September 21 Newsletter

Dear Friends,

Tangents:

Arrived home from 2 week safari in Zambia and Botswana last night….lots to tell you about later….one of the best things was no email or internet or smart phones for two weeks! 

We have trained them (men) to think of the Future as a promised land which favored heroes attain – not as something which everyone reaches at the rate of 60 minutes an hour, whatever he does, whoever he is. –CS Lewis, The Srewtape Letters, 1942.  (Thought of this quote when I viewed the photos below published today).

PHOTOS OF THE DAY

What’s happening with respect to the world’s various religious events today:

Pope Francis is greeted by Cuba’s President Raul Castro as he arrives to lead a mass for Catholic faithful in the city of Holguin, Cuba, Monday.Tony Gentile/Reuters

Devotees carry an idol of the Hindu god Ganesh, the deity of prosperity, into the Arabian Sea on the fifth day of the ten-day-long Ganesh Chaturthi festival in Mumbai, India, Monday. Ganesh idols are taken through the streets in a procession accompanied by dancing and singing, and later immersed in a river or the sea, symbolising a ritual seeing-off of his journey towards his abode, taking away with him the misfortunes of all mankind. Danish Siddiqui/Reuters

Ultra-Orthodox Jews of the Hassidic sect Vizhnitz pray on a hill overlooking the Mediterranean Sea as they participate in a Tashlich ceremony in Herzeliya, Israel, Monday. Tashlich, which means ‘to cast away’ in Hebrew, is a practice in which Jews go to a large flowing body of water and symbolically ‘throw away’ their sins by throwing a piece of bread into the water before the Jewish holiday of Yom Kippur, which starts on Tuesday at sundown. Ariel Schalit/AP

A boy leads a goat at a livestock market in Kabul, Afghanistan, Monday. Muslims around the world are preparing to celebrate Eid al-Adha, marking the end of the Haj, by slaughtering sheep, goats, cows and camels to commemorate Prophet Abraham’s willingness to sacrifice his son Ismail on God’s command. Mohammad Ismail/Reuters

Market Closes for September 21, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, climbing for the fourth time in five days, as industrial companies rallied and energy producers advanced with crude.

     Equities jumped 1 percent as a gauge of diversified commodities prices increased for only the second time in seven sessions. Oil advanced on signs that producers are investing less in drilling, which could take a bigger bite out of falling U.S. crude production.

     The Standard & Poor’s/TSX Composite Index rose 132.54 points to 13,779.44 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has pared a monthly decline to 0.6 percent, which would be a fifth straight drop.

     Industrial and energy companies rallied at least 1.8 percent. Pipeline operators rose as Enbridge Inc. jumped 3.5 percent and TransCanada rose 4.1 percent. Canadian Pacific Railway Ltd. and Canadian National Railway Co. climbed more than 1.3 percent.

     Financial companies increased 1.8 percent. Toronto-Dominion Bank, the nation’s largest lender, increased 1.8 percent.

     Suncor Energy Inc. climbed 2.2 percent after it agreed to buy an additional 10 percent working interest in the Fort Hills oil sands project from Total E&P Canada Ltd. for C$310 million.

     Valeant Pharmaceuticals International Inc. sank 4.9 percent, the most in a month, joining a slump in U.S. health- care stocks. The Nasdaq Biotechnology Index sank 4.4 percent after Democratic presidential candidate Hillary Clinton said some “price gouging” in the specialty drug market was “outrageous” in a tweet. Clinton is expected to disclose a drug pricing plan tomorrow.

     Raw-materials producers tumbled 1.9 percent as gold prices declined. Gold futures fell for the second time in three sessions, down 0.4 percent to settle at $1,132.80 an ounce in New York as comments from some Federal Reserve officials fueled concern the central bank may raise interest rates this year.

     First Quantum Minerals Ltd. tumbled 9.4 percent for a second straight retreat and Teck Resources Ltd. lost 5.1 percent. Energy and raw-materials producers are the worst- performing industries in the S&P/TSX this year, each tumbling 20 percent as oil has plunged more than 25 percent from this year’s closing peak in June.

     The spread between U.S. crude and the more expensive international benchmark Brent narrowed as West Texas Intermediate futures climbed 4.5 percent to settle at $46.68 a barrel. The spread averaged $2.25 last week, the least since January. U.S. production has declined for six weeks even as the Organization of Petroleum Exporting Countries has sustained output.

US

By Oliver Renick and Joseph Ciolli

     (Bloomberg) — U.S. stocks advanced, following a two-day selloff, as investors took an optimistic view on domestic growth amid reassuring comments from Federal Reserve policy makers.

     Microsoft Corp. and Apple Inc. increased at least 1.4 percent to pace gains in technology shares. E*Trade Financial Corp. and Allstate Corp. rose more than 1.7 percent as financial companies climbed. Energy shares rose as oil prices rebounded. Merck & Co. lost 2.2 percent, and the Nasdaq Biotechnology Index slumped 4.4 percent after Democratic presidential candidate Hillary Clinton tweeted that she that she would release a plan to combat the high cost of prescription drugs.

     The Standard & Poor’s 500 Index added 0.5 percent to 1,966.97 at 4 p.m. in New York, after briefly erasing a 1.1 percent gain. The gauge fell a combined 1.9 percent Thursday and Friday. The Dow Jones Industrial Average climbed 125.61 points, or 0.8 percent, to 16,510.19. The Nasdaq Composite Index was little changed, weighed on by the drop in biotech shares, after gaining as much as 1.1 percent. About 6.5 billion shares traded hands on U.S. exchanges, 9.7 percent below the three-month average.

