November 2, 2015 Newsletter

Dear Friends,

Tangents:

Today is:
All Soul’s Day today; Christian religions.
Day of the Dead (Dia de los Muertos), Mexico.

A day to remember the dead and celebrate their lives.

November (Latin “nine”).  The ninth month on the ancient Roman Calendar when the year began in March.  The old Dutch name was Slaghtmaand, “slaughter month,” the time when the beasts were slain and salted down for winter use.  The Anglo-Saxon name was similar as Blotmonath, literally “blood month.”   Another Saxon mane was Windmonath, “wind month”, when fishermen beached their boats and stopped fishing until the next spring.  The equivalent in the French Revolutionary calendar was Brumaire, “mist month,” corresponding to the period from October 23^rd-November 21^st.

PHOTOS OF THE DAY

A musician plays his violin next to a depiction of La Santa Muerte (Saint Death) at a shrine during Day of the Dead celebrations in Ciudad Juarez, Mexico, Monday. The saint is often depicted as a skeletal ‘grim reaper’ and followers leave offerings of tequila, rum, beer, cigarettes, cash, flowers and candy at altars adorned with rosaries and candles. Jose Luis Gonzalez/Reuters

Indian Christians pay tribute at the graves of their loved ones on All Souls Day in Kolkata, India, Monday. Friends and families gather in cemeteries to offer prayers and to decorate graves with candles and flowers. Bikas Das/AP

The sun sets behind the Houses of Parliament in London Monday. Toby Melville/Reuters

Market Closes for November 2^nd, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, after posting the best gain in six months in October, as Valeant Pharmaceuticals International Inc. rebounded from its worst-ever monthly loss amid intense scrutiny over its business practices.

     Valeant rallied 9.1 percent, the most in a month, after stock commentary site Citron Research said it won’t release new allegations against the drugmaker. Penn West Petroleum Ltd. and Potash Corp of Saskatchewan Inc. rallied to lead commodities producers higher as factory data in Germany, Italy and the U.S. topped estimates, overshadowing a third straight monthly contraction in Chinese manufacturing data.

     The Standard & Poor’s/TSX Composite Index rose 93.84 points, or 0.7 percent, to 13,623.01 at 4 p.m. in Toronto. The Canadian benchmark equity gauge climbed 1.7 percent in October, the best since April. It was nevertheless the worst performance among 24 developed-nation markets in that time, as a gauge of global equities capped its best month in four years.

     Equities rose around the world again on Monday, with the MSCI All-Country World Index adding 0.5 percent. Manufacturing in the euro area unexpectedly accelerated in October, to 52.3 from 52.0 in September. American manufacturing was little- changed at 50.1, just ahead of the median forecast of 50 in a Bloomberg survey of economists.

     China’s official purchasing managers index remained at 49.8 in October, compared with an estimate of 50, the line between expansion and contraction. China is Canada’s largest trading partner after the U.S. and one of the world’s most important resource consumers.

     Canadian energy and raw-materials stocks climbed at least 1.1 percent despite a decline in commodities prices. The two industries, still among the worst-performing in the S&P/TSX for the year, rallied at least 7 percent in October to lead the index.

     Gold producers climbed 7.8 percent last month, the most since January, as weakening global growth, including in Europe and China, dimmed speculation of a rate increase. The probability that U.S. policy makers will increase borrowing costs has since risen to 50 percent according to futures data after officials signaled last week a December increase remains on the table.

     Valeant rebounded from a record 49 percent plunge in October. On Oct. 21, Citron accused Valeant of an Enron-like strategy of recording fake sales using an affiliated pharmacy, Philidor Rx Services, to store inventory and record those transactions as sales. Valeant shares plummeted 28 percent in one day. The company has denied the allegation.

US

By Joseph Ciolli

     (Bloomberg) — Another step in the recovery from this summer’s equity meltdown occurred Monday as a broad advance in U.S. stocks pushed the Nasdaq 100 Index above its July high and toward record territory.

     The index’s 1.2 percent advance extended its rally from the Aug. 25 trough to 17 percent, making it the first major index of U.S. stocks to retake a multiyear high established earlier in 2015. The Standard & Poor’s 500 Index remains more than 1 percent from its May 21 peak of 2,130.82, while the Dow Jones Industrial Average was 2.6 percent from its last record.

