Category: Events

Dear Friends,

Tangents:

DRIVE-THROUGH COMEDY

British funnyman James Corden’s “The Late Late Show (CBS) may come on past your bedtime, but thanks to YouTube, you can get caught up on his hilarious and wildly entertaining Carpool Karaoke skits, in which he invites the likes of Rod Stewart, boy bank One Direction, Stevie Wonder to ride with him to work and sing along with the radio.  The latest passenger is Chris Martin  – too funny. 

Check it out at www.youtube.com/user/TheLateLateShow.

PHOTOS OF THE DAY

Lightning flashes above flowing lava as Sakurajima, a well-known volcano, erupts Friday evening in southern Japan. Kyodo News/AP

Strollers and a cyclist enjoy the sunset on the shore of Lake Zug Friday in Zug, Switzerland. Alexandra Wey/Keystone/AP

Market Closes for February 5^th, 2016

Market Index	Close	Change
Dow Jones	16204.97	-211.61   -1.29%
S&P 500	1880.05	-35.40   -1.85%
NASDAQ	4363.15	-146.414   -3.25%
TSX	12763.99	-10.51
		-0.08%

International Markets

Market Index	Close	Change
NIKKEI	16819.59	-225.40
		-1.32%
HANG SENG	19288.17	+105.08
		+0.55%
SENSEX	24616.97	+278.54
		+1.14%
FTSE 100	5848.06	-50.70
		-0.86%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.130	1.151
CND. 30 Year Bond	1.948	1.965
U.S.    10 Year Bond	1.8357	1.8446
U.S. 30 Year Bond	2.6683	2.6786

Currencies

BOC Close	Today	Previous
Canadian $	0.71865	0.72719
US $	1.39149	1.37516
Euro Rate 1 Euro=		Inverse
Canadian $	1.55262	0.64407
US $	1.11580	0.89622

Commodities

Gold	Close	Previous
London Gold Fix	1150.35	1156.35
Oil	Close	Previous
WTI Crude Future	30.89	31.72

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little changed on Friday, as gold and silver producers pared earlier losses triggered by data showing the economy lost jobs last month.

     The Standard & Poor’s/TSX Composite Index fell 10.51 points, or 0.1 percent, to 12,763.99 at 4 p.m. in Toronto, paring declines in the final hour of trading as raw-material shares advanced. The benchmark gauge capped a weekly drop of 0.5 percent, after posting wild swings of more than 140 index points for six straight days prior to Friday.

     Canada’s equity benchmark is the best-performing developed market in the world in 2016, after being among the worst in the past year. While the S&P/TSX entered a bear market last month, the gauge rallied from a two-and-a-half year low in January to trim declines for the year. It is currently down 1.9 percent for 2016.

     A report today showed Canada’s unemployment rate unexpectedly climbed to 7.2 percent from 7.1 percent in January while the number of jobs fell by 5,700. Economists surveyed by Bloomberg had projected a 6,000 increase. Alberta’s jobless rate rose to the highest since February 1996 at 7.4 percent.

     “The weaker than expected decline in employment in January was a poor start to the year and provides more evidence that the economy is struggling to cope with the collapse in oil prices,” said David Madani, senior Canada economist at Capital Economics in a note to clients. “The Bank of Canada will likely have no other choice but to cut interest rates further.”

     While the recently elected federal government led by Prime Minister Justin Trudeau is expected to introduce fiscal stimulus to help buffer the economy, that is not likely to have an effect until the second half of the year, and the jobless rate will increase to as high as 7.8 percent a year from now, Madani said.

     Separately, data showed the U.S. economy added 151,000 jobs in January, as hourly earnings improved from year-ago figures. A further tightening of labor conditions that sparks wage gains would help assure Federal Reserve policy makers inflation will reach its goal.

     Raw-materials producers jumped 2.7 percent, the most in the S&P/TSX. Goldcorp Inc. and Barrick Gold Corp. rose more than 5.1 percent as all 10 of the biggest gainers today were gold and silver producers. Spot gold climbed for a sixth day on Friday, while silver prices increased for a third day.

     Industrial and technology companies contributed the biggest declines to the S&P/TSX. Bombardier Inc. dropped 8.1 percent to the lowest since 1989. The Canadian government is pushing for changes to the embattled planemaker’s dual-class share structure in exchange for financial aid, officials familiar with the plans said.

     BlackBerry Ltd. dropped 3 percent, the most in three weeks, after the smartphone maker fired about 200 employees in Florida and Ontario in an effort to trim costs. Sierra Wireless Inc. sank 24 percent to a two-year low after forecasting 2016 earnings and revenue that fell short of analysts’ estimates.

     Genworth MI Canada Inc., a mortgage insurer, jumped 4.5 percent to a month high after reporting fourth-quarter earnings ahead of analysts’ estimates. About half of the 240 companies listed in the S&P/TSX are scheduled to report earnings over the next two weeks.

US

By Joseph Ciolli and Anna-Louise Jackson

     (Bloomberg) — The willingness of U.S. stock investors to abide price-earnings ratios stretching into three and four digits came under pressure Friday as the Nasdaq Composite Index fell to its lowest since October 2014.

     The jobs-day tumble in American equities turned into a full-blown selloff in stocks with the highest valuation. The Nasdaq Internet Index sank 5.2 percent, as Facebook Inc. lost 5.8 percent. Tableau Software Inc. tumbled more than 49 percent after a miss on licensing revenue, setting off a rout in data- analytics firms including Salesforce.com Inc. LinkedIn Corp. fell 44 percent after forecasting a year of slower revenue growth.

     The Nasdaq 100 Index lost 3.4 percent to 4,024.47 at 4 p.m. in New York, to the lowest since August. The Standard & Poor’s 500 Index fell 1.9 percent to 1,880.02, capping the second-worst week this year, down 3.1 percent. It was the gauge’s worst performance on the day of a U.S. jobs report since June 2012, when it plunged 2.5 percent. The Dow Jones Industrial Average dropped 211.75 points, or 1.3 percent, to 16,204.83.

     Stocks declined in inverse proportion to valuation, with a group of about 100 companies with the highest price-earnings ratios in the Russell 1000 Index declining more than 4.5 percent while the lowest gained 1.9 percent.

     “Investors are selling the big tech and large-cap names to stem any further losses — that’s what’s leading us down today,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “Economic numbers were mixed, and the market started off modestly down before starting to make new lows as it went along. You’ve seen profit-taking going into the weekend as well.”

     A report today showed job growth settled into a more sustainable pace in January and the unemployment rate dropped to an almost eight-year low, signs of a resilient labor market that’s causing wage growth to stir. While the increase in payrolls was less than forecast, it largely reflected payback for a seasonal hiring pickup in the final two months of 2015. Hourly earnings rose more than estimated after climbing in the year to December by the most since July 2009.

     The S&P 500 Technology Index fell 3.4 percent, its third decline in four days. Salesforce.com dropped 13 percent, while Adobe Systems Inc. and Red Hat Inc. lost at least 7.9 percent as Tableau’s tumble dragged down other software makers.

     LinkedIn reported a loss for the year ended Dec. 31. The company said income before items was $373 million for the 12 months, meaning its market value at Thursday’s close was almost 70 times earnings by that measure. Amazon trades at a price- earnings ratio of more than 400. The most expensive company in the Nasdaq Composite is Shutterfly Inc. with a multiple of more than 1,700, Bloomberg data show.

     “The market is starting to beat up a number of companies that had held up well or that were the 2015 momentum stocks,” said David Katz, who oversees about $680 million as chief investment officer at Matrix Asset Advisors Inc. in New York. “When you have a LinkedIn selloff of 45 percent, it just brings up people’s worst fears. Everybody’s trying to get out of a small exit.”

     Microsoft Corp. dropped for a fifth day, the longest losing streak in five months. Shares are down 9 percent since a 5.8 percent rally on Jan. 29 following the company’s better-than- expected earnings. A gauge of semiconductor stocks fell 3.3 percent, led lower by declines of more than 5.7 percent in Nvidia Corp., Skyworks Solutions Inc. and Broadcom Ltd.                       

     The Nasdaq Internet Index lost 5.2 percent, the most since 2011, to the lowest in more than a year. Facebook, Amazon and Priceline Group Inc. sank more than 5 percent, with Facebook posting its steepest retreat in 15 months.

     Apple Inc. ended the week as the world’s most valuable company, a title it relinquished on Tuesday to Google parent Alphabet Inc. Shares in Alphabet failed to sustain gains sparked by better-than-expected earnings and dropped 7.6 percent for the week, while the iPhone maker limited losses to 3.4 percent in the five days. Apple’s market capitalization of $521 billion surpassed Google’s by almost $50 billion.

     The Chicago Board Options Exchange Volatility Index climbed 7.1 percent Friday to 23.38. The measure of market turbulence known as the VIX rose 11 percent in January, its third straight monthly increase. About 9.4 billion shares traded hands on U.S. exchanges, 21 percent above the three-month average.

     Following the jobs data, the dollar rebounded from a slide that had helped boost commodity prices and optimism for profits at multinational companies, sending shares of raw-material and industrial companies higher in the previous two days. Whipsawing markets and global growth worries have made further rate hikes from the Federal Reserve less likely this year, putting pressure on the U.S. currency.                      

     “The market is trying to sort out what this means for the Fed,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird, which oversees $110 billion. “The report, in a vacuum, would suggest a March increase is back on the table. It was nice to see some wage gains for the first time in a while. It becomes a quandary for the Fed board now. This adds to the confusion over when the next rate hike will come.”

     Fed officials in comments this week urged patience in assessing the economy amid tighter financial conditions. Policy makers in December indicated four quarter-point rate increases might be warranted this year. Amid financial market turbulence and tepid data, investors have cut the probability they see of the Fed acting, pricing in just a 10 percent chance of a March increase and 17 percent odds in April, up from 15 percent just before the jobs report.

     Investors have been on guard for any signs in economic data or corporate earnings that weakness emanating from China is spilling over. With the U.S. earnings season more than midway through, about 77 percent of firms that have reported have beat profit estimates, though less than half posted better-than- expected sales. Analysts estimate earnings at index members fell 4.5 percent in the fourth quarter, better than Jan. 15 predictions for a 7 percent slump.

     Eight of the S&P 500’s 10 main industries declined today, with technology and consumer discretionary companies falling at least 3.1 percent. Seven groups slid more than 1 percent. Phone and utility shares were the only groups to gain. For the companies that tumbled the most today — Hanesbrands Inc., Salesforce.com Inc. and Hess Corp. — it was the worst day for all three stocks since 2008.                     

     Consumer discretionary companies in the benchmark fell for a fourth straight day to the lowest level in a year. Hanesbrands led the way, dropping 15 percent after its 2016 sales outlook fell short of analyst expectations.

     News Corp., the Wall Street Journal and New York Post publisher controlled by billionaire Rupert Murdoch, slid 9.1 percent to a record low after its quarterly profit missed estimates as advertising sales declined. Nike Inc. decreased 5 percent, the most since March 2014, and Netflix Inc., the S&P 500’s strongest performer last year, sank 7.7 percent to the lowest since last May.

     Restaurants were hammered amid speculation their profits could suffer from higher wage costs. Starbucks Corp. dropped 6.5 percent, the biggest one-day loss since 2012. Darden Restaurants Inc., McDonald’s Corp. and Taco Bell parent Yum! Brands Inc. all declined more than 3.5 percent.

     “After all the dust settles, people are going to continue to watch oil and the financial stocks,” said Matt Maley, an equity strategist at Miller Tabak & Co LLC in New York. “People are definitely looking at the macro issues right now more than they’re looking at earnings.”

 

Have a wonderful weekend everyone.

 

Be magnificent!

Though there is repulsion enough in Nature, she lives by attraction.

Mutual love enables Nature to persist.

Mahatma Gandhi

As ever,

 

Carolann

 

I frequently tramped eight or ten miles…to keep an appointment with a beech tree

or a  yellow birch or an old acquaintance among the pines.

                              -Henry David Thoreau, 1817-1862

 

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

Portfolio Manager &

Senior Vice-President

 

Dear Friends,

Tangents:

On February 4^th, 1813, Jane Austen wrote to her sister Cassandra:

Your letter was truly welcome, and I am much obliged to you all for your praise;  it came a t a right time, for I had had some fits of disgust.  Our second evening’s reading to Miss Benn [from Pride and Prejudice, just published] had not pleased me so well, but I believe something must be attributed to my mother’s too rapid way of getting on: and though she perfectly understands the characters herself, she cannot speak as they ought.  Upon the whole, however, I am quite vain enough and well satisfied enough.  The work is rather too light, and bright, and sparkling;  it wants shade;  it wants to be stretched out here and there with a long chapter of sense, if it could be had;  if not, of solemn specious nonsense, about something unconnected with the story;  an essay on writing, a critique on Walter Scott, or the history of Buonaparté, or anything that would form a contrast, and bring the reader with increased delight to the playfulness and epigrammatism of the general style.  I doubt your quite agreeing with me here.  I know your starched notions.

PHOTOS OF THE DAY

Revelers wearing sheepskin ‘busos’ costumes walk in the traditional carnival parade in Mohacs, Hungary, Thursday. The busos use various noisy wooden rattlers to drive away winter. Tamas Soki/MTI/AP

 

People perform ‘Ganghuoshaolong,’ or ‘burn dragon with iron fire,’ ahead of the upcoming Chinese Lunar New Year in Jishou, Hunan province, China. Reuters

Market Closes for February 4^th, 2016

Market Index	Close	Change
Dow Jones	16416.58	+79.92   +0.49%
S&P 500	1915.45	+2.92   +0.15%
NASDAQ	4509.559	+5.321   +0.12%
TSX	12774.50	+181.48
		+1.44%

International Markets

Market Index	Close	Change
NIKKEI	17044.99	-146.26
		-0.85%
HANG SENG	19183.09	+191.50
		+1.01%
SENSEX	24338.43	+115.11
		+0.48%
FTSE 100	5898.76	+61.62
		+1.06%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.151	1.154
CND. 30 Year Bond	1.965	1.972
U.S.    10 Year Bond	1.8446	1.8792
U.S. 30 Year Bond	2.6786	2.7074

Currencies

BOC Close	Today	Previous
Canadian $	0.72719	0.72608
US $	1.37516	1.37725
Euro Rate 1 Euro=		Inverse
Canadian $	1.54221	0.64842
US $	1.12147	0.89168

Commodities

Gold	Close	Previous
London Gold Fix	1156.35	1132.00
Oil	Close	Previous
WTI Crude Future	31.72	32.28

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied a second day, amid the most volatile stretch of trading so far this year, as metals prices extended a rebound and investors weighed earnings from some of the country’s largest companies.

