Category: Newsletters

Dear Friends,

Tangents:
On October 26^th, 1819, Lord Byron wrote to Douglas Kinnaird about his poem Don Juan:

As to Don Juan – confess – confess – you dog – and be candid – that it is the sublime of that there sort of writing – it may be bawdy – but is it not good English? – it may be profligate – but is it not life, is it not thething? – Could any man have written it – who has not lived in the world? – and tooled in a post-chaise? in a hackney coach? in a gondola? against a wall? in a court carriage? in a vis á vis? – on a table? – and under it?

 –from Don Juan
…Your bays may hide the baldness of your brows— 
       Perhaps some virtuous blushes—let them go— 
To you I envy neither fruit nor boughs— 
       And for the fame you would engross below, 
The field is universal, and allows 
       Scope to all such as feel the inherent glow: 
Scott, Rogers, Campbell, Moore and Crabbe, will try 
‘Gainst you the question with posterity. 

For me, who, wandering with pedestrian Muses, 
       Contend not with you on the winged steed, 
I wish your fate may yield ye, when she chooses, 
       The fame you envy, and the skill you need; 
And, recollect, a poet nothing loses 
       In giving to his brethren their full meed 
Of merit, and complaint of present days 
Is not the certain path to future praise. 

He that reserves his laurels for posterity 
       (Who does not often claim the bright reversion) 
Has generally no great crop to spare it, he 
       Being only injur’d by his own assertion; 
And although here and there some glorious rarity 
       Arise like Titan from the sea’s immersion, 
The major part of such appellants go 
To—God knows where—for no one else can know…
                                               By Lord Byron

PHOTOS OF THE DAY

Wafts of mist move over the landscape near Tolzin, northeastern Germany, on Wednesday morning. Bernd Wuestneck/dpa/AP

A street vendor looks at garlands on sale for the Tihar festival, also called Diwali, along the streets of Kathmandu, Nepal, on Wednesday.Navesh Chitrakar/Reuters
Market Closes for October 26^th, 2016

Market Index	Close	Change
Dow Jones	18199.33	+30.06   +0.17%
S&P 500	2139.43	-3.73   -0.17%
NASDAQ	5250.270	-33.129   -0.63%
TSX	14807.56	-63.07
		-0.42%

International Markets

Market Index	Close	Change
NIKKEI	17391.84	+26.59
		+0.15%
HANG SENG	23325.43	-239.68
		-1.02%
SENSEX	27836.51	-254.91
		-0.91%
FTSE 100	6958.09	-59.55
		-0.85%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.157	1.141
CND. 30 Year Bond	1.826	1.812
U.S.    10 Year Bond	1.7896	1.7560
U.S. 30 Year Bond	2.5389	2.4985

Currencies

BOC Close	Today	Previous
Canadian $	0.74756	0.74878
US $	1.33768	1.33551
Euro Rate 1 Euro=		Inverse
Canadian $	1.45901	0.68540
US $	1.09070	0.91684

Commodities

Gold	Close	Previous
London Gold Fix	1270.50	1269.40
Oil	Close	Previous
WTI Crude Future	49.18	49.51

Market Commentary:
NUMBER OF THE DAY
70 years

The term of Austria’s newest bond, issued Tuesday—the longest-dated publicly issued government bond in the eurozone and the latest example of how central banks’ easy-money policies are prompting issuers to secure cheap borrowing for many decades ahead.
Canada
By John Hyland
     (Bloomberg) — Canadian stocks declined for a third day as disappointing corporate earnings raised concerns about the strength of the nation’s economy.
     The S&P/TSX Composite Index fell 0.4 percent to 14,807.56 at 4 p.m. in Toronto. The index has fallen 0.9 percent since closing at a 15-month high on Friday. It’s still up 14 percent in 2016, the top performance among developed equity markets tracked by Bloomberg.
     Seven of 11 sectors in the index fell Wednesday, led by drops of more than 1.5 percent by information technology companies, industrials and materials producers. DH Corp. plunged 43 percent to the lowest level in almost five years after it reported that a decline in its legacy check-making business was speeding up and large banks were delaying purchases of new software. Its third quarter earnings missed analysts estimates and the company provided a cautious outlook for 2017.
     Canadian National Railway Co. fell 3.8 percent, the most since April, amid concern its margins may contract and next year’s earnings expectations may be too optimistic. Energy producers also slipped as crude remained below $50 a barrel on renewed concerns over a supply glut. Financials gained 0.4 percent, paced by Toronto-Dominion Bank, which rose for a 10th consecutive day and reached a record high of $60.84.
     Raw materials producers took a hit as metals retreated after Tuesday’s rally. In corporate news, Premier Gold Mines Ltd. fell 7.7 percent after saying it will buy exploration projects in Nevada and Mexico from Goldcorp Inc. and Kinross Gold Corp. The materials industry remains the best performing sector in the index, having gained 45 percent this year.
     Energy producers, Canada’s second-largest sector, retreated as oil fell to a three-week low after a government report showed an unexpected decline in U.S. petroleum supply was centered on the West Coast. Crude has fluctuated as concerns grow over Russia and Iraq’s willingness to cooperate with OPEC on output cuts. Encana Corp. fell 0.8 percent to the lowest level this month and Canadian Natural Resources Ltd. slid from the high it hit on Monday.
     Medical marijuana producer Canopy Growth Corp. gained 6.1 percent after Shoppers Drug Mart, Canada’s largest drug store chain, applied for a medical marijuana retail license. Loblaw Companies Ltd., the owner of Shoppers, jumped more than 1 percent on the news, which is the company’s biggest intraday gain since August. Tal Woolley, an analyst at Dundee Securities in Toronto, wrote that other companies will follow Loblaw’s lead and medical marijuana will be one of the largest retail categories to emerge in Canada over the next five to 10 years.

US
By Anna-Louise Jackson and Rebecca Spalding
     (Bloomberg) — The S&P 500 Index edged lower, after lurching between gains and losses, with corporate reports spurring a tug of war as financial and industrial companies advanced to counter losses among health-care and technology shares.
     A disappointing forecast from Apple Inc. weighed on tech, and Edwards Lifesciences Corp. plunged the most in three years to drag health-care lower after the company’s sales missed estimates. Countering declines, Boeing Co. jumped the most in 21 months following its quarterly report. Mondelez International Inc. rallied after boosting its profit forecast, and the KBW Bank Index rose to its best level this year as Treasury yields approached June highs.
     The S&P 500 fell 0.2 percent to 2,139.43 at 4 p.m. in New York, after briefly erasing a 0.5 percent slide when crude oil wiped out losses on signs of lower supplies. The benchmark renewed declines as oil again lost momentum in the afternoon. The Dow Jones Industrial Average rose 30.06 points, or 0.2 percent, to 18,199.33, bolstered by Boeing. The Nasdaq Composite Index slumped 0.6 percent, the most in two weeks. About 6.7 billion shares traded hands on U.S. exchanges, 3 percent above the three-month average.
     “It’s not common to see the Dow, the S&P and the Nasdaq performing in such disparate ways,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242 billion. “Only 4 percent of the time have we seen the Dow outperform the S&P and the S&P outperform the Nasdaq by these margins. It’s typically driven by just a handful of names or sectors sticking out like sore thumbs, so it’s important to not assume the Nasdaq is telling us something the Dow or the S&P are missing. Still, it’s rare and rare events tend to grab our attention.”
     The S&P 500 hasn’t climbed for more than two consecutive days for almost five weeks, unable to gain traction during an earnings season dappled with disappointing forecasts from Intel Corp. to 3M Co. and Apple. While 78 percent of companies that have reported so far beat profit forecasts and 62 percent exceeded revenue estimates, analysts still predict third-quarter income will be flat compared to a year ago. Google parent Alphabet Inc. and Amazon.com Inc. are among those releasing results tomorrow.
     Shares moving on earnings news included:
     * Chipotle Mexican Grill Inc. sank to a three-year low, with quarterly results missing estimates as the company struggles to come back from an outbreak of foodborne illnesses last year.
     * Southwest Airlines Co. dropped 8.5 percent after predicting a revenue measure may worsen this quarter, a sign of diminished power to raise airfares.
     * Biogen Inc. rallied 3.7 percent after its quarterly profit topped estimates, with sales from a top-selling multiple- sclerosis drug jumping 10 percent.
     * Northrop Grumman Corp. climbed to a record, after raising its full-year earnings forecast as third-quarter results topped estimates.
     * Akamai Technologies Inc. and Juniper Networks Inc. surged more than 10 percent after their profits beat estimates, offsetting some of Apple’s drag on the technology group.
     * Huntington Bancshares Inc. advanced 5 percent to a nine-month high after its quarterly results topped predictions. That helped sending lenders in the S&P 500 toward a ten-month high.
     Meanwhile, investors are assessing the likely trajectory of interest rates and the outcome of the the U.S. presidential elections, with the next Federal Reserve meeting and the vote both due in the next two weeks. Traders see a less than one-in- five chance the Fed will raise rates at its next meeting before the election. They are pricing in nearly 73 percent odds of a December move.
     A report today showed purchases of new-homes in September stayed close to an almost nine-year high, showing residential real estate was maintaining momentum heading into the quieter selling season.
     “The market is pretty directionless at the moment, chopping around in a range,” said Michael Hewson, a market analyst at CMC Markets in London. “Some investors are trimming down their portfolios ahead of next week’s Fed announcement.”
     The S&P 500 is on track for a third monthly decline and its worst since January. That goes against its historical trend — the benchmark has climbed 1.9 percent on average in the past 25 Octobers, the biggest gain of any month. It’s trading at 18 times forecast earnings, the highest since 2009.
     In Wednesday’s trading, seven of the S&P 500’s 11 main industries retreated, with real estate sinking 1.3 percent while technology and health-care shares lost at least 0.5 percent. Financials and industrials increased more than 0.4 percent. The CBOE Volatility Index rose 5.8 percent to a one-week high.
     “The markets typically trade defensively in October before an election anyway, I expect more of the same,” said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird. “The market is going to go lower before it goes higher. It’s going to require a springboard and that springboard requires slightly lower prices.”

 

Have a wonderful evening everyone.

 

Be magnificent!

We must always bear in mind
that we rarer not going t be free,
but are free already.
Every idea that we are bound is a delusion.
Every idea that we are happy or unhappy
is a tremendous delusion.
Swami Vivekananda

As ever,
 

Carolann

 

Never attribute to malice what can adequately
be explained by stupidity.
                                          -Hanlon’s Razor

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

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com

Dear Friends,

Tangents:

On this day in 1854, the British suffered heavy losses against Russia in the Battle of Balaclava during the Crimean War. The battle inspired Alfred Lord Tennyson’s poem “Charge of the Light Brigade.”

The Charge of the Light Brigade
  By Alfred, Lord Tennyson

1.
Half a league, half a league,
  Half a league onward,
All in the valley of Death
  Rode the six hundred.
“Forward, the Light Brigade!
“Charge for the guns!” he said:
Into the valley of Death
  Rode the six hundred.
2.
“Forward, the Light Brigade!”
Was there a man dismay’d?
Not tho’ the soldier knew
  Someone had blunder’d:
Theirs not to make reply,
Theirs not to reason why,
Theirs but to do and die:
Into the valley of Death
  Rode the six hundred.
3.
Cannon to right of them,
Cannon to left of them,
Cannon in front of them
  Volley’d and thunder’d;
Storm’d at with shot and shell,
Boldly they rode and well,
Into the jaws of Death,
Into the mouth of Hell
  Rode the six hundred.
4.
Flash’d all their sabres bare,
Flash’d as they turn’d in air,
Sabring the gunners there,
Charging an army, while
  All the world wonder’d:
Plunged in the battery-smoke
Right thro’ the line they broke;
Cossack and Russian
Reel’d from the sabre stroke
  Shatter’d and sunder’d.
Then they rode back, but not
  Not the six hundred.
5.
Cannon to right of them,
Cannon to left of them,
Cannon behind them
  Volley’d and thunder’d;
Storm’d at with shot and shell,
While horse and hero fell,
They that had fought so well
Came thro’ the jaws of Death
Back from the mouth of Hell,
All that was left of them,
  Left of six hundred.
6.
When can their glory fade?
O the wild charge they made!
  All the world wondered.
Honor the charge they made,
Honor the Light Brigade,
  Noble six hundred. 

