Month: December 2012

 

Dear Friends,

Tangents:

WE ARE THE DECISIVE ELEMENT

I have come to the frightening conclusion that I am the decisive element.

It is my personal approach that creates the climate.

It is my daily mood that makes the weather.

I possess tremendous power to make life miserable or joyous.

I can be a tool of torture or an instrument of inspiration.

I can humiliate or humor, hurt or heal.

In all situations, it is my response that decides whether a crises is escalated or de-escalated, and a person I humanized or de-humanized…

-Johann Wolfgang von Goethe, 1749-1832.

On this day in…

1941 – Japanese planes raid Pearl Harbor in a surprise attack.

1942 – The U.S. Navy launches USS New Jersey, the largest battleship ever built.

1949 – The A.F.L. and the C.I.O. organize a non-Communist international trade union.

1972 – The crew of Apollo 17, the last manned mission to the moon, lifts off at Cape Canaveral, Florida.

1981 – The Reagan Administration predicts a record deficit in 1982 of $109 billion.

1988 – An earthquake in Armenia kills an estimated 100,000 people.

 

Do not dwell in the past, do not dream of the future, concentrate the mind on the present moment.  –Buddha.

photos of the day

December 7, 2012

Great Tit birds feed on nuts and seeds left by visitors in a bird feeder in a park in central Minsk, Belarus.

/Vasily Fedosenko/Reuters

A lobster boat heads out to sea at dawn in South Portland, Maine. A red sky in the morning often indicates a storm system is moving east.

Robert F. Bukaty/AP

 

Market Closes for December 7th, 2012:

Market  Index	Close	Change
Dow  Jones	13155.13	+81.09    +0.62%
S&P 500	1418.07	+4.13    +0.29%
NASDAQ	2978.041	-11.226    -0.38%
TSX	12159.59	+8.46
		+0.07%

International Markets

Market  Index	Close	Change
NIKKEI	9527.39	-17.77
		-0.19%
HANG  SENG	22191.17	-58.64
		-0.26%
SENSEX	19424.10	-62.70
		-0.32%
FTSE 100	5914.40	+12.98
		+0.22%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.710	1.695
CND.   30 Year Bond	2.312	2.302
U.S.   10 Year Bond	1.6215	1.5857
U.S.   30 Year Bond	2.8104	2.7739

Currencies

BOC Close	Today	Previous
Canadian $	0.98875	0.99156
US   $	1.01138	1.00851
Euro Rate  1 Euro=		Inverse
Canadian   $	1.27820	0.78235
US  $	1.29274	0.77355

Commodities

Gold	Close	Previous
London Gold   Fix	1704.05	1699.83
Oil	Close	Previous
WTI Crude Future	85.93	86.26
BRENT	108.39	108.45

Market Commentary:

Canada

By Inyoung Hwang

Dec. 7 (Bloomberg) — Canadian stocks rose, paring a weekly decline in the Standard & Poor’s/TSX Composite Index, as reports showing faster-than-estimated job growth overshadowed a decline in U.S. consumer confidence.

Transcontinental Inc. rallied 6.6 percent, the most in more than a year, after TD Securities recommended buying shares of the commercial printer. Viterra Inc. rose 2.1 percent after Glencore International Plc received Chinese regulatory approval to take over the grain handler. Harry Winston Diamond Corp. lost 1 percent after its chief executive officer said now isn’t the right time to sell its retail unit.

The S&P/TSX advanced 8.64 points, or 0.1 percent, to 12,159.77 in Toronto. The equity gauge lost 0.7 percent in the week after a report showed manufacturing in the U.S. unexpectedly shrank and the Bank of Canada maintained a bias to raise interest rates.

“The initial headline number for the jobs report was a beat,” Jeffrey Bradacs, a fund manager with Manulife Asset Management Ltd., said from Toronto. He oversees about C$1.5 billion. “It was less about how strong the economy was but more about analysts having difficulty predicting the effects of hurricane Sandy.”

U.S. employment climbed by 146,000 jobs last month, a Labor Department report showed today, exceeding the 85,000 forecast by 91 economists surveyed by Bloomberg. The jobless rate in the world’s largest economy dropped to 7.7 percent, its lowest level in four years.

A separate report showed Canadian employment rose almost six times faster than economists forecast in November with most of the increase coming from full-time and private-sector work.

The increase of 59,300 lowered the unemployment rate to 7.2 percent from 7.4 percent, the first decline in five months, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected a 10,000 gain in jobs and 7.4 percent unemployment, according to median forecasts.

The S&P/TSX pared early gains after a report showed confidence among U.S. consumers fell more than forecast in December. The Thomson Reuters/University of Michigan preliminary consumer sentiment index decreased to 74.5, the weakest in four months, from 82.7 in November. Economists projected a preliminary reading of 82 for December, according to the median of 67 estimates in a Bloomberg survey.

Investors also watched developments on U.S. budget negotiations. U.S. House Speaker John Boehner said “there’s no progress to report” on talks with President Barack Obama to avert tax increases and spending cuts set to take effect in January.

Transcontinental rallied 6.6 percent to C$10.66 after it was raised to “buy” from “hold” at TD Securities by analyst Michael Elkins. The 12-month target price is C$12.00 per share.

Viterra increased 2.1 percent to C$16.20. Glencore International’s C$6.1 billion takeover of Canada’s largest grain handler received Chinese regulatory approval. Approval from China’s Ministry of Commerce will allow for the takeover to be completed by Dec. 17. Glencore agreed to buy Viterra for C$16.25 a share.

The price of gold rose while oil fell. The S&P GSCI Index of commodities lost 0.4 percent today 2.6 percent this week.

Goldcorp, the world’s second-largest producer of the metal, rallied 1.2 percent to C$36.91. Suncor Energy Inc. lost 0.7 percent to C$32.24.

Lundin Mining Corp. slid 4.6 percent to C$5.01. The metal producer forecast copper production from 2013 through 2015 will be between 100,000 tons and 110,000 tons a year. The estimates were disappointing, George Topping, a Toronto-based analyst at Stifel Nicolaus & Co., said in an e-mail.

Harry Winston, the only gem producer and jewelry retailer in Canada, slumped 1 percent to C$14.13.

“We don’t have any great pressure to dispose of the diamond luxury retail business,” Chairman and Chief Executive Officer Robert Gannicott said today on Harry Winston’s earnings conference call. “It’s not a particularly good time to contemplate doing that anyway.”

US

By Lu Wang and Rita Nazareth

Dec. 7 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index higher for a third week, as optimism over better-than-estimated jobs data overshadowed a drop in consumer confidence amid continuing budget talks.

JPMorgan Chase & Co. and Bank of America Corp. advanced more than 1.7 percent as financial shares rallied. American International Group Inc. rose 2.6 percent after saying it is in talks to sell 90 percent of its plane-leasing unit. Apple Inc. lost 2.6 percent, sending the maker of iPhones and iPad tablet computers to its biggest weekly decline since May 2010.

The S&P 500 rose 0.3 percent to 1,418.07, the highest level since Nov. 6, at 4 p.m. New York time. The Dow Jones Industrial Average gained 81.09 points, or 0.6 percent, to 13,155.13, extending its weekly advance to 1 percent. Both gauges advanced for a third week, the longest winning streak since August. The Nasdaq Composite Index dropped 0.4 percent to 2,978.04. More than 5.48 billion shares changed hands on U.S. exchanges, or 12 percent below the three-month average.

“We’re increasing equities,” Barry James, who helps oversee $3.5 billion as president of James Investment Research in Xenia, Ohio, said in a phone interview. “People got too pessimistic about the whole fiscal cliff thing. The markets are in a way looking for a reason to go up.”

Stocks rallied as Labor Department figures showed employment climbed by 146,000 following a revised 138,000 gain in October that was less than initially estimated. The median estimate of 91 economists surveyed by Bloomberg called for a gain of 85,000. Superstorm Sandy “did not substantively impact” the data, the agency said. The unemployment rate fell to 7.7 percent, the lowest since December 2008, as the size of the labor force shrank.

U.S. equities briefly erased gains after a gauge of consumer confidence decreased more than forecast. The Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment for December fell to 74.5 from 82.7 a month earlier. The median economist estimate was for a decrease to 82.

Investors also watched developments in federal budget negotiations. The White House has “wasted another week” and no progress has been made in budget talks, House Speaker John Boehner said in a news conference today in Washington. President Barack Obama and Republicans are working toward a compromise to avert what has been labeled a fiscal cliff — a Jan. 1 surge of more than $600 billion in automatic tax increases and spending cuts that could propel the nation into recession.

“There is a lot of confusion and there are a lot of cross currents here to consider,” Terry L. Morris, who helps oversee about $2.5 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview.

“Unemployment has improved, yet confidence deteriorated. How do you explain the market isn’t doing anything when Boehner comes out and says we’re nowhere? It seems like the market should have been going down, but the fact it’s not tells me that the market wants to go higher.”

Today’s gain pushed the S&P 500 above its average in the past 50 days for the first time since Oct. 19, according to data compiled by Bloomberg. The index had spent the previous 32 days below the threshold, the longest streak since a 52-day stretch that ended Oct. 7, 2011, the data show. The average is watched by traders to gauge the market’s trends.

Financial companies in the S&P 500 climbed 0.8 percent as a group to the highest level since Nov. 6. JPMorgan Chase rallied 2.6 percent, the most in the Dow, to $42.56, while Bank of America advanced 1.7 percent to $10.64.

AIG rose 2.6 percent to $34.13. The insurer said it is in talks to sell 90 percent of its plane-leasing unit to an investor group including New China Trust Co. A deal may value International Lease Finance Corp. at about $5.5 billion, according to one person with knowledge of the matter, who asked not to be identified because the talks are confidential.

