Category: Events

Dear Friends, 

Tangents: 

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

PHOTOS OF THE DAY

People watch a competitor riding a homemade vehicle without an engine on a 300-meter-track during the Red Bull Soapbox Race in Amman, Jordan, Friday. Muhammad Hamed/Reuters

Guests take cover from the rain under umbrellas as they make their way through a labyrinth of 125,000 sunflowers, as they head for a ceremony marking the opening of the new entrance to the Van Gogh museum and the 125th anniversary of the Dutch master’s death in Amsterdam, Netherlands, Friday. Peter Dejong/AP

Market Closes for September 4^th, 2015

Market Index	Close	Change
Dow Jones	16102.38	-272.38   -1.66%
S&P 500	1921.22	-29.91   -1.53%
NASDAQ	4683.918	-49.578   -1.05%
TSX	13478.31	-118.10
		-0.87%

International Markets

Market Index	Close	Change
NIKKEI	17792.16	-390.23
		-2.15%
HANG SENG	20840.61	-94.33
		-0.45%
SENSEX	25201.90	-562.88
		-2.18%
FTSE 100	6042.92	-151.18
		-2.44%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.439	1.462
CND. 30 Year Bond	2.197	2.220
U.S.    10 Year Bond	2.1244	2.1596
U.S. 30 Year Bond	2.8836	2.9348

Currencies

BOC Close	Today	Previous
Canadian $	0.75304	0.75810
US $	1.32795	1.31908
Euro Rate 1 Euro=		Inverse
Canadian $	1.48067	0.67537
US $	1.11500	0.89686

Commodities

Gold	Close	Previous
London Gold Fix	1118.25	1128.00
Oil	Close	Previous
WTI Crude Future	46.05	46.75

Market Commentary:

Canada

By Theophilos Argitis

     (Bloomberg) — Canada’s economy unexpectedly added jobs in August, mostly full-time work in services such as education and health care, in another sign of sustained momentum in a labor market that has defied the oil price shock.

     Canadian employment grew by 12,000 during the month, bringing to 193,300 the number of new jobs over the past 12 months, Statistics Canada said Friday in Ottawa. The unemployment rate rose to 7 percent from 6.8 percent as more Canadians entered the labor force. Economists surveyed by Bloomberg had predicted a drop of 5,000 jobs in August.

     The employment gains are defying gross domestic product data that show Canada’s economy contracted in the first two quarters of the year amid a plunge in oil prices, and may give the Bank of Canada pause as it considers whether to cut interest rates again to boost growth.

     “Canada got another signpost from August employment that, at least for now, there’s some momentum in the economy,” Avery Shenfeld, chief economist at CIBC World Markets, said in a note to investors.

     Canada’s central bank cut interest rates twice this year and swaps trading shows some investors have been paring their bets on the possibility of another cut at the next decision on Sept. 9.

     The Canadian dollar pared losses after the report, down 0.3 percent to 1.3212 per U.S. dollar at 9:13 a.m. in Toronto. It had fallen as much as 0.5 percent.

     Services-related industries are doing much of the heavy lifting, adding 17,200 jobs in August to offset job losses for goods producers such as factories. Over the past 12 months, the country has added 201,600 service jobs, while losing 8,300 goods producing jobs.

     The composition of new jobs is also improving. The nation created 54,400 full time jobs in August, offsetting a drop of 42,400 part-time jobs. Over the past 12 months, Canada added 317,900 new full-time workers, offsetting a 124,500 drop in part-time work.

     The total number of actual hours worked jumped 0.8 percent in August from the month before, the most since November 2010.

US 

By Anna-Louise Jackson and Oliver Renick

     (Bloomberg) — U.S. stocks slumped as August payrolls data gave little comfort to investors seeking direction on interest rates amid volatile global markets and growing concern about the economy’s strength.

     The Standard & Poor’s 500 Index lost 1.5 percent to 1,921.22 at 4 p.m. in New York. The benchmark index slid 3.4 percent for the week, its second-worst performance since December. The Dow Jones Industrial Average fell 272.38 points, or 1.7 percent, to 16,102.38. Equity markets will be closed Monday for Labor Day. Trading on U.S. exchanges was 10 percent below the three-month average.

     It’s “a glass-half-empty kind of day,” said Patrick Blais, a fund manager at Manulife Asset Management Ltd. in Toronto. He helps manage about C$280 billion at the firm. “Right now there’s a lot of nervousness so it’s natural for the market to react aggressively.”

     In the U.S. stock market, the S&P 500 had its sixth decline exceeding 1 percent in 12 days. Prior to that there’d been 10 such declines since January. The benchmark gauge has moved up or down by an average of more than 2 percent a day since falling out of its 2015 trading range on Aug. 20 — almost four times as much as in the prior nine months.

     September is historically the worst month of the year for the S&P 500, with the equity gauge falling 1.1 percent on average based on data going back to 1927, according to data compiled by Bloomberg.

     “There’s a risk-off mentality rather than a risk-on one going into a three-day weekend for the U.S. and after the Chinese markets have been closed for four days,” Mark Spellman, a fund manager who helps oversee $4.2 billion at Alpine Funds in Purchase, New York, said by phone. “The weakness in the market is due primarily to continued global growth concerns.”

     Financial markets have been unable to shake off volatility that’s jolted markets amid concern China’s slowdown will spread. The Dow yesterday erased a rally of nearly 200 points as optimism over the European Central Bank’s revamp of quantitative easing faded. The gauge surged 1.8 percent Wednesday after tumbling 2.8 percent the day before.

     Research from a JPMorgan Chase & Co. strategist this week argued that robotic selling by quantitative investment funds tuned to volatility and price trends — which contributed to last month’s losses in U.S. stocks — is only about halfway completed. Marko Kolanovic said such traders probably have to get rid of another $100 billion in stocks in the next one to three weeks.

     Data today showed U.S. employers added 173,000 workers in August and the jobless rate dropped to 5.1 percent. The gain in payrolls, while less than forecast, followed advances in July and June that were stronger than previously reported. The unemployment rate is the lowest since April 2008. Average hourly earnings climbed more than forecast and workers put in a longer workweek, the report also showed.

     The jobs report is the last major data point before the Fed meets later this month on Sept. 16-17 to discuss the timing of its first increase in interest rates in nearly a decade. Investors raised bets on a September liftoff to 30 percent from 26 percent before the jobs data, while that’s still less than the 48 percent odds predicted before China devalued the yuan on Aug. 11.

     “This is the first time the market has looked at a Fed meeting and really has no idea what the Fed is going to do,” said Mark Kepner, an equity trader at Themis Trading LLC in Chatham, New Jersey. “Right now you’re looking at the overall uncertainty and that’s what’s hanging on the market. I don’t think this number in and of itself changes how somebody’s going to vote.”

     Fed Bank of Richmond President Jeffrey Lacker said the central bank should end the era of record-low interest rates, now that the impacts from winter weather and energy prices have passed. He said labor-market slack has been reduced to pre- recession levels, and shorter-term inflation measures are tracking the U.S. central bank’s 2 percent target.

     “It’s time to align our monetary policy with the significant progress we have made,” Lacker said in the text of a speech in Richmond.

     The Chicago Board Options Exchange Volatility Index rose 8.6 percent to 27.80. The gauge of market turbulence known as the VIX is up 6.7 percent for the week, after posting a record 135 percent jump in August.

     All 10 major industries in the S&P 500 fell more than 1.1 percent, with financial and raw-material shares dropping at least 1.9 percent. Goldman Sachs Group Inc. and JPMorgan Chase & Co. lost more than 1.9 percent to lead declines among the largest banks.

     Netflix Inc. slid for the sixth consecutive day, losing 2.3 percent. The stock is down 16 percent since Aug. 27, after more than doubling from the beginning of the year.

     Freeport-McMoRan Inc. tumbled 4.2 percent as copper dropped that most in eight weeks after Germany factory orders fell more than expected in July.

     Caterpillar Inc. lost 1.8 percent after the stock was downgraded to neutral from outperform at Robert Baird by equity analyst Mircea Dobre. Joy Global Inc. fell 1.4 percent, a day after it plunged the most in six years after cutting its 2015 outlook amid the global commodity downturn.

 

Have a wonderful weekend everyone.

 

Be magnificent!

“The most difficult thing is the decision to act, the rest is merely tenacity.” –Amelia Earhart

As ever,

Karen

 “Every strike brings me closer to the next home run.” –Babe Ruth

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

Senior Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends, 

Tangents: 

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

PHOTOS OF THE DAY

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

Lebanese anglers cast fishing poles from a rocky coastal area at the Mediterranean Sea in Beirut, Lebanon, Thursday.

Market Closes for September 3^rd, 2015

Market Index	Close	Change
Dow Jones	16374.76	+23.38   +0.14%
S&P 500	1951.13	+2.27   +0.12%
NASDAQ	4733.496	-16.483   -0.35%
TSX	13596.41	+51.16
		+0.38%

International Markets

Market Index	Close	Change
NIKKEI	18182.39	+86.99
		+0.48%
HANG SENG	20934.94	-250.49
		-1.18%
SENSEX	25764.78	+311.22
		+1.22%
FTSE 100	6194.10	+110.79
		+1.82%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.462	1.456
CND. 30 Year Bond	2.220	2.209
U.S.    10 Year Bond	2.1596	2.1861
U.S. 30 Year Bond	2.9348	2.9523

Currencies

BOC Close	Today	Previous
Canadian $	0.75810	0.75379
US $	1.31908	1.32663
Euro Rate 1 Euro=		Inverse
Canadian $	1.46703	0.68165
US $	1.11216	0.89915

Commodities

Gold	Close	Previous
London Gold Fix	1128.00	1137.75
Oil	Close	Previous
WTI Crude Future	46.75	46.25

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canada stocks climbed, joining gains in equities around the world after the European Central Bank revamped its quantitative-easing program and pledged to use all tools to bolster growth. Canadian shares advanced 0.4 percent at 4 p.m. in Toronto, paring an earlier advance of as much as 1.2 percent as anxiety about the U.S. government’s jobs report offset stimulus optimism. Energy and financial-services stocks led gains. The Standard & Poor’s/TSX Composite Index has recovered 0.9 percent in two days, after a 2.7 percent rout on Tuesday.

     A global equity gauge of developed and developing markets rose 0.5 percent as volatile Chinese markets will remain closed for the rest of the week while the country celebrates the 70th anniversary of Japan’s defeat at the end of World War II.

     Exports from Canada surged for a second month in July, led by increases in motor vehicle shipments, aircraft-related sales and consumer goods. Energy product exports declined. The nation’s trade deficit narrowed to C$593 million, the lowest since November 2014. Data earlier in the week indicated Canada’s economy had contracted a second straight quarter, meeting the definition of a technical recession.

     ECB President Mario Draghi increased the purchase limit of a country’s debt stock, allowing officials to buy higher proportions of each euro area member’s debt. European Central Bank officials also cut forecasts for economic growth and inflation, due to the emerging-market rout.

     Gold prices tumbled 0.8 percent, the most in a week, to $1,124.50 an ounce in New York as demand for the metal as an alternative asset declined. Goldcorp Inc. retreated 3.6 percent.

     The S&P/TSX rose 51.16 points to 13,596.41 at 4 p.m. in Toronto, paring a weekly decline to 1.9 percent. The equity gauge has dropped 7.1 percent in 2015.

     Canadian Western Bank fell 2.5 percent, after reporting third-quarter earnings. Bank of Nova Scotia and Royal Bank of Canada, among the nation’s largest lenders, increased at least 0.9 percent.

     Energy producers rose 0.5 percent as a group, halting a two-day slide. TransCanada Corp. rose 1.1 percent. Oil traded above $51 in London and West Texas Intermediate crude added 1.1 percent to $46.75. Oil has fluctuated this week after capping the biggest three-day rally in 25 years on Monday.

     China, Canada’s second-largest trading partner, is shutting down its exchanges and banks until Monday to commemorate the 70th anniversary of Japan’s World War II defeat, giving investors a breather from the volatility that has engulfed Chinese markets and the rest of the world.

     First Quantum Minerals Ltd. advanced 3.4 percent for a second day of gains as copper hit a three-week high to lead an advance in base metals. Teck Resources Ltd. added 2.3 percent.

