.”

Have a wonderful evening everyone.

 

Be magnificent!

Oh, if you only knew yourselves!  You are souls; you are gods.
Swami Vivekananda

As ever,

 

Carolann

 

If you want to live a happy life, tie it to a goal,
not to people or objects.
             -Albert Einstein, 1879-1955       

 

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