After the close of regular trading, AIG said superstorm Sandy will cost the company about $1.3 billion after taxes and reinsurance, the highest sum disclosed by a U.S. insurer. The shares tumbled 1.8 percent as of 4:42 p.m. in New York.

Freeport-McMoRan Copper & Gold Inc. climbed 2.9 percent to $31.70. The world’s largest publicly traded copper producer was raised to strong buy from buy at Oracle Investment. The stock slumped 20 percent in the previous two days after agreeing to buy Plains Exploration & Production Co. and McMoRan Exploration Co. for $9 billion. The move was a “game changer and a wise use of capital,” Oracle analyst Laurence Balter said in a note.

Macy’s Inc. gained 1.3 percent to $39.41 after the department-store chain authorized a $1.5 billion increase in share repurchases.

McGraw-Hill Cos. gained 4.2 percent to $56.53. The global information-services provider announced a special dividend of $2.50 a share.

Computer and software makers in the S&P 500 fell 0.6 percent for the only loss among 10 industry groups.

Apple slipped 2.6 percent to $533.25. The shares slumped 8.9 percent this week amid concern that the company will lose ground in smartphones to Nokia Oyj in China while giving up market share to Google Inc. in tablets.

Amarin Corp. sank 19 percent to $9.69. The maker of the cholesterol-lowering drug Vascepa fell as investors lost confidence that the company will soon be acquired.

The cost of protecting against swings in financial shares from JPMorgan to Berkshire Hathaway Inc. has fallen to a 19- month low as banks fire workers to improve profitability and the housing market recovers.

Implied volatility for three-month contracts with an exercise price closest to the Financial Select Sector SPDR Fund was 21 percent higher than for the SPDR S&P 500 ETF Trust yesterday, according to data compiled by Bloomberg. That’s the smallest gap between the key measures of options prices since May 2011. A gauge of banks, brokerages and insurers in the S&P 500 has climbed 22 percent this year, the most among the 10 main groups.

Analysts forecast that financial companies will post the third-fastest profit growth among S&P 500 industries next year as mortgage interest rates near record lows help drive demand for a shrinking property supply and banks reduce costs. Home prices in October rose the most since 2006 and the U.S. economy expanded more than previously estimated in the third quarter.

“The market is recognizing that the financial sector is healing,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $170 billion, said in a phone interview yesterday. “Housing prices are rising, so the collateral of the banking system is getting more valuable, which helps banks weather any future problems.”

Have  a wonderful weekend everyone.

 

Be magnificent!

 

Our contribution

to the progress of the world must, therefore,

consist in setting own house in order.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Nothing will work unless you do.

-Maya Angelou, 1928-

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:

It’s St. Nicholas Day in Europe.  St. Nicholas is the patron saint of merchants. 🙂

Today would have been Dave Brubeck’s 92^nd birthday.  The Jazz great died yesterday morning.

And also on this day in…

1865 – 13^th Amendment ratified; slavery abolished.

1877 –  Thomas A. Edison makes the first sound recording when he recites “Mary had a Little Lamb” into his phonograph machine.

1896 – Ira Gershwin was born.

1917 –  The Bolsheviks imprison Czar Nicholas II and his family in Tobolsk.

1938 –  France and Germany sign a treaty of friendship.

1976 –  Democrat Tip O’Neill is elected speaker of the House of Representatives. He will serve the longest consecutive term as speaker.
Whenever I hear anyone arguing for slavery, I feel a strong impulse to see it tried on him personally. –Abraham Lincoln.

photos of the day

December 6, 2012

View of Et Si? Installation by artist Daniel Knipper is seen during the rehearsal for the ‘Festival of Lights’ in central Lyon, France, late Wednesday night. The festival, with designers from all over the world, is one of Lyon’s most famous and will run from December 6 to 9.

Robert Pratta/Reuters

A NASA handout released December 5 shows a composite image of Asia and Australia at night, assembled from data acquired by the Suomi NPP satellite in April and October 2012. The image was made possible by the satellite’s ‘day-night band’ of the Visible Infrared Imaging Radiometer Suite (VIIRS), which detects light in a range of wavelengths from green to near-infrared and uses filtering techniques to observe dim signals such as city lights, gas flares, auroras, wildfires and reflected moonlight.

NASA Earth Observatory/Reuters

 

Market Closes for December 6th, 2012:

 

Market  Index	Close	Change
Dow  Jones	13074.04	+39.55    +0.30%
S&P 500	1413.94	+4.66    +0.33%
NASDAQ	2989.266	+15.569    +0.52%
TSX	12151.13	-6.16
		-0.05%

International Markets

Market  Index	Close	Change
NIKKEI	9545.16	+76.32
		+0.81%
HANG  SENG	22249.81	-21.10
		-0.09%
SENSEX	19486.80	+94.94
		+0.49%
FTSE 100	5901.42	+9.34
		+0.16%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.695	1.687
CND.   30 Year Bond	2.302	2.295
U.S.   10 Year Bond	1.5857	1.5875
U.S.   30 Year Bond	2.7739	2.7770

Currencies

BOC Close	Today	Previous
Canadian $	0.99156	0.99191
US   $	1.00851	1.00815
Euro Rate  1 Euro=		Inverse
Canadian   $	1.28521	0.77808
US  $	1.29615	0.77152

Commodities

Gold	Close	Previous
London Gold   Fix	1699.83	1693.60
Oil	Close	Previous
WTI Crude Future	86.26	87.88
BRENT	108.45	110.23

Market Commentary:

Canada

By Eric Lam

Dec. 6 (Bloomberg) — Canadian stocks fell as bank shares slumped amid fourth-quarter earnings reports, overshadowing a jump in Loblaw Cos. after the company announced it will create a real estate investment trust.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce fell more than 0.5 percent after reporting results that included rising provisions for bad loans. Loblaw, Canada’s largest grocery chain by market value, soared the most in 25 years as it will sell units in the REIT in an initial public offering. Bombardier Inc. rose 1.5 percent after Delta Air Lines Inc. agreed to buy regional jets in a deal worth as much as $3.29 billion.

The Standard & Poor’s/TSX Composite Index lost 6.16 points, or 0.1 percent, to 12,151.13 in Toronto. The equity gauge has gained 1.6 percent this year. Trading volume was 27 percent higher than the 30-day average, according to data compiled by Bloomberg.

“Overall, the market is treading water. A lot of the direction is still being held hostage by the fiscal cliff,” said Luciano Orengo, a fund manager with Manulife Asset Management Ltd. in Toronto. His team manages about C$1.4 billion ($1.41 billion) in assets. “The headline stock today is Loblaw; I think people like that they’re unlocking the value in their real estate.”

In Washington, House Speaker John Boehner is under pressure as a few dozen Republicans have joined a bipartisan call to consider “all options” on taxes and entitlement programs in an effort to reach a budget compromise ahead of more than $600 billion in automatic tax increases and spending cuts scheduled for the new year.

Bank stocks lost the most in the S&P/TSX. Toronto-Dominion, the country’s second-largest lender, fell 1.8 percent to C$81.12. CIBC, the fifth-biggest bank, slipped 0.5 percent to C$80.14. National Bank of Canada, the No. 6 lender, dropped 1.4 percent to C$76.66.

Toronto-Dominion and CIBC posted profits that beat analysts’ estimates, helped by gains from their investment- banking units. National Bank of Canada matched estimates after posting a 20 percent earnings gain. Toronto-Dominion set aside C$565 million for bad loans, 66 percent more than a year ago, while CIBC had C$328 million in provisions, a 7.2 percent increase. National’s provisions fell 8 percent to C$46 million.

“The headlines beat, but when you look under the hood the quality of the beat wasn’t great,” said Manulife’s Orengo.

Loblaw surged 14 percent to C$38.20, its biggest gain since October 1987. The grocer said it plans to contribute about 35 million square feet of real estate with a current value of more than C$7 billion and plans to retain a “significant” majority interest, according to a statement today. The IPO is expected to be completed next year pending regulatory approvals and authorization to list on the TSX.

George Weston Ltd., which owns 60 percent of Loblaw, advanced 6.8 percent to C$67.71. Bombardier added 1.5 percent to C$3.33 after announcing it has sold 40 CRJ900 NextGen jets to Delta, along with options for 30 more aircraft.

The deal is Bombardier’s third major aircraft order in recent months. NetJets, a unit of Warren Buffett’s Berkshire Hathaway Inc., agreed to buy as many as 275 Challenger aircraft worth $7.3 billion in June, and luxury air-charter company VistaJet Holding SA ordered as many as 142 Global-series planes with a value of $7.8 billion in November.

DragonWave Inc., which sells wireless network equipment, lost 2.3 percent to C$2.16 after the company cut its forecast for third-quarter revenue to $39 million, from $43 million to $50 million previously. The stock pared earlier losses of as much as 16 percent.

The Ottawa-based company blamed the sales revision on “short-term supply challenges” that caused shipments to be delayed, as well as lower-than-expected orders from European customers.

US

By Rita Nazareth and Lu Wang

Dec. 6 (Bloomberg) — U.S. stocks rose for a second day as Apple Inc. rebounded from its biggest drop in four years and investors weighed prospects for a budget deal in Washington.

Apple advanced 1.6 percent, reversing an earlier loss.

Akamai Technologies Inc. increased 10 percent after agreeing to sell services with AT&T Inc. H&R Block Inc., the biggest U.S. tax preparer, advanced 5.1 percent after reporting a loss that was smaller than analysts estimated. Freeport-McMoRan Copper & Gold Inc., the world’s largest publicly traded copper producer, and MetLife Inc., the biggest U.S. life insurer, declined at least 1.2 percent following analysts’ rating downgrades.

The Standard & Poor’s 500 Index increased 0.3 percent to 1,413.94 at 4 p.m. New York time. The Dow Jones Industrial Average advanced 39.55 points, or 0.3 percent, to 13,074.04.

More than 5.7 billion shares changed hands on U.S. exchanges, or 8.9 percent below the three-month average.

