Month: July 2013

Dear Friends,

Tangents:

On this day in…

1898, In Michigan, W.K. Kellogg and his brother unintentionally invent corn flakes.

1935, Paperback books were first introduced.

1954, In Memphis, a 19-year-old Elvis Presley appeared in concert for the first time.

1971, Apollo 15 became the fourth mission to land on the moon.

1975, Jimmy Hoffa, former Teamsters union president, disappears in Detroit, never to be heard from again.

It has been my experience that folks who have no vices have very few virtues. –Abraham Lincoln.

July~ With mid-day temperatures up in the 80s I become limp like the fast-fading flowers in the garden and unable to do anything active.  So I must resort to early rising before the sun gets too high, which means adjusting my internal clock.  It is amazing how much more one gets through when no one else is about to interrupt actions or trains of thought, when no telephone or door-bell rings and even the letters are left lying as they fell when the postman pushed them through the letter-box.

By ten o’clock I have done a full morning’s work and can enjoy a feeling of achievement.  The stillness of the early morning scene enables me to take in and enjoy many things which pass me by during the bustle of the day.  First there are the scents, which seem even more generous with their offerings than they are in the evening.  The good old-fashioned dog-rose in the hedgerow was almost effusive in its fragrance and the leaves of the Sweetbriar or Eglantine, so loved by the Elizabethans, had a richness, which must have been caused by the dew, far surpassing anything they usually provide, except after rain…-from A Countrywoman’s Notes, Rosemary Verey, Gryffon Publications, 2009.

Photos of the Day –July 30th, 2013

Ginger Huber from the United States performs during the women’s 20 meter high dive final at the FINA Swimming World Championships in Barcelona, Spain. Daniel Ochoa de Olza/AP

Uighur acrobat Aisikaier Wubulikasimu walks on a 59-foot-long, two-inch-wide tightrope strung between two hot air balloons in Shilin county, Yunnan province, China. Reuters

Market Closes for July 30^th, 2013

Market  Index	Close	Change
Dow  Jones	15520.59	-1.38    -0.01%
S&P 500	1685.96	+0.63    +0.04%
NASDAQ	3616.467	+17.327    +0.48%
TSX	12581.75	-87.29
		-0.69%

International Markets

Market  Index	Close	Change
NIKKEI	13869.82	+208.69
		+1.53%
HANG  SENG	21953.96	+103.81
		+0.48%
SENSEX	19348.34	-244.94
		-1.25%
FTSE 100	6570.95	+10.70
		+0.16%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.509	2.496
CND.   30 Year Bond	3.021	3.000
U.S.   10 Year Bond	2.6007	2.6023
U.S.   30 Year Bond	3.6706	3.6744

Currencies

BOC Close	Today	Previous
Canadian $	0.97024	0.97427
US   $	1.03067	1.02641
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36686	0.73160
US  $	1.32618	0.75404

Commodities

Gold	Close	Previous
London Gold   Fix	1326.42	1328.61
Oil	Close	Previous
WTI Crude Future	103.08	104.55
BRENT	109.359	109.359

Market Commentary:

Canada

By Katie Brennan

July 30 (Bloomberg) — Canadian stocks fell the most in a month after OAO Uralkali, the world’s largest potash producer, predicted prices for the crop nutrient will fall about 25 percent after it exits an export cartel.

Potash Corp. of Saskatchewan Inc. dropped 16 percent, the most in four years, as Uralkali predicted potash prices may fall below $300 a ton after a change in the company’s trading policy.

Agrium Inc., which also produces fertilizer, lost 5 percent.

Toronto-Dominion Bank fell 1.9 percent after saying it expects a third-quarter loss in its insurance division of as much as C$290 million due to severe weather claims.

The S&P/TSX fell 87.29 points, or 0.7 percent, to 12,581.75 at 4 p.m. in Toronto. The gauge has gained 1.2 percent this year. Trading volume was 16 percent higher than the 30-day average.

“The Uralkali announcement was really the nail in the coffin for Canadian resource players,” Bob Decker, a fund manager with Aurion Capital Management in Toronto, said in a phone interview. He helps manage C$6 billion ($5.8 billion) at the firm. “Potash was a resource people were using as a hiding place because of the sustainability of high prices, but that has been broken by the Uralkali announcement this morning.”

