December 12, 2016 Newsletter

Dear Friends,

Tangents:
1901 – December 12 – Communications – Italian scientist and engineer Guglielmo Marconi receives the first transatlantic radio message on Signal Hill, from 3,200 km away across the Atlantic Ocean from Poldhu, Cornwall; on December 16, he is officially notified by the Anglo-American Telegraph Company that it will take legal action against him unless he immediately ceases his wireless experiments and removes his equipment from Newfoundland. St. John’s, Newfoundland.

In his journal, Guglielmo Marconi describes the first transatlantic radio communication received by him in St John’s, Newfoundland from Poldhu in Cornwall, December 12^th,1901:

Shortly before midday I placed the single earphone to my ear and started listening.  The receiver on the table before me was very crude  – a few coils and condensers and a coherer – no valves, no amplifiers, not even a crystal.  But I was at last on the point of putting the correctness of all my beliefs to the test.  The answer came at 12:30 when I heard, faintly but distinctly, pip-pip-pop.  I handed the phone to Kemp: “Can you hear anything?” I asked.  “Yes, “ he said, “the letter S” – he could hear it.  I knew then that all my anticipations had been justified.  The electric waves sent out into space from Poldhu had traversed the Atlantic – the distance, enormous as it seemed then, of 1,700 miles – unimpeded by the curvature of the earth.  The result meant much more to me than the mere successful realization of an experiment….I now felt for the first time absolutely certain that the day would come when mankind would be able to send messages without wires not only across the Atlantic bit between the farthermost ends of t
he earth.
PHOTOS OF THE DAY

People enjoy a stroll on the ice of Lago Bianco on Monday, near Poschiavo, Switzerland. Gian Ehrenzeller/Keystone/AP

People tour a Christmas attraction featuring a display of more than 800,000 light bulbs in Universal Studios Singapore on Monday. Edgar Su/Reuters
Market Closes for December 12^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks fell for the first time in seven days, halting the longest streak of gains since March, as railway operators led industrial shares lower.
     The S&P/TSX Composite Index lost 0.2 percent to 15,287.70 at 4 p.m., pulling back from the highest level since May 2015. The benchmark gauge has risen almost 18 percent in 2016, the top performer among developed markets tracked by Bloomberg, ahead of No. 2 market Norway’s 15 percent advance.
     Canadian National Railway Co. lost 2.3 percent, the most in six weeks, after Roddy Boyd’s Southern Investigative Reporting Foundation mentioned the stock cautiously, discussing Ontario auditors’ accusations in November that Canadian National and competitor Canadian Pacific Railway Ltd. overcharged the province’s transit agency. The pair drove a 1.7 percent loss in industrial stocks.
     Canadian National said in an e-mailed statement that the report’s allegations are false and based on information from fired employees terminated for alleged fraud and subject to ongoing litigation.
     Energy producers added 0.4 percent, paring an earlier gain. Oil jumped to the highest price since July 2015 after Saudi Arabia signaled it’s ready to cut output more than earlier agreed and non-OPEC countries including Russia pledged to pump less next year. Canadian Natural Resources Ltd. and Cenovus Energy Inc. each rose at least 0.7 percent.
     Raw-materials producers are the top industry among 11 in the S&P/TSX this year with a 39 percent advance, followed by a 31 percent gain in energy shares, driven by rebounding gold and crude prices in 2016. Teck Resources Ltd., Canada’s largest diversified mining company, is up almost six-fold on a resurgence in commodities from metallurgical coal to zinc.
     In other moves:
* Open Text Corp. slipped 2 cents to the lowest level in a month after proposing an offering of shares to raise $500 million to finance a portion of the purchase price for its previously announced deal to buy Dell’s enterprise content business for $1.62 billion
* WestJet Airlines Ltd. added 1.8 percent to a two-month high after reporting a November load factor of 80 percent, up 1.4 percent from year-ago levels.
US
By Oliver Renick
     (Bloomberg) — U.S. stocks fell as financial shares dropped and a rally in energy companies faded after crude oil pared some gains on expectations for a supply cut.
     The S&P 500 Index slipped 0.1 percent to 2,259.96 at 4 pm. in New York, the first decline in seven sessions. The S&P 500 Index, Dow Jones Industrial Average and Russell 2000 Index all closed at records on Friday. The Dow Jones added 0.2 percent to 19,769.43 Monday.
* Financial stocks down 0.9 percent, weighed by 3.5 percent drop in Navient (NAVI) and declines of at least 2.6 percent in Ameriprise Financial (AMP) and People’s United Financial Inc.
(PBCT)
* Phone and utilities companies extend Friday’s rally with 10- year Treasury little changed as bond proxy stocks including REITs rallied after gaining last week
* Energy stocks up 1.4 percent after climbing as much as 2.5 percent, with all but 11 companies in 36-member index advancing
* Dow lifted by gains of at least 2.2 percent in Pfizer (PFE), Johnson & Johnson (JNJ), Exxon (XOM)
* Goldman Sachs basket of most-shorted companies lost 1.3 percent; up 15 percent since election
*       WTI futures up 2.6 percent after Saudi Arabia signaled it’s ready to cut output more than earlier agreed and non-OPEC countries including Russia pledged to pump less next year
*       The Shanghai Composite Index fell 2.5 percent, the most in six months
*       The U.S. is primed for a rate hike this week, with the Federal Reserve set to announce its decision on Wednesday
* EARNINGS:
** After market: VeriFone Systems Inc (PAY), Peregrine Pharmaceuticals Inc. (PPHM), Investors Real Estate Trust (IRET)
** After market Tuesday: ABM Industries Inc. (ABM), HEICO Corp.
(HEI), Nordson Corp. (NDSN)
By David Goodman and Jeremy Herron
     (Bloomberg) — Most U.S. stocks retreated as a rally that took crude oil to the highest price in 17 months eased, with the focus shifting to the Federal Reserve’s forthcoming policy meeting. Treasuries pared declines that pushed 10-year yields above 2.5 percent for the first time since 2014.
     While energy stocks jumped with utilities, losses in bank shares saw the S&P 500 Index slip in afternoon trading Monday. A gauge of small-cap companies retreated by more than 1 percent as benchmark indexes in the U.S. fell from record highs, even as blue-chip shares advanced. Oil climbed 2.6 percent, paring a rally that exceeded 5 percent on a deal to cut output between OPEC and other producers. Chinese shares sank the most since June amid concern the nation’s property market is in poised to decline. Gold increased.
     The oil deal lit a fire under crude prices, fueling an increase in investors’ expectations for global inflation and exacerbating a bond rout that had been supercharged by Donald Trump’s victory in the U.S. election. The prospect of increased price pressures is coloring the market’s outlook for central- bank policy, with traders seeing 100 percent odds of a rate hike from the Fed this week, and a two-in-three chance of additional policy tightening by June, according to Bloomberg calculations based on Fed fund futures.
     Stocks
* The S&P 500 Index fell 0.1 percent to 2,2256.96 as of 4 p.m. in New York, after rising 3.1 percent last week.
* The Dow Jones Industrial Average climbed 0.2 percent and briefly topped 19,800, while the Nasdaq 100 Index slumped 0.6 percent.
* The Stoxx Europe 600 Index fell 0.5 percent in the wake of its steepest weekly rally in almost two years. Still, commodity producers and miners gained, with the Stoxx 600 Oil & Gas Index up 2.2 percent.
* The MSCI Emerging Market Index dropped 0.5 percent for a second straight day of declines.
* Most Asian index futures signaled losses for Tuesday, with Nikkei 225 Stock Average futures down 0.8 percent in Osaka.