     The Standard & Poor’s/TSX Composite Index rose 181.48 points, or 1.4 percent, to 12,774.50 at 4 p.m. in Toronto. The benchmark gauge has swung by more than 100 index points for six straight days, zigzagging between gains and losses, the longest streak by this measure in 2016.

     Even after a 1.8 percent slide so far in 2016, Canada’s equity benchmark is still the best-performing developed market in the world after rallying from a 2 1/2-year low in January. The S&P/TSX also entered a bear market earlier in the month, as investors fled risky assets amid mounting concerns about growth in Europe, China and the U.S. Investors are also examining corporate health, with about half of the 240 companies listed in the S&P/TSX scheduled to report earnings over the next two weeks.

     First Quantum Minerals Ltd. soared 34 percent as raw- materials companies led Canadian shares higher, joining the biggest rebound in global mining stocks since the financial crisis. Metals from copper to zinc advanced. Teck Resources Ltd., Canada’s largest diversified miner, jumped 13 percent.

     Gold producers advanced as the price of the precious metal extended its longest rally in five months as the U.S. dollar fell on lower rate expectations. Goldcorp Inc. jumped 5.1 percent, the highest since October.

     Energy producers and industrial stocks increased. Suncor Energy Inc. added 0.9 percent as the oil-sands producer cut spending by about 10 percent after posting a surprise quarterly loss.

     Oil retreated in New York, erasing an earlier gain, as U.S. stockpiles climbed to the highest since the 1930s. President Barack Obama will propose a $10 per barrel tax on oil in his fiscal 2017 budget to help pay for transportation improvements, the White House said.

     Railway operators Canadian National Railway Co. and Canadian Pacific Railway Ltd. jumped more than 3.1 percent.

     BCE Inc., Canada’s largest telecommunications company, rose 1.4 percent after raising its dividend and reporting fourth- quarter profit that matched analysts’ estimates.

US

By Oliver Renick and Jiayue Huang

     (Bloomberg) — U.S. stocks rose for a second day amid a rally in raw-material and industrial shares, as dollar weakness boosted commodity prices and optimism for profits at multinational companies.

     Freeport-McMoRan Inc. and Alcoa Inc. rallied at least 10 percent, with Alcoa posting its best two-day gain in nearly seven years. Caterpillar Inc. increased 4.3 percent, while General Electric Co. added 1.8 percent. Consumer companies were the worst performers, with Ralph Lauren Corp. tumbling the most ever after cutting its annual forecast, while Kohl’s Corp. lost 19 percent as slow fourth-quarter sales weighed on earnings.

     The Standard & Poor’s 500 Index rose 0.2 percent to 1,915.45 at 4 p.m. in New York, after swinging between gains and losses throughout the session. The Dow Jones Industrial Average added 79.92 points to 16,416.58. The Nasdaq Composite Index climbed 0.1 percent, after erasing a 0.9 percent slide. About 9.5 billion shares traded hands on U.S. exchanges, 22 percent above the three-month average.

     “The lower the dollar, the better it is for commodities, so we are seeing a little bounce back,” said Andrew Brenner, head of international fixed income at National Alliance Capital Markets in New York. “As long as oil can stabilize, I think things will come back. And as long as interest rates stay low, I think equities can bounce significantly.”

     A steep drop in the dollar sparked equity gains yesterday led by energy and raw-material shares, halting the S&P 500’s two-day slide to start the month. The rout in the U.S. currency accelerated after data showed expansion in services industries was the slowest in nearly two years, rekindling worries about the strength of U.S. growth.

     Stocks had their worst January since 2009 as concerns that a slowdown in China will spread and plummeting commodity prices unnerved investors. The benchmark index is 10 percent below its all-time high set in May.

     “The fall in the dollar is a two-edge sword for the U.S.,”  said Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich. “It’s good for earnings, which have been reasonable against low expectations, but it’s incrementally driven by a weakening economic outlook, which is not necessarily positive.”                          

     Investors are on guard for any signs China weakness is spilling over. A report today showed the number of Americans filing applications for unemployment benefits rose last week, while separate data showed worker productivity slumped in the fourth quarter by the most in almost two years, leading to a pickup in U.S. labor costs that threaten corporate profits.

     Another gauge showed factory orders in December fell 2.9 percent, slightly worse than the forecast for a 2.8 percent decline, based on economists surveyed by Bloomberg. Focus will now turn to the government’s monthly nonfarm payrolls report tomorrow.

     With the U.S. earnings season more than halfway through, 78 percent of the S&P 500 companies that have reported beat profit estimates, while less than half posted better-than-expected sales. Analysts estimate earnings at index members fell 5.6 percent in the fourth quarter, better than Jan. 15 predictions for a 7 percent slump.

     “The question is what can we hang our hat on right now? It’s not earnings, it’s not what central banks are able to do, and it’s certainly not what we’re seeing with economic data,” said Yousef Abbasi, global market strategist at JonesTrading Institutional Services LLC in New York. “Central banks continue to take their targets down on growth and inflation and part of today’s frustration came with the whippiness of crude.”

     The Chicago Board Options Exchange Volatility Index rose 0.9 percent to 21.84. The measure of market turbulence known as the VIX climbed for a third straight month in January, the longest such streak in 2 1/2 years.

     Among the S&P 500’s 10 main industries, raw-material and industrial companies increased at least 1.7 percent, while financial shares added 0.9 percent as banks gained. U.S. Bancorp and JPMorgan Chase & Co. increased more than 1.7 percent as the group rose for the first time in three days. Consumer staples and discretionary stocks sank more than 0.5 percent.

     Freeport-McMoRan rallied 18 percent to bring its two-day climb to 31 percent, the biggest such gain since August. The copper producer’s shares dropped 32 percent in January. Monsanto Co. added 6.5 percent, its strongest in five months, to pace the rally in raw-materials as the group rebounds from the worst monthly decline in more than four years.

     Transportation companies were among the strongest performers Thursday, with Ryder System Inc.’s 9.2 percent increase leading the gains, the company’s best since 2009. Railroads Union Pacific Corp. and Kansas City Southern added more than 4.5 percent. Similar to the raw-materials group, transports are also snapping back from the worst monthly drop since 2011.

     The railroads also helped support the gains among industrial companies, while General Electric and United Technologies Corp. rose more than 1.7 percent to pace the advance. Engine maker Cummins Inc. surged 7.6 percent, the most in more than four years, after its quarterly sales exceeded estimates.

     Technology shares erased declines in trading’s final hour to close little changed. Increases of more than 2.1 percent in International Business Machines Corp. and Oracle Corp. offset drops of more than 1.9 percent in Google parent Alphabet Inc.  and Facebook Inc. Alphabet had its biggest two-day drop since August.

     Consumer discretionary shares slid for a third day, the longest losing streak in four weeks. Home Depot Inc. and Nike Inc. fell at least 2.1 percent to weigh the most, followed by Kohl’s, with its 19 percent plunge the biggest drop on record going back to 1992.

     Mattel Inc. rose 1.7 percent and Hasbro Inc. added 1.2 percent after people familiar with the matter said the two toymakers have held talks about merging. Among other consumer shares rising, Whirlpool Corp. gained 3.5 percent after Goldman Sachs Group Inc. upgraded the shares to buy from neutral.

     Merck & Co. fell 2.9 percent, the most since September, to weigh on health-care shares. The drugmaker closed 0.7 percent lower yesterday, after losing as much as 3.6 percent following quarterly results that showed sales of its diabetes drugs missed estimates. Pharmacy benefits manager AmerisourceBergen Corp. lost 4.1 percent to a 15-month low after trimming the top end of the range in its full-year profit forecast.

 

Have a wonderful evening everyone.

 

Be magnificent!

Only the intelligence of love and compassion can solve all problems of life.

Krishnamurti

As ever,

 

Carolann

 

There  is only one success – to be able to spend your life in your own way.

                                                          –Christopher Morely, 1890-1957   

 

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:

PRIME NUMBERS:

1 BILLION: People worldwide who moved from rural areas to cities between 2000 and 2014.

6.9: Percentage growth rate of China’s economy in 2015, the lowest in 25 years.  Some see it as a positive sign of a shift away from manufacturing to consumption and services.

76,156: Miles cycled in one year by US ultramarathon cyclist Kurt “Tarzan” Searvogel on January 10^th.  He broke a long-standing record of 75,065 miles set by British cyclist Tommy Godwin in 1939.

7,355: US patents earned in 2015 by IBM, the leader for the 23^rd year in a row.  Most were in the areas of artificial intelligence and cloud storage.  Samsung was second with 5072.

100: species of arthropods in the typical American home.  These include ants, beetles, millipedes, pill bugs, flies, moths and spiders.

62: Super-rich people, 53 of them men, who control the same amount of wealth as the poorest 3.6 billion people.  In 2010, nearly 390 people shared that much global wealth.

PHOTOS OF THE DAY

A Super Bowl 50 sign stands in a park overlooking San Francisco Wednesday. The Denver Broncos will play the Carolina Panthers Sunday, Feb. 7, in Santa Clara, Calif. Charlie Riedel/AP

An air force officer holds Sri Lanka’s national flag as the sun sets at Galle Face Green in Colombo, Sri Lanka, Wednesday. Sri Lankans will celebrate their 68th Independence day on Feb. 4th. Dinuka Liyanawatte/Reuters

Market Closes for February 3^rd, 2016

Market Index	Close	Change
Dow Jones	16336.66	+183.12   +1.13%
S&P 500	1912.53	+9.50   +0.50%
NASDAQ	4504.238	-12.708   -0.28%
TSX	12593.02	+150.76
		+1.21%

International Markets

Market Index	Close	Change
NIKKEI	17191.25	-559.43
		-3.15%
HANG SENG	18991.59	-455.25
		-2.34%
SENSEX	24223.32	-315.68
		-1.29%
FTSE 100	5837.14	-84.87
		-1.43%

Bonds

 

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.154	1.119
CND. 30 Year Bond	1.972	1.944
U.S.    10 Year Bond	1.8792	1.8448
U.S. 30 Year Bond	2.7074	2.6560

Currencies

BOC Close	Today	Previous
Canadian $	0.72608	0.71159
US $	1.37725	1.40530
Euro Rate 1 Euro=		Inverse
Canadian $	1.52930	0.65389
US $	1.11010	0.90082

Commodities

Gold	Close	Previous
London Gold Fix	1132.00	1128.50
Oil	Close	Previous
WTI Crude Future	32.28	29.88

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rebounded to halt a two-day retreat, reversing earlier losses, amid advances by materials and energy producers.

     Canadian Natural Resources Ltd. and Goldcorp Inc. surged as commodity companies led a recovery in Canadian equities. Rona Inc. shares doubled after a friendly takeover deal from U.S. rival Lowe’s Cos. Equities slumped earlier amid a drop in shares of Valeant Pharmaceuticals International Inc. and financial companies.

     The Standard & Poor’s/TSX Composite Index rose 1.2 percent to 12,593.02 at 4 p.m. in Toronto, erasing earlier losses of as much as 1 percent. The benchmark gauge halted a two-day loss of 3 percent that started February.

     Even with a 3.2 percent drop so far in 2016, Canada’s equity benchmark remains the second-best performing developed market in the world behind New Zealand after rallying from a 2 1/2-year low in January. The S&P/TSX also entered a bear market earlier in the month.

     Raw-material companies rallied the most as the price of gold climbed for a fourth day to a three-month high. Yamana Gold Inc. jumped 10 percent for the biggest gain since November, while Goldcorp Inc. added 8.2 percent. Energy producers rallied with the price of crude as the falling dollar countered data showing a steep gain in U.S. inventories.

     Rona shares surged a record 98 percent to an eight-year high, after the home-improvement retailer agreed to sell itself to rival Lowe’s for C$3.2 billion ($2.3 billion) in cash. Lowe’s will pay C$24 per share, more than double yesterday’s closing price of C$11.77, according to a statement.

     Indigo Books & Music Inc. surged 15 percent, the most in more than four years, after third-quarter earnings and revenue climbed.

     Valeant, briefly the largest company in Canada by market capitalization last year, gained to erase an earlier decline of as much as 5.5 percent after the U.S. House Oversight and Government Reform Committee released two memos late Feb. 2 detailing internal corporate documents from Valeant and Turing Pharmaceuticals on drug prices. The memos were in preparation for a hearing on skyrocketing prescription prices Thursday.

     Manulife Financial Corp. fell to a two-week low, amid concern China may place restrictions on the buying of overseas insurance. Shares of the nation’s largest life insurer have tumbled 6.7 percent in three days.

US

By Oliver Renick and Dani Burger

     (Bloomberg) — U.S. stocks rose for the first time in three days as commodity producers rallied with crude oil, overshadowing concerns that weakness in global growth is spreading.

     Equities stormed higher in afternoon trading as crude futures jumped 8 percent as the dollar touched its lowest levels since 2009. Gains in energy and raw-materials sparked a broader advance that helped banks trim sharp declines. Exxon Mobil Corp. and Chevron Corp. advanced at least 4.1 percent, while Freeport- McMoRan Inc. gained more than 11 percent.

     The Standard & Poor’s 500 Index climbed 0.5 percent to 1,912.53 at 4 p.m. in New York, after erasing an earlier drop of 1.6 percent. The Dow Jones Industrial Average rallied 183.12 points, or 1.1 percent, to 16,336.66, wiping out a drop of nearly 200 points. The Nasdaq Composite Index slipped 0.3 percent, after losing as much as 2.1 percent. About 10 billion shares traded hands on U.S. exchanges, 31 percent above the three-month average.

     “Worries about a U.S. recession have pushed the dollar lower and perhaps moved the Fed off the table,” said John Canally, chief economic strategist at LPL Financial Corp. in Boston. “Because of that, coupled with OPEC news and oil moving higher, we’re having highs of the day. For stocks, it’s all about oil today.”