     Concerns ranging from weakening Chinese growth to stress in credit markets and stagnating corporate earnings pushed the Nasdaq 100 down 14 percent over a one-month stretch starting July 20. The nine-week rebound came as the Federal Reserve held off on interest rate increases and companies including Amazon.com Inc., Microsoft Corp. and Google parent Alphabet Inc. posted sales and profits that beat analyst estimates.

     Gains in the index have come in its biggest computer and software companies. Since the Aug. 25 low, Amazon is up 35 percent, Microsoft has added 32 percent and Facebook has jumped 24 percent. The gauge’s biggest member, Apple Inc. with a 12.9 percent weighting, has advanced 17 percent after tumbling 21 percent in the summer rout.

     “Today some of the biggest losers of the selloff have finally joined the party and are leading the way,” said Randy Warren, who manages more than $100 million at Exton, Pennsylvania-based Warren Financial Service & Associates Inc. “The selloff that we saw was a normal, healthy pullback for the market that didn’t seem to scare too many people off and ultimately served as a buying opportunity.”

     The S&P 500 added 1.2 percent to 2,103.94 at 4 p.m. in New York, the highest level since Aug. 10 — the day before China’s surprise devaluation of its currency sparked turmoil on global financial markets. The Dow Jones Industrial Average gained 165.22 points, or 0.9 percent, to 17,828.76. The Nasdaq Composite Index rallied 1.5 percent.

     While the broader Nasdaq index eclipsed its dot-com peak in April, its 100-stock sister fell just short. It closed Monday less than a point below its record on March 27, 2000. For 2015, the Nasdaq 100 has jumped 11 percent, extending its gain from the end of 2011 to 107 percent.

     U.S. stocks joined a global rally in stocks Monday, as signs of softer manufacturing in China failed, for one day at least, to quell demand from equity investors who instead looked for signs of strength elsewhere.

     “The global data today shows stable economic conditions, which is improving sentiment,” said Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management LLC, which oversees about $68 billion. “M&A activity is always a good litmus test for the sentiment of companies and usually speaks well to market conditions, and we’ve seen some big deals lately.”

     All 10 main S&P 500 groups rose, with energy and health- care stocks climbing at least 2 percent. Energy companies surged 11 percent in October to snap their longest streak of monthly losses ever. Consol Energy Inc. jumped 17 percent while Chevron Corp. gained 4.5 percent to a July high. 

     Deals boosted health-care shares. Dyax Corp. soared 28 percent after Shire Plc agreed to buy the drugmaker for at least $5.9 billion. Pfizer Inc. climbed 3.8 percent as people with knowledge of the matter said the company is making progress in talks to buy Allergan Plc.

     A reading today showed U.S. manufacturing remained stuck in neutral in October as factories struggled with dwindling overseas demand and well-stocked customers at home. Official data earlier showed Chinese factory output shrank for a third month, contrasting with a report signaling a pickup in euro-area manufacturing.

     The October payrolls report due on Friday will begin to loom larger on investor sentiment as the week progresses. Economists surveyed by Bloomberg project the economy added 182,000 jobs last month, up from Septembers 142,000, with the unemployment rate slipping to 5 percent from 5.1 percent a month earlier.

     Equities rallied the most since 2011 in October and are riding their longest streak of weekly gains since December, bolstered in part by central banks as the Fed kept rates pinned near zero, while signs of weak growth prompted the European Central Bank last month to hint at potential extra measures. In Asia, China unexpectedly cut its lending rate and Bank of Japan maintained record stimulus.

     The S&P 500 is up 13 percent from an August low as equities recover from a third-quarter swoon triggered by concern that weakening growth in China would spread. An earnings season that hasn’t been as bad as analysts initially predicted also helped the benchmark erase a loss for the year.

     More than 100 companies in the S&P 500 are scheduled to announce earnings this week. Of those that have released results this season, about 75 percent exceeded profit projections, while 55 percent missed sales forecasts. Analysts estimate earnings dropped 3.9 percent in the third quarter, up from predictions for a 6.1 percent decline a week earlier.

Have a wonderful evening everyone.

Be magnificent!

Hold the reins of your mind, as you would hold the reins of a restive horse.

Svetasvatara Upanishad.

As ever,
 

Carolann

Either you run the day or the day runs you.

                              -Jim Rohn, 1930-2009

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