     “There are a lot of Fed people coming out and trying to be transparent following last week’s selloff, but in some cases that’s leading to more investor confusion,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “There are so many brilliant people talking every day that it’s difficult to sort it all out. There’s still a tremendous amount of nervousness.”

     Just days after the central bank voted to hold interest rates near zero, sparking the biggest post-meeting selloff since July 2014, four Fed officials separately said the U.S. economy is strong enough to withstand a hike this year. Their remarks suggested continued improvement in the domestic economy may overshadow concerns about global conditions.

     The quartet of policy makers who spoke out contended that any threat from abroad is temporary, providing an antidote to Chair Janet Yellen’s warning last week that global financial- market turmoil could harm growth.

     Three regional Fed presidents — San Francisco’s John Williams, St. Louis’s James Bullard and Richmond’s Jeffrey Lacker — argued over the weekend for lifting the central bank’s key interest rate before year’s end. They suggested low unemployment overshadowed the concerns Yellen mentioned. Fed Bank of Atlanta President Dennis Lockhart said Monday he remains confident the central bank will tighten this year as those concerns prove temporary.

     After the Fed left rates unchanged, the S&P 500 erased its weekly gain, with financial companies tumbling. The late-week slump put the finish another period of indecision as the equity gauge capped its 10th straight week of back-and-forth results with a decline of 0.2 percent.

     The central bank’s decision, and the way its deliberations were framed by Yellen in a post-meeting press conference last week, were interpreted by many Fed watchers as a sign that the central bank might not raise interest rates this year. In holding rates steady, the Fed noted international uncertainties and subdued inflation.

     “Raising rates will show confidence in the economy,” said Andrew Brenner, the head of international fixed income for National Alliance Capital Markets. “The way the Fed justified not raising rates by bringing in China and emerging markets got people really confused as to what the Fed is focusing on, and equity markets would like to see the Fed raise because they need to have that uncertainty reduced.”

     Equities have been particularly volatile amid concerns about China and the Fed’s intentions. Traders are now pricing in a 20 percent chance of a rate increase in October, and about a 49 percent probability of a move in December.

     The Chicago Board Options Exchange Volatility Index endured its biggest weekly gain on record in August, and has closed above 20 for 21 straight sessions, the longest stretch since June 2012. The measure of market turbulence known as the VIX fell 9.6 percent Monday to 20.14 and is down 29 percent this month.

     Equity sentiment has been plunging at a historic rate, the cost to hedge against stock losses has soared, and bearishness among professional stock handicappers has risen the most in three decades — all of which is good news for bulls, if history is any guide. Since 1963, the U.S. benchmark has advanced an average 11 percent in the year after newsletter writers surveyed by Investors Intelligence were as pessimistic as they are now, data compiled by Bloomberg show.

     Data today showed sales of previously owned homes fell more than forecast in August, representing a pause in momentum this year for residential real estate. Closings declined 4.8 percent to a 5.31 million annual rate from a revised 5.58 million pace that was the strongest since 2007. Prices climbed and the number of homes on the market decreased from the same time a year ago.                      

     Amid more whipsaw action in equities, nine of the S&P 500’s 10 main industries finished higher Monday, with financial and technology shares rising more than 1 percent. Health-care companies erased an early 0.9 percent increase to lose 1.4 percent, adding to a 1.5 percent slide Friday.

     Companies sensitive to higher interest rates, such as insurers and banks, rallied as bond yields rose. Comerica Inc. and Prudential Financial Inc. gained more than 1.7 percent. KeyCorp and PNC Financial Services Group Inc. climbed at least 1.5 percent.

     Apple and Microsoft advanced more than 1.4 percent to help pace the rally among tech companies. Facebook Inc. climbed 1.2 percent, rising for 11 straight sessions, its longest winning streak since going public in May 2012.

     Red Hat Inc. added 2.3 percent ahead of its quarterly results, while Adobe Systems Inc. climbed 2.6 percent. Atmel Corp. surged 13 percent after agreeing to a $4.6 billion- takeover from Dialog Semiconductor Plc.

     Yahoo rose 1.4 percent as it weighs what to do with its 15 percent stake in Alibaba Group Holding Ltd. Alibaba slipped 2.8 percent. PayPal increased 4 percent, the most in three weeks, after Stifel Financial Corp. raised the shares to buy from hold.

     Merck and Pfizer Inc. lost more than 1.3 percent to weigh on the health-care group. Biogen Inc., Gilead Sciences Inc. and Celgene Corp. all sank at least 2.4 percent as the Nasdaq Biotech Index had its biggest drop in a month.

Have a wonderful evening everyone.

Be magnificent!

With closed eyes, I have come to this last thought:

even while I am unconscious in sleep, the dance of life will continue

in the silent field of my sleeping body, in the same rhythm as the stars above.

My heart beats, my blood courses through my arteries,

and the millions of atoms that live in my body will vibrate in time with the harp

that quivers under the fingers of the great Master.

Rabindranath Tagore

As ever,

Carolann

Heroes don’t need to talk about what they did.

                             -W.P. Kinsella, 1935-

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

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828