     Equities lurched between gains and losses today as economic data rekindled worries about the strength of U.S. growth, while a tumble in the dollar helped send oil rocketing higher and boosted commodity producers.

     A report today showed service industries expanded in January at the slowest pace in nearly two years, raising the risk that persistent weakness in manufacturing is starting to spread to the rest of the U.S. economy. The services slowdown comes as investors are on guard for signs that weakness in China is spilling over.

     A separate reading today showed U.S. companies added a stronger-than-forecast 205,000 workers to payrolls in January. Focus will begin to shift to the government’s January employment report Friday, which is estimated to show the economy added 190,000 jobs, according to economists surveyed by Bloomberg.

     The equity benchmark halted a two-day slide to start the month, with U.S. stocks coming off their worst January since 2009 as concerns about a slowdown in China and plummeting commodity prices unnerved investors. The S&P 500 is 10 percent below its all-time high set in May.

     Beyond oil and economic data, earnings reports also had some influence on stocks Wednesday. Oreo cookie maker Mondelez International Inc. fell 6.5 percent, the biggest drop in seven years, as its profit missed estimates. Gilead Sciences Inc. rose 4.5 percent as quarterly profit beat predictions and the company added $12 billion to its share buyback program. Yahoo! Inc. slumped 4.8 percent after its results, and signals that its core assets may be up for sale.

     With the U.S. earnings season about midway through, some 80 percent of companies in the S&P 500 that have reported beat profit estimates, but less than half posted better-than-expected sales. Analysts estimate earnings at index members fell 5.6 percent in the fourth quarter, better than Jan. 15 predictions for a 7 percent slump.

     The Chicago Board Options Exchange Volatility Index fell 1.5 percent Wednesday to 21.65. The measure of market turbulence known as the VIX earlier jumped as much as 26 percent when equities fell to session lows following data showing larger- than-forecast oil stockpiles.

     “This is an emotional, sentiment-driven market, and it’s likely to remain tied to oil,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “Nerves are pretty frayed after yesterday’s decimation with the deterioration in oil prices spilling over into equity markets.”

     Among the S&P 500’s 10 main industries, energy and raw- material producers rallied at least 3.3 percent to propel Wednesday’s advance. Industrial, utilities and phone companies added more than 1.1 percent. Financials finished little changed, after earlier losing nearly 3 percent, as banks pared a selloff. Technology shares slipped 0.4 percent, trimming a drop of as much as 2 percent.

     Raw-materials producers rose as commodity prices rallied amid a weaker dollar, with the Bloomberg Dollar Spot Index touching its lowest level in almost seven years. Newmont Mining Corp. and Freeport-McMoRan Inc. surged at least 11 percent, with Newmont capping its biggest gain since 2008.

     “I’m looking at the dollar breaking through support levels and it’s the biggest move we’ve seen in a while,” said LPL Financial’s Canally. “It’s becoming less and less of a headwind for corporations, and today it’s certainly less of a headwind for oil.”

     Murphy Oil Corp. and Chesapeake Energy Corp. climbed at least 10 percent to lead the advance among energy companies. West Texas Intermediate crude futures jumped 8 percent, after erasing a drop of as much as 1.6 percent, as the falling dollar countered any concerns about U.S. crude inventories rising to more than 500 million barrels for the first time since 1930.

     Retailers were a drag on consumer discretionary shares as Amazon.com Inc. fell 3.8 percent, down for a fourth day to the lowest since Oct. 1. Lowe’s Cos. tumbled 6.2 percent after agreeing to buy rival Rona Inc. for C$3.2 billion ($2.3 billion) in cash to create one of Canada’s biggest home-improvement retailers. Home Depot Inc. dropped 1.2 percent.

     A day after wresting away the crown of most valuable company from Apple Inc., Google parent Alphabet Inc. gave it right back as its A class shares sank 4 percent, the most since August. Apple added 2 percent. Microsoft Corp. and Facebook Inc. fell more than 1.5 percent to weigh on the technology group. Autodesk Inc. rallied 8 percent, its biggest in three months amid a restructuring plan that includes cutting about 10 percent of its staff.
 

Have a wonderful evening everyone.

 

Be magnificent!

It is in the very heart of our activity that we search for our goal.

Rabindranath Tagore

As ever,
 

Carolann

 

The journey of a thousand miles begins with one step.

                                      -Lao Tzu, 601 BC-531 BC

 

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:

Groundhog’s Day:

On February 2, feisty Punxsutawney Phil gets hauled out of his Pennsylvania home to see if he can see his shadow.  If he does, then we’ll have six more weeks of winter; if he doesn’t spring is on the way  (in about six weeks).  The prognosticating tradition makes perfect sense, because anyone who’s lived in the north knows that the clear, bright days of winter tend to be the coldest – and their brilliant sun casts the best shadows.

  Groundhog’s Day comes halfway between winter solstice, December 21^st,  and the spring equinox, March 20^th, and like many traditions, its origin rests with life’s basic needs – in this case, when will spring come so we can put seeds in the ground?  In Europe, people long looked for signs of hibernating mammals coming out into the light to tell them warm weather was ahead.  Immigrants brought that practice to North America, and in the 1880’s a group of friends in Punxsutawney, Pennsylvania, started going into the woods every February 2^nd to look for groundhogs – also known as woodchucks – to show them if winter was on its way out.  By 1887, it was a full-fledged event.

  The first days of February also mark several other ancient festivals and feast days, such as Candlemas and Imbole, all having to do with light, fire, and the coming of spring.

 See www.groundhog.org.

SPRINGTIME SPLENDOR

Springtime splendor, springtime sweet,
how soon will it be?
If there’s no shadow at your feet,
it may come suddenly
Springtime splendor, springtime true,
may be on its way
But if all the sky is blue,
winter’s here to stay.

                      -Don Halley

PHOTOS OF THE DAY

In this image released by the Dutch Police Tuesday, a trained eagle puts its claws into a flying drone. Police are working with a Hague-based company that trains eagles and other birds to swoop down on small drones and grasp them in their talons in restricted areas or where they are banned, such as at large outdoor events. Dutch Police/AP

Groundhog co-handler John Griffiths holds up Punxsutawney Phil after Phil’s annual weather prediction of an early spring on the 130th Groundhog Day in Punxsutawney, Pa., Tuesday. Alan Freed/Reuters

Market Closes for February 2nd, 2016

Market Index	Close	Change
Dow Jones	16153.54	-295.64   -1.80%
S&P 500	1903.03	-36.35   -1.87%
NASDAQ	4516.945	-103.421   -2.24%
TSX	12442.26	-232.11
		-1.83%

International Markets

Market Index	Close	Change
NIKKEI	17750.68	-114.55
		-0.64%
HANG SENG	19446.84	-148.66
		-0.76%
SENSEX	24539.00	-285.83
		-1.15%
FTSE 100	5922.01	-138.09
		-2.28%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.119	1.229
CND. 30 Year Bond	1.944	2.047
U.S.    10 Year Bond	1.8448	1.9486
U.S. 30 Year Bond	2.6560	2.7625

Currencies

BOC Close	Today	Previous
Canadian $	0.71159	0.71685
US $	1.40530	1.39498
Euro Rate 1 Euro=		Inverse
Canadian $	1.53503	0.65145
US $	1.09231	0.91549

Commodities

Gold	Close	Previous
London Gold Fix	1128.50	1126.50
Oil	Close	Previous
WTI Crude Future	29.88	31.62

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks retreated a second day as crude prices dropped below $30 a barrel before weekly U.S. government stockpile data and the first of the nation’s energy producers reported a slump in quarterly earnings, hinting at more carnage for the beleaguered industry.

     Imperial Oil Ltd. lost 1.8 percent for a third straight decline after saying fourth-quarter profit sank 85 percent. WestJet Airlines Ltd. plunged 11 percent for the biggest one-day drop in 13 years after quarterly earnings missed estimates.

     The Standard & Poor’s/TSX Composite Index fell 1.8 percent to 12,442.26 at 4 p.m. to join a global selloff in equities, as crude’s renewed plunge in February erased memories of its brief rally at the end of last month.

     Even with a 4.4 percent drop so far in 2016, Canada’s equity benchmark remains the second-best performing developed market in the world after rallying from a 2 1/2-year low to close a see-saw January. The S&P/TSX also entered a bear market earlier in the month.

     The resource-rich S&P/TSX is closely linked to commodity prices with raw-materials and energy producers making up about 28 percent of the overall gauge. Crude in New York has tumbled 11 percent this week, capping the biggest two-day drop since 2009. U.S. government stockpile data is forecast to show an increase in supplies, exacerbating a global glut.

     Calgary-based Imperial Oil is the first of 55 Canadian energy companies in the S&P/TSX to report quarterly earnings. About half of the 240 companies in the benchmark Canadian equity gauge are scheduled to report over the next two weeks.

     Imperial Oil, the Canadian affiliate of Exxon Mobil Corp., reported net income in the quarter fell to 12 cents a share from 79 cents a year earlier. Output for the company in the quarter averaged 400,000 barrels per day, compared with 315,000 barrels a year earlier, the company said. Irving, Texas-based Exxon Mobil meanwhile posted its steepest annual profit decline in more than a decade.

     Energy stocks sank 2.7 percent as nine of 10 industries in the S&P/TSX fell. Utilities stocks were the only group to advance. Royal Bank of Canada and Manulife Financial Corp. retreated at least 1.7 percent to lead the nation’s largest financial services companies lower.

     Sliding share prices among the nation’s largest lenders amid investor concerns about earnings growth and rising loan losses has resulted in bank dividend payouts four times greater than Canada’s benchmark government bond yield, the most in more than a decade, according to data compiled by Bloomberg.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks retreated, with the Dow Jones Industrial Average losing more than 290 points, as investors shunned risk assets across the world while oil extended a selloff amid deepening concern that global growth is weakening.

     Energy producers and banks were hit hard, with Chevron Corp. and JPMorgan Chase & Co. falling more than 3.1 percent. Exxon Mobil Corp. dropped 2.2 percent after posting its fifth- straight quarterly profit decline. Class A shares in Google parent Alphabet Inc. rose 1.3 percent to surpass Apple Inc. as the world’s most valuable company after results at its main business topped estimates.

     The Standard & Poor’s 500 Index fell 1.9 percent to 1,903.03 at 4 p.m. in New York, the steepest decline in more than two weeks. The Dow lost 295.64 points, or 1.8 percent, to 16,153.54. The Nasdaq Composite Index declined 2.2 percent. About 8.5 billion shares traded hands on U.S. exchanges, 11 percent above the three-month average.

     “We’re going back to what we saw in the beginning of the year with energy, materials, financials continuing to be under pressure,” said Omar Aguilar, chief investment officer of equities at Charles Schwab Investment Management in San Francisco. “The level of risk aversion in January went through the roof. Friday was an end-of-month relief rally — nothing serious has suggested sentiment has changed direction.”

     The oil rout and worries about a China slowdown have continued to roil global markets, erasing as much as $2.4 trillion from the value of U.S. equities this year. While the S&P 500 recouped some losses in the past two weeks, trimming its worst start to a year since 2009, bearish sentiment has returned. The benchmark is down almost 11 percent from its all- time high set in May.

     The Chicago Board Options Exchange Volatility Index rose 10 percent Tuesday to 21.98, the most since Jan. 15 when the S&P 500 tumbled 2.2 percent to an almost five-month low. The measure of market turbulence known as the VIX rose for a third straight month in January, the longest such streak in 2 1/2 years.

     Investors are also assessing the campaign for the next U.S. president, after Senator Ted Cruz won Monday’s Republican caucuses in Iowa in an upset over Donald Trump. Democrat Hillary Clinton held on to a narrow victory over Senator Bernie Sanders.

     Among the rationales given for the selloff in U.S. equities this year, one that is rarely mentioned is the election cycle. Research from Ned Davis Research Group shows that the final year of a two-term presidency ranks last by returns, with the S&P 500 posting a median decline of 6.6 percent since 1953.

     Nine of the S&P 500’s 10 main industries fell today, with energy and financial shares dropping more than 2.6 percent. Industrial, technology and consumer discretionary companies slid at least 1.9 percent. Utilities were the best performers, rising 0.4 percent.

     Refiner Tesoro Corp. fell 8.2 percent, among the worst performers in energy after its quarterly sales and profit missed estimates. Transocean Ltd. and Marathon Oil Corp. sank at least 7.5 percent.

     Energy shares took another leg down in afternoon trading after S&P cut credit ratings on Chevron, Hess Corp. and Continental Resources Inc. West Texas Intermediate crude futures capped the biggest two-day drop in almost seven years, down 11 percent to slip below $30 a barrel.

     “A lot of people are watching the price of oil and as big as the U.S. economy is, there is now a perception that global economies are more important than regional ones,” said Ron Anari, the Jersey City, New Jersey-based senior vice president of trading at ICAP Plc. “The equity market is all about the profitability of corporations, and it’s not that bad but it definitely could be better. At this state of the game, there is just a lot of market ambiguity.”

     Banks in the benchmark index lost 3.4 percent amid speculation that persistently low interest rates will weigh on profits. The yield on the 10-Year U.S. Treasury note dropped to its lowest since last April. Bank of America Corp. lost 5.2 percent, while Citigroup Inc. declined 4.9 percent. Goldman Sachs Group Inc. slumped 5 percent, the most since 2012. The shares fell for a second day after gaining more than 5 percent in last week’s final two sessions.

     Alphabet’s two share classes were the only stocks to climb among 68 technology companies in the S&P 500. Qorvo Inc. dropped 7.1 percent, while Apple and Microsoft Corp. declined at least 2 percent.

     ADT Corp. and Pitney Bowes Inc. led declines among industrial companies, falling more than 13 percent after their results disappointed investors. Airlines also paced the retreat, with American Airlines Group Inc. and Southwest Airlines Co. decreasing more than 4.8 percent.

     Other travel-related companies weighed on the consumer discretionary group, with Royal Caribbean Cruises Ltd. Tumbling 15 percent, the most since 2009 after forecasting 2016 profit that missed analysts’ estimates. Competitor Carnival Corp. lost 7.9 percent, while TripAdvisor Inc. sank 6.2 percent. Also among discretionary shares, Amazon.com Inc. slumped 4 percent to a 3 1/2-month low.

