September 22, 2016 Newsletter

Dear Friends,

Tangents:
People are often unreasonable, illogical and self-centered.
FORGIVE THEM ANYWAY.

If you are kind, people may accuse you of selfish motives.
BE KIND ANYWAY.

If you are successful, you will win some false friends and some true enemies.
SUCCEED ANYWAY.

If you are honest and sincere, people may deceive you.
BE HONEST AND SINCERE ANYWAY.

What you spend year building, someone could destroy overnight.
BUILD ANYWAY.

If you find serenity and happiness, they may be jealous.
BE HAPPY ANYWAY.

The good you do today, people will often forget tomorrow.
DO GOOD ANYWAY.

Give the world the best you have and it may never be enough.
GIVE THEM YOUR BEST ANYWAY.

In the final analysis, it is between you and God.
IT NEVER WAS BETWEEN YOU AND THEM ANYWAY.
                                       -Mother Teresa

On this day:
On Sept. 22, 1862, President Abraham Lincoln issued the preliminary Emancipation Proclamation, declaring all slaves in rebel states should be free as of Jan. 1, 1863.
Go to article »

1949 – The Soviet Union exploded its first atomic bomb.

1969 – Willie Mays of the San Francisco Giants hit his 600th career home run during a game in San Diego.

1995 – Time Warner struck a $7.5 billion deal to buy Turner Broadcasting System IncPHOTOS OF THE DAY

A man sits on top of Alvier peak, 7,687 ft above sea level, with the fog covered Rhine valley to his feet, Thursday, in Wartau, Switzerland. Gian Ehrenzeller/Keystone/AP

Workers clean Rome’s famed Spanish Steps after restoration work that lasted almost a year in Rome, Italy, Thursday. Alessandro Bianchi/Reuters

Grape pickers fill boxes with grapes at a vineyard during the traditional Champagne wine harvest in Ay, France, on Thursday. Benoit Tessier/Reuters

A small fisherman’s boat makes its way past the rocks of Sete Nave as the sun sets outside Pietrosella, on the southern part of Corsica, France, on Thursday. Christian Hartmann/Reuters
Market Closes for September 22^nd, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By John Hyland
     (Bloomberg) — Canadian stocks rose for a fourth day, adding to gains sparked by the Federal Reserve’s decision to not raise interest rates amid signs the world’s largest economy is improving.
     The S&P/TSX Composite Index rose 0.6 percent to 14,797.17 at 4 p.m. in Toronto, touching the highest level since June 2015 before paring the advance. The index closed at a two week high and is now up almost 14 percent this year.
     Financial markets around the world rallied after a decision to leave interest rates unchanged boosted equities and bonds. The dollar fell, fueling a rally in commodities denominated in the U.S. currency from copper to oil. Shares of high-dividend- yielding companies also advanced as investors sought income amid a drop in fixed-income yields.
     Energy producers gained 0.9 percent, tracking a rally in oil after Algeria said OPEC may turn its informal talks next week into a formal session. OPEC members are focused on either boosting output or defending their market share, and will have difficulty reaching a deal, according to a Bloomberg survey. Oil edged higher after weekly government data showed U.S. inventories dropped to their lowest level since February. Suncor Energy Inc. and Canadian Natural Resources Ltd. gained at least 1.6 percent. TransCanada Corp. added 1 percent to yesterday’s gains, closing at a record.
     Financial-service firms rose 0.7 percent. Bank of Nova Scotia gained 0.5 percent, closing at its highest level in two years. Brookfield Asset Management Inc. rose 3.9 percent, after RBC Capital Markets raised the stock to a top pick, based on the company’s well executed business plan. TMX Group gained 2.7 percent, the most in a month, after eliminating 95 full-time positions in the third quarter and targeting further cost reductions.
     Raw-materials producers slipped 0.4 percent. Barrick Gold Corp. and Franco Nevada Corp. fell at least 1.4 percent. Silver Wheaton Corp. dropped 0.9 percent. Copper gained 4.6 percent, and First Quantum Minerals Ltd. closed at a two week high.

