November 10, 2015 Newsletter

Dear Friends,

Tangents:

On this day in 1983, Microsoft introduced Windows.

1925: Actor Richard Burton was born.

On Nov. 10, 1982, the newly finished Vietnam Veterans Memorial was opened to its first visitors in Washington, D.C.

1871: Stanley finds Livingstone.

November 10, 1872, in the New York Herald, H.M. Stanley describes the most famous meeting of his life the year before, on November 10^th, 1871:

Well, we are but a mile from Ujiji [on lake Tanganyika] now, and it is high time we should let them know a caravan is coming; so “Commence firing” is the word passed along the length of the column, and gladly do they begin.  They have loaded their muskets half full, and they roar like the broadside of a line-of-battle ship.  Down go the ramrods, sending huge charges home to the breech, and volley after volley is fired.   The flags are fluttered; the banner of America is in front, waving joyfully….near; and still the cannon muskets tell the noisy seconds…

  Suddenly a man – a  black man – at my elbow shouts in English, “How do you do, sir?”

  “Hello, who the deuce are you?”

  “I am the servant of Dr. Livingstone,” he says; and before I can ask any more questions he is running like a madman towards the town.

  We have at last entered the town.  There are hundreds of people around me – I might say thousands without exaggeration, it seems to me.  It is a grand triumphal procession.  As we move, they move.  All eyes are drawn towards us.  The expedition at last comes to a halt;  the journey is ended for a time; but I alone have a few more steps to make.

  There is a group of the most respectable Arabs, and as I come nearer I see the white face of an old man among them.  He has a cap with a gold band around it, his dress is a short jacket of red blanket cloth, and his pants – well, I didn’t observe.  I am shaking hands with him.  We raise our hats, and I say:

  “Dr. Livingstone, I presume?”

  And he says, “Yes.”
 

PHOTOS OF THE DAY

People rest on the promenade des Anglais in Nice, southeastern France, Tuesday. Lionel Cironneau/AP

A boy stands in between the garlands kept on sale along the streets of Kathmandu during the Tihar festival, also called Diwali, in Kathmandu, Nepal, Tuesday. Hindus all over Nepal are celebrating the Tihar festival during which they worship cows, which are considered a maternal figure, and other animals. Also known as the festival of lights, devotees also worship the goddess of wealth Laxmi by illuminating and decorating their homes using garlands, oil lamps, candles and colorful light bulbs. Navesh Chitrakar/Reuters

Market Closes for November 10^th, 2015

International Markets

Bonds

Currencies

Commodities

There’s a certain part of the contented majority who love anybody who is worth a billion dollars.  –John Kenneth Galbraith.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks slumped a fifth day, extending losses after reaching a month low, amid a resurgence in concern over slowing economic growth in China.

     China’s consumer-price index rose a slower-than-forecast 1.3 percent in October, the latest sign that consumer demand is weakening and the world’s second-biggest economy is slowing. The fresh data comes after an earlier report showed a slump in imports in China on weaker industrial demand for coal, iron and other commodities.

     The Standard & Poor’s/TSX Composite Index fell 70.99 points, or 0.5 percent, to 13,411.63 at 4 p.m. in Toronto. The index has lost 8.3 percent this year, trailing only Singapore and Greece among developed markets.

     Base metals and coal producer Teck Resources Ltd. dropped 3 percent and First Quantum Minerals Ltd. sank 6.6 percent as zinc traded at a six-year low, leading declines in industrial metals. Raw-materials producers lost 2.1 percent as a group, for the fourth decline in five sessions.

     Canadian equities have lagged most peers, led by declines in natural resource and health-care stocks, as the country’s resource-dominated market has been hampered by a slump in oil prices, slowing overseas growth and the prospect of an interest- rate hike from the Federal Reserve. China is Canada’s second- largest trading partner after the U.S.

     Amaya Inc., the online gambling purveyor, plunged a record 32 percent after cutting its revenue and earnings expectations for the year. The strengthening U.S. dollar, especially against the euro, has significantly crimped consumer purchasing power and curbed revenue, the company said.

     Intertape Polymer Group Inc. jumped 9.2 percent, the most since May. U.S. hedge funds FrontFour Capital Group and Zelman Capital are agitating for change at the company, urging the board to consider ways to unlock value including a possible sale of the Quebec-based packaging company.

     Valeant Pharmaceuticals International Inc. slipped 2.2 percent. The drugmaker said in a conference call Tuesday that the decision to cut ties with pharmacy Philidor Rx Services would meaningfully affect its dermatology business. Valeant will also host an investor day and update financial forecasts before the end of the year. Valeant has lost 68 percent from an Aug. 5 high amid pressure over how it prices its drugs.

US

By Kate Garber

     (Bloomberg) — U.S. stocks were little changed, with the Standard & Poor’s 500 Index ending a four-day losing streak, as investors weighed the extent of the autumn rally in equities and the odds of higher interest rates in December.

     Health-care and consumer shares bounced after equities’ steepest decline in six weeks, offsetting a slide in Apple Inc. that weighed on the technology group and a retreat among raw- materials shares amid fresh signs of weakness in China.