PHOTOS OF THE DAY

A man makes his way under fall foliage in Garmisch-Partenkirchen, Germany, on Tuesday. Matthias Schrader/AP

A man stands on the shore of the Baltic Sea in Timmendorfer Strand, northern Germany, on Tuesday. Michael Probst/AP
Market Closes for October 25^th, 2016

Market Index	Close	Change
Dow Jones	18169.27	-53.76   -0.30%
S&P 500	2143.16	-8.17   -0.38%
NASDAQ	5283.398	-26.428   -0.50%
TSX	14870.63	-52.38
		-0.35%

International Markets

Market Index	Close	Change
NIKKEI	17365.25	+130.83
		+0.76%
HANG SENG	23565.11	-38.97
		-0.17%
SENSEX	28091.42	-87.66
		-0.31%
FTSE 100	7017.64	+31.24
		+0.45%

Bonds

 

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.141	1.151
CND. 30 Year Bond	1.812	1.814
U.S.    10 Year Bond	1.7560	1.7629
U.S. 30 Year Bond	2.4985	2.5155

Currencies

BOC Close	Today	Previous
Canadian $	0.74878	0.75259
US $	1.33551	1.32875
Euro Rate 1 Euro=		Inverse
Canadian $	1.45409	0.68771
US $	1.08879	0.91845

Commodities

Gold	Close	Previous
London Gold Fix	1269.40	1265.55
Oil	Close	Previous
WTI Crude Future	49.51	50.12

Market Commentary:

NUMBER OF THE DAY
$199 billion
The record-breaking value of Chinese overseas acquisitions so far this year, reflecting an aggressive new generation of Chinese deal makers. On Monday, HNA Group announced the purchase of a 25% stake in Hilton Worldwide from Blackstone Group for $6.5 billion.
Canada
     By John Hyland
     (Bloomberg) — Canadian stocks fell for a second day as a selloff in crude dragged energy producers lower, overshadowing a rally in raw materials paced by West Fraser Timber Co. Ltd. and gold miners.
     The S&P/TSX Composite Index fell 0.4 percent to 14,870.63 at 4 p.m. in Toronto. Raw materials rebounded after snapping their longest winning streak in three months. Miners and energy producers have propelled the index to a 14 percent increase this year, making it the top performing developed equity market in the world, ahead of the U.K. and New Zealand.
     Nine of the 11 sectors in the index fell, paced by a 1.3 percent decline in energy shares, while raw-materials producers rose to a one-week high as gold climbed and West Fraser Timber Co Ltd. topped earnings and revenue estimates. The lumber company capped its largest gain in 16 years, rising 12 percent.
     Gold investors assessed demand from India before its Diwali festival that can lead to increased buying, with miners rebounding from yesterday’s decline. B2Gold Corp. added 8 percent and Barrick Gold Corp. increased 2.2 percent.
     Demand for gold has slipped recently, with the price falling more than $100 from its high this year, as traders price in increasing odds that interest rates will rise. Expectations for higher borrowing costs have strengthened the dollar, sending a gauge on the currency to its highest since March before easing back today. Rising rates dull the precious metal’s appeal when compared to higher yielding assets.
     Health-care shares advanced 0.8 percent, led by a 1.8 percent climb in Valeant Pharmaceuticals International Inc. Renowned fund manager Bill Miller said he purchased shares of the drug maker, predicting the stock will double in three years.
     Energy producers, Canada’s second largest sector, retreated as crude in New York dropped 1.1 percent to a one-week low. Oil slipped below $50 a barrel on speculation Russia won’t curb output, just after Iraq said it should be exempt from OPEC’s planned cuts. TransCanada Corp. and Canadian Natural Resources Ltd. fell at least 1.3 percent.
     Financials, which account for about a third of the index, declined 0.3 percent. Royal Bank of Canada slipped 0.4 percent to a one-week low, while Thomson Reuters Corp. declined 0.9 percent.
     Bank of Canada Governor Stephen Poloz said Monday Canada’s two-track economy complicates the decision to cut interest rates. Poloz reiterated the central bank considered cutting rates ahead of last week’s decision to stand pat, but held off because of uncertainties around the nation’s growth outlook. Yesterday, the central bank renewed a two percent inflation targeting agreement, as price increases quickened in September for the first time in five months.
     Canadian stock valuations remain 17 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.6 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.

US
By Rita Nazareth, Anna-Louise Jackson and Rebecca Spalding
     (Bloomberg) — U.S. stocks declined from a two-week high as mixed forecasts from industry giants and a slump in consumer confidence spurred concern over the outlook for the world’s largest economy. Oil retreated.
     Blue chips Caterpillar Inc. and 3M Co. dropped after cutting their estimates, outweighing optimism with United Technologies Corp. and Procter & Gamble Co.’s earnings. Apple Inc. fell in after-hours trading as it reported sliding prices for its smartphones and forecast lower-than-expected profitability over the holiday period. The pound pared losses as Bank of England Governor Mark Carney signaled that the chances of another interest-rate cut this year are diminishing. Oil sank on bets Russia won’t join OPEC to curb supply.
     Traders have been assessing the strength of corporate profits and the economy amid bets on a Federal Reserve hike by December. U.S. consumer confidence fell more than forecast in October as households became less upbeat about the labor market, the Conference Board said Tuesday. More than a third of S&P 500 companies are scheduled to report earnings this week, including Alphabet Inc., Coca-Cola Co., Amazon.com Inc. and Boeing Co. 
     “Given that we’re now in the thick of earnings season, there are going to be acute reactions nearly every day,” said Frank Cappelleri, executive director at Instinet LLC in New York. “Other than that, the price action is not materially different than what we’ve seen over the last two months. There have been multiple false starts where budding momentum has gotten cut short.”
     Global markets have actually seen declines in volatility — with a cross-asset gauge of price swings in equities, rates, currency and commodities down to the lowest since 2014.
     While risks exist, the drop in anxiety has coincided with a reduction in uncertainty when it comes to U.S. politics and policy. Hillary Clinton’s odds of victory are close to the highest on record at 86.5 percent, according to forecaster FiveThirtyEight. Likewise, investors appear to be coming to terms with the inevitability of a Federal Reserve hike in December.
     “Until we get something that really surprises the market, we’re going to continue in this low volatility,” said Hank Smith, who helps manage more than $6 billion as chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania “Neither the election nor the Fed’s rate decision have people particularly worried right now.”
     The S&P 500 dropped 0.4 percent to 2,143.16 at 4 p.m. in New York. The gauge has been stuck in a 64-point trading range after reaching a record in August and hasn’t climbed for three consecutive sessions in more than a month.
     Apple shares fell 2.3 percent to $115.55 in extended hours on Tuesday. The stock closed at $118.25 in New York regular trading. It had rallied 22 percent in the last three months. The company, which gets two thirds of revenue from the iPhone, experienced its first annual sales decline since 2001, amid waning smartphone demand.
     Among stocks moving on corporate news:
     * 3M slumped after cutting the top end of its 2016 profit forecast.
     * Caterpillar slipped after reducing its sales estimate for this year.
     * Sherwin-Williams Co.’s disappointing results weighed on shares of Home Depot Inc. and Lowe’s Cos.
     * Whirlpool Corp. tumbled after lowering its profit outlook.
     * Under Armour Inc. sank as its forecast renewed slowdown concern.
    * JetBlue Airways Corp. fell after reporting profit that missed estimates.
     * Procter & Gamble and United Technologies climbed after their results beat forecasts.A two-day lull for European equities ended as                Novartis AG led drugmakers down after saying its profit fell for a seventh straight quarter while Italian lenders slumped. The Stoxx Europe 600 Index fell 0.4 percent, erasing an earlier advance. Miners jumped to their highest level since August 2015, tracking a rally in metal prices.
     Most emerging-market stocks retreated as Brazilian consumer companies fell on prospects for a slower-than-expected reduction in borrowing costs, outweighing gains in commodity producers from South Africa to China.
     Oil fell 1.1 percent in New York. Output cuts aren’t “an option for us,” said Russia’s envoy at OPEC, Vladimir Voronkov, according to Interfax. U.S. crude supplies probably rose 2 million barrels last week, a Bloomberg survey showed before Energy Information Administration data Wednesday.
      “The nonsense around the production agreement comes in and out of the market,” said John Kilduff, a partner at Again Capital LLC, a New York-based hedge fund that focuses on energy. “It’s coming out of oil today because of the Russian statements, which come after Iraq made it clear that they weren’t going to make a cut.”
     West Texas Intermediate for December delivery slipped 56 cents to $49.96 a barrel on the New York Mercantile Exchange. Brent for December settlement dropped 67 cents, or 1.3 percent, to $50.79 a barrel on the London-based ICE Futures Europe exchange.
     Arabica coffee, the mild-tasting bean type favored by Starbucks Corp., surged to the highest since February 2015 after Brazil’s largest producer cut its export estimate for 2016 amid rising domestic consumption and the effects of drought.
     Gold rallied on speculation that demand will accelerate before the Diwali religious festival in India, the world’s second-biggest buyer of the metal.
     Industrial metals surged as increasing profits at Chinese steelmakers and gains in global manufacturing boosted speculation that demand will improve.
     The pound rebounded from its lowest level since the flash crash earlier this month after Carney said there were limits to officials’ willingness to look beyond an overshoot of their inflation target. Sterling fell 0.4 percent at $1.2186, after earlier slumping 1.3 percent.
     “The comments by Carney do highlight that the latest sterling selloff is starting to worry policy makers as it brings closer the risk of stagflation,” said Valentin Marinov, head of Group-of-10 currency strategy at Credit Agricole SA’s corporate- and investment-banking unit in London.
     Bloomberg’s Dollar Spot Index, which tracks the currency against 10 major peers, fell 0.1 percent after rising to the highest in seven months.
     South Africa’s rand led gains in emerging markets amid a rally in metals. Russia’s ruble rose as companies lined up to make payments before a tax deadline. Chile’s peso rallied amid speculation of a change of government next year and as copper prices surged.
     A gauge of expected price swings in Treasuries fell to the lowest since December 2014 before the Fed meets next week as traders see a clearer outlook for monetary policy in the U.S. and abroad.
     “No one’s expecting anything from the Fed’s meeting next week,” said Justin Lederer, an interest-rate strategist in New York at Cantor Fitzgerald LP, one of 23 primary dealers that trade with the Fed. “People are looking for a December rate hike. Even with the presidential election, people are comfortable with rates.”
     The benchmark U.S. 10-year note yield was little changed at 1.76 percent, according to Bloomberg Bond Trader data. A $26 billion two-year Treasury auction drew the weakest demand since July.
     Austria sold 2 billion euros ($2.2 billion) of bonds due in November 2086 via banks, according to a person familiar with the matter. The sale follows this year’s century bond offerings from Belgium and Ireland, as well as 50-year deals from France, Italy and Spain, as countries take advantage of historically low interest rates to issue ultra-long debt.

 

Have a wonderful evening everyone.

 

Be magnificent!

Like the silkworm you have built a cocoon around yourself.  Who will save you?
Burst your own cocoon and come out as the beautiful butterfly, as the free soul.
Swami Vivekananda

As ever,

 

Carolann

 

No matter how rich you become, how famous or powerful, when you die the size of
your funeral will still pretty much depend on the weather.
                                                                          -Michael Pritchard, b. 1949

 

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

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com

Dear Friends,

Tangents:

On this day in 2005, civil rights activist Rosa Parks dies at age 92.
On Oct. 24, 1945, the United Nations charter took effect.
Go to article »

Confidence is silent.
Insecurities are loud.