Uralkali upended the $20 billion-a-year potash industry by ending limits on production that underpinned prices and halting cooperation with Belarus that controlled supplies from the former Soviet Union. The move by the Berezniki, Russia-based company may push prices for the soil nutrient used in fertilizer to less than $300 a ton, Uralkali Chief Executive Officer Vladislav Baumgertner told reporters today.

Potash Corp., Canada’s largest maker of the fertilizer, plunged 16 percent to C$32.66 for the biggest decline since December 2008. Trading volume in the stock was 17 times the three-month average. Agrium fell 5 percent to C$89.15.

Six of 10 groups in the SPX/TSX declined, led by a 3.7 percent drop in raw-materials producers. Utility companies and financial stocks dropped at least 0.5 percent. Health-care and industrial stocks rose the most, adding at least 0.2 percent.

TD fell 1.9 percent to C$87.22. The bank will take a charge of about C$418 million, or 45 cents a share, for flood-related costs in Alberta and Toronto and increased general insurance claims, the Toronto-based lender said today in a statement.

“Banks have had a strong run up and there is going to be some profit taking,” said Decker of Aurion Capital Management.

The eight-company Standard & Poor’s/TSX Commercial Banks Index has gained 4.8 percent this month.

TransAlta Corp. lost 5 percent to C$14.13. Canada’s largest publicly traded power generator posted second-quarter profit that missed analysts’ estimates as a force majeure at a plant reduced its generating capacity.

Open Text Corp. dropped 5.6 percent to C$69.48, the lowest in more than two months. Susquehanna Financial Group analyst Derrick Wood said in a note that growth is weak across the software maker’s product sets.

FirstService Corp. gained 6.4 percent to C$36.61, the most since 2009, after the property-services company posted second- quarter adjusted earnings per share that were 45 percent higher than analysts’ estimates.

Progressive Waste Solutions Ltd. added 3.2 percent to C$23.77. The Vaughan, Ontario-based trash collection company posted better-than-estimated second-quarter earnings and said it saw “notable improvement” in industrial collection volumes.

US

By Alex Barinka and Nick Taborek

July 30 (Bloomberg) — The Standard & Poor’s 500 Index rose, heading for its biggest monthly gain since January, as investors analyzed corporate earnings and awaited results from the Federal Reserve’s two-day meeting.

Eastman Chemical Co. and Goodyear Tire & Rubber Co. jumped more than 6.3 percent as earnings topped estimates. Mosaic Co. and Agrium Inc. plunged at least 5.4 percent after OAO Uralkali ended limits on potash production and said the price of the soil nutrient may fall 25 percent. Coach Inc. lost 7.9 percent as discounts and weak handbag sales hurt revenue in North America.

The S&P 500 added less than 0.1 percent to 1,685.96 at 4 p.m. in New York, after swinging between gains and losses during the trading session. The Dow Jones Industrial Average fell 1.38 points to 15,520.59 today. About 5.9 billion shares changed hands, 7.7 percent below the three-month average.

“We’re waiting again to hear what the Fed has to say because everybody’s on tenterhooks,” Sarah Hunt, an associate fund manager and analyst who helps oversee $4.5 billion at Purchase, New York-based Alpine Woods Capital Investors LLC, said in a phone interview. “Earnings have been a mixed bag but I would say mostly positive.”

The S&P 500 is heading for a 5 percent advance this month, as companies from Facebook Inc. to Visa Inc. reported better- than-estimated earnings. The benchmark index surged 149 percent since March 2009, driven by three rounds of bond purchases by the U.S. central bank. The gauge fell in June, after seven months of increases, on concern the Fed will begin to reduce its $85 billion of monthly bond purchases.

The Federal Open Market Committee, which has said it may start paring stimulus should the U.S. economy meet the central bank’s forecasts, started a two-day meeting today. The Fed will probably maintain its benchmark interest rate at 0.25 percent, economists predict. Policy makers will begin to reduce the central bank’s bond-purchase program in September, a Bloomberg survey of economists shows.

Home prices rose in May by the most in more than seven years as the recovery in U.S. residential real estate gained momentum, a report showed today. The S&P/Case-Shiller index of property values climbed 12.2 percent from May 2012, after advancing 12.1 percent a month earlier. The median projection of 31 economists surveyed by Bloomberg called for a 12.4 percent advance.

