Category: Events

Dear Friends,

Tangents:

I attended Barron’s investment conference on Monday and The Economist’s Annual Finance & Economics Forum on Tuesday, both taking place in NYC.  The focus this year at the Buttonwood (The Economist’s) conference was “The Valley Meets the Street” – what’s new and what’s coming in fintech.  It is really amazing, dazzling even.  The final event of the day was an Economist debate: This house believes millennials will stop using banks.  Both the Pro and the Con panels made very convincing arguments, so there is much to contemplate. 

Some catching up to do here, so I’ll tell you more about it in the next couple of days…

PHOTOS OF THE DAY Sergio Marchionne (c.) points at a Ferrari SF15-T parked in front of the New York Stock Exchange in honor of Ferrari’s IPO, Wednesday. The parent company, mass-market carmaker Fiat Chrysler Automobiles, is selling Ferrari shares under the stock name RACE. Mark Lennihan/AP

A detail of the vaulting of the Sagrada Familia Basilica, designed by architect Antoni Gaudi, in Barcelona, Spain, Wednesday. Barcelona’s breathtaking Basilica has begun its final phase of raising six immense towers that officials say will make it Europe’s tallest religious building. Manu Fernandez/AP

Market Closes for October 21^st, 2015

MarketIndex	Close	Change
DowJones	17168.61	-48.50  -0.28%
S&P 500	2018.94	-11.83  -0.58%
NASDAQ	4840.117	-40.854  -0.84%
TSX	13704.19	-137.73
		-1.00%

International Markets

MarketIndex	Close	Change
NIKKEI	18554.28	+347.13
		+1.91%
HANGSENG	22989.22	-86.39
		-0.37%
SENSEX	27287.66	-19.17
		-0.07%
FTSE 100	6348.42	+3.29
		+0.05%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.458	1.538
CND.30 Year Bond	2.265	2.332
U.S.   10 Year Bond	2.0263	2.0670
U.S.30 Year Bond	2.8655	2.9127

Currencies

BOC Close	Today	Previous
Canadian $	0.76122	0.77024
US$	1.31369	1.29830
Euro Rate1 Euro=		Inverse
Canadian $	1.48949	0.67137
US$	1.13385	0.88195

Commodities

Gold	Close	Previous
London GoldFix	1167.10	1177.75
Oil	Close	Previous
WTI Crude Future	44.65	45.55

Market Commentary:

Canada

By Peter Henderson

     (Canadian Press) — TORONTO — The Toronto stock market dropped by triple digits and the loonie contracted sharply against the greenback after a pullback in commodity prices and a disappointing read on the economy from the Bank of Canada.

     The Toronto Stock Exchange’s S&P/TSX index ended the day down 137.73 points at 13,704.19, with the health-care subsector posting the biggest loss on the day, down 6.41 per cent.

     Valeant Pharmaceuticals stock plunged 19.2 per cent to $154.21 on Wednesday after short-seller research firm Citron Research compared the Canadian pharmaceutical company to the collapsed energy giant Enron and accused it of creating a network of phantom pharmacies to fool auditors.

     The drug company denied the allegations.

     Valeant shares have fallen from a peak of $347.84 in August, with American political figures including Hillary Clinton turning their focus in the last month to price increases in the pharmaceutical industry.

     Kash Pashootan, portfolio manager at First Avenue Advisory in Ottawa, a Raymond James company, said investors can do all the research in the world but they can never really predict a company’s fortunes.

     “What you’re seeing is another reminder of why diversification is so important in any investing,” he said.

     In New York, the Dow Jones average of 30 stocks closed down 48.50 points at 17,168.61, while the broader S&P 500 index fell 11.83 points to 2,018.94 and the Nasdaq index dropped 40.85 points to 4,840.12.

     Pashootan said that ever since the American economy began to recover in 2010, North American equity markets have shown strong results.

     Now, he said, the market is changing as investors become more aware that those returns are unlikely to last.

     “After five years of phenomenal gains in the markets, especially the U.S. markets, it’s unrealistic to expect that for the next five years growth will come at the same magnitude,” he said.

     On the commodity markets, the December gold contract ended trading down $10.40 to US$1,167.10 an ounce, the December crude contract fell US$1.09 to US$45.20 a barrel and the November natural gas contract fell 7.2 cents to US$2.404 per thousand cubic feet.

     Pashootan said the oil market is still suffering from worldwide oversupply and that he foresees a rough time for oil company stocks as they continue to adjust to the lower oil price.

     Many oil companies have been protected by the long-term hedges they invest in as insurance against an oil price decline and many of those hedges are beginning to expire, he said.

     “Then they will really feel the impact of selling oil into a market at half the price of what they were used to selling it at,” Pashootan said.

     The loonie fell by 0.91 of a cent to 76.24 cents US.

     The Bank of Canada announced on Wednesday that it would keep its key overnight interest rate at 0.5 per cent.

     The bank said in its economic forecast that it will take several years for the Canadian economy to adjust to the impact of persistently low commodity prices.    

US

By Anna-Louise Jackson and Dani Burger

     (Bloomberg) — U.S. stocks declined after Valeant Pharmaceuticals International Inc. took health-care stocks on a wild ride, distracting investors from one of the busiest days for corporate earnings so far this season.

     Equities whipsawed between gains and losses after a short- seller takedown on Valeant sent the shares plunging, only to then rebound after the company disputed the report and CNBC said investor William Ackman added 2 million shares to his stake in the company. Mixed earnings reports from General Motors Co. to Chipotle Mexican Grill Inc. gave few definitive signals on the health of the economy.

     The Standard & Poor’s 500 Index fell 0.6 percent to 2,018.94 at 4 p.m. in New York, the most in a week after earlier rising as much as 0.4 percent. The Dow Jones Industrial Average lost 48.50 points, or 0.3 percent, to 17,168.61. The Nasdaq Composite Index dropped 0.8 percent as biotechnology shares slumped for a second day. About 6.8 billion shares traded hands on U.S. exchanges, 8 percent below the three-month average.

     “We were looking for biotech and health-care as a form of leadership to stabilize the market and this news certainly doesn’t help,” said Andrew Burkly, head of institutional portfolio strategy at Oppenheimer & Co. in New York. “That was the component we were missing on the rally and this sets that back.”

     The S&P 500 was unable to make any forward progress for a second session after reaching a two-month high. Equities have been recovering from a summer selloff and the benchmark’s first correction in four years, which was fed by anxiety over China’s slowdown and confusion on the Federal Reserve’s intentions toward interest rates. The S&P 500 is up 5.2 percent this month, rebounding from its worst quarter since 2011.

     The Chicago Board Options Exchange Volatility Index rose 6 percent Wednesday to 16.70. The measure of market turbulence known as the VIX pared its monthly drop to 32 percent, on track for its steepest since July.

     Investors are looking to corporate America for clues on the strength of the economy as the Fed considers raising interest rates for the first time in almost a decade. The probability of a Fed rate increase this year is about 32 percent, according to data compiled by Bloomberg. March is the first month for which traders price in at least even odds of a boost.                       

     Some 46 S&P 500 companies are due to post results on Thursday, including Caterpillar Inc., Dow Chemical Co., 3M Co. and Amazon.com Inc. Of those that have reported so far, about 47 percent have outpaced sales estimates while 74 percent have beaten earnings targets. Profits are expected to fall 6.7 percent this quarter, according to data compiled by Bloomberg.

     “Earnings reports have been more good than bad so far, but the real meat of earnings will be in the next two weeks,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “There’s not enough to draw from to make a broad conclusion yet.”

     Chipotle slid to a three-month low as its weaker-than- expected profit renewed concerns about escalating costs and slowing growth. Higher labor costs and marketing expenses squeezed profit at the Mexican-food chain last quarter.

     Chipotle’s decline dragged down other eatery stocks. The Bloomberg Limited-Service Restaurant Index fell 2.2 percent, while Jack in the Box Inc. and Papa Murphy’s Holding Inc. both lost more than 4.3 percent. Consumer discretionary stocks erased earlier automaker-led gains as Chipotle weighed and Harley- Davidson Inc. sank 2.5 percent to extend yesterday’s 14 percent tumble.

     Valeant slumped 19 percent, trimming an earlier 40 percent plunge, after a stock-commentary site run by a short seller accused the company of an Enron-like strategy of recording fake sales by using phony customers. Health-care stocks sank 0.9 percent, trimming most of an earlier 2.5 percent drop. The Nasdaq Biotechnology Index declined 0.5 percent after falling as much as 3.5 percent.

     St. Jude Medical Inc. tumbled 8.9 percent, the most since 2012, after it reported third-quarter revenue that missed the consensus of analysts’ estimates and trimmed 2015 guidance. Endo International Plc fell 13 percent, its biggest decline since 2009.

     Yahoo! Inc. and EMC Corp. lost more than 5.2 percent to pace a slump among technology shares. Yahoo reported its biggest quarterly sales drop since 2009 and gave a fourth-quarter revenue forecast that missed analysts’ estimates. EMC’s results met analysts’ reduced estimates, while its shares were hurt in part by a 19 percent drop by VMware Inc., of which EMC owns 81 percent. VMware tumbled amid a weak gauge of future revenue.

     Energy and raw-materials fell more than 0.9 percent, the session’s worst performers among the S&P 500’s 10 major groups. Range Resources Corp. and Consol Energy Inc. decreased more than 6.5 percent as oil slid after a government report showed U.S. crude inventories grew by the most in six months. Alcoa Inc. lost 3.2 percent, and Freeport-McMoRan Inc. declined 2.4 percent before its earnings report tomorrow.

     GM had its best gain since 2012 after its quarterly profit was boosted by strong light-truck sales in the U.S. and stable operations in China. The company credited strong margins in North America and only a slight decline in China, where auto sales have struggled.

     Boeing Co. climbed 1.7 percent to the highest since Aug. 19. The company reassured investors that the aerospace market remains robust after raising its full-year profit forecast amid rising jetliner deliveries and a slowdown in 787 Dreamliner costs.

     The two acquisitions in the semiconductor industry helped the Philadelphia Stock Exchange Semiconductor Index eke out a gain to its highest since July. KLA-Tencor Corp. rose 19 percent after Lam Research Corp said it would acquire the company in a $10.6 billion cash-and-stock deal. SanDisk Corp. added 2.1 percent and advanced for a sixth day after Western Digital Corp. agreed to pay about $19 billion for the storage maker.

     The pacts added to what was already a record year for chip deals — a total of $76 billion before Wednesday.

 

Have a wonderful evening everyone.

 

Be magnificent!

I hold that true education of the intellect can only come through a proper exercise

and training of the bodily organs, e.g., hands, feet, eyes, ears, nose, etc.

In other words an intelligent use of the bodily organs in a child provides

the best and quickest way of developing his intellect.

But unless the development of the mind and body goes hand in hand

with a corresponding awakening of the soul,

the former alone would prove to be  a poor lopsided affair.

By spiritual training I mean education of the heart.

Mahatma Gandhi

As ever,

 

Carolann

 

Nobody got anywhere in the world by simply being content.

                                           -Louis L’Amour, 1908-1988

 

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:

PHOTOS OF THE DAY

A woman selling garlands of marigold flowers waits for customers at a wholesale flower market during Durga Puja festival in Kolkata, India. The garlands are in great demand as people seek to decorate temples and their homes during the festival that will be celebrated till October 22. Rupak De Chowdhuri/Reuters

A hot-air balloon is seen above tents during a tent cultural festival in Hefei, Anhui province, China, Saturday. Nearly 500 tents and about 1,000 people participated in the festival, local media reported. Stringer/Reuters

Market Closes for October 20^th, 2015

Market Index	Close	Change
Dow Jones	17217.11	-13.43   -0.08%
S&P 500	2030.77	-2.89   -0.14%
NASDAQ	4880.973	-24.499   -0.50%
TSX	13841.92	+83.54
		+0.61%

International Markets

Market Index	Close	Change
NIKKEI	18207.15	+75.92
		+0.42%
HANG SENG	22989.22	-86.39
		-0.37%
SENSEX	27306.83	-58.09
		-0.21%
FTSE 100	6345.13	-7.20
		-0.11%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.538	1.455
CND. 30 Year Bond	2.332	2.260
U.S.    10 Year Bond	2.0670	2.0228
U.S. 30 Year Bond	2.9127	2.8812

Currencies

BOC Close	Today	Previous
Canadian $	0.77024	0.76809
US $	1.29830	1.30192
Euro Rate 1 Euro=		Inverse
Canadian $	1.47318	0.67881
US $	1.13469	0.88130

Commodities

Gold	Close	Previous
London Gold Fix	1177.75	1175.40
Oil	Close	Previous
WTI Crude Future	45.55	45.89

Market Commentary:

Canada

Eric Lam

     (Bloomberg) — Canadian stocks rose after voters gave Justin Trudeau’s Liberal Party a surprise majority mandate following a tight three-way race. Construction companies, oil and gold producers rallied.