     The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year as crude plunged. Energy and raw-materials producers have the biggest declines among 10 industries in the S&P/TSX this year.

US 

By Jeremy Herron and Oliver Renick

     (Bloomberg) — An almost 200-point rally in the Dow Jones Industrial Average faded in afternoon trading as optimism over European stimulus, which provided a boost to government bonds, gave way to anxiety ahead of Friday’s U.S. jobs report.

     U.S. equities ended the day little changed, with attention focused on Friday’s payrolls data, which is expected to provide the last major clue on the state of the economy before the Federal Reserve next meets. Stocks rallied earlier in the session, while the euro tumbled and sovereign debt rose, after Mario Draghi said the European Central Bank is expanding the scope of monetary stimulus amid signs of a slowdown in the region.

     “There’s going to be caution not only going into the jobs report but into the long weekend,” said Tim Ghriskey, who helps oversee $1.5 billion as managing director and chief investment officer at Solaris Asset Management. “Draghi threw a degree of caution on the markets, but now people are waiting for tomorrow, absolutely.”

     The nonfarm payrolls data Friday represents the last major data point before the Fed meets on Sept. 16-17 to discuss the timing of its first increase in interest rates in nearly a decade. U.S. reports Thursday showed jobless claims rose more than forecast last week, while a measure of the services industry hovered just below a 10-year high.

     Futures traders are betting the Fed will push back raising its fed funds rate. The probability of an increase in September has fallen to 28 percent, from 38 percent at the end of last week, according to data compiled by Bloomberg. The figures are based on the assumption that the benchmark will average 0.375 percent after the first hike.

     “The granddaddy of numbers is the report tomorrow and as the Fed moves, the market will move,” Terry Sandven, who helps oversee $126 billion as chief equity strategist at U.S. Bank Wealth Management in Minneapolis, said by phone. “The economics scoreboard seems strong enough to warrant something other than crisis-level rates, but there’s also justification to wait for the end of the year.”

     ECB President Draghi said the central bank will use all tools available to spur growth. He acknowledged a “somewhat weaker economic recovery” in the region, and said the emerging- market rout sparked by China’s shock devaluation of its currency last month threatened global expansion.

     The Standard & Poor’s 500 Index closed up 0.1 percent by 4 p.m. in New York, after briefly erasing a rally of more than 1 percent. The gauge surged 1.8 percent Wednesday after tumbling 3 percent the day before, when it notched up its third-worst drop of 2015. The index remains about 6 percent below the level it traded at on the day China devalued the yuan.

     The pullback in major indexes Thursday coincided with the release of research from a JPMorgan Chase & Co. strategist arguing that robotic selling by quantitative investment funds tuned to volatility and price trends — which contributed to last month’s losses in U.S. stocks — is only about halfway completed.

     Marko Kolanovic said such traders probably have to get rid of another $100 billion in stocks in the next one to three weeks. On Aug. 27, Kolanovic warned in a similar note that “price insensitive” program traders are likely to cause repeated selloffs.

     The Stoxx Europe 600 Index rallied 2.4 percent Thursday as investors welcomed the assurances of ECB support after the China-fueled volatility.

     The MSCI Emerging Markets Index advanced for the first time this week, rising 0.6 percent as benchmark gauges in Egypt, India, Hungary, Poland, South Africa and Dubai all rallied more than 1 percent.

     “One modest positive today is the fact China is offline for its Victory Day commemorations,” said Chris Weston, Melbourne- based chief markets strategist at IG Ltd. “So traders and investors will be focused on domestic data, valuations and trying to understand how to navigate these crazy markets.”

     Markets in Hong Kong were closed Thursday for the World War II anniversary celebrations, while those on the mainland remain shut for the rest of the week.

     The euro slid 0.9 percent to $1.1123, while the yen dropped 0.2 percent to 120.07 per dollar. The euro weakened versus all of its 16 major counterparts after policy makers cut economic forecasts and raised the limit on bond purchases per issue under their quantitative-easing program.

     The British pound fell for an eighth straight day against the greenback, its longest stretch of declines in almost a year, as data showed growth in the U.K. services sector unexpectedly slowed in August.

     Benchmark 10-year Treasury yields fell two basis points, or 0.02 percentage point, to 2.16 percent. German 10-year bunds climbed for a third day while yields on similar-maturity Italian debt dropped the most in more than two weeks.

     The ECB’s 25-member Governing Council kept the main refinancing rate at 0.05 percent Thursday as predicted by all 47 economists in a Bloomberg survey. The deposit rate and the marginal lending rate stayed at negative 0.2 percent, and 0.3 percent, respectively.

     The Bloomberg Commodity Index rose 0.6 percent, advancing for a second day. Copper climbed 2.5 percent in London, while nickel and aluminum gained at least 1.3 percent.

     West Texas Intermediate crude climbed 1.1 percent to $46.75 a barrel in New York, after falling as much as 1.3 percent earlier in the day. Brent oil rose 18 cents to $50.68 in London.

     Gold for immediate delivery fell 0.8 percent to $1,125.46 an ounce. The metal lost 0.6 percent on Wednesday, its first decrease in four days.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“The best and most beautiful things in the world cannot be seen or even touched – they must be felt with the heart.” Helen Keller

As ever,

Karen

 

“Education is the most powerful weapon which you can use to change the world.”

Nelson Mandela

 

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

Senior Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

September:  The seventh month from March, when the year formerly commenced.  The old Dutch name was Herstmaand, meaning autumn month and the Anglo-Saxon Hoerfestmonath, meaning harvest month.  After the introduction of Christianity, it became Haligmonath in the Anglo-Saxon, meaning “holy month” since the nativity of the Virgin Mary was commemorated on the 8^th and the  Exaltation of the Cross or Holy Cross Day on the 14^th and St. Michael’s Day on the 29^th.  In the French Revolutionary Calendar the equivalent month was Fructidor, or fruit month, corresponding to the period from August 19^th to September 22^nd. – from Brewer’s Dictionary of Phrase & Fable.

On this day in 1969, America’s first ATM debuted, dispensing cash from Chemical Bank in Rockville Center, New York.

PHOTOS OF THE DAY

A view of The Man during the Burning Man 2015 ‘Carnival of Mirrors’ arts and music festival in the Black Rock Desert of Nevada, Tuesday. Participants are still arriving from all over the world for the sold-out festival to spend a week in the remote desert to experience art, music, and the unique community that develops. Jim Urquhart/Reuters

The Atlas V rocket launches from Cape Canaveral, as seen from Viera, Fla., with its reflection in a lake along Murrell Road, early Wednesday. The rocket is carrying a US Navy communications satellite. Tim Shortt/Florida Today/AP

Market Closes for September 2^nd, 2015

Market Index	Close	Change
Dow Jones	16351.38	+293.03   +1.82%
S&P 500	1948.86	+35.01   +1.83%
NASDAQ	4749.980	+113.875   +2.46%
TSX	13545.25	+63.35
		+0.47%

International Markets

Market Index	Close	Change
NIKKEI	18095.40	-70.29
		-0.39%
HANG SENG	20934.94	-250.49
		-1.18%
SENSEX	25453.56	-242.88
		-0.95%
FTSE 100	6083.31	+24.77
		+0.41%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.456	1.432
CND. 30 Year Bond	2.209	2.180
U.S.    10 Year Bond	2.1861	2.1577
U.S. 30 Year Bond	2.9523	2.9182

Currencies

BOC Close	Today	Previous
Canadian $	0.75379	0.75499
US $	1.32663	1.32452
Euro Rate 1 Euro=		Inverse
Canadian $	1.48919	0.67151
US $	1.12253	0.89084

Commodities

Gold	Close	Previous
London Gold Fix	1137.75	1142.30
Oil	Close	Previous
WTI Crude Future	46.25	45.41

Put not your trust in money, but put your money in trust. –Oliver Wendell Holmes.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rebounded from a two-day slide amid an easing of the selloff in global equities.

     The nation’s benchmark index ended higher after fluctuating between gains and losses. Health-care companies surged as Valeant Pharmaceuticals International Inc., the second-largest company by market capitalization, advanced the most since July on deal news. Canada’s largest lenders also advanced.

     The Standard & Poor’s/TSX Composite Index rose 63.35 points to 13,545.25 at 4 p.m. in Toronto, after a two-day slide of 2.8 percent. The equity gauge has dropped 7.4 percent in 2015.

     China, Canada’s second-largest trading partner, is shutting down its exchanges and banks until Monday to commemorate the 70th anniversary of Japan’s World War II defeat, giving investors a breather from the volatility that has engulfed Chinese markets and the rest of the world.

     Global stocks had tumbled in the previous two days amid rising concern a slowdown in China’s economy and slump in its equity markets would affect growth around the world. Data yesterday indicated Canada’s economy slid a second quarter, meeting the technical definition of a recession, amid a rout in crude prices.

     Senior-housing companies in Canada rallied after Amica Mature Lifestyles Inc. agreed to be acquired by a pension fund- backed company, jumping 111 percent. Chartwell Retirement Residences, the largest operator of assisted-living homes across Canada, jumped 6.8 percent, the most since 2009.

     Valeant rose 4 percent, snapping a two-day retreat after agreeing to buy Synergetics USA Inc. in a cash deal worth $6.50 a share. Synergetics, a supplier of precision surgical devices, will enhance Valeant’s Bausch & Lomb eye-care business, the company said in the release.

     Colliers International Group Inc. jumped 4.5 percent, the biggest gain in almost a month, after agreeing to buy real- estate firm Gateway Commercial in St. Louis for an undisclosed sum.

     Alimentation Couche-Tard Inc., operator of gas bars and convenience stores, climbed 2.9 percent for a second straight increase. The company yesterday reported second-quarter earnings ahead of analysts’ estimates thanks to lower fuel prices and higher volumes sold, along with strong merchandise sales, Jennifer Bartashus, a Bloomberg Intelligence analyst, said in a report.

     The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year as crude plunged. Oil in New York rebounded after tumbling 7.7 percent Tuesday. Suncor Energy Inc. slipped 2.9 percent.

     Energy and raw-materials producers are the worst-performing industries among 10 in the S&P/TSX this year. The S&P/TSX Energy Index has slumped 4.8 percent in two days and is down 20 percent for the year.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks rallied, after the Standard & Poor’s 500 Index posted one of its steepest drops this year, amid a respite from a global equities selloff.

     After pacing the rout yesterday, technology shares led the rebound as Apple Inc. and Microsoft Corp. rose more than 3.6 percent. H&R Block Inc. jumped 7.5 percent after announcing a stock buyback plan. McDonald’s Corp. and Home Depot Inc. added at least 2.7 percent. A gauge of U.S. airlines rallied the most in more than seven months. Energy shares erased a decline along with oil, with crude closing higher after lurching between gains and losses.

     A surge in the final minutes pushed the S&P 500 up 1.8 percent to 1,948.86 at 4 p.m. in New York, closing at the session high after the gauge fell 3.8 percent over the previous two sessions. Equities jumped in early trading and then trimmed their gains by more than half before an afternoon rebound along with oil prices. The Dow Jones Industrial Average added 293.03 points, or 1.8 percent, to 16,351.38. The Nasdaq Composite Index gained 2.5 percent.

     “China’s going to be closed the next few days and that means there won’t be this negative lead-in to markets in the morning so that will be a nice reprieve,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “The date for a potential rate raise is certainly going back and forth and with the recent volatility in the market and situation overseas, people don’t have much conviction on when it will be.”

     The benchmark equity gauge’s 3 percent decline on Tuesday – – its third-biggest of 2015 — marked a sour start to what has historically been the worst month of the year. The S&P 500 falls 1.1 percent on average in September, according to data compiled by Bloomberg going back to 1927.

     Another troubling sign is that futures on Chicago Board Options Exchange Volatility Index have climbed, showing traders predict turbulent markets will endure. The gauge known as the VIX fell 17 percent Wednesday to 26.09, after a record monthly jump in August,up 135 percent.

     The S&P 500 slumped 6.3 percent last month as China’s currency devaluation spurred concern over global growth, erasing more than $5.7 trillion in equity market values worldwide, while volatility surged the most on record. The equity index entered a correction last week, only to then rally more than 6 percent over two days. It closed Wednesday 8.5 percent below its all- time high set in May.

