Month: August 2012

Dear Friends,

Tangents:

Interesting news item today:

Scientists have found a galaxy that gives birth to more stars in a day than ours does in a year.  Astronomers used NASA’s Chandra X-Ray telescope to spot this distant gigantic galaxy creating about 740 new stars a year.  By comparison, our Milky Way  galaxy spawns just about one new star each year. The galaxy is about 5.7 billion light years away in the center of a recently discovered cluster of galaxies.

And also on this day in…

1777 – France declares a state of bankruptcy.

1812 – American General Hull surrenders Detroit without resistance to smaller British force under General Isaac Brock.

1896 – Gold discovered in the Klondike of Canada’s Yukon Territory, setting off the Gold Rush.

1948 – Babe Ruth died.

1958 – Madonna was born.
1965 – The Watts Riot ends in South Central Los Angeles after six days.

1977 – Elvis Presley died.

I don’t know anything about music.  In my line you don’t have to. –Elvis Presley.

photos of the day August 16, 2012

Horses continue running after losing their riders during the Madonna dell’Assunta (Virgin of the Assumption) ancient Palio, the famous break-neck bareback horse race run in the main square in Siena, Italy.

Paolo Lazzeroni/AP

People browse books at a giant outdoor library, an installation by Italian artist Massimo Bartolini, in the vineyard of the Saint-Peters Abbey in Ghent, Belgium.

Virginia Mayo/AP

Data from NASA’s Hubble Space Telescope shows two clusters full of massive stars that may be in the early stages of merging. The 30 Doradus Nebula is 170,000 light-years from Earth.

NASA/Reuters

Market Closes for August 16, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13250.11	+85.33
		+0.65%
S&P 500	1415.51	+9.98
		+0.71%
NASDAQ	3062.39	+31.46
		+1.04%
TSX	12032.58	+127.14
		+1.07%

International Markets

Market  Index	Close	Change
NIKKEI	9092.76	+167.72
		+1.88%
HANG  SENG	19962.95	-89.34
		-0.45%
SENSEX	17600.56	-1.22
		-0.01%
FTSE 100	5834.51	+1.47
		+0.03%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.963	1.942
CND.   30 Year Bond	2.489	2.454
U.S.   10 Year Bond	1.8346	1.8051
U.S.   30 Year Bond	2.9527	2.9100

Currencies

BOC Close	Today	Previous
Canadian $	1.01356	1.01086
US   $	0.98663	0.98926
Euro Rate  1 Euro=		Inverse
Canadian   $	1.21922	0.82019
US  $	1.23575	0.80922

Commodities

Gold	Close	Previous
London Gold   Fix	1614.95	1604.00
Oil	Close	Previous
WTI Crude Future	95.60	94.33
BRENT	117.53	117.23

Market Commentary:

Canada

By Katia Dmitrieva

Aug. 16 (Bloomberg) — Canadian stocks rose, sending the Standard & Poor’s/TSX Composite Index to the highest level since May, after German Chancellor Angela Merkel affirmed support for the euro during a press conference in Ottawa and U.S. building permits jumped to a four-year high.

Barrick Gold Corp. climbed 3.9 percent after the company said it is in preliminary talks to sell its Africa unit to China National Gold Group Corp. Cameco Corp. added 5.2 percent as oil advanced in New York. Alderon Iron Ore Corp. rallied 6.5 percent. Energy and raw-materials companies contributed the most to gains in the S&P/TSX.

The Canadian stocks gauge rose 127.14 points, or 1.1 percent, to 12,032.58. The benchmark index has climbed 1.6 percent over the last three sessions, erasing its 2012 losses.

“Merkel came out and reaffirmed her support for the euro,” Jeff Young, who helps manage C$900 million as chief investment officer at NexGen Financial Corp. in Toronto, said in a phone interview. “People are thinking that to support the euro, that’s going to necessitate bringing down the borrowing cost for euro members, which is going to necessitate help from the ECB, which means we’re going to get quantitative easing out of the ECB. That’s the chain of thought.”

Merkel backed the European Central Bank’s insistence on austerity conditions for helping reduce borrowing costs in indebted countries, saying Germany is “in line” with the ECB’s approach to defending the euro. She said that euro-area policy makers “feel committed to do everything we can to maintain the common currency.” Merkel also hailed Canada’s budget and debt discipline as a model for the 17-nation euro area.

Oil surged on the Comex in New York, climbing above $95 a barrel for the first time in three months on signals of future U.S. economic growth and concern that Israel will strike Iran and disrupt oil supplies.

U.S. building permits reached a four-year high, increasing to an 812,000 annual pace in July. Michael Oren, Israel’s U.S. ambassador, said yesterday that Israel would strike Iran if only to delay that country’s ability to produce nuclear weapons for a few years.

Canadian Natural Resources Ltd. rose 2.3 percent to C$31.53. Cameco added 5.2 percent to C$22.

Goldcorp Inc. increased 4.7 percent to C$37.93 as the metal gained 0.8 percent on the Comex in New York. Kinross Gold Corp. rose 2.6 percent to C$8.25. Alderon Iron climbed 6.5 percent to C$2.45.

Barrick Gold added 3.9 percent to C$35.60. China, with $3.2 trillion of foreign-exchange reserves, has urged its companies to buy assets overseas, securing energy and commodity resources to feed industries from power generation to construction. A deal for Barrick’s 73.9 percent stake in African Barrick Gold Plc is not certain, the company said.

US

By Lu Wang

Aug. 16 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level since April, as building permits jumped in July to a four-year peak and Cisco Systems Inc.’s earnings beat estimates.

Cisco rallied 9.6 percent while Sears Holdings Corp. climbed 6.5 percent as its loss narrowed. An S&P index of homebuilders soared 4.4 percent to the highest level since 2008.

Facebook Inc. dropped 6.3 percent to the lowest price since its initial public offering as the end of a lockup period freed 271.1 million shares for trading. Wal-Mart Stores Inc. fell 3.1 percent after its forecast trailed analyst estimates.

The S&P 500 rose 0.7 percent to 1,415.51 at 4 p.m. in New York. The benchmark index is less than four points from a four- year peak of 1,419.04 set on April 2. The Dow Jones Industrial Average added 85.33 points, or 0.7 percent, to 13,250.11. The Nasdaq Composite Index climbed 1 percent to 3,062.39. Volume for exchange-listed stocks in the U.S. was 5.9 billion shares, 9 percent below the three-month average.

“We’re in a situation where the economy is growing, jobs are being created, and the consumer seems to be feeling better about spending,” Jason Benowitz, who helps manage $5 billion at Roosevelt Investment Group Inc. in New York, said in a phone interview. “The fact permitting is improving in the housing market suggests the future is going to be there. On the other hand, you have to counterweight the less likely chance of further monetary easing.”

The S&P 500 Total Return index, which assumes dividends are reinvested back into the gauge’s 500 stocks, climbed to a record today even as the regular S&P 500 remained almost 10 percent below its peak in 2007.

Stocks broke out of a narrow trading range today. The S&P 500 has hovered around 1,400 for the past seven sessions, with intraday price movement averaging 0.6 percent, the smallest fluctuation over a comparable period since January 2011, according to data compiled by Bloomberg. The Dow’s price swings were less than 1 percent from Aug. 6 through yesterday, the narrowest since at least 2000, the data show.

Trading volume and volatility have dropped as vacationing traders awaited policy clues from the Federal Reserve’s summit at the end of the month and a European Central Bank meeting in September. The index has rallied 11 percent from a five-month low on June 1 amid speculation global central banks will introduce further stimulus measures.

Equities extended gains after a person familiar with the matter said Spain is about to get an emergency disbursement from a 100 billion-euro ($123 billion) bailout package. German Chancellor Angela Merkel said the ECB’s insistence on conditionality in return for help to lower borrowing costs in indebted countries matches her country’s priorities to end the crisis in the euro region.

“Everybody is seeing an emerging good story coming out of Europe,” Greg Peterson, director of investment research at Ballentine Partners LLC in Waltham, Massachusetts, which has about $4 billion in assets, said in a phone interview.

“American corporations are in great shape. Their earnings are solid and their cash at hand is excellent. I expect the solid returns to hold for the rest of the year, if not build on it.”

Building permits, a proxy for future construction, rose to an 812,000 pace, the most since August 2008, the Commerce Department said today. A Labor Department report showed jobless claims climbed by 2,000 to 366,000 in the week ended Aug. 11 while the Fed Bank of Philadelphia’s general economic index showed manufacturing in the Philadelphia region contracted in August for a fourth consecutive month.

“Today’s data is by and large neutral,” Wasif Latif, vice president of equity investments at USAA Investments in San Antonio, which oversees about $50 billion, said in a phone interview. “But when you aggregate the data that have been coming in during the summer, there does seem to be some softening going on in the economic activity, other than the bottoming that we’re witnessing in housing. That would indicate that the Fed continues to be ready to do something.”

Technology, commodity and industrial companies rose the most among 10 S&P 500 industry groups, jumping at least 0.9 percent. The Morgan Stanley Cyclical Index climbed 1.6 percent to the highest level since May as investors snapped up shares most tied to economic swings.

The S&P gauge of computer and software makers advanced 1.5 percent. Microsoft Corp. gained 1.9 percent to $30.78 while International Business Machines Corp. added 1.2 percent to $200.84.

Cisco surged 9.6 percent, the most in a year, to $19.02. The biggest maker of computer-networking equipment reported profit and sales that topped analysts’ estimates as job cuts kept costs in check and price reductions attracted customers.

Sears climbed 6.5 percent to $60.29. The retailer controlled by hedge fund manager Edward Lampert reported a smaller second-quarter loss, helped by reduced inventory costs.

All 11 members of the S&P Supercomposite Homebuilding Index advanced. PulteGroup Inc. jumped 6.4 percent to $13.60, KB Home added 5.5 percent to $10.89 and Toll Brothers Inc. increased 5.6 percent to $32.16.

Home Depot Inc., the largest U.S. home-improvement retailer, rose 2.4 percent to $56.31, the highest level since 2000. Smaller rival Lowe’s Cos. gained 2.3 percent to $27.45.

GameStop Corp. climbed 5.5 percent to $17.98 for the biggest increase since April 2011. The largest video-game retailer boosted its dividend by 67 percent and said it will buy back stock after reporting a drop in second-quarter earnings.

Facebook sank 6.3 percent to $19.87, the lowest close ever. The world’s largest social network freed up 271.1 million of its shares today, boosting by 60 percent the number that could be traded and adding to concerns that have weighed on the stock since the company’s May IPO.

Early Facebook investors such as DST Global Ltd., Goldman Sachs Group Inc., Elevation Partners and Accel Partners get a green light today to start selling part of their holdings, Menlo Park, California-based Facebook has said in filings.

Wal-Mart fell 3.1 percent to $72.15. The world’s largest retailer said profit this year may be $4.83 to $4.93 a share amid slowing sales growth in the U.S. The average estimate of analysts was for profit of $4.93.

Agilent Technologies Inc. tumbled 8.2 percent to $37.15. The maker of scientific-testing equipment cut its full-year forecasts, citing slowing economic growth and delays in order deliveries from customers. Profit for the current fiscal year will be no more than $3.08 a share, Agilent said. Analysts, on average, estimated $3.23.

Perrigo Co. slipped 6.6 percent to $108.93. The generic over-the-counter drugmaker reported fourth-quarter sales of $831.8 million, trailing the average analyst estimate of $854 million in a Bloomberg survey.

Idenix Pharmaceuticals Inc. plunged 30 percent, the most in two years, to $5.84. A trial of the company’s hepatitis C drug was placed on hold because of heart failure concerns raised in a competitor’s study of a similar medicine, Idenix said.

A possible stalemate around U.S. fiscal tightening and a slowing economy will pull stocks down this year, even as equities may gain in the longer term, Goldman Sachs Group Inc.’s chief U.S. equity strategist said.

“The uncertainty that is very significant relating to the fiscal cliff and the budget issues and the tax policy for next year are unlikely to get resolved in the very near term,” New York-based David Kostin said in a radio interview today on “Bloomberg Surveillance” with Tom Keene. Still, “if you are looking where you are buying the market now, on a long term basis, it is attractive.”

 

Have a wonderful evening everyone.

Be magnificent!

 

It is necessary that this be the aim of our entire life.

In all of our thoughts and actions,

we must be conscious of the infinite.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

 

One cool judgment is worth a thousand hasty counsels.

The thing to be supplied is light, not heat.

-Woodrow Wilson, 1856-1924

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

 

Dear Friends,

Tangents:

August 15^th, 1969: Over 400,000 young people attend a weekend of music at Woodstock, New York.

August 15, 1969 – The Woodstock Music Festival Poster:

Aerial shot of the 1969 Woodstock Music Festival

And also on  this day in…

1769 – Napoleon Bonaparte was born.

1912 – Julia Child was born.

1914 – The Panama Canal opens to traffic.

1930 – President Hoover looks to combat drought and economic depression.
1947 – Britain grants independence to India and Pakistan.
1945 – Gasoline and fuel oil rationing ends in the U.S.

photo of the day August 15, 2012

A couple talk as the sun sets at Enoshima beach in Fujisawa, near Tokyo.

Shizuo Kambayashi/AP

Market Closes for August 15, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13164.71	-7.43
		-0.06%
S&P 500	1405.53	+1.60
		+0.11%
NASDAQ	3030.93	+13.95
		+0.46%
TSX	77909.88	+56.27
		+0.47%

International Markets

Market  Index	Close	Change
NIKKEI	8925.04	-4.84
		-0.05%
HANG  SENG	20052.29	-239.39
		-1.18%
SENSEX	17728.20	CLOSED FOR INDEPENDENCE DAY
FTSE 100	5833.04	-31.74
		-0.54%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.942	1.857
CND.   30 Year Bond	2.454	2.382
U.S.   10 Year Bond	1.8051	1.7309
U.S.   30 Year Bond	2.9100	2.8307

Currencies

BOC Close	Today	Previous
Canadian $	1.01086	1.00772
US   $	0.98926	0.99234
Euro Rate  1 Euro=		Inverse
Canadian   $	1.21569	0.82258
US  $	1.22889	0.81374

Commodities

Gold	Close	Previous
London Gold   Fix	1604.00	1599.65
Oil	Close	Previous
WTI Crude Future	94.33	93.43
BRENT	117.23	114.93

Market Commentary:

Canada

By Katia Dmitrieva

Aug. 15 (Bloomberg) — Canadian stocks advanced after U.S. industrial production rose in July as investors awaited more signs of whether the Federal Reserve and European Central Bank would act to spur economic growth.

