October 7, 2015 Newsletter

Dear Friends,

Tangents:

On this day in 2003, Arnold Schwarzenegger became California governor, parlaying his celebrity into a win as he had very little political experience before assuming the position.
(Which is why you cannot discount Donald Trump winning the Presidency).

Laughter is the shortest distance between two people. –Victor Borge

If a man walks in the woods for love of them half of each day, he is in danger of being regarded as a loafer. 
But if he spends his days as a speculator, shearing off those woods and making the earth bald before her time, he is deemed an industrious and enterprising citizen. –Henry David Thoreau.

The leaves are beginning to look their autumn best, so try being a loafer and admire the beauty the earth has to offer in the woods this time of year.

PHOTOS OF THE DAY

Russian President Vladimir Putin speaks before an ice hockey match between former NHL stars and officials at the Shayba Arena in the Black Sea resort of Sochi, Russia, Wednesday. Russian President Vladimir Putin spent his 63rd birthday on the ice, playing hockey with NHL stars against Russian officials and tycoons. Alexei Nikolsky/RIA-Novosti/AP

Police officers salute as the Star Spangled Banner is played to mark the beginning of a lift off during the 2015 Albuquerque International Balloon Fiesta in Albuquerque, New Mexico, Wednesday. Lucas Jackson/Reuters

Market Closes for October 7^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rallied to the highest level since August, with commodities producers extending advances amid a resurgence in U.S. dollar-denominated assets from oil to copper. 

     Energy and raw-materials producers led a 1.6 percent increase in Canadian equities. The two industries have surged in the past four days, as the weakening dollar boosts demand for commodities. The groups remain the worst performers in the benchmark index this year, with losses of at least 15 percent.

     The Standard & Poor’s/TSX Composite Index rose 221.09 points to 13,868.35 at 4 p.m. in Toronto, the highest close since Aug. 19. The benchmark Canadian equity gauge has climbed 4.7 percent in four days, rebounding from a 4 percent slump in September. The index has lagged global peers among developed markets this year with a 5.2 percent decline.

     Equities around the world are rebounding from the worst quarter since 2011, led by gains in oil and mining companies. The MSCI All Country World Index climbed a sixth straight day, the longest streak of gains since April, while the S&P 500 posted its sixth increase in seven days.

     Crude in New York slipped, erasing earlier gains, to close at $47.81 a barrel. The commodity had advanced for three days, to an Aug. 31 high Tuesday. Copper climbed to a two-week high to lead an advance in industrial metals.

     Canadian Natural Resources Ltd. increased 5.7 percent and Suncor Energy Inc. rose 1.7 percent as energy producers rallied 2.9 percent. The S&P/TSX Energy Index has jumped 13 percent in four days, to an almost two-month high.

     Teck Resources Ltd., Canada’s largest diversified miner, surged 14 percent for the biggest increase in six weeks after it sold future silver output from a mine in Peru to Franco-Nevada Corp. for an upfront payment of $610 million. First Quantum Minerals Ltd. jumped 18 percent with the price of copper. First Quantum has rallied 81 percent in four days.

     Commodities producers have rebounded as the U.S. dollar has weakened on bets the Federal Reserve will delay raising interest rates. The Bloomberg Dollar Spot Index was little changed after a four-day decline.

     Bombardier Inc. sank 13 percent, almost erasing yesterday’s 15 percent gain, after the planemaker and Airbus Group SE abandoned talks on a potential business collaboration. The companies announced the end of discussions late Tuesday following a Reuters report that Montreal-based Bombardier had approached its larger rival to sell a stake in the struggling CSeries jetliner.

US

By Dani Burger

     (Bloomberg) — The Standard & Poor’s 500 Index reached its highest level since the end of the August selloff, rising as biotechnology companies rebounded and energy shares extended their longest rally since December 2013.

     The benchmark index again tested points where an advance petered out at the end of August and a September rally wilted. Commodity stocks rose for a seventh session, weathering through a late-morning fade, with the appeal of the beaten-down energy and raw-materials groups enhanced by the dollar’s recent weakness.