     Trudeau, the first son of a prime minister to be elected into the same office, defeated incumbent Stephen Harper’s Conservative Party with a decisive 184 of 338 seats in the House of Commons, ending almost a decade of Tory rule, according to preliminary results from Elections Canada. Most polls had expected the Liberals would win a minority government.

     The Standard & Poor’s/TSX Composite Index rose 115.38 points, or 0.8 percent, to 13,873.76 at 10:12 a.m. in Toronto. The S&P/TSX has risen 4.2 percent in October as it tries to recover from the worst quarter since 2011.

     “The election is one factor within many things going on,” said Patrick Blais, a fund manager at Manulife Asset Management Ltd. in Toronto. His firm manages about C$280 billion. “The election in itself is a positive as the market doesn’t appreciate uncertainty and now we have certainty with a majority government.”

     Trudeau’s surprise victory removes a layer of worry for investors in a year when Canadian equities and the dollar have struggled amid a plunge in commodity prices, expectations of the removal of U.S. stimulus and tepid global demand. The benchmark stock index has lagged global peers among developed markets this year with a 5.2 percent decline.

     “Given the downturn in oil prices, the new government will be careful not to disrupt or further hinder the industry,” Blais said. “It’s not the right time to enact stringent laws.”

     Energy producers gained 1.4 percent as 58 of 59 members of the S&P/TSX Energy Index advanced. Suncor Energy Inc. climbed 1.5 percent. Crude for November delivery, which expires Tuesday, added 1.1 percent to $46.39 a barrel in New York.

     Canopy Growth Corp. jumped as much as 21 percent to lead marijuana stocks higher. Trudeau had also pledged to legalize the substance among his policy promises during the campaign.

     Engineering companies SNC-Lavalin Group Inc. and Aecon Group Inc. rallied at least 3.3 percent in the wake of the vote as Trudeau successfully campaigned on a platform of increased infrastructure spending, said Andrew Pyle, fund manager at ScotiaMcLeod Inc. in Peterborough, Ontario. WSP Global Inc. climbed 2.8 percent.

     “A pro-growth government is good for the markets,” Pyle said in a phone interview. His team manages about C$300 million.

     If history is any guide, equities will trend higher under Trudeau’s incoming Liberal government.

     Stretching back to 1922 and the time of William Lyon Mackenzie King, Liberal prime ministers have posted stock returns three times higher than with Conservative leaders, according to monthly data to August 2015 compiled by Bloomberg from TMX Group Ltd., the operator of the Toronto Stock Exchange.

US

By Jeremy Herron and Anna-Louise Jackson

     (Bloomberg) — The three-week rally in U.S. stocks sputtered for a second day and Treasuries fell, as mixed earnings and robust housing data did little to alter perceptions on the economy’s strength and the timing for higher interest rates.

     The Standard & Poor’s 500 Index slipped from a two-month high in choppy trading. The yield on 10-year Treasuries climbed to a one-week high, reinforcing bond-market sensitivity to data as Federal Reserve officials give conflicting policy signals. Four-week bill rates surged as the government faces a debt crunch next month. Canadian stocks rose on speculation a new government will boost fiscal stimulus.

     “We’ve hit a bit of a soft patch,” said Matthew Kaufler, a portfolio manager with Federated Investors Inc. who oversees funds with about $2 billion assets. “It’s hard to parse out some of what’s going on from earnings. I don’t think there’s a groundswell or major shift happening in the market .”

     A surge in new-home construction signaled the residential real-estate market may underpin economic growth, though futures traders still give a 32 percent chance that rates will rise this year. A European Central Bank report fueled speculation officials won’t add to monetary stimulus in that region. Results from IBM Corp. to Travelers Cos., and deals involving SanDisk Corp. and Yum! Brands Inc. set the tone on U.S. equities market.

     The Standard & Poor’s 500 Index lost 0.1 percent at 4 p.m. in New York. The gauge’s high for the session equaled its average price for the past 100 days, the first time it’s touched that level since August. 

     The index has climbed 7.8 percent since Sept. 29, as it rebounds from the worst quarterly performance since 2001. The gauge has advanced almost 9 percent from the nadir of its summer selloff, though gains have slowed in recent days as earnings season intensifies.

     International Business Machines Corp. declined 5.9 percent after lowering its full-year profit forecast as quarterly sales missed estimates. Harley-Davidson Inc. dropped the most in the S&P 500 after earnings fell short. A slump in biotechnology shares led the Nasdaq Composite Index lower by 0.5 percent.

     United Technologies Corp. surged after announcing a share repurchase program, while Travelers jumped on its results. Verizon Communications Inc. boosted phone stocks. Yum rose 1.9 percent after saying it will split its China business off into a separate publicly traded company. SanDisk surged on speculation it will be bought as soon as this week.

     In Canada, the S&P/TSX Index climbed 0.6 percent after Justin Trudeau’s Liberal Party put an end to Conservative Prime Minister Stephen Harper’s decade-long rule. Trudeau campaigned on a plan that included running C$25 billion ($19 billion) in deficits for three years to stimulate the economy with infrastructure spending, while increasing taxes on top earners and cutting them for the middle class.

     The yield on 10-year Treasury notes rose five basis points to 2.07 percent, the highest since the rate ended at 2.09 percent a week ago. Fed Governor Daniel Tarullo said last week that he doesn’t currently favor an interest rate hike in 2015 after several other officials said the central bank would still increase rates this year as long as the economy stays on track.

     “We’ve seen this difference of opinion at the Fed, and that discussion, which is taking place out in the market, has created a lot of uncertainty,” said Larry Milstein, managing director of government-debt trading at R.W. Pressprich & Co. in New York. “It means more uncertainty, which means more volatility.”

     The cost to the U.S. government to borrow money for four weeks spiked to about $500,000 from zero, as investors demand a premium for the risk that the government won’t be able to make good on the obligations if Congress does not raise the debt limit.

 

     European government bonds fell after the ECB lending data. Yields on 10-year French bonds rose seven basis points to 0.99 percent, while those on German bunds added six basis points to 0.63 percent.

     The Bloomberg Dollar Spot Index rose less than 0.1 percent. The gauge fell earlier as officials from Australia to Europe signaled looser monetary policies are starting to work. The euro rose 0.2 percent to $1.1344, ending three days of declines. 

     The single currency has gained almost 9 percent from a 12- year low of $1.0458 in March, when the ECB started implementing a QE program designed to revive inflation in the euro zone. The currency has advanced versus 15 of 16 major peers in the past three months.

     Canada’s dollar strengthened 0.3 percent to C$1.29820 to the dollar. Trudeau campaigned against Harper’s budget-restraint agenda, claiming the nation needs a return to deficit spending to combat economic woes triggered by an oil-price collapse.

     Oil dropped to a two-week low before a government report that’s projected to show an increase in U.S. crude stockpiles. West Texas Intermediate crude fell 0.7 percent to settle at $45.55 a barrel. Brent rose 10 cents to end the session at $48.71 in London.

     U.S. inventories probably climbed by 3.5 million barrels last week, following an increase of 7.6 million in the prior period, according to a Bloomberg survey of analysts before an Energy Information Administration report Wednesday.

     U.S. natural gas futures rose 1.9 percent to $2.488 per million British thermal units, advancing for a second day on forecasts for unusually cold weather on the east coast that could boost demand for the heating fuel.

     Emerging-market stocks fell from a two-month high as investors weighed the prospects for a pullback in the monetary stimulus in developed nations that has helped prop up demand for riskier assets.

     The MSCI Emerging Markets Index dropped 0.4 percent from the highest since Aug. 11, while most currencies gained. A Bloomberg gauge tracking 20 developing-nation currencies declined 0.2 percent, falling for a third day. Currencies in Malaysia, Indonesia and South Korea each fell at least 0.8 percent against the dollar.

     The premium investors demand to own emerging-market debt over U.S. Treasuries narrowed three basis points to 392 basis points, according to JPMorgan Chase & Co. indexes.

 

Have a wonderful evening everyone.

 

 

Be magnificent!

 

“We can do anything we want to do if we stick to it long enough”. Helen Keller

 

As ever,

 

“Keep steadily before you the fact that all true success depends at last upon yourself”. Theodore T. Hunger

 

Karen

 

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 until Wednesday, I will be writing the newsletter on her behalf. 

PHOTOS OF THE DAY

Fallen leaves in autumn colors lie on roots in Munich, Germany, Monday. Matthias Schrader/AP

The Cotopaxi volcano spews ash and vapor, seen from Quito, Ecuador, Monday. Cotopaxi began showing renewed activity in April and its last major eruption was in 1877. Dolores Ochoa/AP

Market Closes for October 19^th, 2015

Market Index	Close	Change
Dow Jones	17230.54	+14.57   +0.08%
S&P 500	2033.66	+0.55   +0.03%
NASDAQ	4905.473	+18.785   +0.38%
TSX	13758.38	-79.72
		-0.58%

International Markets

Market Index	Close	Change
NIKKEI	18131.23	-160.57
		-0.88%
HANG SENG	23075.61	+8.24
		+0.04%
SENSEX	27364.92	+150.32
		+0.55%
FTSE 100	6352.33	-25.71
		-0.40%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.455	1.463
CND. 30 Year Bond	2.260	2.260
U.S.    10 Year Bond	2.0228	2.0316
U.S. 30 Year Bond	2.8812	2.8780

Currencies

BOC Close	Today	Previous
Canadian $	0.76809	0.77764
US $	1.30192	1.29095
Euro Rate 1 Euro=		Inverse
Canadian $	1.47385	0.67850
US $	1.13205	0.88335

Commodities

Gold	Close	Previous
London Gold Fix	1175.40	1180.85
Oil	Close	Previous
WTI Crude Future	45.89	47.26

Market Commentary:

Canada

By Kate Garber and Eric Lam

     (Bloomberg) — A slide in commodities producers sent Canadian stocks lower in light trading as investors remained on tenterhooks ahead of the results of a hotly contested federal election with no clear front-runner among three parties.

     Voters went to the polls Monday in a tight election that may end the decade-long run of incumbent Prime Minister Stephen Harper’s Conservatives. Polls suggest the Liberal Party led by Justin Trudeau will win the most seats, though fall short of enough to form a majority government. The threat of the election producing no clear winner introduces a wild card to volatile currency and equity markets.

     “We’ll really wait to see tomorrow whether the results of the election have an impact,” said David Cockfield, fund manager at Northland Wealth Management in Toronto. His firm manages about C$325 million. “I have the impression that if it’s a Conservative minority or a Liberal minority government that not too much would change from a foreign investment standpoint.”

     In trading 24 percent below the 30-day average, the Standard & Poor’s/TSX Composite Index fell 79.72 points, or 0.6 percent, to 13,758.38 at 4 p.m. in Toronto. With polls set to close at 9:30 p.m., investors focused on the slowest quarterly expansion in China’s economy since 2009, with commodities sliding on the prospect for a drop in demand. 

     Valeant Pharmaceuticals International Inc., the fourth- biggest stock by weighting in the benchmark index, slid after saying it may spin off one line of drugs and in the future focus less on acquisitions that depend on buying old treatments and raising their prices.

     If no party wins a majority, the country may be headed for fraught negotiations to form a minority government. While some parties have collaborated, historically there’s never been a formal coalition in Canada and that’s unlikely to change. 

     Stretching back to 1922 and the time of William Lyon Mackenzie King, Liberal prime ministers have posted stock returns three times higher than with Conservative leaders, according to monthly data to August 2015 compiled by Bloomberg from TMX Group Ltd., the operator of the Toronto Stock Exchange.

     The instability caused by the election is adding another layer of worry for investors in a year when Canadian equities and the dollar have struggled amid the commodity price plunge, expectations of the removal of U.S. stimulus and tepid global demand. The benchmark stock index has lagged global peers among developed markets this year with a 6 percent decline.

     “We suspect that a minority Liberal outcome, with informal support by the NDP party, is the scenario ’priced into’ markets given the movement in opinion polls in recent weeks,” said Mark Chandler, head of Canadian fixed income strategy at Royal Bank of Canada’s RBC Capital Markets unit, in a note to clients. “Such an outcome should not have an unduly large market reaction.”

     The S&P/TSX has risen 3.4 percent in October as it tries to recover from the worst quarter since 2011. The gauge has alternated between gains and losses for five straight sessions.

US

By Jeremy Herron and Anna-Louise Jackson

     (Bloomberg) — While signs of weakness in the Chinese economy rekindled declines in commodities, U.S. stocks ended Monday little changed at an eight-week high as consumer companies advanced before a barrage of earnings reports.

     Crude oil extended last week’s drop on concern over the global glut, while copper slipped the most in three weeks as data showed China’s economy grew at the slowest pace since 2009 last quarter. The Standard & Poor’s 500 Index eked out a third day of gains, with advances in Netflix Inc. to Tyson Foods Inc. offsetting a slump in raw material producers. The dollar strengthened versus the euro, while rates on short-term Treasury bills surged amid concern the U.S. Congress won’t reach a deal to raise or suspend the debt-ceiling.

