September 2, 2015 Newsletter

Dear Friends,

Tangents:

September:  The seventh month from March, when the year formerly commenced.  The old Dutch name was Herstmaand, meaning autumn month and the Anglo-Saxon Hoerfestmonath, meaning harvest month.  After the introduction of Christianity, it became Haligmonath in the Anglo-Saxon, meaning “holy month” since the nativity of the Virgin Mary was commemorated on the 8^th and the  Exaltation of the Cross or Holy Cross Day on the 14^th and St. Michael’s Day on the 29^th.  In the French Revolutionary Calendar the equivalent month was Fructidor, or fruit month, corresponding to the period from August 19^th to September 22^nd. – from Brewer’s Dictionary of Phrase & Fable.

On this day in 1969, America’s first ATM debuted, dispensing cash from Chemical Bank in Rockville Center, New York.

PHOTOS OF THE DAY

A view of The Man during the Burning Man 2015 ‘Carnival of Mirrors’ arts and music festival in the Black Rock Desert of Nevada, Tuesday. Participants are still arriving from all over the world for the sold-out festival to spend a week in the remote desert to experience art, music, and the unique community that develops. Jim Urquhart/Reuters

The Atlas V rocket launches from Cape Canaveral, as seen from Viera, Fla., with its reflection in a lake along Murrell Road, early Wednesday. The rocket is carrying a US Navy communications satellite. Tim Shortt/Florida Today/AP

Market Closes for September 2^nd, 2015

International Markets

Bonds

Currencies

Commodities

Put not your trust in money, but put your money in trust. –Oliver Wendell Holmes.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rebounded from a two-day slide amid an easing of the selloff in global equities.

     The nation’s benchmark index ended higher after fluctuating between gains and losses. Health-care companies surged as Valeant Pharmaceuticals International Inc., the second-largest company by market capitalization, advanced the most since July on deal news. Canada’s largest lenders also advanced.

     The Standard & Poor’s/TSX Composite Index rose 63.35 points to 13,545.25 at 4 p.m. in Toronto, after a two-day slide of 2.8 percent. The equity gauge has dropped 7.4 percent in 2015.

     China, Canada’s second-largest trading partner, is shutting down its exchanges and banks until Monday to commemorate the 70th anniversary of Japan’s World War II defeat, giving investors a breather from the volatility that has engulfed Chinese markets and the rest of the world.

     Global stocks had tumbled in the previous two days amid rising concern a slowdown in China’s economy and slump in its equity markets would affect growth around the world. Data yesterday indicated Canada’s economy slid a second quarter, meeting the technical definition of a recession, amid a rout in crude prices.

     Senior-housing companies in Canada rallied after Amica Mature Lifestyles Inc. agreed to be acquired by a pension fund- backed company, jumping 111 percent. Chartwell Retirement Residences, the largest operator of assisted-living homes across Canada, jumped 6.8 percent, the most since 2009.

     Valeant rose 4 percent, snapping a two-day retreat after agreeing to buy Synergetics USA Inc. in a cash deal worth $6.50 a share. Synergetics, a supplier of precision surgical devices, will enhance Valeant’s Bausch & Lomb eye-care business, the company said in the release.

     Colliers International Group Inc. jumped 4.5 percent, the biggest gain in almost a month, after agreeing to buy real- estate firm Gateway Commercial in St. Louis for an undisclosed sum.

     Alimentation Couche-Tard Inc., operator of gas bars and convenience stores, climbed 2.9 percent for a second straight increase. The company yesterday reported second-quarter earnings ahead of analysts’ estimates thanks to lower fuel prices and higher volumes sold, along with strong merchandise sales, Jennifer Bartashus, a Bloomberg Intelligence analyst, said in a report.

     The resource-rich S&P/TSX has been one of the worst- performing developed markets in the world this year as crude plunged. Oil in New York rebounded after tumbling 7.7 percent Tuesday. Suncor Energy Inc. slipped 2.9 percent.

     Energy and raw-materials producers are the worst-performing industries among 10 in the S&P/TSX this year. The S&P/TSX Energy Index has slumped 4.8 percent in two days and is down 20 percent for the year.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks rallied, after the Standard & Poor’s 500 Index posted one of its steepest drops this year, amid a respite from a global equities selloff.

     After pacing the rout yesterday, technology shares led the rebound as Apple Inc. and Microsoft Corp. rose more than 3.6 percent. H&R Block Inc. jumped 7.5 percent after announcing a stock buyback plan. McDonald’s Corp. and Home Depot Inc. added at least 2.7 percent. A gauge of U.S. airlines rallied the most in more than seven months. Energy shares erased a decline along with oil, with crude closing higher after lurching between gains and losses.

     A surge in the final minutes pushed the S&P 500 up 1.8 percent to 1,948.86 at 4 p.m. in New York, closing at the session high after the gauge fell 3.8 percent over the previous two sessions. Equities jumped in early trading and then trimmed their gains by more than half before an afternoon rebound along with oil prices. The Dow Jones Industrial Average added 293.03 points, or 1.8 percent, to 16,351.38. The Nasdaq Composite Index gained 2.5 percent.

