December 22, 2016 Newsletter

Dear Friends,

Tangents:

If you are depressed, you are living in the past.
If you are anxious, you are living in the future.
If you are at peace, you are living in the present.
                                                     -Lao Tzu

On Dec. 22, 1864, during the Civil War, Union Gen. William T. Sherman sent a message to President Lincoln from Georgia, saying, “I beg to present you as a Christmas gift the city of Savannah.”
PHOTOS OF THE DAY

People dine at the ‘Dinner in the Sky’ restaurant, overlooking the city center area with the Kuala Lumpur Tower lit up at left, in Malaysia on Thursday. The concept, used in countries around the world, consists of lifting patrons 150 feet high with a crane for a haute-cuisine meal. Lim Huey Teng/AP

Christmas lights illuminate the rue Royale in front of the Place de la Concorde, the Luxor Obelisk and the Dome des Invalides during the holiday season in Paris on Thursday. Charles Platiau/Reuters
Market Closes for December 22^nd, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Lu Wang
     (Bloomberg) — Canadian stocks advanced for a sixth day amid reports that showed retail sales beat estimates while inflation rate slowed more than expected.
     The S&P/TSX Composite Index added 0.2 percent to 15,335.23 at 4 p.m. in Toronto, extending a rally that has propelled the benchmark gauge toward its sixth straightly monthly advance. Energy shares paced the gain on higher crude prices, rising 0.7 percent, while technology and consumer discretionary stocks were the worst performers.
     The deceleration in inflation illustrates the weak demand that is still weighing on the economy more than two years after oil prices began to drop. Partly because of the family benefit payments that Prime Minister Justin Trudeau’s Liberal Party introduced this year to boost sluggish growth, retail sales rose for a third month in October.
     In other moves:
* Aurinia Pharmaceuticals Inc. plunged 20 percent after saying H.C. Wainwright & Co. and Cormark Securities agreed to buy $25 million of securities
* Guyana Goldfields Inc. jumped 10 percent. The company said Wednesday that it completed $160 million of debt refinancing with existing lenders
US
By Oliver Renick
     (Bloomberg) — U.S. stocks slid as the dollar pushed higher and Treasuries extended declines following the release of economic data that met or exceeded expectations.
     The S&P 500 Index slipped 0.2 percent to 2,261 at 4 p.m. in New York as the Dow Jones Industrial Average slid further away from the 20,000 level that has eluded it so far. The Nasdaq Composite Index and Russell 200 Index each lost 0.4 percent.
* In the S&P 500, 299 of 505 shares close lower
* Consumer discretionary shares drop 1%
* Financial shares down 0.3%; phone and energy stocks up at least 0.4%
* Russell 2000 index of small-caps down 0.9%
* VIX moves higher to 11.43 for first gain in six sessions
* Data:
** GDP rose at a 3.5% annualized rate in the three months ended in September, compared with a prior estimate of 3.2%
** Household purchases, which account for almost 70% of the economy, grew at a 3% annualized rate, stronger than the 2.8% pace previously estimated
** Initial jobless claims were higher than expected; 275k vs 257k
* Strategists on average expect the S&P 500 to end 2017 at 2,356, according to the mean of 15 estimates compiled by Bloomberg, implying a 4 percent gain from Wednesday’s close. The benchmark is poised for its first annual advance since 2014, up 11 percent.
By Rebecca Spalding:
     (Bloomberg) — The SPDR S&P Retail ETF dropped as much as 3.6 percent Thursday, the most since June, after Commerce Department data showed inflation-adjusted disposable income in November dropped for the first time in three years.
     Eight of the ten of the day’s worst performing stocks in the S&P 500 were retailers, including Bed Bath & Beyond, which lost as much 10.2 percent after reporting weaker than expected sales in the third quarter. The rout extended to both high- and low-end brands alike: Nordstrom and Dollar Tree each plunged over 5 percent for the day.
