October 6, 2015 Newsletter

Dear Friends,

Tangents:

David Gilmour is on tour in the new year and I bought some tickets for one of his concerts scheduled for next March.  When I got home last night, I found a package from TicketMaster that contained his latest CD,RATTLE THAT LOCK.  It’s very good, both the music and the lyrics; Gilmour wrote the music and most of the lyrics were written by Polly Samson.

I like the words in the title track, Rattle That Lock:
Whatever it takes to break
Got to do it
From the Burning Lake
Or the Eastern Gate
You’ll get through it
Rattle that lock and lose those chains…

Let’s go do it
Have it all our way
Go back to where we blew it
And lose our heads along the way
So long Sin, au revoir Chaos
If there’s a Heaven it can wait…

And all the other travelers
Become phantoms to our eyes
The furies and the revelers
The fallen angels in disguise
No Discord, chance or Rumour
Is going to interrupt this bliss…

So let’s get to it
It’s calling like a flame
Through the darkness and the night
A world suspended on a golden chain
No Discord, Chance or Rumour
Is going to interrupt this bliss…

PHOTOS OF THE DAY

A rainbow forms after a passing rain shower near Grants, New Mexico, Monday. Lucas Jackson/Reuters

A surfer bails out of a wave in Cow Bay, Nova Scotia, Canada. on Tuesday. The waves are remnants of hurricane Joaquin which missed the province as it tracked far offshore out into the Atlantic. Andrew Vaughan/The Canadian Press/AP

The Dutch cargo ship Flinterstar sinks off of the Belgian coast near Zeebrugge, Belgium on Tuesday. The Dutch-registered cargo ship sank off the Belgian coast after colliding with a gas tanker early Tuesday morning. The VBZR is a government approved search and rescue organization run entirely by volunteers. VBZR Vrijwillige Blankenbergse Zee Reddingsdienst/AP

Market Closes for October 6^th, 2015

International Markets

Bonds

Currencies

Commodities

Money is better than poverty, if only for financial reasons.

                                                                     -Woody Allen

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose for a third day, the longest streak in three weeks, as commodities producers extended a rally after the price of metals and oil jumped.

     Makers of energy and raw materials led a 0.7 percent increase in Canadian equities. Crude in New York rose to the highest in a month, while copper capped its longest winning streak in two weeks. Resources have gained as the U.S. dollar slips amid speculation interest rates will remain low for longer. While commodities producers have rallied at least 10 percent since Sept. 28, they remain the index’s biggest drag this year with losses of more than 16 percent.

     The Standard & Poor’s/TSX Composite Index rose 95.06 points to 13,647.26 at 4 p.m. in Toronto, extending a Sept. 21 high. The benchmark Canadian equity gauge has climbed 3.1 percent in three days, rebounding from a 4 percent slump in September. The index has lagged global peers among developed markets this year with a 6.7 percent decline.

     Canada’s merchandise trade deficit widened in August as exports fell 3.6 percent, including a 20.9 percent drop in crude oil and bitumen. The deficit expanded to C$2.53 billion ($1.93 billion) from July, exceeding the most bearish forecasts, according to Statistics Canada Tuesday from Ottawa.

     Commodities producers have rallied as the U.S. dollar has weakened on bets the Federal Reserve will delay raising interest rates. The Bloomberg Dollar Spot Index slipped 0.6 percent for a fourth straight decline, the longest streak since Aug. 24.

     Barrick Gold Corp. rallied 6.1 percent and Yamana Gold Inc. increased 8.9 percent. Gold for December delivery climbed 0.8 percent to settle at $1,146.40 an ounce in New York. The price has advanced for three sessions, the longest rally in six weeks. Higher interest rates curb the demand for gold, which doesn’t pay interest and is seen as an alternative investment.

     Chemical products company Canexus Corp. soared 25 percent, a record, after agreeing to sell itself to Superior Plus Corp. in an all-share deal that implies a 48 percent premium from yesterday’s close. Superior lost 5.9 percent, the most since July 23.

     First Quantum Minerals Ltd. jumped 21 percent after announcing plans to cut net debt by greater than C$1 billion through asset sales and other moves. The company also lowered its production forecasts for 2015 to 385,000 to 410,000 tonnes from a July 29 estimate of 410,000 to 440,000 tonnes. First Quantum has surged 53 percent in three days, the most since 2009.

     Bombardier Inc. soared 15 percent, the most in almost a month, after Reuters reported the planemaker had approached Airbus Group SE about acquiring a majority stake in the company’s struggling CSeries jetliner.

US

By Dani Burger and Kate Garber

     (Bloomberg) — A selloff in biotechnology shares dragged the Nasdaq Composite Index lower as equities retreated after nearing their highest levels since the August selloff.

     The Standard & Poor’s 500 Index ended its longest winning streak this year, after surging yesterday near where an advance faltered at the end of August, and another rally ran out of steam after the Federal Reserve stood pat on interest rates last month. The Nasdaq Biotechnology Index tumbled 3.8 percent, while energy and raw-materials shares rose as investors continued to favor the beaten-down sectors.