     “There’s fear out there of missing the rally and that forces people into the market,” said Tim Ghriskey, chief investment officer who helps oversee $1.5 billion at Solaris Asset Management. “Right now, the focus is on earnings. Overall, earnings have been better than expected. There have been no big currency issues and no big impact from losing orders from the strength in the dollar.”

     While investors are switching their focus to company earnings following a three-week rally in global equities, the anxieties that fueled last quarter’s worst selloff in four years flared again Monday with the Chinese growth data, which stoked concern over weakening demand in the world’s biggest consumer of commodities and Asia’s largest economy. Morgan Stanley became the latest American bank to disappoint on earnings, with results due this week from about 100 other S&P 500 companies. U.S. lawmakers need to raise the government’s borrowing capacity by Nov. 3 to ensure it can meet daily expenses.

     The S&P 500 added less than 0.1 percent Monday to 2,033.66, extending a three-week climb that’s driven the gauge up 5.9 percent in October, following two months of declines.

     International Business Machines Corp. fell in after-hours U.S. trading after reporting revenue that fell short of analysts’ estimates. The stock was down almost 5 percent in New York.

     Meanwhile, SanDisk Corp. surged more than 7 percent after people familiar with the matter said the company is in advanced talks to sell itself to Western Digital Corp. This year to date has been the biggest ever for semiconductor company mergers and acquisitions. Firms in the $300 billion industry are facing rising costs and a shrinking customer base, encouraging them to get together to add scale.

     Energy and materials producers led losses during the normal trading day, sliding more than 0.7 percent. The two groups are suffering their biggest declines since September after leading the recent stock rebound. Commodity companies are the worst performers in the S&P 500 in 2015.

     Morgan Stanley followed Goldman Sachs Group Inc. and JPMorgan Chase & Co. in reporting profit that trailed analysts’ expectations, renewing concern over the earning power of financial companies. The stock slid 4.8 percent. 

     The Stoxx Europe 600 Index climbed 0.3 percent to a two- month high, fueled by positive company earnings reports and gains in stock of Deutsche Bank AG. The German lender rose 3.7 percent on news that it’s undertaking the biggest management shakeup in more than a decade. Foodmaker Danone SA and Metro AG advanced after earnings.

     The MSCI Asia Pacific Index lost 0.3 percent amid losses in Japan. The Hang Seng Index in Hong Kong ended Monday little changed after the Chinese data, while the Hang Seng China Enterprises Index, which tracks mainland Chinese stocks listed in the city, climbed 0.5 percent.

     Rates on Treasury bills due Nov. 12 surged to the highest level since March. Such debt is the most at risk of not being repaid should Congress fail to reach a debt-ceiling deal. The rate on the bill, which began trading in November 2014, rose to as high as 0.165 percent, from 0.0325 percent on Oct. 16, according to Bloomberg Bond Trader data.

     U.S. Treasury Secretary Jacob J. Lew last week moved up by two days to Nov. 3 the date by which lawmakers must raise the nation’s borrowing capacity to ensure the government can meet daily expenses.

     In 2013, similar wrangling over the debt ceiling sent rates on bills that matured close to the deadline to a two-year high before a deal triggered a decline. An 11th-hour political agreement allowed President Barack Obama to sign legislation to suspend the debt ceiling and end a partial government shutdown – – on the very day Lew then said the government would exhaust its borrowing capacity.

     The rate on one-month bills reached the highest since October 2013, while yields on U.S. 10-year Treasuries slipped one basis point, or 0.01 percentage point, to 2.03 percent, after falling five basis points last week.

     The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major counterparts, added 0.3 percent Monday as the euro slid for a third day.

     The single currency retreated against 12 of its 16 major peers as economists said European Central Bank President Mario Draghi may consider adding to monetary stimulus. The ECB meets on Thursday.

     The Canadian dollar weakened 0.8 percent in a second day of losses as citizens voted in a tight national election that opinion polls suggest will see Prime Minister Stephen Harper’s Conservative Party ejected from power. The Liberal Party is projected to secure the most seats in parliament, though short of the 170 required to form a majority government.

     The MSCI Emerging Markets Index added 0.2 percent to add to its third straight weekly advance.

     Positive company earnings from India and gains in Turkish shares helped extend a rally that’s boosted riskier assets this month. Weaker commodity prices weighed on South African gold producers, while Russia’s ruble retreated with oil.

     The Brazilian real climbed 1.1 percent, posting the biggest gain among Latin American currencies, after President Dilma Rousseff reassured markets that Finance Minister Joaquim Levy will stay in his post because the government agrees with his policies.

     Gold futures dropped the most this month, sliding 0.9 percent to settle at $1,172.80 an ounce after a private report on Friday showed a bigger-than-expected increase in U.S. consumer sentiment. The data helped revive speculation over the path of U.S. interest rates, with many Federal Reserve officials touting an increase this year, a possibility being discounted by traders. Silver fell 1.7 percent.

     Copper futures slid 1.5 percent to settle at $5,206 a metric ton, the biggest drop in three weeks, while aluminum, lead, nickel and zinc also fell.

     West Texas Intermediate crude dropped 2.9 percent to settle at $45.89 a barrel, its lowest close since Oct. 2, while Brent dropped 3.7 percent to end at $48.61 in London. The Chinese gross domestic product data along with figures showing Saudi Arabia’s commercial oil stockpiles rose to the highest level since 2002 in August unsettled traders already on edged amid signs of waning demand and global oversupply.

     Crude, wheat and metals helped drive the Bloomberg Commodity Index down 1.4 percent to its lowest level since Oct. 2. Wheat futures slumped a fourth day, losing 1.3 percent amid favorable growing weather in Ukraine, a top producer of the crop. The U.S. Plains and Midwest regions are also expected to see beneficial rain in the next two weeks.

 

Have a wonderful evening everyone.

 

“In every day, there are 1,440 minutes. That means we have 1,440 daily opportunities to make a positive impact.” Les Brown

 

Be magnificent!

 

 “The purpose of life is a life of purpose.” Robert Byrne

 

As ever,

 

Karen

 

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:

Oscar Wilde was born on this day in 1854.

Poem Selected by Natasha Trethewey, NY Times, October, 2015.

I love the moment in a poem when two worlds collide, as in a movie theater.  Here, the action on-screen and in the audience reflects what is always present in a poem: something in the foreground and something in the background – a distance that must be bridged.

THE BRIDGE

   -by Linda Pastan

At Loew’s Burnside Theatre in the forties
an unknown boy pressed his face
to mine.  We were in the children’s section;
a glowering matron patrolled the aisles alert
as a watchdog, nose twitching, for noise
or fighting or missiles of wadded gum.
Not for the discovery of desire
by twelve-year-old strangers,
The Bridge of San Luis Rey looming
on the screen, Akim Tamiroff starring.
I still remember that bridge (woven by Incas
imagined by Thornton Wilder) falling
and falling, the actors in period costume spilling
like tenpins into space, caught in midair
as I was, partway between love and death.

I am not young enough to know everything. –Oscar Wilde.

I shall be in attendance at an investment conference Monday and Tuesday, so back to you on Wednesday. 

PHOTOS OF THE DAY

French President Francois Hollande walks on the Solheimajokull Glacier, where the ice has receded by more than 1 kilometer (0.6 miles,) during a visit to Iceland Friday. Hollande is in Iceland to experience firsthand the damage caused by global warming, ahead of major UN talks on climate change when Paris hosts the World Climate Change Conference 2015 (COP21) from Nov. 30 to Dec. 11. Thibault Camus/Reuters

A couple watch an illuminated fountain display in Tokyo Friday. Thomas Peter/Reuters

Market Closes for October 16^th, 2015

Market Index	Close	Change
Dow Jones	17215.97	+74.22   +0.43%
S&P 500	2033.08	+9.22   +0.46%
NASDAQ	4886.688	+16.587   +0.34%
TSX	13851.76	+22.79
		+0.16%

International Markets

Market Index	Close	Change
NIKKEI	18291.80	+194.90
		+1.08%
HANG SENG	23067.37	+179.20
		+0.78%
SENSEX	27214.60	+204.46
		+0.76%
FTSE 100	6378.04	+39.37
		+0.62%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.463	1.442
CND. 30 Year Bond	2.260	2.2451
U.S.    10 Year Bond	2.0316	2.0192
U.S. 30 Year Bond	2.8780	2.8382

Currencies

BOC Close	Today	Previous
Canadian $	0.77462	0.77764
US $	1.29095	1.28595
Euro Rate 1 Euro=		Inverse
Canadian $	1.46526	0.68247
US $	1.13502	0.88104

Commodities

Gold	Close	Previous
London Gold Fix	1180.85	1184.25
Oil	Close	Previous
WTI Crude Future	47.26	46.38

Market Commentary:

Canada

By Eric Lam and Allison McNeely

     (Bloomberg) — Canada’s election introduces a wild card to volatile currency and equity markets as voters head to the polls Monday in a tight three-way race with little chance of a clear winner.

     Incumbent Conservative Prime Minister Stephen Harper enters the final weekend with his decade-long reign at risk, trailing the Liberal Party led by Justin Trudeau. The latest polls suggest Trudeau is poised to win the most seats in Canada’s Parliament, while falling short of the 170 required for a majority. New Democrat Thomas Mulcair remains in the mix, leading to potentially fraught negotiations to form a minority government through alliance.

     Canadian equities and the dollar have struggled this year amid a plunge in commodities prices, expectations of higher U.S. interest rates and slowing global growth in recent months. The multiple combinations and inherent instability of a minority government adds another element for investors to grapple with.

     “Canada may face a protracted period of uncertainty in various minority government scenarios,” said Derek Holt, a Bank of Nova Scotia economist, in a note to clients Oct. 15.

     The Standard & Poor’s/TSX Composite Index rose 9.13 points, or 0.1 percent, to 13,838.10 at 4 p.m. in Toronto. Canadian equities have rallied 4 percent in October after capping the worst quarterly slump in four years in September. The Canadian benchmark is down 5.4 percent this year and is the worst- performing market in the Group of Seven industrialized nations.

     The Canadian dollar retreated 0.3 percent to C$1.29082 per U.S. dollar on Friday. One loonie buys 77.47 U.S. cents. A recent bout of strength has lifted the currency off its lowest point in 11 years. It has risen five of the last six weeks as prices for crude oil, one of the country’s largest exports, strengthened and the economic growth outlook brightened. The currency, also known as the loonie for the aquatic bird, is down 10 percent for the year, headed for a 2003 low.

     Canadian 10-year government bonds, meanwhile, have been a source of relative stability through the volatility in the commodity, equity and corporate bond markets. The bonds are yielding 1.46 percent, up 2 basis point from yesterday’s close, and down from about 1.6 percent in the middle of September.

     A victory by the NDP, which has socialist roots, would create the greatest initial sell-off in the Canadian dollar, while a Conservative win would be a “big sigh of relief,” said David Rosenberg, chief economist and strategist at Gluskin Sheff & Associates Inc., in a phone interview.

     At the same time, “any Canadian dollar sell off based on a Liberal victory would probably have me pounding my fist on the table that this would be a buying opportunity,” he said. “The implications for economic growth under their policies is rather significantly positive.”

     If history is any guide, a win by Justin Trudeau and the Liberals bodes well for Canadian stocks. Stretching back to 1922 and the time of William Lyon Mackenzie King’s first term in office, stock returns have been three times higher under Liberal prime ministers than with Conservative leaders, according to monthly data to August 2015 compiled by Bloomberg from TMX Group Ltd., operator of the Toronto Stock Exchange.

     Many events next week have the potential to rock financial markets. China, Canada’s second-biggest trading partner after the U.S. and a key consumer of commodities, reports third- quarter economic growth ahead of the federal election, with results of the vote not expected until late in the evening Monday. The Bank of Canada, which has cut interest rates twice already this year, will deliver its next key borrowing rate decision on Wednesday.

     “There will be so much packed into next week both on the global and domestic calendars that determining sustained market reactions to any specific domestic event will be difficult,” says Scotiabank’s Holt.

US

By Joseph Ciolli

     (Bloomberg) — General Electric Co. rose to a seven-year high amid better-than-estimated quarterly profits, leading an advance in U.S. stocks as the Standard & Poor’s 500 Index posted its longest weekly winning streak since May.

     Equities stretched further above an area where a series of prior rebounds from a summer selloff had stalled. The leadership today shifted, however, to health-care and consumer shares, rather than this month’s stalwarts — energy, raw-materials and industrials — as those groups lagged amid a rising dollar. GE rallied 3.4 percent to its highest since September 2008. 

     The S&P 500 added 0.5 percent in a late-day flourish to 2,033.11 at 4 p.m. in New York, extending an eight-week high. The gauge posted its third consecutive weekly gain. The Dow Jones Industrial Average rose 74.22 points, or 0.4 percent, to 17,215.97. The Nasdaq Composite Index climbed 0.3 percent, while the Russell 2000 Index sank less than 0.1 percent after falling as much as 0.9 percent. About 6.6 billion shares traded hands on U.S. exchanges, 10 percent below the three-month average.