     Chinese shares closed lower on the last trading day of this week as investors assessed the level of state support before a major military parade on Thursday. Mainland markets will be closed Thursday and Friday to commemorate the end of World War II.

     “Volatility will stay high for a while,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private- banking unit in Hellerup, Denmark. “China is still making people panic and a lot of us are concerned that we’ll break the lows from last week. But many companies are starting to look very cheap now and the market will eventually find a support level, especially if the Fed doesn’t raise rates this month.”

     Amid continuing concerns that China’s slowdown will weigh on the global economy, traders are now pricing in a 32 percent chance that the Federal Reserve will raise interest rates this month, down from 38 percent on Monday. Policy makers have a little more than two weeks to assess incoming data before deciding whether to act on rates.

     A report from the Fed Wednesday said the economy expanded across most regions and industries in July and August as tighter labor markets boosted wages for some workers. Six of 12 Fed districts reported “moderate” growth, and five others said expansion was “modest,” according to the Beige Book.                          

     Data today on private payrolls showed companies added 190,000 workers in August, below the 200,000 forecast by economists surveyed by Bloomberg. Attention will focus on the government’s monthly jobs report, due Friday, as a major data point before the Fed’s meeting. A separate gauge Wednesday showed July factory orders rose less than forecast by economists.

     All of the S&P 500’s 10 main groups increased today, with technology, consumer discretionary and industrial companies each rising more than 2.1 percent after those industries lost at least 2.6 percent on Tuesday. Energy shares rose 0.9 percent after erasing an early 1.2 percent drop. About 7.5 billion shares traded hands on U.S. exchanges, 7 percent above the three-month average.

     Along with Apple and Microsoft, a handful of semiconductor companies boosted the tech group. Nvidia Corp., Qorvo Inc. and Avago Technologies Ltd. all rose more than 2.5 percent. Intel Corp. added 2.8 percent as it unveiled a new chip design which will help make laptops more powerful and easier to use, the company said. Facebook Inc. and PayPal Holdings Inc. gained more than 3 percent.

     Airlines helped lift industrial shares in the benchmark amid the earlier retreat in oil prices. American Airlines Group Inc. and Delta Air Lines Inc. rallied at least 5 percent, with American posting its strongest increase since March. A Bloomberg index of U.S. carriers climbed 4.3 percent, with JetBlue Airways Corp. up 6.4 percent for its biggest gain in four months. The Dow Jones Transportation Average rose 2.5 percent.

     Health-care shares advanced as biotechnology companies rebounded from a two-day drubbing. Biogen Inc. and Celgene Corp. added at least 3.5 percent. The Nasdaq Biotechnology Index rose3.7 percent after after a 5.6 percent drop during the previous two days. Bristol-Myers Squibb Co. increased 2.4 percent while Waters Corp. added 3.3 percent to snap a three-day slide.

     Energy companies in the S&P 500 closed higher in a tumultuous day for crude. West Texas Intermediate futures rose 1.9 percent, after falling as much as 4.8 percent following a government report that showed U.S. supplies climbed the most since April. Tesoro Corp. and Newfield Exploration Co. gained more than 3 percent to lead the group. Even with oil’s advance, Chesapeake Energy Corp. and Diamond Offshore Drilling Inc. still lost at least 2.1 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

Wise people are concerned only with what lies behind all these things.

Just as bees fly form one blossom to another, looking only for the essence of each one,

wise people look only for the essence of every person they meet.

Wise people, who know and understand the soul, are indifferent to both pleasure and pain,

they have risen above sensations.  They are indifferent to the past and the future, they have risen above time.

They are indifferent to danger; they have risen above fear.

Wise people know that what is here, is also there; that what was, will also be.

They see unity, not division.

 

Katha Upanishad

As ever,
 

Carolann

 

When angry, count ten before you speak; if very angry, a hundred.

                                                  -Thomas Jefferson, 1743-1826

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

September 1, 1939: World War ll begins.  I have just finished reading an amazing book, the events of which take place during World War ll.  It is entitled “All the Light We Cannot See” by Anthony Doer.  It won the 2015 Pulitzer Prize for fiction and the 2015 Andrew Carnegie Medal for Fiction.  I highly recommend it.

“A novel to live in, learn from, and feel bereft over when the last page is turned.” — Booklist

“Tackling questions of survival, endurance and moral obligations during wartime, the book is as precise and artful and ingenious as the puzzle boxes the heroine’s locksmith father builds for her. Impressively, it is also a vastly entertaining feat of storytelling.” –New York Times Book Review

PHOTOS OF THE DAY

A double rainbow is seen above a row of terrace houses in Clapham, south London, Britain, Tuesday. The second rainbow, above the main arc has the sequence of its colors reversed, with red on the inner side of the bow. Dylan Martinez/Reuters

An Indian villager rescues his sheep on a makeshift raft at Balimukh village, about 43 miles east of Gauhati, India, Tuesday. Monsoon floods have inundated hundreds of villages across the northeast Indian state of Assam, killing several people and forcing some 800,000 people to leave their homes.Anupam Nath/AP

Market Closes for September 1^st, 2015

Market Index	Close	Change
Dow Jones	16058.35	-469.68   -2.84%
S&P 500	1913.85	-58.33   -2.96%
NASDAQ	4636.105	-140.402   -2.94%
TSX	13481.90	-377.22
		-2.72%

International Markets

Market Index	Close	Change
NIKKEI	18165.69	-724.79
		-3.84%
HANG SENG	21185.43	-485.15
		-2.24%
SENSEX	25696.44	-586.65
		-2.23%
FTSE 100	6058.54	-189.40
		-3.03%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.432	1.490
CND. 30 Year Bond	2.180	2.235
U.S.    10 Year Bond	2.1577	2.2126
U.S. 30 Year Bond	2.9182	2.9579

Currencies

BOC Close	Today	Previous
Canadian $	0.75499	0.76104
US $	1.32452	1.31398
Euro Rate 1 Euro=		Inverse
Canadian $	1.49913	0.66705
US $	1.13174	0.88359

Commodities

Gold	Close	Previous
London Gold Fix	1142.30	1135.00
Oil	Close	Previous
WTI Crude Future	45.41	49.20

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian equities tumbled, after the worst month in nearly a year, as the economic malaise that has gripped stock markets around the world continued into September.

     The Standard & Poor’s/TSX Composite Index slumped 2.7 percent as data showed Canada’s gross domestic product shrank again in the second quarter, meeting the technical definition of a recession. The report followed disappointing China manufacturing data that weighed on global stocks.

     The S&P/TSX sank 377.22 points to 13,481.90 at 4 p.m. in Toronto. Canadian stocks lost as much as 10 percent in August before rebounding 6.2 percent in four days. The equity gauge has dropped 7.9 percent in 2015.

     Gross domestic product in Canada declined at a 0.5 percent annualized pace from April to June, Statistics Canada said Tuesday in Ottawa. The agency also revised its first-quarter contraction deeper, to 0.8 percent from 0.6 percent. Economists had estimated a 1 percent decline in the second quarter.

     “With exports still struggling and business investment falling in response to the fallout in the energy sector, hopes for a sustained rebound beginning in the second half of the year look misplaced,” David Madani, an economist at Capital Economics in Toronto, said in a report to clients. “The economy is still struggling to deal with low oil prices.”

     Equities tumbled around the world as investors digested the latest news from China. The S&P 500 sank 3 percent in New York as the MSCI All-Country World Index retreated 2.7 percent.                      

     China’s official factory gauge fell to the lowest level in three years as monetary easing failed to revive the country’s flagging economy. The benchmark Canadian equities index fell 4.2 percent in August as concerns mount that China’s policy makers won’t be able to prop up its markets at the same time Federal Reserve officials signaled they’re preparing to raise interest rates.

     The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year as crude plunged. Oil futures slipped 7.7 percent in New York, after the biggest three-day rally in 25 years, as speculation faded OPEC may coordinate supply restraint with other nations. Oil surged 27 percent in the three days through Monday.

     Energy stocks had the biggest declines among 10 groups in the benchmark index today, sliding 4.2 percent. First Quantum Minerals Ltd. dropped 11 percent as copper prices have fallen in New York for four straight months, the worst streak since 2008.

     Penn West Petroleum Ltd. sank 17 percent after the Calgary oil producer said it will scrap its dividend, fire 35 percent of its work force and look to sell more assets. Penn West is the third-worst performing stock in the S&P/TSX this year with a 65 percent decline.

     Bombardier Inc., the worst-performer in the gauge this year, dropped 9.3 percent. Royal Bank of Canada and Bank of Nova Scotia sank at least 2.7 percent to lead the nation’s largest lenders lower.

     A volatility gauge for 60 of the largest, most liquid stocks in Canada jumped 12 percent. The measure added 78 percent in August, its biggest monthly climb in data back to 2009.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks joined a worldwide selloff, after equities’ worst month in more than three years, amid continuing concerns that China’s slowdown will weigh on the global economy.

     Energy shares fell for the first time in five sessions as oil retreated after the commodity’s strongest three-day rally since 1990. Exxon Mobil Corp. and ConocoPhillips slumped more than 2.8 percent. Banks were among the hardest hit, with Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. losing at least 4.1 percent. Apple Inc. and Microsoft Corp. sank more than 3.9 percent to drag down technology shares. Copper producer Freeport-McMoRan Inc. dropped 8.2 percent.

     The Standard & Poor’s 500 Index slid 3 percent to 1,913.85 at 4 p.m. in New York, the third-worst drop this year. It’s a sour start to September, historically the worst month of the year with the equity gauge falling 1.1 percent on average going back to 1927, according to data compiled by Bloomberg. The Dow Jones Industrial Average sank 469.68 points, or 2.8 percent, to 16,058.35. The Nasdaq Composite Index lost 2.9 percent.

     “The problem is, as much as China is the catalyst for this, it’s also that we’re seeing weakness in fundamentals here,” said Matt Maley, an equity strategist at Miller Tabak & Co LLC in New York. “A lot of company earnings were hurt by China in the second quarter and it’s only gotten worse. People are losing confidence with the whole situation there breaking down, not just in the stock market but in data as well.”

     Equities dropped in Asia, with the Shanghai Composite Index slumping as much as 4.8 percent, after manufacturing reports pointed to a deepening Chinese economic slowdown.                     

     International Monetary Fund Managing Director Christine Lagarde said Tuesday the global expansion outlook is worse than the lender anticipated less than two months ago. “This reflects two forces: a weaker than expected recovery in advanced economies, and a further slowdown in emerging economies, especially in Latin America,” Lagarde said in a speech in Jakarta.

     A report today showed U.S. factories expanded in August at the slowest pace since May 2013 as anemic demand from emerging markets such as China translated into leaner factory order books. A measure of exports matched the weakest reading since April 2009. The weak manufacturing data surface ahead of the Federal Reserve’s September policy meeting in which they will debate whether the economy is strong enough to withstand an increase in interest rates in the face of fragile overseas economies.

     Remarks by Fed Vice Chairman Stanley Fischer last week suggested the central bank hasn’t ruled out raising rates when policy makers gather on Sept. 16-17. That has heightened concerns that the Fed may increase rates even as growth slows around the world. Fed Bank of Boston President Eric Rosengren said in a speech today that uncertainty over inflation and global growth justify a modest pace of rate increases, regardless of when the central bank begins tightening.

     Traders are now pricing in a 30 percent chance that the Fed will act this month, down from 38 percent yesterday. Attention will focus this week on the government’s August jobs report, due Friday, as the last major data point before the Fed’s meeting.

     “Markets may have overemphasized China’s impact, but markets are also in relatively bad shape and we’re getting more negative technical signals,” said Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich. “It’s a close call for the Fed and as long as markets are in turbulence, I don’t think it will raise rates. If the markets remain too turbulent, they will postpone to October.”

     The S&P 500 ended down 6.3 percent in August as China’s currency devaluation spurred concern over global growth, erasing more than $5.7 trillion in equity market values worldwide, while a measure of volatility surged the most on record. The S&P 500 plunged the most since 2011 and entered a correction last week, only to then rally more than 6 percent over two days. The U.S. benchmark index closed Tuesday 10 percent below its all-time high set in May.