“The Fed is going to be very measured. They let the genie out of the bottle and said that tapering is going to begin,” Douglas Cote, chief market strategist at ING U.S. Investment Management in New York, said in a telephone interview. His firm oversees $185 billion. “Housing is a pillar of the economy right now because of how it’s related to the consumer and how it’s related to jobs.”

The Conference Board’s index of U.S. consumer confidence decreased to 80.3 in July from 82.1 a month earlier, data from the New York-based private research group showed. Investors will get further clues to the state of the economy later this week with the release of data on U.S. gross domestic product and the monthly labor report.

President Barack Obama, prodding Congress to consider fresh economic proposals after two years of gridlock, called for restructuring business taxes so long as the initial revenue generated goes toward job creation in a speech today in Chattanooga, Tennessee.

Investors are also watching earnings reports. Of the 305 companies in the S&P 500 that have posted quarterly results so far, 72 percent have exceeded analysts’ estimates for profit and 55 percent have topped sales projections, data compiled by Bloomberg show.

Technology shares rose the most among 10 main industries in the S&P 500 today. Western Union Co. jumped 4.5 percent to $17.75, the highest level since October, as the world’s biggest money-transfer business reported profit that exceeded analysts’ estimates. Cisco Systems Inc. advanced 1.3 percent to $25.67 for the largest increase in the Dow.

Eastman Chemical climbed 6.3 percent to $79.75 after the biggest U.S. producer of chemicals from coal said it expects full-year earnings of $6.40 to $6.50 a share, compared with its previous forecast of $6.30 to $6.40. Analysts on average projected $6.34 a share.

Goodyear jumped 8.9 percent to $18.56. The largest U.S. tiremaker said second-quarter earnings were 76 cents a share.

Analysts surveyed by Bloomberg had estimated 48 cents a share.

Herbalife Ltd. increased 0.9 percent to $60.04 after the nutrition company reported second-quarter profit that exceeded analysts’ estimates and said earnings this year will be as much as $4.95 a share, up from a previous projection of a maximum of $4.80.

Sprint Corp. advanced 7.3 percent to $6.16. Chief Executive Officer Dan Hesse predicted the carrier would begin adding monthly contract customers in 2014 after the shutdown of its ill-fated Nextel network last month. Sprint posted a loss of $1.6 billion, or 53 cents, for the second quarter, wider than the 31 cents estimated by analysts.

Pitney Bowes, rose 13 percent to $16.60, the most in the S&P 500. The provider of postal meters and other equipment agreed to sell its management-services unit to Apollo Global Management LLC for about $400 million in cash.

Phone stocks fell 1.5 percent, the most among 10 industries in the S&P 500. Raw-materials producers slid 0.3 percent.

Mosaic plummeted 17 percent to $43.81 and Agrium lost 5.4 percent to $86.50. Uralkali, the world’s largest potash producer, upended the $20 billion-a-year industry by abandoning limits on production that underpinned prices and halting cooperation with Belarus that controlled supplies from the former Soviet Union.

The decision sent shares of potash producers plunging as much as 27 percent from Israel to Germany to Canada and the U.S. as investors speculated a flood of supplies will lead to lower prices for potash, a soil nutrient that strengthens plant roots.

Coach tumbled 7.9 percent to $53.30. The largest U.S. luxury handbag maker said fiscal fourth-quarter profit fell 12 percent. Sales at stores open at least a year in North America sank 1.7 percent in the quarter, and Chief Executive Officer Lew Frankfort said in a statement that he wasn’t satisfied with handbag sales.

Health Management Associates fell 11 percent to $13.30 after receiving additional subpoenas from regulators regarding certain emergency room operations that supplement earlier ones from 2011. Community Health Systems Inc., the second-largest U.S. hospital chain, said today it has agreed to buy Health Management for $3.9 billion in cash and stock.

The sale came amid pressure from Glenview Capital Management LLC, which owns about 15 percent of Health Management. Glenview proposed ousting the company’s board and management because of its “substandard strategic and financial approach.” Community Health slipped 3.5 percent to $45.58.

Xylem Inc. tumbled 10 percent to $25.54. The water company spun off by ITT Corp. lowered full-year revenue forecasts citing weaker demand.

Nasdaq OMX Group Inc. fell 1.7 percent to $32.46 after Goldman Sachs Group Inc. advised selling the shares, saying the company’s diversification strategy will reduce profit margins and may cause the exchange operator to miss earnings forecasts.