     On the winning end of the consumer group today, Michael Kors Holding Ltd. jumped 24 percent, its largest gain in nearly four years. The company’s holiday results exceeded estimates, boosted by e-commerce sales and a new lineup of accessories. Mattel Inc. soared 14 percent, its best since 2009, also as holiday performance beat forecasts.

     DuPont Co. was the only one of 30 stocks in the Dow average to advance, rising 5.4 percent after merger partner Dow Chemical Co. reported better-than-expected earnings as its plastics business benefited from the drop in oil prices. Dow Chemical Chief Executive Andrew Liveris plans to leave the company after the merger is completed.

     More than 100 S&P 500 companies post results this week, and analysts estimate profits at index members fell 5.6 percent in the fourth quarter, better than Jan. 15 predictions for a 7 percent slump. Of those that have released financial results, 80 percent beat profit projections, while 49 percent topped sales estimates.

     Investors will be looking this week at economic releases for indications of the strength of the U.S. economy, with the government’s January jobs report coming into focus on Friday. Federal Reserve Bank of Kansas City President Esther George said today recent financial turmoil was anticipated and is no reason to delay further interest-rate increases.

     George, who has consistently been among the most hawkish Fed officials, said last December’s interest-rate hike, the first such move since 2006, was belated and cautioned it would be a mistake to wait too long to raise rates further.

     “A lot of last week’s rally was a technical, one-time thing,” said Michael O’Rourke, chief market strategist at Jonestrading Institutional Services LLC. “The Bank of Japan can’t do negative rates every day, and you had a month-end reshuffling that put a strong bid into equities so we’re seeing an unwind. Rallies right now are short, sharp and don’t last very long.”
 

Have a wonderful evening everyone.

 

Be magnificent!

The true source of rights is duty.

If we discharge our duties, rights will not be far to seek.

Mahatma Gandhi

As ever,
 

Carolann

 

Finding good players is easy.  Getting them to play as a team is another story.

                                                                       -Casey Stengel, 1890-1975

 

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:

February: the month of purification among the ancient Romans (Latin februum, purgation.)

The Dutch used to call the month Spokkelmaand, vegetation month.  The Anglo-Saxons knew it as solmonath, mud month.  In the French Revolutionary Calendar its equivalent, from January 21^st to February 19^th, was Pluviose, rain month.

The days lengthen.  The sun is still more red than gold.  Yet the sky brightens when the clouds part and the rain or snow passes.  The month opens with the Celtic festival of Imbole, marking the lactation of the ewes, the flow of milk announcing the return of life: the joy of becoming.  But spring is still far away.  Patience and faith are called for.  Perhaps this is why the month takes its name from Februa, the Roman festival of Purification.  To purify is to separate the gold from the dross, the good from the bad.  It requires memory and the practice of discernment.  Discernment is often symbolized by a sword, but there is something feminine about February.  It is a gentle month, filled with feasts celebrating female figures like St. Brigit, the Virgin Mary, and the Virgin Goddess Artemis.  They ask us to practice keeping silent, pondering all things in our hearts.  Great strength, you may be sure, will come from such discretion. –from Cosmo Doogood’s Urban Almanac.

Fill-dyke: the month of February, when rain and melting snow fill the ditches to overflowing.

February fill dyke, be it black or be it white;
But if it be white it’s the better to like.
                               Old Proverb

Seattle Opera put on a  fabulous Marriage of Figaro on Saturday night.  Mozart at his comedic best.  Snagged a few hours at the annual boat show on Lake Union yesterday.  Can’t say any particular one stood out, though all were pretty wonderful, Dufours, Hunters, Janneaus, Hanses and many more new models on show.

PHOTOS OF THE DAY

Miss Piggy, with New York Stock Exchange Chief of Staff John Tuttle, rings the NYSE opening bell to highlight the season premier of Disney’s ‘The Muppets’ television show, Monday. Richard Drew/AP

 

Joaldunaks walk on their way to take part in the Carnival between the Pyrenees villages of Ituren and Zubieta, northern Spain, Monday. In one of the most ancient carnivals in Europe, dating from before the Roman empire, companies of Joaldunak (cowbells) made up of residents of two towns, Ituren and Zubieta, parade the streets costumed in sandals, lace petticoats, sheepskins around the waist and shoulders, colored neckerchiefs, conical caps with ribbons and a hyssop of horsehair in their right hands and cowbells hung across their lower back. Alvaro Barrientos/AP

Italian policemen check masked revelers as they arrive at San Marco Piazza during the Venice Carnival, Sunday. Alessandro Bianchi/Reuters

Market Closes for February 1^st, 2016

MarketIndex	Close	Change
DowJones	16449.18	-17.12  -0.10%
S&P 500	1939.38	-0.86  -0.04%
NASDAQ	4620.367	+6.415  +0.14%
TSX	12674.37	-147.76
		-1.15%

International Markets

 

MarketIndex	Close	Change
NIKKEI	17865.23	+346.93
		+1.98%
HANGSENG	19595.50	-87.61
		-0.45%
SENSEX	24824.83	-45.86
		-0.18%
FTSE 100	6060.10	-23.69
		-0.39%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.229	1.225
CND.30 Year Bond	2.047	2.035
U.S.   10 Year Bond	1.9486	1.9226
U.S.30 Year Bond	2.7625	2.7468

Currencies

BOC Close	Today	Previous
Canadian $	0.71685	0.71580
US$	1.39498	1.39704
Euro Rate1 Euro=		Inverse
Canadian $	1.51902	0.65832
US$	1.08892	0.91834

Commodities

Gold	Close	Previous
London GoldFix	1126.50	1111.80
Oil	Close	Previous
WTI Crude Future	31.62	33.62

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — The rebound in Canadian stocks proved to be short-lived, as the Standard & Poor’s/TSX Composite Index ended a four-day rally amid falling oil prices and renewed concerns about a slowdown in China.

     After a month of see-saw trading during January that pushed the S&P/TSX to the top-performing developed market in the world, Canadian equities resumed their slide Monday. The benchmark equity gauge fell 1.2 percent to 12,674.37 at 4 p.m. in Toronto. The index had rallied 8.3 percent in the final trading days of last month, after hitting a two-and-a-half year low on Jan. 20.

     Energy producers slumped 3.1 percent for the biggest slump out of 10 groups. Crude prices fell after government data showed industrial activity in China, the world’s biggest energy consumer, dropped in January to a three-year low. A separate report showed manufacturing in the U.S. shrank in January for a fourth consecutive month as businesses cut staffing plans. The U.S. and China are Canada’s two largest trading partners.

     The resource-rich S&P/TSX remains closely linked to commodity prices with raw-materials and energy producers making up about 28 percent of the overall gauge. Crude futures in New York slumped, erasing its longest rally of the year after the China report and data compiled by Bloomberg showing OPEC nations pumped 33.11 million barrels a day last month following Indonesia’s readmission to the group.

     Royal Bank of Canada and Bank of Nova Scotia lost more than 1.1 percent as financial companies declined. Seven of ten industries in the S&P/TSX retreated.

     Gold producers advanced to a three-week high as the metal climbed for a fifth day in six to the highest in almost three months. China’s continued slowdown boosted the appeal of haven assets. Yamana Gold Inc. and Kinross Gold Corp. advanced more than 3.5 percent.

     Amaya Inc. surged 20 percent, the biggest gain since June 2014, after the company said Chairman and Chief Executive Officer David Baazov has indicated he intends to make a cash offer for the firm. The potential offer for Amaya, the world’s largest online poker company and owner of PokerStars, values the company at about C$2.8 billion.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks closed little changed, with gains in Facebook Inc. and Alphabet Inc. helping to overcome concerns that China’s slowdown will spread as slumping crude oil led a selloff in energy shares.

     Internet companies put a floor under equities, with Facebook and Google parent Alphabet rising more than 1.2 percent. Netflix Inc. increased 2.5 percent amid speculation Apple Inc. could make an offer for the online video company. Energy companies retreated with crude, after capping back-to- back weekly advances for the first time since November. Exxon Mobil Corp. sank 2 percent before its earnings report Tuesday. Alphabet rose in late trading after its earnings report.

     The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,939.38 at 4 p.m. in New York, after erasing a drop of as much as 1 percent. The Dow Jones Industrial Average lost 17.12 points, or 0.1 percent, to 16,449.18, while the Nasdaq Composite Index rose 0.1 percent. About 8 billion shares traded hands on U.S. exchanges, 4 percent above the three-month average.

     “I actually expect a positive start into the new month but the market is still shaky and February will be not easy,” said Benno Galliker, a trader at Luzerner Kantonalbank AG. “The focus is on China, oil and earnings. The weak numbers out of China and the lower oil price are keeping a lid on the market.”

     Equities began paring declines in earnest in afternoon trading after dovish comments from Federal Reserve Vice Chairman Stanley Fischer, who said the central bank’s policy moves are not predetermined as it assesses the impact of recent market turmoil.

     Worries about a slowdown in the world’s second-biggest economy and a rout in oil have roiled global equities this year. While the S&P 500 recouped some losses in the past two weeks, paring its January drop to 5.1 percent, China’s official factory gauge today signaled a record sixth month of deterioration.

     The main U.S. equity gauge is 9 percent away from an all- time high set in May, and has rebounded 4.3 percent from a 21- month low on Jan. 20, led by a 10 percent climb by phone companies and a 9.8 percent increase in energy producers.

     Amid the turbulence, investors have been loading up on shares of companies with the sturdiest earnings momentum. Qualities that define winning investments no longer include the high-risk, high-reward potential of companies whose balance sheets are laden with debt. Such a shift has been a bearish signal for stocks in the past, often marking the end of bull markets.

     More than 100 S&P 500 companies are due to report results this week. Alphabet rose 6.2 percent as of 4:55 p.m. after Google reported profit and revenue that topped estimates, lifted by robust sales of online ads and tighter cost controls.

     Analysts estimate profits at index members fell 5.6 percent in the fourth quarter, better than Jan. 15 predictions for a 7 percent slump. Of those that have released financial results, 79 percent beat profit projections, while 49 percent topped sales estimates.

     Investors are also assessing economic releases for indications on the strength of the U.S. economy. Data today showed manufacturing shrank in January for a fourth consecutive month as businesses cut staffing plans. A separate report showed household spending cooled in December as Americans used gains in incomes to boost their savings, with little evidence that inflation is gaining traction.

     Attention will turn later in the week to jobs data, with a reading on private payrolls growth scheduled for Wednesday and the government’s January jobs report due Friday. Fed Vice Chair Stanley Fischer said today it was too difficult to gauge the impact on the U.S. economy from recent turmoil in financial markets and uncertainty over China, leaving policy makers undecided about what to do next.

     The Chicago Board Options Exchange Volatility Index fell 1.1 percent Monday to 19.98. The measure of market turbulence known as the VIX rose for a third straight month in January, the longest such streak in 2 1/2 years.

     Phone companies and utilities were Monday’s best performers among the S&P 500’s 10 main groups, rallying at least 0.9 percent. Consumer, raw-materials and technology shares also rose. Energy companies lost 1.9 percent, paring an earlier 3.3 percent drop.

     “Usually when oil’s down this much you’d see stocks down,” said Larry Peruzzi, managing director of international equities at Mischler Financial Group Inc. in Boston. “After the last two weeks traders and investors are just emotionally spent with huge up days and huge down days. Central banks and people searching through earnings numbers offsets it a little bit.”

     CenterPoint Energy Inc. gained 4.2 percent to bolster an advance among utilities. The owner of Houston’s electric utility said it may sell or spin off to shareholders its stake in Enable Midstream Partners LP as falling fuel prices weigh on the pipeline owner’s value. The company’s 2016 profit outlook also exceeded estimates.  Questar Corp. rallied 23 percent after Dominion Resources Inc., the owner of Virginia’s largest utility, said it will buy the company for about $4.4 billion to expand its holdings in better- performing natural gas assets. Duke Energy Corp. added 2.3 percent to a five-month high after Lockheed Martin Corp. agreed to buy 30 megawatts of capacity from a Duke Energy solar farm in North Carolina.  Google parent Alphabet Inc. climbed to a 2016 high before its earnings report and Facebook extended its climb to a fresh record. An index of Internet companies rose for a third session, the longest streak in more than a month. Twitter Inc. surged 6.6 percent, its best advance in almost four months, after a report in The Information said investor Marc Andreessen and private equity firm Silver Lake have “considered some sort of deal.”

     Sysco Corp. jumped 8.4 percent, the most in more than two years to close at a record after the food distributor’s quarterly results exceeded estimates. The shares led gains in consumer staples, with Kroger Co. and Whole Foods Market Inc. increasing at least 2.2 percent.                       

     Kinder Morgan Inc. and Devon Energy Corp. fell at least 6.5 percent to lead the slide in energy. After rising to a three- week high on Friday, West Texas Intermediate crude futures sank 6 percent on signs industrial activity in China is deteriorating, potentially hurting demand as OPEC pumps record amounts of crude.

     Financial shares slid, with banks in the benchmark index falling for the first time in five sessions. Bank of America Corp. and JPMorgan Chase & Co. fell more than 1 percent. Yield on the U.S. 10-Year U.S. Treasury bond has declined 14 percent since the start of the year.

     Industrial companies also fell, led by a 6.8 percent drop in Roper Technologies Inc. The company reported quarterly earnings below analysts’ estimates, and reduced its outlook for 2016 profits. Raytheon Co. and General Electric Co. lost at least 1.5 percent.

 

Have  a wonderful evening everyone.

 

Be magnificent!

The word duty indicates compulsion.

The word responsibility indicates freedom.

Duties lead one to demand rightfully.

Responsibilities lead one to command respectfully.

Sense of responsibility is out of love.

Duties can be thrust upon others.

Responsibilities are taken up by oneself.

There can be unwillingness in performing one’s duty.

Responsibility is always taken up willingly.

Maa Purnananda

As ever,

 

Carolann

 

Strength and growth come only through continuous effort and struggle.

                                                            -Napoleon Hill, 1883-1970

 

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 Jan. 29, 1963, poet Robert Frost died in Boston.