“Apple stock is taking a breather after a sharp selloff and that’s helping the overall market,” said Alan Gayle, senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “Most analysts continue to like their story. We’re seeing some validation of that. In addition, the jobless claims were better than expected. The data suggest the U.S. economy continues to heal and that will be the case as long as we don’t fall off the fiscal cliff.”

A few dozen Republicans joined a bipartisan push to break an impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest-earning Americans, signing a letter calling for openness to “all options.” Fewer Americans than projected filed applications for unemployment benefits last week as disruptions caused by superstorm Sandy waned.

Equities fell earlier as the European Central Bank forecast the economy will shrink 0.5 percent this year, more than the 0.4 percent contraction it predicted in September. The ECB cut its 2013 forecast to a contraction of 0.3 percent, and projected expansion of 1.2 percent in 2014. Risks to the outlook remain on the downside, ECB President Mario Draghi said.

“Weak activity is expected to extend into next year,” Draghi said at a press conference in Frankfurt after policy makers left the benchmark rate at a record low of 0.75 percent.

“Later in 2013, economic activity should gradually recover as global demand strengthens and our accommodative monetary-policy stance and significantly improved financial market confidence work their way through to the economy.”

The S&P 500 swung between gains and losses earlier today.

Intraday price fluctuations in the benchmark index averaged 0.8 percent over the past five days, the smallest since September, according to data compiled by Bloomberg.

“The market is showing not much conviction,” said Stephen Carl, head equity trader at Williams Capital Group LP in New York. “Fiscal cliff is on the forefront, stalling any moves at the moment. If there is a disparity one way or the other from tomorrow’s jobs report, you will probably see a move in the market.”

Data tomorrow is forecast to show U.S. payrolls rose by 85,000 workers last month, the smallest gain since June, according to the median forecast of economists.

Seven out of 10 groups in the S&P 500 rose today as technology and consumer discretionary shares had the biggest advances. Utilities and phone companies declined the most.

Apple rose 1.6 percent to $547.25, reversing an earlier decline of as much as 3.7 percent. It plans to spend more than $100 million next year on building Mac computers in the U.S., shifting a small portion of manufacturing away from China, the country that has handled assembly of its products for years.

The shares slumped 6.4 percent yesterday on concern that Apple will lose ground in smartphones to Nokia Oyj in China while giving up market share to Google Inc. in tablets. China Mobile Ltd. agreed to carry the Lumia 920T, a device based on Microsoft Corp.’s Windows Phone 8 software. In another announcement that may have fueled the stock’s slide, research firm IDC said yesterday that Apple’s share of the tablet market will slip to 53.8 percent this year from 56.3 percent in 2011, while Google’s will increase.

Akamai surged 10 percent to $39.06. The content-delivery services for AT&T’s business customers will be jointly sold and managed by both companies and be offered as a feature integrated into AT&T’s network, said Fletcher Cook, a spokesman for AT&T, the largest U.S. phone company. The contract is a multi-year, exclusive agreement, said Cook, who declined to disclose the terms.

H&R Block gained 5.1 percent to $18.26. The second-quarter results “reflect savings from our cost reduction initiatives and a strong tax season in Australia,” Chief Executive Officer Bill Cobb said in the statement.

Sirius XM Radio Inc. rose 0.7 percent to $2.79. The satellite-radio broadcaster said it will issue a special dividend of 5 cents a share and repurchase as much as $2 billion in stock.

Starbucks Corp. gained 5.7 percent to $53.70. The world’s biggest coffee-shop operator was raised to outperform from neutral at Robert W. Baird & Co. by analyst David Tarantino. The 12-month share-price estimate is $62.

Freeport-McMoRan dropped 4.2 percent to $30.81 after being downgraded to market perform from outperform at BMO Capital Markets and Macquarie Group Ltd.

The shares slumped 16 percent yesterday, the most in four years, after the mining company agreeing to buy Plains Exploration & Production Co. and McMoRan Exploration Co. for $9 billion. The move was criticized by BlackRock Inc., one of Freeport’s largest investors, and Dan Rohr, an analyst at Morningstar Investment Service, for failing to create any obvious cost savings.

MetLife declined 1.2 percent to $32.91. The shares were downgraded to equal-weight from overweight at Barclays Plc by analyst Jay Gelb. The share-price estimate is $37.

Traders are pushing the cost of protecting against J.C. Penney Co. swings to an all-time high relative to its competitors amid investor pessimism about Chief Executive Officer Ron Johnson’s turnaround plan.

Implied volatility, the key gauge of options prices, for three-month contracts closest to J.C. Penney shares has risen to 65.8, according to data through yesterday compiled by Bloomberg.

That is 3.3 times the level for the SPDR S&P Retail ETF, near the record reached last month. J.C. Penney, the fourth-largest U.S. department-store company, has lost 48 percent this year.

Johnson, who joined as chief executive officer about a year ago from Apple, is losing customers in a bid to implement an everyday low-pricing plan and turn the chain into a collection of branded shops. Revenue at J.C. Penney has declined by more than 20 percent for three straight quarters, sending the shares to their lowest price in almost four years. The company said earlier this week that its operating efficiency may be hurt after it fired employees while others left voluntarily.

“People are very focused on when the company will see some sort of bottom on the sales decline,” Jessica Bemer, a Sewickley, Pennsylvania-based senior analyst at Snow Capital Management LP, which oversees about $2.5 billion, said in a telephone interview yesterday. “The concern is that in order to be successful in that venture, the company will need to stabilize cash flow. It’s going to take some time to get there. How long are people going to wait?”

 

Have  a wonderful evening everyone.

 

Be magnificent!

 

Every day we see or read of appalling things happening in the world as the result of violence in man.

You may say, “I can’t do anything about it,” or “How can I influence the world?”

I think you can tremendously influence the world if you yourself are non violent,

if you lead actually every day a peaceful life – a life which is not competitive, ambitious, envious –

a life which does not create enmity.

Small fires can become ablaze.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Fires can’t be made with dead embers, nor can enthusiasm be stirred

by spiritless men.   Enthusiasm in our daily work lightens effort and

turns even labor into pleasant tasks.

-James Baldwin, 1924-1987

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 on my lunch break I was strolling through Chapter’s and came across a book that caught my attention. While reading the synopsis on the back, I had about three people approach me and tell me what a wonderful read this book was.  Even when I was at the counter paying for the book, it has a guarantee. What does that mean? Even if you read the book and are dissatisfied, Chapters will still refund you the original price of the book.  The name of this book is “Rules of Civility”. It’s set in New York City in 1938, and is the story of an uncompromising twenty-five-year-old named Katey Kontent. Armed with little more than a formidable intellect, a bracing wit, and her own brand of cool nerve, Katey embarks on a journey from a Wall Street secretarial pool through the upper echelons of New York society in search of a brighter future.  Throughout this book Katey will learn how individual choices become the means by which life crystallizes loss.

So next time you are in your local book store looking for a good read, check out Rules of Cilvility! Care for a good read?

 

“Go confidently in the direction of your dreams. Live the life you have imagined.” – Henry David Thoreau

 

And also on this day in…

1848 – U.S. President Polk triggered the Gold Rush of ’49 by confirming the fact that gold had been discovered in California.

1876 – The Stillson wrench was patented by D.C. Stillson. The device was the first practical pipe wrench.

1901 – Movie producer Walt Disney was born in Chicago. He created his first Mickey Mouse cartoon at the age of 27.
Disney movies, music and books

1904 – The Russian fleet was destroyed by the Japanese at Port Arthur, during the Russo-Japanese War.

1908 – At the University of Pittsburgh, numerals were first used on football uniforms worn by college football players.

1913 – Britain outlawed the sending of arms to Ireland.

1932 – German physicist Albert Einstein was granted a visa making it possible for him to travel to the U.S.

 

photos of the day December 5, 2012

People struggle against wind and drifting snow in Stockholm. Sweden’s main airport was paralyzed due to a snowstorm in the country’s capital, just as the winners of this year’s Nobel prizes were to arrive to receive their awards.

Anders Wiklund/Scanpix Sweden/Reuters

A man blows his trumpet from the Old Town Hall Tower as a Christmas tree is illuminated at the Old Town Square in Prague, Czech Republic.

David W Cerny/Reuters

 

Market Closes for December 5th, 2012:

 

Market  Index	Close	Change
Dow  Jones	13034.49	+82.71    +0.64%
S&P 500	1409.28	+2.23    +0.16%
NASDAQ	2973.697	-22.988    -0.77%
TSX	12157.29	+20.11
		+0.17%

International Markets

Market  Index	Close	Change
NIKKEI	9468.84	+36.38
		+0.39%
HANG  SENG	22270.91	+470.94
		+2.16%
SENSEX	19391.86	+43.74
		+0.23%
FTSE 100	5892.08	+23.04
		+0.39%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.687	1.698
CND.   30 Year Bond	2.295	2.301
U.S.   10 Year Bond	1.5875	1.6028
U.S.   30 Year Bond	2.7770	2.7770

Currencies

BOC Close	Today	Previous
Canadian $	0.99191	0.99275
US   $	1.00815	1.00730
Euro Rate  1 Euro=		Inverse
Canadian   $	1.29658	0.77126
US  $	1.30715	0.76502

Commodities

Gold	Close	Previous
London Gold   Fix	1693.60	1697.05
Oil	Close	Previous
WTI Crude Future	87.88	88.50
BRENT	110.23	111.08

Market Commentary:

Canada

By Nikolaj Gammeltoft and Eric Lam

Dec. 5 (Bloomberg) — Canadian stocks rose, snapping a two- day retreat, as optimism grew over U.S. budget talks and energy producers advanced following an easing of Chinese restrictions on investing in banks.

Primaris Retail Real Estate Investment Trust jumped 15 percent after real-estate investor KingSett Capital Inc. said it plans a C$4.4 billion ($4.4 billion) bid for the company.

