November 30, 2016 Newsletter

Dear Friends,

Tangents:

Winston Churchill was born  on this day in 1874.
Another great, mark Twain was born on November 30^th, 1835.  Twain is quoted as saying, “I came in with Halley’s Comet in 1935.  It is coming again next year, and I expect to go out with it.”    He did. Twain died at Redding, Connecticut, April 21, 1910 (just one day after  Halley’s Comet’s perihelion).
On Nov. 30, 1995, President Clinton became the first U.S. chief executive to visit Northern Ireland.

Be careful about reading health books.
You may die of a misprint. –Mark Twain.

PHOTOS OF THE DAY

An elderly Kashmiri Muslim man prays seated on dried leaves on a cold and foggy day in Srinagar, Indian controlled Kashmir on Wednesday. Parts of Indian-controlled Kashmir region is experiencing cold and foggy conditions after fresh snowfall in the Himalayan mountain ranges in the past few days. Mukhtar Khan/AP

People gather around lit candles in the shape of a ribbon during a HIV/AIDS awareness campaign ahead of World Aids Day, in Kathmandu, Nepal on Wednesday. Navesh Chitrakar/Reuters
Mourners hold candles as they gather during a vigil to pay tribute to Thailand’s late King Bhumibol Adulyadej in central Bangkok, Thailand on Wednesday. Athit Perawongmetha/Reuters
Market Closes for November 30^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks sealed the longest winning streak in more than two years as the country’s resource sector continues to roar back to life.
     Energy producers soared with crude after OPEC agreed to oil production cuts, the Trudeau government approved two long- gestating pipeline projects and the economy grew at the fastest pace in two years in the third quarter, combining to drive a fifth straight monthly gain for the S&P/TSX Composite Index — the longest stretch of wins since April 2014.
    The benchmark equity gauge rose 0.6 percent to 15,082.85 at 4 p.m. in Toronto, capping a 2 percent advance in November. Trading volume in the Canadian equity benchmark was 60 percent higher than the 30-day average. The index is up 16 percent in 2016, the top performer among developed markets tracked by Bloomberg, well ahead of No. 2 market Norway’s 9.2 percent advance.
    “This puts a ground floor under oil in the short run at about $50,” said John Stephenson, Chief Executive Officer at Stephenson & Co. Capital Management in Toronto. His firm manages about C$51 million. “It’s a pro-growth story today, and energy is a big part of it. It’s better than people thought, overall a great story for producers.”
    Stephenson owns energy names including Gibson Energy Inc., Canadian Natural Resources Ltd. and Pembina Pipeline Corp. and may be looking at oilfield services companies such as Precision Drilling Corp. next.
    “We haven’t yet but we may start wading in,” he said. “If I was in Calgary today it might be a good day to go for a beer after.”
    Energy producers soared 5 percent as a group to drive gains in the Canadian benchmark. Canadian Natural Resources and Encana Corp. rallied at least 8.8 percent.
     Canada’s gross domestic product expanded at a 3.5 percent annualized pace from July to September, Statistics Canada said from Ottawa. Output grew 0.3 percent in September from August, ahead of economists’ expectations for a 0.1 percent rise. Energy exports jumped 27 percent as the industry rebounded from losses after wildfires in Alberta disrupted production.
     “For the first time in ages, this sets the stage for broad- based upward revisions to Canada’s overall GDP growth rate, for both 2016 and perhaps 2017,” said Douglas Porter, chief economist at BMO Capital Markets, in a report to clients. “The latter could also be potentially fueled by firming oil prices.”