Memorized when we were children:

Dust of Snow
     Robert Frost

The way a crow
Shook down on me
The dust of snow
From a hemlock tree

Has given my heart
A change of mood
And saved some part
Of a day I had rued.

The Secret Sits
     Robert Frost

We dance round in a ring and suppose,
But the Secret sits in the middle and knows.

PHOTOS OF THE DAY

A long exposure shows an igloo at ‘Igloo village’ (Iglu Dorf) in front of the famous Matterhorn mountain in Zermatt, Switzerland, Thursday night. The hotel-igloo village, made of snow and ice and located at 2815 meters above sea level, has a bar, a restaurant, and bedrooms and is celebrating its 20th anniversary. Jean-Christophe Bott/Keystone/AP

 

A man watches as Storm Gertrude whips up the Irish sea off Blackpool as it crosses over northwest Britain Friday. Red weather warnings are in place as Gertrude whips up winds of up to 90 m.p.h. Phil Noble/Reuters

Market Closes for January 29^th, 2016

Market Index	Close	Change
Dow Jones	16466.30	+396.66   +2.47%
S&P 500	1940.24	+46.88   +2.48%
NASDAQ	4613.953	+107.277   +2.38%
TSX	12822.13	+230.20
		+1.83%

International Markets

Market Index	Close	Change
NIKKEI	17518.30	+476.85
		+2.80%
HANG SENG	19683.11	+487.28
		+2.54%
SENSEX	24870.69	+401.12
		+1.64%
FTSE 100	6083.79	+152.01
		+2.56%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.225	1.240
CND. 30 Year Bond	2.035	2.050
U.S.    10 Year Bond	1.9226	1.9784
U.S. 30 Year Bond	2.7468	2.7844

Currencies

BOC Close	Today	Previous
Canadian $	0.71580	0.71218
US $	1.39704	1.40415
Euro Rate 1 Euro=		Inverse
Canadian $	1.51314	0.66088
US $	1.08310	0.92327

Commodities

Gold	Close	Previous
London Gold Fix	1111.80	1114.00
Oil	Close	Previous
WTI Crude Future	33.62	33.22

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks climbed a fourth day, trimming a monthly drop that sent shares into a bear market earlier this year, as crude prices rose and data showed the resource-rich nation’s economy expanded for the first time in three months.

     The Standard & Poor’s/TSX Composite Index rose 1.8 percent to 12,822.13 at 4 p.m. in Toronto. The index has rallied 8.3 percent since hitting a 2 1/2-year low on Jan. 20. While the benchmark equity gauge posted its first negative January since 2010, the late rally among energy producers has boosted the S&P/TSX’s performance to the best among developed markets this year.

     “It’s a dash for trash,” said John Stephenson, chief executive officer of Stephenson & Co. Capital Management in Toronto. His firm manages about C$50 million. “We’ve had a few days in a row of rising oil prices and it’s disproportionately benefiting Canada. Energy rallies a bit and people buy the energy names, especially the most beat up.”

     Health-care and raw material companies posted the biggest gains Friday as all 10 groups in the S&P/TSX advanced. Valeant Pharmaceuticals International Inc. jumped 5.3 percent after a two-day rout of 13 percent. Yamana Gold Inc. climbed 7.1 percent as the price of gold advanced.

     “There’s some good opportunities in the markets today if you’re a long-term investor,” said Sadiq Adatia, chief investment officer at Sun Life Global Investments in Toronto.

His firm manages C$12.3 billion. “In the energy sector, we were buyers last week. There are great opportunities looking out two to three years from now.”

     Energy shares ended higher in a see-saw day of trading after Alberta left royalty rates unchanged for bitumen, recognizing the “existential threat” the beleaguered industry faces from the U.S. shale boom. The review had initially stirred concerns that costs would rise for producers.

     West Texas Intermediate capped a second weekly gain, rising 40 cents to settle at $33.62 a barrel in New York. Futures advanced 4.4 percent this week and has pared declines this year to about 9 percent from a 12-year low of $26.55 on Jan. 20. Oil prices spiked after Russia’s Energy Minister Alexander Novak on Thursday said the Organization of Petroleum Exporting Countries and other producers may meet to discuss output.

     The broader S&P/TSX remains in the red for January, weighed down by losses among health-care and consumer discretionary stocks. Bombardier Inc., Concordia Healthcare Corp. and auto- parts manufacturer Linamar Corp. have been among the worst performers so far in 2016.

     The S&P/TSX joined a global rally Friday after the Bank of Japan surprised investors by adopting a negative interest-rate strategy. The MSCI All-Country World Index advanced 2.1 percent for a second day of gains, to a three-week high.

     “Green arrows abound on this last trading day of the month in what has otherwise been a horrible start to the year,” David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc. in Toronto, wrote in a note.

     A rebound in manufacturing and wholesaling helped Canada’s gross domestic product expand by 0.3 percent in November, matching economists’ forecasts and indicating the nation is shaking off the damage from a drop in commodity prices.

     The S&P/TSX has performed better relative to other benchmarks after having “taken it on the chin” in 2015, when it was one of the worst performers in the developed world, Stephenson said.

     “There is a huge amount of pent-up enthusiasm for energy and investors are excited to see a rally,” he said.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks ended the worst January since 2009 with the best one-day gains in more than four months, after earnings from Microsoft Corp. exceeded expectations and the Bank of Japan stepped up monetary stimulus.

     The equity rally accelerated in the final hour of trading, with the strong finish a fitting end to a weak month that featured sharp reversals on an almost daily basis. Microsoft led the surge Friday with its biggest gain in three months. Nine of the S&P 500’s 10 main groups rose at least 1.7 percent. Amazon.com Inc. was a blemish, tumbling 7.6 percent as earnings for the holiday quarter missed estimates.

     The Standard & Poor’s 500 Index rose 2.5 percent to 1,940.24 at 4 p.m. in New York, the strongest advance since Sept. 8. Still, the gauge slumped 5.1 percent for the month, its worst start to a year since the height of the financial crisis. The Dow Jones Industrial Average advanced 396.66 points, or 2.5 percent, to 16,466.30, its best day in five months. The Nasdaq Composite Index added 2.4 percent, still finishing with its worst month since May 2010. The Russell 2000 Index jumped 3.2 percent, capping its worst month since 2011 with its biggest rally in four years.

     “Part of the strength in the markets today is central banks in the developed world being accommodative, and the other is a surprisingly strong Chicago manufacturing number that was really a blowout,” said Phil Orlando, who helps oversee $360 billion as chief equity-market strategist at Federated Investors Inc. in New York. “Earnings have been better than expected so far.”

     Stocks swung between gains and losses this week as investors assessed corporate earnings and the degree to which central banks will intervene to help stem increasing volatility and a dimming outlook for global growth. The S&P 500’s rally Friday lifted it to a second consecutive week of gains for the first time since Dec. 4.

     Prior to today’s unexpected action from the Bank of Japan to adopt a negative interest-rate strategy, the European Central Bank signaled last week it could boost stimulus as soon as March. The Federal Reserve said Wednesday it was watching to see how the global economy and markets impact the U.S. outlook.                         

     Data today showed the economy expanded at a slower pace in the fourth quarter, in line with forecasts, as households tempered spending while businesses cut back on capital investment and made further adjustments to inventories. A separate report showed consumer confidence cooled in January, shaken by the stock-market downturn, while a gauge on Chicago- area manufacturing jumped more than forecast to the highest in a year.

     “With today’s GDP there’s modest economic growth and Japan overnight pursuing lower interest rates means the Fed is not likely to raise four times this year,” said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ U.S. Intermediary Business. “Events like what happened with Japan going to negative interest rates puts downward pressure on our own interest rates and impacts the Fed’s ability to raise rates.”

     Investors are also scouring earnings for indications on how well U.S. companies are weathering weakness emanating from China. Analysts estimate profits at index members fell 5.6 percent in the fourth quarter, better than predictions two weeks ago that called for a 7 percent slump. Of those that have already posted results, 80 percent beat earnings projections, while 48 percent have exceeded sales estimates.                      

     Among companies moving after their reports today, Honeywell International Inc. rose 5.3 percent to pace gains in the S&P 500’s industrial group after its aerospace sales increased and the company reiterated its 2016 outlook. Visa Inc. climbed the most in 15 months after its profit exceeded estimates as consumer card spending increased. Video-game publisher Electronic Arts Inc. sank 7.5 percent after forecasting fiscal fourth-quarter results that fell short of estimates.

     Anxiety fueled by China’s slowdown and a rout in oil prices have battered stocks since the start of the year. The rout has pushed valuations down to 2014 levels and erased more than $2 trillion from the value of American equity markets. The S&P 500 is down 8.9 percent from its record set in May, after climbing 4.4 percent from a 21-month low reached on Jan. 20.

     The Chicago Board Options Exchange Volatility Index fell 9.9 percent Friday to 20.20, a three-week low. The measure of market turbulence known as the VIX increased 11 percent in January, after rising as much as 52 percent for the month. About 10.1 billion shares traded hands on U.S. exchanges, 31 percent above the three-month average.                        

     Technology companies rallied Friday to the biggest one-day climb in five months, bolstered by Microsoft’s gains. The group rose 3.6 percent to lead the S&P 500’s 10 main industries. Raw- material, financial and industrial shares each added at least 2.7 percent. Phone companies had the best performance this month, up 5.5 percent, while raw-materials were the worst, losing almost 11 percent.

     Joining Microsoft to power the tech group, Apple Inc. increased 3.5 percent to trim its drop this week, while Facebook Inc. and Google parent Alphabet Inc. advanced more than 1.7 percent. Hard-drive maker Seagate Technology Plc capped its biggest rally in more than three years after reporting sales that beat some analysts’ predictions amid a tough market for computer components.

     Semiconductor and equipment companies posted their steepest climb since September, rising 4 percent. Micron Technology Inc. and Qorvo Inc. led with gains of more than 7.9 percent. Intel Corp. rose 3.5 percent, the most since August.                     

     In addition to the boost from Honeywell, 3M Co. rose for a fourth day to help lift industrials to the best gain in more than three months. 3M increased 8.2 percent this week, its best since 2009, after the company reported better-than-estimated results on Tuesday. General Electric Co. added 3.2 percent, the most since October.

     Energy companies in the benchmark climbed to a three-week high. Consol Energy Inc., the second-biggest loser in the S&P 500 last year, surged 18 percent, even after its quarterly loss was wider than estimated. Kinder Morgan Inc. added 7.6 percent. Phillips 66 rose 1.8 percent, erasing a 3.7 percent drop. The largest U.S. independent refiner by market value reported a decline in profit as refining margins narrowed.

     Consumer discretionary companies advanced 1.2 percent, overcoming the drag from Amazon’s biggest drop since October 2014. Home Depot Inc. and Walt Disney Co. added at least 2.4 percent to help boost the group.

 

Have a wonderful weekend everyone.

 

Be magnificent!

No matter how insignificant the thing you have to do,

do it as well as you can,

give it as much of your care and attention as you would give to the thing

you regard as most important.

Mahatma Gandhi

As ever,
 

Carolann

 

Drawing on my fine command of language, I said nothing.

                                      -Robert Benchley, 1889-1945

 

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 history:

On Jan. 28, 1986, space shuttle Challenger exploded 73 seconds after liftoff from Cape Canaveral, killing all seven crew members.

 

1980 – Canadian Caper – Ambassador Ken Taylor engineers escape of 6 US diplomats from Iran.

PHOTOS OF THE DAY

A tourist takes a photograph of a new clockwork lion statue in Trafalgar Square, London, Thursday. The statue raises awareness and funds for the Big Cats Initiative, which supports efforts to save big cats. Grant Pollard/Invision/AP

Monkeys on leashes perform Thursday ahead of the Chinese New Year of the Monkey, which falls on Feb. 8, in Hangzhou, Zhejiang province, China. Reuters

Market Closes for January 28^th, 2016

Market Index	Close	Change
Dow Jones	16069.64	+125.18     +0.79%
S&P 500	1893.36	+10.41     +0.55%
NASDAQ	4506.676	+38.508     +0.86%
TSX	12591.93	+214.16
		+1.73%

International Markets

Market Index	Close	Change
NIKKEI	17041.45	-122.47
		-0.71%
HANG SENG	19195.83	+143.38
		+0.75%
SENSEX	24469.57	-22.82
		-0.09%
FTSE 100	5931.78	-58.59
		-0.98%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.240	1.247
CND. 30 Year Bond	2.050	2.056
U.S.    10 Year Bond	1.9784	1.9993
U.S. 30 Year Bond	2.7844	2.8010

Currencies

BOC Close	Today	Previous
Canadian $	0.71218	0.70966
US $	1.40415	1.40912
Euro Rate 1 Euro=		Inverse
Canadian $	1.53619	0.65096
US $	1.09400	0.91408

Commodities

Gold	Close	Previous
London Gold Fix	1114.00	1116.25
Oil	Close	Previous
WTI Crude Future	33.22	32.30

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a third day, the longest winning streak of 2016, as crude prices surged to a three-week high on a report OPEC and other producers will meet to discuss a potential output cut.

     Encana Corp. soared the most in more than seven years. Canadian Natural Resources Ltd. and Crescent Point Energy Corp. jumped as all but one of 55 members in a gauge of energy producers advanced.

     Oil futures surged as much as 7.8 percent in New York after Russia’s Energy Minister Alexander Novak said meeting participants in February may discuss a Saudi Arabian proposal for all oil-producing countries to trim production by 5 percent, Interfax reported. Crude settled at $33.22 a barrel, up 2.9 percent, paring earlier gains after OPEC delegates said no talks were planned.

     The Standard & Poor’s/TSX Composite Index rose 1.7 percent to 12,591.93, a three-week high. The index has gained 3.7 percent in three days, paring a monthly decline to 3.2 percent.

     The Bloomberg Commodity Index ended little-changed Thursday after rebounding 2.2 percent in the previous two days as crude prices jumped and gold rallied to a three-month high. Canada’s resource-rich benchmark equity gauge had moved in line with the Bloomberg index of commodities prices every day since Jan. 15 until today, according to data compiled by Bloomberg.

     Potash Corp. of Saskatchewan Inc. rose 1.3 percent, reversing earlier losses that sent shares to their lowest level in more than eight years. The world’s largest fertilizer producer by market value cut its quarterly dividend for the first time since a 1989 initial public offering after a forecast of lower-than-expected earnings Thursday amid lower prices for crop nutrients.