US
By Rita Nazareth, Dani Burger and Alan Soughley
     (Bloomberg) — From the U.S. to Europe and Asia, markets are sending a clear signal — the era of cheap money is far from over.
     Traders piled into equities, bonds and commodities as the Federal Reserve lowered its outlook for future rate hikes, soothing worries that global central banks would taper stimulus efforts. American stocks approached record highs, euro-region notes had their best day since Brexit, and the dollar fell against most major currencies. The decision also gave fresh impetus to emerging markets, with Russia and Argentina announcing debt sales. Commodities jumped for a sixth straight day as oil topped $46 a barrel.
     Stocks have surged, while bond yields fell to record lows as major central banks sought to boost growth with easy policies. Hours before the Fed scaled back tightening plans Wednesday, Japan tweaked its stimulus program, bolstering bets Europe will keep its accommodative stance. Thomas Lee, the biggest equity bull on Wall Street, said the U.S. monetary restraint is one more reason to bet shares will climb. Meanwhile, former Fed Chairman Alan Greenspan called the rally in Treasuries unsustainable, and Janus Capital Group’s Bill Gross said a bear market has been delayed.
     “It’s a bit of a relief rally,” said Chris Gaffney, the president of EverBank World Markets in St. Louis. “Now we are onto the next piece of uncertainty, which is third quarter earnings and, of course, the election.”
     With central banks moving off center stage, investors will turn their attention to the first of three U.S. presidential debates on Monday ahead of the Nov. 8 election and another earnings season that gets underway in about three weeks. Data today showed the mixed picture in the world’s largest economy — sales of previously owned homes declined in August, while filings for unemployment benefits dropped last week to match the lowest level since April.
     MSCI’s gauge of global equities climbed 1.2 percent at 4 p.m. in New York, the first back-to-back gain above 1 percent since the end of June. Emerging-market shares posted their biggest advance in more than two months.
     The S&P 500 Index added 0.7 percent to 2,177.18, rising back above its average price during the past 50 days for the first time in almost two weeks. The Nasdaq Composite Index rose to an all-time high.
     Computer and software stocks in the megacap realm keep vaulting to records at a rate not seen since before the dot-com bubble. While the Fed’s decision yesterday to leave interest rates unchanged is lifting the broader market, optimism about fourth-quarter earnings is giving technology companies an extra boost, according to Alan Gayle, a senior strategist at RidgeWorth Investments.
     “Technology is an easy place to invest in if you’re playing a turnaround in corporate profits and potential turn in capital spending,” Gayle said. “If you think we’ve gone through the worst of the profits downturn, which most people believe, the first beneficiary is likely to be technology.”
     For the first time since Bloomberg began compiling 2016 targets last year, forecasters have increased their estimates for the level at which the Stoxx Europe 600 Index will end in December. They now see the gauge reach 346, according to the average of 10 projections compiled by Bloomberg, up from 334 last month. The measure, propelled to its biggest jump in almost three weeks after the Fed kept borrowing costs unchanged, closed 0.5 percent above that level.
     The U.S. 10-year note yield dropped three basis points, or 0.03 percentage point, to 1.62 percent, according to Bloomberg Bond Trader data.
     “Yields will remain at historically low levels for some time,” Bill Irving, co-manager of Fidelity Government Income Fund said, according to the transcript of an interview on his firm’s website. “In that environment, I’d be cautious about reaching for yield.”
     Treasuries have rallied this year as economic circumstances in the U.S. and abroad caused the Fed to delay tightening policy multiple times after a liftoff from near zero in December. While signs of labor-market strength have led bond traders to price in a growing likelihood of a rate increase by year-end, other data such as August retail sales and industrial production have shown declines.
     The probability of a Fed move this year is about 57 percent, according to futures data compiled by Bloomberg. Still, the tightening cycle is poised to be the slowest and shallowest in recent history, based on the market for overnight index swaps, which reflect expectations for the fed funds effective rate.
     Benchmark German 10-year bund yields dropped the most since June 24, while those on Spanish five- and 10-year securities slid to all-time lows. The biggest gains were in longer-dated securities, which are more sensitive to the outlook for inflation and had underperformed last week in the run up to the Bank of Japan and Fed meetings.
     Russia offered investors $1.25 billion of 4.75 percent bonds in a tap of the 2026 notes it sold in May, according to the Finance Ministry. The Eurobonds were priced at 106.75 percent of face value, the ministry said. Meanwhile, Argentina has picked three banks to pitch an offering of at least 500 million euros ($562 million) bonds to European investors this month.
     Bloomberg’s Dollar Spot Index, which measures the greenback against major peers, dropped 0.1 percent, leaving its decline this year at about 4 percent. The greenback fell against most higher-yielding currencies including South Korea’s won and the Mexican peso.
     “The U.S. dollar decline has more weeks to go, we think about two months,” Hans Redeker, Morgan Stanley’s chief global currency strategist in London, said in an interview with Bloomberg Television. “We suggest that the U.S. dollar will extend its decline, index-wise, between 4 percent to 5 percent.”
     Elsewhere in the world, the rand halted a six-day rally after South Africa’s Reserve Bank left interest rates unchanged for a third straight meeting as it signaled it may be close to the end of its policy-tightening cycle. Norway’s krone led gains among major currencies after the nation’s central bank refrained from cutting interest rates. New Zealand’s dollar fell for the first time in four days after policy makers signaled further easing.
     The weaker dollar spurred gains in raw materials as the Bloomberg Commodity Index posted the longest advance in a month.
     Oil rose to a two-week high after rival OPEC members Saudi Arabia and Iran met in Vienna a week before the organization holds talks in Algeria.
     Futures rose 2.2 percent to $46.32 a barrel in New York. Officials from Saudi Arabia and Iran, whose rivalry derailed an oil supply accord earlier this year, along with fellow OPEC member Qatar, met at OPEC headquarters. Oil extended gains as equities advanced and the dollar fell. U.S. crude supplies dropped to the lowest since February, trimming stockpiles that remain at the highest seasonal level in at least three decades, government data showed Wednesday.
     “The Saudi talks with Iran increase the likelihood of an agreement next week,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “The Iraqi’s are saying it’s the right time for OPEC to make a deal, which is also supportive.”

Have a wonderful evening everyone.

Be magnificent!

The universe is like an ocean in perfect equilibrium.
A wave cannot rise in one place, without creating a hollow elsewhere.
The sum total of the energy of the universe remains identical from one end to the other.
If you take from one place, you must give elsewhere.
Swami Vivekananda

As ever,

Carolann

Don’t compromise yourself.
You are all you’ve got.
               -Janis Joplin, 1943-1970

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