Try to Praise the Mutilated World
by Adam Zagajewski

Try to praise the mutilated world.
Remember June’s long days,
and wild strawberries, drops of wine, the dew.
The nettles that methodically overgrow
the abandoned homesteads of exiles.
You must praise the mutilated world.
You watched the stylish yachts and ships;
One of them had a long trip ahead of it,
while salty oblivion awaited others.
You’ve seen the refugees heading nowhere,
you’ve heard the executioners sing joyfully.
You should praise the mutilated world.
Remember the moments when we were together
in a white room and the curtain fluttered.
Return in thought to the concert where music flared.
You gathered acorns in the park in autumn
and leaved eddied over the earth’s scars.
Praise the mutilated world
and the grey feather a thrush lost,
and the gentle light that strays and vanishes
and returns.
PHOTOS OF THE DAY:

Jury members stand behind a show piece by the Canadian national team during the International Exhibition of Culinary Art (IKA), also known as the Culinary Olympics, in Erfurt, Germany, on Monday. The ‘Olympics of Chefs’ has more than 2,000 participants and is the most important event for chefs and cooks worldwide. Jens Meyer/AP
Goshi, a black jaguar, stands on top of a carved Halloween pumpkin in its enclosure as part of the Enchantment event at Chester Zoo in Chester, England, on Monday. Phil Noble/Reuters
Some of the 8,000 participants in the Zombie Bike Ride pedal down South Roosevelt Boulevard during the annual Fantasy Fest costume and mask festival in Key West, Fla., on Sunday. Rob O’Neal/Florida Keys News Bureau/Reuters
Market Closes for October 24^th, 2016

Market Index	Close	Change
Dow Jones	18223.03	+77.32   +0.43%
S&P 500	2151.33	+10.17   +0.47%
NASDAQ	5309.828	+52.426   +1.00%
TSX	14923.01	-16.03
		-0.11%

International Markets

Market Index	Close	Change
NIKKEI	17234.42	+49.83
		+0.29%
HANG SENG	23604.08	+229.68
		+0.98%
SENSEX	28179.08	+101.90
		+0.36%
FTSE 100	6986.40	-34.07
		-0.49%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.151	1.129
CND. 30 Year Bond	1.814	1.794
U.S.    10 Year Bond	1.7629	1.7347
U.S. 30 Year Bond	2.5155	2.4839

Currencies

BOC Close	Today	Previous
Canadian $	0.75259	0.74971
US $	1.32875	1.33384
Euro Rate 1 Euro=		Inverse
Canadian $	1.44549	0.69181
US $	1.08786	0.91924

Commodities

Gold	Close	Previous
London Gold Fix	1265.55	1266.05
Oil	Close	Previous
WTI Crude Future	50.12	50.55

Market Commentary:
Canada
By John Hyland
     (Bloomberg) — Canadian stocks slid back from a five-day rally on Monday as a drop in commodities prices pressured oil and gold companies.
     The S&P/TSX Composite Index fell 0.1 percent to 14,923.01 at 4 p.m. in Toronto. The gauge rose 2.4 percent last week to its highest level since June 2015. Gains among miners and energy producers have propelled the index to a 15 percent increase this year, making it the top performing developed equity market in the world, ahead of the U.K. and New Zealand.
     Seven of the 11 sectors in the index edged higher, led by information technology, which picked up 0.9 percent, paced by a 2 percent increase in Montreal-based CGI Group Inc. Financials, which account for about a third of the index, rose 0.2 percent after Toronto-Dominion Bank and TD Ameritrade Holding Corp. agreed to buy St. Louis-based brokerage Scottrade Financial Services Inc. for $4 billion. Toronto-Dominion, the largest stakeholder in TD Ameritrade, expects the deal to bolster its U.S. expansion. The lender’s stock rose 0.2 percent to a record high.
     Energy producers, Canada’s second largest sector, fell 0.7 percent as crude dropped 0.4 percent at 4 p.m. in New York, hovering just above $50 a barrel. Oil slumped after Iraq, OPEC’s second-biggest producer, said it should be exempt from planned output cuts. Enbridge Inc. fell 0.9 percent and TransCanada Corp. was down 1.4 percent.
     Raw-materials producers fell 0.9 percent from a monthly high. Gold fell 0.2 percent as the dollar slipped from its highest level in seven months, supporting demand for the metal that has sunk more than $100 from its high this year. That rally, which took gold prices to the best first half in almost four decades, is fading as traders price-in increasing odds that interest rates will rise. Rising rates dull the precious metal’s appeal because it doesn’t pay interest. Barrick Gold Corp. fell 1.9 percent.
     The Bank of Canada renewed a two percent inflation targeting agreement, as Canada’s inflation rate quickened in September for the first time in five months. The consumer price index rose 1.3 percent in September from a year ago, led by higher gasoline prices.
     Canadian stock valuations remain 17 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.7 compared with 20.2 for the the S&P 500 Index, according to data compiled by Bloomberg.
     Restaurant Brands International Inc., which owns Burger King and Tim Hortons, fell 4.5 percent despite posting third- quarter profit that topped analysts’ estimates. The Oakville, Ontario-based company has gained 16 percent this year.

US
By Anna-Louise Jackson
     (Bloomberg) — Acquirers may be paying less in acquisitions, but that isn’t keeping equity bulls from celebrating another round of merger mania.
     AT&T Inc.’s planned takeover of Time Warner Inc., at $108.7 billion the largest of the year, led a spate of announcements since Friday totaling nearly $124 billion. B/E Aerospace Inc. jumped 16 percent after Rockwell Collins Inc. said it would purchase the aircraft-parts supplier for $6.4 billion. Financial companies reached a six-week high as TD Ameritrade Holding Corp. and its largest stakeholder agreed to buy Scottrade Financial Services Inc.
     The S&P 500 Index rose 0.5 percent to 2,151.33 at 4 p.m. in New York, closing at a two-week high as one of the earnings reporting season’s busiest weeks began. The Nasdaq 100 Index added 1.2 percent to a record as Microsoft Corp. led a rally in technology shares.
     While dealmaking is picking up, the average premium has shrunk to a two-year low of 28 percent in the fourth quarter, according to data compiled by Bloomberg. Cash-and-stock transactions, which represent about 37 percent of total volume when proposed deals are excluded, also are being proffered at lower premiums. The measure has ticked up from a one-year low in the second quarter, but at 26 percent in the current period it’s below a longer-term average of nearly 32 percent.
     Even if animal spirits are a little more muted, the flurry is good for sentiment, said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “Clients like to see that M&A because it just means companies are still optimistic about the future. There’s an optimism that encircles this many deals in one day.”
     Amid a backdrop of lackluster growth, many companies still have cash on hand, and buying other companies has become a more compelling way to appease investors rather than increasing dividends or making infrastructure investments, said Steve Chiavarone, a portfolio manager with Federated Investors in New York. With the S&P 500 trading about 19 percent above its five- year average price-earnings ratio, that’s made share repurchases less attractive.
     “When you’re trading near all-time highs, you have to ask what’s the incremental value of that share repurchase,” Chiavarone said. “To see companies engaging in M&A, as long as it’s intelligent and thoughtful M&A, that’s a better use of cash than buying more shares.”
     After surging as much as 7.2 percent this year to a record in August, the S&P 500 has been stuck in a 64-point trading range as investors weigh Federal Reserve policy, the strength of corporate profits and economic reports. The main benchmark for U.S. equity crept up 0.4 percent last week as S&P 500 companies looked poised to report profit growth for the first time in six quarters. The gauge trades at 18.2 times forecast earnings, the highest since at least 2009.
     The Dow Jones Industrial Average gained 77.32 points on Monday, or 0.4 percent, to 18,223.03. About 5.8 billion shares traded hands on U.S. exchanges, 10 percent below the three-month average.
     While dealmaking helped send stocks higher Monday, some of the companies involved in the latest wave held back stronger gains in the S&P 500. AT&T lingered at an eight-month low, losing 1.7 percent, while Time Warner retraced part of a two- day, 13 percent jump that came on speculation their merger was imminent. Rockwell Collins marked its biggest drop in five years, and TD Ameritrade sank the most since June.
     “You would think there’d be a bigger pop on all these deals,” Antonelli said. “Today’s price action, where the market jumps significantly overnight and then opens and goes sideways, doesn’t give you a warm and fuzzy feeling because it leads you to believe that a lot of people are just watching and waiting.”
     More than a third of S&P 500 members are scheduled to post earnings this week, including Apple Inc., Alphabet Inc. and Boeing Co. Analysts now predict year-on-year profit will be flat once the third-quarter reporting is finished, better than projections for a 1.5 percent contraction a month ago.
     Among other shares moving on corporate news, T-Mobile US Inc. gained 9.5 percent to a nine-year high after posting profit that exceeded estimates. Hilton Worldwide Holdings Inc. added as much as 3.7 percent before paring gains as China’s HNA Group is acquiring about 25 percent of the hotel company from from Blackstone Group LP in a deal valued at about $6.5 billion.
     Kimberly-Clark Corp. lost 4.7 percent to a one-year low after cutting estimates for annual sales growth. Genworth Financial Inc. dropped 8.1 percent after China Oceanwide Holdings Group Co. agreed to purchase the financial-services firm in a $2.7 billion cash deal.
     Microsoft Corp. extended Friday’s post-earnings rally, stretching to a fresh all-time high to bolster gains among technology companies as the group closed at the loftiest level in more than 16 years.

 

Have a wonderful evening everyone.

 

Be magnificent!

The freedom of the seed resides in its fulfillment of its dharma, of its nature and its destiny,
which is to become a tree; the failure to achieve this
becomes for the seed a prison.
The sacrifice through which one thing reaches its fulfillment is not a sacrifice that leads to death,
it is the casting off of chains and the attainment of freedom.
Rabindranath Tagore

As ever,

 

Carolann

 

The inherent vice of capitalism is the unequal sharing of blessings;
the inherent virtue of socialism is the equal sharing of miseries.
                                                         -Winston Churchill, 1874-1965

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Portfolio Manager &
Senior Vice-President

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com

 

Dear Friends,

Tangents:

The Colder the Air

We must admire her perfect aim,
this huntress of the winter air
whose level weapon needs no sight,
if it were not that everywhere
her game is sure, her shot is right.
The least of us could do the same.

The chalky birds or boats stand still,
reducing her conditions of chance;
air’s gallery marks identically
the narrow gallery of her glance.
The target-center in her eye
is equally her aim and will.

Time’s in her pocket, ticking loud
on one stalled second.  She’ll consult
not time nor circumstance.  She calls
on atmosphere for her result.
(It is this clock that later falls
in wheels and chimes of leaf and cloud.)
                         -Elizabeth Bishop
PHOTOS OF THE DAY

Fog blankets the south tower of Golden Gate Bridge on Friday in San Francisco. Eric Risberg/AP

 

People brave the wind on the waterfront of Victoria Harbor as Typhoon Haima approaches Hong Kong on Friday. Typhoon Haima churned toward southern China after smashing into the northern Philippines with ferocious wind and rain, triggering flooding, landslides and power outages. Vincent Yu/AP
Market Closes for October 21st, 2016

Market Index	Close	Change
Dow Jones	18145.71	-16.64   -0.09%
S&P 500	2141.16	-0.18   -0.01%
NASDAQ	5257.402	+15.569   +0.30%
TSX	14939.04	+91.12
		+0.61%

International Markets

Market Index	Close	Change
NIKKEI	17184.59	-50.91
		-0.30%
HANG SENG	23374.40	+69.43
		+0.30%
SENSEX	28077.18	-52.66
		-0.19%
FTSE 100	7020.47	-6.43
		-0.09%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.129	1.171
CND. 30 Year Bond	1.794	1.828
U.S.    10 Year Bond	1.7347	1.7556
U.S. 30 Year Bond	2.4839	2.5062

Currencies

BOC Close	Today	Previous
Canadian $	0.74971	0.75580
US $	1.33384	1.32310
Euro Rate 1 Euro=		Inverse
Canadian $	1.45168	0.68886
US $	1.08853	0.91867

Commodities

Gold	Close	Previous
London Gold Fix	1266.05	1271.65
Oil	Close	Previous
WTI Crude Future	50.55	50.43

Market Commentary:
Canada
By John Hyland
     (Bloomberg) — Canadian stocks extended a rally to a fifth day and headed for the best week since March as Tourmaline Oil Corp. paced gains among energy shares and banks advanced on signs inflation is picking up.
     The S&P/TSX Composite Index gained 0.3 percent to 14,893.63 at 10:36 a.m. in Toronto. The gauge has rallied 2.1 percent in the week to the highest level since June 2015. Rallies among energy producers and miners have propelled the gauge to a 14 percent increase this year, making it the top performing developed equity market in the world, ahead of the U.K. and New Zealand.
     Energy producers, Canada’s second largest sector, rose the most as eight of the 11 industries in the broader index. Tourmaline Oil gained 7.4 percent to the highest in 18 months after purchasing $1 billion in Western Canadian energy assets from Royal Dutch Shell Plc. Suncor Energy Inc. gained more than 1 percent.
     Raw-materials rose 0.3 percent, led by Turquoise Hill Resources Ltd. The company said it expects to meet the “higher end” of its full-year target.
     Industrial stocks declined 0.1 percent to the lowest level in more than two weeks, led down by Bombardier Inc. after it announced plans to cut 7,500 jobs, more than 10 percent of its workforce, in the next two years. The airplane manufacturer is initiating a restructuring plan after taking on billions of dollars of debt to develop its marquee C Series jetliner. Bombardier Inc. shares declined 1.1 percent, and have plunged 55 percent since 2011.
     Canada’s inflation rate quickened in September for the first time in five months. The consumer price index rose 1.3 percent in September from a year ago, led by higher gasoline prices. The Bank of Canada maintained the benchmark interest rate at 0.5 percent this week and reduced Canada’s growth profile in large part because of slower housing markets and a lower trajectory for exports.
     Canadian stock valuations remain 17 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.6 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.