     The S&P 500 fell 0.4 percent to 1,979.92 at 4 p.m. in New York, after reaching a two-week high Monday. The Dow Jones Industrial Average gained 13.76 points, or 0.1 percent, to 16,790.19. DuPont Co. jumped 7.7 percent to add 26 points to the Dow after its chief executive, Ellen Krullman, said she intends to retire.The Nasdaq Composite sank 0.7 percent.

     “The market is catching its breath after strong run over the past several days,” said Alan Gayle, senior strategist for Atlanta-based Ridgeworth Investments, which has about $42.5 billion in assets. “The important thing for me is the market tried to test the August lows and we saw a rebound from there.”

     The S&P 500 ended a five-day advance that had restored almost $700 billion to U.S. equity prices, as expectations for a Federal Reserve interest-rate increase were pushed out into next year. That sent the dollar lower and has boosted energy, raw- material and industrial shares amid speculation that a weaker U.S. currency will lift profits for multinational companies which benefit when their overseas earnings are converted back to dollars.

     Among the S&P 500’s 10 main groups, raw-materials and energy shares extended their rally to a sixth day Tuesday, the longest for energy since December 2013. Health-care fell the most as biotechs retreated after earnings warnings from companies that sell technology to drug firms and concern about pharmaceutical pricing reignited selling that began three weeks ago. Technology, industrial and phone companies were little changed.

     “You’re right at the cusp of the highest closing level since we crashed in August,” said Jim Paulsen, the Minneapolis- based chief investment strategist at Wells Capital Management Inc., which oversees $351 billion. “All that is good technically, but one bad thing is leadership. The main leader, health-care, has been AWOL in this rally. That’s probably not a good sign that this is a sustainable rally.”                      

     Health-care companies fell for the first time in six sessions, with Biogen Inc., Celgene Corp. and Vertex Pharmaceuticals Inc. losing more than 3.6 percent. The Nasdaq Biotech Index dropped for a second day and has slumped 15 percent since Democratic presidential candidate Hillary Clinton criticized“price gouging” in the industry two weeks ago. Pfizer Inc. declined 2.1 percent after climbing 8.6 percent in the prior five days.

     A rally in commodities boosted raw-materials and energy shares as the dollar continued to slide. Oil surged 4.9 percent to the highest level in a month amid speculation that falling crude production will ease the global supply glut. Chevron Corp. jumped 3.5 percent to a two-month high. Transocean Ltd. added 7.2 percent for its best three-day rally ever, up 26 percent.

     DuPont led gains among raw-material companies in the benchmark index amid its biggest advance since 2009. Freeport- McMoRan Inc. rose 5.8 percent. The miner abruptly revamped its board and said it’s considering spinning off its oil and natural gas business, weeks after Carl Icahn disclosed a stake. Alcoa Inc. increased 5.5 percent and is up more than 18 percent in three days, the most in six years.

     A slowdown in emerging markets driven by weak commodity prices forced the International Monetary Fund to cut its outlook for global growth this year to 3.1 percent from a July forecast of 3.3 percent. Next year the world economy will expand 3.6 percent, less than the 3.8 percent projected in July, the fund predicted.

     The Chicago Board Options Volatility Index slipped 0.7 percent Tuesday to 19.40, and is down 30 percent after six days of declines. The measure of market turbulence known as the VIX yesterday closed below 20 for the first time since Aug. 20. About 7.7 billion shares traded hands on U.S. exchanges, 4.6 percent above the three-month average.

     Day-to-day swings in U.S. equities have abated in the last week, providing some respite from turbulence fueled by concerns about slowing global growth and uncertainty over the Fed’s course of action on rates. After disappointing payrolls data on Friday, traders are now pricing in 33 percent odds of a Fed rate liftoff in December, and a 57 percent chance in March.

     While China’s slowdown and Fed policy have had the heaviest influence on investor sentiment lately, corporate profits will begin to grab more attention. Alcoa unofficially kicks off the reporting season after markets close Oct. 8. Analysts project earnings for S&P 500 members dropped 6.9 percent in the third quarter.

     Among other shares moving on corporate news, Skyworks Solutions Inc. sank 1.4 percent, trimming an earlier 9 percent drop, after agreeing to buy PMC-Sierra Inc. for $2 billion in cash. The chipmaker joins Dialog Semiconductor Plc., Intel Corp. and Avago Technologies Ltd. in buying industry colleagues in the past year. Avago slid 3.4 percent today while Intel gained 1.7 percent. PMC-Sierra jumped 33 percent to a nine-year high.

     PepsiCo. climbed 1.3 percent to a six-week high after its third-quarter profit topped analysts’ estimates. The company also raised its forecast for the year as North American snack and beverage sales climbed, helped by higher prices.

     A Bloomberg index of U.S. airlines fell 4.4 percent, the steepest slide since May amid speculation on higher fuel prices as oil rallied. Alaska Air Group Inc. and American Airlines Group Inc. declined more than 5.1 percent.

Have a wonderful evening everyone.

Be magnificent!

The human voice can never reach the distance

that is covered by the still small voice of conscience.

Mahatma Gandhi

As ever,

Carolann

Feet, what do I need you for when I have wings to fly?

                                        -Frida Kahlo, 1907-1954

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