September 23, 2016 Newsletter

Dear Friends,

Tangents:

On this day in…
63 B.C. – Caesar Augustus was born in Rome.

1806 – The Lewis and Clark expedition returned to St. Louis from the Pacific Northwest.

1846 – The planet Neptune was discovered by German astronomer Johann Gottfried Galle.

1926 – Jazz saxophonist and composer John Coltrane was born in Hamlet, N.C.

1930 – Musician Ray Charles was born Ray Charles Robinson in Albany, Ga.

1939 – Sigmund Freud, the founder of psychoanalysis, died at age 83.

1949 – Bruce Springsteen was born.

1990 – Iraq threatened to destroy Middle East oil fields and attack Israel if other nations tried to force it from Kuwait.

POINTS OF PROGRESS:
SCOTLAND: The country’s wind turbines produced enough energy to meet all of its electricity needs over the course of one day – 106 percent of those needs, to be precise.  Portugal managed a similar feat in May, meeting all of its energy needs for four days straight (107 hours) via renewable sources.  Over the course of a year, more than half of Scotland’s electricity is generated via renewable. –The Guardian.

CALIFORNIA:  Freeways are to start generating energy.  On several of the state’s major roads, piezoelectric crystals will be installed as part of a pilot program.  About as big as watch batteries, these sensors produce an electrical charge when submitted to pressure, as by vehicles driving over them, for instance.  Other countries are already using this technology to generate electricity, including Japan, Israel, and Italy, and scientists estimate the amount of energy produced by a 10-mile stretch of four-lane roadway could power the entire city of Burbank. –California State Assembly, Ecowatch

JAPAN: Tokyo elected its first female governor.  In a country lagging behind many others in the advancement of women in the workplace, this represents a milestone.  Japan is endeavoring to boost an economy largely stagnant for a quarter of a century, and some analysts regard incorporating more women into the labor force as crucial contribution to that effort. –CSM.

FRANCE: A nearly complete ban on ivory and rhinoceros horn was announced by the country’s government, following similar bans elsewhere in Europe and in other regions.  The one exemption covers carved rhinoceros horn or ivory objects dated prior to July 1, 1975, when the Convention on International Trade in Endangered Species came into force.  –French Government, International Fund for Animal Welfare.
PHOTOS OF THE DAY

A drone, made by CyPhy Works, carries a UPS package on Children’s Island off the coast of Beverly, Mass., on Thursday during a demonstration of a drone making a commercial delivery of a package to a remote or difficult-to-access location. Brian Snyder/Reuters

Jon Kuhn, a team member at the Virginia Farm Market in Winchester, Va., catches one of the 1,000 pumpkins he was helping unload from a delivery truck on Friday. Jeff Taylor/The Winchester Star/AP
Market Closes for September 23^rd, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By John Hyland and Eric Lam
     (Bloomberg) — Canadian stocks halted a four-day rally as energy producers tumbled with crude, while inflation data that boosted the likelihood of added stimulus sent financial shares lower and an unexpected drop in retail sales weighed on consumer shares.
     The S&P/TSX Composite Index fell 0.7 percent to 14,697.93 at 4 p.m. in Toronto, paring the best weekly advance since April to 1.7 percent. The benchmark for Canadian equity has surged 4.5 percent in the third quarter, pushing its gain this year to 13 percent. 
     Nine of the 11 sectors declined Friday, with raw-materials and energy producers losing more than 1 percent. Oil and gas companies retreated as New York crude slumped as much as 4.1 percent to trade at around $44 a barrel after Saudi Arabia was said to dismiss the prospects for an output agreement in talks in Algiers next week, according to an OPEC delegate familiar with the nation’s oil policies.
     Financial-service firms fell 0.5 percent Friday. Only six of the 26 members in the group advanced. Combined the firms make up about one-third of the S&P/TSX. Bank of Nova Scotia fell 0.9 percent after closing at a record.
     Canada’s core inflation rate was the slowest in two years in August, with the pace of consumer prices and overall inflation decelerating. The data spurred bets the economy may need added monetary stimulus. That hit financial shares that would see profits crimped by lower interest rates.
     Shares of consumer staples stocks fell after data showed retail sales unexpectedly fell in July. Maple Leaf Foods Inc. slumped 1.8 percent and Loblaw Cos. slid 1 percent to pace declines.
     Raw-materials producers slipped 1.4 percent. Barrick Gold Corp. and Goldcorp Inc. dropped more than 1.2 percent. Silver Wheaton Corp. slumped 2.3 percent and First Quantum Minerals Ltd. fell 1.2 percent.