NYSE Euronext added 0.7 percent to $41.70. The U.S. exchange operator being bought by IntercontinentalExchange Inc. reported earnings that beat estimates as revenue from derivatives trading rose and costs fell.

 

Have  a wonderful evening everyone.

 

Be magnificent!

 

Fear is one of the greatest problems in life.  A mind that is caught in fear

lives in confusion, in conflict, and therefore must be violent, distorted and aggressive.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

A smile is a curve that sets everything straight.

-Phyllis Diller, 1917-2012

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:

July 29^th, 1958: NASA established.

-from a recent article in the NY Times by Richard A. Friedman, Professor at the Weill Cornell Medical College:

“Ah, the languorous days of endless summer!  Who among us doesn’t remember those days and wonder wistfully where they’ve gone?  Why does time seem to speed up as we age?  Even the summer solstice – the longest, sunniest day of the year – seems to have passed in a flash.  No less than the great William James opined on the matter, thinking that the apparent speed of time’s passage was a result of adults’ experiencing fewer memorable events:

‘Each passing year converts some of this experience into automatic routine which we hardly note at all, the days and the weeks smooth themselves out in recollection to content-less units, and the years grow hollow and collapse.’

Don’t despair.  I am happy to tell you that the apparent velocity of time is a big fat cognitive illusion and happy to say there may be a way to slow the velocity of our later lives….here’s a possible answer:  Think about what it’s like when you learn something for the first time – for example how, when you are young, you learn to ride a bike or navigate your way home from school.  It takes time to learn new tasks and to encode them in your memory.  And when you are learning about the world for the first time, you are forming a fairly steady stream of new memories of events, places and people.  When, as and adult, you look back at your childhood experiences, they appear to unfold in slow motion probably because the sheer number of them gives you the impression that they must have taken forever to acquire.  So when you recall the summer vacation when you first learned to swim or row a boat, it feels endless.  But this is merely an illusion, the way adults understand the past when they look through the telescope of lost time.   This, though, is not an illusion:  almost all of us faced far steeper learning curves when we were young.  Most adults do not explore and learn about the world the way they did when they were young;  adult life lacks the constant discovery and endless novelty of childhood.  Studies have shown that the greater the cognitive demands of a task, the longer its duration is perceived to be.  Dr. David Eagleman at Baylor College of Medicine found that repeated stimuli appear briefer in duration than novel stimuli of equal duration.  Is it possible that learning new things might slow down our internal sense of time?

The question and the possibility it presents put me in mind of my father, who died a few years ago at age 86.  An engineer by training, he read constantly after he retired.  His range was enormous; he read about everything from astronomy to natural history, travel and gardening.  I remember once discovering dozens of magazines and journals in the house and was convinced that my parents had become the victims of a mail-order scam.

Thinking I’d help with the clutter, I began to bundle up the magazines for recycling when my father angrily confronted me, demanding to know what the hell I was doing.  ‘I read all of these,’ he said.

And then it dawned on me.  I cannot recall his ever having remarked on how fast or slow his life seemed to be going.  He was constantly learning, always alive to new ideas and experience.  Maybe that’s why he never seemed to notice that time was passing.

So what, you might say, if we have an illusion about time speeding up?  But it matters, I think, because the distortion signals that we might squeeze more out of life.

It’s simple:  if you want time to slow down, become a student again.  Learn something that requires sustained effort; do something novel.  Put down the thriller when you’re sitting on the beach and break out  a book on evolutionary theory or Spanish for beginners or  a how-to book on something you’ve always wanted to do.  Take a new route to work; vacation at an unknown spot.  And take your sweet time about it.”

Photos of the Day –July 29th, 2013

People walk underneath an umbrella canopy in downtown Belgrade, Serbia. Marko Djurica/Reuters

A child plays at a public fountain in a park in Bucharest, Romania. Bogdan Cristel/Reuters

A person slides down a huge water pipe at a public swimming pool on a hot sunny day in Vienna. Leonhard Foeger/Reuters

Market Closes for July 29^th, 2013

Market  Index	Close	Change
Dow  Jones	15521.97	-36.86    -0.24%
S&P 500	1685.33	-6.32    -0.37%
NASDAQ	3599.140	-14.025    -0.39%
TSX	12669.04	+21.14
		+0.17%