     “Investors are keying in on earnings season, which will really get rolling next week,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “It’s been a good week and month to date, which has the S&P back close to even for the year. The numbers are better than how it feels. Other issues, such as China, have quieted down.”

     Along with GE, other companies that reported results today included Honeywell International Inc., which slid 1.5 percent after its revenue missed expectations and the company trimmed its full-year sales forecast. Schlumberger Ltd. lost 2.2 percent after reporting quarterly profit that declined from the previous year.

     The focus on quarterly results is intensifying, with earnings at S&P 500 members projected to have fallen 6.7 percent in the last quarter. Energy and materials companies will see the steepest drop, according to analyst forecasts compiled by Bloomberg. Morgan Stanley, International Business Machines Corp., Boeing Co. and Microsoft Corp. are among 118 companies in the index scheduled to report next week.

     Stocks are rebounding from their worst quarter in four years, while investor sentiment oscillates between concern at the ripple effects of China’s slowdown, and optimism that the Federal Reserve will delay increasing interest rates until policy makers are satisfied that overseas turbulence won’t derail U.S. growth. The S&P 500 rose 0.9 percent this week, and has rallied 8.9 percent from the low during an August selloff.

     Traders now don’t see better-than-even odds of borrowing costs rising until March next year. The probability of an increase this year is 34 percent, down from 39 percent a week ago, after weaker-than-expected data in both the U.S. and China pushed out expectations for a rate boost.

     Reports today were mixed, with U.S. factory output falling in September for a second month as high inventories and lukewarm demand from overseas customers kept American producers bogged down. A separate report showed consumer sentiment climbed more than forecast in October as lower-income Americans projected wage gains will accelerate and falling energy prices helped stretch paychecks.

     The Chicago Board Options Exchange Volatility Index fell 6.2 percent Friday to 15.05, falling to its lowest since Aug. 18. The measure of market turbulence known as the VIX is down 39 percent this month, on pace for its biggest monthly drop ever. 

     Nine of the S&P 500’s 10 main groups advanced today, with consumer staples and health-care stocks the best performers. Industrial companies were the only sector to slip.

     Consumer staples companies in the benchmark increased 1 percent. as Altria Group Inc. and Tyson Foods Inc. added more than 1.4 percent. Philip Morris International Inc. rallied for a second day, up 2 percent. The world’s largest publicly traded tobacco company on Thursday topped quarterly profit estimates and raised the low end of its forecast, helped by higher prices and a recovering economy.

     Health-care companies gained for a second day, paced by Tenet Healthcare Corp. and Universal Health Services Inc., which rose more than 2.5 percent. An exchange-traded fund tracking health-care services companies extended its two-day gain to 2.1 percent.

     Twitter Inc. advanced 4.9 percent to a more than two-month high after former Microsoft Chief Executive Steve Ballmer said he has a 4 percent stake in the company. Ballmer tweeted early Friday a congratulations to the social-media company for its new Moments product, which helps users follow major events. “Glad I bought 4% past few months,” the post said.

     Energy stocks erased a loss to finish Friday up 0.2 percent as crude oil rose for the first time this week. Exxon Mobil Corp. advanced 1.2 percent, bringing its October gain to 11 percent which would be the most since 2006. Diamond Offshore Drilling Inc. increased 2.3 percent.

     Halliburton Co. slid 3.7 percent after competitor Schlumberger, the world’s largest oilfield services provider, declined the most in almost three weeks as its profit fell amid the deepening global crude market downturn. Halliburton is due to report quarterly results on Monday.

     Wynn Resorts Ltd. declined 1.2 percent, trimming an earlier 10 percent plunge, after the casino operator posted a 27 percent drop in third-quarter revenue as results in Macau shrank by more than a third. Chief Executive Officer Steve Wynn also criticized Chinese bureaucrats who haven’t told him how many gaming tables he’ll get at his $4.1 billion resort scheduled to open in Macau on March 25. Wynn is the best-performing stock in the S&P 500 so far this month.

     An index of transportation stocks slipped 1.6 percent as 16 out of 20 companies fell. The Bloomberg U.S. Airlines Index lost 1.5 percent, led by a 15 percent drop for Spirit Airlines Inc., the biggest in three years. The no-frills carrier that trumpets itself as “ultra low cost” tumbled to the lowest since 2013 after forecasting continued weakness in pricing. Kansas City Southern tumbled 11 percent, the most since January 2014, after the railroad’s quarterly results missed analysts’ forecasts.

     Freeport-McMoRan Inc., another of the S&P 500’s top performers in October, fell 4.3 percent, the most in the raw- materials group. The copper producer dropped for the fourth time in five days, losing 7.8 percent during the stretch, after rallying 27 percent last week to help lead the S&P 500 to its best weekly gain this year. Alcoa Inc. slumped for a sixth day, down 1.6 percent amid its longest losing streak since August.

 

Have a wonderful weekend everyone.

 

Be magnificent!

A child must be brought up to understand the word no.  He should be taught yes first of all,

then, yes and no, then no and yes, in such a way that he gradually comes to realize, that there is rally only no.

A child’s education is learning to understand no, and  this enables him to grow.

Growing up means accepting the concept of no.

Swami Prajnanpad

As ever,

 

Carolann

 

I’ve failed over and over again in my life and that is why I succeed.

                                                        -Michael Jordan, 1963-

 

 

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:

This day in 1990, Soviet leader Mikhail Gorbachev won the Nobel Peace Prize for his work in ending Cold War tensions.
 

1990    Soviet President Mikhail S. Gorbachev was named the winner of the Nobel Peace Prize.

1993    Nelson Mandela and F.W. de Klerk were named winners of the Nobel Peace Prize for their efforts to end apartheid in South Africa.

2002    ImClone Systems founder Sam Waksal pleaded guilty in New York in the biotech company’s insider trading scandal.

2007    The New York Yankees and third baseman Alex Rodriguez agreed on a record 10-year, $275 million contract, the richest in sports history.

-from The Book of Days:

Edward Gibbon, Autobiography:

It was Rome, on the 15^th of October 1764, as I sat musing amidst the ruins of the Capitol, while the barefooted friars were singing vespers in the temple of Jupiter, that the idea of writing the decline and fall of the city first started to my mind.  But my original plan was circumscribed to the decay of the city rather than of the empire; and though my reading and reflections began to point towards that object, some years elapsed, and several avocations intervened, before I was seriously engaged in the execution of that laborious work.

The friars were actually singing in Santa Maria in Aracoeli, on the site of the temple of Juno.

PHOTOS OF THE DAY

The sun rises behind a beach installation of the Black Pearl pirate ship made of driftwood on New Brighton beach, Liverpool, northwest England, Thursday. The installation was created by artists Frank Lund and Major Mace. Peter Byrne/PA/AP

A man walks between two structures that form part of the roof of the Oslo Opera House in Norway Thursday. Russell Boyce/Reuters

Market Closes for October 15^th, 2015

Market Index	Close	Change
Dow Jones	17141.75	+217.00   +1.28%
S&P 500	2023.86	+29.62   +1.49%
NASDAQ	4870.102	+87.253   +1.82%
TSX	13828.97	-46.36
		-0.33%

International Markets

Market Index	Close	Change
NIKKEI	18096.90	+205.90
		+1.15%
HANG SENG	22888.17	+448.26
		+2.00%
SENSEX	27010.14	+230.48
		+0.86%
FTSE 100	6338.67	+69.06
		+1.10%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.442	1.392
CND. 30 Year Bond	2.245	2.214
U.S.    10 Year Bond	2.0192	1.9788
U.S. 30 Year Bond	2.8655	2.8382

Currencies

BOC Close	Today	Previous
Canadian $	0.77764	0.77308
US $	1.28595	1.29352
Euro Rate 1 Euro=		Inverse
Canadian $	1.46345	0.68332
US $	1.13799	0.87874

Commodities

Gold	Close	Previous
London Gold Fix	1184.25	1173.90
Oil	Close	Previous
WTI Crude Future	46.38	46.64

Treasury Bills Sold at Zero Percent Interest Top $1 Trillion: Investors are handing the federal government a lot of free money. The pile of Treasury bills sold at an interest rate of zero since the financial crisis topped $1 trillion this summer and grew further this week, with auctions for three-month bills on Tuesday and one-month bills on Wednesday that each carried no yield.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Valeant Pharmaceuticals International Inc., at one point this year the largest stock in Canada, has come down a few pegs as the drugmaker’s pricing decisions face the scrutiny of U.S. lawmakers.

     Valeant dropped 5.4 percent on Thursday, touching a February low and extending its loss from an August peak to about 37 percent. The Laval, Quebec-based company led declines in the benchmark Canadian equities index after disclosing it had received subpoenas from the U.S. Attorney’s Office in Massachusetts and the Manhattan U.S. Attorney’s Office seeking information on its patient assistance programs, drug distribution and pricing decisions.

     The Standard & Poor’s/TSX Composite Index fell 46.36 points, or 0.3 percent, to 13,828.97 at 4 p.m. in Toronto, for the third decline in four days. The benchmark Canadian equity gauge is down 5.5 percent for the year, the poorest showing among 24 countries except for Singapore and Greece.

     “Given the recent political and media scrutiny of pharmaceutical pricing practices and the impact this has had on the specialty pharmaceutical sector, we will be focused on any additional disclosure that management provides related to price versus volume growth,” said Alan Ridgeway, analyst at Scotia Capital in a note to clients.

     Ridgeway lowered his price target for the stock to C$250 from C$295 due to the general declines in the pharmaceutical industry ahead of Valeant’s third-quarter earnings results expected Oct. 19. He maintained a sector outperform rating, the equivalent of a buy.

     Biotechnology companies, one of the best-performing groups in the S&P 500 this year, plunged into a bear market after Democratic U.S. presidential candidate Hillary Clinton raised concern about possible “price gouging” of prescription drugs in a tweet Sept. 21. Valeant slumped 22 percent in September, the biggest monthly decline since 2007.

     The drugmaker had reached a record C$346.32 on Aug. 5 and, along with smaller peer Concordia Healthcare Corp., were the two best-performing stocks in the S&P/TSX as late as Sept. 20. The two companies competed with global peers in an acquisition frenzy in the first half of the year, pursuing a growth-by- acquisition strategy.

     Valeant, with a market cap of more than $70 billion, is now jockeying with Bank of Nova Scotia for the title of third- largest stock in the benchmark index, behind Royal Bank of Canada and Toronto-Dominion Bank.

     Health-care stocks remain the best-performing industry in the broader S&P/TSX this year with a 22 percent advance, after paring a gain of as much as 94 percent earlier in the year.

     Prices for Canadian stocks remain expensive relative to global peers. The MSCI All-Country World Index, a measure of developed and developing markets, currently trades at about 17.3 times earnings. The index’s valuation dropped to as low as about 16 at the end of September, the lowest since October 2014. By contrast, the price-to-earnings ratio of the S&P/TSX sits at 20.1, after falling to as low as 18.9 in September.

US

By Kate Garber

     (Bloomberg) — U.S. stocks advanced for the first time in three days as bank shares rebounded amid Citigroup Inc.’s better-than-estimated results, touching off a rally that sent the Standard & Poor’s 500 Index to an eight-week high.

     The mood toward bank stocks had an about-face since yesterday, lifting equity market sentiment as Citigroup’s 4.4 percent climb paced banks’ best gain in more than a month. Biotechnology shares continued a rebound from Tuesday’s selloff, while energy jumped without help from oil prices. Netflix Inc. slumped after its U.S. subscriber growthmissed analysts’ forecasts, while Wal-Mart Stores Inc. fell again after its worst drop since 1988.

     The S&P 500 Index gained 1.5 percent to 2,023.86 at 4 p.m. in New York, closing at its highest level since Aug. 20. The Dow Jones Industrial Average added 217 points, or 1.3 percent, to 17,141.75. The Nasdaq Composite Index climbed 1.8 percent, with Apple Inc. and Amazon.com Inc. up more than 1.5 percent. About 7.1 billion shares traded hands on U.S. exchanges, 3.7 percent below the three-month average.

     “The best way to describe the bank earnings is they didn’t rock the boat,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “Expectations around timing of the Fed action is really the prime driver of sentiment and the market right now. The Fed is the 800-pound gorilla.”

     Equities are rebounding from their worst quarter in four years, with investor sentiment weaving from worries that a slowdown in China will spread, to reassurance that the Federal Reserve will be slow to raise interest rates until policy makers are more confident that overseas turbulence won’t derail U.S. growth and inflation will reach their 2 percent target. The S&P 500 is up 5.4 percent this month, and has rallied 8.4 percent from the low during an August selloff.

     A report today showed consumer prices excluding food and fuel rose more than forecast in September, propelled by rising rents. Plunging energy expenses caused total costs to decrease by the most since January. A separate report showed the number of Americans submitting applications for jobless benefits unexpectedly declined last week to match the fewest in four decades, bringing the monthly average to its lowest level since December 1973.