     The Chicago Board Options Exchange Volatility Index rose 10 percent Tuesday to 31.40. The measure of market turbulence known as the VIX had a record monthly jump in August,up 135 percent. About 9 billion shares traded hands on U.S. exchanges today, 28 percent above the three-month average.

     A handful of stocks that had driven much of the S&P 500’s 2015 gains before the August selloff came under pressure Tuesday. Facebook Inc., Amazon.com Inc., Apple, Netflix Inc. and Google Inc. — which had come to be known as the Fab Five — were all down at least 2.4 percent. Among other technology shares, semiconductor makers Avago Technologies Ltd. and Skyworks Solutions Inc. fell more than 4.9 percent.

     All 10 of the S&P 500’s main groups declined today, with energy, financial, technology and raw-material companies all falling more than 3 percent. Energy and financials led the benchmark’s 3.9 percent selloff on Aug. 24, which was its biggest drop in four years.

     Energy shares halted a four-day, 12 percent rally after crude fell the most in two months. Chevron Corp. lost 3.5 percent, while Murphy Oil Corp., Consol Energy Inc. and Devon Energy Inc. retreated more than 5.4 percent.

     Citigroup and Wells Fargo & Co. fell more than 4.3 percent to pace declines among financial companies, where all 88 stocks in the group retreated. E*Trade Financial Corp. and Lincoln National Corp. decreased at least 4.9 percent. The KBW Bank Index sank 4.3 percent, its second-biggest drop this year, with 22 of the gauge’s 24 members down at least 3 percent.

     Dollar Tree Inc. slid 8.7 percent, the most in the S&P 500 and its biggest drop since February 2009. The discount retailer forecast sales that trailed analysts’ estimates, as it works to integrate its acquisition of Family Dollar Stores Inc.

     Netflix lost 8 percent for its biggest drop this year. Along with Dollar Tree, the online video-streaming service led the benchmark’s consumer discretionary group lower. Netflix shares are still up 117 percent this year. Wynn Resorts Ltd. and Whirlpool Corp. decreased more than 4.7 percent Tuesday.

 

Have a wonderful evening everyone.

 

Be magnificent!

Ever tell  yourself, I am He.

These words that will burn up the dross that is in the mind, words that will bring out the tremendous energy

which is within you already, the infinite power which is sleeping in your heart.

Swami Vivekananda

As ever,

 

Carolann

 

A yawn is a silent shout.

-G.K. Chesterton, 1874-1936

 

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 1980, the communist government of Poland signed an accord with striking shipyard workers in the city of Gdansk. Lech Walesa, who led the striking workers, went on to form Solidarity, the first independent labor union to develop in a Soviet bloc country.

August 31, 1896; Gold discovered in the Klondike.

August 31,1800.  Coleridge describes the end of his cross-country walk from Keswick to Dove Cottage, the Wordsworths’ home at Grasmere, in his Notebook.  He and Wordsworth “invented” the idea of walking for pleasure.

Descended.  As I bounded down, noticed the moving stones under the soft moss, hurting my feet.  Ascended that steep and narrow ridge.  On my right that precipice and the morass at its feet.  On my left the twp tarns and another precipice twice as lofty as the other, but its white stones more coated and lined with moss.  Am now at the top of Helvellyn…No words can convey any idea of this prodigious wildness.  That precipice… its ridge, sharp as a  jagged knife, level so long, and then ascending so boldly.  What a frightful bulgy precipice I stand on and to my right how the crag…plunges down like a waterfall, reaches a level steepness, and again plunges!  The moon is above Fairfield almost at the full.  Now descended over a perilous peat-moss then down a hill of stones all dark, and darkling.  I climbed stone after stone down a half-dry torrent and came out at the Raise Gap.  And Oh! My God! How did that opposite precipice look in the moonshine – its name Stile Crags.

Dorothy Wordsworth Journal, August 31, 1800:

At eleven o’clock Coleridge came, when I was walking in the still, clear moonshine in the garden…We sat and chatted till half-past three, W. in his dressing-gown.  Coleridge read us a part of Christabel.

PHOTOS OF THE DAY

Costumed revelers perform in the Notting Hill Carnival in London, Monday. Held each August Bank Holiday since 1966, the Notting Hill Carnival is the largest festival celebration of its kind in Europe. Tim Ireland/AP

A woman watches tropical fish from Okinawan sea on display in a glass tank placed outside Sony Building at Tokyo’s Ginza shopping district on Monday. Koji Sasahara/AP

Market Closes for August 31^st, 2015

Market Index	Close	Change
Dow Jones	16528.03	-114.98   -0.69%
S&P 500	1972.18	-16.69   -0.84%
NASDAQ	4776.508	-51.817   -1.07%
TSX	13859.12	-5.95
		-0.04%

International Markets

Market Index	Close	Change
NIKKEI	18890.48	-245.84
		-1.28%
HANG SENG	21670.58	+58.19
		+0.27%
SENSEX	26283.09	-109.29
		-0.41%
FTSE 100	6247.94	+55.91
		+0.90%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.490	1.444
CND. 30 Year Bond	2.235	2.190
U.S.    10 Year Bond	2.2126	2.1824
U.S. 30 Year Bond	2.9579	2.9103

Currencies

BOC Close	Today	Previous
Canadian $	0.76104	0.75752
US $	1.31398	1.32009
Euro Rate 1 Euro=		Inverse
Canadian $	1.47390	0.67847
US $	1.12170	0.89150

Commodities

Gold	Close	Previous
London Gold Fix	1135.00	1135.00
Oil	Close	Previous
WTI Crude Future	49.20	45.36

Market Commentary:

Canada

By Callie Bost

     (Bloomberg) — Canadian stocks slipped, capping the worst month of trading in nearly a year as concern that global growth will slow sank equities around the world.

     The benchmark Canadian equities index fell 4.2 percent in August, sucked lower in the downdraft created by China’s shock devaluation of its currency on Aug. 11. Equities tumbled as concerns mount that China’s policy makers won’t be able to prop up its markets at the same time Federal Reserve officials signaled they’re preparing to raise interest rates.

     Canadian stocks lost as much as 10 percent in a 19-day drop this month before jumping 6.2 percent in four days last week. The Standard & Poor’s/TSX Composite Index slid less than 0.1 percent to 13,859.12 at 4 p.m. in Toronto. The gauge almost erased a slide of 1.5 percent as energy shares rallied with the price of crude. Volume in S&P/TSX stocks was 27 percent above the 30-day average.

     All of the 10 main industries in the S&P/TSX declined in August, led by an 8.9 percent rout in health-care shares, the most in four years. The group declined 2.1 percent Monday, led by a 2.3 percent slump in Valeant Pharmaceuticals International Inc. ProMetic Life Sciences Inc. slid 2.1 percent.

     The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year amid the collapse in crude prices, though energy shares rallied 2.6 percent Monday to pare a monthly drop to 3.3 percent.

     Paramount Resources Ltd., Canadian Energy Services & Technology Corp. and Pengrowth Energy Corp. surged more than 12 percent, as oil capped the biggest three-day gain in 25 years.

     A volatility gauge for 60 of the largest, most liquid stocks in Canada jumped 5.8 percent to 24.47. The measure added 78 percent in August, its biggest monthly climb in data back to 2009.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks declined, with the Standard & Poor’s 500 Index posting its worst month in more than three years, as investors harbored concerns about slowing global growth and the impact of a potential interest-rate increase by the Federal Reserve as soon as September.

     Merck & Co. and Celgene Corp. sank at least 2.7 percent to weigh on the health-care group. Yahoo! Inc. and Facebook Inc. slumped more than 1.7 percent to drag technology shares lower. Energy erased an earlier drop along with oil, as Consol Energy Inc. and ConocoPhillips gained more than 4.9 percent. Phillips 66 rose 2.4 percent as Warren Buffett’s Berkshire Hathaway Inc. has amassed a $4.5 billion stake in the oil refiner. Berkshire fell 1.3 percent.

     The S&P 500 lost 0.8 percent to 1,972.18 at 4 p.m. in New York, capping its biggest monthly slide since May 2012. The gauge in earlier trading fell as much as 1.2 percent. The Dow Jones Industrial Average sank 114.98 points, or 0.7 percent, to 16,528.03, completing its worst monthly drop since May 2010. The Nasdaq Composite Index declined 1.1 percent to also finish its steepest retreat since May 2012. About 7.8 billion shares traded hands on U.S. exchanges, 11 percent above the three-month average.

     “There’s so much emotion right now, and in this environment you can come in any morning and have something out of Europe or Asia crossing us and that’s what causes us to move,” said Steve Bombardiere, an equity trader at Conifer Securities LLC in New York. “There were a lot of people who wanted to buy a correction, but after last week they paused and are thinking about how long it is going to last.”

     Equities trimmed their losses in the late morning after energy shares in the benchmark index reversed a 2.5 percent selloff to rally as much as 1.4 percent. The move followed a jump in oil prices after a government report reduced its crude production estimates and OPEC said it’s ready to talk to other global producers to achieve “fair prices.” Stocks have been whipsawed by gains and losses since last week as markets remain subject to sudden shifts in investor sentiment.

     The S&P 500 ended down 6.3 percent this month as China’s currency devaluation on Aug. 11 spurred concern over global growth, erasing more than $5.3 trillion in equity market values worldwide. The benchmark’s 0.9 percent gain last week masked a volatile period in which the S&P 500 plunged the most since 2011 to enter a correction, only to rally more than 6 percent over two days for its best back-to-back gains since the beginning of the bull market in 2009.

     The Chicago Board Options Exchange Volatility Index rose 9.1 percent Monday to 28.43. The measure of market turbulence known as the VIX had a record monthly jump, up 135 percent. More than $2 trillion of share value was erased from U.S. markets between the end of July and the lowest levels of last week, a sum equal to roughly two years of S&P 500 earnings, data compiled by Bloomberg show.

     The S&P 500 had its worst August since 2001, while the Dow’s 6.6 percent drop was its biggest since it fell 15 percent in August 1998.

     While August ranks in the middle among months based on share performance, it has produced some of the worst returns of the year since 2009. During the week ended August 12, 2011, the S&P 500 alternated between gains and losses of at least 4 percent for four days, something never seen in 88 years of data compiled by Bloomberg. In 2013, the S&P 500 fell 3.1 percent in August, one of only two months of negative returns in a year when the index surged 30 percent.                          

     Despite this month’s equities rout, remarks by Federal Reserve Vice Chairman Stanley Fischer suggested the central bank hasn’t ruled out raising interest rates when the Federal Open Market Committee gathers on Sept. 16-17. Bets on a September liftoff climbed after Fischer said there is “good reason” to believe inflation will accelerate. Traders are now pricing in a 40 percent chance the central bank will act in September, up from a one-in-four chance last Wednesday.

     The Fed has said it will be appropriate to raise rates when it has seen some further improvement in the labor market and is “reasonably confident” inflation will move back to its 2 percent target over the medium term. Investor attention will focus this week on the government’s August jobs report, due Friday, as the last major data point before the Fed’s meeting.

     “August was a rough month for everybody,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “There’s a little scare now where people are getting this feeling from Fischer saying we could see a hike as soon as September, that they don’t care about volatility and that we’re on our own. You could argue a rate hike is good for stocks, but it’s a big unknown and the market is undecided, that’s where the fear is.”

     Nine of the S&P 500’s 10 main groups fell Monday, with utilities, health-care and industrial shares sliding the most. Energy companies were up 1.1 percent as crude oil surged 8.8 percent.

     The health-care group was August’s worst performer in the benchmark index, down 8.1 percent, the steepest monthly decline since February 2009. Amgen Inc. slid 2.6 percent today and had its weakest month in more than seven years. The Nasdaq Biotechnology Index sank 3.1 percent, its largest monthly loss since March 2014.

     Kroger Co. fell 1.7 percent to pace a drop among consumer staples companies. The supermarket chain extended its August decline to 12 percent, the most in a month since January 2009. Drug-store chain CVS Health Corp. retreated 1.7 and lost 9 percent in August, its biggest monthly slide in five years.

     Boeing Co. and Textron Inc. declined at least 1.9 percent to lead industrial companies lower. General Electric Co. and United Technologies Corp. lost more than 1.3 percent. GE had its worst month since January, falling 4.9 percent.

     Netflix Inc. slipped 2.2 percent. The online streaming service said it won’t renew its contract with cable network Epix, preferring to develop original movies rather than stick with films it had to share with other providers.