International Markets

Market  Index	Close	Change
NIKKEI	13661.13	-468.85
		-3.32%
HANG  SENG	21850.15	-118.80
		-0.54%
SENSEX	19593.28	-154.91
		-0.78%
FTSE 100	6560.25	+5.46
		+0.08%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.496	2.452
CND.   30 Year Bond	3.000	2.956
U.S.   10 Year Bond	2.6023	2.5624
U.S.   30 Year Bond	3.6744	3.6190

Currencies

BOC Close	Today	Previous
Canadian $	0.97427	0.97271
US   $	1.02641	1.02805
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36132	0.73458
US  $	1.32630	0.75398

Commodities

Gold	Close	Previous
London Gold   Fix	1328.61	1333.86
Oil	Close	Previous
WTI Crude Future	104.55	104.59
BRENT	109.359	109.359

Market Commentary:

Canada

By Katie Brennan

July 29 (Bloomberg) — Canadian stocks rose, snapping a four-day slump in the benchmark index, as Hudson’s Bay Co. rallied after announcing a $2.4 billion acquisition and telephone stocks jumped.

Hudson’s Bay, the operator of Canada’s largest department- store chain, surged 5.8 percent after agreeing to acquire luxury U.S. retailer Saks Inc. Telus Corp. and Rogers Communications Inc. added more than 1.4 percent as the industry minister reportedly met with executives of the country’s largest phone companies. Turquoise Hill Resources Ltd. fell 17 percent after parent Rio Tinto Group delayed work on a $5.1 billion underground expansion of a copper mine in Mongolia.

The Standard & Poor’s/TSX Composite Index added 21.14 points, or 0.2 percent, to 12,669.04 at 4 p.m. in Toronto. The gauge declined 0.3 percent last week. Trading volume was 33 percent lower than the 30-day average.

“The Hudson’s Bay, Saks merger is a decent-sized transaction so it’s getting lots of interest. The real-estate implications will continue to garner additional interest as they spin this thing out,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. He helps manage C$220 million ($210 million). “We expect lots of M&A and we are focused on that.”

Hudson’s Bay, Canada’s oldest company, gained 5.8 percent to C$17.45 after agreeing to pay $16 a share in cash for Saks, in a deal that may spur the creation of a real estate investment trust. The price is a 30 percent premium to New York-based Saks’s closing price on May 20, the day before media reports began, according to a statement today. The transaction, which brings together the Lord & Taylor and Saks Fifth Avenue brands, creates a company that will operate 320 stores.

Seven of the 10 groups in the benchmark index rose, as telephone stocks gained the most with a 0.9 percent advance.

Telus added 1.8 percent to C$31.95 and Rogers Communications climbed 1.4 percent to C$41.92.

Canadian Industry Minister James Moore met with senior executives from the country’s mobile-phone companies about their concerns over the possible entry of Verizon Communications Inc. into the market, according to a person familiar with the meetings. Verizon said June 18 that it is interested in acquiring Canadian carriers such as Wind Mobile.

Commodities producers slumped, with energy and raw- materials companies erasing at least 0.1 percent. Health-care companies fell the most, losing 0.6 percent as a group.

Bombardier Inc. added 3.3 percent to C$5.06 after GMP Securities LP analyst Deepak Kaushal rated the world’s largest maker of corporate jets a buy in new coverage, with a target price of C$7. The company also won a contract to provide technology for a new metro line in Riyadh, Saudi Arabia.

Bombardier’s share of the contract amounts to $383 million.

Canadian Natural Resources Ltd. slid 0.7 percent to C$31.97 as Macquarie Research analyst Chris Feltin and Toronto-Dominion Bank downgraded their ratings on the stock to the equivalent of hold. The nation’s largest producer of heavy crude fell the most in more than three months Friday on concern that output next year will be affected due to a leak at its Primrose oil-sands project.

Turquoise Hill lost the most in the S&P/TSX, falling 20 percent to C$4.38 after Rio Tinto delayed the expansion of its Oyu Tolgoi copper mine, pending financing approval by Mongolia’s parliament. Rio controls the mine through its 51 percent stake in Turquoise Hill, which in turn owns 66 percent of the operation. The government owns the remaining stake in the mine, which is forecast to account for a third of Mongolia’s economy.

US

By Alex Barinka

July 29 (Bloomberg) — U.S. stocks fell, paring a monthly gain for the Standard & Poor’s 500 Index, as fewer Americans signed contracts in June to buy previously owned homes.