     Commodities
* West Texas Intermediate crude climbed to $52.83 a barrel after earlier climbing above $53. Brent oil futures added $1.36 to $55.69. Both contracts settled at their highest prices since July last year.
* The deal between OPEC members and outside nations, including Russia, was agreed at a meeting in Vienna at the weekend. It should usher in the first global petroleum cuts in 15 years and covers about 60 percent of the world’s output.
* Copper futures slumped 1.5 percent, erasing a gain of as much as 1.4 percent after data showed London Metal Exchange inventories rose the most since June.
* Gold futures rebounded after sliding to a 10-month low as the Fed prepares to raise rates, damping the metal’s appeal as a store of value.

     Bonds
* Ten-year Treasury yields rose as much as six basis points before paring the advance to be up one basis point at 2.48 percent.
* Hedge funds and other large speculators raised bearish bets on 10-year Treasuries to the highest level in almost two years last week, more than doubling them to a net 228,604 contracts, according to the latest Commodity Futures Trading Commission data.
* Germany’s yield curve, as measured by the spread between two- and 30-year bonds, reached its widest point since 2014, based on closing prices, while a similar gauge for Japan expanded for a fifth day.
* Ten-year U.K. bond yields climbed four basis points, or 0.04 percentage point, to 1.49 percent.

     Currencies
* Oil-exporting currencies lead gains against the dollar, with the Russian ruble gaining 2.4 percent and the Norwegian krone and Mexican peso advancing at least 0.8 percent
* The euro gained 0.7 percent to $1.0633, after dropping 1 percent last week.
* Japan’s yen gained 0.3 percent to 115 per dollar, halting a two-day retreat.

Have a wonderful evening everyone.

Be magnificent!                                                                                         

What we are about to undertake is an expedition together, a journey of discovery
into the most secret recesses of our consciousness.
And for such an adventure we must travel light, we cannot burden ourselves
with opinions, prejudices, conclusions that is, with all the baggage that we have collected
over the past two thousand years or more.  Forget everything you know about yourself;
forget everything that you have thought about yourself;
we are going to set off as if we know nothing.
Krishnamurti

As ever,

Carolann

We know what we are, but know not what we may be.
                                 -William Shakespeare, 1564-1616

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

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