Canadian Pacific Railway Ltd. added 4.1 percent after the company said it plans to shrink its workforce by 23 percent.

Suncor Energy Inc., the nation’s largest oil producer, rose 1.3 percent. Canadian Western Bank fell 0.9 percent after analysts with Macquarie and Canaccord Genuity downgraded the stock.

The Standard & Poor’s/TSX Composite Index rose 20.11 points, or 0.2 percent, to 12,157.29 in Toronto. The equity gauge has gained 1.7 percent this year.

“China is reversing the path it took a year ago to cool its economy,” said Barry Schwartz, fund manager with Baskin Financial Services in Toronto. His firm manages about C$450 million. “It looks like they’ll be in some kind of stimulus mode, so that helps the resources today.”

China’s regulators abolished a rule limiting insurers’ investments in commercial banks and Xinhua news agency said yesterday after a meeting of top party leaders that China will actively promote urbanization and expand domestic demand.

In U.S. budget talks, a few dozen Republicans have joined a bipartisan call to break the impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest- earning Americans. The Republicans signed a letter calling for exploration of “all options” on taxes and entitlement programs, a signal that some rank-and-file members are ready to bargain.

Energy and financial stocks contributed most to gains in the S&P/TSX as nine of 10 industries advanced. Trading volume was 9.4 percent higher than the 30-day average, according to data compiled by Bloomberg.

Suncor added 1.3 percent to C$32.68 and Canadian Natural Resources Ltd. gained 1.3 percent to C$27.78.

Primaris jumped 15 percent to C$26.40 for its biggest gain since November 2008. The potential offer from KingSett Capital is worth C$26 per unit of Primaris, the Toronto-based real estate investor said in a statement today.

The S&P/TSX REIT Index rose 2.3 percent on the news, the biggest gain for the index since August 2011. Allied Properties REIT increased 4.4 percent to C$32.19 and Calloway REIT gained 3.2 percent to C$28.94.

Canadian Pacific rose 4.1 percent to C$96.82 after Chief Executive Officer Hunter Harrison said yesterday he plans to eliminate 4,500 jobs by 2016. The company also plans to shutter container-car terminals and will evaluate assets from its 2007 acquisition of Dakota, Minnesota & Eastern Railroad.

Canadian Western Bank fell 0.9 percent to C$27.74. Sumit Malhotra, analyst with Macquarie Research, lowered his rating to neutral from outperform while Scott Chan, analyst with Canaccord Genuity, cut his rating to hold from buy. The bank yesterday reported earnings that fell short of analysts’ estimates.

Canadian Western Bank has fallen 4.3 percent in the past two days.

Goldcorp Inc. dropped 3.3 percent to C$36.61 and Barrick Gold Corp. slipped 2.4 percent to C$33.12 as the price of the metal fell to its lowest in almost a month. Gold futures for February delivery fell 0.1 percent to $1,693.80 an ounce in New York.

US

By Lu Wang and Susanne Walker

Dec. 5 (Bloomberg) — U.S. stocks rose amid optimism lawmakers will reach a budget agreement before the end of the year to avoid automatic spending cuts and tax increases.

Treasuries climbed and the Dollar Index halted its longest slump in more than a year. Oil and gasoline slid on supply data.

The Standard & Poor’s 500 Index added 0.2 percent to 1,409.28 at 4 p.m. in New York after earlier slumping as much as 0.6 percent. Ten-year U.S. note yields lost one basis point to 1.59 percent and the Dollar Index increased 0.2 percent after declining for five days. Spain’s bonds extended losses after the government missed a maximum sales target at a debt sale.

A few dozen Republicans joined a bipartisan call to break the impasse between President Barack Obama and House Speaker John Boehner over taxes for the highest-earning Americans, signing a letter calling for exploration of “all options.”

Obama told a business group in Washington that “nobody wants to get this done more than me” and lawmakers probably could solve the budget debate in about a week if Republicans move.

“The President had a more positive tone with regard to a resolution of the fiscal cliff today,” said Rick Fier, director of equity trading at Conifer Securities LLC in New York. His firm oversees $8 billion in assets. “People expected the worst when he gets on the TV and he didn’t come across so negatively so the sellers stopped.”

Citigroup Inc. surged 6.3 percent for its biggest gain in almost a year, and diversified financial firms led gains among 24 industries in the S&P 500, after announcing it will eliminate more than 11,000 jobs and scale back operations in some emerging markets. Bank of America Corp. rallied 5.7 percent. Trading in the two stocks led to a surge in volume, according to Miller Tabak & Co. chief technical analyst Jonathan Krinsky. Volume of S&P 500 stocks was 22 percent higher than the 30-day average, data compiled by Bloomberg shows.

Travelers Cos., the insurer in the Dow Jones Industrial Average, jumped 4.9 percent after saying it is resuming share buybacks and projecting that superstorm Sandy will cost the company about $650 million. Plains Exploration & Production Co. jumped 23 percent and McMoRan Exploration Co. surged 87 percent as Freeport-McMoRan Copper & Gold Inc. agreed to acquire them for about $9 billion.

Apple Inc. slid 6.4 percent, the biggest drop in four years, and led the S&P 500’s earlier decline amid concern Nokia Oyj is getting a leg up in China. Market researcher IDC said the company’s share in the global tablet market will slip to less than half by 2016.

Two-year Treasury yields decreased less than one basis point to 0.24 percent and 30-year rates were little changed at 2.78 percent. Treasury 10-year yields were in a range of 22 basis points last month, according to data compiled by Bloomberg, the narrowest since April 2007. This month, the gap has been 5.6 basis points, or 0.056 percentage point.

The Stoxx Europe 600 Index closed up 0.2 percent, after rising as much as 0.4 percent. A gauge of mining companies surged to a four-week high as Anglo American Plc and Rio Tinto Group climbed at least 2.5 percent. Nokia Oyj rallied 9.7 percent as China Mobile Ltd. agreed to carry the Finnish mobile- phone maker’s flagship Lumia 920T smartphone.

Tesco Plc advanced 3.3 percent as the U.K.’s largest grocery company said it will likely leave the U.S. after announcing a review of its Fresh & Easy unit.

Europe’s equity benchmark will rally 11 percent by the end of the first quarter of 2013 if it breaks above a key resistance, according to Natixis. The Stoxx Europe 600 will climb as high as 307 if it crosses above 278, said Ouri Mimran, a technical strategist at Natixis in Paris. The immediate resistance represents the 50 percent Fibonacci retracement of the decline from July 2007 through March 2009 in the aftermath of the financial crisis.

Spain’s bonds plunged as the nation sold 4.25 billion euros ($5.56 billion) of bonds, less than the 4.5 billion-euro target.

Ten-year Spanish bonds increased 15 basis points to 5.40 percent. Italian 10-year securities dropped for the first time in seven days. German bunds advanced, while French, Belgian and Swiss 10-year rates dropped to record lows as investors sought the safest assets.

Energy commodities led losses in the S&P GSCI Index, with gasoline falling 1.9 percent and crude oil decreasing 0.7 percent to $87.88 a barrel after the U.S. Energy Department said gasoline stockpiles climbed more than forecast.

The MSCI Emerging Markets Index climbed 1.1 percent to the highest level on a closing basis since May. The Shanghai Composite Index increased 2.9 percent, the most since Sept. 7.

China’s regulators abolished a rule limiting insurers’ investments in commercial banks and Xinhua news agency said yesterday after a meeting of top party leaders that China will actively promote urbanization and expand domestic demand. Spain sold 4.25 billion euros ($5.6 billion) of debt due between 2015 and 2022, less than the 4.5 billion-euro target.

Russia’s Micex Index added 1.7 percent and Brazil’s Bovespa index increased 0.2 percent.

 

“Discipline is the bridge between goals and accomplishment.” – Jim Rohn

 

Have a wonderful evening everyone!!!!!

 

Be magnificent!

“Be kind whenever possible. It is always possible.” – Dalai Lama

 

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5838

 

 

Dear Friends,

 

Tangents:

 

The Poem

First Signs of Ageing

by John Burnside

 

Being was never my forte; cold red wine

and glimmer of herd instinct bearing me into a night

that any fool could travel, if he chose.

I much prefer the moment’s

absence, like the scent

of tulips in the hall and women calling

softly, from one landing to the next,

a moment since.

I never understood what they were saying,

but something they love

is retrieved from the huddle of knowing

again and again the justice of should-have-been

in place of what never was.

I think of them now as sisters, as I think

each footfall is a mirror where I keep

the secret I never told, a childhood game

persisting on the cold side of away –

and should-have-been a house

I know, the way a blind man knows the house

he lives in, blind from birth and every room

laid out for none to see, in steps and echoes.

 

On this day in 1980, Led Zeppelin announced it was disbanding after drummer John Bonham unexpectedly passed away. –Steven Russolillo, WSJ, 12/04/2012.

 

And also on this day in…

1835 – Samuel Butler, writer, was born.

1875 – Rainer Maria Rilke, poet, is born.

1942 – U.S. planes make the first raids on Naples, Italy.

1947 – Tennessee William’s play A Streetcar Named Desire premieres on Broadway starring Marlon Brando and Jessica Tandy.

1952 – The Grumman XS2F-1 makes its first flight.

1959 – Peking pardons Pu Yi, ex-emperor of China and of the Japanese puppet-state of Manchukuo.

1981 – President Ronald Reagan broadens the power of the CIA by allowing spying in the United States.

1991 – The last American hostages held in Lebanon are released.

 

Blow, blow, thou winter wind.  Thou art not so unkind.  As a man’s ingratitude.  –William Shakespeare.

photos of the day

December 4, 2012

Chalets are pictured in Barboleuse near the alpine ski resort of Villars-sur-Ollon. In March 2011, Switzerland accepted an initiative to limit the number of holiday homes to a 20 percent cap in every village in the country. The law will be enforced, beginning January 1, 2013.