     Valeant Pharmaceuticals International Inc. tumbled 9.2 percent to a November low. The drugmaker on Jan. 25 released a memo written by Chief Executive Officer Michael Pearson that offered little on his current condition or the timing of his return to work after taking a medical leave of absence with severe pneumonia. Health-care shares fell the most in the S&P/TSX, losing 8.5 percent.

     Bombardier Inc. sank 11 percent, extending a 25-year low, as the struggling aerospace manufacturer traded below C$1. Investors are losing patience with the company amid repeated delays and cost overruns in its C Series jet. The stock was one of the worst-performing in the S&P/TSX last year and has slumped 34 percent in January.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks advanced, with energy shares leading a rebound sparked by rising crude-oil prices, as investors weighed corporate earnings and prospects for global growth.

     Equities whipsawed amid a slew of quarterly results on the reporting season’s busiest day, a session after the Federal Reserve said it’s monitoring global developments to assess their impact on U.S. growth. Facebook Inc.’s better-than-expected report sparked gains in technology, while Abbott Laboratories sank 9.3 percent, weighing on health-care shares after its forecast trailed estimates. Amazon.com Inc. fell in late trading while Microsoft Corp. rallied following their earnings reports after markets closed.

     The Standard & Poor’s 500 Index climbed 0.6 percent to 1,893.36 at 4 p.m. in New York, after swinging between a 1.1 percent gain and a 0.5 percent loss. The Dow Jones Industrial Average rose 125.18 points, or 0.8 percent, to 16,069.64. The Nasdaq Composite Index climbed 0.9 percent, rising from a three month low. About 8.8 billion shares traded hands on U.S. exchanges, 16 percent above the three-month average.

     “It’s no longer about whether we’re rebounding from the financial crisis back to normal levels,” said Jason Pride, the Philadelphia-based director of investment strategy at Glenmede, which oversees $30 billion. “It’s about whether growth is going to be sustained, how good is that growth and where is the market incorrectly placing value. The takeaway for the market from the Fed announcement yesterday is that they’re seeing growth as being a little slower and they definitely see the risks from possible contagion from China and what’s going on in the oil markets.”

     While oil’s direction has been a strong influence on equities, earnings results are gaining clout as the pace of the reporting season intensifies. Stocks dropped yesterday amid an Apple-led slump and Boeing Co.’s biggest decline in 14 years after outlooks from both companies disappointed. Caterpillar Inc. contributed to today’s revival, leading the Dow with a 4.7 percent gain after reporting better-than-estimated earnings as cost cuts blunted the effects of a commodities meltdown.

     Amazon slid 10 percent as of 4:44 p.m. after its holiday quarter profit and sales missed estimates, taking the shine off of a year marked by record earnings and an expansion of the company’s businesses. The Web retailer’s cloud-computing division had fourth-quarter sales of $2.4 billion, up 69 percent from a year earlier. Meanwhile, Microsoft gained 3.6 percent in late trading after posting better-than-projected sales and profit, fueled by cloud services and Office productivity programs.

     Investors are looking to earnings as a possible bright spot in the worst month for stocks in five years, down 7.4 percent. Analysts estimate profit at S&P 500 firms fell 6.3 percent in the fourth quarter, better than predictions a week earlier that called for a 7 percent slump. Of those that have already posted results, 80 percent beat earnings projections and 50 percent exceeded sales forecasts.

     Fed policy makers left interest rates unchanged yesterday and said they still expect to raise borrowing costs at a “gradual” pace, while watching to see the impact of the global economy and markets. The comments sent the probability of a March hike lower, to 14 percent from about one-in-four odds before the meeting.                          

     Since the Fed last month raised rates for the first time in almost a decade, turbulence in financial markets and a dimming of the outlook for worldwide growth have spurred investors to expect a slower rise in borrowing costs.

     Data today showed orders for business equipment fell in December by the most in 10 months. Orders for all durable goods slumped 5.1 percent, the most since August 2014. A separate report showed contracts to purchase previously owned homes rose less than forecast in December, indicating more tempered progress in residential real estate early this year.

     The Chicago Board Options Exchange Volatility Index fell 3 percent Thursday to 22.42. The measure of market turbulence known as the VIX is up 23 percent in January, its biggest monthly surge since a record jump in August.

     Among the S&P 500’s 10 main groups, energy companies rallied 3.2 percent and technology shares added 1.5 percent to pace the advance. Health-care companies slumped 2.3 percent, the only industry retreating today.

     Energy stocks rose to a three-week high, buoyed by stronger oil prices. Hess Corp. added 9.5 percent, the most since 2008, after reporting better-than-expected quarterly results yesterday. Kinder Morgan Inc. and Devon Energy Corp. each rose at least 8.4 percent.

     Crude rose as much as 7.8 percent after Russia’s energy minister said that OPEC and other producers may meet to discuss output, before paring gains as OPEC delegates said no talks were planned. The commodity closed 2.9 percent higher in New York.

     Facebook’s 16 percent rally was its best in more than two years and it closed at an all-time high of $109.11. Among other tech companies, PayPal Holdings Inc. rose 8.4 percent after its quarterly profit and revenue beat estimates, and Google parent Alphabet Inc. increased 4.3 percent, the most since October.

     Juniper Networks Inc. offset some gains within the tech group, tumbling 15 percent, the most in more than four years. The network equipment maker forecast earnings for the current quarter that missed estimates and said its chief financial officer is stepping down. EBay Inc. fell 12 percent, its steepest loss in seven years after sales stalled last quarter and the company’s first-quarter profit and revenue forecasts were below analysts’ estimates.                         

     Health-care companies sank to a four-month low, dragged down by Abbott’s worst drop since 2002. The largest maker of heart stents provided a profit forecast range that trailed analysts’ estimates, citing the impact of the stronger dollar and its struggling Venezuelan business.

     Biotech stocks saw even greater losses, as the iShares Nasdaq Biotechnology ETF tumbled 3.6 percent to the lowest since October 2014. The fund, which is down 22 percent in January, is on track for its worst month of performance since it was created in 2001.

     Incyte Corp. fell 9.6 percent after halting a mid-stage trial looking at an experimental drug for colorectal cancer, while Celgene Corp. lost 5 percent to its lowest since October 2014 after providing an outlook that disappointed investors.

     “Biotechs are running counter to the good day that oil is having and energy stocks are having,” said Tim Ghriskey, who helps oversee $1.5 billion as managing director and chief investment officer at Solaris Asset Management in New York. “The health-care sector is just taking it on the chin today and I think that’s a valuation issue.”

     Better-than-expected earnings results helped send Under Armour Inc. almost 23 percent higher, the strongest gain in two years. Meanwhile, United Rentals Inc. slumped 18 percent, the most since 2008, after forecasting sinking rental rates next year and UBS AG downgraded the stock to neutral from buy. Alliance Data Systems Corp. tumbled 19 percent, the most in seven years, after trimming first-quarter guidance.

 

Have a wonderful evening everyone.

 

Be magnificent.

Civilization, in the real sense of the term, consists not in the multiplication

but in the deliberate and voluntary restriction of the wants.

This alone promotes real happiness and contentment, and increases the capacity for service.

A certain degree of physical harmony and comfort is necessary, but above that level,

it becomes a hindrance instead of a help.

Therefore the ideal of creating an unlimited number of wants and satisfying them

seems to be a delusion and a snare.   The satisfaction of one’s physical needs, even the intellectual needs

of one’s narrow self,  must meet at a point a dead stop before it degenerates into physical

and intellectual voluptuousness.  A man must arrange his physical and cultural circumstances

so that they may not hinder him  in his service of humanity,

on which all  his energies should be concentrated.

Mahatma Gandhi

As ever,
 

Carolann

 

Our life always expresses the result of our dominant thoughts.

                                        -Soren Kierkegaard, 1813-1855

 

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:

The List: Five unusual claims to fame

                                       -Elsa Court, Financial Times 

The British wet-weather record was set by Eallabus in 1923. Here are five other places with unusual claims to fame:
 
After 83 days of consecutive rainfall, residents of Eglwyswrw in south-west Wales had gone from wishing it would end to wishing for a few more rainy days — the village was just six days short of the British wet-weather record set by Eallabus, north-west Scotland, in 1923. But earlier this week a day of sunshine unexpectedly broke out and the longstanding record remained unbroken. Here are five other places with unusual claims to fame.

1.   Tsovkra-1, Dagestan, Russia, is home to a population made up entirely of tightrope-walkers (pictured above). This remote village in the Caucasus became famous after the second world war for providing tightrope acrobats for circuses across the Soviet Union (it was twice awarded the Artist of the People award, the USSR’s highest artistic distinction). The population of Tsovkra-1 may have dropped from 3,000 to 400 over the past 30 years but those who remain hope to resurrect the village’s unusual history — a tightrope-walking school has just reopened.

2.   Norwich, England, has two cathedrals and 32 medieval churches — more than any other city in northern Europe — yet according to a 2011 census, was the “least religious” city in England and Wales. Some 42.5 per cent of respondents — the highest in the census — reported having “no religion”, compared with an overall average of 25.1 per cent.

3.   Rjukan, Norway, enjoyed winter daylight for the first time in history in 2013. Set deep in a narrow valley, the town is normally bathed in darkness from September to March, but its council invested NKr5m (£544,000) to build three giant mirrors to bounce sun rays on to its main square, which now advertises itself as “a sunny meeting place” at the heart of a once shadowy town.

4.   Woodchurch, Kent, last year sought international recognition by astronomers as one of the darkest places in England. After identifying an area of about 20 miles on the edge of Romney Marsh as having among the darkest night skies in the country, Ashford Borough Council applied for International Dark Sky Community status to help protect the area from light pollution and promote tourism by stargazers. A decision is awaited.

5.   Longyearbyen, Svalbard, Norway, prides itself on being the world’s most northerly town. It is also known for being a place where dying — or rather, dying and being buried — is proscribed. The reason? Svalbard’s extreme cold makes it impossible for bodies to decompose, meaning that corpses can be a health hazard. People who die or are taken ill in the remote Arctic town are immediately airlifted or shipped to mainland Norway.

On this day in…

1967    More than 60 nations signed a treaty banning the orbiting of nuclear weapons.

1973    The Vietnam peace accords were signed in Paris.

1998    First lady Hillary Rodham Clinton, appearing on NBC’s “Today” show, said that allegations against her husband were the work of a “vast right-wing conspiracy.”

2010    Apple CEO Steve Jobs unveiled the iPad tablet computer during a presentation in San Francisco.

2010    J.D. Salinger, the reclusive author of “The Catcher in the Rye,” died in Cornish, N.H. at age 91.

PHOTOS OF THE DAY

A group of visitors walk inside the Holocaust Memorial in Berlin Wednesday on International Holocaust Remembrance Day, marking the liberation of Auschwitz Nazi death camp on Jan. 27, 1945. Markus Schreiber/AP

 

A woman takes pictures of a big heart made of red roses at the international trade fair for plants in Essen, Germany, Wednesday. More than 1,600 exhibitors from 50 countries presented the latest trends at the world’s leading trade fair for horticulture. Martin Meissner/AP

Market Closes for January 27^th, 2016

Market Index	Close	Change
Dow Jones	15944.46	-222.77   -1.38%
S&P 500	1882.95	-20.68     -1.09%
NASDAQ	4468.168	-99.505   -2.18%
TSX	12377.77	+46.45
		+0.38%

International Markets

Market Index	Close	Change
NIKKEI	17163.92	+455.02
		+2.72%
HANG SENG	19052.45	+191.65
		+1.02%
SENSEX	24492.39	+6.44
		+0.03%
FTSE 100	5990.37	+78.91
		+1.33%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.247	1.266
CND. 30 Year Bond	2.056	2.071
U.S.    10 Year Bond	1.9993	1.9942
U.S. 30 Year Bond	2.8010	2.7852

Currencies

BOC Close	Today	Previous
Canadian $	0.70966	0.70823
US $	1.40912	1.41196
Euro Rate 1 Euro=		Inverse
Canadian $	1.53592	0.65108
US $	1.08998	0.91744

Commodities

Gold	Close	Previous
London Gold Fix	1116.25	1113.60
Oil	Close	Previous
WTI Crude Future	32.30	31.45

Market Commentary:

Canada

By Oliver Renick

     (Bloomberg) — Canadian stocks recovered from early losses on Wednesday as the Standard & Poor’s/TSX Index continued a streak of moving in tandem with commodity and crude prices.

     The S&P/TSX rallied for a second straight day, adding 0.4 percent to 12,377.77 at 4 p.m. in Toronto and erasing a decline of as much as 0.7 percent. Half of the index’s 10 main industries advanced. The S&P/TSX, which entered a bear market earlier this year, is poised for its worst monthly performance since May 2012.

     Canada’s benchmark index has moved closely with raw materials prices this year, as investors in the country’s resource-heavy equities market weigh tumbling oil prices and signs of slowing growth in China. The S&P/TSX has moved in the same direction as a Bloomberg index of commodities every day since Jan. 15, according to data compiled by Bloomberg.

     Energy stocks in the S&P/TSX reversed losses to jump 0.8 percent, with 40 companies in the 55-member index advancing. Precision Drilling Corp. and Pengrowth Energy Corp. led gains, each adding more than 6.6 percent. Oil erased a decline as stockpiles at the biggest U.S. storage hub dropped even as nationwide crude supplies climbed to the highest level since 1930.

     Raw-materials advanced more than any group in the S&P/TSX, climbing 1.2 percent as the Bloomberg commodity index jumped 0.8 percent. Gold bullion, this month’s best performing metal, was at a two-month high before the U.S. Federal Reserve bank ends a two-day meeting. Concerns over the strength of the global economy has boosted demand for the haven and prompted investors to push back expectations of when the Fed will next raise borrowing costs.

     Technology shares also advanced, adding 0.4 percent on a 4 percent surge in CGI Group Inc. The company reported quarterly earnings and revenue that topped analyst estimates. Profits in the first quarter were C$0.84 a share, compared with expectations of C$0.83, the company said.