US
By Anna-Louise Jackson
     (Bloomberg) — U.S. stocks closed little changed after erasing an early selloff, as deal activity boosted consumer stocks and Microsoft Corp. rallied to a record, offsetting losses spurred by concerns a stronger dollar will damp corporate earnings.
     Equities rebounded as Reynolds American Inc. soared the most ever after British American Tobacco Plc offered to pay $47 billion for full control of the cigarette maker. Time Warner Inc. jumped to a 15-month high on speculation it may agree to a takeover by AT&T Inc. That blunted declines spurred by the surging dollar and disappointing outlooks from General Electric Co. and Advanced Micro Devices Inc. AT&T sank 3 percent to a seven-month low.
     The S&P 500 Index fell less than a point to 2,141.16 at 4 p.m. in New York, all but wiping out an early 0.5 percent drop. The benchmark capped its first weekly advance in three, increasing 0.4 percent. The Dow Jones Industrial Average lost 16.64 points, or 0.1 percent, to 18,145.71. The Nasdaq Composite Index rose 0.3 percent, buoyed by Microsoft and PayPal Holdings Inc., which jumped 10 percent. About 6 billion shares traded hands on U.S. exchanges, 8 percent below three-month average.
     “This is going to be an earnings reporting season that is going to be moving us back toward positive earnings growth,” Bill Northey, chief investment officer at US Bank’s Private Client Reserve in Helena, Montana, said by phone. “But against that backdrop, we’ve seen a pretty strong jump in the dollar. We’ll have to keep an eye on how strong the U.S. dollar becomes and how U.S. equity markets perform.”
     After surging as much as 7.2 percent this year through a record in August, the S&P 500 has failed to push higher as investors assess central-bank policy, the strength of corporate America and economic reports. The index hasn’t climbed for three consecutive sessions in a month, vacillating between daily gains and losses while trading at 18 times forecast earnings, the highest since 2009. The CBOE Volatility Index fell for a fourth session, the longest streak in three months.
     Earnings remained in focus today, as nine S&P 500 firms reported. More than a fifth of the gauge’s companies have released results so far, and while 81 percent have beaten earnings expectations, analysts still forecast a 0.4 percent contraction in overall third-quarter profits. That compares to a 1.6 percent decline predicted just before the reporting period began two weeks ago.
     “Earnings this season have been all over the place, a mixed-to-OK season,” said Otto Waser, chief investment officer of R&A Group Research & Asset Management in Zurich. “People are generally more cautious when rates rise. Underlying earnings growth is close to zero, so why should the market move higher with interest rates going higher?”
     Among shares moving on earnings news: GE slipped 0.3 percent, after falling as much as 2.6 percent. The company cut its 2016 forecast for organic sales growth, projecting the figure would be flat to up 2 percent this year, after previously forecasting an increase of as much as 4 percent. Advanced Micro Devices fell 6.3 percent after predicting fourth-quarter revenue that will miss analysts’ estimates, hurt by dwindling orders for game console processors.
     Microsoft reached a record, rising 4.2 percent as its results were bolstered by growing demand for cloud-based software and services. 
     PayPal climbed to an all-time high after saying it will make more money in coming years than previously expected, easing concern that recent deals with credit card companies would suppress earnings.
     McDonald’s Corp. marked its strongest gain in a year as quarterly revenue topped estimates, helped by international markets including the U.K. and Canada.
     The dollar is also in the spotlight. The greenback gained versus most peers and for a fourth consecutive day against the euro. It is the strongest since March relative to the single currency after European Central Bank President Mario Draghi signaled that quantitative easing won’t come to an “abrupt” end, leaving traders waiting until at least December for news about policy changes. GE said foreign exchange effects will hurt earnings by as much as 6 cents a share this year.
     “If you have to translate foreign earnings into stronger currency your earnings expectations are going lower,” said Waser. “This caps earnings upside quite a bit.”
     Investors are also parsing economic data and comments by policy makers for hints on the timing of the Federal Reserve’s next interest-rate increase. Reports on manufacturing, consumer confidence, durable goods orders and gross domestic product will be in focus next week.
     Traders are pricing in less than one-in-five odds of a hike at the Fed’s next meeting, which takes place days before the presidential election, and a 69 percent chance of action in December. San Francisco Fed President John Williams said in a speech today that slow growth is likely “here to stay,” and he repeated his support for a gradual increase in rates “sooner rather that later.”
     In Friday’s trading, seven of the S&P 500’s 11 main industries fell. Phone companies led losses for a second day, their worst back-to-back performance in two months. Energy and health-care companies sank more than 0.6 percent. Time Warner helped drive the consumer-discretionary group higher, while Reynolds American and rival cigarette makers Altria Group Inc. and Philip Morris International Inc. lifted consumer staples.
     Scripps Networks Interactive Inc. and Discovery Communications Inc. rallied more than 3.6 percent as cable networks rose on the Time Warner deal speculation. Viacom Inc. and CBS Corp. added at least 2 percent, while Netflix Inc. advanced 3.4 percent to a 10-month high.

 

Have a wonderful weekend everyone.

 

Be magnificent!

Do we still not know that the appearance of a seed is in direct contradiction to its true nature?
If you submit the seed to a  chemical analysis, you would find in it perhaps some carbon, proteins,
and many other things, but never the hint of the leaf of a tree.
Rabindranath Tagore

 

As ever,
 

Carolann

 

You’ve got to do your own growing,
no matter how tall your grandfather was..
                                  -Irish Proverb

 

 

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

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828

Dear Friends,

Tangents:

Things you can control:

1. Your belief
2. Your attitude
3. Your thoughts
4. Your perspective
5. How honest you are
6. Who your friends are
7. What books you read
8. How often you exercise
9. The type of food you eat
10. How many risks you take
11. How you interpret situations
12. How kind you are to others
13. How kind you are to yourself
14. How often you say “I love you”
15. How often you say “thank you”
16. How you express your feelings
17. Whether or not you ask for help
18. How often you practice gratitude
19. How many times you smile today
20. The amount of effort you put forth
21. How you spend/invest your money
22. How much time you spend worrying
23. How often you think about your past
24. Whether or not you judge other people
25. Whether or not you try again after a setback
26. How much you appreciate the things you have

BY RUBEN CHABVES//THINKGROWPROSPER

PHOTOS OF THE DAY

On Thursday, Israelis and foreign nationals participate in the Jerusalem March, an annual pro-Israel procession that takes place in the city during the Jewish holiday of Sukkot. Ammar Awad/Reuters

Bird watchers view huge flocks of wading and sea birds flying over the coastline as seasonal high tides force them off their feeding grounds and closer to shore near Snettisham in Norfolk, England, on Thursday. Toby Melville/Reuters
Market Closes for October 20^th, 2016

Market Index	Close	Change
Dow Jones	18162.35	-40.27   -0.22%
S&P 500	2141.34	-2.95   -0.14%
NASDAQ	5241.832	-4.580   -0.09%
TSX	14848.27	+7.78
		+0.05%

International Markets 

Market Index	Close	Change
NIKKEI	17235.50	+236.59
		+1.39%
HANG SENG	23374.40	+69.43
		+0.30%
SENSEX	28129.84	+145.47
		+0.52%
FTSE 100	7026.90	+4.98
		+0.07%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.171	1.194
CND. 30 Year Bond	1.828	1.845
U.S.    10 Year Bond	1.7556	1.7450
U.S. 30 Year Bond	2.5062	2.5077

Currencies

BOC Close	Today	Previous
Canadian $	0.75580	0.76246
US $	1.32310	1.31154
Euro Rate 1 Euro=		Inverse
Canadian $	1.44593	0.69160
US $	1.09283	0.91505

Commodities

Gold	Close	Previous
London Gold Fix	1271.65	1269.05
Oil	Close	Previous
WTI Crude Future	50.43	51.60

Market Commentary:
Canada
By John Hyland
     (Bloomberg) — Canadian stocks ended mixed as the nation’s biggest lenders — Royal Bank of Canada and Toronto-Dominion Bank — the nation’s largest lenders, extended highs to offset a slump in railroads.
     The S&P/TSX Composite Index was up slightly at 14,848.24 at 4:000 p.m. in Toronto, after a three-day advance that took the Canadian equity benchmark to its highest since June 2015.
     Rallies among energy producers and miners have propelled the gauge to a 14 percent increase this year, making it the top performing developed equity market in the world, ahead of the U.K. and New Zealand.
     Financial services, which account for a third of the S&P/TSX Composite Index, gained 0.2 percent to lead an advance in five of the 11 industries in the broader index. Royal Bank added 0.5 percent for a fourth day of gains, while Toronto-Dominion is on a six-day winning streak, extending records for both stocks. Toronto-Dominion reportedly teamed with TD Ameritrade Holding Corp. and made a joint, non-binding offer for St. Louis brokerage firm Scottrade earlier this month, according to people familiar with the situation.
     The Bank of Canada maintained the benchmark interest rate at 0.5 percent yesterday and reduced Canada’s growth profile in large part because of slower housing markets and a lower trajectory for exports. The European Central Bank Thursday kept its rates unchanged and signaled that it may extend its stimulus program beyond the planned March end.
     Canadian stock valuations remain 17 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.6 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.
     Canadian Pacific Railway Ltd. lost 2 percent to lead a 0.7 percent drop in industrial stocks, the biggest laggards in the S&P/TSX. The railway operator retreated a second day after cutting its profit target for the year Wednesday due to falling revenue from commodities.
     Raw-materials producers gained 0.5 percent and energy companies added 0.2 percent Thursday even as prices for gold, copper and crude retreated. Barrick Gold Corp. slipped 0.8 percent while Goldcorp Inc. added 1.2 percent. Oil declined from a 15-month high as investors weighed conflicting signals from OPEC members on their readiness to reduce production, ahead of a key November meeting. The group’s October rise is now at 3.8 percent.

US
By John Hyland and Rebecca Spalding
     (Bloomberg) — U.S. stocks edged lower as disappointing results from Verizon Communications Inc. to EBay Inc. overshadowed gains in health-care and American Express Co.’s best rally in seven years.
     Equities wavered on a variety of influences, including corporate reports, stimulus measures from the European Central Bank, a final presidential debate before the Nov. 8 election and signs the housing market continues to bolster growth, adding to the case for higher borrowing costs. Crude fell from a 15-month high, though energy producers were little change after a stronger outlook for oil prices from the World Bank. Microsoft Corp. rallied in after-hours trading as its results beat estimates.
     The S&P 500 Index fell 0.1 percent to 2,141.34 at 4 p.m. in New York, trimming a morning drop that reached 0.5 percent. The benchmark closed near its average price during the past 100 days after falling below the closely watched level. The Dow Jones Industrial Average lost 40.27 points, or 0.2 percent, to 18,162.35. The Nasdaq Composite Index declined 0.1 percent. About 6.2 billion shares traded hands on U.S. exchanges, 5 percent below the three-month average.
     “There have been a handful of news items for traders to key off of today, including Draghi’s comments, earnings and the last night’s debate,” said Frank Cappelleri, executive director at Instinet LLC in New York. “With the market so close to an important support level, traders have been looking for reasons to either buy before the potential bounce or sell in front of a larger decline. The erratic movement so far suggests that both of these have been happening today.”
     The ECB today kept its quantitative-easing program and interest rates unchanged. U.S. equity futures earlier followed European shares lower after the central bank’s President Mario Draghi said during a press conference that the euro region’s economic outlook remains subject to downside risks. He also reiterated that officials will extend stimulus if needed.
     Thursday’s declines halted the S&P 500’s two-day winning streak, which had been spurred by a spate of results showing signs that companies may break a five-quarter streak of falling profits. The index hasn’t climbed for three consecutive sessions in a month, wobbling indecisively between daily gains and losses.
     Following the close of regular trading, Microsoft jumped 5.3 percent as of 4:36 p.m., after its quarterly sales and profit topped predictions, buoyed by growing demand for cloud- based software and services.
     Among shares moving on earnings news:
     * American Express Co. rallied the most in seven years after boosting its projection for annual profitability.
     * Mattel Inc. had its best one-day gain in eight months after its quarterly sales topped estimates, boosted by Barbie and American Girl doll sales.
     * Travelers Cos. lost 5.8 percent, the steepest slide in the Dow, after posting its fourth-straight profit decline as weather-related costs climbed and investment income slipped.
     * EBay Inc. suffered its worst drop since January after forecasting fourth-quarter revenue and profit that may miss projections.
     * Verizon Communications Inc. sank 2.5 percent after adding fewer monthly mobile subscribers than analysts had predicted.
     * Union Pacific Corp. slumped 6.7 percent, the most since 2009, as its profit missed predictions, with freight demand continuing to decline and the railroad struggling to boost prices.
      “Last week and earlier this week we had some bank earnings that were pretty good,” said Timothy Ghriskey, who helps manage $1.5 billion as chief investment officer at Solaris Asset Management LLC in New York. “We’ve seen a number of industrial companies, however, either pre-announce or report some weak earnings and that’s certainly been negative.”
     Meanwhile, central banks have held sway over equity markets this year, with investors parsing economic data and comments by officials for hints on the timing of the Federal Reserve’s next interest-rate increase. Traders are pricing in less than one-in- five odds of a hike at the next meeting that takes place days before the presidential election, and a nearly 68 percent probability of a move in December.
     As investors scour data for hints on the path for rates, a report today showed sales of previously owned homes increased more than projected in September. Filings for unemployment benefits rose by the most since July, after spending several weeks at or near a four-decade low, according to another gauge. A separate measure indicated expansion in Philadelphia-area manufacturing slowed this month.
     The earnings season’s impact on equities is also becoming more visible as the reporting pace picks up. A fifth of S&P 500 companies have released results so far, and while nearly 83 percent have beat earnings expectations, according to data compiled by Bloomberg, companies such as EBay that don’t follow better-than-predicted profits with a satisfying outlook are susceptible to punishment from investors. Analysts forecast profits in the benchmark will fall 1.4 percent.
     In Thursday’s trading, 10 of the S&P 500’s 11 main industries declined, with Verizon leading phone companies to a five-month low. Union Pacific was the biggest drag on industrials, with railroads in the benchmark marking their steepest drop in almost two years. Health-care companies were the strongest group, led by Danaher Corp. as the medical- equipment maker rose the most since last October after boosting its full-year profit forecast.
     Despite the pullback in stocks, the CBOE Volatility Index fell for a third day, the longest stretch in two months. The measure of market turbulence sank 4.6 percent to 13.75, the lowest since October 10.