Denis Balibous/Reuters

A woman stands in front of a doll display in a traditional Christmas market in Rome, Italy.

Tony Gentile/Reuters

 

Market Closes for December 4th, 2012:

 

Market  Index	Close	Change
Dow  Jones	12951.78	-13.82    -0.11%
S&P 500	1407.05	-2.41    -0.17%
NASDAQ	2996.685	-5.512    -0.18%
TSX	12137.18	-32.56
		-0.27%

International Markets

Market  Index	Close	Change
NIKKEI	9432.46	-25.72
		-0.27%
HANG  SENG	21799.97	+32.12
		+0.15%
SENSEX	19348.12	+42.80
		+0.22%
FTSE 100	5869.04	-2.20
		-0.04%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.698	1.711
CND.   30 Year Bond	2.301	2.306
U.S.   10 Year Bond	1.6028	1.6241
U.S.   30 Year Bond	2.7770	2.8065

Currencies

BOC Close	Today	Previous
Canadian $	0.99275	0.99457
US   $	1.00730	1.00546
Euro Rate  1 Euro=		Inverse
Canadian   $	1.30065	0.76884
US  $	1.31015	0.76327

Commodities

Gold	Close	Previous
London Gold   Fix	1697.05	1718.95
Oil	Close	Previous
WTI Crude Future	88.50	89.27
BRENT	111.08	111.85

Market Commentary:

Canada

By Nikolaj Gammeltoft and Eric Lam

Dec. 4 (Bloomberg) — Canadian stocks fell for a second day as energy shares slumped amid a decline in oil prices while the Bank of Canada maintained a bias to raise interest rates.

Canadian Natural Resources Ltd. retreated 2.6 percent as oil fell for the first time in four days. ShawCor Ltd., which provides coatings and other services to the pipeline industry, plunged 14 percent after the company said a sale was unlikely.

Bank of Montreal, Canada’s fourth-largest lender, rose 0.6 percent after reporting fourth-quarter profit that topped analysts’ estimates.

The Standard & Poor’s/TSX Composite fell 32.56 points, or 0.3 percent, to 12,137.18 in Toronto. The equity gauge has gained 1.5 percent this year.

“People have an understanding that the economy is weakening, so while there may be this bias toward raising I don’t think it will happen and the market can see through it,” said Robert McWhirter, fund manager with Selective Asset Management Inc. in Toronto. His firm manages about C$60 million ($60 million). “People are still trying to figure out where to go from here with regards to the fiscal cliff.”

Bank of Canada Governor Mark Carney kept his bias to raise interest rates, saying economic growth will accelerate next year after temporary disruptions in energy output and weak global demand curbed the country’s expansion. Canada’s gross domestic product slowed to a 0.6 percent annualized pace of growth in the third quarter, the slowest in more than a year.

The benchmark rate on overnight loans between commercial banks remained 1 percent, where it’s been for more than two years, and policy makers said a “small degree of slack” in the economy will gradually disappear, bringing inflation to the 2 percent target over the next 12 months. Today’s decision was expected by all 26 economists surveyed by Bloomberg News.

U.S. President Barack Obama said in a Bloomberg Television interview that a Republican offer on averting the so-called fiscal cliff doesn’t go far enough and won’t raise the revenue needed to shrink the deficit by $4 trillion over the next decade.

“We have the potential of getting a deal done,” Obama said at the White House today in his first television interview since winning re-election. “Unfortunately,” he said, House Speaker John Boehner’s proposal “right now is still out of balance.”

Crude for January delivery fell 0.7 percent as Republicans and Democrats try to avert more than $600 billion in automatic tax increases and spending cuts that start in January.

Energy companies contributed the most to losses in the S&P/TSX as seven out of 10 industries retreated. Trading volume was in line with the 30-day average.

Canadian Natural Resources dropped 2.6 percent to C$27.43 and Encana Corp. slipped 2.2 percent to C$21.14.

ShawCor plunged 14 percent to C$39.31, its biggest loss since March 2000, after the Toronto-based company said it’s “highly unlikely” that a sale of all of its shares will occur “at this time.” A special committee and the board are continuing to review strategic solutions, the company said in a statement yesterday. ShawCor had said on Sept. 5 it was considering selling itself.

Bank of Montreal added 0.6 percent to C$59.63 after the lender said fourth-quarter profit rose 41 percent on gains from investment banking and trading. The bank said earnings for the quarter were C$1.59 a share, up from C$1.11 a year earlier.

OceanaGold Corp. sank 8.1 percent to C$3.08 after the gold mining company, with projects in New Zealand and the Philippines, said yesterday it plans to raise C$93 million by selling 30 million shares to a group of investors at a discount.

The deal, expected to close Dec. 18, sells each share at C$3.11, a 7.1 percent discount to yesterday’s close.

The company plans to use the cash to reduce outstanding debt and provide balance sheet flexibility.

US

By Rita Nazareth and Lu Wang

Dec. 4 (Bloomberg) — U.S. stocks fell, sending the benchmark Standard & Poor’s 500 Index lower for a second straight day, after President Barack Obama held his ground about raising tax rates for the highest-income Americans.

Las Vegas Sands Corp. and Wynn Resorts Ltd. dropped at least 2.7 percent, joining a slump in Macau casinos, on speculation China may increase scrutiny of junket operators, who provide credit to high-stake gamblers. Intel Corp. advanced 2.2 percent on plans to sell bonds in a four-part offering to repurchase stock that’s trading at the lowest in 16 months.

The S&P 500 retreated 0.2 percent to 1,407.05 at 4 p.m. New York time. The Dow Jones Industrial Average fell 13.82 points, or 0.1 percent, to 12,951.78. More than 5.9 billion shares traded hands on U.S. exchanges, or 4.7 percent below the three- month average, according to data compiled by Bloomberg.

“The clock is ticking,” said Quincy Krosby, market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than 1 trillion. She spoke in a phone interview. “The focus is on what goes on in Washington. The market will be volatile. You’ve got to be very well hedged given that the market is so much headline-driven.”

U.S. President Obama’s administration rejected a Republican plan for tackling the fiscal cliff that omitted higher tax rates for top-earning Americans, leaving the issue unresolved with about four weeks left before more than $600 billion in tax increases and federal spending cuts start taking effect.

European stocks rose as finance ministers met to discuss moves to stem the debt crisis.

Obama said in a Bloomberg Television interview that the Republican offer on resolving the fiscal cliff doesn’t go far enough and won’t raise the revenue needed to shrink the deficit by $4 trillion over the next decade. Obama, in his first television interview since winning re-election, said, “We have the potential of getting a deal done.”

The president said he’s willing to make further cuts in entitlements and realizes he won’t get “100 percent” of what he wants. Still, he insisted that Republicans accept higher tax rates for top earners if the U.S. is to avoid automatic spending cuts and tax increases at the start of 2013.

“We’re going to have to have higher rates for the wealthiest,” Obama said today. “It’s just a matter of math.”

Casino shares tumbled. Police in mainland China and Macau have detained people from at least three of the biggest junket operators in recent weeks, the Wall Street Journal reported, citing people familiar with the situation. By acting as middlemen, junket operators help drive the VIP business that accounts for about two-thirds of casino revenue in the world’s largest gambling hub. Las Vegas Sands fell 2.8 percent to $45.46. Wynn Resorts dropped 2.9 percent to $110.12.

MetroPCS Communications Inc. sank 7.5 percent to $9.96. The company, which agreed to merge with T-Mobile USA Inc. in October, fell after Reuters reported that Sprint Nextel Corp. is unlikely to make a counteroffer.

Darden Restaurants Inc. fell 9.6 percent to $47.40. The owner of the Red Lobster and Olive Garden chains reported preliminary fiscal second-quarter profit of 25 cents to 26 cents a share, trailing analysts’ estimates. Chief Executive Officer Clarence Otis said the company’s promotions didn’t resonate with consumers and were affected by rivals’ offers.

Oshkosh Corp. lost 3.8 percent to $28.96. Billionaire activist investor Carl Icahn dropped his bid to buy Oshkosh after failing to receive enough shareholder support.

IAC/InterActiveCorp. declined 7.8 percent to $43.50. The Internet company founded by Barry Diller fell after Goldman Sachs Group Inc. cut its rating on the stock to sell.

Intel gained 2.2 percent to $19.97. The world’s largest semiconductor maker, whose attempt with Microsoft Corp. to combat Apple Inc.’s iPad in the $63.2 billion tablet market is getting off to a slow start, may issue five-year securities to yield about 80 basis points more than similar-maturity Treasuries, 10-year bonds at a relative yield of about 115 basis points, 20-year securities at about 135 basis points and 30-year debt at about 150, according to a person familiar with the offering.

Big Lots Inc. rose 12 percent to $31.27. The discount retailer boosted its earnings forecast, saying it now expects to earn as much as $3.05 a share this year. The company had projected profit of $2.95 at most.

Netflix Inc. rallied 14 percent to $86.65. The online video service signed a multiyear accord to carry Walt Disney Co. animated and live-action films, marking the first time a major studio has bypassed traditional cable-TV outlets.

Options traders are speculating the worst is over for Hewlett-Packard Co., pushing bearish contracts to the cheapest level in almost seven years.

Puts priced 10 percent below shares in the world’s largest computer maker cost 2.17 points more than calls betting on a 10 percent increase, according to three-month data compiled by Bloomberg. The price relationship known as skew fell to 1.54 on Nov. 26, the lowest since February 2006. Hewlett-Packard shares have lost 50 percent this year.

The stock is cheapest in at least four years after the company accused Autonomy Corp., the software maker it bought last year, of a broad range of financial falsehoods contributed to a $8.8 billion writedown. Hewlett-Packard Chief Executive Officer Meg Whitman is cleaning up the business and her strategy of paring product lines and cutting staff to make the company more competitive will benefit stock, according to Keith Trauner of GoodHaven Capital Management LLC.