     Adding to retailers woes is likely uncertainty over the new administration’s tax policies for imported goods. House Republicans have proposed a “destination-based tax”, which would impose levies based on where a good ends up rather than where it was produced.
* Vitamin Shoppe Inc. fell as much as 6.7%, the most since Nov.; G-III Apparel Group fell as much as 7.7%, the most since Dec. 2
* Caleres Inc., Coach Inc., and Dillard’s Inc., each lost 4.4%, 4.0%, 7.3% respectively
By Jeremy Herron:
     (Bloomberg) — U.S. stocks retreated in thin trading, with benchmark indexes hovering below all-time highs ahead of the holidays, while Treasuries slipped after a flurry of data bolstered optimism in the American economy.
     The Dow Jones Industrial Average fell to 19,920 after climbing yesterday within 14 points of 20,000. The Bloomberg Dollar Spot Index resumed an advance, nearing the highest in more than a decade, while yields on 10-year government debt climbed to 2.55 percent. Gold slumped to $1,130 an ounce and crude prices settled a nickel short of $53 a barrel.
     Data on durable goods orders showing increased business activity may reinforce bets that Donald Trump’s fiscal stimulus plans will stoke growth. Speculation the President-elect will open the spigot of spending has sent the dollar to near a 14- year high against the euro and pushed the Dow Jones Industrial Average to almost 20,000 this week.
     “Going into next year, we are confident the dollar will continue to make headway. It will be the currency that appreciates in 2017, it’s just a question of how much,” said Andrew Milligan, head of global strategy at Standard Life Investments Ltd. in Edinburgh.
     Stocks
* The S&P 500 Index declined for a second day, losing 0.2 percent to 2,260.97 at 4 p.m. in New York. Trading volume was 30 percent below the 30-day average at this time of day.
* The Dow fell 0.1 percent as its push to 20,000 has stalled. The blue-chip index on Thursday came within 14 points of the round-number milestone before pulling back.
* Billionaire investor Carl Icahn said he was concerned about the U.S. stock market “in the short term” given its run-up following Trump’s win, adding that he increased his hedging in recent weeks. 
* Many investors are likely waiting until January to sell stocks in anticipation of lower taxes on those gains in 2017, Icahn said on CNBC.
* Orders for U.S. business equipment advanced more than forecast last month, while the final reading of third-quarter gross domestic product topped estimates.
* The Stoxx Europe 600 Index lost 0.2 percent, retreating from the year’s highest intraday level on Wednesday. The basic resource industry was the biggest decliner, down 1.3 percent.
     Bonds
* Treasuries fell, pushing the 10-year yield two basis points higher to 2.55 percent. The yield on two-year notes rose for the first time in five days.
* German bunds also declined, with the benchmark yield two basis points higher at 0.27 percent.
* U.S. mortgage rates rose, with the 30-year reaching the highest level since April 2014, after the Federal Reserve increased its benchmark lending rate.
     Commodities
* West Texas Intermediate crude oil rose 0.9 percent to settle at $52.95 a barrel as Iraq signaled that it would adhere to the OPEC production targets. WTI dropped 1.5 percent Wednesday after data showed U.S. crude stockpiles expanded for the first time in five weeks.
* Lead, zinc and nickel dropped at least 2 percent as data showed China stepping up production.
* Gold traded near the lowest level in more than 10 months as exchange-traded funds holding the metal saw a 29th day of contraction. Bullion for future delivery dropped 0.3 percent to $1,130 an ounce.
* EARNINGS:
** After market Thursday: Cintas Corp (CTAS)

Have a wonderful evening everyone.

Be magnificent!

Man has accepted conflict as an innate part of daily existence
because he has accepted competition, jealousy, greed, acquisitiveness and aggression
as a natural way of life.
Krishnamurti

As ever,

Carolann

Everything you’ve ever wanted is on the other side of fear.
                                         -George Addair, 1823-1899

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