Royal Bank of Canada and Toronto-Dominion Bank advanced at least 0.9 percent. Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, climbed 1 percent. Bank shares contributed most to gains on the Standard & Poor’s/TSX Composite Index. Energy shares reversed declines as oil rose.

The S&P/TSX gained 52.24 points, or 0.4 percent, to 11,905.85 at 3:21 p.m. in Toronto, after falling as much as 0.1 percent earlier.

“People are positioning themselves for a potential solution out of Europe by buying the financial stocks,” Brian Huen, who helps manage C$55 million at Toronto-based Red Sky Capital Management Ltd., said in phone interview. “I think the market is in an up-trend because people want to own this market, especially into the late August, early September events.”

Industrial production in the U.S. rose in July, led by a pick-up in motor vehicle output and a rebound in utility use during the hottest month on record. In a separate report by the Federal Reserve Bank of New York, manufacturing in the New York area contracted in August for the first time in 10 months.

The Federal Open Market Committee on Aug. 1 reiterated its pledge to ease policy further if necessary, and ECB President Mario Draghi promised last month that policy makers will do whatever is needed to preserve the euro. Investors are awaiting Fed Chairman Ben S. Bernanke’s speech Aug. 31 at the Kansas City conference in Jackson Hole, Wyoming, and an ECB meeting next month for more direction.

Royal Bank, the country’s largest lender, gained 1 percent to C$52.52. Toronto-Dominion Bank advanced 0.9 percent to C$80.06. Bank of Montreal added 0.4 percent to C$57.35.

Gold companies advanced as the metal rose 0.3 percent on the Comex in New York. Osisko Mining Corp., which holds interest in the Canadian Malartic gold deposit in Quebec, added 2.5 percent to C$9.28. Barrick Gold Corp., the largest producer of the metal, rose 1 percent to C$34.23. New Gold Inc. advanced 2.6 percent to C$10.21.

Great Basin Gold Ltd., a producer of the metal in South Africa and Nevada, plunged 45 percent to 24 cents, the most in almost 23 years. It warned investors it’s running out of cash after lower-than-expected production at the Burnstone mine. It will seek to raise at least C$60 million ($61 million) through a combination of asset sales or new shares. Chief Executive Officer Ferdi Dippenaar resigned.

Potash Corp. increased 1 percent to C$43.34. Agrium Inc., the largest farm retailer in the U.S., added 1.7 percent to C$97.60. The company is meeting with Jana Partners LLC and other shareholders today after rejecting the hedge fund’s proposal for Agrium to spin off its retail unit, according to two people familiar with the situation.

Oil reversed declines as the commodity gained 0.8 percent on the Comex in New York, having fallen as much as 0.8 percent in earlier trading. Cenovus Energy Inc. added 1 percent to C$32.64. Cameco Corp. advanced 2.4 percent to C$20.87.

US

By Lu Wang

Aug. 15 (Bloomberg) — Most U.S. stocks rose, after a two- day decline in the Standard & Poor’s 500 Index, as investors weighed manufacturing data for clues on whether the Federal Reserve will move to stimulate the economy.

Abercrombie & Fitch Co. and JDS Uniphase Corp. rallied at least 8.2 percent after earnings topped analysts’ estimates.

Deere & Co. dropped 6.3 percent as profit trailed analysts’ estimates and the largest maker of farm equipment cut its full- year forecast. Staples Inc. tumbled 15 percent after reducing its projections amid slower growth.

More than two stocks advanced for each declining on U.S. exchanges at 4 p.m. New York time. The S&P 500 rose 0.1 percent to 1,405.53, after falling as much as 0.2 percent. The Dow Jones Industrial Average slipped 7.36 points, or 0.1 percent, to 13,164.78. Volume for exchange-listed stocks in the U.S. was 4.8 billion shares, 26 percent below the three-month average.

“You’re getting back and forth data that sometimes confirm the potential for QE3, like today, and yesterday brings it into question,” said Andrew Slimmon, Chicago-based managing director of global investment solutions at Morgan Stanley Smith Barney, referring to another round of Fed stimulus known as quantitative easing. His firm has $1.7 trillion in client assets. “There is going to be no other expected major news between now and when the Fed meets on Aug. 31. There will be a lot of conjecture back and forth about what they are going to do.”

Industrial production in the U.S. increased in July, Fed data showed today, propelled by a pickup in motor vehicle output and a rebound in utility use during the hottest month on record.

A separate report showed manufacturing in the New York area unexpectedly contracted in August for the first time since October.

The S&P 500 slipped less than 0.1 percent yesterday as a slump in technology and financial shares reversed an earlier rally amid better-than-estimated retail sales. Intraday price swings in the benchmark index have narrowed to a daily average of 0.6 percent during the past eight days, the smallest fluctuation over a comparable period since January 2011, according to data compiled by Bloomberg.

The index has fluctuated around 1,400 for the past seven trading sessions, with U.S. equity volume reaching the lowest level since at least 2008 excluding holidays and volatility sliding to a five-year low.

“With the volume so light, it doesn’t take much to get a movement in either direction,” Scott Armiger, a money manager at Christiana Trust in Greenville, Delaware, which has $11 billion in client assets, said in a phone interview. “The market just seems to be resisting all the worries here.”

Trading has slowed as vacationing traders awaited policy clues from the Fed’s summit at the end of the month and the European Central Bank meeting in September. The index has rebounded 10 percent from a five-month low on June 1 amid speculation global central banks will introduce further stimulus measures. The Fed will hold off from a third round of bond buying in September amid better economic figures, Goldman Sachs Group Inc. said in a report today.

About 4.5 billion shares changed hands on all venues on Aug. 13, the lowest level in data compiled by Bloomberg going back four years that excludes the days surrounding New Year’s, Christmas, Thanksgiving and Independence Day. Volume averaged 5.8 billion shares a day this month, 13 percent below the average level during the first seven months of 2012.

The Chicago Board Options Exchange Volatility Index, known as the VIX, lost 7.1 percent to 13.70 on Aug. 13, the lowest level since June 2007. The VIX fell 1.5 percent to 14.63 today.

Investors are piling into securities that gain should equity volatility increase, a bearish bet on stocks that was last popular when the S&P 500 climbed above 1,400 in March.

Outstanding shares jumped to a record for the three most-used exchange-traded securities that profit from volatility gains in U.S. stocks, according to data compiled by Bloomberg.

Consumer discretionary, financial and commodities companies in the S&P 500 rose more than 0.3 percent as a group today while energy and utilities stocks performed worst, losing at least 0.3 percent.

Cisco Systems Inc. rose 1.1 percent to $17.35 during regular trading. After the market close, the biggest maker of computer-networking equipment posted profit and sales that beat analysts’ estimates and raised its quarterly dividend by 75 percent. The stock jumped 4.3 percent to $18.10 in extended trading at 5:21 p.m.

Abercrombie & Fitch rallied 9 percent to $35.23. The teen- clothing retailer authorized additional share buybacks and reported second-quarter profit that topped the company’s preliminary report earlier this month.

JDS Uniphase surged 8.2 percent to $11.56. The maker of fiber-optic testing equipment posted fourth-quarter profit excluding some items of 15 cents a share, beating the average analyst estimate of 12 cents in a Bloomberg survey. The company forecast first-quarter sales between $415 million and $435 million, compared with the average analyst estimate for $426.2 million at the time of the company’s release.

Target Corp. added 1.8 percent to $64.50, the highest level since October 2007. The second-largest U.S. discount retailer raised its annual profit forecast as it increases sales by adding groceries and enticing more spending from customers with a discount card.

Facebook Inc., which raised $16 billion in the largest-ever technology initial public offering, rose 4 percent to $21.20. A lockup on shares held by investors begins to expire tomorrow.

The owner of the world’s most popular social network plunged 46 percent from its May debut through yesterday amid concern over the company’s ability to make money from mobile users.

Deere lost 6.3 percent to $75.10. The world’s largest manufacturer of agricultural equipment cut its full-year profit forecast as sales slow in Asia and Latin America, undermining the company’s growth strategy. Profit for the full year will be $3.1 billion, Deere said, compared with its May forecast of $3.35 billion and the $3.33 billion average of 15 analyst estimates.

Staples tumbled 15 percent to $11.49, the lowest close since 2003. The office-supply retailer said results fell short of its expectations in the second quarter because U.S. growth decelerated and demand remained weak in Europe and Australia.

Staples said annual revenue will be unchanged, compared with a May forecast for low-single digit growth. Analysts had estimated a gain of about 1 percent.

The S&P 500 may reach 1,500 this year as the economy picks up momentum in the fourth quarter, according to Byron Wien, vice chairman of Blackstone Group LP’s advisory services unit.

“Housing is bottoming, gasoline is down from the beginning of the year, 90 percent of the people in the country have jobs,” Wien said in an interview this morning on Bloomberg Television’s “In the Loop” show. “The European situation is getting better, not resolved, but getting better. The fiscal cliff will be deferred,” he said, referring to higher taxes and spending cuts that will take effect at year-end unless Congress acts. “There will be more good news than bad.”

Have  a wonderful evening everyone.

Be magnificent!

Meditation is movement without any motive, without words, and the activity of thought.

It must be something that is not deliberately set about.

Only then is it a movement within the infinite, measureless to man, without a goal, without an end,

without a beginning.  And that has a strange action in daily life, because all life is one,

and then becomes sacred.

Krishnamurti, 1895-1986

As ever,

Carolann

For one human being to love another; that is perhaps the most difficult of all our tasks, the ultimate, the last test and proof, the work for which all other work is but a preparation.

-Rainer Maria Rilke, 1875-1926

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Today is the day Italians celebrate La Torta dei Fieschi:

When Count Fieschi of Lavagna in Genoa, Italy, was married in 1240, he invited his guests—and everyone else in town—to share a cake that was more than 30 feet high. The citizens of Lavagna haven’t forgotten his generosity, and each year they celebrate the event on August 14. Dressed in costumes, they parade to the town square, where they pin to their clothes a piece of paper (blue for men, white for women) on which a word is written. When they find someone wearing the same word, the couple is given a piece of “Fieschi’s cake.” –from The Free Dictionary by FarLex.

And also on this day in…

1935 – FDR signs Social Security Act.

1945 – Japan’s unconditional surrender becomes public.

1959 – Earvin “Magic” Johnson was born.

1968 – Halle Berry was born.
1973 – The U.S. ends the “secret” bombing of Cambodia.

2003 – Blackout hits Northeast U.S. and Canada.

photos of the day August 14, 2012

Children play in a mud bank while watching a festival inaugurating the Amazon River as one of the seven natural wonders of the world at the mouth of Itaya River in Iquitos, Peru. The Amazon River made it to the list of winners in a global contest conducted by the New Seven Wonders Foundation.

Enrique Castro-Mendivil/Reuters

Gardeners work on a giant carpet made of flowers to form a floral decoration at Brussels’ Grand Place. The design requires about 700,000 flowers to create, according to event organizers.

Francois Lenoir/Reuters

Market Closes for August 14, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13172.14	+2.71
		+0.02%
S&P 500	1403.93	-0.18
		-0.01%
NASDAQ	3016.98	-5.54
		-0.18%
TSX	11853.61	+15.28
		+0.13%

International Markets

Market  Index	Close	Change
NIKKEI	8929.88	+44.73
		+0.50%
HANG  SENG	20291.68	+210.32
		+1.05%
SENSEX	17728.20	+94.75
		+0.54%
FTSE 100	5864.78	+32.90
		+0.56%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.857	1.803
CND.   30 Year Bond	2.382	2.334
U.S.   10 Year Bond	1.7309	1.6625
U.S.   30 Year Bond	2.8307	2.7515

Currencies

BOC Close	Today	Previous
Canadian $	1.00772	1.00757
US   $	0.99234	0.99249
Euro Rate  1 Euro=		Inverse
Canadian   $	1.22245	0.81803
US  $	1.23489	0.81176

Commodities

Gold	Close	Previous
London Gold   Fix	1599.65	1609.95
Oil	Close	Previous
WTI Crude Future	93.43	92.73
BRENT	114.93	113.92

Market Commentary:

Canada

By Julia Leite

Aug. 14 (Bloomberg) — Canadian stocks advanced as U.S. retail sales beat estimates and oil rose amid speculation that inventories declined to the lowest level in four months.

Suncor Energy Inc., the nation’s largest oil producer, gained 0.9 percent. Agrium Inc., the largest U.S. farm retailer, climbed 0.6 percent after saying it won’t spin off its retail operations. Gold producer Alacer Gold Corp. slumped 2 percent as it cut its production forecast for the year.

The Standard & Poor’s/TSX Composite Index rallied 56.06 points, or 0.5 percent, to 11,894.39 at 11:43 a.m. in Toronto.

It slipped 0.4 percent yesterday. Energy and financial stocks contributed the most to the advance today among 10 industries in the gauge, while raw-materials shares declined.

“The European economic data wasn’t worse than what people expected, so that was a positive,” Irwin Michael, a portfolio manager at ABC Funds in Toronto, said in a telephone interview.

His firm oversees about C$850 million. “U.S. retail sales were considerably better than expected. I guess people gain a little confidence, which takes gold down and oil up.”

Retail sales in the U.S. rose more than forecast in July, the first gain in four months, as consumer spending rebounded at department stores, auto dealers and electronics outlets. The 0.8 percent increase reported by the U.S. Commerce Department exceeded economists’ projections for a 0.3 percent rise, based on the median forecast in a Bloomberg survey.

Stocks worldwide advanced earlier after Germany said gross domestic product rose 0.3 percent from the first quarter.

Economists predicted a 0.2 percent increase, according to a Bloomberg News survey. French GDP was unchanged in the quarter, better than the 0.1 percent decline economists had predicted.

Oil snapped two days of losses before a U.S. Energy Department report that analysts estimate will show a decline in crude stockpiles last week. Stockpiles probably fell by 1.75 million barrels in the seven days ended Aug. 10 as refiners operated near the highest rates in five years, according to the median response in a Bloomberg survey.

Oil for September delivery advanced 0.8 percent to $93.43 a barrel. Suncor rose 0.9 percent to C$31.80. Canadian Natural Resources Ltd., the nation’s third-largest oil company, advanced 2 percent to C$30.66.

Royal Bank of Canada, the nation’s largest lender, gained 2 percent to C$51.93, snapping four days of declines. Bank of Nova Scotia, Canada’s third-largest bank, rose 0.8 percent to C$52.27 after agreeing to buy 51 percent of Colfondos AFP, Colombia’s fourth-largest pension-fund company.

Agrium advanced 0.6 percent to C$96.12 after announcing it would hold onto its retail business following a report that shareholder Jana Partners LLC wants to separate the unit from the more profitable wholesale operations.