Have a wonderful evening everyone.

 

Be magnificent!

Man must understand that when he cuts himself off from all stimulating and purifying contact with infinity,
and no longer relies on it for his subsistence and his health, he risks madness;
he tears himself asunder, and divorces himself from his very substance.
Rabindranath Tagore

As ever,

 

Carolann

 

What lies behind us and what lies before us are tiny matters,
compared to what lies within us.
                                 -Ralph Waldo Emerson, 1803-1882

 

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

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com

Dear Friends,

Tangents:

Today is Sukkoth, the Hebrew name for the Feast of the Tabernacle.  The Tabernacle (from the Latin tabernaculum, meaning tent) refers to the portable shrine instituted by Moses during the wanderings of the Jews in the wilderness.  It was divided by a veil or hanging, behind which, in the Holy of Holies (the innermost apartment of the Jewish temple, in which the Ark of the Covenant was kept and into which only the High Priest was allowed to enter and even then only once a year on the Day of Atonement) was the Ark of the Covenant.  The outer division was called the Holy Place.  When set up in camp, the whole was surrounded by an enclosure (Exodus 25-31, 33:7-10).

I AM
two of the most powerful words.  For what you put after them shapes your reality.
PHOTOS OF THE DAY

A Jewish man uses his mobile phone to record worshippers who are covered in prayer shawls as they recite the priestly blessing at the Western Wall in Jerusalem’s Old City during the Jewish holiday of Sukkot on Wednesday. Baz Ratner/Reuters

Bulldog Rosie sits under the desk of her owner, Barbara Goldberg, CEO of O’Connell & Goldberg Public Relations, at her office in Hollywood, Fla., on Tuesday. Goldberg is a small business owner who believes pets improve the quality of their work life, boosting morale and easing tension for staffers.Lynne Sladky/AP
Market Closes for October 19^th, 2016

Market Index	Close	Change
Dow Jones	18202.62	+40.68   +0.22%
S&P 500	2144.29	+4.69   +0.22%
NASDAQ	5246.410	+2.574   +0.05%
TSX	14840.49	+88.25
		+0.60%

International Markets

Market Index	Close	Change
NIKKEI	16998.91	+35.30
		+0.21%
HANG SENG	23304.97	-89.42
		-0.38%
SENSEX	27984.37	-66.51
		-0.24%
FTSE 100	7021.92	+21.86
		+0.31%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.194	1.196
CND. 30 Year Bond	1.845	1.836
U.S.    10 Year Bond	1.7450	1.7432
U.S. 30 Year Bond	2.5077	2.5061

Currencies

BOC Close	Today	Previous
Canadian $	0.76246	0.76279
US $	1.31154	1.31097
Euro Rate 1 Euro=		Inverse
Canadian $	1.43912	0.69487
US $	1.09727	0.91135

Commodities

Gold	Close	Previous
London Gold Fix	1269.05	1258.20
Oil	Close	Previous
WTI Crude Future	51.60	50.29

Market Commentary:

NUMBER OF THE DAY
$100 million 

The approximate amount that one junk-bond trader at Goldman Sachs earned in trading profits for the bank earlier this year, an unusual gain at a time when new regulations have forced Wall Street to take fewer risks. Goldman reported surprisingly strong earnings Tuesday as revenue surged in the third quarter. 

Canada
By John Hyland and Eric Lam
     (Bloomberg) — Canadian stocks jumped to a 15-month high as the nation’s resource-rich equity index advanced with oil and gold prices. Shares also got a boost from the prospect for additional stimulus as the Bank of Canada dimmed its outlook for the domestic economy.
     The S&P/TSX Composite Index rose 0.6 percent to 14,840.49 at 4 p.m. in Toronto, as a third day of gains pushed its advance in October to 0.8 percent. The Canadian equity benchmark is up 14 percent this year amid rallies in miners and energy producers that make up one-third of the index, making it the top performing developed equity market in the world ahead of the U.K. and New Zealand.
     “You’ve got oil and gold up, that’s really fueling Toronto right now,” said Norman Levine, a fund manager with Portfolio Management Corp. in Toronto. The firm manages about C$550 million and has recently begun positioning its portfolios for a higher interest rate environment and stimulative infrastructure spending in Canada, including adding a position in Edmonton engineering firm Stantec Inc., Levine said.
     Raw-materials and energy producers paced gains Wednesday, jumping at least 1.3 percent as crude prices surged to the highest levels in 15 months. Crude has rallied as OPEC members look set to enact a production cut that would reduce supply. Oil got a boost Wednesday amid a decline in U.S. stockpiles, according to weekly industry data that showed inventories dropped by 3.8 million barrels.
     Raw-materials producers surged as gold advanced to its highest in two weeks. The metal’s appeal improved as the dollar weakened amid speculation the Federal Reserve will gradually tighten monetary policy. Gold had its first back-to-back gains in almost a month on Tuesday. Barrick Gold Corp. soared 7.5 percent for the biggest gain in a month.
     While the Fed considers the timing for higher interest rates, the Bank of Canada maintained its benchmark lending rate and reduced the nation’s growth profile on weakness in exports and new housing rules. Governor Stephen Poloz said the central bank “actively” discussed the possibility of adding more stimulus to jump-start the economy. However, the increased amount of uncertainty stayed his hand.
     While the prospect for more stimulus would underpin Canadian equity gains because lower rates would boost the economy, adding to corporate profits, tighter monetary policy in the U.S. would signal growth there, bolstering prospects for Canada’s exporters Levine said. America is Canada’s largest trading partner.
     “As the U.S. economy improves the Canadian economy will improve,” he said. “You’d be surprised how soon we will raise rates. We will eventually follow what the Fed does because our countries are so tied.”
     Corporate results continue to show a mixed picture for the nation’s largest companies. Canadian Pacific Railway declined 1.87 percent as it reduced its full-year profit target amid a 9 percent revenue decline. Canada’s second-largest railroad has reduced staff and parked locomotives amid falling revenue.
     Canadian stock valuations are 17 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.6 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.

US
By Oliver Renick and Rebecca Spalding
     (Bloomberg) — When stock investors and currency traders look out upon the world, they see two very different things.
     In the equity market, things are calm. The S&P 500 Index is alternating between small up-and-down moves day after day, and the benchmark gauge for price turbulence sits 20 percent below its historical average. At the same time in currencies, where volatility came close to doubling in 2014 as the dollar rallied, anxiety is refusing to abate.
     How big is the disparity? Stock angst as measured by the CBOE Volatility Index is sitting near a record low relative to a basket of seven developed-world currencies, according to one measure of options prices. The ratio of three-month implied volatility in the S&P 500 is 1.4 times that of the average currency reading, a lower level than about 88 percent of the time in the last 10 years, data compiled by Bloomberg show.
     The S&P 500 climbed 0.2 percent to 2,144.29 at 4 p.m. Wednesday, capping its first back-to-back gains in two weeks, bolstered by better-than-forecast earnings and a rally in crude oil. The gauge closed above its average price during the past 100 days for the first time in seven sessions.
     The co-head of equities at Cantor Fitzgerald says something has to give.
     “Historically, a basket of currencies in the big markets can be more sensitive to where there is outlying volatility that just looking at equity vol may not make you aware of — so to some extent, volatility in the currency market portends volatility in the equity market,” New York-based Peter Cecchini said in an interview. “As the dollar continues to strengthen that could mean outflows from emerging markets and the catalyst may well be a rate hike in December.”
     Volatility in currency markets, though less than in the aftermath of the U.K.’s Brexit vote, is 79 percent higher than in the middle of 2014, when the U.S. dollar began a 25 percent rally through January of this year.
     Currency swings have come in tandem with some of the biggest selloffs in the U.S. equity market in the past two years. The S&P 500 dipped 5 percent in the two days following Brexit as the pound plunged the most ever, and stocks dropped as much as 10 percent in August 2015 on the heels of a surprise devaluation of the Chinese yuan. 
     While China has steadily weakened the yuan since then, currency swings in 2016 have become more prominent in the pound, yen and the Canadian dollar. Three-month volatility in the pound remains near the highest since the financial crisis and the yen this year has twice touched levels unseen since 2013.
     Still, it’s been all quiet on the equity front. The same gauge of volatility for the S&P 500 is more than 8 percent lower than a month ago and 12 percent below its five-year average. A lack of high-yielding asset classes outside the U.S. stock market and persistently low interest rates set by the Fed may be suppressing volatility in stocks, Cecchini said. The measure of market turmoil known as the VIX fell 5.7 percent Wednesday.
     Energy producers jumped today as crude oil reached a 15- month high, helping to spur broader equity gains. Data showed stockpiles unexpectedly fell, boosting optimism that the drag on profits from oil and gas companies will abate. Banks advanced amid better-than-forecast earnings.
     After regular trading, American Express Co. raised its full-year profit forecast as quarterly results exceeded estimates, sending the shares up 5 percent as of 4:30 p.m. EBay Inc. dropped 8 percent after hours as its fourth-quarter earnings outlook disappointed.
     The Dow Jones Industrial Average climbed 40.68 points, or 0.2 percent, to 18,202.62. The Nasdaq Composite Index rose less than 0.1 percent, muted by Intel Corp.’s disappointing sales outlook which held back technology shares. About 6 billion shares traded hands on U.S. exchanges, 8 percent below the three-month average.
     “We did get a number of earnings so that will continue to be the focus,” said Yousef Abbasi, a global market strategist at JonesTrading Institutional Services LLC. “We could have some momentum behind financials today. It has been a market that has lacked leadership to a certain extent, so we’re looking to financials and energy.”
     Morgan Stanley and Halliburton Co. climbed at least 1.8 percent on better-than-estimated results, while U.S. Bancorp advanced 1.3 percent after posting a profit that beat analysts’ expectations as revenue from loans and fee-based businesses increased. Intel dropped the most in nine months, while cigarette maker Reynolds American Inc. sank to the lowest since January after its profit missed predictions.
     Ahead of the third and final presidential debate, a Bloomberg Politics national poll showed a nine-point lead for Democratic nominee Hillary Clinton over Republican Donald Trump. A Trump could prompt declines in equities, Citigroup Inc. has said.
     Traders are betting it’s unlikely the Federal Reserve will raise rates at its November meeting just days before the vote, while they price in a 63 percent chance of a hike in December, down from 68 percent a week ago. With investors seeking clues on the trajectory of Fed rate increases, a report today showed new- home construction unexpectedly fell in September, while permits rose more than forecast. Separately, the Fed’s Beige Book survey of regional conditions showed a “mostly positive” outlook for the economy.
     With Wednesday’s advance, the S&P 500 further trimmed its third consecutive monthly decline — and its first October slide since 2012 — to 1.1 percent. The benchmark closed today 2.1 percent below an all-time high reached in August.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Order is the very essence of the universe –
the order of birth and death and so on.  It is only man that seems to live in disorder, confusion.
He has lived that way since the world began.
Krishnamurti

As ever,

 

Carolann

 

Any human anywhere will blossom in a hundred unexpected talents and capacities
simply be being given the opportunity to do so.
    -Doris Lessing, 1919-2013
(British novelist born in Persia)

 

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

Tel: 778.430.5808
(C): 250.881.0801
Toll Free: 1.877.430.5895
Fax: 778.430.5828
www.carolannsteinhoff.com

Dear Friends,

Tangents:

On this day in 1977, New York Yankee Reggie Jackson hit three home runs to lead the Yankees to an 8-4 victory over the Los Angeles Dodgers in the deciding Game 6 of the World Series.