     The S&P 500 advanced 0.8 percent to 1,995.83 at 4 p.m. in New York, rebounding from a midday drop of as much as 0.2 percent to close at its highest since Aug. 20. The index closed within a point of its average price during the past 50 days. The Dow Jones Industrial Average increased 122.10 points, or 0.7 percent, to 16,912.29. The Nasdaq Composite Index climbed 0.9 percent, bringing its 2015 gain to 1.2 percent.

     “The commodity rally extending itself is a significant story,” said Andrew Burkly, head of institutional portfolio strategy at Oppenheimer & Co. in New York. “The movement has come from people looking to see if oil prices can hold above $50, or if there is an oversold bounce. Overall, it’s the continuing story, that commodity-centric and energy companies have been doing better.”

     It was a whipsaw session for investors as an early 1 percent climb led by energy stocks faltered, with equities erasing gains after a government report showed that U.S. crude inventories and production climbed. The S&P 500 retreated twice after reaching its 50-day moving average before closing just below that level amid a surge in the final minutes.

     The Chicago Board Options Volatility Index fell 5.2 percent Wednesday to 18.40, its lowest since August 19. The measure of market turbulence known as the VIX dropped for a seventh day, the longest stretch since February 2014, losing 33 percent over the period. About 8.4 billion shares changed hands on U.S. exchanges, 13 percent above the three-month average.

     Stocks have swung between gains and losses since August’s tumble, amid concern about a slowing global economy triggered by weakness in China, and confusion over the Federal Reserve’s policy intentions. The S&P 500 has rebounded 4 percent since ending its worst quarter in four years, and is up 6.9 percent from an August low reached during the index’s first correction since 2011.

     Expectations for the Fed to raise borrowing costs this year have diminished since the weaker-than-expected September jobs report last Friday. Traders are pricing in a 39 percent chance of an increase in December and almost 62 percent probability of a move higher in March. The Bloomberg Dollar Index was little changed, after a four-day slide amid the lower odds of a Fed rate increase this year.

     Among the S&P 500’s 10 main industries, health-care companies were the best performers as biotechnology shares rebounded from a two-day drop. Celgene Corp. and Amgen Inc. were up more than 4.2 percent, and the Nasdaq Biotechnology Index climbed 2 percent after sliding 3.8 percent yesterday.

     Industrial companies rose for the third time in four sessions 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. Boeing Co. and General Electric Co. climbed 1.8 percent. United Rentals Inc. added 3.3 percent on its way to the strongest three-day rally in three years.

     Energy and raw-materials shares regrouped after briefly erasing an early advance. The two industries also benefit from the weaker dollar, which makes commodities denominated in the U.S. currency more attractive. Transocean Ltd. and Murphy Oil Corp. rose more than 2.8 percent, paring earlier gains of at least 4 percent after the crude inventories data undercut the morning rally.

     Freeport-McMoRan Inc. jumped 10 percent after the miner added two of Carl Icahn’s allies to its board. Newmont Mining Corp. and fertilizer maker Mosaic Co. gained at least 3.2 percent to rise for a fourth day, their longest rallies since May.                       

     Adobe Systems Inc. fell 5.3 percent, the most in six weeks, after forecasting fiscal 2016 sales and profit that fell short of analysts’ estimates. The software maker cited currency fluctuations and a change in how it charges customers.

     Corporate earnings will grab an increased share of investors’ attention this week, with Alcoa Inc. unofficially kicking off the reporting season after markets close tomorrow. Companies reporting next week include Johnson & Johnson, Intel Corp. and JPMorgan Chase & Co.

     Analysts project profits for S&P 500 members dropped 6.9 percent in the third quarter. Still, a Fed measure of corporate income has posted its biggest quarterly increase since 2012, suggesting the overall picture for profits may be skewed by downgrades at energy producers combating weak oil prices.

     Among the season’s early reporters, Yum Brands Inc. tumbled 19 percent, the most in 13 years after the owner of the KFC, Pizza Hut and Taco Bell chains posted profits that missed analysts’ estimates. Results were hurt by a lingering slump in China.
 

Have a wonderful evening everyone.

Be magnificent!

Chitragupta, who is supposed to be writing out our deeds in an account book

is no other than the conscious and unconscious parts of our mind.

The Lord of Law, to whom we have to render the account,

is the Soul within us.

Gopal Singh

As ever,

Carolann

Jealousy is all the fun you think they had.

                              -Erica Jong, 1942-

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