Osisko Mining Corp. declined 1.6 percent to C$9.17 as gold fell for a second day, shedding 0.5 percent to $1604.50 an ounce. Alacer Gold fell 2 percent to C$5.93.

US

By Inyoung Hwang

Aug. 14 (Bloomberg) — U.S. stocks erased gains, sending the Standard & Poor’s 500 Index lower for a second day, as a slump in technology and financial shares reversed an earlier rally amid better-than-estimated retail sales.

Hewlett-Packard Co. and Cisco Systems Inc. posted the biggest declines in the Dow Jones Industrial Average. The S&P 500 Financials Index slipped 0.1 percent after earlier rising as much as 0.7 percent. Alcoa Inc. retreated 1.6 percent, pacing losses among commodity stocks. Home Depot Inc. increased 3.6 percent after quarterly earnings topped analysts’ estimates.

The S&P 500 dropped less than 0.1 percent to 1,403.93 at 4 p.m. in New York, after earlier rising as much as 0.4 percent.

The Dow added 2.71 points, or less than 0.1 percent, to 13,172.14. Volume for exchange-listed stocks in the U.S. was about 5.2 billion shares today, 20 percent below the three-month average, according to data compiled by Bloomberg.

“The light volume demonstrates there’s just little conviction right now,” Peter Tuz, who helps manage about $800 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a telephone interview. “It is a symptomatic of the fact that people are just not that interested in the equity market.”

Stocks rose early in the day after U.S. retail sales climbed more than forecast in July as consumer spending rebounded at department stores, auto dealers and electronics outlets. The 0.8 percent advance, the first gain in four months, followed a 0.7 percent drop in June, Commerce Department figures showed. Economists projected a 0.3 percent rise, according to the median forecast in a Bloomberg survey.

A separate report showed wholesale prices increased more than forecast in July, reflecting higher costs for automobiles, cigarettes and pharmaceuticals.

Stocks worldwide advanced earlier after the Federal Statistics Office in Germany said gross domestic product rose 0.3 percent from the first quarter. Economists predicted a 0.2 percent increase, according to the median of 40 estimates in a Bloomberg News survey. French GDP was unchanged in the quarter, better than the 0.1 percent decline economists had predicted.

“The market was up earlier on light volume,” said Eric Teal, chief investment officer at First Citizens Bancshares Inc., which manages $4.5 billion in Raleigh, North Carolina, said in a telephone interview. “The economic news has been generally on the uptrend in the last few weeks despite ongoing European concerns. With some of the summer seasonal factors affecting the market, volume’s going to be soft.”

The Chicago Board Options Exchange Volatility Index rebounded after four days of losses, climbing 8.4 percent to 14.85. The gauge known as the VIX lost 7.1 percent to 13.70 yesterday, the lowest level since June 2007.

U.S. equity volume yesterday reached the lowest level since at least 2008 excluding holidays. About 4.5 billion shares changed hands on all venues, the lowest level in data compiled by Bloomberg going back four years that excludes the days surrounding New Year’s, Christmas, Thanksgiving and Independence Day.

Hewlett-Packard, the world’s largest maker of personal computers, slid 1.3 percent to $19.36. Cisco, the largest maker of computer-networking gear, lost 1 percent to $17.17. Intel Corp., the world’s largest chipmaker, retreated 0.8 percent to $26.48. Juniper Networks Inc. erased 4.5 percent to $18.07 for the biggest decline in the S&P 500.

Groupon Inc. plunged 27 percent to $5.51, the lowest level since the company’s initial public offering in November. The largest daily-deal website reported second-quarter revenue that missed estimates as economic weakness in Europe curbed online coupon sales. Revenue rose 45 percent to $568.3 million, the Chicago-based company said yesterday. That fell short of the average analyst estimate of $575.3 million, according to data compiled by Bloomberg.

Commodity companies lost 0.5 percent for the biggest drop out of 10 groups in the S&P 500. Alcoa, the largest U.S. aluminum producer, retreated 1.6 percent to $8.69. The S&P 500 Financials Index slipped 0.1 percent after earlier rising as much as 0.7 percent.

Retailers had the biggest gain out of 24 groups in the S&P 500, climbing 0.9 percent.

Home Depot, the largest U.S. home-improvement retailer, rose 3.6 percent to $54.71 for the biggest rally in the Dow.

Sales by stores open at least a year advanced 2.1 percent, the fifth straight quarterly increase, as consumers visited more often and spent more per trip.

Estee Lauder Cos., the maker of Mac and Clinique skin care, added 9.3 percent to $60.13. Profit in the fourth quarter was 17 cents a share, exceeding the average analyst estimate by 1 cent. Revenue during the period was $2.25 billion, beating the average projection of $2.21 billion.

Monster Beverage Corp. climbed 10 percent, the most in the S&P 500, to $58.59. The board of directors at the largest U.S. energy drink maker authorized an additional $250 million in buybacks, according to a statement from the company yesterday.

 

Have a wonderful evening everyone.

Be magnificent!

Man cannot be broken down into emotions, intellect, or action.

Man is a whole.

When these three elements of intellect, feelings, and action are in harmony, they make up man.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

 

Nothing, of course, begins at the time

you think it did.

-Lillian Hellman, 1905-1984

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Saw a fabulous concert on the weekend with Bonnie Raitt and band.   Colin James appeared onstage for the encore.  Raitt is just an amazing musician.  Here is what one reviewer wrote about her latest CD, Slipstream:  Bonnie Raitt’s latest CD, brings us into her psychic living room for a reassuring aural hug.  After a  seven-year absence, she is back in the studio, more intimate and soulful than ever.  Her familiar offerings of rockers, country blues, and ballads are here.  But her signature slide guitar sound burrows deeper; the ballads are more plaintive.  Collaborations with producer Joe Henry offer lush textures that underscore Raitt’s musicianship and sensuous gravel-laced voice.

The Poem:

WORKER

sweat the felt screed the cement

pack the joist level the cleat

eat the piece hammer the nail

string-line the future

raise the bones

build the skeletons

whistle the windows

into our rooms

hoist your brushes

sweep the sky.

And on this day in…

1889 – The first coin-operated telephone is patented by William Gray

1899 – Alfred Hitchcock is born.

1926 – Fidel Castro is born.

1961 – Berlin is divided; Berlin wall is erected.
1963 – A 17-year-old Buddhist monk burns himself to death in Saigon, South Vietnam – it serves as a important turning point in the resolve of the Vietnamese to end foreign rule and exploitation.

photos of the day August 13, 2012

Table and chairs stand empty in Olympic Park in London, Monday, following the end of the London 2012 Olympic Games.

Tim Ireland/AP

A meteor streaks past stars in the night sky over the village of Kuklici, known for its hundreds of naturally formed stones, near Kratovo, 49 miles east from the capital Skopje. The Perseids meteor shower is observed every August when the Earth passes through a stream of space debris left by comet Swift-Tuttle.

Ognen Teofilovski/Reuters

Market Closes for August 13, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13169.43	-38.52
		-0.29%
S&P 500	1404.11	-1.76
		-0.13%
NASDAQ	3022.52	+1.66
		+0.5%
TSX	11838.33	-52.56
		-0.44%

International Markets

Market  Index	Close	Change
NIKKEI	8885.15	-6.29
		+0.07%
HANG  SENG	20081.36	-54.76
		-0.27%
SENSEX	17633.45	+75.71
		+0.43%
FTSE 100	5831.88	-15.23
		-0.26%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.803	1.813
CND.   30 Year Bond	2.334	2.338
U.S.   10 Year Bond	1.6625	1.6881
U.S.   30 Year Bond	2.7515	2.7549

Currencies

BOC Close	Today	Previous
Canadian $	1.00757	1.00837
US   $	0.99249	0.99170
Euro Rate  1 Euro=		Inverse
Canadian   $	1.22444	0.81670
US  $	1.23371	0.81054

Commodities

Gold	Close	Previous
London Gold   Fix	1609.95	1617.35
Oil	Close	Previous
WTI Crude Future	92.73	93.36
BRENT	113.92	114.80

Market Commentary:

Canada

By Katia Dmitrieva

Aug. 13 (Bloomberg) — Canadian stocks fell, sending the benchmark index lower for the first time in three days, as energy and raw material shares slipped after Bank of America Corp. cut its outlook for growth in China.

TMX Group Inc., the owner of the Toronto stock exchange, tumbled 5.5 percent, the most in a year. Canadian Natural Resources Ltd., the third-largest energy provider, declined 2.8 percent. Teck Resources Ltd. dropped 2.5 percent as copper retreated. Raw-materials and energy companies contributed most to the decline in the Standard & Poor’s/TSX Composite Index out of 10 industries.

The S&P/TSX fell 52.56 points, or 0.4 percent, to 11,838.33, after rising as much as 0.2 percent early in the day.

The benchmark index rose 0.9 percent in the last two sessions.

“The market is sobering up from the good news coming out of the European Central Bank, and the bulls are basically stepping to the sidelines today,” David Sherlock at Calgary- based McLean & Partners, which manages C$1 billion, said in a phone interview. “The TSX, we’re materials and energy, and the risky stuff comes off first. This is a classic sober, second- thought, risk-off day.”

Bank of America joined Deutsche Bank AG and Barclays Plc in cutting growth forecasts for China on weaker exports. Gross domestic product in China, the world’s largest consumer of base metals, rose 7.6 percent in the second quarter from a year earlier, the sixth straight quarterly slowdown. Canadian stocks are heading for their worst year since 1998 relative to global equities as a slowing economy weighs on commodities, which make up about half of the TSX.

Suncor Energy Inc., the largest energy provider in the country, dropped 0.8 percent to C$31.53. Canadian Natural Resources slipped 2.8 percent to C$30.07. Encana Corp. declined 2.7 percent to C$21.98. Cenovus Energy Inc. slid 0.4 percent to C$32.34.

Raw-materials producers in the S&P/TSX have fallen 13 percent this year, the worst performer among 10 groups.

Copper fell to a one-week low. Teck Resources, Canada’s largest diversified miner, declined 2.5 percent to C$29.58. The Vancouver-based company plunged 18 percent this year and last month reported second-quarter profit that fell more than analysts forecast because of a drop in prices for metals including copper.

Gold declined in New York, snapping three days of gains.

Goldcorp Inc., the world’s second-largest producer of the metal, fell 0.9 percent to C$36.73.

Barrick Gold Corp., the largest producer, slipped 1 percent to C$33.96. This month, Barrick touched the lowest level since 2008. The Toronto-based company in July reported profit that missed analysts’ estimates.

TMX Group tumbled 5.5 percent to C$47.00 after an analyst raised concern its new owner won’t be able to wring as much value out of its takeover as anticipated. Paul Holden, an analyst at CIBC World Markets, cited regulatory constraints. The Toronto-based company announced selling 95.4 percent of its outstanding shares to Maple Group Acquisition Corp., a consortium of Canadian banks, insurers and pension funds, after markets closed Friday.

US

By Inyoung Hwang

Aug. 13 (Bloomberg) — The Standard & Poor’s 500 Index fell for the first time in seven days, ending the longest streak of gains in 20 months, as slower-than-forecast economic growth in Japan added to investor concern of a global slowdown.

Commodity shares led declines among 10 groups in the S&P 500 as Bank of America Corp. cut its outlook for Chinese growth.

Alcoa Inc. and Cisco Systems Inc. fell the most in the Dow Jones Industrial Average as investors sold stocks most tied to the economy. TripAdvisor Inc. lost 4.5 percent after Google Inc. agreed to acquire all of John Wiley & Sons Inc.’s travel assets.

The S&P 500 slid 0.1 percent to 1,404.11 at 4 p.m. in New York. The Dow lost 0.3 percent to 13,169.43. Trading volume for exchange-listed stocks in the U.S. was about 4.5 billion shares, the lowest level since July 3 when the market closed at 1 p.m. and about 31 percent lower than the three-month average, according to data compiled by Bloomberg. The Chicago Board Options Exchange Volatility Index, known as the VIX, fell 7.1 percent to 13.70, the lowest level since 2007.

“There are some worries that while we’re all focused on Europe, China could actually be one of the reasons why GDP disappoints and that is a negative,” Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston, which oversees $350 billion, said in a telephone interview. “The GDP data from Japan reminds us of a risk of a hard landing in China.”

Japan, the world’s third-largest economy, expanded at an annualized 1.4 percent pace in the second quarter, trailing the median forecast for 2.3 percent growth from economists surveyed by Bloomberg. Wells Fargo & Co. reduced its earnings estimate for the S&P 500 this year as deteriorating economic data hurts profits at energy and raw-material producers.

Bank of America cut its 2012 economic growth forecast for China to 7.7 percent from 8 percent, according to a report today from Ting Lu, an economist based in Hong Kong.

The S&P 500 posted its fifth straight weekly rally after German Chancellor Angela Merkel backed a bond-buying proposal by the European Central Bank. In the U.S. last week, central bank officials debated whether more action is needed to stimulate growth. A worse-than-expected Chinese trade report on Aug. 10 added to signs the global economy is weakening, stoking speculation the government will step up measures to support expansion.

“Japan’s economy grew less than forecast and there was also speculation that China may cut rates, but now investors are thinking it’s not going to happen as quickly as speculated,”

Thomas Garcia, head of equity trading at Santa Fe, New Mexico- based Thornburg Investment Management Inc., said in an e-mail.

His firm oversees about $80 billion. “We have had a pretty nice run in the equity markets lately. We could see a little profit taking.”

Gina Martin Adams, Wells Fargo’s equity strategist, cut her 2012 forecast by $1 to $101 a share and reduced her projection for next year by $3 to $104, according to a note to clients dated today.

Eight out of 10 groups in the S&P 500 declined. Alcoa, the largest U.S. aluminum producer, fell 1.7 percent to $8.83. Cisco Systems lost 1.1 percent to $17.34. Exxon Mobil Corp., the world’s largest oil company by market value, slipped 0.3 percent to $88.14.

TripAdvisor, the online travel-recommendation service, lost 4.5 percent to $33.52. Google agreed to acquire all of John Wiley’s travel assets, including the Frommer’s brand, to expand local services and attract users and advertisers from sites such as TripAdvisor’s.

Google gained 2.8 percent to $660.01 after the owner of the world’s most popular search engine said it will cut about 4,000 jobs and shut down a third of the facilities at its Motorola Mobility Holdings Inc. unit.

Monster Beverage Corp. lost 1.8 percent to $53.27. Goldman Sachs Group Inc. lowered its rating on beverage stocks to neutral from attractive, citing higher valuations relative to food stocks. Dr. Pepper Snapple Group Inc. decreased 0.8 percent to $44.69. The firm also lowered its rating on Coca-Cola Co. to neutral from conviction buy. The Atlanta-based company slipped 0.2 percent to $39.30.