     A worse-than-forecast U.S. retail sales report yesterday compounded pessimism from disappointing data on China’s economy, sending the probability of the Federal Reserve raising interest rates by January to 39 percent, from 47 percent last week. March resumed as the first month for which traders are pricing in at least even odds of a liftoff, after those bets had been pushed to April before today’s data.                          

     Fed Bank of New York President William C. Dudley said today that he favors raising interest rates later this year if his forecast is met. Debate among policy makers has gone increasingly public in recent days, with cautious comments by Fed governors Lael Brainard and Daniel Tarullo that argued for patience on liftoff.

     Earnings season is beginning to compete more aggressively against the Fed for investors’ attention. Analysts forecast profits for S&P 500 members dropped 7.2 percent in the third quarter. Disappointing results from JPMorgan Chase & Co. and Wal-Mart’s shock forecast that next year’s profit will slump dragged equities lower yesterday. General Electric Co. and Honeywell International Inc. are due to report results tomorrow.

     The Chicago Board Options Exchange Volatility Index fell 11 percent Thursday to 16.05, its lowest since Aug. 19. The measure of market turbulence known as the VIX is down 34 percent this month, the most since February.                         

     Bank stocks in the S&P 500 had their strongest gain in almost two months amid today’s earnings results. KeyCorp rose 4.7 percent, the most in seven weeks, after matching profit estimates while net interest margins were better than expected. JPMorgan, the biggest U.S. bank, rebounded 3.2 percent to wipe out Wednesday’s drop when its quarterly results disappointed. Bank of America Corp. added 3.5 percent.

     Even Goldman Sachs Group Inc. joined the financial sector rally, rising 3 percent despite third-quarter results falling short of analysts’ estimates for the first time in four years. Net income fell 36 percent from a year earlier, while net revenue was below $7 billion for the first time in two years.

     Biotechnology shares climbed for a second day, erasing a selloff on Tuesday to lead health-care higher. Amgen Inc., Biogen Inc. and Gilead Sciences Inc. all increased at least 3.2 percent. Pfizer Inc. and Merck & Co. gained more than 2.3 percent. The Nasdaq Biotechnology Index climbed for a second day, adding 4.4 percent.

     Energy companies in the benchmark index rose 1.6 percent, despite crude oil slipping for a fourth day amid the biggest increase in stockpiles in six months. Exxon Mobil Corp. gained 1.7 percent. Valero Energy Corp. and Southwestern Energy Co. increased more than 3.1 percent.

     Seagate Technology Plc was among the leading losers in the benchmark with a 13 percent tumble, the most since 2011. The hard-drive maker’s preliminary quarterly revenue fell short of analysts’ estimates. Consumer electronics company Garmin Ltd. dropped nearly 13 percent to a four-year low after cutting its earnings outlook. 

     Netflix fell 8.3 percent, the most in a year after falling short on two important measures: subscriber growth and programming expenses. Blaming the slump on new credit and debit card technology, the online video service still expects to finish 2015 with net additions of about 6 million subscribers in the U.S., the fourth straight year of such gains.

     Valeant Pharmaceuticals International Inc. fell 4.8 percent, as the company faces subpoenas seeking information on drug pricing. The subpoenas renew concerns that Valeant and other drugmakers will face continued political scrutiny over drug prices.

Have a wonderful evening everyone.
 

Be magnificent!

If this individuality is wiped away, the creative joy that crystallized it disappears,

even if no material was lost, even if no atom was destroyed.

And if it is lost, it is also a loss for the entire world.  It is particularly precious because it is not universal.

Rabindranath Tagore

As ever,

 

Carolann

 

If you rest, you rust.

 -Helen Hayes, 1900-1993

 

 

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 1962, the Cuban Missile Crisis started, taking the U.S. and the Soviet Union to the brink of nuclear conflict.

October 14, 1964: Martin Luther King Jr. was awarded the Nobel Peace Prize.

Gary and I spent the weekend at the sail boat show in Annapolis; lucked out with beautiful weather and gentle breezes on Chesapeake Bay where we were able to sail a new Jeanneau 45 and a new  Hylas 54.  We also attended a seminar conducted by renowned sailor and author Ralph Naranjo who riveted us with tales from the six years he and his wife and their two small children sailed around the world in the world on their Ericson 41.  His book is entitled The Art of Seamanship which was published last year and which I intend to read at my earliest opportunity.  Annapolis is a charming town – full of history.  We stopped for a day in Baltimore before heading home and it is truly a beautiful city – also very charming and steeped in history. 

PHOTOS OF THE DAY

People rest in hammocks as they experience The Chronarium Sleep Lab, a public sleep laboratory presented by British group Loop.pH during the Festival of Tech in Singapore, Monday. Edgar Su/Reuters

A self-driving vehicle picks up people during a demonstration at Gardens by the Bay in Singapore. Singapore unveiled its public transport future on Monday, including passengers commuting in driverless buses and platoons of autonomous trucks following a single driver. Edgar Su/Reuters

Market Closes for October 14^th, 2015

Market Index	Close	Change
Dow Jones	16924.75	-157.14   -0.92%
S&P 500	1994.23	-9.46   -0.47%
NASDAQ	4782.848	-13.762   -0.29%
TSX	13865.32	+20.59
		+0.15%

International Markets

Market Index	Close	Change
NIKKEI	17891.00	-343.74
		-1.89%
HANG SENG	22439.91	-160.55
		-0.71%
SENSEX	26779.66	-66.87
		-0.25%
FTSE 100	6269.61	-72.67
		-1.15%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.392	1.444
CND. 30 Year Bond	2.214	2.251
U.S.    10 Year Bond	1.9788	2.0369
U.S. 30 Year Bond	2.8382	2.8780

Currencies

BOC Close	Today	Previous
Canadian $	1.29352	1.30318
US $	0.77308	0.76735
Euro Rate 1 Euro=		Inverse
Canadian $	1.48409	0.67381
US $	1.14733	0.87159

Commodities

Gold	Close	Previous
London Gold Fix	1173.90	1165.20
Oil	Close	Previous
WTI Crude Future	46.64	46.66

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canada’s gold producers have been the biggest beneficiaries of the recent volatility in global markets amid speculation the Federal Reserve will hold off this year on raising interest rates.

     Raw-materials producers are the best-performing group in the benchmark Canadian equity gauge in October, led by a rally among mining companies. Gold jumped to a three-month high, rebounding from a five-year low in July. Gold is a more attractive investment in times of low rates as the metal doesn’t pay interest.

     The Standard & Poor’s/TSX Composite Index rose 30.60 points, or 0.2 percent, to 13,875.33 at 4 p.m. in Toronto, halting a two-day retreat. The benchmark Canadian equity gauge is down 5.2 percent for the year, the poorest showing among 24 countries except for Singapore and Greece.

     Gold has climbed after global stocks capped the worst quarterly performance since 2011 amid rising concern that a slowdown in China is accelerating. Canadian stocks climbed 4.7 percent last week, the most since December, as commodities and emerging markets rebounded amid a drop in the dollar. Raw- materials producers have jumped 15 percent in October, the biggest monthly advance since January.

     Gold futures advanced 1.2 percent to $1,179.80 an ounce in New York, and is up more than 5 percent this month, on track for the biggest rise since January. Chinese data from imports to factory gate deflation has indicated the weakness in the economy is persisting. In the U.S., reports today showed retail sales rose less than forecast and wholesale prices dropped, posing a problem for the Fed as it looks for signs inflation is moving toward its target.

     The Fed declined to raise interest rates in September, and the chance it will wait until at least 2016 has risen to 64.3 percent, according to data compiled by Bloomberg based on futures.

     Barrick Gold Corp. added 8.9 percent and Goldcorp Inc. increased 8.8 percent to lead gold producers higher. Suncor Energy Inc. rose 1.1 percent and Encana Corp. climbed 2.8 percent as energy stocks advanced.

     Despite the recent rally, energy and raw-materials producers remain the worst-performing industries in the S&P/TSX this year, giving Canadian equities the third-worst performance among developed markets.

     Prices for Canadian stocks remain expensive relative to global peers. The MSCI All-Country World Index, a measure of developed and developing markets, currently trades at about 17.1 times earnings. The index’s valuation dropped to as low as about 16 at the end of September, the lowest since October 2014. By contrast, the price-to-earnings ratio of the S&P/TSX sits at 20.1, after falling to as low as 18.9 in September.

     Valeant Pharmaceuticals International Inc., the third- largest stock in the S&P/TSX by market capitalization, jumped 5.6 percent for the fifth advance in six sessions. The drugmaker tumbled 22 percent in September, the most since 2007, as U.S. lawmakers scrutinized drug pricing policies.

US

By Neil Denslow and Joseph Ciolli

     (Bloomberg) — U.S. stocks were dragged lower as a bleaker outlook from Wal-Mart Stores Inc. added to global growth concerns. The dollar fell to the lowest in three months and bonds rose as investors became more certain the Federal Reserve will hold off on raising interest rates.

     Wal-Mart had its biggest plunge in more than 27 years after predicting a decline in profit during the next fiscal year. Treasuries rose and the greenback weakened against all major peers as the odds that a U.S. rate increase will be delayed until at least 2016 climbed to the highest this year. Gold advanced to a three-month high.

     “The probability of a global recession is rising as news out of China gets worse,” said Hugh Grieves, who runs the U.S. Opportunities Fund at Miton Group in London. “As each data point comes out, positive or negative, sentiment lurches from one extreme to the other very quickly.”

     The global economy is already showing signs of stress, with weak data from China piling up and ripple effects being felt as far away as Brazil’s deteriorating labor market. The growing evidence of a slowdown is validating the Fed’s decision last month to hold off on raising interest rates. For investors looking for more clarity on the outlook for corporate earnings, today’s results provided little comfort.

     The drumbeat of weaker-than-expected economic data continued today as Chinese producer prices matched their biggest slump since the global financial crisis. In the U.S., retail sales rose less than forecast and wholesale prices dropped, posing a problem for the Fed as it looks for signs inflation is moving toward its target. Meanwhile, analysts project profits for S&P 500 members dropped 7.2 percent in the third quarter.

     “The market is very fragile when it comes to the growth story right now,” Mark Kepner, an equity trader at Themis Trading LLC in Chatham, New Jersey, said by phone.

     The Standard & Poor’s 500 Index dropped 0.5 percent, after slipping for the first time in five days on Tuesday. The Dow Jones Industrial Average lost 0.9 percent as Wal-Mart accounted for 45 points of the gauge’s 157-point drop.

     Wal-Mart plunged 10 percent, its biggest loss since 1988. The retail chain said earnings will decrease 6 percent to 12 percent in fiscal 2017, which ends in January of that year. Analysts had estimated a gain of 4 percent on average according to data compiled by Bloomberg.

     “Wal-Mart’s sizable reset of expectations has shaken the overall market,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, which oversees about $170 billion. “Investors are reconsidering their future forecasted growth rates for S&P earnings.”

     Reaction to earnings from the largest U.S. banks was mixed, with JPMorgan Chase & Co. falling 2.5 percent after cautioning that trading this quarter is off to a tepid start, while Bank of America Corp. added 0.8 percent after its quarterly profit rebounded as expenses fell.

     TripAdvisor Inc. surged 26 percentafter announcing a deal with Priceline Group Inc. to bring the online travel company’s catalog of hotels into TripAdvisor’s booking system. SanDisk Corp. jumped 11 percent as people with knowledge of the matter said the chipmaker hired a bank to explore a potential sale.

     The yield on U.S. 10-year Treasuries dropped 6 basis points to 1.98 percent. German bunds rallied, with the yield on 10-year bonds falling 5 basis points to 0.54 percent. Yields on similar- maturity securities from the U.K. tumbled 7 basis points to 1.76 percent.

     Fed officials last month left interest rates unchanged, opting to monitor the risk that China’s slowdown could spill over to the U.S. Traders’ bets that the Fed will lift its benchmark by year-end have dropped to less than a 30 percent chance, and aren’t much higher for January. For March, the probability has tumbled to about 50 percent, from 66 percent at the start of the month.

     Fed Governor Daniel Tarullo told CNBC yesterday that he doesn’t currently favor raising interest rates in 2015. That lines him up with fellow Governor Lael Brainard, who made the case on Monday for patience, and diverges from the majority of Federal Open Market Committee members including Fed Chair Janet Yellen.

     China sold 10-year bonds with the lowest coupon since 2008. The $4.4 billion of 10-year notes had a coupon of 2.99 percent, which was lower than the 3.1 percent median estimate in a Bloomberg survey.

     The Bloomberg Dollar Spot Index, a gauge of the U.S. currency against 10 major peers, slid 0.9 percent, touching its lowest since June 30. The dollar dropped to its weakest in seven weeks versus the euro and down for a third day against the yen. Canada’s dollar advanced 0.9 percent.

     The pound rose as a report showed the U.K.’s unemployment rate unexpected fell to the lowest level since mid-2008. Sterling climbed 1.5 percent to $1.5483, its biggest gain since May.

