January 8, 2016 Newsletter

Dear Friends,

Tangents:

The Poem:  Poetry and walking each invite a kind of meditation,  In this poem, the contemplation of snowflakes – the precise seeing of the external landscape – gives way to the landscape of the speaker’s psyche. –Natasha Trethewey.

SNOWFLAKES

           By Jennifer Grotz

Yesterday they were denticulate as dandelion greens, they
locked together in spokes and fell so weightlessly

I thought of best friends holding hands.
And then of mating hawks that soar into the air to link their claws

and somersault down, separating just before they touch the ground.
Sometimes the snowflakes glitter, it’s more like tinkling

than snow, it never strikes, and I want to be struck, that is
I want to know what to do.  I begin enthusiastically.

I go in  a hurry, I fall pell-mell down a hill, like a ball of yarn’s
unraveling trajectory – down and away but also surprising ricochets

that only after seem foretold.  Yesterday I took  a walk because
I wanted to be struck, and what happened was

an accident: a downy clump floated precisely in my eye.
The lashes clutched it close, melting it against the eye’s hot surface.

And like the woman talking to herself in an empty church
eventually realizes she is praying.  I walked home with eyes that melted snow.

PHOTOS OF THE DAY

Vivienne Palmer takes Blue (l.) and Chiquita, both rescue dogs, for a walk in snowy Boulder, Colo., Friday morning. Paul Aiken/Daily Camera/AP

A rainbow glows behind a palm tree near Seal Beach Pier in Seal Beach, Calif., Thursday. Most of California saw sunny skies after days of powerful El Nino-driven storms drenched the region. Matt Masin/The Orange County Register/AP

The Flying Scotsman steam engine leaves East Lancashire Railway in Bury, Britain, Friday. The venerable engine, which has toured both the United States and Australia since it was retired from service, made a series of short test runs ahead of a program of heritage journeys this year on Britain’s main lines after a decade of restoration. It is one of the world’s most famous engines. Darren Staples/Reuters

Tourists walk on the beach in Nice, southeastern France, during high tide Friday. Temperatures in the area rose to 18 degrees Celsius (64 Fahrenheit.) Lionel Cironneau/AP

Market Closes for January 8^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks slid for an eighth day and posted the biggest weekly loss since August, as a decline in gold producers overshadowed labor market reports that exceeded expectations.

     The Standard & Poor’s/TSX Composite Index fell 2.76 points to 12,445.45 at 4 p.m. in Toronto, after earlier advancing as much as 0.8 percent. The gauge lost 4.3 percent in the first week of trading in 2016 and capped yesterday a 20 percent plunge from its September 2014 record, hitting a magnitude in declines commonly defined as a bear market. Canada is the second Group of 7 country to see its benchmark enter a bear market, after Germany’s DAX Index did in August.

     Employers in Canada added 22,800 jobs in December, almost three times the median projection by economists who saw an increase of 8,000 jobs, according to a Bloomberg survey. U.S. payrolls surged by 292,000, topping the highest forecast in a Bloomberg survey.

     Underlying concerns remain about the makeup of the gains in employment, Avery Shenfeld, chief economist at Canadian Imperial Bank of Commerce, wrote in a note to clients. Workers designated as employees by Statistics Canada fell by 17,500 while the self- employed category jumped 40,300. Full-time positions also fell, the data show.

     “A nice headline masking a continuing trend for weak hiring by private sector companies,” Shenfeld said. “All of the job growth was in Ontario, consistent with our view that Canada’s largest province is in reasonable shape.”

     The S&P/TSX Gold Index slipped 2.2 percent as the price of the metal, which rallied this week as investors sought a haven, fell 0.5 percent. Barrick Gold Corp. lost 3.4 percent.

     Canada’s resource-rich benchmark has been one of the worst- performing markets in the world in the past year, as oil prices in New York and London collapsed to decade lows. Valuations for Canadian stocks have tumbled about 15 percent to 19.2 times earnings, from a high of 22.7 in April.

     Even as crude extended losses to a 12-year low, Canadian energy producers added 1.1 percent, halting two days of declines.

     Global equity markets closed lower Friday after a chaotic week of trading in which China halted trading twice before suspending a new circuit-breaker system and lowered the reference rate for the yuan. A gauge of developed and emerging nation stocks fell, as the U.S. benchmark Standard & Poor’s 500 Index lost 1.1 percent in New York and posted its worst week since 2011

US

By Lu Wang, Anna-Louise Jackson and Oliver Renick

     (Bloomberg) — U.S. stocks tumbled in a late-afternoon selloff that sent major equity indexes to their worst weekly declines in more than four years, as investors found little relief in moves by China to restore calm to its sinking markets and data that showed resilience in the U.S labor market.

     Bank stocks led the late slide, with JPMorgan Chase & Co. and Citigroup Inc. falling at least 2.2 percent to cap the week with drops of nearly 11 percent. Energy shares in the Standard & Poor’s 500 Index lost 1.3 percent to press deeper into five-year lows. Seven of the benchmark’s 10 main industries sank more than 5.5 percent this week in the gauge’s worst five-day start to a year in data going back to 1928.