First Solar Inc., the world’s biggest maker of thin-film panels, slid 4.4 percent to $20.49 after German solar-panel maker Solarworld AG reported a loss and said it won’t be profitable this year.

U.S. Steel Corp. slumped 2.4 percent to $22.86 as iron ore prices slumped to a 31-month low after purchases by China, the world’s biggest buyer, fell to the smallest in three months as slowing economic growth curbed demand.

Tesoro Corp. climbed 9.5 percent to $38.87 for the biggest gain in the S&P 500. The largest independent refiner on the U.S.

West Coast agreed to buy BP Plc’s California oil refinery and 800 gasoline stations in the Southwest for $1.18 billion.

Sears Holdings Corp. jumped 5.7 percent to $54.36 after Barron’s reported that the second-biggest U.S. department store company may double to $100 a share if it sells assets and improves profitability.

 

Have a wonderful evening everyone.

Be magnificent!

Meditation is one of the greatest arts in life, perhaps the greatest,

and one cannot possibly learn it from anybody else,

that is the beauty of it.

It has no technique and therefore no authority.

When you learn about yourself, watch yourself, watch the way you walk,

how you eat, what you say, the gossip, the hate, the jealousy –

if you are aware of all that in yourself, without any choice,

that is part of meditation

Krishnamurti, 1895-1986

As ever,

Carolann

 

Life is too short to be the caretaker of the wrong details.

-Alexandra Stoddard, 1967-

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

The last few weeks have really been inspiring news-wise. The Olympics have showcased the pinnacle of human physical ability and the landing of the Mars Curiosity rover shows the best of the human mind. I was also reminded of the selfless compassion people can posses when I came across the story of Scott Neeson. Neeson was a hot-shot Hollywood executive who gave up his mansion, his Porsche and his million dollar paycheck to help homeless children in Cambodia. His life changing epiphany came to him in 2004 while standing in the hot Cambodian sun watching the local children of the Phnom Penh area scour for scraps through the recently dumped rubbish. While watching this scene, his ear was glued to his cell phone. On the other end was a representative for a Hollywood star, whose client was unhappy about the in-flight entertainment. Neeson overheard the actor griping in the background. ” ‘My life wasn’t meant to be this difficult.’ Those were his exact words,” Neeson says. “I was standing there in that humid, stinking garbage dump with children sick with typhoid, and this guy was refusing to get on a Gulfstream IV because he couldn’t find a specific item onboard,” he recalls. “If I ever wanted validation I was doing the right thing, this was it.”

Neeson has since gone on to manage a multitude of charitable efforts that help Cambodia children. His office is lined with the before and after pictures of those he’s helped. Neeson says that for him, each of the children he helps is an individual. He knows what all of them look like and nearly all of their names. Through Neeson’s efforts his organization manages four residential homes around town for more than 500 other deprived children and is building another. He operates after-school programs and vocational training centers and he’s built day cares and nurseries. His charity provides some 500 children with three meals a day and runs a bakery where disadvantaged youths learn marketable skills while making nutrient-rich pastry for the poorest kids. It pays for well over 1,000 children’s schooling and organizes sightseeing trips and sports days for them.

Neeson admits there’s a lot to miss about Hollywood. He says he misses Sundays playing paddle tennis on the beach with friends and taking the boat out to the islands. When asked how it compares to his life now, Neeson said “Sundays here, I’m down at the garbage dump. But I’m really happy.”

And on this day in…

1846 – The Smithsonian was established.

1876 – Alexander Graham Bell (1847-1922) makes the world’s first long-distance call from Brantford to the Bell homestead in Paris, Ontario, using a 13-mile long line strung from Brantford.

1911 – The House of Lords (Monarch) in Great Britain cedes power to the House of Commons (Democratic), making it the more powerful house.

1949 – Avro Canada C.102 Jetliner takes maiden flight; designed to meet a Trans-Canada Airlines requirement; first jet transport to fly in North America and second to fly in the world, 13 days after the flight of the De Havilland 106 Comet; government halts development in 1951 to force Avro to concentrate on the CF-100 jet fighter.

1950 – President Truman calls the National Guard to active duty to fight in Korean War.

photos of the day August 10, 2012

Devotees try to form a human pyramid to break a clay pot containing curd during the celebrations to mark the Hindu festival of Janmashtami in Mumbai, India.

Danish Siddiqui/Reuters

A two-week-old Chilean Flamingo stretches its wings beneath its father, Maurice, who stands guard at Drusillas Park in Alfriston, south east England. Earlier in the year Barry White songs were played to encourage the birds to breed.

Gareth Fuller/PA

Market Closes for August 10, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13207.95	+42.76
		+0.32%
S&P 500	1405.87	+3.07
		+0.22%
NASDAQ	3020.86	+2.22
		+0.07%
TSX	11890.89	+32.76
		+0.28%

International Markets

Market  Index	Close	Change
NIKKEI	8891.44	-87.16
		-0.97%
HANG  SENG	20136.12	-133.35
		-0.66%
SENSEX	17557.74	-3.13
		-0.02%
FTSE 100	5847.11	-4.40
		-0.08%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.783	1.813
CND.   30 Year Bond	2.318	2.338
U.S.   10 Year Bond	1.6573	1.6881
U.S.   30 Year Bond	2.7469	2.7549

Currencies

BOC Close	Today	Previous
Canadian $	1.00901	1.00837
US   $	0.99107	0.99170
Euro Rate  1 Euro=		Inverse
Canadian   $	1.21794	0.82106
US  $	1.22891	0.81373

Commodities

Gold	Close	Previous
London Gold   Fix	1620.00	1617.35
Oil	Close	Previous
WTI Crude Future	92.87	93.36
BRENT	114.49	114.80

Market Commentary:

Canada

By Eric Lam

Aug. 10 (Bloomberg) — Canadian stocks rose as gains by mining and technology companies tempered disappointment after the nation’s employers unexpectedly shed jobs and China’s export growth slowed.

Barrick Gold Corp and Kinross Gold Corp. climbed at least 1.2 percent. Open Text Corp. soared 10 percent. Research In Motion Ltd. jumped 6.5 percent after two people familiar with the situation said the BlackBerry device maker’s enterprise- services unit has attracted the attention of International Business Machines Corp.

The Standard & Poor’s/TSX Composite Index rose 32.76 points, or 0.3 percent, to 11,890.89, with most of the advance coming in the last 30 minutes after the index swung between gains and losses throughout the day. The benchmark index has gained 2 percent for the week, its biggest weekly gain since May.

“This is a very good sign,” Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto, said in a phone interview. The firm manages about $4 billion.

“People want to buy the market and are willing to overlook bad news in the hope central banks will come to the rescue.”

Canadian employers unexpectedly shed 30,400 jobs in July, and the unemployment rate rose to 7.3 percent, as the country’s retailers and wholesalers let go part-time workers. The job losses, all in part-time work, were the most since October 2011, Statistics Canada said today from Ottawa.

China’s outbound shipments increased 1 percent from a year earlier, the customs bureau said today in Beijing, after an 11.3 percent rise in June.

Kinross advanced 2.6 percent to C$8.17. Barrick, the largest gold producer in the world, rose 1.2 percent to C$34.30.

Gold futures for December delivery climbed for a third day to settle at $1,622.80 an ounce on the Comex in New York, extending its weekly gain to 0.8 percent. The metal has risen 3.6 percent in 2012.

Argent Energy Trust traded for the first time on the S&P/TSX today, closing at C$10.07. Its initial public offering price was C$10 a unit. The Calgary-based company raised C$212.3 million in Canada’s largest IPO of the year to purchase oil and gas assets in Texas.

Magna International Inc. advanced 5.1 percent to C$43.90, the highest since May, a day after posting better-than-expected second-quarter results. North America’s largest auto-parts supplier posted adjusted earnings of $1.48 a share, ahead of analysts’ estimates of $1.28 based on a Bloomberg survey.

Open Text Corp. soared 10 percent to C$54.19, its biggest gain since February. The networking software maker was raised to a buy from a neutral rating by analyst Tom Liston with Versant Partners.

RIM jumped 6.5 percent to C$8.22. IBM made an informal approach about possibly acquiring the enterprise-services division, which operates a network of secure servers used to support RIM’s BlackBerry devices, said one of the people familiar with the situation, who asked not to be named because the matter is private.

The business, seen as the company’s most valuable asset, may be valued at $1.5 billion to $2.5 billion depending on the mix of assets included, according to Berenberg Bank. RIM said in May that it had hired JPMorgan Chase & Co. and RBC Capital Markets to study strategic options. The stock is up 18 percent this week.

US

By Rita Nazareth

Aug. 10 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its longest advance since December 2010, as optimism the Federal Reserve will act to stimulate the economy helped the market recover from an earlier decline.

J.C. Penney Co. rose 5.9 percent as Chief Executive Officer Ron Johnson said his overhaul of the department-store chain is “on track.” Facebook Inc. added 3.8 percent as Chief Financial Officer David Ebersman is said to be meeting with investors in New York days before the lifting of a ban on stock sales by some of the company’s biggest shareholders. Broadcom Corp. gained 3 percent as the maker of chips that help mobile devices connect to the Internet was raised at Sanford C. Bernstein & Co.

The S&P 500 rose 0.2 percent to 1,405.87, reversing a loss of as much as 0.5 percent and rising for a sixth day. It capped a fifth weekly advance, the longest streak since March. The Dow Jones Industrial Average added 42.76 points, or 0.3 percent, to 13,207.95. Volume for exchange-listed stocks in the U.S. was 5 billion shares, 24 percent below the three-month average.

“The weaker the data the higher the likelihood of stimulus,” said Alan Gayle, a senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “The weakness in China is likely to prompt a move there. While the Fed has been clear it will do anything to support growth, some people tend to think it’s inevitable.”

Stocks rebounded after the San Francisco Chronicle reported that Fed Bank of San Francisco President John Williams said the lack of progress in reducing the unemployment rate and the slow economic recovery have convinced him it’s time to move ahead with a third round of asset purchases. Earlier losses were driven by a worse-than-expected Chinese trade report which intensified concern that global economic growth is slowing.

“The market is looking at the worldwide slowdown,” said Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, which oversees about $40 billion. “China is slowing down, Europe is in a recession.

Everybody realizes that we’re on a tough situation. The question is — can it get weaker or not?”

Bets on global central bank action to stimulate the economy have driven the S&P 500 up 10 percent since June 1. The index rose for five straight days through yesterday amid better-than- estimated corporate profits and data on the jobs market. About 72 percent of the S&P 500 companies which reported second- quarter results so far have beaten earnings estimates, according to data compiled by Bloomberg.

David Bianco, Deutsche Bank AG’s chief U.S. equity strategist, cut his 2012 earnings estimate for S&P 500 companies amid lower commodity prices, weak capital markets, a stronger dollar and a “midyear stall” in global manufacturing. His forecast was cut to $102 a share from $105.

Eight out of 10 groups in the S&P 500 rose today as phone, industrial and health-care shares had the biggest gains. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against S&P 500’s declines, slid 3.5 percent to 14.74, the lowest since March.

J.C. Penney rallied 5.9 percent to $23.40. Johnson, the former Apple Inc. retail chief who joined as CEO in November, is tweaking his pricing strategy after the previous plan confused customers by reducing sales events and coupons.

Facebook gained 3.8 percent to $21.81. Goldman Sachs Group Inc., Microsoft Corp. and other large investors that bought equity before the initial public offering will have freedom to sell their stakes starting Aug. 16. That’s after the lifting of limits imposed by underwriters on the sale of shares for a preset period after an IPO. A person with knowledge of the meetings declined to elaborate on the plans, which are private.

Broadcom rose 3 percent to $35.35. The company was raised to outperform at Sanford C. Bernstein.

Research In Motion Ltd. jumped 6.3 percent to $8.29. The company’s enterprise-services unit has attracted the interest of International Business Machines Corp., according to two people familiar with the situation.

Yahoo! Inc. lost 5.4 percent to $15.15. Chief Executive Officer Marissa Mayer has embarked on a strategy review that may result in a reversal of plans to restructure operations and return billions of dollars in cash to shareholders.

Monster Beverage Corp. tumbled 11 percent to $54.27. The largest U.S. energy drink maker by volume sales said an unspecified attorney general is investigating the company’s flagship drink and ingredients.

Chesapeake Energy Corp. slid 3.1 percent to $19.68. The second-largest U.S. natural-gas producer received a subpoena in June from the antitrust division of the U.S. Justice Department’s Midwest Field Office.

Cisco Systems Inc. retreated 0.9 percent to $17.54. The outlook for the biggest maker of computer-networking equipment may be worse than estimated, said Ryan Hutchinson, an analyst at Lazard Capital Markets LLC.

Big Lots Inc. dropped 7 percent to $38.44. The discount retailer was downgraded to underweight from neutral at JPMorgan Chase & Co. by equity analyst Matthew Boss. The 18-month share- price estimate is $34.

Manchester United Plc was unchanged at $14. The English soccer club with a record 19 championships raised $233.3 million in its U.S. initial public offering, less than first sought. The 134-year-old team and the Glazer family that bought it in 2005 sold 16.7 million shares for $14 each yesterday.

Investors put $356 billion into U.S. checking and savings accounts in the first six months of this year, almost double the $188 billion they deposited into bond mutual funds and exchanged-traded funds, according to TrimTabs Investment Research.

Equity mutual funds and ETFs attracted $6 billion in net deposits, Sausalito, California-based TrimTabs said in a statement yesterday. Retail money-market funds lost $21.3 billion to withdrawals in the first half, according to the firm.

“People are risk-averse in a risky world and don’t trust the powers that be to manage the economy and the markets,”

Charles Biderman, chief executive officer of TrimTabs, said in a telephone interview. “When that happens, you hunker down and put money away for better times.”

Some investors are avoiding equities even as stock markets have rallied this year. The MSCI All-Country World Index rose 7.9 percent and the S&P 500 increased 12 percent through yesterday. Europe’s crisis has sent some investors into the perceived safety of bonds.

Economic indicators may need to change for the better by October in order for U.S. stocks to sustain this year’s gains, according to Myles Zyblock, chief institutional strategist at RBC Capital Markets.

Shares of companies most affected by the pace of economic growth have been out of favor for months, according to data tracking the ratio of Morgan Stanley indexes for cyclical and consumer-product shares since 2009, when a bull market began.

“We see one of two likely scenarios” unfolding for stocks, Zyblock wrote two days ago in a report. The first is that the economic gauges will rebound during the next month or two to confirm the gains in stocks. The second is that share prices will decline as the indicators fall further.