     Health-care shares fell the most in the S&P/TSX with a 3.8 percent loss as a 4.6 percent decline in Concordia Healthcare Corp. weighed on the group of five stocks.

     Telephone companies also retreated, after Rogers Communications Inc., Canada’s largest wireless operator, reported fourth-quarter earnings that missed analysts’ estimates as increased competition for subscribers led to higher advertising and promotions costs. Rogers shares slumped 5.4 percent for the biggest drop in the S&P/TSX.

     Bombardier Inc.’s shares briefly fell below C$1, before closing at that level. It’s the latest blow for the iconic Canadian manufacturer as it buckles under $9 billion in debt.

The rout raises the prospect that the aircraft maker will be thrown out of the main Canadian stock gauge.

US

By Anna-Louise Jackson and Oliver Renick

     (Bloomberg) — U.S. stocks sank following no discernible shift in stance from the Federal Reserve amid recent market turmoil, as Apple Inc. and Boeing Co. led a slide after their outlooks disappointed investors.

     Even a gain in crude oil couldn’t stem the afternoon selling Wednesday, as Boeing had its steepest drop in 14 years, and Apple’s loss was the biggest in two years. An index of technology hardware companies slumped to its lowest in 21 months. Biogen Inc. and Capital One Financial Corp. gained at least 4.8 percent after their profits beat estimates. Facebook Inc. rallied in late trading following its earnings report after the markets closed.  

     The Standard & Poor’s 500 Index fell 1.1 percent to 1,882.95 at 4 p.m. in New York, after swinging between gains of as much as 0.7 percent and a 1.6 percent loss. The Dow Jones Industrial Average fell 227.77 points, or 1.4 percent, to 15,944.46 with Apple and Boeing combining for a 123-point drag. The Nasdaq Composite Index lost 2.2 percent. About 8.8 billion shares traded hands on U.S. exchanges, 16 percent above the three-month average.

     “The market was going into the statement pricing in some expectations that the Fed was either going to acknowledge slowing economic data, market volatility and China or sound a little dovish and that didn’t play out,” Brian Rauscher, chief portfolio strategist at Robert W Baird & Co in New York, said by phone. “If every other central bank says we’re loosening and you don’t think the economy here is strong enough, then investors will ultimately price in a more dovish Fed and you see this back-and-forth in the markets.”

     Fed policy makers left interest rates unchanged and said they still expect to raise borrowing costs at a “gradual” pace while watching to see how the global economy and markets impact the U.S. outlook. Since the Fed raised interest rates last month for the first time in almost a decade, turbulence in financial markets and a dimming of the outlook for global growth have spurred investors to expect a slower rise in borrowing costs.

     The median projection of policy makers’ forecasts in December called for four quarter-point rate increases in 2016, while futures markets indicate traders see fewer. The probability of a raise in March has fallen to 19 percent, from even odds at the start of the year.

     Anxiety fueled by China’s slowdown and a rout in oil prices has hammered stocks since the start of the year, wiping as much as $2.4 trillion from the value of U.S. equities alone. The S&P 500 remains on track for its worst January since 2009, with results from Apple and Boeing offering little relief from worries that weakness in China is festering.

     Equities already had a volatile day leading into the Fed’s statement, beginning with a selloff led by Apple and Boeing. Oil prices then recovered from an early drop to spark a late-morning rally in energy shares. Banks boosted the move by building on yesterday’s climb, only to shave their advance after word from the Fed.

     “Buyers moved to the sidelines as an initial reaction to the statement,” said Walter “Bucky” Hellwig, who helps manage $17 billion as a senior vice president at BB&T Wealth Management in Birmingham, Alabama. “There was not a more dovish statement from the FOMC and that disappoints investors.”

     Fed officials have emphasized that the course for rates depends on progress in the economy. A report today showed purchases of new homes in the U.S. surged in December to the highest level in 10 months, closing out the best year for housing since 2007. Sales jumped a stronger-than-forecast 10.8 percent last month. Data yesterday showed consumer confidence improved in January to a three-month high.

     The earnings season is also in full swing, with at least 32 S&P 500 companies reporting today. Of the firms that have posted quarterly results so far, 76 percent beat earnings estimates, while about half of them exceeded sales projections.

     Facebook climbed 8 percent as of 4:55 p.m. after delivering another quarter of record revenue that topped estimates as it sells more ads via videos, mobile devices and the Instagram photo-sharing service. PayPal Holdings Inc. beat sales estimates as it won new vendors, sending its shares up 5.3 percent in late trading. EBay Inc. slumped 9.5 percent after projected earnings that may miss analysts’ estimates as growth on its marketplace stalled.                      

     Even as the pace of the reporting season picks up, equity investors have held to their fixation this year on the direction of crude prices. The S&P 500 has moved in virtual lockstep with oil, with their relationship reaching the tightest since 2011. Today was no different as equities this morning briefly erased losses along with crude.

     The Chicago Board Options Exchange Volatility Index rose 2.7 percent to 23.11. The measure of market turbulence known as the VIX is down about 14 percent in the last seven sessions, trimming its biggest monthly surge since a record jump in August.

     Eight of the S&P 500’s 10 main industries declined Wednesday, with technology shares falling 2.5 percent under Apple’s weight, while consumer discretionary, health-care and industrial companies lost at least 1 percent. Phone and utility companies rose.

     Apple suppliers Qorvo Inc. and Skyworks Solutions Inc. fell more than 5.6 percent after the world’s most valuable company forecast a sales decline for the first time in more than a decade. Apple Chief Executive Tim Cook said yesterday the company is beginning to see “economic softness” in China.                     

     Boeing paced the drop in industrials after predicting weaker profit and fewer jetliner deliveries than analysts expected. Textron Inc. sank 13 percent, the most since April 2013, after its quarterly earnings missed estimates.

     Health-care stocks slumped the most in more than a week, as Illumina Inc. and Regeneron Pharmaceuticals Inc. both tumbled more than 6 percent to the lowest levels since at least November. The iShares Nasdaq Biotechnology ETF fell 3.1 percent, bringing its three-day losses to 5.1 percent, as it closed at the lowest since October 2014.

     Consumer discretionary stocks fell 1.5 percent, dragged down by Amazon.com Inc.’s 3 percent decline. Netflix Inc. tumbled for a sixth straight day and closed down 6.8 percent at a level last seen in June. Travel-related companies also sold off, as Priceline Group Inc. fell 6.1 percent to the lowest in 11 months, while Royal Caribbean Cruises Ltd. and Carnival Corp. both lost at least 3.5 percent.

     Banks continued a rebound, rising for the third time in four days amid speculation that rising rates will help boost profits as bond yields crept higher. Capital One rallied 4.8 percent, the most since October after fourth-quarter profit and revenue exceeded analysts’ estimates. Huntington Bancshares Inc. and Zions Bancorporation added more than 2.4 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

In the search for the Truth, dharma, the real effort does not preclude action

(does not consist in neglecting action), but by trying to accord oneself more and more exactly

with the exterior harmony.  The currency of this effort is in becoming:

whatever work you take on, dedicate it to Brahman.

Rabindranath Tagore

As ever,
 

Carolann

 

It’s not the load that breaks you down, it’s the way you carry it.

                                                             -Lou Holtz, 1937-

 

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:

Prime Numbers:

1 Billion: Rides taken via Uber, the ridesharing network, as of December 24, 2015.  Uber was founded insane Francisco in 2009.

4: Nations and regions worldwide where Netflix is not available because of restrictions on US companies: China, Crimea, North Korea and Syria.  Netflix recently rolled out service of its media-sharing platform in more than 130 countries.

1404 Carats: the weight of the world’s largest blue star sapphire, dug from a mine in Sri Lanka.  The gem has a minimum value of $100 million.

4: Newly discovered superheavy elements approved for inclusion in the periodic table of elements.

14 Million: Price (in Japanese yen, about $117,000) paid by a Japanese sushi restaurant chain January 4^th for a 441 pound bluefin tuna, a record.  That’s abot $265 per pound.

PHOTOS OF THE DAY

Traditional Aboriginal dancers perform a ceremony on Australia Day in Sydney Tuesday. Australia Day is the anniversary of the arrival and landing of the First Fleet of convict ships from Great Britain, and the raising of the Union Jack at Sydney Cove by Captain Arthur Phillip, on Jan 26, 1788. Dita Alangkara/AP

 

Members of the Jarl Squad, dressed in Viking costumes, march through the streets of Lerwick on the Shetland Isles, Scotland, during the Up Helly Aa festival Tuesday. Originating in the 1880s, the festival celebrates Shetland’s Norse heritage. Andrew Milligan/PA/AP

Market Closes for January 26^th, 2016

Market Index	Close	Change
Dow Jones	16167.23	+282.01     +1.78%
S&P 500	1903.63	+26.55     +1.41%
NASDAQ	4567.672	+49.181   +1.09%
TSX	12331.32	+188.16
		+1.55%

International Markets

Market Index	Close	Change
NIKKEI	16708.90	-402.01
		-2.35%
HANG SENG	18860.80	-479.34
		-2.48%
SENSEX	24485.95	+50.29
		+0.21%
FTSE 100	5911.46	+34.46
		+0.59%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.266	1.243
CND. 30 Year Bond	2.071	2.058
U.S.    10 Year Bond	1.9942	2.0047
U.S. 30 Year Bond	2.7852	2.7859

Currencies

BOC Close	Today	Previous
Canadian $	0.70823	0.70033
US $	1.41196	1.42789
Euro Rate 1 Euro=		Inverse
Canadian $	1.53401	0.65188
US $	1.08644	0.92044

Commodities

Gold	Close	Previous
London Gold Fix	1113.60	1106.60
Oil	Close	Previous
WTI Crude Future	31.45	28.39

Market Commentary:

Canada

By Oliver Renick

     (Bloomberg) — Canadian stocks continued to mirror prices of commodities, rallying to trim the equity benchmark’s worst monthly decline since 2012, as resources from crude to copper rebounded.

     The Standard & Poor’s/TSX Index added 1.6 percent to 12,331.32 at 4 p.m. in Toronto, following a 2 percent decline on Monday. Nine of the index’s 10 main industries climbed. The S&P/TSX, which entered a bear market earlier this year, has fallen 5.2 percent this month.

     Health-care shares advanced the most in the index, climbing 4.5 percent on gains of at least 3.3 percent in Concordia Healthcare Corp. and Valeant Pharmaceuticals International Inc. The group of five stocks is down 2.9 percent on the year.

     Concern that China’s government won’t be able to stop the world’s second-largest economy from slowing has sent commodities prices tumbling. That’s pushed Canada’s resource-heavy equities market into a bear market as the nation’s economy suffered from waning demand for minerals and oil. Commodities advanced Tuesday on speculation the U.S. economy will continue to grow and that central banks are prepared to step up stimulus if warranted.

     Energy stocks in the S&P/TSX increased, as all but two companies in the 55-member index rose. Pengrowth Energy Corp. and Birchcliff Energy Ltd. led gains, jumping more than 15 percent. West Texas Intermediate crude climbed after Iraq’s oil minister said at a conference in Kuwait that Saudi Arabia and Russia are now more flexible about cooperating to cut output.

     Raw-materials producers jumped 2.1 percent as a Bloomberg index of commodities added 1.4 percent. Forty of the 46 commodity companies in the S&P/TSX advanced today as gold and copper rose.

     Canadian National Railway jumped 1.6 percent after reporting fourth-quarter earnings per share that beat analyst estimates, even as revenue missed. Earnings were C$1.18 in the fourth quarter, compared with the average estimate of $1.11.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks rallied, with the Dow Jones Industrial Average posting its strongest gain in more than seven weeks, amid better-than-forecast earnings from companies ranging from 3M Co. to Coach Inc. while energy shares rebounded with oil after a selloff Monday.

     Proctor & Gamble Co., 3M and Johnson & Johnson rose at least 2.5 percent after their quarterly profits beat analysts’ estimates. Sprint Corp. surged 19 percent after posting a smaller-than-estimated loss and gaining subscribers for a fifth straight quarter. Coach climbed the most since 2010 after raising its full-year earnings outlook, and Chevron Corp. gained 4 percent as energy shares led the rally. Apple Inc. was little changed in late trading after its earnings report.

     The Standard & Poor’s 500 Index added 1.4 percent to 1,903.63 at 4 p.m. in New York, recovering from a 1.6 percent drop yesterday. The Dow gained 282.01 points, or 1.8 percent, to 16,167.23. The Nasdaq Composite Index increased 1.1 percent. About 7.9 billion shares traded hands on U.S exchanges, 4.3 percent above the three-month average.

     “Crude oil has done well today, that’s probably what’s responsible for this rally,” Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee, said by phone. “It comes down to what energy is doing and it has for a while. Earnings have started to ramp up, so that could be helping today as well. We need to see crude oil spend a month sideways and it’s just not happening yet.”

     Tuesday’s rally provided a reprieve for the S&P 500, which remains on track for its worst January since 2009 as a plunge in oil prices exacerbated worries that China’s slowdown will weigh on global growth. Better-than-forecast earnings reports and economic data today helped soothe some of those concerns, while Federal Reserve officials gathered in Washington for a two-day policy meeting.

     Policy makers are widely expected to leave rates steady, though investors will be scouring Wednesday’s statement for hints officials are backing away from the path of four rate increases in 2016. Signals last week that central banks in Europe and Japan stand ready to boost stimulus to tamp down market volatility fueled a flight to risk assets after equities had the worst two-week start to a year on record.

     Fed officials have emphasized that the course for rates depends on progress in the economy. A report today showed home prices in 20 U.S. cities rose at a faster pace in the year ended November, underscoring the shortage of supply amid steady demand. Separate data showed consumer confidence improved in January to a three-month high as Americans grew more upbeat about the prospects for the economy, labor market and their incomes.

     The S&P 500 has lost 8.2 percent since the Fed raised borrowing costs last month for the first time in nearly a decade. The probability of a rate increase this week has stayed low after the December liftoff, and chances the Fed will raise in March have fallen to less than one-in-four from even odds at the start of the year.

     Traders are also watching corporate earnings results for a read on the strength of the economy. Of those S&P 500 members that have already posted results, 80 percent beat earnings projections while 50 percent exceeded sales forecasts. Analysts estimate profit at firms in the index fell 6.3 percent in the fourth quarter, better than predictions a week ago calling for a 7 percent slump.