     Consol Energy rose 5.8 percent amid crude’s biggest three- day gain since 1990, leading energy companies higher. Hess Corp., Marathon Oil Corp. and Chesapeake Energy Corp. each gained at least 3.4 percent. The group pared its monthly decline to 4.7 percent after losing 7.8 percent in July and sliding for the fourth straight month.

 

Have a wonderful evening everyone.

 

Be magnificent!

When the mind and intellect developed, man asked,

Who am I?  who is it before me?

The search for reality began…

Moving one step towards finding the answer to the question,

Who am I, we brought  consciousness from outside to inside.

Wisdom turned the direction of the consciousness within and

we perceived our soul.

The journey of the soul in the outer world was over and the journey within had begun.

Acharya Mahaprajna

As ever,
 

Carolann

 

A wise man will make more opportunities than he finds.

                                     -Francis Bacon, 1561-1626

 

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:

Full Moon this weekend – last in August.

Summer con’t
       -V. Sackville West

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

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

PHOTOS OF THE DAY

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

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

Market Closes for August 28^th, 2015

Market Index	Close	Change
Dow Jones	16643.01	-11.76   -0.07%
S&P 500	1984.16	-3.50   -0.18%
NASDAQ	4828.324	+15.616   +0.32%
TSX	13820.88	+54.21
		+0.39%

International Markets

Market Index	Close	Change
NIKKEI	19136.32	+561.88
		+3.03%
HANG SENG	21612.39	-226.15
		-1.04%
SENSEX	26392.38	+161.19
		+0.61%
FTSE 100	6247.94	+55.91
		+0.90%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.444	1.461
CND. 30 Year Bond	2.190	2.208
U.S.    10 Year Bond	2.1824	2.1876
U.S. 30 Year Bond	2.9103	2.9269

Currencies

BOC Close	Today	Previous
Canadian $	0.75752	0.75749
US $	1.32009	1.32014
Euro Rate 1 Euro=		Inverse
Canadian $	1.47616	0.67743
US $	1.11823	0.89427

Commodities

Gold	Close	Previous
London Gold Fix	1135.00	1119.00
Oil	Close	Previous
WTI Crude Future	45.36	42.56

Market Commentary:

Canada

By Eric Lam

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

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

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

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

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

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

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

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

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

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

US

By Oliver Renick and Lu Wang

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

Have a fabulous weekend everyone.

 

Be magnificent!

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

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

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

You must also have seen how expansive the tree is.

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

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

Acharya Mahaprajna

As ever,
 

Carolann

 

Life itself is the proper binge.

      -Julia Child, 1912-2004

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

  There is a boom in short-term home lets by the super-rich, according to an article in  the Financial Times last weekend.  In June, the number of one bed listings at Airbnb charging more than $1500 US per night was nearly three times what it had been a year before.  Asia is leading the charge: high-end apartments – those with pools and gyms – grew quickest in Tokyo (up 78 %) and Hong Kong (up 70 %).  Over the same 12-month period, London listings grew by half and those in Paris by a third.   

  Luxury Retreats, which claims to turn away 95 % of those who offer their (mainly) holiday homes, now has 2,800 properties largely in the US and Caribbean with nightly rates ranging from $1000 to $124,000 for the plushest private island.

  Second –home owners are getting younger, meaning more look to the internet for smart rental solutions when they are not using their homes themselves.  The average age of second-home buyers in the US dropped from 52 to 43 in the 10 years to 2013, according to the US National Association of Realtors.

  Increasingly, people are renting their main homes too.  “Where the super-rich have listed secondary residences for some time, now they’re starting to offer their main homes while staying in other properties or holidaying,” says Olivier Gremillon, who runs Airbnb’s European business.

  Many rich users once avoided posting photos on their Airbnb profiles for fear of friends thinking they were hard up, says Mr. Grmillion.  All that has changed: “now it’s cool to be part of the sharing economy; it’s something for people to talk about over dinner parties.”

  The motivation is social as well as financial.  Laurent likes the company.  A scion of a large French family – he won’t give his surname – he lets his sumptuous 4,300 sq ft Louis XVI period spare apartment in Paris.  Extra income for maintenance is handy, he says, but his guests, and their generous reviews are what he gets excited about.  He’ll give tours of the house, explaining which family castle features in this painting, which French king once sat in that armchair and when that celebrity came to stay.  For between $100 and $1500 US per night, depending on the season, he’ll throw in  a few of his own staff of “cleaners, driver, guardian and cooks.”  Owners can add their own deposit requirements and checking procedures.  In 10 years, Laurent has lost only a Bose sound system and a few bottles of champagne from the cellar.

  A few users with posh pads may not be super-rich.  Lower- income European aristocrats are increasingly employing Airbnb to rent outbuildings on their estates, helping to fix leaking roofs, says Mr. 
Gremillon.

Renting guide

Home rentals:
Luxuryretreats.com
Fees: host rate agreed with owner; site sets guest rate independently and pockets the difference.
Perks: full concierge; host specifies level of pampering from basic housekeeping to full-time staff.

Onefinestay.com
Fees: host rate agreed with owner; site sets guest rate independently.
Perks: concierge, full housekeeping, imported linen, toiletries, mobile preloaded with host’s local tips

Luxury.homeaway.com
Fees: host pays annual fee of $349 or a 10-13 % fee per booking.
Perks: at discretion of host.

Airbnb.com
Fees: host pays 3% per booking; guest pays 6-12%.
Perks: whatever host will offer from use of servants to party invitations.

House swaps:
3rdhome.com
Fees: Free to list; each booking costs between $395 -$995
Perks: the sky’s the limit.

HomeExchange.com
Fees: Host chooses membership package.
Perks: negotiated with your swap.

PHOTOS OF THE DAY

Balloons in the installation ‘Heartbeat’ hang in Covent Garden Market in London Thursday. ‘Heartbeat’ is French artist Charles Petillon’s first public art installation and his first ever live work outside of France, uniting modern art with world-class architecture. The piece is created from 100,000 white balloons and stretches 54 meters in length and 12 meters in width, incorporating gentle pulsating white light to symbolize the beating of a heart and reflect the history, energy and dynamism of the district. Frank Augstein/AP

President Obama holds a child as he greets residents in the Tremé neighborhood of New Orleans Thursday for the 10th anniversary of hurricane Katrina. Tremé is one of the oldest black neighborhoods in America. Andrew Harnik/AP

Market Closes for August 27^th, 2015

Market Index	Close	Change
Dow Jones	16654.77	+369.26   +2.27%
S&P 500	1980.82	+40.31   +2.08%
NASDAQ	4812.707	+115.170   +2.45%
TSX	13729.05	+347.46
		+2.60%

International Markets

Market Index	Close	Change
NIKKEI	18574.44	+197.61
		+1.08%
HANG SENG	21838.54	+758.15
		+3.60%
SENSEX	26231.19	+516.53
		+2.01%
FTSE 100	6192.03	+212.83
		+3.56%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.461	1.442
CND. 30 Year Bond	2.208	2.196
U.S.    10 Year Bond	2.1876	2.1752
U.S. 30 Year Bond	2.9269	2.9316

Currencies

BOC Close	Today	Previous
Canadian $	0.75749	0.75204
US $	1.32014	1.32971
Euro Rate 1 Euro=		Inverse
Canadian $	1.48464	0.67357
US $	1.12460	0.88920

Commodities

Gold	Close	Previous
London Gold Fix	1119.00	1120.75
Oil	Close	Previous
WTI Crude Future	42.56	38.60

Market Commentary:
Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied, capping its best performance since 2011, as crude prices had the biggest jump in six years and the U.S. economy grew more than forecast.

     Markets in the U.S. and Europe climbed after Chinese stocks snapped the worst sell-off since 1996. The Chinese government resumed its intervention in the stock market Thursday and is also supporting the yuan, according to people familiar with the matter. Better-than-expected U.S. gross domestic product bolstered confidence in the outlook for the world’s largest economy.

     Energy producers jumped 5.8 percent, the biggest one-day gain since 2009. Oil climbed 10 percent, after falling below $40 this week as concern over slowing demand in China fueled volatility in global markets.

     Toronto-Dominion Bank added 1.6 percent after third-quarter profit rose to a record on retail banking. The lender reclaimed the position of Canada’s largest bank as assets climbed to C$1.1 trillion, surpassing Royal Bank of Canada. Canadian Imperial Bank of Commerce rallied 5.9 percent, the most in four years, as profit topped analysts’ estimates. It also raised its dividend.

     Canadian banks have soared 7.1 percent in three days, the biggest such rally since November 2011, as the nation’s largest lenders reported earnings. Bank of Nova Scotia is scheduled to report Friday.

     The Standard & Poor’s/TSX Composite Index jumped 385.08 points, or 2.9 percent, to 13,766.67 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has rebounded 5.5 percent in three days, the biggest such increase since November 2011. The rally cut the S&P/TSX’s loss for the month to 4.9 percent. The index is headed for a fourth straight monthly decline, the longest such streak since September 2011.

     “There’s still some concern with respect to China, but if the U.S. continues to grow bit by bit I can see further gains in this rally,” said Prab Sagoo, a Canadian equity market analyst at Nasdaq Advisory Services on the phone from Montreal.

     The MSCI All-Country World Index of developed and developing markets has increased 4.1 percent in two days, the best two-day rally since 2011. The S&P 500 rose 2.4 percent in New York while the Stoxx Europe 600 Index soared 3.5 percent.

     Global markets were buoyed today after the U.S. economy grew at a 3.7 percent annualized rate in the second quarter on bigger gains in consumer spending, and China’s government stepped up its attempts to stabilize the country’s stock market and currency by buying equities and selling U.S. treasuries, according to people familiar. China and the U.S. are Canada’s two largest trading partners.

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

     Teck Resources Ltd., Canada’s largest diversified miner, jumped 24 percent for the biggest gain since April 2009 after agreeing to combine its Chile copper-and-gold project with Goldcorp Inc. to cut costs.

US

By Callie Bost

     (Bloomberg) — The Standard & Poor’s 500 Index posted the biggest two-day surge since 2009 as a relief rally swept across global markets and the economy grew stronger than expected in the second quarter.

     U.S. stocks briefly pared gains in late-afternoon trading, trimming an advance of as much as 2.5 percent in the S&P 500 to less than 0.5 percent before resuming its climb, indicating markets are still vulnerable to violent swings.

     The benchmark gauge rose 2.4 percent to 1,987.66 at 4 p.m. in New York, capping a two-day gain of 6.4 percent, its strongest since the bull market began more than six years ago. The Dow Jones Industrial Average climbed 369.26 points, or 2.3 percent, to 16,654.77. The Dow had its best back-to-back run-up since December 2008. The Nasdaq Composite Index gained 2.4 percent. About 10 billion shares traded hands on U.S. exchanges, 44 percent above the three-month average.

     “We got our pullback, and now we’re going to focus on U.S. things like GDP and the Fed,” said John Canally, chief economic strategist at LPL Financial Corp. in Boston. “When you’re in a correction, it’s not fun, but when you’re out, you can refocus on what matters.”

     Raw-material and energy companies advanced the most as commodity prices rebounded, with crude oil rising 9 percent. Copper producer Freeport-McMoRan Inc. soared 29 percent after unveiling plans to cut production. Consol Energy Inc. and Transocean Ltd. added more than 11 percent. Netflix Inc. rallied for a third day, up 6.8 percent, and Apple Inc. increased 2.9 percent. Tiffany & Co. slipped as quarterly profit missed analysts’ estimates.

     Data today showed gross domestic product rose at a 3.7 percent annualized rate, exceeding all estimates of economists surveyed by Bloomberg, and up from the 2.3 percent reported last month. Bigger gains in consumer and business spending showed the U.S. expansion getting back on track. A separate report showed filings for jobless benefits declined to a three-week low.

     Contracts to purchase previously owned homes climbed in July for the sixth time in the last seven months, another report showed. The 0.5 percent increase in the pending home sales index was less than a 1 percent rise forecast by economists surveyed by Bloomberg.

     “The economy is in good shape and we’re chugging along at a good pace and that’s good for earnings,” Canally said. “It also should clear some of the noise out of this market. There has been a lot of concern about a slowdown in the economy.”