October
    -by Robert Frost

O hushed October morning mild,
Thy leaves have ripened to the fall;
Tomorrow’s wind, if it be wild,
Should waste them all.
The crows above the forest call;
Tomorrow they may form and go.
O hushed October morning mild,
Begin the hours of this day slow,
Make the day seem to us less brief.
Hearts not averse to being beguiled,
Beguile us in the way you know.
Release one leaf at break of day;
At noon release another leaf;
One from our trees, one far away.
Retard the sun with gentle mist;
Enchant the land with amethyst.
Slow, slow!
For the grapes’ sake, if they were all,
Whose leaves already are burnt with frost,
Whose clustered fruit must else be lost—
For the grapes’ sake along the wall.

PHOTOS OF THE DAY

A stroller walks along linden trees through early morning mist at the Georgengarten in Hannover, northern Germany, on Tuesday. Holger Hollemann/dpa/AP

Light filters through colored leaves as autumn weather arrives in Europe in Orvault, western France, on Tuesday. Stephane Mahe/Reuters

People riding water-powered jet boards perform in Yixing, Jiangsu province, China, on Monday. Reuters
Market Closes for October 18^th, 2016

MarketIndex	Close	Change
DowJones	18161.94	+75.54  +0.42%
S&P 500	2139.60	+13.10  +0.62%
NASDAQ	5243.836	+44.013  +0.85%
TSX	14752.25	+155.73
		+1.07%

International Markets

MarketIndex	Close	Change
NIKKEI	16963.61	+63.49
		+0.38%
HANGSENG	23394.39	+356.85
		+1.55%
SENSEX	28050.88	+520.91
		+1.89%
FTSE 100	7000.06	+52.51
		+0.76%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.196	1.221
CND.30 Year Bond	1.836	1.846
U.S.   10 Year Bond	1.7432	1.7660
U.S.30 Year Bond	2.5061	2.5216

Currencies

BOC Close	Today	Previous
Canadian $	0.76279	0.76138
US$	1.31097	1.31340
Euro Rate1 Euro=		Inverse
Canadian $	1.43937	0.69475
US$	1.09794	0.91080

Commodities

Gold	Close	Previous
London GoldFix	1258.20	1254.80
Oil	Close	Previous
WTI Crude Future	50.29	49.94

Market Commentary:
Canada
By John Hyland
     (Bloomberg) — Canadian stocks rose with other global financial markets Tuesday, buoyed by positive earnings reports from some key multinational companies and signs that the U.S., the world’s largest economy, is strong enough to withstand a gradual pace of monetary tightening.
     The S&P/TSX Composite Index rose 1.1 percent to 14,752.25 at 4 p.m. in Toronto, its highest level this month. The index shrugged off last week’s declines amid better than expected results from Goldman Sachs Group Inc. and Johnson & Johnson. The Canadian equity benchmark is up 13 percent this year, making it the top performing developed equity market in the world, ahead of the U.K. and New Zealand.
     All but one of the 11 industries in the index edged higher, led by a 3.3 percent gain for raw-materials producers. Gold had its first back-to-back gains in almost a month as the dollar weakened amid interest rate speculation. Gold and silver are poised to climb by the time of the London Bullion Market Association Conference in October 2017, according to a survey of people attending this year’s gathering, which ends Tuesday. Barrick Gold Corp. and Goldcorp Inc. gained at least 2 percent to reach their highest level in two weeks. Silver Wheaton Corp. gained 3.9 percent, hitting a two week high.
     Energy producers, Canada’s second largest sector, climbed 0.9 percent to the highest level since June 2015, on a rise in oil. Crude edged above $50 where prices have been hovering since OPEC’s decision to cut output last month. The S&P/TSX Energy index is 26 percent higher this year.
     Financial services, which account for a third of the S&P/TSX Composite Index, gained 0.8 percent to the highest level since November 2014. The Royal Bank of Canada and Toronto-Dominion Bank climbed more than 0.8 percent, reaching record highs. Bank of Canada Governor Stephen Poloz may push back his prediction for the economy to reach full output next year and keep interest rates unchanged at an interest-rate decision Wednesday.
     Valeant gained 3.2 percent, rebounding from an earlier decline after the drug maker cut ties with a mail-order pharmacy that helped sell an antidepressant it had acquired and raised prices on. The company slumped 3.6 percent on Monday to the lowest level in more than two months, after Imprimis Pharmaceuticals Inc. announced it was making a cheaper lead poisoning treatment available.
     Canadian stock valuations remain 16 percent higher than their U.S. peers, with the S&P/TSX carrying a price-earnings ratio of 23.6 compared with 20.2 for the the S&P 500 Index, according to data compiled by Bloomberg.
     Amaya Inc., a Canadian online gambling company, ended merger discussions with London-based William Hill Plc, thwarting one of the biggest possible deals in the betting industry, after William Hill’s largest investor, Parvus Asset Management, opposed the union. Amaya shares declined 8.3 percent to the lowest level since June.

US
By Rita Nazareth, Lananh Nguyen and Lukanyo Mnyanda
     (Bloomberg) — Stocks rallied around the world, while the dollar fell amid speculation the Federal Reserve will stick to a gradual tightening of monetary policy.
     Equities jumped the most in almost four weeks as investors parsed earnings reports and energy shares rebounded. The greenback extended its retreat from a seven-month high as data showed consumer prices excluding food and fuel costs in the U.S. rose less than forecast. Oil rallied, closing above $50 a barrel in New York as investors mulled the likelihood of OPEC following through with the production cuts agreed on last month.
     Speculation is mounting that the Fed will boost interest rates in December but take a slow path when it comes to further increases amid mixed signals from the U.S. economy. While the cost of living rose at the fastest pace in five months in September, the increase in prices excluding volatile food and fuel costs trailed estimates, data Tuesday showed. Fed Chair Janet Yellen laid out arguments last week for remaining accommodative without excluding a 2016 hike, a move that would see U.S. policy further diverge from the approaches taken by central bankers from Japan to Europe.
     “With underlying inflation underwhelming, it’s catalyzed more profit-taking on the buck’s recent outperformance,” said Joe Manimbo, an analyst with Western Union Business Solutions, a unit of Western Union Co., in Washington. Yellen’s remarks last week underscored the likelihood of a “lethargic pace” of rate increases, he said.
     The MSCI All-Country World Index rose 0.9 percent as of 4:15 p.m. in New York, bringing its advance this year to 3.5 percent.
     The S&P 500 Index climbed 0.6 percent to 2,139.60, rising from a one-month low. Goldman Sachs Group Inc. gained 2.2 percent after posting a 47 percent increase in earnings, while Netflix Inc. surged 19 percent after reporting a jump in subscribers that alleviated concern about slowing growth. International Business Machines Corp. slipped the most since June after saying that profit margins shrank for the fourth quarter in a row.
     “We’ve been selling off for the better part of a week at this point, and earnings have been good enough to get us into this bounce,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee.
     While only 57 S&P 500 members have reported so far, 84 percent have posted earnings that exceeded analysts’ estimates, with expectations on sales beaten for 68 percent of companies, according to data compiled by Bloomberg.
     Banks in the Stoxx Europe 600 Index rallied ahead of the European Central Bank’s meeting on Thursday, with the regional benchmark adding 1.5 percent. Glencore Plc and Fresnillo Plc paced an advance in miners. Benchmark gauges in Hong Kong, India and the Philippines led gains in emerging-market equities.
     Index futures foreshadowed more gains in Asian equities, with index futures on Japan’s Nikkei 225 Stock Average up 0.6 percent in Chicago. Contracts on stock gauges in Australia, South Korea and China rose at least 0.1 percent.
     The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, fell 0.2 percent. The gauge touched its highest level since March last week.
     The dollar has weakened this year as ructions in global markets and uneven economic data deterred the Fed from tightening policy further.The losses had narrowed in recent weeks on odds the central bank is getting closer to a hike, prompting hedge funds and money managers to boost net bullish bets on the greenback. Futures pricing indicates a gradual pace of rate increases, with traders seeing a 63 percent odds of a move by December, down from 68 percent a week ago.
     “The market has clearly come to a stronger view that they’ll raise rates in December, but that has very little influence on where rates are perceived to go in the longer term,” said Adam Cole, head of global foreign-exchange strategy at Royal Bank of Canada in London.
     The pound advanced versus the dollar as signs of quickening inflation suggested the Bank of England may have limited scope to ease monetary policy further.
     West Texas Intermediate oil for November delivery advanced 0.7 percent Tuesday to settle at $50.29 a barrel on the New York Mercantile Exchange. Brent for December settlement climbed 16 cents to $51.68 a barrel on the London-based ICE Futures Europe exchange, leaving the global benchmark at a $1.06 premium to December WTI.
     Speculators have bolstered bullish oil bets since the OPEC accord was reached on Sept. 28 in Algiers, but fractures have emerged within the group that threaten to derail a final agreement on quotas, expected in Vienna on Nov. 30. U.S. crude inventories probably rose last week, reviving concern about oversupply, according to analysts surveyed by Bloomberg.
     “We’re waiting for new headlines,” said Rob Haworth, a senior investment strategist in Seattle at U.S. Bank Wealth Management, which oversees $133 billion of assets. “Maybe API, but for sure the EIA data will be market moving,” he said, referring to industry and government stockpiles data.
     “We’re looking for a rise in production and it will be interesting to see if production gains,” Haworth said.
     Industrial metals rebounded from their lowest point in almost four weeks as a surge in new credit in China pointed to stabilization in the economy of the world’s biggest commodities buyer. Nickel and tin climbed more than 1 percent.
     Treasuries gained after the weaker-than-expected core inflation reading. Yields on five-year notes fell to the lowest level in two weeks and a gauge of the U.S. yield curve steepened, with the gap between five- and 30-year rates near the widest since June, as shorter maturities outperformed longer- dated debt.
     The U.S. five-year bond yield declined three basis points, or 0.03 percentage point, to 1.23 percent, touching its lowest intraday level since Oct. 5, according to Bloomberg Bond Trader data. 
     Benchmark 10-year note yields fell three basis points as well, to 1.74 percent, while the gap between five- and 30-year debt expanded to about 1.28 percentage points. The 10-year break-even rate, a gauge of inflation expectations that measures the difference between yields on 10-year notes and similar- maturity Treasury Inflation Protected Securities, was about 1.68 percentage points.
     “CPI came out a little lower than expected on the core, which forces the curve to steepen,” said Charles Comiskey, head of Treasury trading in New York at Bank of Nova Scotia, one of 23 primary dealers that trade with the central bank. “The lower inflation report pushed the Fed back a little bit.”

 

Have a wonderful evening everyone.

 

Be magnificent!

Man has lost his inner perspective, he measures his greatness by his size
and not by his vital attachment to the infinite; he judges his activity by his own movement
and not by the serenity of perfection, not by the peace that exists in the starry vault,
in the rhythmic dance of incessant creation.
Rabindranath Tagore

As ever,

 

Carolann

 

The only real prison is fear, and the only real freedom
is freedom from fear.
                               -Aung San Suu Kyi, b. 1945.

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Portfolio Manager &
Senior Vice-President

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Just returned yesterday from New York where last week I attended the Buttonwood conference on fintech and the annual Barron’s conference on current successful investing strategies where many top money managers give their best investment ideas for the year ahead.   As expected the buzz was all about the election with everyone who spoke confirming their opinion that Hilary is going to win.  Of course all the market fluctuation that we, as investors, have had to bear since last September is due to uncertainty – first it was the uncertainty over Brexit, then Russia, Syria, and finally, the  US election.  One of the speakers began his presentation with addressing that uncertainty.  He said, “I’ve got some good news and some bad news.  The good news is that on November 8^th, one of the candidates is going to win the election.  The bad news is that on November 8^th, one of the candidates is going to win the election.”   Joking aside, most were optimistic that the economic recovery already underway in the US will continue.  However, growth will be slower than many forecasters anticipate.   

