December 4, 2015 Newsletter

Dear Friends,

Tangents:

Frank Sinatra was born on December 12^th, 1915, so next Saturday will mark 100 years since his birth.  The Wall Street Journal featured this article a few days ago.  I enjoyed it (a little nostalgia invoking) and thought you might too:

Still Attuned to Sinatra at 100

By James Kaplan

A friend of mine was flying back from Europe a few years ago and began talking with his seatmate, a gentleman who happened to be a Swedish opera singer. Somehow Frank Sinatra came up, and, as my friend told me, the singer suddenly turned very grave. “Ah,” he said. “That is a voice without equal.”

Something about Frank has sunk in deeply, from San Francisco to Stockholm. In his centennial year—he was born Dec. 12, 1915—Sinatra is much in the air, and with good reason. We celebrate his artistry, his matchless personal style, his undying charisma, his apparently inexhaustible effect on American culture.

One question I’m often asked as a Sinatra biographer is what surprised me most about my research. I usually have the feeling—Frank being Frank—that some juicy tidbit of gossip, heretofore unearthed, is what I’m being asked for. My answer probably lets people down: The most surprising thing I found out was how very hard he worked on his singing.

Though he dropped out at 16 from A.J. Demarest High School in Hoboken, N.J., Frank had a brilliant and inquisitive mind; he was verbally gifted, with an original way of expressing himself in the many notes and letters he wrote over the decades. For instance, in 1988Daniel Okrent wrote an Esquire essay praising Sinatra’s late-age durability. In response, the Chairman sent Mr. Okrent a graceful missive thanking him for helping to “explain me to me with a rose in your prose” and for applying his “X-ray word-processor to see so deeply into the heart and soul of this very lucky son of Hoboken who remains eternally overcome at God’s plan for his life.”

Sinatra was a self-educated man, a lifelong reader, mainly of biographies. When it came to popular songs, the lyrics mattered as much to him as the music, if not more. And as soon as he began singing professionally, he started a practice that he continued throughout his career.

“I take a sheet with just the lyrics. No music,” he once told the casino mogul Steve Wynn.“At that point, I’m looking at a poem. I’m trying to understand the point of view of the person behind the words. I want to understand his emotions. Then I start speaking, not singing, the words so I can experiment and get the right inflections. When I get with the orchestra, I sing the words without a microphone first, so I can adjust the way I’ve been practicing to the arrangement. I’m looking to fit the emotion behind the song that I’ve come up with to the music. Then it all comes together.”

Once he sang that number, on record or on stage, he inhabited that lyric, felt it so deeply that anyone listening felt it, too. Combine that with his genius ear and the phrasing he learned from Billie Holiday’s vocals and Tommy Dorsey’s trombone solos. The result is that Sinatra gives the eerie impression that he is thinking these thoughts, feeling these feelings, in the moment the listener is hearing about them. Nobody else quite manages to bring this off.

I’ve studied and written about Frank Sinatra for 10 years, and though I’ve sometimes disliked him, I’ve never been bored with him. His best singing—of which there is a very great deal—still gives me goosebumps, every time. I believe that we will still be celebrating Sinatra, and listening to him, next year, and the year after that, and (as the title of another of his numbers has it) a hundred years from today.

Mr. Kaplan is the author of “Sinatra: The Chairman,” just out from Doubleday.

PHOTOS OF THE DAY

A large flock of greater white-fronted geese, fly near a fishpond in the puszta or Hungarian steppe of Hortobagy, east of Budapest, Hungary, Friday. This species native in Russia, Greenland and North America is a regular guest of the Carpathian Basin, an important wintering area for it. Zsolt Czegledi/MTI/AP

Sunlight peaks through a gap in the clouds as a storm clears to the east of Spruce Mountain in the view overlooking Webb Lake, Friday, near Weld, Maine. Robert F. Bukaty/AP

A historical re-enactment enthusiast dressed as a soldier rests in a tree near the southern Moravian village of Herspice on Friday. Hundreds of history enthusiasts gathered near the city of Slavkov before a re-enactment of Napoleon’s famous battle of Austerlitz on Saturday to mark its 210th anniversary. David W Cerny/Reuters

Market Closes for December 4^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Dani Burger

     (Bloomberg) — Canadian stocks rose, trimming a weekly decline, as gold miners rallied with the price of the metal and banks advanced.