     Apple slipped 0.2 percent as of 4:47 p.m. after forecasting a sales decline for the first time in more than a decade. Sales and iPhone shipments fell short of projections in the quarter ended in December, reinforcing concerns that Apple is reaching the limits of iPhone growth. Profit was also below analysts’ forecasts.

     “I think the strong housing numbers are showing that the United States, while not an island, is fairly well insulated from any slowdown in China,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Advantage Funds, by phone from Menomonee Falls, Wisconsin. “If we can see the good earnings continue and numbers that beat expectations, and more importantly, constructive guidance, that could help us maintain some independence from the Chinese market.”

     3M saw its best rally in four years, boosting the industrial group, after the maker of Post-it notes and Scotch tape cut costs to fight the effects of a strong dollar. J&J also jumped the most since 2011 after its earnings were helped by sales of blockbusters like arthritis treatment Remicade and psoriasis drug Stelara.

     The Chicago Board Options Exchange Volatility Index fell 6.8 percent today to 22.50, after an 8 percent jump on Monday. The measure of market turbulence known as the VIX remains on pace for its biggest monthly gain since August.

     All of the S&P 500’s 10 main industries were higher, reversing Monday’s across-the-board retreat. Energy companies, the worst performers yesterday, surged 3.8 percent. The group has swung at least 2.1 percent in either direction for eight consecutive sessions. Phone companies, industrial, raw-material and financial shares all gained more than 1.7 percent.

     Chesapeake Energy Corp. rose 8.1 percent, after leading energy producers lower yesterday with its biggest drop in more than seven years. Devon Energy Corp. and Range Resources Corp. increased more than 7.8 percent. West Texas Intermediate crude futures rose 3.7 percent, trimming an earlier 6.8 percent jump, after slumping nearly 6 percent yesterday. Iraq’s oil minister said at a conference in Kuwait that Saudi Arabia and Russia are now more flexible about cooperating to cut output.

     Banks in the benchmark snapped back from 26 month lows.  Zions Bancorporation rose 4.2 percent and briefly reversed Monday’s 5.2 percent drop, while Bank of America Corp. climbed 2.7 percent. Huntington Bancshares Inc. was the only loser, falling 8.5 percent after agreeing to acquire smaller rival FirstMerit Corp. for $3.4 billion in cash and stock and saying it will take more than five years to rebuild capital spent on the deal.

     An index of trucking companies surged the most since October 2011, with Heartland Express Inc. and Ryder System Inc. rising more than 7.4 percent. Heartland reported quarterly earnings in line with analysts estimates. Swift Transportation Co. rallied 21 percent, the biggest in two years, after its earnings beat forecasts. The Dow Jones Transportation Average capped its strongest gain in more than four months.

     With data showing Americans feeling better about the economy, a swath of consumer companies from apparel makers to homebuilders were among the session’s strongest performers. Lennar Corp. increased 4.8 percent its steepest gain in a year. Hanesbrands Inc. and Michael Kors Holdings Ltd. advanced more than 2.8 percent.

     Corning Inc. rose 5.7 percent, the best in more than two years. The specialty glassmaker’s fourth-quarter profit and sales beat estimates, while the company said it expects the first quarter will be 2016’s weakest with growth recovering as the year progresses.

     Polaris Industries Inc. fell 9.2 percent, the most in five weeks after the snowmobile and all-terrain vehicle maker’s 2016 outlook missed analysts’ forecasts. Arctic Cat Inc. sank 7.3 percent to a five-year low, and Harley-Davidson Inc. slipped 3.8 percent to the lowest since December 2011.

 

Have a wonderful evening everyone.

 

Be magnificent!

The best way to find yourself is to lose yourself in the service of others.

Mahatma Gandhi

As ever,

 

Carolann

 

Honesty is the first chapter in the book of wisdom.

                          -Thomas Jefferson, 1743-1826

 

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 this afternoon, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

Tourists watch high waves from the Pacific Ocean pounding the coast in Vina del Mar, Chile, Monday. Tourists have been warned by the navy to stay away from beaches, especially in the evening and early morning during high tides. Rodrigo Garrido/Reuters

A snowman stands in front of the White House in Washington Monday. The area is digging out from the weekend blizzard. Kevin Lamarque/Reuters

Market Closes for January 25^th, 2016

Market Index	Close	Change
Dow Jones	15885.22	-208.29     -1.29%
S&P 500	1877.08	-29.82   -1.56%
NASDAQ	4518.492	-72.688   -1.58%
TSX	12143.16	-246.42
		-1.99%

International Markets

Market Index	Close	Change
NIKKEI	17110.91	+152.38
		+0.90%
HANG SENG	19340.14	+259.63
		+1.36%
SENSEX	24485.95	+50.29
		+0.21%
FTSE 100	5877.00	-23.01
		-0.39%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.243	1.319
CND. 30 Year Bond	2.058	2.101
U.S.    10 Year Bond	2.0047	2.0554
U.S. 30 Year Bond	2.7859	2.8261

Currencies

BOC Close	Today	Previous
Canadian $	0.70033	0.70811
US $	1.42789	1.41220
Euro Rate 1 Euro=		Inverse
Canadian $	1.54921	0.64549
US $	1.08496	0.92169

Commodities

Gold	Close	Previous
London Gold Fix	1106.60	1096.25
Oil	Close	Previous
WTI Crude Future	28.39	30.99

Market Commentary:

Canada

By Oliver Renick

     (Bloomberg) — Canadian stocks plunged, joining renewed selling in equities from Europe to America as crude oil resumed a selloff that sent energy shares tumbling.

     The Standard & Poor’s/TSX Index slid 2 percent to 12,143.16 at 4 p.m. in Toronto, the first decline in three sessions. Eight of the index’s 10 main industries fell, with energy and financial companies leading the index lower. The S&P/TSX, which entered a bear market earlier this year, added 2.6 percent last week, its first weekly advance of 2016.

     U.S. and European stocks also halted a two-day rally, as crude oil tumbled 5.8 percent in New York. The rout in oil rekindled concerns that global growth is slowing and sparked demand for haven assets such as government bonds. The yield on Canada’s benchmark 10-year bond slid seven basis points to 1.24 percent.

     Declines in energy prices, as well as a slumping economy, have driven consumer confidence in Canada to a record low. Data today showed the Bloomberg Nanos Canadian Confidence Index measuring optimism on personal finance, job security, housing and the economy fell to 52.3 from 53 a week earlier.

     All companies in the 55-member S&P/TSX energy index declined. Penn West Petroleum Ltd declined 7 percent, while Gran Tierra Energy Inc and Whitecap Resources Inc lost at least 5.9 percent.

     Financial stocks in the S&P/TSX index lost 1.7 percent, as the drop in yields threatened the earnings power at lenders and damped the prospects for investment returns at financial- services firms. The S&P/TSX Banks Index plunged 3 percent Toronto-Dominion Bank and Royal Bank of Canada sliding more than 2.9 percent.

     Raw-materials producers fell 0.6 percent as a Bloomberg index of commodities lost 1.1 percent.

US

By Jeremy Herron and Anna-Louise Jackson

     (Bloomberg) — U.S. stocks halted a two-day rebound, with losses piling up in the last hour of trading as crude oil resumed a selloff that has rocked financial markets this year. Commodity-linked currencies slid as investors sought refuge in haven assets from gold to Treasuries.

     Energy and mining shares pushed the Standard & Poor’s 500 Index’s retreat to 1.6 percent as U.S. crude tumbled back below $31 a barrel, winding back a sizable chunk of Friday’s gains. Sentiment was better in emerging markets, where stocks headed for their steepest two-day advance since September on bets central banks will bolster stimulus to soothe the market turbulence. While the ruble weakened against all but one of its 31 major peers and Canada’s dollar sank, gold jumped. 10-year Treasury yields dropped five basis points.

     Even after it staged a recovery late last week, crude is still nearing a 20 percent decline this year as brimming U.S. stockpiles and the prospect of additional Iranian exports fuel anxiety over a global glut. The slump in energy prices has also amplified concern over world growth and disinflation, as it also points to weaker industrial demand. With energy and commodity companies sliding, a measure of the correlation between global stocks and oil prices over the past 120 days has climbed to 0.5, the highest level since 2013.

     “Obviously investors are working through some potentially difficult issues in their minds about the state of the world economy,” said John Carey, a Boston-based fund manager at Pioneer Investment Management Inc., which oversees about $230 billion. “It might might be a while before we emerge from this period of uncertainty. I’ve noticed that pattern of end-of-day volatility and wonder if there are programs that kick in at the end of the day that contribute to that.”

     The S&P 500 fell to 1,877.07 as of 4 p.m. in New York, following a 2 percent rebound on Friday. Equities are on track for their worst January since 2009 amid concern China’s slowdown will weigh on global growth, with plunging oil prices exacerbating that angst. The U.S. benchmark sank to a 21-month low last week before rallying.

     Halliburton Co. declined 3 percent Monday after posting a quarterly loss, and Exxon Mobil Corp. slid amid the gyrations in crude oil. McDonald’s Corp. gained after the fast-food giant’s earnings beat analysts’ forecasts, while Tyco International Plc surged 12 percent after Johnson Controls Inc. agreed to merge with the company.

     In Europe, the Stoxx 600 Index fell 0.6 percent after surging 5 percent over the previous two sessions. Seadrill Ltd. led the decline, tumbling 8.9 percent after the world’s biggest crude exporter said it’s keeping up investments in energy projects despite oil’s slump. A gauge of mining companies also dropped, while banks slid the most among industry groups.

     “It’s the same old stuff today, the market’s being driven mostly by oil,” said David Donabedian, chief investment officer of Atlantic Trust Private Wealth Management, which oversees about $27 billion. “I don’t think that relationship is justified. I’m not as convinced that it’s a great indication of where the global economy is headed and therefore where the stock market is headed, but obviously a lot of the investment universe disagrees.”

     In Asia, equities rose, with Japanese and Australian shares driving the MSCI Asia Pacific Index up 1.1 percent in a second day of gains. The Topix index added 1.3 percent in Tokyo, even as the yen strengthened. Hong Kong’s Hang Seng Index gained 1.4 percent.

     After extending gains earlier in the session, the retreat in West Texas Intermediate crude really got going during the European day, with futures falling 5.8 percent to $30.34 a barrel by the close of trading in New York. Brent crude lost 5.2 percent to $30.50 in London, after jumping 10 percent on Friday.

     Saudi Arabian Oil Co. is maintaining investment in oil and natural gas projects as it studies options to sell shares in its parent company and refining and chemical operations, Chairman Khalid Al-Falih said Monday. The state-run producer, known as Saudi Aramco, can survive low oil prices for “a long, long time,” he told reporters in Riyadh, fueling concern that the global oil glut will persist.

     Gold advanced as investors zeroed in on the precious metal’s attractiveness as a haven investment. Bullion for immediate delivery rose 1 percent to $1,108.80 an ounce, according to Bloomberg generic pricing. Gold climbed 0.8 percent last week as the turmoil in global stock markets renewed interest in the metal as a store of value.

     Copper in London fell 0.6 percent to $4,417 a metric ton, while nickel dropped 1.7 percent to $8,550 a ton. The London Metals Exchange’s metals gauge fell 0.6 percent, while the Bloomberg Commodity Index slipped 1 percent after rallying last week.

     The euro rose for the first time in four days as the revival of risk aversion renewed bids for low-yielding, haven currencies. The shared currency climbed with the yen and the Swiss franc as investors unwound overseas bets funded in those currencies and channeled cash into government bonds.

     Traders are jittery ahead of central bank meetings in the U.S., Japan and New Zealand this week, with speculation mounting policy makers will have to address the volatile start to 2016 trading and its impact on the world economy. The prospect of another interest-rate cut from the Reserve Bank of New Zealand before the end of June has weighed on the local dollar, which dropped 0.7 percent on Monday.

     Japan’s currency has gained versus all of its 16 major counterparts this year as a China-led stock selloff and the tumble in oil prices bolstered the currency’s appeal. Hedge funds and other large speculators raised net bullish yen positions to the highest level in almost four years last week. The BOJ is scheduled to make a statement on monetary policy Jan. 29.

     The Loonie and Mexico’s peso declined with the ruble as currencies of commodity-producing nations fell with crude. Australia’s dollar weakened 0.7 percent.

     U.S. Treasuries rose for the first time in three days, with the 10-year yield slipping to 2.01 percent. Thirty-year bond yields declined three basis points to 2.80 percent.

     While the Fed’s Open Market Committee is set to review rates Jan. 27, traders aren’t pricing in the probability of the next increase until September. Futures prices indicate U.S. rates will rise to 0.62 percent by the end of this year, which implies about one increase in 2016.

     The yield on 10-year German bunds fell one basis point, or 0.01 percentage point, to 0.47 percent, and rates on similar maturity Japanese notes were down the same amount to 0.23 percent.

     “We saw a pretty simultaneous slump in oil and equity futures,” said John Davies, an interest-rate strategist at Standard Chartered in London. “U.S. Treasury yields took the cue accordingly and the curve has bull flattened in response,” he said referring to longer-dated bond yields falling faster than those on shorter-maturity debt.

     The MSCI Emerging Markets Index rose 0.8 percent to bring its two-day climb to 4 percent. Benchmarks in Taiwan, Indonesia and the Philippines gained more than 1 percent while shares in the Gulf fell with oil. Growing speculation central banks will cut or avoid raising interest rates buoyed Asian markets in the midst of the worst start on record for global stocks. China’s Shanghai Composite Index, whose gyrations were the source of a lot of market tension in the first week of the year, added 0.8 percent.

     All but one of the 10 sub-groups in the developing-nation stocks gauge rose, led by industrial shares, which extended Friday’s advance, the most since August. The ruble, Colombia’s peso and the Turkish lira pushed a measure of emerging-market currencies down for the first time in three days, while most of their Asian peers strengthened.
 

Have a wonderful evening everyone.

 

Be magnificent!

“Knowledge is power. Information is liberating. Education is the premise of progress, in every society, in every family.”

Kofi Annan

As ever,

 

Karen

 

“Unity is strength… when there is teamwork and collaboration, wonderful things can be achieved.” Mattie Stepanek

 

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