     The S&P 500 rose 0.2 percent to 2,081.72 at 4 p.m. in New York, erasing an earlier drop of as much as 0.4 percent. The Dow Jones Industrial Average gained 27.73 points, or 0.2 percent, to 17,758.21. The Nasdaq Composite Index fell 0.2 percent as declines of more than 1.2 percent in Apple and Microsoft Corp. weighed.

     “It feels like a little bit of a breather here,” said Jeff Carbone, who oversees about $1.1 billion as the founder of Cornerstone Financial Partners in Charlotte, North Carolina. “Earnings season is 95 percent through. Now it’s going to be what else can we look for to keep this market moving forward? The key economic data is going to be watching the consumer.”

     The benchmark gauge slid the most since September yesterday, after six straight weeks of gains took it within 1 percent of a record reached in May. The S&P 500 had risen as much as 13 percent from an August low following its first correction in four years. The rally stalled last week after Federal Reserve Chair Janet Yellen said a December rate increase was a “live possibility,” and the October jobs report was stronger than expected. Traders now price in a 66 percent chance of a liftoff next month, up from about 50 percent a week ago.

     With the earnings season drawing to an end, economic data will move to the forefront as policy makers assess whether to raise rates next month. Readings on the health of consumers are due later this week, with October retail sales and consumer sentiment both forecast to rise, according to economists surveyed by Bloomberg. A gauge on wholesale prices is also expected to strengthen.

     Analysts now project profits for S&P 500 companies dropped 3.8 percent in the third quarter, improved from calls for a 7.2 percent decline at the start of the season. Of those index members that have reported, 74 percent beat profit projections, while 56 percent missed sales estimates.

     The Chicago Board Options Exchange Volatility Index declined 7.5 percent Tuesday to 15.29. The measure of market turbulence known as the VIX jumped 15 percent yesterday, the most since Sept. 28, and is up 1.5 percent this month after falling the most ever in October.

     Among the S&P 500’s 10 main industries, raw-materials and technology were the worst performers, while consumer discretionary, utilities and health-care shares rose the most. Miner Freeport-McMoRan Inc. fell 6.3 percent to its lowest in more than a month as copper dropped after weaker-than-expected inflation data in China. Alcoa Inc. lost 3 percent to a more than two-month low.

     D.R. Horton Inc. rose 8.3 percent, the most since April 2014 to lead an S&P gauge of homebuilders to its best gain in nine months. PulteGroup Inc. and Lennar Corp. added more than 3.3 percent.

     Beverage makers led gains among consumer staples companies. Constellation Brands Inc. and Molson Coors Brewing Co. increased more than 1.1 percent. Coca-Cola Enterprises Inc. and Dr. Pepper Snapple Group Inc. advanced at least 1.4 percent.

     Four Corners Property Trust Inc. climbed 5.9 percent, the second-strongest gain among consumer discretionary shares in the S&P 500. Darden Restaurants Inc. completed the spinoff of its selected real-estate assets, with Four Corners becoming an independent company.

     Chipotle Mexican Grill Inc. gained 3.2 percent, the most since July, as it prepares to reopen 43 restaurants in the Pacific Northwest that have been closed for more than a week after an E. coli outbreak sickened dozens of customers.

     Discovery Communications Inc. climbed 3.7 percent. Discovery and Liberty Global Plc will take a combined 6.8 percent stake in Lions Gate Entertainment Corp., deepening the studio’s ties to cable billionaire John Malone. Lions Gate increased 4.1 percent, the most in three months. CBS Corp. and 21st Century Fox Inc. added more than 2 percent.

     Hard-drive makers Seagate Technology Plc and Western Digital Corp. declined at least 4.5 percent, along with Apple’s 3.2 percent slide to pace the retreat among technology companies. Credit Suisse Group AG said in a research report its checks indicate that Apple seems to have lowered component orders by as much as 10 percent, driven by weak demand for iPhone 6s.

     Apple supplier Cirrus Logic Inc. dropped 8.6 percent. Chipmakers Qorvo Inc. and Avago Technologies Ltd. lost more than 3.3 percent, while the Philadelphia Stock Exchange Semiconductor Index decreased 1.8 percent.

     Rockwell Automation Inc. fell 3.4 percent, the most in two months, after the industrial equipment and software provider warned of declining earnings and sales in 2016 amid weak industrial market conditions and a stronger dollar.

     Anadarko Petroleum Corp. lost 6.6 percent, the most since January. Anadarko approached Apache Corp. about a combination that would be the largest for an independent U.S. oil and gas producer this year, according to people familiar with the matter.

     Gap Inc. fell 1.4 percent, and earlier as much as much as 6.1 percent, after the retailer said its sales missed estimates for both its Gap and Banana Republic brands and preliminary third-quarter profit also fell short of forecasts. The company will report its full quarterly results on November 19.

     Gap’s disappointing sales didn’t hold back other retailers. Nordstrom Inc., Kohl’s Corp. and Macy’s Inc. each rose at least 1.7 percent, after falling more than 4.7 percent on Monday.  

Have a wonderful evening everyone.

Be magnificent!

Guard your tongue, for it is highly dangerous;

unguarded words can cause terrible distress.

A single bad word can destroy a vast quantity of good.

A wound caused by fire will eventually heal;

but a wound caused by the tongue leaves a scar that never heals.

Valluvar

As ever,

Carolann

Even if you fall on your face, you’re still moving forward.

                                           -Victor Kiam, 1926-2001

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