     Raw-material producers rose 3.2 percent as bullion surged the most since April on speculation the Federal Reserve will take a gradual approach when it begins raising interest rates. Energy companies fell 1.7 percent after OPEC signaled it will continue to produce 31.5 million barrels a day, according to a delegate with knowledge of the decision. That sent crude prices below $40 a barrel in New York.

     The Standard & Poor’s/TSX Composite Index added 34.10 points, or 0.3 percent, to 13,358.77 at 4 p.m. in Toronto. The gauge fell 0.1 percent in the week for a second straight decline.

     A Canadian labor market report showed employment fell more than economists forecast in November. Jobs dropped by 35,700 following a gain of 44,400 in October. That compares to a projected decrease of 10,000 jobs, according to economists surveyed by Bloomberg. The unemployment rate rose to 7.1 percent, Statistics Canada said Friday in Ottawa.

     Energy companies, which account for more than 18 percent of the nation’s benchmark index, have slumped 24 percent this year. Along with energy stocks, industrial companies also declined Friday. The group fell 1.2 percent, weighed down by railway companies.

     Canadian Pacific Railway Ltd. declined 4.1 percent. Norfolk Southern Corp. rejected the company’s $28 billion takeover, saying that even at a sweetened price, a deal would be unlikely to gain regulatory approval.

     Metals prices are recovering after the dollar weakened the most in almost nine months on Thursday. Silver Standard Resources Inc. gained 5.7 percent and Agnico Eagle Mines Ltd. rose 8.3 percent.

     Barrick surged to the highest level since July. The world’s largest producer of metal is extending a $4 billion revolver loan by a year and negotiated a covenant change, the company said in a statement Thursday.

US

By Joseph Ciolli and Dani Burger

     (Bloomberg) — U.S. stocks rallied, with the Standard & Poor’s 500 Index recovering from its steepest drop in two months amid its strongest gain in nearly three, as jobs data bolstered confidence that the economy is strong enough to withstand higher borrowing costs.

     Technology and financial shares paced Friday’s advance, with Apple Inc., Microsoft Corp. and JPMorgan Chase & Co. all rising more than 3.1 percent, to cap a whipsaw week of trading that drove the benchmark index to moves of more than 1 percent in four straight sessions.

     The S&P 500 climbed 2.1 percent to 2,091.69 at 4 p.m. in New York, its strongest gain since Sept. 8. The gauge posted its ninth weekly advance in the last 10. The Dow Jones Industrial Average gained 369.96 points, or 2.1 percent, to 17,847.63, erasing its weekly decline. The Nasdaq Composite Index added 2.1 percent. A measure of volatility plunged the most in two years. About 7.7 billion shares traded hands on U.S. exchanges, 8.7 percent above the three-month average.

     “This number plus last month’s report really wipes out the stench from the miss we saw in August and September,” Phil Orlando, who helps oversee $360 billion as chief equity-market strategist at Federated Investors Inc. in New York., said by phone. “This number ought to clinch it for the Fed in terms of liftoff in December. We should have a spike after yesterday’s overreaction on the euro and Draghi.”

     Stocks extended gains in afternoon trading after European Central Bank President Mario Draghi said the bank has the power to act to the extent it sees necessary to defend its inflation mandate, and is willing to use it. His comments came a day after the ECB unveiled stimulus measures that disappointed investors, sparking a selloff in Europe that spread to the U.S.

     Friday’s rally began after a report showed a larger-than- forecast 211,000 increase in November U.S. payrolls, following a 298,000 gain a month earlier that was bigger than previously estimated. The jobless rate held at 5 percent, a more than seven-year low.

     A healthy rate of hiring has raised the odds that Federal Reserve officials will boost rates this month for the first time since 2006. The pace of future increases is contingent on progress toward the central bank’s inflation goal and probably depends on how quickly wage pressures mount as the job market tightens.