     The data come as Federal Reserve policy makers debate whether growth is strong enough to withstand the first increase in the benchmark interest rate since 2006. Additionally, the global plunge in stocks also could argue for a delay.

     Market turmoil sparked by growth concerns has reduced expectations for the Fed to increase interest rates as soon as next month. New York Fed Bank President William Dudley said Wednesday the upheaval has made the case for raising rates in September “less compelling.”

     Traders are pricing in a 30 percent chance the central bank will act at its next meeting, down from almost even odds before China’s surprise currency move earlier this month.

     Investors will seek further clues on an impending rate increase from an annual symposium at Jackson Hole, Wyoming starting today. Central bankers gather there for an academic discussion on inflation just as China’s slowdown renews fears of falling prices. Fed Chair Janet Yellen won’t attend this year.

     The Chicago Board Options Exchange Volatility Index fell 13 percent Thursday to 26.29, after trimming its drop to just 1.4 percent during equities’ brief afternoon pullback. The measure of market turbulence known as the VIX stretched its three-day decline to 36 percent after a record six-day jump sent the gauge to its highest level since October 2011.

     Thursday’s bout of late-session turbulence came on a day when JPMorgan Chase & Co. derivatives strategist Marko Kolanovic warned that “price insensitive” program traders are likely to cause repeated selloffs in coming days.

     The biggest moves will probably happen at the beginning and end of sessions as investors employing strategies such as trend following and managed volatility seek to balance their funds to reflect recent price changes in stocks.

     “The obvious risk is if these technical flows outsize fundamental buyers,” Kolanovic said in a note to clients. “In the current environment of low liquidity, they may cause a market crash such as the one we saw at the U.S. market open on Monday.”

     All of the S&P 500’s main groups advanced, with industrial and financial companies joining energy and materials at the top. Utilities and consumer staples shares lagged for a second day.

     The energy group had the best back-to-back gain in more than six years, up 8.6 percent since Tuesday’s close. Newfield Exploration Co. increased 9.4 percent, the most in six months, after losing 25 percent during the recent market selloff. Chevron Corp. added 6.2 percent to lead the Dow amid its best two days since November 2008. Apache Corp. and Halliburton Co. rose at least 8 percent.

     Freeport-McMoRan’s strongest rally ever led raw-materials higher. The largest publicly traded copper producer unveiled plans today to cut production and investments in an effort to preserve margins after commodity prices tumbled. Freeport’s shares are still down 56 percent this year. After the close of trading, Carl Icahn disclosed a new activist stake in the miner. Alcoa Inc. jumped 7.2 percent, while Dow Chemical Co. headed for its largest increase in 19 months, up 6.6 percent.

     Signet Jewelers Ltd. surged 14 percent, its best gain since February 2014 and the most among consumer discretionary shares, after second-quarter sales and profit exceeded analysts’ forecasts. Apparel makers Michael Kors Holdings Ltd., PVH Corp. and Under Armour Inc. advanced more than 5.3 percent amid signs of better consumer spending in today’s GDP data.

     Semiconductors continued to be the driver behind the technology group, rising 8.9 percent since Tuesday. Avago Technologies Ltd. climbed 8.6 percent to bring its two-day increase to 16 percent. Micron Technology Inc. rose 8.7 percent, while Applied Materials Inc. and Qorvo Inc. added at least 3.7 percent.

     Railroads helped pace a climb among industrial companies after the second-quarter GDP report showed the economy improved more than expected. Norfolk Southern Corp., CSX Corp. and Kansas City Southern each rallied more than 4.2 percent, after sliding at least 12 percent during the five sessions that ended on Tuesday. The Dow Jones Transportation Average is up 5.4 percent after yesterday’s gain, its strongest back-to-back advance since 2011.

 

Have  a wonderful evening everyone.

 

Be magnificent!

The human soul travels from the law to love,

from discipline to freedom,

from the moral plane to the spiritual plane.

Rabindranath Tagore

As ever,
 

Carolann

 

Common sense is instinct, and enough of it is genius.

                                      -Josh Billings, 1818-1885

 

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 1944 DeGaulle enters a free Paris.

If you’ve got less than a day to explore a city, check out the ideas at 12hrs.net.  Founded by in-the-know Europeans (Soren Jepsen is a  contributor to GQ and Anna Peuckert wrote National Geographic’s Copenhagen guide-book), the site maps out routes that squeeze a lot of fashion-forward discovery into half a day.  A dozen cities in Europe and North America are covered, including Berlin, Barcelona, Paris, and Vancouver.  Photos of cool locals and shop windows give a sense of place before you get there, with useful tips included. –by Mercedeh Sanati, Globe & Mail.

PHOTOS OF THE DAY

People walk near sculptures of fiberglass horses in downtown Ciudad Juarez, Mexico, Tuesday. Twenty fiberglass horses, designed and painted by local artists, were displayed to the public by the local government to attract tourism and to improve their urban image. Jose Luis Gonzalez/Reuters

Two woman lie in a puddle of squashed tomatoes during the annual ‘tomatina’ tomato fight fiesta in the village of Bunol, Spain, Wednesday. The streets are awash with red pulp as thousands of people pelt each other with tomatoes. Trucks dumped 150 tons of ripe tomatoes for some 22,000 participants, many from abroad, to throw during the hour-long morning festivities. Alberto Saiz/AP

Market Closes for August 26^th, 2015

Market Index	Close	Change
Dow Jones	16285.51	+619.07   +3.95%
S&P 500	1940.51	+72.90   +3.90%
NASDAQ	4697.535	+191.047   +4.24%
TSX	13381.59	+230.66
		+1.75%

International Markets

Market Index	Close	Change
NIKKEI	18376.83	+570.13
		+3.20%
HANG SENG	21080.39	-324.57
		-1.52%
SENSEX	25714.66	-317.72
		-1.22%
FTSE 100	5979.20	-102.14
		-1.68%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.442	1.330
CND. 30 Year Bond	2.196	2.084
U.S.    10 Year Bond	2.1752	2.0714
U.S. 30 Year Bond	2.9316	2.7992

Currencies

BOC Close	Today	Previous
Canadian $	0.75204	0.75030
US $	1.32971	1.33280
Euro Rate 1 Euro=		Inverse
Canadian $	1.50424	0.66479
US $	1.13126	0.88397

Commodities

Gold	Close	Previous
London Gold Fix	1120.75	1137.50
Oil	Close	Previous
WTI Crude Future	38.60	39.13

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied the most since January, rebounding from an early slump to follow the Standard & Poor’s 500 Index as it halted a six-day selloff.

     Equities were whipsawed as volatility continued throughout global markets. The Standard & Poor’s/TSX Composite Index rallied in the opening moments, only to wipe out those gains in the first half hour. The gauge remained little changed until U.S. stocks took off after 2:30 p.m. in New York.

     Stocks fluctuated early in the day as the price of raw goods from oil to copper and gold resumed their decline following a reprieve Tuesday, overshadowing banks as they advanced amid earnings reports.

     National Bank of Canada surged 4.8 percent after posting third-quarter results ahead of estimates. Valeant Pharmaceuticals International Inc., the second-best performing stock in the S&P/TSX this year, climbed 3 percent.

     The S&P/TSX jumped 230.66 points, or 1.8 percent, to 13,381.59 at 4 a.m. in Toronto, for the biggest gain since Jan. 21. The rally cut the benchmark Canadian equity gauge’s loss for the month to 7.5 percent. The index is headed for a fourth straight monthly decline, the longest such streak since September 2011.

     The MSCI All-Country World Index of developed and developing markets rose 1.9 percent as U.S. equities rallied the most since 2011 to offset losses in Europe and China.

     A volatility gauge for 60 of the largest, most liquid Canadian stocks dropped 16 percent. Nine of 10 industry groups in the S&P/TSX advanced on trading volume 12 percent higher than the 30-day average today, paced by a 2.5 percent gain in financial shares.

     Raw-materials producers slumped 2.1 percent to a November 2008 low. The Bloomberg Commodity Index, which tracks a basket of 22 resources, declined 1.3 percent. Gold fell for a third day, the longest stretch in a month, while copper led industrial metals lower and crude traded below $40 a barrel.

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

     Teck Resources Ltd., the largest diversified miner in Canada, dropped 3.7 percent. Gold stocks sank 5.5 percent for a fourth straight day of declines as Yamana Gold Inc. slumped 6.8 percent and Goldcorp Inc. lost 5.3 percent.

     Raw-materials and energy producers, which account for about 30 percent of the broader equity gauge, are the worst-performing industries in the S&P/TSX this year. Crude has slumped more than 35 percent from this year’s June peak amid concern global growth is slowing.

US

By Joseph Ciolli and Anna-Louise Jackson

     (Bloomberg) — Two things that have supported U.S. stocks in the past, dovish words from the Federal Reserve and improving economic data, triggered the biggest rally since 2011 and halted a plunge that erased $2.2 trillion from share values.

     Technology companies led the gains with Apple Inc., Google Inc. and Intel Inc. rising at least 5.5 percent. Amazon.com Inc. surged 7.4 percent, and Netflix Inc. posted a two-day gain of 14 percent. JPMorgan Chase & Co. and Citigroup Inc. increased more than 4.8 percent. Cameron International Corp. soared 41 percent after agreeing to be bought by Schlumberger Ltd. in a $14.8 billion deal.

     Gains in equities accelerated in the final hour as the Standard & Poor’s 500 Index climbed 3.9 percent to 1,940.51 at 4 p.m. in New York, halting a six-day slide that was its steepest in four years. The Dow Jones Industrial Average added 619.07 points, or 4 percent, to 16,285.51. The Nasdaq Composite Index rose 4.2 percent for its strongest increase since August 2011. About 10.7 billion shares traded hands on U.S. exchanges, 55 percent above the three-month average.

     “This type of short-term rally shouldn’t be much surprise given recent weakness,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, which oversees about $170 billion. “Eventually the reality that valuations have come off so much will come into play.”

     The recent turmoil in global stock markets sparked by growth concerns has reduced expectations for the Federal Reserve to increase interest rates as soon as next month. New York Fed Bank President William Dudley said Wednesday the upheaval has reduced the case for raising rates in September, while cautioning it’s important not to overreact to short-term developments.

     Traders are pricing in a one-in-four chance the central bank will act at its next meeting, down from almost even odds before China’s surprise currency devaluation earlier this month.

     Fed policy makers remain focused on economic data, which financial markets can influence, Dudley said, through the wealth effect on U.S. households. A report today showed orders for capital goods increased in July by the most in more than a year, indicating corporate spending was finding its footing prior to the turmoil in financial markets. Orders for all durable goods – – items meant to last at least three years — rose 2 percent, exceeding all forecasts of economists surveyed by Bloomberg.

     More than $2 trillion had been erased from American equity values since the S&P 500 started its losing streak, breaking a calm in a stock market that had gone almost four years without a 10 percent correction. The measure plunged 11 percent in the six days through Tuesday, the most since the U.S. was stripped of its AAA credit rating by S&P in August 2011, and was 1 percent away from erasing its gains since the end of 2013.

     “It’s definitely a positive to see markets move higher,” said Tom Manning, chief investment officer from Boston Private Wealth, which oversees about $9 billion in assets. “I don’t know that we found the bottom. I’m not convinced we don’t have more negative days to follow. We’re not likely to go from extreme volatility to extreme calm overnight.”

     A rally in the first few minutes of trading Wednesday eroded by more than half throughout the morning, before an afternoon rebound took over. That was the opposite of Tuesday’s action when more than 440 points on the Dow disappeared by the final hour of trading, with investors giving in to trepidation over what would happen overnight in China. The Shanghai Composite Index closed down 1.3 percent, erasing an advance of as much as 4.3 percent.

     The Chicago Board Options Exchange Volatility Index slipped 16 percent Wednesday to 30.32. The measure of market turbulence known as the VIX declined for a second day after a record six- day jump sent the gauge to its highest level since October 2011.

     All of the S&P 500’s 10 main industries advanced at least 1.6 percent, with financial, health-care and consumer discretionary companies joining technology shares as the top performers. Tech had its strongest day since March 2009, while the health-care group rose the most in four years.                      