The cyclical-consumer ratio, cited in the Toronto-based strategist’s report, rose only 0.2 percent for the year through yesterday as the S&P 500 gained 12 percent. The contrast became more pronounced in the past two months as the S&P 500 rebounded from its second-quarter low.

Rather than tracking the S&P 500, the cyclical-consumer ratio tended to move in lockstep with the Institute for Supply Management’s factory index, as the report showed. ISM readings for June and July were less than 50, pointing to a contraction in manufacturing.

Based on the backdrop, Zyblock wrote, higher stock prices can be attributed to “fast money investors who’ve been caught short, corporations with excess cash, and international equity investors running away from their home markets.”

 

Have a wonderful weekend everyone!

Be magnificent!

 

The healing of the mind takes place gradually on contact with nature,

with the orange on the branch, the blade of grass eating its way into the cement,

and the hills hidden by the clouds.

Krishnamurti, 1895-1902

As ever,

Carolann

 

Be kind, for everyone your meet is fighting a hard battle.

-Plato, 427 BC-347 BC

 

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

An article in the most recent edition of Maclean’s informs that hundreds of abandoned and semi-abandoned villages up and down the Italian peninsula are for sale.   “These were farming towns and woodsmen’s towns and nobody does that anymore,” says Richard Ingersoll, an urban studies professor at Florence’s Syracuse University.  “Less than two per cent of Italians are involved in agriculture.”   For years, the owners of Pratariccia, a medieval Italian village perched atop the hills above Tuscany’s Casentino valley, have been trying to sell their abandoned town.  Now the religious order that reportedly owns the remote 800-year-old town has turned to eBay, where the 25 crumbling stone cottages and thousands of acres of farmland is on offer for US $3 million.  The agency that is handling the sale says that the best use would be as a resort since tourism is such a hot industry in Italy.  The thought depresses Ingersoll, who thinks the ideal alternative would be to re-agriculturalize the town or turn it into a spiritual retreat, without electricity or computer connections.  “St. Francis spent the most important part of his life here,” he notes.  Interested buyers should be aware of hidden costs.  It could take up to three times Pratariccia’s asking price to make the village habitable.  “But perhaps there would be some crazy-rich person who, instead of paying $140 million for a Damien Hirst work of art, would pay $6 million to put back a town,” says Ingersoll.  –Michelle Tarnopolsky, Maclean’s, August 13^th edition. Oh how I wish!

And on this day in…

480 BC – The Persian army defeats Leonidas at the Battle of Thermopylae.

1883 – Coco chanel was born.

1945 – B-29 bomber, Bock’s Car, drops an Atomic bomb on Nagasaki.

1957 – Melanie Griffith was born.
1969 – Charles Manson’s cult kill 5 people including Roman Polanski’s wife, Sharon Tate.
1974 – Unusual succession makes Gerald Ford President of the U.S.

photos of the day August 9, 2012

A performer is silhouetted in a sea of cloth during a national celebration in Singapore which celebrated its 47th year of independence. Singapore declared independent on August 9, 1965.

Wong Maye-E/AP

The last pieces of about 5,000 Lego blocks are added by elementary school girl Yuka Takahashi to complete a reproduction of Jonannes Vermeer’s, ‘Girl with a Pearl Earring’ in Tokyo. A total of 380 children participated in a nine-day workshop to create the Lego art at the newly opened Legoland Discovery Center.

Shizuo Kambayashi/AP

Market Closes for August 9, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13165.19	-10.45
		-0.08%
S&P 500	1402.80	+0.58
		+0.04%
NASDAQ	3018.64	+7.39
		+0.25%
TSX	11858.13	+77.09
		+0.65%

International Markets

Market  Index	Close	Change
NIKKEI	8978.60	+97.44
		+1.10%
HANG  SENG	20269.47	+203.95
		+1.02%
SENSEX	17560.87	-39.69
		-0.23%
FTSE 100	5851.51	+5.59
		+0.10%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.813	1.823
CND.   30 Year Bond	2.338	2.351
U.S.   10 Year Bond	1.6881	1.6491
U.S.   30 Year Bond	2.7549	2.7505

Currencies

BOC Close	Today	Previous
Canadian $	1.00837	1.00536
US   $	0.99170	0.99467
Euro Rate  1 Euro=		Inverse
Canadian   $	1.21956	0.81996
US  $	1.22976	0.81317

Commodities

Gold	Close	Previous
London Gold   Fix	1617.35	1612.20
Oil	Close	Previous
WTI Crude Future	93.36	93.35
BRENT	114.80	113.09

Market Commentary:

Canada

By Eric Lam

Aug. 9 (Bloomberg) — Canadian stocks rose on better-than- forecast earnings and as U.S. jobless claims unexpectedly fell, signaling economic growth may increase in the world’s biggest crude-producing country.

Canadian Natural Resources Ltd. gained 4.8 percent after the country’s third-largest oil company reported second-quarter earnings that beat estimates. Teck Resources Ltd. rose 3.3 percent. Energy and mining shares contributed most to the advance in the Standard & Poor’s/TSX Composite Index among 10 industries.

The S&P/TSX rose 64.87 points, or 0.6 percent, to 11,845.91 at 12:35 p.m. in Toronto. The benchmark equity index for Canada has retreated 0.9 percent so far this year.

“It’s all earnings-driven. There’s a slew of earnings coming across the tape today,” Paul Taylor, chief investment officer with BMO Harris Private Banking in Toronto, which manages about C$18 billion ($18.1 billion), said in a phone interview. “U.S. jobless claims data was pretty positive as well. Both earnings and economic data give some reason for comfort.”

Jobless claims unexpectedly dropped by 6,000 to 361,000 in the week ended Aug. 4, Labor Department figures showed today in Washington. The median forecast of 43 economists surveyed by Bloomberg News called for an increase to 370,000.

Canadian Natural Resources added 4.8 percent to C$31.

Excluding one-time items, earnings were 55 cents, beating the 53-cent average of 15 analyst estimates compiled by Bloomberg.

Teck Resources rose 3.3 percent to C$29.53.

Canadian Tire Corp. jumped 5 percent to C$69.68 after the retailer reported second-quarter revenue jumped 16 percent.

Shares are headed for their biggest percentage gain since August 2011.

Research In Motion Ltd. rose 1.3 percent to C$7.66 after the BlackBerry device maker won a U.S. judge’s order overturning a jury’s $147.2 million patent-infringement award to rival MFormation Technologies Inc.

Bombardier Inc. tumbled 3.2 percent to C$3.64 as profit dropped 14 percent in the second quarter on lower rail car sales, eroding growth generated by its aerospace business.

Kinross Gold Corp. rose 1.5 percent to C$7.89. J. Paul Rollinson, the company’s new chief executive, said he’s initiating a companywide review to cut costs that may require “tough decisions.”

“Given rising costs, I believe we need to get back to the fundamentals of our business,” Rollinson said yesterday in the company’s second-quarter earnings statement. Kinross has plunged 32 percent in 2012.

US

By Rita Nazareth

Aug. 9 (Bloomberg) — Most U.S. stocks rose, giving the Standard & Poor’s 500 Index its longest rally since March, as data showing an unexpected decline in jobless claims last week tempered concern about a worsening of Europe’s economy.

A measure of homebuilders in S&P indexes advanced 2.3 percent as JPMorgan Chase & Co. said it saw higher demand in the industry and data showed prices for single-family homes rose in most U.S. cities last quarter. E*Trade Financial Corp. increased 6.9 percent as Chief Executive Officer Steven J. Freiberg was ousted from the brokerage. Monster Beverage Corp. declined 9.7 percent after profit and sales trailed estimates.

Five stocks rose for every four falling on U.S. exchanges at 4 p.m. New York time. The S&P 500 added less than 0.1 percent to 1,402.80, rallying 2.8 percent in five days. The Dow Jones Industrial Average lost 10.45 points, or 0.1 percent, to 13,165.19. Volume for exchange-listed stocks in the U.S. was 5.5 billion shares, 18 percent below the three-month average.

“We acknowledge the positive news,” Wayne Lin, a money manager at Baltimore-based Legg Mason Inc., said in a telephone interview. His firm oversees $631.8 billion. “We’ve had some positive surprises on the jobs front and it seems that housing has found some footing. Yet people are aware of the risks. The risk in Europe is still out there.”

Labor Department data showing fewer firings signaled employers are seeing enough demand to retain staff, indicating the economy is sustaining the recovery. Stocks erased gains earlier after the Wall Street Journal reported that former European Central Bank official Otmar Issing said it was wrong to expect the ECB to buy government bonds to ease the region’s debt crisis. Economists surveyed by the ECB predicted the region’s contraction this year will be worse than previously forecast.

A five-day rally has taken the S&P 500 up almost 10 percent from a five-month low on June 1. About 72 percent of S&P 500 companies which reported second-quarter results so far have beaten analysts’ earnings estimates, according to data compiled by Bloomberg.

“It’s kind of blah,” said Malcolm Polley, who oversees about $1.1 billion as chief investment officer at Stewart Capital in Indiana, Pennsylvania. “Growth is slowing in other parts of the world. It will take time. In addition, we’ve had a strong move up in stocks. It may be people just getting tired.”

All 11 stocks in a measure of homebuilders in S&P indexes gained. Data from the National Association of Realtors showed that values nationally jumped the most since 2006 as real estate markets stabilized.

PulteGroup Inc., the largest U.S. homebuilder by revenue, jumped 4.8 percent to $12.67 after being raised to overweight at JPMorgan. KB Home added 6.3 percent to $10.74, while Beazer Homes USA Inc. rallied 4.5 percent to $2.79 after the two companies were also raised at JPMorgan.

E*Trade added 6.9 percent to $8.57. Chairman Frank J. Petrilli will serve as interim CEO while the company seeks a new leader, the company said today in a statement. A board committee which includes the head of its biggest shareholder, Citadel LLC’s CEO Ken Griffin, will lead the search for a new chief executive, the company said.

Cisco Systems Inc. rose 3.2 percent to $17.70 after the biggest maker of computer-networking equipment was added to the “Conviction Buy” list at Goldman Sachs Group Inc. Piper Jaffray Cos. also raised its recommendation for the technology company today.

MBIA Inc. added 15 percent to $10.06. The bond insurer seeking reimbursement from Bank of America Corp. over faulty mortgages surged after pledging to carry on a court fight to force the lender to repurchase the loans.

James River Coal Co. soared 13 percent to $2.52. The producer of the fuel in Appalachia and the Midwest reported a smaller loss than analysts predicted as costs fell.

Lincoln National Corp. climbed 2.3 percent to $23.23. The insurer that hired Ellen Cooper from Goldman Sachs Group Inc. as chief investment officer said it increased the size of its share buyback authorization to $1 billion.

Elizabeth Arden Inc. soared 13 percent to $44.02. The maker of the Britney Spears and Elizabeth Taylor brand fragrances forecast annual profit and revenue that topped estimates.

Alliant Techsystems Inc. advanced 7.1 percent to $51.94.

The U.S. military’s largest ammunition maker rose as higher defense sales helped first-quarter earnings top estimates. It raised its full-year forecast.

Robbins & Myers Inc. surged 27 percent to $59.63. National Oilwell Varco Inc., the largest U.S. maker of oil equipment, agreed to buy the company for about $2.5 billion in cash.

Monster Beverage Corp. tumbled 9.7 percent to $61.20.

Monster and Atlanta-based Coca-Cola Co. are facing higher costs for ingredients such as sweeteners and plastic for bottles.

Knight Capital Group Inc. slid 2.9 percent to $3.07. The market maker that was driven to the verge of bankruptcy after a trading error said last week’s mishap may cause more losses and liabilities and customers may lose confidence in the firm.

Education Management Corp. plunged 19 percent to $3.24. The second-largest for-profit college chain by enrollment fell a day after posting a $1.2 billion loss in the fiscal fourth quarter.

SunPower Corp. declined 10 percent to $4.20. The solar- panel company majority-owned by Total SA tumbled after it cut its 2012 sales forecast.

Kohl’s Corp. slid 1.2 percent to $51.42. The third-largest U.S. department-store company reduced its fiscal 2012 profit forecast after sales fell in the second quarter.

NetApp Inc. dropped 2.6 percent to $32.13. The seller of hardware and software for storing data was downgraded to hold from buy at Cantor Fitzgerald LP by equity analyst Paul Mansky.

The 12-month target price is $38 per share.

Asian dealmaking in North America confirms energy and gold stocks are a bargain when compared with the underlying commodities, according to Frank Holmes, U.S. Global Investors Inc.’s chief executive officer. The shares have trailed commodity prices for more than a year.

“The disparities mean that the cheapest resources are not found in the ground — they’re listed” on stock exchanges, Holmes wrote three days ago in a blog posting.

Proposed multibillion-dollar takeovers of Canadian energy producers by Cnooc Ltd. and Petroliam Nasional Bhd show the value available in commodity stocks, according to Holmes.

Cnooc, China’s largest offshore-oil explorer, offered to acquire Nexen Inc. in July for 61 percent more than the stock’s market price. The proposed deal followed an offer in June from Petronas, Malaysia’s state-owned energy company, for Progress Energy Resources Corp. that was 77 percent above the market price. The bid was raised last month.

Holmes’s firm, based in San Antonio, runs three commodity- related mutual funds with total assets of about $1 billion. The biggest is the Global Resources Fund, which returned 12 percent during the two-year period depicted in the chart, according to data compiled by Bloomberg.

 

Have a wonderful evening everyone.

Be magnificent!

 

Watching and listening are a great art.

By watching and listening we learn infinitely more than we do from any books.

Books are necessary, but watching and listening sharpen your senses.

Krishnamurti, 1895-1986

As ever,

Carolann

 

Do not fear death so much but

rather the inadequate life.

-Bertolt Brecht, 1898-1956

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Lots of buzz about Julia Child these days, including two new biographies that have been  receiving terrific reviews.  August 15^th would have been her 100^th birthday.  PBS honors her legacy with a multi-platform initiative on-air, online, and through social media at pbs.org/food.  Julia-lovers – and I admit I am one – can cook their own versions of her classic dishes and share photographs and blogs on PBS Food and tweet their creations using the hashtag #CookforJulia.  The celebration runs August 5^th to 15^th.

And on this day in…

1937 – Dustin Hoffman was born.
1940 – The German Luftwaffe attacks Great Britain for the first time, beginning the Battle of Britain.

1942 – U.S. Marines capture Guadalcanal airstrip.

1963 – Land Rovers used in famous ‘Great Train Robbery’.
1974 – Richard Nixon resigns.

1981 – Roger Federer was born.

photos of the day August 8, 2012

A man paddles on a stand up paddle board (SUP) during a hot summer day on Lake Geneva in Vevey, Switzerland.