     Today’s report was the last major jobs data before the Fed’s December policy meeting. In two separate speeches this week, Fed Chair Janet Yellen signaled the economy is ready for a rate increase as soon as this month and that she hopes to tighten monetary policy slowly. Traders are pricing in 76 percent odds of a liftoff.

     Philadelphia Fed President Patrick Harker said today the central bank should raise interest rates “sooner rather than later” to allow a gradual pace of future increases, in his first public comments on monetary policy since taking office.

     “The data implies an improving U.S. economy, which should provide a backdrop for the Fed to raise rates at their upcoming meeting,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “You’ll see the market react positively to this data. Expect to see strong performance from financial stocks today, as they’ll be the beneficiaries of a potential rate hike.”

     With Friday’s gains, the S&P 500 erased its weekly decline. A rally on Tuesday to kick off December sent the index to its highest level in almost a month, and within 1.4 percent of its record set in May. Since then, it’s down 0.5 percent, while still about 12 percent above its low in August.

     The Chicago Board Options Exchange Volatility Index fell 18 percent Friday to 14.81, its steepest drop in more than two years. The measure of market turbulence known as the VIX surged 14 percent on Thursday, the most in three weeks.                         

     Nine of the S&P 500’s 10 main groups rose today, with financial, telephone, technology and health-care companies gaining the most. All nine advancing industries climbed more than 1.4 percent.

     Financial companies in the S&P 500 added 2.7 percent, their biggest increase in more than three months, as investors speculated that banks will benefit from higher benchmark lending rates. Meanwhile, the 10-year U.S. Treasury note’s yield declined 1.8 percent, trimming a 6.1 percent surge yesterday. Charles Schwab Corp. increased 4.6 percent, while Morgan Stanley and Bank of America Corp. rose more than 2.5 percent.

     Consumer staples stocks climbed 2.3 percent, the most since Aug. 26. Mondelez International Inc. and Molson Coors Brewing Co. rose more than 3.4 percent. Procter & Gamble Co. added 2.8 percent, its best advance in six weeks.

     Newmont Mining Corp., the biggest U.S. gold producer, climbed 9.2 percent to post the strongest gain in the S&P 500 as gold prices jumped the most since April. The shares closed at the highest level since July. Alcoa Inc. advanced 3.9 percent and Dow Chemical Co. added 2.8 percent to pace raw materials’ 1.8 percent climb.

     Electronic Arts Inc. increased 4.7 percent, its biggest gain since Oct. 12, after the stock was raised to the equivalent of buy from neutral by Atlantic Equities. Dollar Tree Inc. climbed 4.3 percent to a three-month high after being raised to a “top pick” from outperform at RBC Capital Markets. Toymaker Mattel Inc. added 4.3 percent to its highest since July 15.

     The Bloomberg U.S. Airlines Index gained 3.9 percent, the most since Oct. 9, amid the slide in crude oil. Southwest Airlines Co. and Alaska Air Group Inc. climbed at least 4.4 percent to trade at all-time highs. All 11 companies in the gauge rose.

     The S&P 500 Energy Index slipped 0.5 percent. Oil producers in the group took a hit with crude falling 2.5 percent after OPEC decided to maintain production at current levels and refrained from setting an official output target. Consol Energy Inc. and Kinder Morgan Inc. slid more than 11 percent, while Southwestern Energy Co. lost 5.5 percent.

     NRG Energy Inc., the biggest independent U.S. power producer, fell for the third time in four days, taking its slide this week to 23 percent. The shares plunged 13 percent on Wednesday after announcing the sale of two power plants, and bounced 1.7 percent yesterday after saying Chief Executive David Crane was stepping down. The stock fell another 18 percent today, closing at an all-time low.

     Barnes & Noble Inc. dropped 17 percent to its lowest since February 2014. The bookseller posted a quarterly loss and weaker sales, hurt by sluggish online orders and a fast-declining Nook e-reader business.

Have a wonderful evening everyone.

Be magnificent!

Man cannot be broken down into emotions, intellect, or action.

Man is a whole.

When these three elements of intellect, feelings, and action are in harmony, they make up man.

Swami Prajnanpad

As ever,

Carolann

In order to succeed, we must first believe that we can.

                               -Nikos Kazantzakis, 1883-1957

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