     Semiconductors spearheaded the gains within the tech group, as Skyworks Solutions Inc., Nvidia Corp. and Avago Technologies Ltd. advanced more than 6.9 percent. Nvidia halted a seven-day losing streak that clipped 14 percent off its share price. Software maker Intuit Inc. added 4.3 percent to stop a four-day, 25 percent skid.

     Biotechnology shares hard hit in the market’s downdraft staged a recovery, with Amgen Inc. and Biogen Inc. rising at least 5.8 percent. Amgen had lost 13 percent in the previous six sessions. The Nasdaq Biotechnology Index climbed 5.1 percent, its largest jump since August 2011. Merck & Co. rose 6.4 percent, the most in 19 months, to pace gains among health-care companies.

     Banks in the S&P 500 had their strongest increase in more than three years, with rising Treasury yields helping to lift sentiment on the prospects for earnings. Wells Fargo & Co. and Bank of America Corp. gained at least 4.5 percent. KeyCorp, Regions Financial Corp. and Fifth Third Bancorp led the group, up more than 5.2 percent after losing more than 9 percent in the prior three sessions.

     Energy shares rebounded despite further declines in oil prices, with Cameron leading the group amid its deal with Schlumberger. Exxon Mobil Corp. jumped 5.5 percent, the most in more than six years. Chevron Corp. rose 4.4 percent, while Chesapeake Energy Corp. gained 5.1 percent.

     Monsanto Co. helped power gains in the materials group, rising 8.6 percent, the most since January 2009. The company abandoned its effort to acquire Syngenta AG, the world’s top maker of pesticides, after a sweetened bid valuing the Swiss company at $46.2 billion was rejected.

 

Have  a wonderful evening everyone.

 

Be magnificent!

To be truly united with all in knowledge, love, and service, and thus to realize the Self…

is the essence of good.  This is the keystone of the Upanishad teaching:  Life is immense.

Rabindranath Tagore

As ever,

 

Carolann

 

Everything should be made as simple as possible, but not simpler.

                                                    -Albert Einstein, 1879-1955

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

On Aug. 25, 1944, Paris was liberated by Allied forces after four years of Nazi occupation.

1939: Wizard of Oz was released.

PHOTOS OF THE DAY

This undated file photo released Tuesday on a social media site used by Islamic State militants, which has been verified and is consistent with other AP reporting, shows smoke from the detonation of the 2,000-year-old temple of Baalshamin in Syria’s ancient caravan city of Palmyra. The temple was the latest victim in the Islamic State group’s campaign of destruction of historic sites across the territory it controls in Iraq and Syria. Arabic at bottom reads, ‘The moment of detonation of the pagan Baalshamin temple in the city of Palmyra.’ Islamic State social media account/AP

Environmental activists opposed to expansion of the Alberta Clipper tar sands pipeline protest outside the home of Secretary of State John Kerry in Washington Tuesday. Yuri Gripas/Reuters

Market Closes for August 25^th, 2015

Market Index	Close	Change
Dow Jones	15666.44	-204.91   -1.29%
S&P 500	1867.61	-25.60   -1.35%
NASDAQ	4506.488	-19.760   -0.44%
TSX	13150.93	+98.19
		+0.75%

International Markets

Market Index	Close	Change
NIKKEI	17806.70	-733.98
		-3.96%
HANG SENG	21404.96	+153.39
		+0.72%
SENSEX	26032.38	+290.82
		+1.13%
FTSE 100	6081.34	+182.47
		+3.09%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.330	1.265
CND. 30 Year Bond	2.084	2.008
U.S.    10 Year Bond	2.0714	2.0173
U.S. 30 Year Bond	2.7992	2.7353

Currencies

BOC Close	Today	Previous
Canadian $	0.75030	0.75251
US $	1.33280	1.32889
Euro Rate 1 Euro=		Inverse
Canadian $	1.53535	0.65132
US $	1.15197	0.86807

Commodities

Gold	Close	Previous
London Gold Fix	1137.50	1166.50
Oil	Close	Previous
WTI Crude Future	39.13	38.09

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rebounded from the worst plunge in almost four years, snapping a six-day slide, as banks led an advance after Bank of Montreal’s earnings topped analysts’ estimates.

     Royal Bank of Canada and Toronto-Dominion Bank, the nation’s largest lenders, rallied at least 1.7 percent as financial-services stocks jumped 1.7 percent as a group. Bank of Montreal rose 2.4 percent. Energy shares rose as commodities prices surged, with crude climbing from a six-year low.

     Equities in Canada advanced as much as 3 percent at the open, the most since November 2011, before giving back about two-thirds of gains in the final hour of trading with U.S. equities sliding to a loss.

     Equities around the world rallied earlier after China’s central bank cut its benchmark interest rate for the fifth time since November in an effort to drive domestic growth. Some $2.7 trillion had been erased from the value of global stocks Monday.

     The Standard & Poor’s/TSX Composite Index rose 98.19 points, or 0.8 percent, to 13,150.93 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has fallen 9.1 percent this month, headed for a fourth straight monthly decline, the longest such streak since September 2011.

     A volatility gauge for 60 of the largest, most liquid Canadian stocks slipped 3.2 percent after soaring 35 percent on Monday. Seven of 10 industry groups in the S&P/TSX advanced on trading volume 24 percent higher than the 30-day average today.

     The MSCI All-Country World Index of developed and developing markets slipped 0.1 percent, erasing an earlier gain of as much as 2.2 percent. The U.S. benchmark S&P 500 fell 1.4 percent in New York, reversing an earlier 2.9 percent increase after entering a correction yesterday. The Stoxx Europe 600 jumped 4.2 percent.

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

     Encana Corp. advanced 3.5 percent after agreeing to sell natural gas properties in northern Louisiana for $850 million to a venture run by GSO Capital Partners LP and GeoSouthern Haynesville LP in a bid to cut debt.

     Cenovus Energy Inc. rallied 3.6 percent and Suncor Energy Inc. added 2.1 percent to lead energy stocks higher. West Texas Intermediate oil gained 2.8 percent in New York, rebounding from the lowest settlement since February 2009 on Monday.

     Energy producers are the worst-performing industry in the S&P/TSX this year pacing declines with a 26 percent drop. Crude has slumped more than 35 percent from this year’s June peak amid concern global growth is slowing.

US

By Joseph Ciolli

     (Bloomberg) — Volatility continued to jolt financial markets after a rebound that took the Standard & Poor’s 500 Index up 2.9 percent melted away in the final hours of trading. The dollar its pared gains while Treasuries trimmed losses.

     The S&P 500 Index ended Tuesday down 1.4 percent as traders said trepidation over how China’s market will react to policy easing made holding on to stocks too risky for most investors. Before the rally disappeared, it appeared the appetite for risk in markets was returning following a selloff that erased $2.7 trillion from the value of global equities in a few days.

     Equities had climbed earlier in the day, with the Dow Jones Industrial Average regaining more than 440 points as China’s central bank cut its benchmark lending rate for the fifth time since November and lowered the amount of cash banks must set aside in reserves. Commodities rallied, with oil rebounding from a six-year low, while the yen and euro retreated.

     “We just saw a crazy evaporation of gains after being up the majority of the day,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “People are nervous about the potential volatility that could erupt or resurface in the market. They’re not sure what’s going to happen overseas, and that uncertainty is winning out.”

     China’s unexpected devaluation of the yuan on Aug. 11 sparked the biggest rout in U.S. stocks in nearly four years on concern that the slowdown in the world’s second-largest economy is worse than anticipated. A pull back in Chinese equities torpedoed emerging-market assets and sank commodities from oil to metals. Also looming over the markets is the Federal Reserve, which is contemplating the first increase in interest rates since 2006.

     The Dow slid 1.3 percent to 15,666.44 by 4 p.m. in New York, down 4 percent from its highest point. The peak-to-trough retreat exceeded Monday’s loss. The S&P 500 closed at 1,867.61.

     “There’s still some technical damage that needs to be corrected,” said Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co. “There’s still some selling that needs to take place. We’re not just going to slingshot back up.”

     More than $2 trillion has been erased from American equity values since last Wednesday, breaking a calm in a stock market that before this week had gone almost four years without a 10 percent loss. After a day of wild swings, the S&P 500 lost 3.9 percent Monday. That capped a 7 percent two-day retreat, the most since December 2008, sending the index into its first correction since 2011.                       

     A gauge of options prices on U.S. equities dropped 9.1 percent today, paring an earlier drop of 31 percent. The Chicago Board Options Exchange Volatility Index, or VIX, retreated 12 percent after surging as much as 90 percent finishing to its highest level since October 2011 on Monday.

     Other markets rallied in the wake of China’s policy moves, with European shares clawing back most of their biggest decline since the 2008 financial crisis. The Stoxx Europe 600 Index jumped 4.2 percent, the most since 2011, as German equities rallied after entering a bear market and the U.K.’s FTSE 100 Index climbed from its lowest level since 2012.

     The MSCI Emerging Markets Index climbed 2.2 percent after closing Monday at the lowest since July 2009, with benchmarks from Taiwan to Turkey and South Africa advancing at least 3 percent.

     Half of the 30 largest equity markets in developing economies have fallen 20 percent or more from their peaks, surpassing the threshold for a bear market. China and Russia have led the pack, tumbling more than 30 percent each. The remainder are either in a correction, or on the brink of one.

     Mark Mobius says investors should hold off from buying developing-nation shares as the rebound will be short-lived amid widening price swings.

     “We have a little bit to go before we see stabilization, but volatility will remain,” Mobius, chairman of the emerging- markets group at Franklin Templeton Investments, said in an interview with Bloomberg TV. “We are sitting on cash.”

     The dollar pared back some of its advance as U.S. stocks erased their advances. Some of its biggest gains came against the Swiss franc, the euro and the yen — all currencies that investors consider havens in times of market turmoil. The dollar ended the Tuesday session up 0.4 percent to 118.83 yen, after earlier rallying as much as 1.7 percent.

     Tepid demand at a U.S. bond auction helped Treasuries to their first decline in a week, with yields on 10-year debt up seven basis points, or 0.07 percentage point, to 2.07 percent. The notes pared declines as stocks retreated, with the gyrations in equity markets the past week stoking a flight into government debt.

     The Bloomberg Commodity Index rose 0.5 percent from a 16- year low as copper climbed 2.3 percent from a six-year low. Gold futures slid for a second day in New York as the early gains in equities hurt demand for haven assets.

     West Texas Intermediate crude added 2.8 percent to $39.31 a barrel and Brent futures advanced 1.2 percent to $43.21. The oil market is healthier than Monday’s drop to six-year lows suggests, according to banks including Morgan Stanley and Standard Chartered Plc.

 

Have a wonderful evening everyone.

 

Be magnificent!

Nature’s law dictates that, in order to survive, bees must work together.

As a result, they instinctively possess a sense of social responsibility.

They have no constitution, no law, no police, no religion or moral training but,

because of their nature, the whole colony survives.

We human beings have a constitution, laws and a police force.

We have religion, remarkable intelligence, and hearts with a great capacity to love.

We have many extraordinary qualities but, in actual practice,

I think we are behind those small insects.

In some ways, I feel that we are poorer than the bees.

His Holiness the XIVth Dalai Lama.

As ever,

 

Carolann

 

And when we lead, we are most led.

              -Lord Byron, 1788-1824

 

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:

Advice After Stock Market Drop: Take Some Deep Breaths, and Don’t Do a Thing

                                                                                                -by Ron Lieber

The impulse when the stock market falls hard for a few days in a row is to do something. Anything. Our life savings are often on the line, after all.

But that’s just the thing: Stocks are most useful for long-term goals. So unless those goals have changed in the last few days, it probably doesn’t make much sense to overhaul an investment strategy based on a blip of market activity.

So pour yourself a drink, or sit down with a pint of ice cream, and consider the following six things.

First, you are not the stock market. Chances are, your portfolio is a diverse mix of investments. Many people save in target-date mutual funds that do the work of diversification for them. Vanguard’s 2035 fund was down 4.6 percent last week, better than the 5.77 percent decline in the Standard & Poor’s 500-stock index from where it closed a week earlier.

Second, if you have been investing in stocks in the last six years, you most likely are a big winner. It’s generally a bad idea to look at your investment statements too often, but take a quick peek.