PHOTOS OF THE DAY

Italian artist Maurizio Cattelan poses with his creation ‘Him’ (2001) prior to the opening of the exhibition ‘Not Afraid of Love’ at the Hotel de la Monnaie in Paris on Monday. Philippe Wojazer/Reuters

The poppy sculpture ‘Weeping Window,’ a cascade of thousands of handmade ceramic poppies by artist Paul Cummins and designer Tom Piper, is on display at Caernarfon Castle, Wales, on Monday. Rebecca Naden/Reuters
Market Closes for October 17^th, 2016

Market Index	Close	Change
Dow Jones	18086.40	-51.98   -0.29%
S&P 500	2126.50	-6.48   -0.30%
NASDAQ	5199.824	-14.337   -0.27%
TSX	14596.52	+11.53
		+0.08%

International Markets

Market Index	Close	Change
NIKKEI	16900.12	+43.75
		+0.26%
HANG SENG	23037.54	-195.77
		-0.84%
SENSEX	27529.97	-143.63
		-0.52%
FTSE 100	6947.55	-66.00
		-0.94%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.221	1.250
CND. 30 Year Bond	1.846	1.870
U.S.    10 Year Bond	1.7660	1.7977
U.S. 30 Year Bond	2.5216	2.5583

Currencies

BOC Close	Today	Previous
Canadian $	0.76138	0.76113
US $	1.31340	1.31384
Euro Rate 1 Euro=		Inverse
Canadian $	1.44454	0.69226
US $	1.09985	0.90922

Commodities

Gold	Close	Previous
London Gold Fix	1254.80	1251.75
Oil	Close	Previous
WTI Crude Future	49.94	50.35

Market Commentary:
Canada
By John Hyland
     (Bloomberg) — Canadian stocks edged higher in light trading as investors assessed a batch of earnings reports, while Valeant Pharmaceuticals International Inc. slipped after a competitor released a cheaper treatment.
     The S&P/TSX Composite Index rose 0.1 percent to 14,596.52 at 4 p.m. in Toronto, rebounding from a 1.1 percent drop last week. Trading volume was 28 percent lower than the 30-day average. The index is up 12 percent this year, making it the top performing developed equity market in the world, ahead of New Zealand and the U.K.
     Five of the 11 industries in the Canadian equities benchmark edged higher, led by a 0.9 percent gain among raw- materials producers. Barrick Gold Corp. and Goldcorp Inc. gained at least 1.2 percent, rebounding from a rout last week as gold futures tumbled amid speculation that U.S. interest rates will soon rise, which curbs the appeal of the metals that don’t pay interest. There’s a 68 percent chance that the Federal Reserve will raise interest rates December, according to data compiled by Bloomberg.
     Financial services gained 0.1 percent, led by Royal Bank of Canada, which is trading at its highest level since December 2014. Toronto-Dominion Bank rose 0.3 percent to its highest level in more than a month.
     Energy producers fell less than 0.1 percent, as oil dropped to a one-week low after OPEC members added supply and U.S. producers increased drilling. The S&P/TSX Energy index remains 25 percent higher this year and near the highest level since June 2015.
     Health care dropped more than 2 percent, after the sector’s largest company, Valeant, slumped 3.6 percent to the lowest level in more than two months. Valeant declined after Imprimis Pharmaceuticals Inc. announced its availability of a cheaper lead poisoning treatment.
     Canadian stock valuations remain 16 percent higher than their U.S. peers, with the S&P/TSX carrying a price-to-earnings ratio of 23.3 compared with 20.1 for the S&P 500 Index, according to data compiled by Bloomberg.
     The telecommunications sector fell 0.3 percent, after Rogers Communications Inc. announced Guy Laurence resigned as president and chief executive officer. The company named former Telus Corp. Chief Executive Officer Joseph Natale to succeed Laurence. Rogers’ stock has gained 14 percent this year, compared with a 12 percent increase in the S&P/TSX Composite Index.

US
By Rita Nazareth
     (Bloomberg) — Treasuries rebounded from a four-month low, while the dollar retreated after mixed data on the world’s largest economy supported the case for monetary policy to remain accommodative. Oil declined.
     U.S. government bond yields dropped as the greenback retreated against most of its major peers after a measure of manufacturing in New York unexpectedly contracted, while national factory production grew for the third time in four months. Energy shares drove U.S. losses as investors assessed corporate earnings. Crude fell a second day as OPEC members added supply and American producers increased drilling, threatening to compound a global surplus.
     Traders are monitoring economic data and rhetoric from policy makers for clues as to the path of U.S. interest rates. The Federal Reserve Bank of New York said its Empire State index declined this month as analysts projected expansion, while data on U.S. manufacturers signaled recovery. Investors also weighed comments from Fed Vice Chairman Stanley Fischer Monday, who said that he sees limits to how far the central bank can pursue a strategy aimed at continuing to reduce unemployment.
     “People are trying to figure out what the Fed is going to do,” Thomas Garcia, head of equity trading at Thornburg Investment Management Inc. in Santa Fe, New Mexico, said by phone.
     Futures indicate a 66 percent probability the Fed will raise rates by its December meeting, up from around 50 percent as recently as Sept. 27, according to calculations by Bloomberg.
     Benchmark 10-year Treasury yields fell three basis points, or 0.03 percentage point, to 1.77 percent as of 5 p.m. in New York, according to Bloomberg Bond Trader data. The yield earlier touched 1.81 percent, its highest level since June.
     The rally comes following a tumble this month in longer- dated Treasuries. Steven Major, global head of fixed-income research at HSBC Holdings Plc, said the Fed’s policy-tightening pace is too slow for rates to climb meaningfully before the next economic downturn.
     “To me the structural story has not changed — we are talking about the debt overhang, demographics, productivity, excess savings — all the factors for the bond market,” Major said Monday in an interview with Bloomberg TV. “A year out, yields will be lower than they are now. Five years out, I doubt they’d be higher than this level.”
     The selloff in U.K. government bonds gathered pace as prospects of faster inflation gave investors another reason to pull back from a market hurt by the mounting economic and political cost of Brexit.
     The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, fell 0.3 percent after reaching its highest level in almost seven months on Oct. 13. The euro rose 0.3 percent to $1.10000 following its biggest weekly drop since November. The yen also advanced 0.3 percent, to 103.89 per dollar, after weakening 0.5 percent on Friday.
    “We’re looking at this as a short-term pullback after some of the big moves we’ve seen,” said Matt Weller, a senior market analyst at Faraday Research in Grand Rapids, Michigan.
     The pound remained near a three-decade low against the dollar, closing at $1.2181. Bank of England Deputy Governor Ben Broadbent said the currency’s slump since the U.K.’s vote to quit the European Union will help the economy overcome shocks from the decision.
     Elsewhere in the world, the rand led gains among major currencies after a group of senior South African business leaders publicly expressed support for Finance Minister Pravin Gordhan as he faces fraud charges.
     New Zealand’s dollar jumped early on Tuesday after data showed an unexpected increase in consumer prices.
     U.S. stocks slipped Monday, with energy producers falling 0.4 percent as a group as crude oil sank, while Amazon.com Inc. led retailers lower. Lenders retreated even as Bank of America Corp.’s quarterly results exceeded estimates.
     Netflix Inc. surged 20 percent after regular trading hours, as the online television service said it adding more subscribers than estimated in the third quarter. International Business Machines Corp. sank 2.7 percent in late trading after reaffirming its full-year view and despite reporting operating earnings that topped analysts’ forecasts.
     European stocks fell for the fourth time in five days on concern over the health of the global economy, even as speculation grew that inflation will quicken. All industry groups in the Stoxx Europe 600 Index slid, pushing the benchmark gauge down 0.7 percent. The MSCI Emerging Markets Index dropped 0.3 percent, paring its gains this year to 13 percent.
     In Asia, Japanese index futures foreshadowed a retreat, while contracts on stock gauges in Australia and Hong Kong advanced.
     West Texas Intermediate crude dropped 0.8 percent to $49.94 a barrel in New York, its lowest level since Oct. 7. Brent for December delivery fell 0.8 percent to $51.52 a barrel on the London-based ICE Futures Europe exchange, closing at a $1.15 premium to December WTI.
     Libya’s oil output expanded to 560,000 barrels a day, according to the National Oil Corp., up from 540,000 last week. Iran repeated plans to boost production to 4 million barrels a day. Nigeria aims to raise output by 400,000 barrels a day to2.2 million, Oil Minister Emmanuel Ibe Kachikwu said in New Delhi. Rigs targeting crude in the U.S. rose for a seventh week to the highest since February, Baker Hughes Inc. said.
     “There’s a growing recognition that OPEC will have a hard time getting their act together,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida.

 

Have a wonderful evening everyone.

 

Be magnificent!

Does a flower, full of beauty, light and loveliness say, ‘I am giving, helping, serving?’
It is!  And because it is not trying to do anything it covers the earth.
Krishnamurti

As ever,

 

Carolann

 

Light tomorrow with today.
-Elizabeth Barrett Browning, 1806-1861

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Portfolio Manager &
Senior Vice-President

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Schoolchildren from St Philip’s school in Salford wear masks depicting members of Britain’s royal family as they await the arrival of Prince William and his wife, Catherine, Duchess of Cambridge, at the National Football Museum in Manchester, England, on Friday. Phil Noble/Reuters

A competitor participates in a wingsuit flying contest in Zhangjiajie, Hunan Province, China, on Thursday. Reuters

A man rides his motorcycle at sunset in Nyaung Woon village, Kyauk-Se, Myanmar, on Friday. Aung Shine Oo/AP
Market Closes for October 14^th, 2016

Market Index	Close	Change
Dow Jones	18138.38	+39.44   +0.22%
S&P 500	2132.98	+0.43   +0.02%
NASDAQ	5214.160	+0.827   +0.02%
TSX	14584.99	-58.72
		-0.40%

International Markets

Market Index	Close	Change
NIKKEI	16856.37	+82.13
		+0.49%
HANG SENG	23233.31	+202.01
		+0.88%
SENSEX	27673.60	+30.49
		+0.11%
FTSE 100	7013.55	+35.81
		+0.51%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.250	1.196
CND. 30 Year Bond	1.870	1.831
U.S.    10 Year Bond	1.7977	1.7692
U.S. 30 Year Bond	2.5583	2.4991

Currencies

BOC Close	Today	Previous
Canadian $	0.76113	0.75350
US $	1.31384	1.32715
Euro Rate 1 Euro=		Inverse
Canadian $	1.44142	0.69376
US $	1.09711	0.91149

Commodities

Gold	Close	Previous
London Gold Fix	1251.75	1256.50
Oil	Close	Previous
WTI Crude Future	50.35	50.18

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks ended the day lower, paring a weekly advance as energy producers fell from the highest level in more than a year to offset an advance in the nation’s lenders amid promising results from U.S. banks.
     The S&P/TSX Composite Index slipped 0.4 percent to 14,584.99 at 4 p.m. in Toronto, erasing a climb of 0.6 percent. The index remained higher for the week, trimming its loss in October to 1 percent. It’s rallied 12 percent this year just behind New Zealand and the U.K., the three best performers among developed markets.
     Eight of the 11 industries in the benchmark for Canadian equity fell Friday, led by a 1.5 percent drop in raw-materials producers, as the price of gold held near the lowest in four months. Barrick Gold Corp. and Goldcorp Inc. retreated at least 2.6 percent. Gold in New York has tumbled 4.9 percent in October as a first-half resurgence has fizzled out on increasing speculation the Federal Reserve will raise interest rates in December. Gold is less attractive in an environment of higher rates as it doesn’t pay a yield.
     Energy producers lost 0.6 percent, reversing gains as an earlier increase in crude evaporated. Crude futures in New York lost 9 cents to close at $50.35 a barrel as the dollar rose as much as 0.4 percent against its peers, making commodities less attractive. The S&P/TSX Energy index remains 25 percent higher this year and near the highest level since June 2015.
     Commodities producers have powered gains in Canada this year, fueling a rebound in the wider gauge after a weak 2015 when the benchmark equity index posted its worst loss since the 2008 financial crisis. The S&P/TSX Materials Index is up 36 percent and set to halt its longest yearly losing streak since 1988. Energy producers are second.
     Canadian stock valuations remain 16 percent higher than their U.S. peers, with the S&P/TSX carrying a price-to-earnings ratio of 23.3 compared with 20.1 for the the S&P 500 Index, according to data compiled by Bloomberg.
     Teck Resources Ltd. climbed 3.1 percent after Dundee Securities analyst Joseph Gallucci raised his rating for the diversified mining company to a buy from neutral. The analyst also boosted Teck’s price target to C$31.50. Teck is the best- performing stock in the S&P/TSX this year, up more than four- fold amid a rebound in commodities prices.

