September 7, 2016 Newsletter

Dear Friends,

Tangents:

10 THINGS TO GIVE UP

1. EXCUSES
2. SELF DOUBT
3. FEAR OF FAILURE
4. PROCRASTINATION
5. PEOPLE PLEASING
6. FEAR OF SUCCESS
7. NEGATIVE THINKING
8. NEGATIVE SELF TALKS
9. JUDGEMENT OF OTHERS
10. NEGATIVE PEOPLE IN YOUR CIRCLE

PHOTOS OF THE DAY

Fog covers the Inntal Valley as the sun rises from behind Hundskopf mountain in the western Austrian village of Gnadenwald on Wednesday.Dominic Ebenbichler/Reuters

Jockeys ride through the fog as the sun rises at Chantilly horse track, outside Paris, on Wednesday. Michel Euler/AP
Market Closes for September 7^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:
Canada
By Eric Lam
     (Bloomberg) — Canadian stocks slipped after a three-day advance as a rally in materials producers faltered and consumer shares slumped after the Bank of Canada warned risks of weak inflation and slower economic growth have increased.
     The S&P/TSX Composite Index fell 0.1 percent to 14,796.65 at 4 p.m. in Toronto. The benchmark for Canadian equity had advanced 1.5 percent in the prior three days to the highest since June. The index remains the second-best performing developed market in the world, just behind New Zealand, with an advance of almost 14 percent this year. Canadian stocks are more expensive than their U.S. peers, with a price-earnings ratio of 23.5 for the S&P/TSX, opening up a 14 percent premium over the S&P 500 Index.
     Alimentation Couche-Tard Inc. lost 2.2 percent, the biggest drop since June, as consumer staples companies led declines. The convenience store and gas station operator will have to sell two sites in Ontario and Quebec to win approval from Canadian competition regulators to buy certain Imperial Oil Ltd. assets.
     Materials producers ended the day down 0.2 percent, paring an earlier loss, after surging 7.2 percent in the prior three days. New Gold Inc. dropped 7.2 percent, the most since May, to lead declines. The gold producer estimates an increase in capital costs during the development of a mine.
     Raw-materials producers remain the top-performing industry in Canada this year, fueling a rebound in the S&P/TSX after slumping the most since the 2008 Financial Crisis last year. The group, led by surging gold producers with gold on track for its best annual rally since 2010, is still up 55 percent and set to halt the longest yearly losing streak since 1988.
     On Wednesday, the Bank of Canada maintained interest rates at the current 0.5 percent benchmark lending rate, in the central bank’s first decision since July. Canada’s economy contracted by the most since 2009 in the second quarter, yet there were glimmers of optimism as the May Alberta wildfires played a large role in that weakness. Traders are now pricing in an almost 10 percent chance of a rate cut in October, up from 5.7 percent a day ago according to data compiled by Bloomberg.
      “Today’s statement seemed a bit more dovish than might have been expected,” said Avery Shenfeld, chief economist at CIBC Capital Markets in a note to clients. “Financial vulnerabilities related to household debt were still mentioned, a reason why rate cuts aren’t in the offing any time soon.”