     New Zealand’s dollar added 2.4 percent, after central bank Governor Graeme Wheeler said further easing will depend on economic data. Singapore’s dollar snapped a two-day drop, rising

1.3 percent as the city state’s monetary authority, the only advanced economy regulator to use the exchange rate as a key policy tool, said it would “slightly” reduce the pace of the currency’s appreciation versus trading partners.

     The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong dropped 1 percent in its first back-to-back decline in more than two weeks. The Shanghai Composite Index slid 0.9 percent.

     China’s consumer-price index increased 1.6 percent in September from a year earlier, while producer prices fell for a 43rd month.

     The MSCI Emerging Markets Index fell for a second day, losing 0.1 percent.South Africa’s rand and Turkey’s lira gained, helping an index of 20 currencies rebound from the biggest decline since March.

     Gold futures added 1.2 percent to $1,179.80, the highest since June, as further signs of tame global inflation weakened the case for the Fed to raise U.S. interest rates. The metal had a fourth straight gain, and is up more than 5 percent this month, on track for the biggest rise since January.

     Copper rose 1.2 percent, rebounding from an earlier decline.

     West Texas Intermediate fell for a third day, dropping 2 cents to $46.64 on the New York Mercantile Exchange, after paring an earlier loss of 1.5 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

By education I mean an all-round drawing out of the best in a child and man – body, mind, and spirit.

Mahatma Gandhi

As ever,

 

Carolann

 

The most wasted of all days is one without laughter.

                              -e.e. cummings, 1894-1962

 

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

Workers are silhouetted, along with the Eiffel Tower, as they construct scaffolding on the Place de la Concorde as the sun sets on an autumn day in Paris Tuesday. Philippe Wojazer/Reuters

Visitors photograph fall foliage in the Public Garden Tuesday in Boston. Michael Dwyer/AP

Market Closes for October 13^th, 2015

Market Index	Close	Change
Dow Jones	17081.89	-49.97   -0.29%
S&P 500	2003.69	-13.77   -0.68%
NASDAQ	4796.609	-42.033   -0.87%
TSX	13844.73	-119.63
		-0.86%

International Markets

Market Index	Close	Change
NIKKEI	18234.74	-203.93
		-1.11%
HANG SENG	22600.46	-130.47
		-0.57%
SENSEX	26846.53	-57.58
		-0.21%
FTSE 100	6342.28	-28.90
		-0.45%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.444	1.519
CND. 30 Year Bond	2.251	2.314
U.S.    10 Year Bond	2.0369	2.0881
U.S. 30 Year Bond	2.8780	2.9174

Currencies

BOC Close	Today	Previous
Canadian $	1.30318	1.29462
US $	0.76735	0.77243
Euro Rate 1 Euro=		Inverse
Canadian $	1.48327	0.67419
US $	1.13819	0.87859

Commodities

Gold	Close	Previous
London Gold Fix	1165.20	1151.55
Oil	Close	Previous
WTI Crude Future	46.66	49.63

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Disappointing data from China battered Canadian stocks, weighing again on a market that’s suffered one of the biggest hits among global equities as commodity prices slump.

     Stocks fell after reaching a seven-week high last week as imports into China tumbled for an 11th month, rekindling concern that a slowdown in the world’s second-largest economy will spread. Energy and raw-materials producers have declined with prices from copper to oil and gold, giving Canadian equities the third-worst performance among developed markets this year.

     The Standard & Poor’s/TSX Composite Index fell 119.63 points, or 0.9 percent, to 13,844.73 at 4 p.m. in Toronto, the most in two weeks, as Canadian markets re-opened after the Thanksgiving holiday. The benchmark Canadian equity gauge is down 5.4 percent for the year, the poorest showing among 24 countries except for Singapore and Greece.

     Declines over the past two days have cut short an eight-day rally from the lowest level since 2013. Canadian stocks climbed 4.7 percent last week, the most since December, as commodities and emerging markets rebounded amid a drop in the dollar.

     Equity strategists forecast Canadian stocks will resume their recovery. Brian Belski, chief investment strategist at BMO Capital Markets, estimates the S&P/TSX will close 2015 at 15,600 — a 13 percent jump from current levels.

     “The ‘Eeyore complex’ is alive and well in Canada, likely setting the stage for a surprising contrarian rally,” Belski said in an Oct. 1 note to clients. “Bearish sentiment toward Canada reached extreme levels in the quarter. We believe much of the bad news is now priced in and Canada should become increasingly correlated to a strengthening U.S. economy.”

     Despite the declines, prices for Canadian stocks remain expensive relative to global peers. The MSCI All-Country World Index, a measure of developed and developing markets, currently trades at about 17.1 times earnings after halting a nine-day advance. The index’s valuation dropped to as low as about 16 at the end of September, the lowest since October 2014. By contrast, the price-to-earnings ratio of the S&P/TSX sits at 20.1, after falling to as low as 18.9 in September.

     Copper fell for the first time in three sessions today as Chinese imports slid. China is Canada’s second-largest trading partner after the U.S. First Quantum Minerals Ltd. slumped 10 percent and Teck Resources Ltd. retreated 9.4 percent to lead mining companies lower. Copper for delivery in three months lost 0.8 percent in London as nickel, lead and zinc also fell. While copper has rebounded since late September, prices are still near a six-year low.

     Kicking Horse Energy Inc. soared 45 percent, the most since December 2010, after PKN Orlen SA, Poland’s biggest oil company, agreed to buy the Canadian energy producer in a C$356 million deal to increase its Canada production.

US

By Jeremy Herron and Kate Garber

     (Bloomberg) — Weak import data from China rekindled concern that a slowdown there will spread, pulling emerging- market stocks down from a two-month high and weighing on industrial metals. U.S. stocks dropped from the highest level since August as Treasuries rallied.

     The Standard & Poor’s 500 Index fell after rising in nine of the past 10 sessions, while the Dow Jones Industrial Average couldn’t extend its longest rally of the year. Miners led the MSCI All-Country World Index to its first drop in 10 days, with emerging-market equities tumbling 1.5 percent. The dollar advanced, while copper led metals lower and crude slipped.

     U.S. stocks struggled to continue their two-week rebound from the first correction in four years, with investors awaiting corporate results to gauge the health of the economy. Data that showed the 11th straight monthly decline in Chinese imports rekindled concern that demand for metals from the world’s second-largest economy will fall, sending equities in resource- rich nations lower.

     “We’ve had a very, very strong run the first 10 days of October,” said Eric Green, director of research and senior managing partner at Penn Capital, which oversees $4 billion in Philadelphia. “Some backing and filling is probably appropriate here. It can’t go straight up.”

     The S&P 500 fell 0.7 percent at 4 p.m. in New York, halting a four-day rally. The Dow average lost 0.3 percent after seven straight advances. The broader gauge has rallied 7.3 percent from an August low, though investors are looking to corporate earnings for the next catalyst higher.

     Johnson & Johnson fell 0.5 percent after reporting its results, while biotechnology shares in the S&P 500 lost 1.9 percent for the biggest loss among 24 groups.

     Intel Corp. added 0.8 percent at 4:25 p.m. in New York after forecasting fourth-quarter sales that may exceed analysts’ predictions. JPMorgan Chase & Co. slipped 0.9 percent after reporting results.

     “The big concern is not rising interest rates anymore, it’s slowing growth and corporate profits,” saidPatrick Spencer, equities vice chairman at Robert W. Baird & Co. in London. “Earnings are starting this week and some of the biggest banks are reporting, so that is going to set the scene.”

     The MSCI All-Country World Index fell 0.9 percent, halting a rally that added 8.3 percent over nine days. The Stoxx Europe 600 Index dropped 0.9 percent, for its first two-day decline in two weeks. 

     The Bloomberg Dollar Spot Index rose 0.2 percent, while the pound touched the weakest level versus the euro since February as Britain’s inflation rate unexpectedly turned negative for the second time since 1960 in September. The yen strengthened 0.3 percent to 119.74 per dollar, the euro advanced 0.2 percent to $1.1385.

     The Australian dollar weakened 1.4 percent to 72.60 U.S. cents, halting the longest rally in more than six years. New Zealand’s dollar dropped for the first time in 11 days. China is the biggest trading partner for both commodity-driven countries.

     Treasuries advanced following China’s import data, with the yield on the benchmark 10-year note falling four basis points to 2.04 percent. The market was closed on Monday for a U.S. federal holiday.

     “Further disappointing Chinese data weighed on Asian equities, supporting Treasuries,” said Nick Stamenkovic, a fixed-income strategist at broker RIA Capital Markets in Edinburgh. “I doubt 10-year Treasury yields will exceed 2.3 percent by year-end given ongoing fears that weaker emerging- market growth will spill over to developed economies.”

     The yield on German 10-year bunds added one basis point to 0.59 percent, after falling four basis points on Monday. Yields on similar-maturity Italian bonds fell one basis points to 1.66 percent.

     The Bloomberg Commodity Index dropped 0.1 percent. West Texas Intermediate crude slipped to a one-week low, falling 0.9 percent to settle at $46.66 a barrel after tumbling 5.1 percent on Monday, the most in six weeks.

     Global demand for oil is growing while non-OPEC countries are producing less, according to Abdalla Salem El-Badri, the secretary-general of Organization of Petroleum Exporting Countries. The 12-member group said it pumped 31.57 million barrels a day last month, the most since 2012, according to its monthly market report.

     Copper dropped from the highest level in three weeks, declining 1.2 percent to $2.3875 a pound in New York. Gold futures rose 0.1 percent to $1,165.40 an ounce. Silver futures advanced for a third straight session amid signs of tightening supply.

     The MSCI Emerging Markets Index retreated from a two-month high, sliding 1.5 percent. Currencies from Indonesia, Malaysia and Taiwan weakened versus the dollar as a gauge of exchange rates for 20 developing nations declining for a second day, losing 0.8 percent.

     The Hang Seng China Enterprises Index fell from a seven- week high in Hong Kong, losing 1 percent. The Shanghai Composite Index added 0.2 percent, as technology and consumer companies rallied. 

 

Have a great evening everyone.

 

Be magnificent!

 

“Always bear in mind that your own resolution to succeed is more important than any other.” Abraham Lincoln

 

As ever,

 

Karen

 

“Kindness in words creates confidence. Kindness in thinking creates profoundness. Kindness in giving creates love.” Lao Tzu

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

John Lennon was born on October 9^th, 1940.

Also on this day in 1967, Che Guevara, an Argentine socialist revolutionary and guerilla leader, was killed by the Bolivian army at the age of 39.

James Lees-Milne, Diary, Ancestral voices, October  9, 1942:

I attended a meeting of Mrs Ronnie Greville’s executors….[Her will was] a most interesting and complex subject, involving an estate of some 2 million [pounds].  Mrs Greville has left Marie Antoinette’s necklace to the Queen, 20,000 [pounds] to Princess Margaret Rose, and 25,000 [pounds] to the Queen of Spain.  Everyone in London is agog to learn the terms of Mrs G.’s will.  She was a lady who loved the great because they were great, and apparently had a tongue dipped in gall.  I remember old Lady Leslie once exclaiming, when her name was mentioned, “Maggie Greville!  I would sooner have an open sewer in my drawing-room.”

 Mrs Greville had left her house, Polesden Lacey in Surrey, to the National Trust.  She was the illegitimate child of the wealthy brewer William McEwan and the wife of a  watchman at the brewery, put for convenience on the nightshift. –from The Book of Days.

Life is what happens to you while you’re busy making other plans.

                                                         -John Lennon, 1940-1980

HAPPY THANKSGIVING!!!

PHOTOS OF THE DAY

People walk under umbrellas during a snowfall in Red Square, with St. Basil’s Cathedral seen in the background, in central Moscow Friday.Maxim Zmeyev/Reuters

Younus Bouaoun, one of the few watchmaker apprentices in Frankfurt, carries a large wall clock across a street in central Germany Friday.Frank Rumpenhorst/dpa/AP

Market Closes for October 9^th, 2015

Market Index	Close	Change
Dow Jones	17084.49	+33.74   +0.20%
S&P 500	2014.89	+1.46   +0.07%
NASDAQ	4830.469	+19.681   +0.41%
TSX	13964.36	-14.30
		-0.10%

International Markets

Market Index	Close	Change
NIKKEI	18438.67	+297.50
		+1.64%
HANG SENG	22458.80	+103.89
		+0.46%
SENSEX	27079.51	+233.70
		+0.87%
FTSE 100	6416.16	+41.34
		+0.65%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.519	1.506
CND. 30 Year Bond	2.314	2.300
U.S.    10 Year Bond	2.0881	2.1040
U.S. 30 Year Bond	2.9174	2.9397

Currencies

BOC Close	Today	Previous
Canadian $	1.29462	1.30190
US $	0.77243	0.76811
Euro Rate 1 Euro=		Inverse
Canadian $	1.47053	0.68003
US $	1.13588	0.88037

Commodities

Gold	Close	Previous
London Gold Fix	1151.55	1140.00
Oil	Close	Previous
WTI Crude Future	49.63	49.43

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little changed, as equities capped the best weekly performance this year, after the economy added jobs for a third straight month in September and more people entered the labor force looking for work.