     “China’s going to be closed the next few days and that means there won’t be this negative lead-in to markets in the morning so that will be a nice reprieve,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “The date for a potential rate raise is certainly going back and forth and with the recent volatility in the market and situation overseas, people don’t have much conviction on when it will be.”

     The benchmark equity gauge’s 3 percent decline on Tuesday – – its third-biggest of 2015 — marked a sour start to what has historically been the worst month of the year. The S&P 500 falls 1.1 percent on average in September, according to data compiled by Bloomberg going back to 1927.

     Another troubling sign is that futures on Chicago Board Options Exchange Volatility Index have climbed, showing traders predict turbulent markets will endure. The gauge known as the VIX fell 17 percent Wednesday to 26.09, after a record monthly jump in August,up 135 percent.

     The S&P 500 slumped 6.3 percent last month as China’s currency devaluation spurred concern over global growth, erasing more than $5.7 trillion in equity market values worldwide, while volatility surged the most on record. The equity index entered a correction last week, only to then rally more than 6 percent over two days. It closed Wednesday 8.5 percent below its all- time high set in May.

     Chinese shares closed lower on the last trading day of this week as investors assessed the level of state support before a major military parade on Thursday. Mainland markets will be closed Thursday and Friday to commemorate the end of World War II.

     “Volatility will stay high for a while,” said Teis Knuthsen, chief investment officer at Saxo Bank A/S’s private- banking unit in Hellerup, Denmark. “China is still making people panic and a lot of us are concerned that we’ll break the lows from last week. But many companies are starting to look very cheap now and the market will eventually find a support level, especially if the Fed doesn’t raise rates this month.”

     Amid continuing concerns that China’s slowdown will weigh on the global economy, traders are now pricing in a 32 percent chance that the Federal Reserve will raise interest rates this month, down from 38 percent on Monday. Policy makers have a little more than two weeks to assess incoming data before deciding whether to act on rates.

     A report from the Fed Wednesday said the economy expanded across most regions and industries in July and August as tighter labor markets boosted wages for some workers. Six of 12 Fed districts reported “moderate” growth, and five others said expansion was “modest,” according to the Beige Book.                          

     Data today on private payrolls showed companies added 190,000 workers in August, below the 200,000 forecast by economists surveyed by Bloomberg. Attention will focus on the government’s monthly jobs report, due Friday, as a major data point before the Fed’s meeting. A separate gauge Wednesday showed July factory orders rose less than forecast by economists.

     All of the S&P 500’s 10 main groups increased today, with technology, consumer discretionary and industrial companies each rising more than 2.1 percent after those industries lost at least 2.6 percent on Tuesday. Energy shares rose 0.9 percent after erasing an early 1.2 percent drop. About 7.5 billion shares traded hands on U.S. exchanges, 7 percent above the three-month average.

     Along with Apple and Microsoft, a handful of semiconductor companies boosted the tech group. Nvidia Corp., Qorvo Inc. and Avago Technologies Ltd. all rose more than 2.5 percent. Intel Corp. added 2.8 percent as it unveiled a new chip design which will help make laptops more powerful and easier to use, the company said. Facebook Inc. and PayPal Holdings Inc. gained more than 3 percent.

     Airlines helped lift industrial shares in the benchmark amid the earlier retreat in oil prices. American Airlines Group Inc. and Delta Air Lines Inc. rallied at least 5 percent, with American posting its strongest increase since March. A Bloomberg index of U.S. carriers climbed 4.3 percent, with JetBlue Airways Corp. up 6.4 percent for its biggest gain in four months. The Dow Jones Transportation Average rose 2.5 percent.

     Health-care shares advanced as biotechnology companies rebounded from a two-day drubbing. Biogen Inc. and Celgene Corp. added at least 3.5 percent. The Nasdaq Biotechnology Index rose3.7 percent after after a 5.6 percent drop during the previous two days. Bristol-Myers Squibb Co. increased 2.4 percent while Waters Corp. added 3.3 percent to snap a three-day slide.

     Energy companies in the S&P 500 closed higher in a tumultuous day for crude. West Texas Intermediate futures rose 1.9 percent, after falling as much as 4.8 percent following a government report that showed U.S. supplies climbed the most since April. Tesoro Corp. and Newfield Exploration Co. gained more than 3 percent to lead the group. Even with oil’s advance, Chesapeake Energy Corp. and Diamond Offshore Drilling Inc. still lost at least 2.1 percent.

Have a wonderful evening everyone.

Be magnificent!

Wise people are concerned only with what lies behind all these things.

Just as bees fly form one blossom to another, looking only for the essence of each one,

wise people look only for the essence of every person they meet.

Wise people, who know and understand the soul, are indifferent to both pleasure and pain,

they have risen above sensations.  They are indifferent to the past and the future, they have risen above time.

They are indifferent to danger; they have risen above fear.

Wise people know that what is here, is also there; that what was, will also be.

They see unity, not division.

Katha Upanishad

As ever,
 

Carolann

When angry, count ten before you speak; if very angry, a hundred.

                                                  -Thomas Jefferson, 1743-1826

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