US
By Joseph Ciolli
     (Bloomberg) — U.S. stocks closed little changed, holding near records while investors brooded over the trajectory of Federal Reserve monetary policy after mixed economic reports.
     Equities failed to make headway as consumer-staples companies capped the worst drop in six weeks, offsetting gains in technology and energy shares. General Mills Inc. fell the most in almost two years, while Whole Foods Market Inc. and Kroger Co. lost more than 4 percent, spurred by a 14 percent drop in rival Sprouts Farmers Market Inc. after the grocer cut its profit outlook. Apple Inc. rose after executives unveiled new products, and Facebook Inc. advanced to a fresh high, extending its longest winning streak in five months.
     The S&P 500 Index lost less than 0.1 percent to 2,186.15 at 4 p.m. in New York, after rising to within three points of an all-time high. The Dow Jones Industrial Average declined 11.98 points to 18,526.14, and the Nasdaq Composite Index added 0.2 percent to extend a record reached yesterday. About 6.3 billion shares traded hands on U.S. exchanges, 6 percent below the three-month average.
     “The economic data that’s come out in the past week or so has been underwhelming,” said Walter Todd, who oversees about $1.1 billion as chief investment officer for Greenwood Capital Associates LLC in South Carolina. “There was a little hype about the Fed moving in September, but now we’re back to where we were a month ago, questioning whether they’re going to raise at all this year.”
     The S&P 500 been treading water since its Aug. 15 record amid speculation on the path of interest rates and lackluster data. The main U.S. equity index has held in a band of 1.5 percent for 39 days, the narrowest ever for that length of time, and has gone 42 sessions without a 1 percent move in either direction, the longest since 2014.
     Still, data from the Commodity Futures Trading Commission show that hedge funds are adding to long positions in the equity market and building up shorts against the CBOE Volatility Index. Their bullishness contrasts with the views of Wall Street equity strategists, who see the S&P 500 retreating from its current level by the end the year. The measure of market turbulence known as the VIX fell 0.7 percent Wednesday to 11.94, a two-week low.
     Fed Bank of San Francisco President John Williams offered an upbeat assessment of the U.S. economy in a speech on Tuesday. A report today showed job openings climbed to a record in July, rising by the most in six months. Separately, the Fed’s Beige Book survey of regional conditions said the economy grew at a modest pace in July and August as a strong labor market failed to put much upward pressure on wages and prices.
     That follows recent disappointing readings on services- sector activity, manufacturing and hiring that cast doubt on the sturdiness of growth, even after strong consumer spending figures for July. Fed-funds futures currently reflect a 22 percent chance of an increase in borrowing costs this month, down from as high as 36 percent before yesterday’s services data. The first meeting with a better-than-even chance of a hike is December.
     “Interest rates are off the table, but the picture is somewhat cloudy,” said Patrick Spencer, London-based vice chairman of equities at Robert W. Baird, which manages $151 billion. “People are very cautious because they’ve seen the recent economic indicators and they’re concerned that 2017 will continue to see slower growth, but the data haven’t been too bad.”
     In Wednesday’s trading, consumer-staples in the S&P 500 fell 0.9 percent, while technology shares rose for a fourth day to a 16-year high. Whole Foods retreated to a four-month low, and Kroger slumped the most since March. Also weighing on the staples group, Colgate-Palmolive Co. lost 2 percent, and Mead Johnson Nutrition Co. sank 5.5 percent.
     Bolstering the tech group, Western Digital Corp. surged 12 percent, the best since last September, after raising its fiscal first-quarter outlook. Competing hard-drive maker Seagate Technology Plc increased 5.9 percent to a five-month high.
     A Bloomberg gauge of U.S. airlines jumped the most in almost two months after Southwest Airlines Co. said it would slow capacity growth next year, bringing the supply of seats and flights more in line with demand and possibly relieving pressure on fares. American Airlines Group Inc. and Delta Air Lines Inc. rallied more than 4.8 percent.
     Apache Corp. advanced 6.7 percent, the strongest since May, to lead energy producers after saying it made an “immense” oil and natural-gas discovery in an underdeveloped area of Texas’ Permian shale formation, though a lack of infrastructure will pose challenges to bringing the fuel to market.
     Among other shares moving on corporate news, Chipotle Mexican Grill Inc. added 5.9 percent after activist investor Bill Ackman’s Pershing Square Holdings Ltd. announced a 9.9 percent stake in the restaurant chain, which is struggling to recover from a series of foodborne illnesses that began in the second half of 2015.
     Tegna Inc. rose 8.9 percent amid plans to list auto-sales website Cars.com as a separate public company, and it’s evaluating a sale of its CareerBuilder job-hunting unit.
 

Have a wonderful evening everyone.

Be magnificent!

From Him woman was born; and from Her man was born.
From His mind the moon was born; from His eye the sun was born; from His breath the wind was born.
From His navel the atmosphere was born; from His head the sky was born;
and from His ear the four quarters of the sky were born.
Thus the universe was in order.
Rig Veda

As ever,

Carolann

Be true to your work, your word,
and your friend.
          -Henry David Thoreau, 1817-1862

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