     Equities ended the day down 0.1 percent after swinging between gains and losses, as increases among raw-materials producers offset a drop in energy stocks after a five-day rally. Gold advanced to a six-week high as minutes of the Federal Reserve’s latest meeting increased speculation the central bank will hold off raising interest rates until next year.

     Canadian stocks have rallied this week, joining markets around the world in a rebound from the worst quarter since 2011, led by gains in oil and mining companies. The MSCI All Country World Index climbed an eighth straight day, the longest streak of gains since February. Canadian markets will be closed on Monday for the Thanksgiving holiday.

     The Standard & Poor’s/TSX Composite Index fell 14.30 points to 13,964.36 at 4 p.m. in Toronto, trading near the highest level since August. The benchmark Canadian equity gauge has climbed 4.7 percent this week, the best weekly advance since December. The index has lagged global peers among developed markets this year with a 4.6 percent decline.

     The Canadian economy added 12,100 jobs in September, ahead of economists’ median projections for a 10,000 increase. The unemployment rate rose to 7.1 percent from 7 percent as more people returned to the workforce, according to the report from Statistics Canada in Ottawa. September’s gains were led by a 74,000 gain in part-time jobs. Full-time positions dropped 61,900, the largest decline since October 2011.

     The jobs report is the last before an Oct. 19 federal election, followed by the next Bank of Canada rate decision Oct. 21.

     “The headline numbers are OK, not disastrous,” said Geoffrey Pazzanese, a global equity fund manager at Federated Investors Inc., on the phone from New York. His firm manages about $360 billion. “There’s not much the Bank of Canada can do about commodity prices, but keeping rates low can help the other parts of the economy.”

     First Quantum Minerals Ltd. rose 0.8 percent, capping a 65 percent rally this week. The copper mining company said Oct. 5 it will use proceeds from asset sales and other initiatives to reduce debt. Goldcorp Inc. and Barrick Gold Corp. increased at least 5.5 percent as gold jumped.

     Commodities producers have rebounded as the U.S. dollar has weakened on bets the Federal Reserve will delay raising interest rates. The Bloomberg Dollar Spot Index fell for the sixth time in seven days.

     Clearwater Seafoods Inc. climbed 7.8 percent, the most in two months, after agreeing to buy Macduff Shellfish for GBP94.4 million, plus GBP4 million in debt.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index posting its strongest weekly gain this year, as equities continued to rebound from their worst quarter since 2011.

     Shares advanced Friday without the help of energy and raw- material companies, the two best-performing groups so far this month, as energy snapped its longest winning streak in six years. Apple Inc. added 2.4 percent to boost technology shares. Alcoa slumped 6.8 percent to weigh on commodity related companies.

     The S&P 500 added 0.1 percent to 2,014.97 at 4 p.m. in New York, up 3.3 percent for the week, the most since December. A measure of volatility extended a streak of declines to the longest in four years.

     “Policy makers are trying to be prudent with policy, but not panicking over the global outlook,” said Brian Jacobsen, who helps oversee $250 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin. “We’ll see whether or not we can hold above 2,000 in the S&P 500 and build from here ahead of earnings.”

     Federal Reserve minutes Thursday showed caution over raising interest rates, even as the U.S. economy improves, amid the threat that China’s slowing growth could spill over to other emerging market economies. That pushed expectations for an increase further into next year, touching off a rally boosted by energy, raw-material and industrial companies amid a slumping dollar. Traders now price in about a 41 percent chance of a rate liftoff in December, with a 62 percent probability of a March increase.

     Atlanta Fed President Dennis Lockhart said in prepared remarks Friday in New York that the first interest rate increase since 2006 will likely be warranted later this month or in December, as the economy “remains on a satisfactory track.”

     Energy companies in the benchmark index fell after yesterday stretching an advance to an eighth day, the longest in six years. The group is poised for the best weekly climb in 2015, up more than 7.5 percent. Materials and industrials marked their strongest week since December 2011.

     Those three industries have bolstered a rebound from a 6.9 percent slide in the third quarter, turning the tables on their role among the worst performers during the three-month period ending in September. The S&P 500 is up about 5 percent since the quarter ended, and has recovered 7.9 percent from the bottom of an August selloff that pushed the index into its first correction since 2011.

     While the Fed’s policy intentions and China’s slowdown remain heavy influences on sentiment, attention is also shifting toward third-quarter results, with earnings at S&P 500 members projected to fall 7.2 percent. Energy and materials companies will see the steepest drop, according to analyst forecasts compiled by Bloomberg.

     Some 35 S&P 500 companies are scheduled to report results next week, including Johnson & Johnson, Intel Corp. and JPMorgan Chase & Co.

 

Have a terrific weekend everyone.

 

Be magnificent!

Man lives in confusion and fear until he discovers the uniformity of the law in nature;

until then the world is a stranger to him.

And yet, the law discovered is only the perception of the harmony between reason,

which is the soul of man, and the play of nature.

It is the bond that unites man to the world he lives in.

When he discovers it, man feels an intense joy, because he realizes himself in his environment.

To understand this is to find something to which we belong,

and it is the discovery of ourselves outside ourselves that  gives us joy.

Rabindranath Tagore

As ever,

 

Carolann

 

Writing a book is an adventure.  To begin with it is a toy, an amusement;

then it is a mistress, and then a master, and then a tyrant.

                                                      -Winston Churchill, 1874-1965

 

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 1871, the Great Chicago Fire started, leaving four square miles of the Windy City in ruins, including its business district. The blaze killed between 200 and 300 people, left 100,00 homeless and caused an estimated $200 million in damages.

Very positive article in the Financial Times yesterday (which I only had time to read last night) on Justin Trudeau’s rise as the contender for our next Prime Minister.  You can find it under FT BIG READ. CANADA: Against a backdrop of falling oil prices, a weakened economy  and controversy over religious headwear, the country is set to vote in a close election that could  end the Conservatives’ nine-year hold on power.  “With only days to go before the federal elections on October 19, he has replaced Mr. Mulcair, 60, as the top choice of Canadians looking to turn aside Mr. Harper, 56.  Mr. Trudeau’s late surge is particularly important.…In an increasingly tight race Mr. Trudeau’s Liberals are now favoured by 32.5 per cent of the electorate, against32.3 per cent for the Conservatives and only 25 per cent  for the NDP, which has seen its support drop by 12 percentage points since August, according to threehundredeight.com, a poll aggregator…..[Trudeau] pronounced himself ready to govern, pointing to a brains trust of advisers that includes Larry Summers, the former US Treasury Secretary, White House economic adviser and FT columnist, plus David Dodge, the former Bank of Canada governor…”

I find it unfortunate that comprehensive, cogent political press commentary concerning Canada can only be found outside of our own Conservatively biased national press.

PHOTOS OF THE DAY

Liberal Leader Justin Trudeau reacts after nailing in a wall frame during a campaign event at a trade school Thursday, in Vaughan, Ontario, Canada. Paul Chiasson/The Canadian Press/AP

The aurora borealis, or the northern lights, occur over Derwentwater, near Keswick, England, Thursday. The northern lights are the result of collisions between gaseous particles in the Earth’s atmosphere with charged particles released from the sun. Owen Humphreys/PA/AP

Market Closes for October 8^th, 2015

Market Index	Close	Change
Dow Jones	17050.75	+138.46   +0.82%
S&P 500	2013.43	+17.60   +0.88%
NASDAQ	4810.789	+19.637   +0.41%
TSX	13978.66	+110.31
		+0.80%

International Markets

Market Index	Close	Change
NIKKEI	18141.17	-181.81
		-0.99%
HANG SENG	22354.91	-160.85
		-0.71%
SENSEX	26845.81	-190.04
		-0.70%
FTSE 100	6374.82	+38.47
		+0.61%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.506	1.455
CND. 30 Year Bond	2.300	2.252
U.S.    10 Year Bond	2.1040	2.0650
U.S. 30 Year Bond	2.9397	2.8953

Currencies

BOC Close	Today	Previous
Canadian $	1.30190	1.30626
US $	0.76811	0.76554
Euro Rate 1 Euro=		Inverse
Canadian $	1.46833	0.68105
US $	1.12786	0.88663

Commodities

Gold	Close	Previous
London Gold Fix	1140.00	1144.60
Oil	Close	Previous
WTI Crude Future	49.43	47.81

Market Commentary:

Canada

By Kate Garber and Eric Lam

     (Bloomberg) — Canadian stocks rose for a fifth day, the longest streak in two months, as energy producers jumped after the price of crude surged above $50 a barrel for the first time since July.

     Equities advanced 0.8 percent as energy stocks closed at the highest since July 17. Oil has rebounded after slumping to a six-year low in August on speculation that a global supply glut is easing. Equities from Europe to the U.S. also advanced as speculation the Federal Reserve will keep rates lower for longer weakened the U.S. dollar and bolstered commodities.

     The Standard & Poor’s/TSX Composite Index rose 110.31 points to 13,978.66 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.6 percent in five days, the longest streak since Aug. 5. It’s still down by 4.5 percent for the year.

     Eight of 10 main groups in the index rose Thursday, led by a 2.2 percent increase in energy producers. Even after a five- day rally, the group remains the second-worst performer in the benchmark index this year, down 13 percent.

     Encana Corp. gained 6.5 percent. The producer of natural gas and crude said it will sell assets in Colorado for $900 million lower its debt. Encana hopes to bolster its balance sheet after a 45 percent dip in oil prices in the past year.

     Suncor Energy Inc. climbed 4.8 percent and Penn West Petroleum Ltd. surged 26 percent as 50 of 59 stocks in the S&P/TSX Energy Index advanced. West Texas Intermediate jumped 3.4 percent in New York, settling at $49.43 a barrel after touching as high as $50.07.

     Demand for crude will climb more this year than previously projected amid cheaper fuel prices, OPEC Secretary-General Abdalla Salem El-Badri said yesterday in a statement to the International Monetary Fund.

     Concordia Healthcare Corp. sank 11 percent, closing at the lowest since December. The drugmaker has tumbled 24 percent in five days as the wider industry faces greater political scrutiny over drug pricing.

US

By Joseph Ciolli, Lu Wang and Dani Burger

     (Bloomberg) — U.S stocks rose as Federal Reserve minutes reflected caution over raising interest rates even as the economy improves, further boosting commodity producers.

     The minutes kept expectations for higher rates pushed into next year, weakening the dollar and boosting energy, raw- material and industrial companies amid speculation that a weaker U.S. currency will lift their profits. Those three industry groups rallied at least 1.4 percent Thursday. Alcoa Inc. fell in late trading after unofficially kicking off the earnings season with results that missed analysts’ forecasts.

     The Standard & Poor’s 500 Index added 0.9 percent to 2,013.43 at 4 p.m. in New York, rising above a level where recent rallies had stalled. The Dow Jones Industrial Average gained 138.46 points, or 0.8 percent, to 17,050.75. The Nasdaq Composite Index climbed 0.4 percent, erasing an earlier drop of as much as 1.1 percent. About 7.3 billion shares traded hands on U.S. exchanges, in line with the three-month average.

     “They rehashed that people are waiting for clarity on the outlook of the economy,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “Investors are potentially looking at it as dovish, like more time is being bought by the Fed. We have to see what exactly transpires in the weeks ahead.”

     Policy makers agreed that developments between meetings had not “materially” altered their economic outlook, according to the September meeting minutes. “Nonetheless, the committee decided that it was prudent to wait for additional information confirming that the economic outlook had not deteriorated.”

     The Fed noted that domestic economic conditions had continued to improve, though concerns over China and its potential spillover to other economies “were likely to depress U.S. net exports” and cause further strengthening of the dollar, which could damp inflation in the U.S.

     The Fed’s decision on September 17 to not raise interest rates jolted investors, as the central bank cited global market turmoil and a slowdown in China as reasons for standing pat. Equities slid in seven of eight sessions after the meeting, with the S&P 500 losing 5.7 percent.                  
     The odds of a rate increase this year have fallen to less than 39 percent since the Fed meeting and a weak-than-expected September jobs report, compared with a 63 percent chance just before the central bankers gathered last month. Probability of liftoff in January is 46 percent, down from 51 percent before the minutes were released today.

     “The market’s resiliency near the highs over last few days help set it up for this kind of initial response,” said Frank Cappelleri, a market technician at Instinet LLC in New York. “This is first time the S&P has touched 2000 since Fed announced on 9/17. It got the same kind of pop after the news was announced, but it didn’t make for any upside follow through. A lot of people will be looking to see if we can hold things better this time around.”

     The Chicago Board Options Exchange Volatility Index fell 5.3 percent Thursday to 17.42. The measure of market turbulence known as the VIX is down for an eighth session, the longest streak since July 2013.