Denis Balibouse/Reuters

School children dressed as Hindu Lord Krishna take part in a function held ahead of ‘Janamashtmi’ celebrations in the southern Indian city of Chennai. Janamashtmi is the birth anniversary of Lord Krishna which will be celebrated on August 10.

Babu/Reuters

Market Closes for August 8, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13175.64	+7.04
		+0.05%
S&P 500	1402.22	+0.87
		+0.06%
NASDAQ	3011.25	-4.61
		-0.15%
TSX	11781.04	-84.46
		-0.70%

International Markets

Market  Index	Close	Change
NIKKEI	8881.16	+77.85
		+0.88%
HANG  SENG	20065.52	-7.03
		-0.04%
SENSEX	17600.56	-1.22
		-0.01%
FTSE 100	5845.92	+4.68
		+0.08%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.823	1.841
CND.   30 Year Bond	2.351	2.370
U.S.   10 Year Bond	1.6491	1.6266
U.S.   30 Year Bond	2.7505	2.7199

Currencies

BOC Close	Today	Previous
Canadian $	1.00536	1.00322
US   $	0.99467	0.99679
Euro Rate  1 Euro=		Inverse
Canadian   $	1.22996	0.81303
US  $	1.23655	0.80870

Commodities

Gold	Close	Previous
London Gold   Fix	1612.20	1611.60
Oil	Close	Previous
WTI Crude Future	93.35	94.06
BRENT	113.09	112.73

Market Commentary:

Canada

By Eric Lam

Aug. 8 (Bloomberg) — Canadian stocks declined as a slump in energy and financial shares offset gains in mining and phone companies amid concern about the global economy and central banks’ efforts to add stimulus measures.

Bank of Nova Scotia and Royal Bank of Canada dropped at least 0.8 percent to pace losses among banks. Barrick Gold advanced 0.2 percent as the price of the metal rose 0.3 percent, reversing earlier losses. BCE Inc. gained 3 percent as Canada’s second-largest wireless carrier topped second-quarter profit estimates and increased its annual forecast. Research In Motion Ltd., maker of the BlackBerry smartphone, soared 5.9 percent.

The Standard & Poor’s/TSX Composite Index declined 28.95 points, or 0.2 percent, to 11,834.55 at 1:27 p.m. in Toronto.

Equities were weighed down as the U.S. Federal Reserve Bank of Dallas president, Richard Fisher, said global central banks may not have the capacity to undertake additional measures.

German industrial production declined in June, led by a drop in construction output, data from the Economy Ministry in Berlin showed today.

Bank of Nova Scotia tumbled 1.1 percent to C$52.05. Royal Bank of Canada slid 0.8 percent to C$51.41.

Silver Wheaton Corp., which resells silver bought from mining companies, jumped 4.9 percent to C$30.09 after it agreed to pay HudBay Minerals Inc. $750 million for access to future gold and silver production at two HudBay mining sites. HudBay dropped 1.4 percent to C$8.89. Barrick Gold gained 0.2 percent to C$34.01.

RIM jumped 5.9 percent to C$7.75 amid speculation by a Jefferies & Co analyst that Samsung Electronics Co. may license the struggling BlackBerry maker’s new software or consider buying the company.

US

By Rita Nazareth

Aug. 8 (Bloomberg) — The Dow Jones Industrial Average rose a fourth day, the longest gain since June, as a jump in Hewlett- Packard Co. helped the measure recover from earlier losses.

Hewlett-Packard increased 2.4 percent after raising its profit forecast and appointing a new head for its enterprise services unit as it restructures the business. Dean Foods Co. surged 41 percent as its WhiteWave unit filed to raise $300 million in a U.S. initial public offering. McDonald’s Corp. slid 1.7 percent amid unchanged July global sales. Priceline.com Inc., the biggest U.S. online travel agency by market value, tumbled 17 percent on a disappointing earnings projection.

Seven stocks fell for every six rising on U.S. exchanges at 4 p.m. New York time. The Standard & Poor’s 500 Index gained 0.1 percent to 1,402.22. The Dow average added 7.04 points, or 0.1 percent, to 13,175.64, rallying 2.3 percent in four days. Volume for exchange-listed stocks in the U.S. was 5.8 billion shares, or about 13 percent below the three-month average.

“People have been particularly surprised with earnings,” said David Goerz, the San Francisco-based chief investment officer at Highmark Capital Management Inc., which oversees about $17.5 billion of assets. “Profit margins are still very high and will not fall off a cliff. There’s a tendency for people to be more inclined to be a buyer than a seller.”

A four-day rally has taken the S&P 500 up almost 10 percent from a five-month low on June 1. The index is trading above the average year-end forecast among Wall Street strategists of 1,389. About 73 percent of S&P 500 companies which reported second-quarter results so far have beaten analysts’ earnings estimates, according to data compiled by Bloomberg.

Earlier today, benchmark gauges fell after Federal Reserve Bank of Dallas President Richard Fisher said adequate economic stimulus already is in place and that global central banks may not have the capacity to undertake additional measures to boost growth. Stocks rose yesterday as Fed Bank of Boston President Eric Rosengren said the central bank should pursue an “open- ended” easing program of “substantial magnitude.”

“Stimulus can’t hurt, but the problem is that it has less and less effect,” said Madelynn Matlock, who helps oversee about $14.7 billion at Huntington Asset Advisors in Cincinnati.

“Any argument by policymakers is going to pull the market in various directions, depending on what they are saying.”

Seven out of 10 groups in the S&P 500 rose as consumer staples, health-care and commodity shares had the biggest gains.

Hewlett-Packard rallied 2.4 percent, the most in the Dow, to $19.41. Profit excluding some items in the current period will be $1, up from a prior projection of 94 cents to 97 cents, the Palo Alto, California-based company said today.

Dean Foods surged 41 percent, the biggest gain since it began trading 16 years ago, to $17.46. The proceeds will be used to pay down debt at Dallas-based Dean, according to the filing.

Dean said yesterday that it will own at least 80 percent of WhiteWave’s common stock following the IPO and distribute those shares to its investors at least 180 days after the offering.

Macy’s Inc. rose 2.7 percent to $38.01. The owner of its namesake and Bloomingdale’s department stores reported second- quarter profit that beat estimates, helped by its credit cards.

Walt Disney Co. gained 1.4 percent to $50.49. The world’s largest entertainment company, posted better than expected third-quarter profit buoyed by the film hit “Marvel’s The Avengers.” Revenue fell short of analysts’ estimates.

Computer Sciences Corp. gained 16 percent to $29.53. The technology contractor for government and corporate customers reported profit and revenue that topped estimates as its new chief executive officer works on turning the company around.

Express Scripts Holding Co. added 8.4 percent to $60.73.

The largest U.S. processor of drug prescriptions raised its annual profit forecast as gross margins improved following its April acquisition of Medco Health Solutions Inc.

XL Group Plc climbed 6.6 percent to $22.78 after the insurer’s second-quarter profit beat analysts’ estimates as premium revenue increased.

MEMC Electronic Materials Inc. soared 11 percent to $2.28.

The second-largest U.S. polysilicon maker jumped after second- quarter sales of solar projects boosted its cash flow.

New York Times Co. added 6.1 percent to $8.57 after the newspaper publisher entered talks to sell About.com, aiming to salvage a portion of its ill-fated bet on the website.

Bloomin’ Brands Inc. soared 13 percent to $12.41. The owner of the Outback Steakhouse restaurant chain rallied after raising $176 million in its U.S. IPO, pricing a reduced number of shares below the proposed range.

Knight Capital Group Inc. climbed 3.3 percent to $3.16, after tumbling 24 percent over the previous two days. Chief Executive Officer Thomas Joyce estimated last week’s trading loss will be $270 million after taxes and told clients the firm is “in good standing” with clearinghouses.

The post-tax loss compares with a previously disclosed pretax loss of $440 million. The letter comes a week after Knight, one of the biggest market-making firms in the U.S., was driven to the brink of bankruptcy after a technology malfunction spewed orders into the market by mistake.

Cincinnati Bell Inc. jumped 5.4 percent to $3.94 after proposing an IPO for its CyrusOne unit, a data-center operator it acquired in 2010.

A123 Systems Inc. advanced 6.4 percent to 50 cents. The maker of lithium batteries signed a $450 million non-binding financing agreement with China’s Wanxiang Group Corp.

McDonald’s slumped 1.7 percent to $87.53. Analysts projected an increase of 2.3 percent, the average of estimates compiled by Consensus Metrix. Sales at domestic locations fell 0.1 percent. Analysts estimated a gain of 2.2 percent.

Priceline tumbled 17 percent to $562.32. Consumers in Europe — one of the main engines of growth for Priceline — put off travel amid an economic crisis there. The company had been boosting sales in the region after the 2005 acquisition of Amsterdam-based Booking.com. Results were also dragged down as the strength of the U.S. dollar eroded the value of overseas receipts, said Chief Executive Officer Jeffery Boyd.

Rival Expedia Inc. declined 4.6 percent to $56.14, while Orbitz Worldwide Inc. decreased 26 percent to $3.47. TripAdvisor Inc. retreated 4.9 percent to $36.77.

Alpha Natural Resources Inc. declined 8.7 percent to $6.30.

The second-largest U.S. coal producer lowered its metallurgical coal sales forecast for 2012 as steel output declined in Europe and slowed in China.

Ralph Lauren Corp. lost 1.1 percent to $151.35. The retailer of its namesake brand clothing projected second-quarter sales that trailed analysts’ estimates.

VeriFone Systems Inc. plunged 12 percent to $34.18 after Starbucks Corp., the largest coffee-shop chain, said it will use Square Inc.’s rival payment-system technology in 7,000 stores.

Warner Chilcott Plc fell 6.9 percent to $16.54. The drugmaker specializing in women’s health and dermatology said it has ended efforts to find a buyer for the company.

The S&P 500 is in a “make-or-break situation” that will probably lead to either large gains or losses for the benchmark U.S. stocks gauge, according to technical analysts at UBS AG.

After climbing through the 1,390 level, the S&P 500 may test the highs reached in March and May, Michael Riesner and Marc Mueller wrote in a note dated yesterday. A drop below 1,325 would indicate a retreat to the early-June low of 1,266.

Investors should watch the flow of money into defensive stocks, whose earnings are less dependent on economic growth, and cyclicals, which are more tied to the economy, for signs of future moves in the S&P 500, the analysts said.

 

Have  a wonderful evening everyone.

Be magnificent!

 

To conquer the subtle passions

seems to me to be far harder than the

physical conquest of the world by the force of arms.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

 

And remember, we all stumble, every one

of us.  That’s why it’s a comfort to go

hand in hand.

-Emily Kimbrough, 1899-1989

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

I’m listening to the rare roll of thunder as a summer storm begins in Victoria.…it’s rather wonderful!

A poem for you:

THE ROSE-WAY IN GIVERNY

And in the reticulate distance

the cued inertia of Lucifer

astounds.  Our feet bleed:

buoyant, the body at its task.

What you wanted was what I

wanted – slant of sun to the left,

twinkling of civilization elsewise,

and the moon (whelp of history)

to our backs, all come-hither

and dream. Motion understood

is philosophy deferred: peace,

the felt pathos of space and time.

Look, darling, at the establishing

shot. It’s downright Biblical,

this thrown-together vista,

world upon world without end.

-Virginia Konchan

photos of the day August 7, 2012

Anti-nuclear activists form a human chain in Paris as they walk under the Eiffel Tower to mark the 67th anniversary of the world’s first atomic bomb attack in Hiroshima.

Michel Euler/AP

An exile Tibetan girl in Dharmsala, India, lights a candle during a vigil to remember two Tibetans who self-immolated in Tibet.

Ashwini Bhatia/AP

And on this day in…

1861 – Lincoln imposes the first federal tax.

1882 – Hatfield-McCoy feud erupts.

1945 – August 6 – Paul Tibbets, the commander of Enola Gay, drops the first atomic bomb on Hiroshima, Japan.It was the second atomic bomb, dropped on Nagasaki, that induced the Japanese to surrender.

1959 –First photo of Earth from space.
1962 – August 5 – Marilyn Monroe found dead.
1981 – Reagan fires 11,869 air traffic controllers.

Market Closes for August 7, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13168.60	+51.09
		+0.39%
S&P 500	1401.18	+6.95
		+0.50%
NASDAQ	3015.86	+25.95
		+0.87%
TSX	11862.77	+200.18
		+1.72%

International Markets

Market  Index	Close	Change
NIKKEI	8803.31	+77.02
		+0.88%
HANG  SENG	20072.55	+73.83
		+0.37%
SENSEX	17601.78	+188.82
		+1.08%
FTSE 100	5841.24	+32.47
		+0.56%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.841	1.769
CND.   30 Year Bond	2.370	2.310
U.S.   10 Year Bond	1.6266	1.5682
U.S.   30 Year Bond	2.7199	2.6537

Currencies

BOC Close	Today	Previous
Canadian $	1.00322	1.00129
US   $	0.99679	0.99871
Euro Rate  1 Euro=		Inverse
Canadian   $	1.23579	0.80920
US  $	1.23978	0.80660

Commodities

Gold	Close	Previous
London Gold   Fix	1611.60	1603.68
Oil	Close	Previous
WTI Crude Future	94.06	91.63
BRENT	112.73	110.51

Market Commentary:

Canada

By Eric Lam

Aug. 7 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level in one month, on speculation central banks will act to boost the economy and as oil climbed on forecasts that U.S. inventories fell to three- month lows.

Suncor Energy Inc. and Canadian Natural Resources Ltd., two of Canada’s biggest oil producers, gained at least 1.9 percent as crude climbed 1.8 percent. Barrick Gold Corp. gained 3.5 percent. Energy and mining shares contributed most to the increase in the Standard & Poor’s/TSX Composite Index among 10 industries.

The S&P/TSX advanced 185.18 points, or 1.6 percent, to 11,847.77 at 1:16 p.m. in Toronto. The index reached its highest intraday level since July 5. Markets in Toronto were closed yesterday for a civic holiday.

“We’re on the back of a strong European market just generally recovering from the sell-off,” Jennifer Stevenson, a portfolio manager with Dynamic Funds, said in a phone interview.

“The biggest sell-off was in energy and materials and those are the sectors driving the TSX today.”

The Stoxx Europe 600 Index rallied 0.7 percent today to reach a four-month high. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the European Central Bank, a spokesman said yesterday.

U.S. crude stockpiles dropped 1.6 million barrels, or 0.4 percent, as imports and production slipped and refineries operated at the highest rate in five years, according to a Bloomberg News survey of analysts before an Energy Department report tomorrow. Tropical storm Ernesto was forecast to become a hurricane as it heads for Mexico’s Bay of Campeche, home to most of the country’s crude production.