“The stock appears significantly undervalued,” Trauner, a Miami-based money manager at GoodHaven Capital Management LLC, said in a phone interview. “Whitman’s strategies of foregoing large acquisitions, focusing on product design and development, and retooling the sales force are all sensible thoughts going forward.”

Have a wonderful evening everyone.

 

Be magnificent!

 

When there is space between you and the object you are observing

you well know there is no love, and without love, however hard you try to reform the world

or bring about a new social order or however much you talk about improvements,

you will only create agony.

So it is up to you.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Science is what you know, philosophy is

what you don’t know.

-Bertrand Russell, 1872-1970

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:

December, Latin 10^th month: December was the tenth month in the Roman calendar when the year began in March with the vernal equinox.  The Old English name was aerra gëola, meaning earlier Yule.  In the French revolutionary calendar, it was Frimaire, meaning hoarfrost month, from November 22^nd to December 21^st.

“Silence slips peacefully over the black-and-white world.  The wind moans.  The Earth is hard as iron.  Mist and cold penetrate to the bone.  The days grow shorter, the snowfalls heavier.  Bare trees and hunched figures in overcoats and heavy jackets dot the streets.  But inside it is warm, and the kitchen windows are steamed up.  People gather in expectation of the rebirth of light.  There is almost the sense that the Sun will break forth again from the interior of the Earth – or from within our own souls.  Christmas and Hanukkah, among other celebrations, hold forth the promise that, by our dedication and self-sacrifice a new green world of meaning, love, and compassion can be born.  As the solstice, the heavens show us the rebirth of the light, Dies Natalis Solis Invicti – the Birthday of the Unconquerable Sun.  May the power of the world’s being grow strong!  May life’s power to act blossom forth!  May the past bear what is to come!” -fromCosmos Doogood’s Urban Almanac.

Birthstone: Lapis Lazulli

Flower: Narcissi

On this day in 1965, the Beatles released Rubber Soul, their sixth studio album. –Steven Russolillo, WSJ, 12/03/2012.

And also on this day in…

1857 – Joseph Conrad, author, was born.

1923 – Maria Callas was born.

1950 – The Chinese close in on Pyongyang, Korea, and UN forces withdraw southward.

1977 – The State Department proposes the admission of 10,000 more Vietnamese refugees to the United States.

1979 – Eleven are dead and eight injured in a mad rush to see a rock band (The Who) at a concert in Cincinnati, Ohio.

1984 – Toxic gas leaks from a Union Carbide plant and results in the deaths of thousands in Bhopal, India.

1989 – Presidents George Bush and Mikhail Gorbachev announce the official end to the Cold War at a meeting in Malta.

 

The most important persuasion tool you have in your entire arsenal is integrity. – Zig Ziglar

photos of the day

December 3, 2012

A workman walks on the the roof of the Le Louvre Lens Museum, by Japanese architects Kazuyo Sejima and Ryue Nishizawa, on the eve of the inauguration of the museum in Lens, northern France, December 3, 2012.

Pascal Rossignol/Reuters

A silhouetted man is reflected in the glass of ‘L’Ete,’ a painting by Arcimboldo Giuseppe in the Louvre Museum in Lens, northern France. The museum in Lens, to open the 12 Dec, is part of a strategy to spread art beyond the traditional bastions of culture in Paris.

Michel Spingler/AP

A boy somersaults at Marina beach in Chennai, India.

Babu/Reuters

 

Market Closes for December 3rd, 2012:

 

Market  Index	Close	Change
Dow  Jones	12974.98	-50.60    -0.39%
S&P 500	1413.89	-2.29    -0.16%
NASDAQ	3005.311	-4.930    -0.16%
TSX	12188.55	-50.81
		-0.42%

International Markets

Market  Index	Close	Change
NIKKEI	9458.18	+12.17
		+0.13%
HANG  SENG	21767.85	-262.54
		-1.19%
SENSEX	19305.32	-34.58
		-0.18%
FTSE 100	5871.24	+4.42
		+0.08%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.711	1.700
CND.   30 Year Bond	2.306	2.294
U.S.   10 Year Bond	1.6241	1.6156
U.S.   30 Year Bond	2.8065	2.8089

Currencies

BOC Close	Today	Previous
Canadian $	0.99457	0.99382
US   $	1.00546	1.00622
Euro Rate  1 Euro=		Inverse
Canadian   $	1.29815	0.77033
US  $	1.30524	0.76614

Commodities

Gold	Close	Previous
London Gold   Fix	1718.95	1714.80
Oil	Close	Previous
WTI Crude Future	89.27	88.91
BRENT	111.85	113.09

Market Commentary:

Canada

By Eric Lam

Dec. 3 (Bloomberg) — Canadian stocks fell, snapping a three-day advance, as banks and gold miners slid after manufacturing in the U.S. unexpectedly contracted in November on weaker business demand and disruptions from superstorm Sandy.

Goldcorp Inc., the world’s second-largest gold producer, slipped 3.7 percent after Mexico announced it will create a new mining law and review royalties. Bank of Nova Scotia fell 0.7 percent as the lender prepares to report fourth-quarter earnings this week. Saputo Inc., Canada’s largest dairy processor, advanced 3 percent after it agreed to buy Dean Foods Co.’s Morningstar Foods unit for $1.45 billion.

The Standard & Poor’s/TSX Composite Index fell 69.62 points, or 0.6 percent, to 12,169.74 in Toronto. The equity gauge has gained 1.8 percent this year.

“All the economic data this week will have a bit of an asterisk due to Hurricane Sandy,” said Greg Taylor, fund manager with Aurion Capital Management in Toronto. The firm manages about C$8 billion ($8 billion). “Unfortunately the biggest theme of the month is going to be the fiscal cliff. It’s going to cause a lot of people to stay on the sidelines and look again in January. The economy is setting up for a Santa Claus bounce, but we might run out of time.”

The Santa Claus rally is a traditional upswing in stocks in the last five days of the year and the first two in January, according to the Stock Trader’s Almanac.

Government leaders in Washington are negotiating a budget compromise to avoid automatic spending cuts and tax increases scheduled to activate in the new year. House Republicans submitted a new proposal to President Barack Obama today that includes $1.4 trillion in spending cuts and $800 billion in new revenue by limiting tax breaks and capping deductions for top earners.

The Institute for Supply Management’s U.S. factory index decreased to 49.5, the lowest since July 2009, from 51.7 a month earlier, the Tempe, Arizona-based group said today. Economists projected the index would ease to 51.4, according to the median forecast in a Bloomberg survey. A reading of 50 marks the dividing line between expansion and contraction.

Raw-materials stocks contributed most to losses in the S&P/TSX as seven of 10 industries declined. Trading volume was 4.6 percent higher than the 30-day average.

Scotiabank, which will report its fourth-quarter earnings on Dec. 7, slipped 0.7 percent to C$55.62.

Goldcorp dropped 3.7 percent to C$37.29 after Mexican President Enrique Pena Nieto and leaders of the nation’s three largest parties agreed to revise mining royalties. Operations in Mexico accounted for 34 percent of Goldcorp’s revenue in 2011.

Barrick Gold Corp., the largest producer of the metal, slipped 2.7 percent to C$33.55 and Yamana Gold Inc. fell 2.5 percent to C$18.26.

Saputo, which manufactures as well as owns the trademark and brand rights to Hostess Twinkies in Canada, added 3 percent to C$47.41 after agreeing to buy Morningstar Foods, a maker of creams, ice-cream mixes and cheese. The deal is the largest takeover of a dairy company globally this year, according to data compiled by Bloomberg.

Labrador Iron Ore Royalty Corp. rose 2.8 percent to C$30.50 after Robin Kozar, analyst with RBC Capital Markets, raised the stock rating to outperform from sector perform while lifting the price target to C$35 from C$33. Higher production volumes and lower unit costs will drive free cash flow growth, the analyst said.

US

By Lu Wang and Michael P. Regan

Dec. 3 (Bloomberg) — U.S. stocks fell, halting a three-day gain, and commodities trimmed an early advance as a contraction in American manufacturing and concern about the budget debate overshadowed optimism on China’s economy. Treasuries and the dollar fell.

The S&P 500 fell 0.5 percent to close at 1,409.46 at 4 p.m. in New York after climbing as much as 0.5 percent. The Stoxx Europe 600 Index pared gains after rising above its highest closing level in 18 months. The S&P GSCI Index of raw materials was up 0.1 percent after rallying 1.1 percent. The Dollar Index slid to a one-month low while 10-year Treasury yields added one basis point to 1.62 percent.

Equities extended losses as House Republicans, rejecting President Barack Obama’s demand for tax rate increases, proposed $1.4 trillion in spending cuts and $800 billion in new revenue by limiting tax breaks and capping deductions for top earners.

Benchmark indexes opened higher before erasing gains as the Institute for Supply Management’s manufacturing index unexpectedly fell below 50, the threshold signaling growth.

Today’s manufacturing data “is just a confirmation that the fiscal-cliff concerns are actually affecting decision making at the business level,” Andres Garcia-Amaya, New York-based global market strategist at JPMorgan Chase & Co.’s mutual funds unit, which oversees $400 billion in assets, said in a phone interview. “For that reason, the market obviously doesn’t like it, considering that we probably won’t get an answer either at the last minute prior to the holidays or right before” New Year’s, he said.

The S&P 500 also erased early gains after briefly climbing above 1,421, its average over the past 50 days, a level watched by traders to gauge the market’s trend. The index has closed below its 50-day average since Oct. 19, data compiled by Bloomberg show.