     The S&P 500 dropped 1.1 percent to 1,922.03 at 4 p.m. in New York, and fell 6 percent for the week. The Dow Jones Industrial Average sank 167.65 points, or 1 percent, to 16,346.45. The index lost more than 1,000 points this week in its worst opening five-days to a year ever. The Nasdaq Composite Index declined 1 percent, stretching its losing streak to seven days, the longest since 2011.

     “When investors saw there was no traction and the market was unable to hold rallies over several attempts throughout the day, it just became fear of going into the weekend,” said Gene Peroni, a fund manager at Advisors Asset Management Inc. in Conshohocken, Pennsylvania. “The market has just been so reactive to news, people will wait on the sidelines and see what the weekend brings. It has been a rough week.”

     A report today showed a 292,000 gain in jobs last month, exceeding the highest forecast in a Bloomberg survey, after a 252,000 increase in November that was stronger than previously estimated. The unemployment rate held at 5 percent, a seven-year low.

     Worries over contagion from China briefly lessened Friday after officials in the Asian nation set a higher yuan reference rate, suspended a controversial circuit breaker system that had halted stock trading twice since it was implemented at the start of the week and directed state-controlled funds to buy local shares. U.S. equities fluctuated near three-month lows for most of the session before selling accelerated in the final hour.

     The S&P 500 has fallen 7.3 percent since the Federal Reserve raised interest rates last month for the first time in nearly a decade. The central bank balked at boosting borrowing costs in September in part due to turbulence sparked by China’s August currency devaluation. The poor start to 2016 has left the benchmark index 9.8 percent below its all-time high set in May after coming within 1 percent of the record as recently as November. It’s 2.9 percent above the August bottom.

     “We’re still in a risk-off mentality,” said Mark Spellman, a fund manager who helps oversee more than $4 billion at Alpine Funds in Purchase, New York. “I think any kind of risk-on trade mentality that comes in is going to be short-lived until global economic growth improves.”                    

     Fed policy makers have emphasized that progress in economic data will guide their path for future rate increases, which they expect to be gradual. The employment report today showed the jobless rate held at 5 percent, while at the same time worker pay disappointed, rising less than forecast from a year earlier. The Fed is counting on tighter labor conditions to lead to a pickup in wages and inflation.

     Today’s data “is reflective of an underlying momentum that’s in fact accelerating, not decelerating,” said Dan Veru, who helps oversee $3.7 billion as chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management. “There is no wage inflation and there is no commodity inflation. When you have both of these factors, the Fed will be more motivated’’ to hold off raising rates, he said.

     After this week’s turbulence triggered by China, investors will begin to contend with another expected decline in corporate earnings as the reporting season begins. Alcoa Inc., JPMorgan Chase and Intel Corp. are scheduled to deliver results next week. Analysts forecast profits for S&P 500 members fell 6.7 percent last quarter.

     The Chicago Board Options Exchange Volatility Index rose 8.1 percent Friday to 27.01, after erasing an earlier 10 percent drop. The measure of market turbulence known as the VIX is at a three-month high and up 48 percent this month, which would be the most since August’s 135 percent jump. All of the S&P 500’s 10 main industries fell, with financial, health-care and energy shares losing more than 1.3 percent.                      

     Merck & Co. paced declines among health-care companies, losing 1.7 percent as the group fell for the sixth time in seven days and to their lowest level since Oct. 22. Mylan NV and Endo International Plc sank the most, down at least 4.2 percent. The Nasdaq Biotechnology Index declined 1.9 percent amid its longest losing streak in three months.

     Banks in the benchmark posted their worst week in more than four years, down 9.5 percent, while also in the midst of their longest stretch of declines since 2011. JPMorgan Chase, Citigroup Inc. and Bank of America Corp. all fell at least 9.6 percent this week.

     Gap Inc. plunged 14 percent today, its steepest since 2011, after December sales tumbled at its Old Navy chain. The retailer’s shares had rallied 5.7 percent yesterday before the report. Kohl’s Corp. and Nordstrom Inc. lost more than 4.6 percent.

     Teen-apparel seller American Eagle Outfitters Inc. dropped the most in more than five years, down almost 17 percent. Holiday sales missed analysts’ estimates, stoking concerns about a company that had been outshining the rest of its industry.

     Viacom Inc. jumped 5.4 percent, the most since August 2013, to lead a climb among media companies after the shares plunged 45 percent last year. A report said the company will allow investors in March to vote on whether to expand voting rights to all holders. CBS Corp. added 2.5 percent, its biggest gain in two months.

Have a wonderful weekend everyone.

Be magnificent!

When one lives with concepts one never learns.  The concepts become static.

You may change them but the very transformation of one concept to another is still static, is still fixed.

But to have the sensitivity to feel, seeing that life is not a movement of two separate activities,

the external and the inward, to see that it is one, to realize that the inter-relationship is this movement,

is this ebb and flow of sorrow and pleasure and joy and depression, loneliness and escape,

to perceive nonverbally this life as a whole, not fragmented, nor broken up, is to learn.

Krishnamurti

As ever,

Carolann

The harder the conflict, the more glorious the triumph.

                                    -Thomas Paine, 1737-1809

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