September 27, 2016 Newsletter

Dear Friends,

Tangents:

All Things Pass
LAO-TZU

All things pass
A sunrise does not last all morning
All things pass
A cloudburst does not last all day
All things pass
Nor a sunset all night
All things pass
What always changes?

Earth…sky…thunder…
mountain…water…
wind…fire…lake…

These change
And if these do not last

Do man’s visions last?
Do man’s illusions?

Take things as they come

All things pass

PHOTOS OF THE DAY

A cyclist pedals across a road flooded by the overflowing Lachlan River after a natural disaster zone was declared in the New South Wales town of Forbes, Australia, Tuesday. Jason Reed/Reuters

Participants dressed in traditional attire pose during rehearsals for Garba, a folk dance, ahead of Navratri, a festival during which devotees worship the Hindu goddess Durga and youths dance in traditional costumes, in Ahmedabad, India, Tuesday. Amit Dave/Reuters

Britain’s Labour Party leader Jeremy Corbyn is given a violin lesson by 10-year-old Jessica Kelly during a visit to Faith Primary School in Liverpool, England Tuesday, where he met children taking part in the In Harmony project.The project is supported by the Royal Liverpool Philharmonic Orchestra and helps school children learn to play musical instruments. Stefan Rousseau/PA/AP
Market Closes for September 27^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By John Hyland
     (Bloomberg) — Canadian stocks fell a third day as a rout in commodities prices from oil to gold sent shares in resource producers tumbling.
     Raw-materials producers led declines as gold slumped 0.8 percent and an index of gold miners lost 2.4 percent. Energy shares slumped as crude dropped as much as 3 percent in New York after Iran said it’s not willing to freeze output. Consumer shares advanced amid data showing U.S. consumer confidence rose to the highest level since 2007, which helped spark gains in American shares.
     The S&P/TSX Composite Index fell 0.4 percent to 14,558.04 at 4 p.m. in Toronto, paring its advance this quarter to 3.5 percent. The measure has gained 12 percent this year, second- most among developed markets tracked by Bloomberg.
     The Canadian equity benchmark is roughly one-third commodity producers by weighting, making any selloff in resources likely to weigh on the broader index. The drop came as global equities looked set to halt a two-day slide, with U.S. shares edging higher after Hillary Clinton was deemed to have won Monday’s presidential debate against Donald Trump.
     Energy producers in Canada declined 1.2 percent, as crude slumped after Iran said it’s not on their agenda to reach an agreement at the OPEC talks in Algiers. Crude fell 3 percent at 4 p.m. in New York. Cenovus Energy Inc. fell 2.5 percent to their lowest level since July 2016. TransCanada Corp. declined 0.3 percent, after the company agreed to buy all outstanding units of Columbia Pipeline Partners LP for about $848 million in cash.
     Raw-materials producers lost 1.5 percent as spot gold and spot silver declined. OceanaGold Corp. dropped 14 percent to their lowest level since June, after they were named in an audit in the Philippines. Gold is set to end its longest winning streak since July, after Hillary Clinton was deemed the debate winner. Higher odds of a Trump victory are likely to spur price volatility in precious metals, according to Citigroup Inc. Barrick Gold Corp. fell 2.2 percent.
     Financial shares fell less than 0.1 percent, amid lingering European bank concern and weakened national trade. The Bank of Nova Scotia fell at least 0.5 percent and the Royal Bank of Canada dropped 0.2 percent. Toronto-Dominion Bank edged 0.2 percent higher.