Canadian Natural Resources jumped 5.8 percent to C$29.57 and Suncor Energy gained 1.9 percent to C$32.23 as crude oil increased 1.8 percent to $93.81 a barrel on the New York Mercantile Exchange. The contract touched $93.69, the highest level since May 17.

Barrick Gold, the world’s largest gold producer, rose 3.5 percent to C$34 after the company said it is studying buying new mines as it completes a review to reduce costs at existing assets.

“Perhaps there’s more M&A opportunities today than there were a year ago and as a company we’re looking at those assets on a daily basis,” Mike Feehan, regional president of the Toronto-based company’s Australia and Pacific operations said today at the Diggers & Dealers mining conference in Kalgoorlie, Australia.

Teck Resources Ltd., Canada’s largest diversified miner, jumped 5.1 percent to C$28.78. The price of copper rose to a one-week high amid speculation that China, the world’s biggest consumer of industrial metals, will announce more stimulus measures to bolster its economy.

Tahoe Resources Inc. soared 8.1 percent to C$16 after Guatemala said it will withdraw a proposal to change the constitution to allow the state to acquire stakes of as much as 40 percent in natural resource companies. Tahoe operates the Escobal silver mine southeast of Guatemala City.

Toronto-Dominion Bank rose 0.6 percent to C$79.47 and Bank of Nova Scotia added 1.5 percent to C$52.62 after John Aiken, financials analyst with Barclays Capital, maintained his overweight rating on the former and upgraded the latter to equalweight from underweight.

US

By Stephen Kirkland and Rita Nazareth

Aug. 7 (Bloomberg) — The Standard & Poor’s 500 Index rose to a three-month high, commodities gained and the yen weakened amid better-than-estimated corporate earnings and speculation central banks will boost efforts to lift growth.

The S&P 500 advanced 0.5 percent at 4 p.m. in New York in a third straight day of gains. The Stoxx Europe 600 Index added 0.8 percent to reach a four-month high. Standard Chartered Plc tumbled the most since at least 1988 after a U.S. regulator said the lender may face a suspension of business activities. The yen depreciated against all 16 major counterparts while the Dollar Index was little changed. U.S. Treasuries remained lower after a $32 billion auction. Gasoline surged more than 2 percent to lead gains commodities higher.

Chesapeake Energy Corp., Sirius XM Radio Inc. and Fossil Inc. were among U.S. stocks that rallied after reporting earnings. Federal Reserve Bank of Boston President Eric Rosengren told CNBC the central bank should pursue an “open- ended” easing program of “substantial magnitude” to boost growth and hiring amid a global slowdown. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the European Central Bank, a spokesman said yesterday.

“Any shift in sentiment can result in a powerful move upward in the market,” Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania, said in a telephone interview. His firm manages about $6.5 billion. “Earnings have come in well above expectations. Expectations about Fed action help and there’s more confidence today that Europe is inching closer to a credit plan to avert a financial crisis.”

Commodity, consumer and industrial shares helped lead gains among the 10 main groups in the S&P 500 today while Cisco Systems Inc., JPMorgan Chase & Co. and United Technologies Corp. were among the biggest gains in the Dow Jones Industrial Average.

Fossil, the maker of jewelry and leather goods, rallied after its profit and earnings forecast topped estimates amid increasing sales of its Skagen brand. Chesapeake Energy, the second-largest U.S. natural-gas producer, jumped after reporting the highest quarterly profit in company history and boosted its asset-sales target to plug a looming funding shortfall. Sirius XM Radio gained after adding subscribers and boosting its forecast.

Earnings have topped analysts’ average estimate at about 72 percent of the S&P 500 companies which reported second-quarter results so far, according to data compiled by Bloomberg.

More than four shares rose for each that declined in the Stoxx 600. Xstrata Plc climbed 1.6 percent and Danske Bank A/S added 6.7 percent after they reported earnings that beat estimates. Standard Chartered tumbled 16 percent, the most in almost 24 years, after a U.S. regulator said the lender faces suspension of business activities because of transactions with Iranian banks. Nestle fell 1 percent.

Elan Corp. sank 8.7 percent to its lowest price this year.

The Irish drugmaker wrote down to zero the value of its venture with Johnson & Johnson to develop an Alzheimer’s treatment.

Among the 24 commodities tracked by the S&P GSCI Index, gasoline and Brent crude rallied at least 2 percent to lead gains. Oil climbed 1.6 percent to $93.67 a barrel in New York, the highest settlement since May 15.

The yield on the 10-year U.S. Treasury note rose six basis points to 1.62 percent. U.S. notes remained lower following the sale of $32 billion of three-year notes at a higher-than- forecast yield. The securities, which mature in August 2015, drew a yield of 0.370 percent, compared with the average forecast of 0.361 in a Bloomberg News survey of seven of the Federal Reserve’s 21 primary dealers.

Spain’s 10-year yield rose 12 basis points, reversing an earlier decline, while its two-year rate climbed 36 basis points. The yield on Italy’s 10-year bond fell three basis points, paring steeper declines, and similar-maturity Portuguese debt yields declined 42 basis points.

 

Have a wonderful evening everyone.

Be magnificent!

 

There will have to be rigid and iron discipline

before we achieve anything great and enduring,

and that discipline will not come by mere academic argument

and appeal to reason and logic.

Discipline is learnt in the school of adversity.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

 

And the day came when the risk to remain tight

in a bud was more painful than the risk it took

to blossom.

-Anaïs Nin, 1903-1977

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

National Geographic photographer Jim Richardson identifies 10 places every photographer should visit, creating an impressive list.   Richardson includes tips on the great shot to get at each.  Check out the full list at http://bit.ly/natbucket.

For us, there is only the trying. The rest is not our business. – T.S. Eliot

And on this day in…

1492 – Christopher Columbus leaves Spain on his Voyage to the New World.

1610 – Henry Hudson discovers a great bay in Eastern Canada, and names it for himself.

1914 – Germany and France declare against each other.

1941 – Martha Stewart is born.

1949 – The NBA is born.

1958 – the USS Nautilus travels under the North Pole.

1996 – the “Macarena” tops U.S. pop charts.

photos of the day August 3, 2012

Dark clouds cover the sky in downtown Shanghai.

Aly Song/Reuters

Jamaica’s Rosemarie Whyte stands in the pouring rain during a women’s 400-meter heat during the athletics in the Olympic Stadium at the 2012 Summer Olympics, London.

Anja Niedringhaus/AP

Market Closes for August 3, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13111.83	+232.95
		+1.81%
S&P 500	1391.98	+26.98
		+1.98%
NASDAQ	2974.71	+64.94
		+2.23%
TSX	11659.59	+153.09
		+1.33%

International Markets

Market  Index	Close	Change
NIKKEI	8555.11	-98.07
		-1.13%
HANG  SENG	19666.18	-24.06
		-0.12%
SENSEX	17197.93	-26.43
		-0.15%
FTSE 100	5787.28	+124.98
		+2.21%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.769	1.674
CND.   30 Year Bond	2.310	2.250
U.S.   10 Year Bond	1.5682	1.4762
U.S.   30 Year Bond	2.6537	2.5509

Currencies

BOC Close	Today	Previous
Canadian $	1.00129	1.00737
US   $	0.99871	0.99268
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24030	0.80625
US  $	1.2371	0.80729

Commodities

Gold	Close	Previous
London Gold   Fix	1603.68	1589.00
Oil	Close	Previous
WTI Crude Future	91.63	87.13
BRENT	110.51	107.23

Market Commentary:

Canada

By Eric Lam

Aug. 3 (Bloomberg) — Canadian stocks snapped a four-day losing streak as oil and gold prices rebounded after U.S. payrolls in July increased more than forecast.

Suncor Energy Inc., Canada’s biggest oil company, gained 3.6 percent as the price of oil rose 4.9 percent. Ivanhoe Mines Ltd. jumped 7.1 percent, the most since April, as gold futures advanced the most in more than a week. Royal Bank of Canada, the nation’s largest lender, climbed 1.5 percent. Energy and bank shares contributed most to the rise in the Standard & Poor’s/TSX Composite Index among 10 industries.

The S&P/TSX surged 156.09 points, or 1.4 percent, to 11,662.59 in Toronto. The benchmark gauge pared its losses for the week to 0.9 percent.

“Every day brings a new story and the market reacts, sometimes quite violently, both up and down,” Greg Eckel, a fund manager with Morgan Meighen & Associates, which manages about C$1 billion ($1 billion), said in a phone interview. “A couple of positives in Europe and in the U.S. seems to be enough for today.”

Non-farm payrolls for the U.S., the world’s largest consumer of crude and Canada’s biggest trade partner, increased 163,000 in July boosted by a pickup in employment at automakers.

The median estimate of 89 economists surveyed by Bloomberg News called for a gain of 100,000. Unemployment rose to 8.3 percent.

In Europe, members of German Chancellor Angela Merkel’s coalition parties signaled they won’t stand in the way of European Central Bank chief Mario Draghi’s plan to buy government bonds.

Suncor rose 3.6 percent to C$31.63. Oil futures surged 4.9 percent, the biggest gain since June 29, climbing to $91.40 in New York.

Ivanhoe Mines, which is developing the massive Oyu Tolgoi gold and copper mine in Mongolia, jumped 7.1 percent to C$8.60 as gold futures for December delivery increased 1.2 percent to settle at $1,609.30 an ounce in New York, the biggest gain since July 25.

Royal Bank of Canada climbed 1.5 percent to C$51.60.

Toronto-Dominion Bank rose 1.3 percent to C$79 and Bank of Nova Scotia gained 1 percent to C$51.86.

Stantec Inc. soared 10 percent to C$31.22, the most in three years, after the engineering and architecture services company posted second-quarter earnings the topped analyst expectations.

“We are impressed with Stantec’s modest but consistent growth profile in a difficult environment, particularly in the U.S.,” Sara O’Brien, analyst with RBC Capital Markets, said in a note upgrading the company to outperform.

Telus Corp., Canada’s third-largest wireless carrier, rose 1.3 percent to C$63.17 after reporting second-quarter profit that beat analysts’ estimates as customer spending on smartphone data surged. The company raised its forecast for annual revenue.

US

By Lu Wang

Aug. 3 (Bloomberg) — U.S. stocks rose for a fourth week, giving the Dow Jones Industrial Average the longest rally since October, as better-than-forecast jobs data erased a four-day drop amid investor disappointment with global stimulus efforts.

Technology companies climbed the most among the 10 industry groups in the Standard & Poor’s 500 Index. Apple Inc. jumped 5.2 percent amid speculation the company may join the Dow, while First Solar Inc. soared 18 percent on surging profit. Better- than-expected earnings at MetLife Inc. and Frontier Communications Corp. sent their stocks up at least 9 percent.

Knight Capital Group Inc. plunged 61 percent after a trading error spurred a $440 million loss.

The S&P 500 added 0.4 percent for the week to 1,390.99. The benchmark index for American equities extended its 2012 gain to 11 percent. The Dow climbed 20.51 points, or 0.2 percent, to 13,096.17, the highest level since May 3.

“We’ve come to fall into this trap if you will, when it comes to central banks, we want something from them immediately and if we don’t get it, the market gets disappointed,” Mark Freeman, who oversees about $13 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said in a phone interview. “At the end of the day, the fundamentals matter, and the fundamentals are doing OK.”

Equities reversed weekly losses on the final day, with the S&P 500 jumping 1.9 percent, after a Labor Department report showed American payrolls climbed more than forecast even as the jobless rate unexpectedly rose. The benchmark index slumped 1.5 percent in the previous four days as European Central Bank President Mario Draghi and Federal Reserve Chairman Ben S. Bernanke failed to reassure investors on immediate efforts to bolster the economy.

The S&P 500 slipped as much as 9.9 percent from an almost four-year high on April 2 amid concern Europe’s debt crisis is worsening and the global economy is slowing. The equity gauge has since climbed 8.8 percent after central banks in Europe and China cut interest rates.

U.S. stocks fell on Aug. 1 as the Fed held off on stepping up record stimulus, saying it will “closely monitor” economic and financial developments and “will provide additional accommodation as needed.” Equities slid the next day as Draghi kept interest rates on hold and signaled the ECB intends to join forces with governments to buy bonds, while conceding that Germany’s Bundesbank had reservations about the plan.

The rally in stocks on the final day gained strength as members of German Chancellor Angela Merkel’s coalition parties signaled they won’t stand in the way of Draghi’s bond plan.

“The U.S. economy is continuing to plod along, not going into a recession,” James McDonald, chief investment strategist at Northern Trust Corp., said in the phone interview. The Chicago-based firm oversees $704.3 billion. “While Mario Draghi did not give us the magic bullet, they’re clearly working towards further intervention to help support the European Monetary Union.”

Computer and software makers in the S&P 500 climbed 1.5 percent as a group. Apple rose 5.2 percent to $615.70, the highest since April. The world’s largest company by market value is considering a stock split and its decision in March to pay its first dividend in 17 years makes it more likely the shares could be added to the Dow index, Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co., wrote in a July 31 note.

First Solar surged 18 percent to $17.06 after second- quarter earnings increased 81 percent. The world’s biggest maker of thin-film panels boosted its full-year profit forecast.

About 73 percent of S&P 500 companies which reported quarterly results have beaten estimates, according to data compiled by Bloomberg. Sales missed estimates at 59 percent of companies.

MetLife, the largest U.S. life insurer, jumped 9 percent to $33.19 after profit beat analysts’ estimates on gains from derivatives it uses to protect against a drop in interest rates.

Prudential Financial Inc. rallied 8.2 percent, the most since December, to $52.03. The second-largest U.S. life insurer said profit more than doubled as its international business improved and the company recorded gains on derivatives.

Frontier Communications Corp. advanced 18 percent to $4.40 for the biggest increase in the S&P 500. The company, which sells voice and broadband service to individuals and businesses, reported per-share earnings that topped the average analyst estimate by 70 percent, the most since 2006, according to data compiled by Bloomberg.

Knight plunged 61 percent to $4.05. Errors related to the company’s trading software sent stocks moving as much as 151 percent on Aug. 1, prompting the New York Stock Exchange to review trading in 140 companies from Molycorp Inc. to AT&T Inc.

Transactions that occurred during the height of the volatility were canceled in six securities, where prices swung at least 30 percent in the first 45 minutes.

Knight fought to preserve its business as concern grew about its solvency. On the final day of the week, Knight told brokers it received short-term financing, according to a person familiar with the matter. As the company opened its books to potential saviors, people with knowledge of the matter said KKR & Co., TPG Capital and Silver Lake were among buyout firms that had an initial interest — while one said chances of a private- equity deal are small.