That outsize gain you see is one reason you are in stocks in the first place. Plenty of research shows that if you miss just a few days of the market’s biggest gains, your long-term portfolio will suffer badly. If you decide to put a bunch of your money in cash this week, how will you know when to get back in the market? You’ll probably be looking for a sign, and that sign will be the very rebound days that you will have missed out on.

Still uneasy? Consider a third point: At some time in the past, when you were not scared, you made a decision to construct your portfolio a certain way. You knew that stocks involved risk and that the returns they have traditionally delivered, above and beyond what cash and bonds do, was the reward for your persistence.

Nothing about the events of recent days suggests that the fundamentals of capitalism have changed. So neither should your confidence in very long-term ownership of the pieces of the for-profit enterprises that benefit from your fortitude.

Nobody knows for sure whether we’re in for a decline in the stock market of 25 percent or more. But if such a decline does happen and you are a regular investor, you’ll be buying more when prices are lower.

How worried are you about the recent declines in global markets? Do you plan to change your investments?

Which brings us to point No. 4: Long-term investors have time to recover. I know too many 70-year-olds who sold all of their stocks in 2009 and are healthy enough to live to 100. They’d be going on a lot more vacations now and be worrying less about long-term care if they had held firm.

Worried about a 529 college savings plan for a 12-year-old? Hopefully, you weren’t 100 percent in stocks with six years to go before needing money for tuition. Still, you have at least nine years for a portion of that portfolio to recover from any sustained downturn. If that 12-year-old is the oldest of at least two children, you could use cash to pay some tuition bills for the eldest and let some of the account ride even longer for the next child.

Let’s say you still have trouble sleeping. Then you may be the sort of person who needs to consider a fifth point: Some people cannot handle the stress of investing in stocks. But try to give this more time, and consider the alternatives. There are few investments that can deliver the kinds of returns that stocks can without their own accompanying anxiety.

Another alternative is to save a lot more in safer investments like cash or certain bonds. Most people don’t have enough income to do that easily, so settling for lower returns will mean a combination of working longer and living modestly, forever. For some people, that is a fine trade-off.

One final point for new investors (and their parents and grandparents, who ought to be counseling them right about now): This is what markets do. There is absolutely nothing abnormal about what is going on here.

Most of us have to save somewhere, and history suggests that stocks are the most accessible route to get the returns you’ll need to retire someday. It would take decades of systemic economic erosion to prove otherwise, and a few days of market declines do not suggest that anything like that is upon us.

A version of this article appears in print on August 22, 2015, on page B2 of the New York edition with the headline: Take Some Deep Breaths, and Don’t Do a Thing. 

PHOTOS OF THE DAY

Tourists pose for photographs with the iconic statue of a bull in New York’s financial district Monday. Wall Street opened sharply lower with the Dow Jones industrial average losing more than 1,000 points following a more-than 8 percent drop in Chinese shares and a selloff in oil and other commodities. Lucas Jackson/Reuters

 

A TV camerawoman takes footage of an emergency exit at a multifunction station in the NEAT Gotthard Base Tunnel during a media visit near the town of Sedrun, Switzerland, Monday. The world’s longest train tunnel, which crosses the Alps, will consist of two parallel single track tunnels, each 57 km (35 miles) long. It should become operational at the end of 2016. Arnd Wiegmann/Reuters

Market Closes for August 24^th, 2015

Market Index	Close	Change
Dow Jones	15871.28	-588.47   -3.58%
S&P 500	1908.82	-62.07   -3.15%
NASDAQ	4526.250	-179.789   -3.82%
TSX	13173.13	-300.54
		-2.23%

International Markets

Market Index	Close	Change
NIKKEI	18540.68	-895.15
		-4.61%
HANG SENG	21251.57	-1158.05
		-5.17%
SENSEX	25741.56	-1624.51
		-5.94%
FTSE 100	5898.87	-288.78
		-4.67%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.265	1.271
CND. 30 Year Bond	2.008	2.011
U.S.    10 Year Bond	2.0173	2.0452
U.S. 30 Year Bond	2.7353	2.7346

Currencies

BOC Close	Today	Previous
Canadian $	0.75251	0.76413
US $	1.32889	1.30868
Euro Rate 1 Euro=		Inverse
Canadian $	1.54060	0.64910
US $	1.15932	0.86258

Commodities

Gold	Close	Previous
London Gold Fix	1166.50	1147.70
Oil	Close	Previous
WTI Crude Future	38.09	41.37

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks plunged the most in almost four years, joining a rout in markets around the world as the U.S. benchmark entered a correction and commodities stumbled to a 16-year low.

     Equities in the resource-rich Standard & Poor’s/TSX Composite Index sank as much as 5.7 percent as the market opened, the most since March 2009 on an intraday basis, as investors fled all but the safest assets in the world. Stocks then pared those losses by some three-quarters by midday before succumbing to further selling in the final two hours of trading.

     Brent crude slid to less than $45 a barrel for the first time since 2009 as the Bloomberg Commodity Index of 22 raw materials sank to a 1999 low.

     “Let’s be cognizant we’ve had a pretty remarkable week here of stock price movement and very rarely do we see that switch on, then switch off,” said Gareth Watson, vice president of investment management and research at Richardson GMP Ltd. in Toronto. His firm manages about C$28 billion ($21.1 billion). “We will see more volatility here before things settle out.”

     The S&P/TSX fell 420.93 points, or 3.1 percent, to 13,052.74 at 4 p.m. in Toronto, the most since October 2011. Trading volume was 64 percent higher than the 30-day average today. The benchmark Canadian equity gauge has fallen 9.8 percent this month, headed for a fourth straight monthly decline, the longest such streak since September 2011.                       

     Seven Canadian stocks triggered automatic trading halts today, including Hudson’s Bay Co., a record since the circuit breaker program was adopted in 2012, according to data from the Investment Industry Regulatory Organization of Canada. In the past, IIROC has only seen as many as six such halts in an entire quarter.

     A volatility gauge for 60 of the largest, most liquid Canadian stocks surged as much as 56 percent before paring the gain to 35 percent.

     The MSCI All-Country World Index of developed and developing markets tumbled 3.8 percent, the most since 2011. The U.S. benchmark S&P 500 plunged 3.9 percent, down 11 percent from its May high, while stocks in Germany entered a bear market and Chinese stocks tumbled the most since 2007.

     More than $5 trillion has been erased from the value of global equities since China unexpectedly devalued the yuan on Aug. 11, fueling concerns about global growth and the demand for commodities.

     “Canada was dealing with its own issues prior to the massive pullback in global activity,” said Andrew Pyle, a fund manager at ScotiaMcLeod Inc. in Peterborough, Ontario who manages about C$300 million. “A lot of that is tied to oil and the global rout in capital markets just compounds the problem for Canada.”

     Energy producers are the worst-performing industry in the S&P/TSX this year pacing declines with a 26 percent drop. Crude has slumped more than 30 percent from this year’s June peak amid concern global growth is slowing.

     Bombardier Inc., the second-worst performing stock in the S&P/TSX this year, sank 16 percent in heavy trading.

     “The markets are getting a little panicky and that’s what we saw at the open,” said Michael O’Brien, a fund manager and head of core Canadian equities at TD Asset Management in Toronto. His firm manages about C$333 billion.

US

By Anna-Louise Jackson and Joseph Ciolli

     (Bloomberg) — The Standard & Poor’s 500 Index fell into a correction for the first time since 2011 in one of the most volatile trading days ever, as a rout in global equity markets deepened.

     It was a day of wild swings as equities plunged at the open before staging a sharp rebound, with the Nasdaq 100 Index by midday nearly erasing a 9.8 percent drop. The Dow Jones Industrial Average dropped 1,000 points in the opening minutes of trading, while the S&P 500 tumbled 5.3 percent and then pared declines before an afternoon wave of renewed selling.

     The S&P 500 dropped 3.9 percent to 1,893.21 at 4 p.m. in New York, and closed 11 percent below its May record. The Dow lost 588.40 points, or 3.6 percent, to 15,871.35, after sliding as much as 6.6 percent. The Nasdaq Composite Index retreated 3.8 percent to its lowest level since Oct. 27, trimming an early 8.8 percent skid.

     “Investors in China have lost confidence in the central bank, and it’s a very alarming and difficult situation for the markets,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion. “It ultimately depends on whether the China situation results in a severe economic slowdown. It that happens, it’s going to ripple through the U.S.”

     About 14 billion shares traded hands on U.S. exchanges, the most in more than four years. It was the second-highest value traded ever, according to Ana Avramovic, a U.S. strategist at Credit Suisse Group AG.

     The Chicago Board Options Exchange Volatility Index rose 45 percent to 40.74, after an early 90 percent surge that temporarily sent the index to its loftiest level since January 2009. The gauge known as the VIX closed at a nearly four-year high after more than doubling last week.

     The Dow’s 1,089.42-point swing from its session low to its high is the biggest one-day net point swing in the average’s history. The 7.1 percent move between Monday’s high and low is the largest since the flash crash of May 6, 2010. Both the S&P 500 and the Dow posted their largest two-day declines since December 2008.

     The S&P 500’s rout sent valuations tumbling. The price-to- earnings ratio for the gauge sank to 16.76, the lowest level since the October pullback. Then, the measure bottomed just above 16.50, the cheapest since January 2014. The less-expensive shares enticed some buyers, as equities sharply trimmed their opening losses.

     “As prices go lower, we see selective opportunities to buy as opposed to a provocation to become more bearish,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland, the private-banking unit of KeyCorp that oversees more than $25 billion in assets. “We’re emphasizing large-caps relative to smaller ones,” and within the U.S., companies that are less export-oriented.                          

     Calm in the U.S. market shattered last week, with volatility soaring by the most on record as the Dow entered a correction and investors dumped the biggest winners of 2015. Shares succumbed to a global selloff that’s wiped more than $5 trillion off the value of equities around the world since China’s shock currency devaluation on Aug. 11.

     The S&P 500 is on track for its worst August decline in 17 years. It sank the most since 2011 on Friday amid signs China’s economy is weakening, capping its single 5 percent decline of the year after spending the previous seven months locked in a trading range that had no precedent in a century of market history.

     Moreover, speculation had been building all year for the Federal Reserve to raise interest rates in September for the first time since 2006, following the end of quantitative easing in 2014.

     Traders are now pricing in a less than one-in-four chance the central bank will act next month, from about 48 percent just before the yuan devaluation, as the rout in equity markets has shaken confidence that the global economy will be strong enough to withstand higher U.S. rates.

     “The chickens are coming home to roost,” said Thomas Thygesen, SEB’s head of cross-asset strategy in Copenhagen. “We’ve been too hopeful that Fed tapering didn’t matter, that they could hike interest rates and we’d still have a healthy economy. Since the Fed stopped bond purchases, they’ve been choking the life out of global manufacturing and that matters most for commodities and emerging markets.”

     The retreat in global stock markets bears resemblances to losses that hit equities in 1998, when financial stress from Asia to Russia sent the S&P 500 down 19 percent, only to recover in three months, said Laszlo Birinyi, the president of Birinyi Associates in Westport, Connecticut.

     “I wouldn’t expect a mirror image but my point is that for all the negative things I’ve read this weekend, almost all of these have been comments by people who were bearish to begin with,” Birinyi said Monday in an interview on Bloomberg Radio. m“This is a short-term painful correction but when you have a situation where the market is well aware of the issues, the market has ability to correct.”

     All of the benchmark index’s main groups tumbled at least 3 percent today, with raw-materials shares approaching a two-year low while energy companies slumped to the lowest since October 2011. Citigroup Inc. and JPMorgan Chase & Co. fell at least 5.2 percent as banks retreated the most since June 2012.

     Only six stocks in the S&P 500 rose, led by AGL Resources Inc. The natural-gas distributor soared 28 percent after agreeing to be acquired for $8 billion in cash by Southern Co., the third-largest U.S. utility owner. Southern slid 4.9 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

The person who can wear the mantle of a Master

is one who is devoted to the cause of non-violence and non-possession

who is driven by the quest for truth and the right perspective,

who is capable of solving his own emotional and mental problems and

who can show others the way to overcome their emotional and mental problems.

Acharya Mahaprajna

As ever,

 

Carolann

 

Laughter is the sun that drives winter from the human face.

                                              -Victor Hugo, 1802-1885

 

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