     Commodity producers and industrial shares have had their strongest rallies in years while the dollar has slumped since the weaker-than-forecast September jobs report set back expectations for higher rates. The Bloomberg Dollar Spot Index sank to a three-week low. Industrials benefit from the weaker currency when their overseas earnings are converted back to dollars, while commodities denominated in a lower U.S. currency are more attractive.

     Alcoa’s results reported after the markets closed suffered under the weight of a global aluminum glut, missing analysts’ estimates after the price of the metal fell for a fourth straight quarter. Shares of the largest U.S. aluminum company dropped 4.2 percent as of 5:04 p.m.

     A report today showed filings for unemployment benefits declined last week to the lowest level since mid-July, extending a run of applications near decade lows that shows dismissals remain in check. Managers are reluctant to trim staffing levels because domestic demand is holding up in the face of diminished global growth expectations.

     Corporate profits will be another barometer on the economy’s health. Analysts project earnings for S&P 500 members dropped 6.9 percent in the third quarter. Companies releasing results next week include Johnson & Johnson, Intel Corp. and JPMorgan Chase & Co.

     “This particular earnings season will be a period for most companies to really start talking about next year,” said Eric Schoenstein, Portland, Oregon-based co-manager of the $4.9 billion Jensen Quality Growth Fund. That could be a way to provide some direction. We need some transparency to clear up the confusion around where the economy is headed, where companies are headed.”

     All of the S&P 500’s 10 main industries rose Thursday, with energy adding to its longest rally in six years, while materials haven’t had a longer winning streak since December 2013. Both have climbed for eight straight days. Industrials gained for the fourth time in five sessions, posting the strongest advance over the period since 2011, up 7 percent.                         

     The benchmark’s energy group is up 16 percent during its run-up since Sept. 28, with Chesapeake Energy Corp., Marathon Oil Corp. and Transocean Ltd. rising more than 35 percent over the time frame. Marathon Oil and Anadarko Petroleum Corp. gained at least 4.6 percent Thursday, while Chevron Corp. added 2 percent for its seventh advance in eight days. Oil surged above $50 a barrel for the first time since July on speculation that demand is picking up.

     Boeing Co. and Honeywell International Inc. rallied more than 1.4 percent, while railroad Union Pacific Corp. added 2 percent to a two-month high to pace industrials’ advance. Among raw-materials shares, Freeport-McMoRan Inc. increased 3.5 percent to stretch its rally to an eighth day, the longest in three months. The copper producer is up 51 percent over the period.

     Biotechnology shares retreated for the third time in four days, though the group pared their losses as equities rallied after the Fed minutes. The Nasdaq Biotechnology Index slipped 0.3 percent, after earlier falling 3.5 percent.

     Among companies moving on corporate news, EMC Corp. rose 4.7 percent to a two-month high. Dell Inc. is in talks to combine with EMC, people with knowledge of the matter said, in a deal that would help the companies cater to more customers and cope with a slowdown in demand for computers and storage equipment.

     Netflix Inc. jumped 6.3 percent, the most in more than a month. The world’s dominant paid online video service is raising the price of its most popular streaming subscription by $1 a month to $9.99 for new customers in the U.S., Canada and parts of Latin America following a similar move in Europe this year.

     EBay Inc. fell 6 percent, its biggest drop in more than two years. The online marketplace’s September same-store sales growth was 1.1 percent, the lowest since February 2011 and down from August’s 3.4 percent, according to ChannelAdvisor.
 

Have  a wonderful evening everyone.

 

Be magnificent!

The main purpose of life is to live rightly, think rightly, act rightly.

The soul must languish when we give all our thought to the body.

Mahatma Gandhi

As ever,

 

Carolann

 

It takes a genius to whine appealingly.

        -F. Scott Fitzgerald, 1896-1940

 

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 2003, Arnold Schwarzenegger became California governor, parlaying his celebrity into a win as he had very little political experience before assuming the position.
(Which is why you cannot discount Donald Trump winning the Presidency).

Laughter is the shortest distance between two people. –Victor Borge

If a man walks in the woods for love of them half of each day, he is in danger of being regarded as a loafer. 
But if he spends his days as a speculator, shearing off those woods and making the earth bald before her time, he is deemed an industrious and enterprising citizen. –Henry David Thoreau.

The leaves are beginning to look their autumn best, so try being a loafer and admire the beauty the earth has to offer in the woods this time of year.

PHOTOS OF THE DAY

Russian President Vladimir Putin speaks before an ice hockey match between former NHL stars and officials at the Shayba Arena in the Black Sea resort of Sochi, Russia, Wednesday. Russian President Vladimir Putin spent his 63rd birthday on the ice, playing hockey with NHL stars against Russian officials and tycoons. Alexei Nikolsky/RIA-Novosti/AP

Police officers salute as the Star Spangled Banner is played to mark the beginning of a lift off during the 2015 Albuquerque International Balloon Fiesta in Albuquerque, New Mexico, Wednesday. Lucas Jackson/Reuters

Market Closes for October 7^th, 2015

Market Index	Close	Change
Dow Jones	16912.29	+122.10   +0.73%
S&P 500	1995.82	+15.90   +0.80%
NASDAQ	4791.152	+42.792   +0.90%
TSX	13865.28	+218.02
		+1.60%

International Markets

Market Index	Close	Change
NIKKEI	18322.98	+136.88
		+0.75%
HANG SENG	22515.76	+684.14
		+3.13%
SENSEX	27035.85	+102.97
		+0.38%
FTSE 100	6336.35	+10.19
		+0.16%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.455	1.425
CND. 30 Year Bond	2.252	2.221
U.S.    10 Year Bond	2.0650	2.0333
U.S. 30 Year Bond	2.8953	2.8733

Currencies

BOC Close	Today	Previous
Canadian $	1.30626	0.76720
US $	0.76554	1.30345
Euro Rate 1 Euro=		Inverse
Canadian $	1.46780	0.68129
US $	1.12366	0.88995

Commodities

Gold	Close	Previous
London Gold Fix	1144.60	1147.50
Oil	Close	Previous
WTI Crude Future	47.81	48.53

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied to the highest level since August, with commodities producers extending advances amid a resurgence in U.S. dollar-denominated assets from oil to copper. 

     Energy and raw-materials producers led a 1.6 percent increase in Canadian equities. The two industries have surged in the past four days, as the weakening dollar boosts demand for commodities. The groups remain the worst performers in the benchmark index this year, with losses of at least 15 percent.

     The Standard & Poor’s/TSX Composite Index rose 221.09 points to 13,868.35 at 4 p.m. in Toronto, the highest close since Aug. 19. The benchmark Canadian equity gauge has climbed 4.7 percent in four days, rebounding from a 4 percent slump in September. The index has lagged global peers among developed markets this year with a 5.2 percent decline.

     Equities around the world are rebounding from the worst quarter since 2011, led by gains in oil and mining companies. The MSCI All Country World Index climbed a sixth straight day, the longest streak of gains since April, while the S&P 500 posted its sixth increase in seven days.

     Crude in New York slipped, erasing earlier gains, to close at $47.81 a barrel. The commodity had advanced for three days, to an Aug. 31 high Tuesday. Copper climbed to a two-week high to lead an advance in industrial metals.

     Canadian Natural Resources Ltd. increased 5.7 percent and Suncor Energy Inc. rose 1.7 percent as energy producers rallied 2.9 percent. The S&P/TSX Energy Index has jumped 13 percent in four days, to an almost two-month high.

     Teck Resources Ltd., Canada’s largest diversified miner, surged 14 percent for the biggest increase in six weeks after it sold future silver output from a mine in Peru to Franco-Nevada Corp. for an upfront payment of $610 million. First Quantum Minerals Ltd. jumped 18 percent with the price of copper. First Quantum has rallied 81 percent in four days.

     Commodities producers have rebounded as the U.S. dollar has weakened on bets the Federal Reserve will delay raising interest rates. The Bloomberg Dollar Spot Index was little changed after a four-day decline.

     Bombardier Inc. sank 13 percent, almost erasing yesterday’s 15 percent gain, after the planemaker and Airbus Group SE abandoned talks on a potential business collaboration. The companies announced the end of discussions late Tuesday following a Reuters report that Montreal-based Bombardier had approached its larger rival to sell a stake in the struggling CSeries jetliner.

US

By Dani Burger

     (Bloomberg) — The Standard & Poor’s 500 Index reached its highest level since the end of the August selloff, rising as biotechnology companies rebounded and energy shares extended their longest rally since December 2013.

     The benchmark index again tested points where an advance petered out at the end of August and a September rally wilted. Commodity stocks rose for a seventh session, weathering through a late-morning fade, with the appeal of the beaten-down energy and raw-materials groups enhanced by the dollar’s recent weakness.

     The S&P 500 advanced 0.8 percent to 1,995.83 at 4 p.m. in New York, rebounding from a midday drop of as much as 0.2 percent to close at its highest since Aug. 20. The index closed within a point of its average price during the past 50 days. The Dow Jones Industrial Average increased 122.10 points, or 0.7 percent, to 16,912.29. The Nasdaq Composite Index climbed 0.9 percent, bringing its 2015 gain to 1.2 percent.

     “The commodity rally extending itself is a significant story,” said Andrew Burkly, head of institutional portfolio strategy at Oppenheimer & Co. in New York. “The movement has come from people looking to see if oil prices can hold above $50, or if there is an oversold bounce. Overall, it’s the continuing story, that commodity-centric and energy companies have been doing better.”

     It was a whipsaw session for investors as an early 1 percent climb led by energy stocks faltered, with equities erasing gains after a government report showed that U.S. crude inventories and production climbed. The S&P 500 retreated twice after reaching its 50-day moving average before closing just below that level amid a surge in the final minutes.

     The Chicago Board Options Volatility Index fell 5.2 percent Wednesday to 18.40, its lowest since August 19. The measure of market turbulence known as the VIX dropped for a seventh day, the longest stretch since February 2014, losing 33 percent over the period. About 8.4 billion shares changed hands on U.S. exchanges, 13 percent above the three-month average.

     Stocks have swung between gains and losses since August’s tumble, amid concern about a slowing global economy triggered by weakness in China, and confusion over the Federal Reserve’s policy intentions. The S&P 500 has rebounded 4 percent since ending its worst quarter in four years, and is up 6.9 percent from an August low reached during the index’s first correction since 2011.

     Expectations for the Fed to raise borrowing costs this year have diminished since the weaker-than-expected September jobs report last Friday. Traders are pricing in a 39 percent chance of an increase in December and almost 62 percent probability of a move higher in March. The Bloomberg Dollar Index was little changed, after a four-day slide amid the lower odds of a Fed rate increase this year.

     Among the S&P 500’s 10 main industries, health-care companies were the best performers as biotechnology shares rebounded from a two-day drop. Celgene Corp. and Amgen Inc. were up more than 4.2 percent, and the Nasdaq Biotechnology Index climbed 2 percent after sliding 3.8 percent yesterday.

     Industrial companies rose for the third time in four sessions amid speculation that a weaker U.S. currency will lift profits for multinational companies, which benefit when their overseas earnings are converted back to dollars. Boeing Co. and General Electric Co. climbed 1.8 percent. United Rentals Inc. added 3.3 percent on its way to the strongest three-day rally in three years.

     Energy and raw-materials shares regrouped after briefly erasing an early advance. The two industries also benefit from the weaker dollar, which makes commodities denominated in the U.S. currency more attractive. Transocean Ltd. and Murphy Oil Corp. rose more than 2.8 percent, paring earlier gains of at least 4 percent after the crude inventories data undercut the morning rally.

     Freeport-McMoRan Inc. jumped 10 percent after the miner added two of Carl Icahn’s allies to its board. Newmont Mining Corp. and fertilizer maker Mosaic Co. gained at least 3.2 percent to rise for a fourth day, their longest rallies since May.                       

     Adobe Systems Inc. fell 5.3 percent, the most in six weeks, after forecasting fiscal 2016 sales and profit that fell short of analysts’ estimates. The software maker cited currency fluctuations and a change in how it charges customers.

     Corporate earnings will grab an increased share of investors’ attention this week, with Alcoa Inc. unofficially kicking off the reporting season after markets close tomorrow. Companies reporting next week include Johnson & Johnson, Intel Corp. and JPMorgan Chase & Co.

     Analysts project profits for S&P 500 members dropped 6.9 percent in the third quarter. Still, a Fed measure of corporate income has posted its biggest quarterly increase since 2012, suggesting the overall picture for profits may be skewed by downgrades at energy producers combating weak oil prices.

     Among the season’s early reporters, Yum Brands Inc. tumbled 19 percent, the most in 13 years after the owner of the KFC, Pizza Hut and Taco Bell chains posted profits that missed analysts’ estimates. Results were hurt by a lingering slump in China.
 

Have a wonderful evening everyone.

 

Be magnificent!

Chitragupta, who is supposed to be writing out our deeds in an account book

is no other than the conscious and unconscious parts of our mind.

The Lord of Law, to whom we have to render the account,

is the Soul within us.

Gopal Singh

As ever,

 

Carolann

 

Jealousy is all the fun you think they had.

                              -Erica Jong, 1942-

 

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