Abercrombie & Fitch Co. slumped 20 percent to $29.37 for the biggest retreat in the S&P 500. The teen retailer cut its annual forecast, citing an anticipated drop in same-store sales in the second half of 2012.

Coach Inc., the largest U.S. luxury handbag maker, tumbled 15 percent, the most since August, to $52.66, after reporting revenue that trailed analysts’ estimates amid slowing sales growth in North America.

Facebook Inc. declined 11 percent to $21.09 for the week.

The world’s biggest social-networking website dropped to its lowest level on Aug. 2. It was Facebook’s fifth straight day of losses after reporting earnings that showed slowing growth. The company snapped its losing streak on the final day of the week, jumping 5.2 percent, after Brian Wieser, an analyst at Pivotal Research Group, said the company could step up revenue growth with ad sales.

 

Have a wonderful weekend everyone.

Be magnificent!

 

All things are linked together through cause and effect.  There is no such thing as an accident.

When we cannot find the link between cause and effect in an event, we call it an accident.

Swami Prajnanpad, 1891-1974

 

As ever,

Carolann

 

Knowledge is the only instrument of production

that is not subject to diminishing returns.

-John Clarke, 1948-

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

To get where you’re going, you have to be good, and to be good where you’re going, you have to be damned good.  Every once in a while, you’ll succeed.  Most of the time you’ll fail, and most of the time  the circumstances will be well beyond your control. – Aaron Sorkin, Syracuse University Commencement Speech, 2012.

On this day in…

1876 – Wild Bill Hickok is shot while playing poker.

1934 – Hindenburg dies, Hitler becomes Fuhrer.
1939 – Einstein urges U.S. Atomic action.

1965 – (Toronto-born Canadian) Newsman Morley Safer films the destruction of a Vietnamese village by U.S. Marines.
1990 – Iraqi forces invade neighbouring Kuwait.

Trust your intuition and be guided by love. –Charles Eisenstein

photos of the day August 2, 2012

Buddhist monks walk in thick mist during a monsoonal rain in Dharmsala, India. The area receives heavy rainfall during the summer monsoon season though this year it has been lighter than usual.

Ashwini Bhatia/AP

The English National Ballet troupe waits to perform a pre-show for the artistic gymnastics women’s individual all-around competition at the 2012 Summer Olympics, in London.

Gregory Bull/AP

Market Closes for August 2, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12878.88	-92.18
		-0.71%
S&P 500	1365.00	-10.14
		-0.74%
NASDAQ	2909.77	-10.44
		-0.36%
TSX	11506.50	-112.03
		-0.96%

International Markets

Market  Index	Close	Change
NIKKEI	8653.18	+11.33
		+0.13%
HANG  SENG	19690.20	-130.18
		-0.66%
SENSEX	17224.36	-33.02
		-0.19%
FTSE 100	5662.30	-50.52
		-0.88%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.674	1.711
CND.   30 Year Bond	2.250	2.295
U.S.   10 Year Bond	1.4762	1.5240
U.S.   30 Year Bond	2.5509	2.5973

Currencies

BOC Close	Today	Previous
Canadian $	1.00737	1.00512
US   $	0.99268	0.99491
Euro Rate  1 Euro=		Inverse
Canadian   $	1.22731	0.81479
US  $	1.21833	0.82080

Commodities

Gold	Close	Previous
London Gold   Fix	1589.00	1600.35
Oil	Close	Previous
WTI Crude Future	87.13	88.91
BRENT	107.23	106.58

Market Commentary:

Canada

By Eric Lam

Aug. 2 (Bloomberg) — Canadian stocks declined for a fourth day as natural gas and oil prices slumped after European Central Bank President Mario Draghi failed to reassure investors on immediate efforts to bolster the economy.

Suncor Energy Inc. lost 1.9 percent as oil tumbled 1.3 percent. Canadian Natural Resources Ltd. and Cenovus Energy Inc. sank at least 2.4 percent as the price of natural gas plunged 5.6 percent. Energy shares contributed most to the decline in the Standard & Poor’s/TSX Composite Index among 10 industries.

The S&P/TSX fell 78.23 points, or 0.7 percent, to 11,540.30 at 12:59 p.m. in Toronto. The benchmark gauge has lost 1.9 percent this week, bringing its 2012 decline to 3.5 percent.

“What we’ve seen from Europe to date has been talk, not specific plans or actions,” Brian Belski, chief investment strategist with BMO Capital Markets, said in a phone interview from New York. “Markets and investors around the world — and it doesn’t matter if it’s today or next week — they want and deserve answers. That’s why you see these reactions and are most likely going to continue to see these reactions.”

Draghi, who pledged last week to do “whatever it takes” to preserve the euro, said the bank will join forces with governments to buy sovereign bonds. Details of the purchase plan will be fleshed out in the coming weeks, Draghi said at a Frankfurt press conference. Earlier, the ECB kept its main interest rate at 0.75 percent.

Suncor lost 1.9 percent to C$30.19. Canadian Natural Resources slid 2.4 percent to C$26.95. Cenovus slipped 2.5 percent to C$30.49 as natural gas futures declined in New York after a government report showed that U.S. stockpiles climbed more than expected last week.

Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer producer, fell 3.7 percent to C$42.30, and Agrium Inc. decreased 0.8 percent to C$93.94 after analyst Charles Neivert with Dahlman Rose & Co. in New York cut his rating on both companies to a hold from a buy.

“The severe drought in the major growing areas of the U.S. may be about to apply the coup de grace to the fertilizer shares,” he wrote in a report today.

US

By Rita Nazareth

Aug. 2 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index down for a fourth straight day, after European Central Bank President Mario Draghi failed to reassure investors on immediate efforts to bolster the economy.

Alcoa Inc., JPMorgan Chase & Co. and DuPont Co. dropped at least 1.8 percent to pace losses in the biggest companies.

Knight Capital Group Inc. plunged 63 percent after saying losses from a trading breakdown are $440 million, more than some analysts had estimated, as it explores strategic and financial alternatives. General Motors Co. slid 2.6 percent as the automaker said second-quarter profit slumped 38 percent.

About five stocks fell for every three that rose on U.S. exchanges at 4 p.m. New York time. The S&P 500 lost 0.7 percent to 1,365, dropping 1.5 percent in four days. The Dow Jones Industrial Average declined 92.18 points, or 0.7 percent, to 12,878.88. Volume for exchange-listed stocks in the U.S. was 7.3 billion shares, or 8.6 percent above the three-month average.

“It’s status quo,” said Hayes Miller, who helps oversee about $48 billion as the Boston-based head of asset allocation in North America at Baring Asset Management Inc. He spoke on a phone interview. “I don’t know why people feel that authorities can come up with magic solutions. I don’t know that the magic bullet exists. There are limits to what the ECB can do.”

Stocks joined a global slump as Draghi signaled the ECB intends to join forces with governments to buy bonds in sufficient quantities to ease the region’s crisis, while conceding that Germany’s Bundesbank has reservations about the plan. Details on the plan will be fleshed out in coming weeks, he said after keeping the interest rate on hold at 0.75 percent.

Yesterday, the American central bank also failed to bolster confidence. The Federal Reserve’s pledge to provide additional support for the economy disappointed investors anticipating a more definitive sign of further monetary easing. The S&P 500 rose as much as 29 percent from its October 2011 low amid bets the central bank would add economic stimulus.

Tomorrow’s jobs report may provide more direction toward the Fed’s next steps to ensure the recovery is not derailed.

Payrolls rose by 100,000 after an 80,000 gain in June and the unemployment rate held at 8.2 percent, according to a Bloomberg survey. Data today showed orders placed with U.S. factories unexpectedly fell and jobless claims rose less than forecast.

Pacific Investment Management Co.’s Mohamed El-Erian said the world economy is suffering its severest slowdown since the recession ended in 2009. The chief executive officer of Pimco predicted global growth of 2.25 percent over the next 12 months.

That’s down from the 3.9 percent in 2011 and 5.3 percent in 2010 recorded by the International Monetary Fund. The world economy contracted 0.6 percent in 2009.

“This is a serious, synchronized slowdown,” El-Erian said in an interview today.

Companies which are most-dependent on economic growth tumbled today, with the Morgan Stanley Cyclical Index slumping 1.1 percent. Nine of 10 groups in the S&P 500 retreated as commodity companies had the biggest losses. Alcoa, the largest U.S. aluminum producer, slipped 3 percent to $8.18. JPMorgan dropped 2.3 percent to $35.17. DuPont, a chemical maker, declined 1.8 percent to $49.02.

Investors watched the latest developments with Knight Capital. The shares plunged 63 percent to $2.58, extending a two-day tumble to 75 percent. Knight has “all hands on deck” and is in close contact with clients and counterparties as it tries to weather trading errors that cost it $440 million, Chief Executive Officer Thomas Joyce said.

Joyce said it’s “hard to comment” on discussions with creditors and the firm explored strategic and financial alternatives following a loss almost four times its annual profit. The problems were triggered by what Joyce called “a bug, but a large bug” in software as the company, one of the largest U.S. market makers, prepared to trade with a New York Stock Exchange program catering to individual investors.

“Technology breaks,” Joyce said in an interview on Bloomberg Television’s “Market Makers” program with Erik Schatzker and Stephanie Ruhle today. “It ain’t good. We don’t look forward to it.”

Investors also watched second-quarter corporate earnings.

About 73 percent of companies which reported quarterly results have beaten analysts’ estimates, according to data compiled by Bloomberg. Sales missed estimates at 59 percent of companies.

GM slumped 2.6 percent to $19.14. The automaker faces rising losses in Europe and a stagnating China market. Overseas challenges threaten to undercut the company’s recovery even as its domestic market is on pace for the best year since 2007.

Abercrombie & Fitch Co. plunged 15 percent to $29.06, the lowest since 2009. The teen retailer with more than 1,000 stores cut its annual forecast yesterday, citing an anticipated drop in same-store sales in the second half of 2012.

Monster Worldwide Inc. declined 14 percent to $6.10. The Internet recruiting service exploring a possible sale forecast earnings that fell short of analysts’ predictions, citing European economic weakness.

MGIC Investment Corp. sank 64 percent, the most ever, to 88 cents. The mortgage insurer reported its biggest loss since 2009 and its risk-to-capital ratio breached regulatory standards.

Apache Corp. dropped 4.9 percent to $82.58. The independent oil and natural-gas producer reported second-quarter profit that trailed analysts’ estimates after energy prices fell and maintenance hampered production.

Parker Hannifin Corp. slid 3.3 percent to $78.85 after the maker of fluid power systems and air-conditioning products forecast annual earnings lower than some analysts’ estimates amid a demand slump in Europe.

DirecTV fell 2.6 percent to $48.80. The largest U.S. satellite-television provider reported second-quarter profit that trailed analysts’ estimates after posting the company’s first net decrease in U.S. subscribers.

Sealed Air Corp. sank 17 percent, the biggest decline in the S&P 500, to $13.15. The maker of Bubble Wrap posted second- quarter earnings that trailed analysts’ estimates and announced plans to pursue “strategic options.”

Navistar International Corp. dropped 13 percent to $21.44.

The maker of International brand trucks disclosed a U.S. Securities and Exchange Commission inquiry and withdrew its full-year earnings forecast.

Bristol-Myers slumped 8.6 percent, the most since 2002, to $32.55. The company lost ground in the race to develop a stand- alone hepatitis C pill after it suspended testing of an experimental drug for the disease that cost it $2.5 billion to buy earlier this year.

Separately, executive Robert Ramnarine was charged with insider trading for making $311,361 in illegal profit by buying stock options in three companies targeted for acquisition.

Facebook Inc. dropped 4 percent to $20.04, a record low.

The shares are 47 percent below their initial public offering price of $38. The world’s largest social-networking service last week reported earnings that showed slowing growth.

Gap Inc. and Macy’s Inc. posted July same-store sales that beat estimates as promotions and warm weather boosted shopping traffic. Gap, the biggest U.S. specialty-apparel retailer, climbed 13 percent to $33.17. Macy’s, owner of its namesake and Bloomingdale’s department stores, added 3.8 percent to $36.40.

First Solar Inc. surged 21 percent, the biggest advance in the S&P 500, to $17.93. The world’s biggest maker of thin-film panels said profit jumped 81 percent after it recognized revenue for selling power plants.

MetLife Inc. rose 4.2 percent to $31.70. Profit beat estimates and more than doubled on gains from derivatives it uses to protect against a decline in interest rates.

Tesoro Corp. jumped 14 percent to $31.79. The largest independent refiner on the U.S. West Coast said profit surged 78 percent and announced a $500 million share buyback plan.

Time Warner Cable Inc. added 2.7 percent to $87.94. The second-largest U.S. cable-television provider reported second- quarter profit that beat analysts’ estimates after gaining broadband Internet subscribers.

Green Mountain Coffee Roasters Inc. rallied 27 percent to $22.66. The maker of Keurig brewers and single-serve pods said third-quarter profit rose 30 percent and it will repurchase as much as $500 million in shares over the next two years.

Yelp Inc. added 17 percent to $22. The online review website reported second-quarter sales that topped estimates as an expansion into new regions helped widen its user base.

Jeremy Siegel, author of “Stocks for the Long Run”, said Bill Gross, who runs the world’s biggest bond fund at Pimco, is wrong when he compares long-term returns from equities investing to a “Ponzi scheme.”

“I like Bill Gross a lot, but he’s got the economics wrong,” Siegel said on Bloomberg Television’s “In the Loop” with Betty Liu. Siegel is “obviously pushing at windmills,”

Gross said today in an interview with Liu. “He belongs back in his ivory tower,” Gross said.

In his monthly investment outlook July 31, Gross said that the so-called Siegel Constant, which purports to show a long- term history of inflation-adjusted equity real returns of 6.6 percent since 1912, may be a “historical freak” unlikely to be seen again. Presuming a 2 percent return for bonds and 4 percent nominal returns for stocks, a diversified portfolio produces a nominal return of 3 percent and inflation-adjusted returns near zero, Gross, who manages the $263.4 billion Total Return Fund at Pimco, wrote in the outlook.

“Those that are looking for double-digit returns for stocks to pay education, to pay for retirement, are bound to be disappointed and that’s why the cult of equity is dead,” Gross said today in the interview with Liu. “It’s hard to see how corporations and stocks can continue to earn 3 percent more than GDP going forward and that’s only common sense.”

 

Have a wonderful evening everyone.

Be magnificent!

 

I declare out loud to whoever wants to believe me:

I have no word in my mouth

that is not in your heart!

Kabir, 1440-1518

As ever,

Carolann

 

Great services are not canceled by one act

or by one single error.

-Benjamin Disraeli, 1804-1881

Carolann Steinhoff, B.Sc., CFP, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7