US
By MARLEY JAY
     New York (AP) — U.S. stocks gave up large gains and finished barely higher Friday. Banks and technology companies traded higher, while stocks that pay large dividends fell thanks to a jump in bond yields.
     Stocks were on track for large gains early in the day as reports showed consumers in both the U.S. and China appeared to be spending more. Banks rose after JPMorgan Chase and Citigroup disclosed solid quarterly results. But the gains faded as the day wore on. Drug company stocks continued to fall and energy companies slipped.
     “The retail sales numbers on the surface looked pretty good but when you dig into them they were not that great,” said Mike Baele, managing director at U.S. Bank’s Private Client Reserve. “It seems like every good report we get, we get an offsetting weaker report.”
     The Dow Jones industrial average, which had jumped as much as 162 points in the morning, finished up 39.44 points, or 0.2 percent, at 18,138.38. The Standard & Poor’s 500 inched up 0.43 points to 2,132.98. The Nasdaq composite gained 0.83 points to 5,214.16.
     Goldman Sachs was responsible for most of the Dow’s gains. It rose $3.10, or 1.9 percent, to $170.52 after Britain’s High Court threw out a $1 billion lawsuit against the company. Libya’s sovereign wealth fund had accused Goldman Sachs of duping the fund into making risky deals.
     Bond prices fell. The yield on the 10-year Treasury note rose to 1.80 percent from 1.75 percent. Higher bond yields also help banks because they lead to higher interest rates on loans, and that allows banks to make bigger profits from lending.
     JPMorgan Chase and Citigroup reported results were better than investors expected. The reports may have raised investor hopes for companies that will report their results next week, like Morgan Stanley, Charles Schwab, and BlackRock.
     “It was a good kickoff to earnings season” for banks, said Baele. “It was actually some decent revenue as well with both investment banking and trading.”
     Rising bond yields attracted investors’ attention, and they sold utilities, real estate investment trusts, and other stocks that pay large dividends as a result. Those payments are more appealing to investors seeking income when bond yields are low. PG&E Corp. fell 57 cents to $59.80 and Duke Energy slid 73 cents to $77.21.
     The Commerce Department said retail sales bounced back in September as spending on restaurants, cars and gas improved. The agency also said business stockpiles and sales grew in August, which is a sign that economic growth could get stronger.
     Reports suggested consumers in China are starting to spend more, which helped technology companies recover some of Thursday’s losses. Microsoft climbed 50 cents to $57.42 while Intel rose 48 cents, or 1.3 percent, to $37.45 and Apple picked up 68 cents to $117.66.
     While retail spending rose, the Commerce Department’s report also showed that spending at department stores decreased in September as consumers continued to do more of their shopping online. Kohl’s lost $1.44, or 3.2 percent, to $43.68 and Macy’s fell $1.23, or 3.3 percent, to $35.57.
     Computer and printer maker HP said it will cut between 3,000 and 4,000 jobs over the next three years as demand for those products continues to fall. HP stock lost 67 cents, or 4.4 percent, to $14.48.
     Twitter fell 91 cents, or 5.1 percent, to $16.88 after Salesforce.com told the Financial Times it isn’t interested in buying the company. Twitter has lost 32 percent of its value since October 5th on reports that potential buyers were not going to make offers. Salesforce investors were not enthusiastic about the potential offer, and its stock jumped $3.64, or 5.2 percent, to $74.27.
     U.S. crude oil gave up 9 cents to $50.35 a barrel in New York. Brent crude, the international standard, fell 8 cents to $51.95 a barrel in London. That sent energy companies lower.
     Health care stocks, which are by far the worst-performing industry on the S&P 500 this year, continued to slip. EpiPen maker Mylan lost $1.39, or 3.7 percent, and closed at a three- year low of $36.49. Cancer drug maker Celgene sank $2.13, or 2.1 percent, to $98.50.
     In other energy trading, wholesale gasoline added 1 cent to $1.49 a gallon. Heating oil lost 1 cent to $1.57 a gallon. Natural gas slumped 6 cents, or 1.7 percent, to $3.29 per 1,000 cubic feet.
     The price of gold fell $2.10 to $1,255.50 an ounce. Silver lost 2 cents to $17.44 an ounce. Copper slipped 1 cent to $2.11 a pound.
     The dollar rose to 104.18 yen from 103.60 yen. The euro rose to $1.0983 from $1.1053.
     France’s CAC 40 jumped 1.5 percent and Germany’s DAX rose 1.6 percent. In Britain the FTSE 100 advanced 0.5 percent. Japan’s benchmark Nikkei 225 index added 0.5 percent and South Korea’s Kospi advanced 0.4 percent. Hong Kong’s Hang Seng added 0.9 percent. Thailand’s SET index climbed 4.7 percent in the second day of trading after the death of Thailand’s king. The SET fell 4 percent in September as investors worried about the monarch’s health and even with the rally Friday the index fell 1.8 percent this week.

Have a wonderful weekend everyone.

 

Be magnificent!
 

 “I never dreamed about success. I worked for it.” Estee Lauder

As ever,
 

Karen

 

“The purpose of human life is to serve, and to show compassion and the will to help others.” Albert Schweitzer

 

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM
Portfolio Manager &
Senior Vice-President

Queensbury Securities Inc.,
St. Andrew’s Square,
Suite 340A, 730 View St.,
Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Pilgrims pray at the Basilica of Our Lady of Aparecida, Brazil’s national saint, in the city of Aparecida, Sao Paulo state, Brazil, on Wednesday. Every year on this date, millions of Brazilian and foreign pilgrims visit the shrine and about 100,000 people usually attend services in Aparecida commemorating her. Roosevelt Cassio/Reuters

Queen Letizia of Spain looks through the window of a car after attending a military parade marking Spain’s National Day in Madrid on Wednesday. Juan Medina/Reuters
Market Closes for October 12^th, 2016

Market Index	Close	Change
Dow Jones	18144.20	+15.54   +0.09%
S&P 500	2139.18	+2.45   +0.11%
NASDAQ	5239.019	-7.769   -0.15%
TSX	14618.97	+69.37
		+0.48%

International Markets

Market Index	Close	Change
NIKKEI	16840.00	-184.76
		-1.09%
HANG SENG	23407.05	-142.47
		-0.60%
SENSEX	28082.34	+21.20
		+0.08%
FTSE 100	7024.01	-46.87
		-0.66%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.196	1.197
CND. 30 Year Bond	1.831	1.835
U.S.    10 Year Bond	1.7692	1.7638
U.S. 30 Year Bond	2.4991	2.5014

Currencies

BOC Close	Today	Previous
Canadian $	0.75350	0.75421
US $	1.32715	1.32589
Euro Rate 1 Euro=		Inverse
Canadian $	1.46149	0.68423
US $	1.10123	0.90808

Commodities

Gold	Close	Previous
London Gold Fix	1256.50	1253.45
Oil	Close	Previous
WTI Crude Future	50.18	50.79

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks halted three days of declines as miners rallied with groups that pay high dividends as the Federal Reserve’s latest meeting minutes showed officials continue to favor only gradual increases in U.S. interest rates.
     The S&P/TSX Composite Index rose 0.5 percent to 14,618.97 at 4 p.m. in Toronto. The gauge has retreated 0.7 percent so far in October after capping a third monthly gain. The index is up 12 percent this year, making it the third-best performing developed market equity index in the world just behind the U.K. and New Zealand.
     Nine of 11 industries in the benchmark for Canadian equity advanced Wednesday, led by a 1.9 percent climb among raw- materials producers. Real-estate, utilities and consumer-staples stocks rose at least 1 percent.
     Gold miners jumped as the price of the metal for immediate delivery added 0.2 percent in New York, holding near the lowest level in four months. Gold has fallen on speculation the Fed will raise rates this year. Officials at the September meeting said a “reasonable argument could be made either for an increase at this meeting or for waiting for some additional information on the labor market and inflation.”
     Traders have now priced in a 68 percent chance the Fed will increase interest rates in December, a modest increase from before the minutes were released, according to data compiled by Bloomberg. A gauge measuring the dollar against its major peers advanced a third day to trade at the highest in seven months. 
     Gold is less attractive in an environment of rising rates because it doesn’t pay a yield, while a firming greenback is generally negative for commodities priced in U.S. dollars.
     Oil and gas companies lost 0.1 percent, paring an earlier retreat, as crude fell 1.2 percent in New York, holding near $50 a barrel for a second day of losses. Crescent Point Energy Corp. and Husky Energy Inc. lost at least 2.6 percent.
     Enbridge Inc. added 1.1 percent, reversing an earlier decline. Protesters seeking to stop construction of an oil pipeline in North Dakota temporarily shut five pipelines. Protesters used bolt cutters to tamper with valves in an attempt to disrupt a pipeline in Minnesota, forcing Enbridge to shut two of its main lines as a precaution.
     Commodities producers remain the top-performing industries in Canada this year, fueling a rebound in the wider gauge after a weak 2015 when the benchmark equity gauge posted its worst loss since the 2008 financial crisis. The S&P/TSX Materials Index is up 38 percent and set to halt its longest yearly losing streak since 1988. Energy producers are second with a 25 percent gain.
     Canadian stock valuations remain 16 percent higher than their U.S. peers, with the S&P/TSX carrying a price-to-earnings ratio of 23.3 compared with 20.2 for the the S&P 500 Index, according to data compiled by Bloomberg.

US
By John Hyland and Anna-Louise Jackson
     (Bloomberg) — U.S. stocks extended gains after minutes from the Federal Reserve’s latest meeting showed officials were in no rush to raise interest rates as they wait for additional data on the strength of the labor market.
     The S&P 500 Index rose 0.3 percent to 2,143.69 at 2:22 p.m. in New York, near its average price during the past 100 days after the steepest selloff in four weeks took it below that closely watched level for the first time since June. The index extended gains following the Fed release as officials were seen debating the timing for higher rates amid data showing steady but slow improvement in the economy.
     “It was a little bit more balanced in the sense of more talking around the possibility of raising the rates,” said Melda Mergen, senior vice president and director of U.S. equities in Boston at Columbia Threadneedle Investments. “That being said, it’s pretty much offset with the factors like looking at the downside risk outside the U.S. and maybe the other things in the economy can give them a pause here.”
     Uncertainties over the economic outlook and the desire by the committee to assure that job growth remains strong are likely to delay another rate increase until December, federal funds futures traders are betting. Fed officials next meet Nov. 1-2, just before the U.S. election on Nov. 8.
At the September meeting, the Federal Open Market Committee left the benchmark lending rate unchanged, even as a majority of the 17 participants still forecast at least one hike this year. Officials debating the merits of raising interest rates last month described the decision as a close call, with several saying a rate hike was needed “relatively soon,” minutes of the September meeting showed.
     Equity investors are on edge after Alcoa Inc. yesterday dropped the most in seven years following results that missed analysts’ estimates. The release came as projections called for a sixth quarter of falling earnings for the S&P 500, while speculation intensified that the Fed will raise borrowing costs this year. The benchmark U.S. 10-year note yield rose to a four- month high Wednesday, while traders place the odds of a move in December at 67 percent, up from 50 percent two weeks ago.
     “The combination of bad out-the-gate earnings reports, rising sense of Fed raising rates, and bond yields going up is a tough combination for stocks,” said Jim Paulsen, chief investment strategist at Wells Capital Management, which manages about $350 billion. “The market is going to need a show of momentum economically and on earnings to handle higher yields.”
     Recent economic data beating forecasts and comments by Fed officials have fueled bets that the central bank is on a path to increase rates this year. Investors will watch reports on retail sales, consumer sentiment and producer prices due on Friday.
     “Some investors are a bit nervous,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “Hiking once is fine, but a series of increases could hurt the market. While good for banking, it means higher financing costs, which means lower profits for firms.”
     Railroad CSX Corp. will release earnings after Wednesday’s market close, while Delta Air Lines Inc., JPMorgan Chase & Co. and Citigroup Inc. are also among those scheduled to report this week. Analysts forecast a profit drop of 1.6 percent for S&P 500 companies in the third quarter.
     “The trend coming out of the industrials companies that reported is very weak, but we’re not seeing any indication that that’s bleeding outside of industrials,” said John Augustine, chief investment officer for Huntington Bank in Columbus, Ohio, which oversees more than $17 billion. “There’s still the potential for a 2 to 3 percent upside surprise overall to earnings estimates and that will end the profits recession.”
     After surging as much as 7.2 percent this year through a record in August, the S&P 500 has failed to push higher. On Tuesday, the gauge closed at an almost one-month low, while the CBOE Volatility Index surged 15 percent. The measure of expected stock-price swings added 3.3 percent on Wednesday.

 

Have a wonderful evening everyone.

 

Be magnificent!

“Start by doing what’s necessary; then do what’s possible; and suddenly you are doing the impossible.” Francis of Assisi

 

As ever,
 

Karen

 

“Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment.” Buddha

 

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