DuPont Co., General Electric Co. and Coca-Cola Co. lost at least 1.4 percent for the biggest declines in the Dow Jones Industrial Average. Newmont Mining Corp. declined 3 percent after the largest U.S. gold producer appointed Gary Goldberg to replace Richard O’Brien as chief executive officer.

An index of airlines fell 1.9 percent as Delta Air Lines Inc. slipped 3.8 percent. The company is mulling a bid for Singapore Airlines Ltd.’s stake in Virgin Atlantic Airways Ltd., according to people familiar with the plans who declined to be identified because the matter is private.

Dell Inc. added 4.4 percent after Goldman Sachs Group Inc. recommended buying the shares.

December has been the best month for the S&P 500 since 1950 with an average gain of 1.7 percent, according to the Stock Trader’s Almanac. The stock market may also get a year-end boost from a so-called Santa Claus rally — an upswing in the last five days of the year and the first two in January, the almanac said.

While JPMorgan Chase & Co.’s chief U.S. equity strategist Thomas Lee told Bloomberg Television today that American equities are in a secular bull market, his counterpart at Wells Fargo & Co. predicted a drop next year. The S&P 500 will fall 1.8 percent to 1,390 by the end of 2013 as global growth slows and policymakers struggle to reach a budget agreement, according to Wells Fargo’s Gina Martin Adams.

Adams, who has the lowest projection for the U.S. equity benchmark next year among Wall Street strategists surveyed by Bloomberg, says investors should buy companies that are least- tied to economic growth. The average estimate from eight other forecasters implies a 9.2 percent rally to 1,546 from Nov. 30.

“The U.S. economy is likely to flirt with recession in the near term, as slowing exports and falling investment likely lead to a weaker consumer at the start of 2013,” Adams wrote in a report today. “The market will suffer downward pressure until policymakers act decisively to convince investors that the U.S. debt house is ‘in order’.”

Stocks, bonds, commodities and the dollar all posted monthly gains in November for the second time this year amid optimism central bank stimulus programs are bolstering growth in the world’s biggest economies.

Today’s report showing manufacturing unexpectedly contracted in November for the fourth month signaled factory managers grew more concerned about the potential economic toll stemming from the so-called fiscal cliff. Data may show on Dec. 7 that U.S. payrolls rose by 90,000 last month, the smallest gain since June, as superstorm Sandy forced businesses to close.

Republicans are renewing attempts to use a debt-limit increase to force deeper spending cuts, replicating the 2011 showdown that led to a credit-rating downgrade. Many congressional Republicans see the need to raise the $16.4 trillion limit on public debt in early 2013 as leverage to force President Barack Obama to cut spending. House Republicans view the U.S. budget deficit, which topped $1 trillion in each of the past four years, as a crisis requiring immediate action.

There’s “clearly a chance” that there won’t be an agreement in time to avert the fiscal cliff, House Speaker John Boehner told “Fox News Sunday.” “I would say we’re nowhere, period,” he said.

American companies are supplanting China from the world’s 500 biggest stocks faster than at any time in the past decade, as an improving U.S. economy and investor confidence in free markets overcomes the lure of equities offering twice the profit growth.

U.S. corporations led by Apple Inc. and Exxon Mobil Corp. make up 171 of the top 500 with a market capitalization of $10.6 trillion, or 40.3 percent of the total, compared with 159 valued at $8.24 trillion in 2009, data compiled by Bloomberg show.

PetroChina Co. and Industrial & Commercial Bank of China Ltd. lead the 24 Chinese firms worth $1.74 trillion qualifying today, down from 34 with a capitalization of $2.19 trillion.

Among European stocks, Cable & Wireless Communications Plc rose 1.2 percent after agreeing to sell its Monaco and Islands unit to Bahrain Telecommunications Co. for $680 million. Colruyt SA slid 1.9 percent after first-half earnings before interest and taxes missed analysts’ estimates.

The Stoxx Europe 600 Index advanced 0.1 percent at the close in London as three stocks rose for every two that fell.

The equity benchmark has rallied 18 percent from this year’s low on June 4 as the European Central Bank announced an unlimited bond-buying plan and the Federal Reserve started a third round of asset purchases.

Ten-year Greek bond yields fell below 15 percent for the first time since July 2011 as the nation offered to buy back bonds.

The euro strengthened 0.5 percent to $1.3054 and climbed as high as $1.3076, the strongest level since October. The dollar weakened against 11 of 16 major peers, dropping 0.3 percent to 82.27 yen. The Dollar Index declined to as low as 79.799, the weakest since Oct. 31.

The Australian dollar dropped versus 15 of 16 major counterparts, sliding 0.6 percent to 0.7982 euro. The Reserve Bank of Australia will return interest rates to a half-century low of 3 percent tomorrow, economists predict, as data today showed manufacturing contracted and retail sales stagnated. New Zealand’s dollar weakened versus most peers after data showed the nation’s terms of trade worsened.

China’s official Purchasing Managers’ Index was 50.6 in November, while a private gauge of manufacturing climbed to 50.5, separate reports showed. Nine of 16 analysts surveyed over the past two weeks by Bloomberg forecast China will set an economic growth goal of 7.5 percent, unchanged from 2012, in a sign that new leadership headed by Xi Jinping won’t tolerate a bigger slowdown from the lowest target since 2004.

The S&P GSCI Index of commodities trimmed gains after reaching 657.11, the strongest level since Oct. 22. Sugar, natural gas, aluminum and silver rose at least 0.9 percent to lead gains in 15 of 24 commodities tracked by the index, while hogs, nickel and Kansas wheat fell the most.

Gold futures rose 0.5 percent to $1,721.10 an ounce, rebounding from the biggest weekly drop in five months, as the dollar weakened and investors boosted holdings of exchange- traded products backed by bullion to a record 2,621.73 metric tons Nov. 30, according to data compiled by Bloomberg. Silver increased 1.4 percent to $33.759 an ounce.

The MSCI Emerging Market index was little changed following a two-day gain. Hong Kong’s Hang Seng index slumped 1.5 percent, the steepest drop since Nov. 15. The BSE India Sensex 30 Index slipped 0.2 percent, retreating from the highest level since April 2011.

Turkey’s ISE National 100 Index rose 1.7 percent to the highest close in records dating to January 1988 as the nation’s inflation rate fell to the lowest in 14 months, giving the central bank more room to reduce borrowing costs.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

As long as individuality survives, that is,

as long as you continue to see others as separate from you,

a feeling of hostility towards them cannot fail to prevail.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

I believe it is harder to be fair to oneself

than to others.

-Andre Gide, 1869-1951

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:

On this day in 1900, Oscar Wilde dies in a Paris hotel room after saying of the room’s wallpaper: “My wallpaper and I are fighting a duel to the death. One or the other of us has to go.”

And also on this day in…

1667 – Jonathan Swift was born.

1835 – Mark Twain was born.

1874 – Winston Churchill was born.

1936 – Abbie Hoffman was born.

1948 – The Soviet Union complete the division of Berlin, installing the government in the Soviet sector.

1950 – President Truman declares that the United States will use the A-bomb to get peace in Korea.

1961 – The Soviet Union vetoes a UN seat for Kuwait, pleasing Iraq.

1974 – India and Pakistan decide to end a 10-year trade ban.

1974 – Pioneer II sends photos back to NASA as it nears Jupiter.

1979 – Pope John Paul II becomes the first pope in 1,000 years to attend an Orthodox mass.

1979 – Pink Floyd released the album “The Wall.”

 
Always do right.  This will gratify some people and astonish the rest.  –Mark Twain.

photos of the day

November 30, 2012

A block of encrusted silver coins from the shipwreck of a 1804 galleon, on its first display to the media at a ministry building, in Madrid. Spanish cultural officials have allowed the first peep at 16 tons (14.5 metric tons) of the shipwreck, ‘Nuestra Senora de las Mercedes’ a treasure worth an estimated $500 million that a US salvage company gave up after a five-year international ownership dispute.

Daniel Ochoa de Olza/AP

A Sotheby’s employee carefully handles one volume of a medieval manuscript , Philip The Good’s copy of ‘Mystere de la Vengeance’ unseen on the market for 200 years, during a press viewing in London. The manuscript which comprises of two volumes estimated at 4-6 million pounds (6.5-9.6 million US Dollars) will go on sale in the evening sale of Old Master Paintings and Drawings on Dec. 5 in London.

Kirsty Wigglesworth/AP

 

Market Closes for November 30th, 2012:

 

Market  Index	Close	Change
Dow  Jones	13025.58	+3.76    +0.03%
S&P 500	1416.18	+0.23    +0.02%
NASDAQ	3010.241	-1.786    -0.06%
TSX	12239.36	+36.51
		+0.30%

International Markets

Market  Index	Close	Change
NIKKEI	9446.01	+45.13
		+0.48%
HANG  SENG	22030.39	+107.50
		+0.49%
SENSEX	19339.90	+168.99
		+0.88%
FTSE 100	5866.82	-3.48
		-0.06%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.700	1.709
CND.   30 Year Bond	2.294	2.297
U.S.   10 Year Bond	1.6156	1.6182
U.S.   30 Year Bond	2.8089	2.7956

Currencies

BOC Close	Today	Previous
Canadian $	0.99382	0.99283
US   $	1.00622	1.00722
Euro Rate  1 Euro=		Inverse
Canadian   $	1.29033	0.77500
US  $	1.29385	0.77021

Commodities

Gold	Close	Previous
London Gold   Fix	1714.80	1725.75
Oil	Close	Previous
WTI Crude Future	88.91	88.07
BRENT	113.09	112.16

Market Commentary:

Canada

By Eric Lam

Nov. 30 (Bloomberg) — Canadian stocks erased losses in the final minutes of trading, paring the first monthly drop for the Standard & Poor’s/TSX Composite Index since May, before MSCI Inc. rebalanced its global indexes after a semi-annual review.