US
By Rita Nazareth and Dani Burger
     (Bloomberg) — U.S. stocks shrugged off a drop in oil to rally as consumer confidence jumped and banking shares rebounded. Mexico’s peso led emerging markets higher on the perception that presidential nominee Hillary Clinton beat Donald Trump in their first debate.
     The S&P 500 Index extended its quarterly advance, led by technology and retail companies, while European stocks halted a two-day rout as banks trimmed their losses. Mexico’s peso, increasingly a barometer of Trump-related anxiety, led gains among the world’s major currencies. Treasuries advanced to a three-week high as the dollar retreated. Oil tumbled as Iran said it’s unwilling to freeze output at current levels and wants to raise production to 4 million barrels a day. Gold and copper slumped.
     Equities climbed after data showing U.S. consumer confidence rose to the highest since 2007 bolstered optimism about the world’s largest economy. The report also fueled gains in Europe, where lenders almost erased losses and Deutsche Bank AG was unchanged after plunging to a record low. While stocks struggled to find direction in early trading, polls showing Clinton outperformed Trump in the debate were also cited as a reason for relief. Citigroup Inc. has said a Republican win in November could send stocks slumping, and warned this week it may also spur volatility in both gold and currency markets.
     “You have the perspective that Trump lost the debate, and good consumer confidence numbers,” said Dennis Debusschere, a senior managing director and global portfolio strategist at Evercore ISI in New York. “If Deutsche Bank goes to the back page on the day, markets can focus on the election and the confidence data.”
     The first of three presidential debates between Trump and Clinton ahead of the Nov. 8 election drew more than 83 million viewers, making it the most-watched in history. The number snapped the previous record for the biggest audience set during the 1980 contest between Jimmy Carter and Ronald Reagan, with 80.6 million viewers.
     A CNN poll showed that 62 percent of voters who watched the debate said Clinton won the discussion, compared with 27 percent for Trump. Still, the Republican and Democratic nominees each got 46 percent of likely voters in a head-to-head contest in a Bloomberg Politics national poll released before the event.
     “Polls on voting intentions still show that the race is essentially neck and neck,” said James Athey, a money manager at Aberdeen Asset Management Plc in London, which has $402.9 billion in assets. “It will be these polls which truly have the power to drive a genuine re-pricing.”
     The S&P 500 added 0.6 percent to 2,159.93 at 4 p.m. in New York, extending its quarterly advance to 2.9 percent. Amazon.com Inc. jumped to a record, while Microsoft Corp. was up 1.9 percent to pace the rally.
     “Really, it’s the consumer confidence number, which was extremely strong here, a big positive surprise that has helped the market,” said Timothy Ghriskey, who helps manage 1.5 billion as chief investment officer at Solaris Asset Management LLC in New York.
     The Stoxx Europe 600 Index added less than 0.1 percent, wiping out an earlier decline. Banks trimmed losses as Deutsche Bank erased a drop of as much as 3.5 percent. Commerzbank AG fell after a report it plans to cut jobs and suspend dividend payments. Credit Suisse Group AG slid as its chief said the lender is mulling further cost cuts at the global markets unit that posted a loss earlier this year.
     MSCI’s gauge of global equities rose 0.3 percent, and emerging-market shares halted a two-day slide.
     The Mexican peso rebounded from a record low, a respite for a currency that has posted the worst performance among its major peers in the past month amid polls showing that Trump gained ground on Clinton. The U.S. Republican candidate has vowed to renegotiate the North American Free Trade Agreement if he wins.
     “Markets perceive a lower probability of Trump winning after the debate,” said Andres Jaime, a strategist at Barclays Plc who was the top forecaster for the currency in the first half of the year. “As shorts get squeezed, the Mexican peso is outperforming its peers.”
     Bloomberg’s Dollar Spot Index, which measures the greenback against major peers, dropped 0.3 percent. The yen was little changed, while the euro slipped 0.3 percent.
     The Swedish krona led losses among its Group-of-10 peers after Riksbank Governor Stefan Ingves said that he remains determined if necessary to fight low inflation with more stimulus.
     The Egyptian pound fell to a record low on the black market on speculation that policy makers will weaken the official exchange rate for the second time this year.
     U.S. 10-year notes advanced for a second day, with the yield falling three basis points, or 0.03 percentage point, to 1.56 percent, according to Bloomberg Bond Trader data. Merrill Lynch’s Option Volatility Estimate Index, known by the acronym MOVE, declined for a fifth day to 58.9 Monday, the lowest closing level in 21 months. It has fallen about 14 percent since Sept. 20, the day before the Federal Reserve’s latest policy decision.
     A closer-than-expected U.S. election or further turmoil in the European banking sector may serve as catalysts that would send volatility higher, according to Timothy High, U.S. strategist at BNP Paribas SA in New York, a primary dealer.
     “I don’t think we’re going to get a big warning before a volatility event,” High said. “It’s kind of like when a flock of birds changes direction. When one goes, they all go at the same time.”
     European securities from higher-rated nations climbed as investor uneasiness about Deutsche Bank’s financial footing sparked demand for the safest assets at the expense of those from more indebted nations. Germany’s 10-year bond yield fell to the lowest since July and Finland’s dipped below zero for the first time.
     Oil dropped in New York, continuing the gyrations of recent days. It’s “not on our agenda” to reach agreement at the OPEC talks in Algiers, Iranian Oil Minister Bijan Namdar Zanganeh said in the Algerian capital. Influential forecasters gave a worsening outlook for the market, with the head of the International Energy Agency saying supply and demand won’t be in balance until late 2017 and Goldman Sachs Group Inc. cutting its fourth quarter price forecast.
     “The chances of a deal being reached are shrinking,” said Phil Flynn, senior market analyst at Price Futures Group in Chicago. “The more we hear, the greater the doubts. The IEA’s comments and Goldman cutting their forecast put further pressure on the market.”
     West Texas Intermediate for November delivery dropped 2.7 percent to $44.67 a barrel on the New York Mercantile Exchange. Nickel surged after top ore supplier Philippines said three-quarters of its mining industry fell short in an audit. Gold, silver and copper retreated.

Have a wonderful evening everyone.

Be magnificent!

Our consciousness is not actually yours or mine; it is the consciousness of man,
evolved, grown, accumulated through many, many centuries…
When one realizes this our responsibility becomes extraordinarily important.
Krishnamurti

As ever,

Carolann

Lost time is never found again.
-Benjamin Franklin, 1706-1790

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