    Brent crude broke above $50 a barrel for the first time since Oct. 28 and West Texas Intermediate surged in New York as members of the Organization of Petroleum Exporting Countries agreed to reduce production by 1.2 million barrels a day to 32.5 million. It’s a surprising turnaround after weeks of negotiations, with Saudi Arabia, Iraq and Iran resolving their differences after threatening to derail talks.                     “The Saudis seemed very determined,” said David Cockfield, fund manager at Northland Wealth Management in Toronto. His firm manages about C$400 million. “Some people were convinced they wouldn’t be able to come up with a deal. The mathematics works – – say they cut 5 percent, if prices go up 10 percent you’re still ahead of the game.”
     Enbridge Inc. slipped 0.4 percent, erasing an earlier gain after winning approval for its Line 3 proposal from the Canadian government, one of two major pipeline projects to get the nod Tuesday. Prime Minister Justin Trudeau however rejected Enbridge’s Northern Gateway proposal citing excessive risks.
     Natural resource producers are the top-performing industries in the S&P/TSX this year. Teck Resources Ltd., the nation’s largest diversified miner, has surged six-fold this year for the top performance among Canadian stocks as metallurgical coal and zinc prices have rallied.
     Royal Bank of Canada, the nation’s largest lender, stumbled 3.4 percent for its worst slide since January after fourth- quarter profit fell short of analysts’ expectations amid the slowest growth in personal and commercial banking in more than two years and slumping earnings from capital markets. Toronto- Dominion Bank and Canadian Imperial Bank of Commerce report their results Thursday.
     Valeant Pharmaceuticals International Inc. retreated 7.9 percent, the most in three weeks. The drugmaker has decided to keep and invest in its gastrointestinal drugs division after talks to sell the unit to Takeda Pharmaceutical Co. fell apart, according to people familiar with the matter. Valeant will need to find another way to pay down its $30 billion in debt.
US
By Eric J. Weiner and Camila Russo
     (Bloomberg) — U.S. stocks were mostly lower despite a strong performance by energy shares after OPEC members reached an agreement to cut petroleum production.
     The S&P 500 Index soared at the market’s open and surpassed it’s record high, but then retreated and was down 0.27 percent to 2,198.81 at 4 p.m. in New York. The Dow Jones Industrial Average also touched a record high before fading and was essentially flat at 19,123.58. The Nasdaq Composite Index fell more than 1 percent to 5,323.68.
     Earlier Tuesday, the Organization of Petroleum Exporting Countries reached an agreement to curtail oil supply by 1.2 million barrels, the first cut in eight years.
     “Today, with a significant rally in crude, it’s up about 8 percent or so, leadership is going to come from energy,” said Yousef Abbasi, a global market strategist at JonesTrading Institutional Services LLC. “There is going to be a positive tail wind off of this”
    Energy stocks climbed 4.82 percent as a group. Devon Energy Corp. gained 14.63 percent and Marathon Oil Corp. rose 20.8 percent, both hitting 52-week highs
     “An agreement on production cuts is positive for oil stocks in the short term, but the upside to oil prices will be limited,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn, Germany. “U.S. stocks still have further to gain as Trump’s policies seem to be heading in a better direction than people expected before the election.”
     Stocks have rallied in November, with all major U.S. indexes touching records, on speculation president-elect Donald Trump will increase fiscal spending to stimulate the world’s largest economy. The S&P 500 has climbed 3.4 percent, on track for its biggest monthly advance since July.
     Reports on pending home sales and the Federal Reserve’s Beige Book are due later today, as well as a private release on employment. Investors are also awaiting the government payrolls data on Friday for clues on the pace of future interest-rate hikes from the Federal Reserve. The probability of a rate increase in December is at 100 percent, compared with a 68 percent chance at the start of November.
      “The only things that really changed since the last Beige Book were the election, the dollar, and inflation,” said Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management LLC. “Election uncertainty was cited as holding back auto sales, hiring, and construction. Now, that uncertainty is resolved and that excuse goes away.”

Have a wonderful evening everyone.

Be magnificent!

You must learn how to be lucid in all your actions;
that is, you must not only be aware of the time, the place, and the circumstances,
in which the action takes place, but also of yourself, the player, of your body
and what is happening at any moment.
It is not only a question of seeing things as they are, but of seeing yourself at the same time,
and the reactions that take place within you.
In other words, you absorb the whole thing within you and you become complete.
Swami Prajnanpad

As ever,

Carolann

If you want the present to be different from the past,
study the past.

                                -Baruch Spinoza, 1632-1677

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

 
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