US
By Anna-Louise Jackson
     (Bloomberg) — U.S. stocks retreated as energy producers and Apple Inc. led declines, with the S&P 500 Index paring its best weekly advance in more than two months after a rally spurred by the Federal Reserve.
     Equities halted the longest winning streak in seven weeks as Apple and Facebook Inc. dragged down the technology group, while tumbling crude oil sank energy shares on worries OPEC won’t reach an agreement to curb output. Apple fell in afternoon trading amid speculation over iPhone demand. Bats Global Markets Inc. soared 19 percent and Twitter Inc. climbed the most since 2013 amid deal speculation.
     The S&P 500 lost 0.6 percent to 2,164.69 at 4 p.m. in New York, as crude dropped the most since July and Apple lost 1.7 percent. The equity benchmark closed below its average price during the past 50 days. The Dow Jones Industrial Average slipped 131.01 points, or 0.7 percent, to 18,261.45. The Nasdaq 100 Index declined 0.7 percent, a day after posting its 12th record close this year. About 6.3 billion shares traded hands on U.S. exchanges, 7 percent below the three-month average.
     “Today is the inevitable pause because the last two days saw a pretty significant move, particularly in light of a Fed that did what the market was expecting,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “The bulk of the price action — you’ve got bonds selling off a little bit, you’ve got crude oil selling off, the dollar rallying a little bit — it’s what you’d expect from a pause in a rally.”
     Facebook slipped 1.6 percent after saying it gave advertisers an inflated measure of video ad viewership. Apple took a sudden afternoon dive, losing as much as 2.7 percent on speculation that German research firm GfK issued a report suggesting iPhone 7 sales would be lower than last year, based on data in Europe and Asia. That helped send tech stocks in the main U.S. equity measure to their biggest loss in two weeks.
     The S&P 500 closed up 1.2 percent for the week, after the Federal Reserve held off raising interest rates and scaled back the number of increases it expects in 2017. The equity gauge has returned to within 1.2 percent of a record set in August, recovering from a rout two weeks ago as signals from the Fed and the Bank of Japan calmed concerns that central banks might be less inclined to extend their unprecedented measures to support growth.
     The CBOE Volatility Index rose 2.3 percent Friday to 12.29, trimming its biggest weekly decline since July 1. The measure of market turbulence known as the VIX on Wednesday wiped out a monthly gain that had reached as much as 35 percent.
     “We had a good week and a consolidation is the right move, given the uncertainties that still linger and the elections coming up,” said Christoph Riniker, the Zurich-based head of strategy research at Julius Baer Group Ltd. “The Fed’s decision was positive short-term, but we’re still going to have a rate hike and the consensus is still going for December.”
     Three Fed officials on Wednesday dissented, the most since December 2014, in favor of a quarter-point hike. One of them, Boston Fed President Eric Rosengren said today in an explanation of his dissent that failure to get back to a strategy of gradual rate increases may threaten the ongoing U.S. economic recovery. Not tightening policy could generate “the sorts of significant imbalances that historically have led to a recession,” he said.
     Investors will now turn their attention to economic data and the next earnings season that gets underway in about two weeks. A Bloomberg gauge tracking the degree to which data miss or exceed economists’ estimates has been negative for all of September. Reports are due next week on durable-goods orders, services and personal spending in the world’s biggest economy. Analysts project profit at S&P 500 companies fell 1.5 percent in the third quarter.
     Nine of the S&P 500’s 11 main industries retreated, with real estate rising Friday, and leading in its first week after being separated from the financial group. Phone companies also gained. Energy producers lost 1.3 percent, while technology shares slipped 1 percent. Industrials and financials lost at least 0.6 percent.
     Oil and gas companies slumped as Saudi Arabia was said to dismiss the prospects for an output agreement to stabilize the market in talks in Algiers next week. The energy group in the benchmark index erased a morning gain, sliding as much 1.7 percent. Transocean Ltd. and Devon Energy Corp. declined at least 5.5 percent.
     Among shares moving Friday on corporate news, Salesforce.com Inc. fell the most in seven months after people familiar with the matter said it was among Twitter’s potential suitors. Yahoo! Inc. also weighed on the tech group, losing 3.1 percent a day after saying the personal information of at least 500 million users was stolen in an attack on its accounts from 2014.
     Endo International Plc jumped 15 percent after replacing its chief executive officer amid a 73 percent plunge in its stock price during the past year. Imperva Inc. rallied 21 percent to a seven-month high after people familiar with the matter said the security-software company has drawn interest from potential buyers including Cisco Systems Inc. and International Business Machines Corp. Cisco fell 1 percent.

Have a wonderful weekend everyone.

Be magnificent!

It is through you that the sun shines and the stars shed their luster, and the earth becomes beautiful.
It is through your blessedness that they all love and are attracted to each other.
You are in all, and you are all.
Swami Vivekananda

As ever,

Carolann

Without great solitude, no serious work is possible.
                                -Pablo Picasso, 1881-1973

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