Dollarama Inc., the only Canadian stock added to the MSCI Canada Index, rallied 1.5 percent. Nexen Inc., which is awaiting approval of its sale to China’s Cnooc Ltd., rallied 4.9 percent to snap nine days of losses after Canadian Prime Minister Stephen Harper said the government will soon make decisions on foreign-investment guidelines.

The S&P/TSX rose 0.3 percent to 12,239.36 in Toronto, erasing an earlier decline of as much as 0.3 percent. The benchmark Canadian equity gauge retreated 1.5 percent for the month. Trading volume was 20 percent higher than the 30-day average.

“The activity both on the volume and movement side of the market today was as a result of the MSCI rebalance,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. His firm manages about C$220 million. “The reason these stocks go up is because there are so many funds that track it.”

Amendments to indexes can alter share prices as passively managed funds buy and sell stocks to mirror the benchmark indexes. Some $321.9 billion was invested in exchange-traded funds linked to MSCI indexes at the end of October, according to MSCI. About $3 trillion of funds are benchmarked against its indexes globally.

Dollarama, which added 1.5 percent to C$63.45, was added to the MSCI Canada Index, according to a statement from the index company. Fairfax Financial Holdings Ltd. lost 2.8 percent to C$343.94 and Precision Drilling Corp. added 2.2 percent to C$7.44 as the two stocks were removed.

Canada’s economic growth slowed to a 0.6 percent annualized pace in the third quarter as consumer spending gains were blunted by the fastest export decline since the end of the last recession and falling business investment. The gain in gross domestic product for July to September was the slowest in more than a year and short of analysts’ estimates, according to a survey by Bloomberg.

Financial stocks contributed the most to gains in the S&P/TSX as nine of 10 industries advanced. Talisman Energy dropped 3.2 percent to C$11.18 after Randy Ollenberger, an analyst with BMO Capital Markets, cut his rating on the oil and natural gas producer to market perform from outperform.

Richmont Mines Inc. slumped 26 percent to C$2.82. The gold producer said it closed a mine and suspended exploration at another near Rouyn-Noranda, Quebec. The company cut its output forecast for next year.

Nexen added 4.9 percent to C$24.39. Canadian regulators are reviewing the sale of Calgary-based Nexen and an appeal of Petroliam Nasional Bhd.’s rejected C$5.2 billion ($5.24 billion) bid for Progress Energy Resources Corp.

Trilogy Energy Corp. rose 3.2 percent to C$28.64 and Bonterra Energy Corp. added 2.5 percent to C$44.02. Crude for January delivery rose 1 percent to settle at $88.91 for its first monthly gain since August.

US

By Inyoung Hwang

Nov. 30 (Bloomberg) — U.S. stocks erased losses in the final 15 minutes, sending the Standard & Poor’s 500 Index to a second weekly gain, as investors bought shares before changes to MSCI Inc. indexes amid federal budget talks.

MetroPCS Communications Inc. rallied 5 percent as Guggenheim Securities LLC said the wireless carrier could get a bid from Sprint Nextel Corp. VeriSign Inc. plunged 13 percent, the most in the S&P 500, after a new contract letting the company manage Web sites ending in .com limited price increases.

Yum! Brands Inc. lost 9.9 percent after saying same-store sales in China will decline. Zynga Inc. dropped 6.1 percent after loosening terms of its longstanding alliance with Facebook Inc.

The S&P 500 rose less than 0.1 percent to 1,416.18 at 4 p.m. in New York. The Dow Jones Industrial Average added 3.76 points, or less than 0.1 percent, to 13,025.58. More than 7.1 billion shares traded hands on U.S. exchanges today, or 15 percent above the three-month average, according to data compiled by Bloomberg.

“A lot of the volatility near today’s close is due to the MSCI rebalance,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said by e-mail. His firm oversees $250 billion. “Outside of that, we’ve been trading solely on political rhetoric in Washington.”

Changes to MSCI’s global indexes were implemented at the close of trading today, causing the S&P 500 to jump as much as 0.2 percent to its highest intraday level of 1,418.86 within the final two minutes of trading before paring most of its gain by the close. The eight U.S. companies that were added included homebuilder Lennar Corp. and Under Armour Inc., a sportswear maker. For-profit educator Apollo Group Inc. and coal miner Walter Energy Inc. were among the seven stocks removed.

MSCI, the developer of gauges such as the MSCI World Index of 24 developed countries, made the changes after a semi-annual review. Amendments to indexes can alter share prices as passively managed funds buy and sell stocks to mirror the benchmark indexes. About $3 trillion of funds are benchmarked against its indexes globally, according to MSCI. Some $321.9 billion was invested in exchange-traded funds linked to MSCI indexes at the end of October.

“Rebalances can sometimes create price dislocation,” Mike Shea, a managing partner at New York-based brokerage firm Direct Access Partners LLC, wrote in an e-mail. “Let’s also not forget the competitive nature of Wall Street. Not every investor simply places their order into the end of day closing match. Some try and outperform that closing price. So it is not uncommon to see more aggressive trading around the close.”

President Barack Obama earlier today warned of “prolonged negotiations” ahead as congressional Republicans dug in on their opposition to his plan to avert the fiscal cliff. House Speaker John Boehner, an Ohio Republican, told reporters in Washington “right now we’re almost nowhere” on talks.

The S&P 500 advanced 0.5 percent this week and rose 0.3 percent for the month. U.S. stocks have swung between gains and losses amid lawmakers’ comments on whether an agreement can be reached to avert more than $600 billion in spending cuts and tax increases scheduled to begin on Jan. 1. The benchmark gauge of U.S. stocks has lost 0.9 percent since the president won re- election on Nov. 6.

Savita Subramanian, head of U.S. equity strategy at Bank of America Corp. wrote in a note that she expects the market to be in a “better place” by mid-2013, as the equity risk premium gradually declines. She cited a bottoming in China growth, reduced tail risk from Europe and a multi-stage solution to the fiscal cliff. New York-based Subramanian forecasts the S&P 500 will reach 1,600 at the end of next year on earnings of $110 a share.

U.S. equity funds tracked by EPFR Global attracted more than $10 billion in net inflows during the fourth week of November, their best showing in more than a year, according to the Cambridge, Massachusetts-based research firm.

Spending by U.S. consumers unexpectedly declined and incomes stagnated in October as superstorm Sandy kept those in the Northeast from getting to work or from shopping at malls and car dealerships.

Purchases decreased 0.2 percent, the weakest reading since May, after a 0.8 percent gain in the prior month, Commerce Department figures showed today in Washington. The median estimate of 79 economists surveyed by Bloomberg called for no change in so-called nominal sales. Incomes were unchanged, held down by a drop in wages caused by Sandy.

“I’m concerned that the fundamentals are starting to roll over,” Douglas Cote, chief market strategist at New York-based ING U.S. Investment Management, said in a telephone interview.

His firm oversees about $165 billion. “I did not like the consumer numbers out today. Personal income and personal spending were below consensus. People say it’s because of Sandy but the consensus knew about Sandy and it’s below the Sandy- factored-in consensus. That’s a concern.”

Utility companies advanced 1 percent for the biggest gain among 10 industries in the S&P 500. The sector has increased for five straight days, the longest winning streak since July 2. It is still the only S&P 500 group to be down this year, having fallen 2.7 percent.

MetroPCS rallied 5 percent to $10.65. Guggenheim analyst Shing Yin said the pay-as-you-go wireless carrier could get a bid in the next one to four weeks from Sprint for as much as $13 a share. MetroPCS agreed last month to merge with Deutsche Telekom AG’s T-Mobile USA division. Under the deal, the German parent company will hold 74 percent of the combined entity and pay MetroPCS shareholders $1.5 billion in cash.

St. Jude Medical Inc. added 1.8 percent to $34.28. The second-largest manufacturer of heart rhythm devices authorized a share buyback program for as much as $1 billion amid a U.S. regulatory review for the manufacturing of one of its key products. The St. Paul, Minnesota-based company was raised to buy from neutral at Mizuho Securities USA.

Advanced Micro Devices Inc. rallied for a fourth straight day, rising 7.8 percent to $2.20. The second-largest maker of personal-computer processors has surged 18 percent since Nov. 27 amid a report it will sell its Austin, Texas campus to raise cash. Shares of the Sunnyvale, California-based company are still down 59 percent this year.

VeriSign tumbled 13 percent to $34.15. The U.S. Department of Commerce approved a contract extension through Nov. 30, 2018, that lets the main manager of the Internet-address database continue current pricing of $7.85 per domain name registration.

VeriSign no longer has the right to four price increases of as much as 7 percent over the term of the contract, an option that was included in the previous accord.

Yum fell 9.9 percent to $67.08. The company, owner of the Taco Bell and KFC dining chains, said fourth-quarter same-store sales in China will decline 4 percent from a year earlier.

Other consumer-discretionary shares slumped. Coach Inc., the largest U.S. luxury handbag maker, dropped 2.6 percent to $57.84. Tiffany & Co. slumped 1.4 percent to $58.98, while homebuilder PulteGroup Inc. sank 1.9 percent to $16.81.

Zynga Inc. erased 6.1 percent to $2.46, while Facebook rose 2.5 percent to $28 after earlier falling as much as 2.1 percent.

The companies loosened terms of their longstanding alliance, making it easier for competing game developers to vie for users on the world’s largest social-networking service. The new terms eased log-in, payment and advertising requirements for Zynga, which makes most of its money by selling virtual goods in games played on Facebook.

Groupon Inc. lost 8.7 percent to $4.15. The largest provider of online coupon has no immediate plans to replace Chief Executive Officer Andrew Mason after its board met to deliberate whether to make changes to senior management.

Directors of the Chicago-based company met yesterday and some members were planning to voice frustration with Mason’s leadership, a person with knowledge of the matter said.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

It is not others who must change, but you.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

I am not an adventurer by choice

but by fate.

-Vincent Van Gogh, 1853-1890

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