Energy stocks and financial companies lost more than 0.7 percent for the biggest declines among 10 industries in the S&P 500. Perrigo Co. fell 6.8 percent after saying it will buy Irish drugmaker Elan Corp. for $8.6 billion. Facebook Inc. gained 4.2 percent to the highest price since May 2012, the month of its public offering, amid optimism over mobile ad sales.

The S&P 500 slipped 0.4 percent to 1,685.33 at 4 p.m. in New York. The equity benchmark lost less than 0.1 percent last week, halting its longest streak of weekly gains since May 17.

The Dow Jones Industrial Average dropped 36.86 points, or 0.2 percent, to 15,521.97 today. About 5.19 billion shares changed hands, 18 percent below the three-month average.

“Some of the economic data appears softer than we anticipated,” Eric Teal, who helps oversee $5 billion as chief investment officer at First Citizens BancShares Inc., said via phone from Raleigh. “Some pause might be in order over the next few months after the strong gains the first half of the year.”

The S&P 500 has climbed 4.9 percent this month. The benchmark index surged 149 percent since March 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases by the U.S. central bank. The gauge fell in June, after seven consecutive months of gains, as investors examined economic data to assess when the Federal Reserve will reduce its $85 billion of monthly bond purchases.

The Fed has said economic data will determine the timing and pace of any reduction in its asset purchases. The central bank will probably maintain its benchmark interest rate at 0.25 percent after concluding its two-day policy-setting meeting on July 31, economists predicted. The Fed will begin to reduce its bond-purchase program in September, according to economists surveyed by Bloomberg.

Fewer Americans signed contracts in June to buy previously owned homes, showing rising mortgage rates are beginning to restrain the housing market. The index of pending home sales dropped 0.4 percent, less than forecast, to 110.9 in June after climbing a month earlier to the highest level since December 2006, figures from the National Association of Realtors showed today in Washington. The median forecast in a Bloomberg survey of 40 economists called for a 1 percent decline.

The week will offer further clues to the state of the economy, with the release of data on U.S. gross domestic product and the monthly labor report, as well as monetary policy announcements by the Fed and the European Central Bank.

Investors will also watch this week’s earnings from more than 130 companies listed on the S&P 500. Of the 269 companies in the S&P 500 that have posted results so far this earnings season, 73 percent have exceeded analysts’ estimates for profit and 56 percent have beaten sales projections, data compiled by Bloomberg show.

“It’s still the case that macro is driving markets at the moment,” Ramin Nakisa, an asset allocation strategist at UBS AG in London, told Francine Lacqua on Bloomberg Television. “We are entering a world in which rates are rising, and the Fed’s going to taper. There may be higher volatility, but there will be a bigger appetite for risk. Now we’re seeing a rotation into cyclicals, so markets are saying we want growth.”

The Chicago Board Options Exchange Volatility Index, or VIX, climbed 5.3 percent to 13.39, after adding 1.4 percent last week. The equity volatility gauge reached its highest level this year in June and has since fallen 35 percent.

Energy and financial stocks fell 0.8 percent each. Exxon Mobil Corp. slipped 0.8 percent to $94.03 and Chevron Corp. slumped 1.1 percent to $126.17. Bank of America Corp. lost 1.4 percent to $14.52 for the biggest decline in the Dow while JPMorgan Chase & Co. declined 0.6 percent to $55.69.

Chesapeake Energy Corp., the second-biggest U.S. natural- gas producer after Exxon, dropped 0.4 percent to $22.75. Gas futures slumped in New York to the lowest price in 21 weeks on forecasts for mild weather, after tropical storm Dorian fell apart in the Atlantic.

Perrigo lost 6.8 percent to $125.17 today. The maker of over-the-counter medicines will pay holders of Elan’s American depositary receipts $16.50 per ADR in cash and stock, according to a joint statement today. That’s 11 percent greater than the July 26 closing price for the ADRs. Elan rose 3.6 percent to $15.46 in U.S trading.

Omnicom Group Inc. slipped 0.6 percent to $64.75, reversing an earlier rally of as much as 8.3 percent, after agreeing to merge with Publicis to create a company with revenue of $23 billion and a market value of $35 billion. The shareholders of Publicis and Omnicom will each hold about 50 percent of the new entity, Publicis Omnicom Group.

The combined business will use its scale to negotiate better advertising rates for its clients. Publicis’s Chief Executive Officer Maurice Levy and Omnicom’s CEO John Wren will jointly run Publicis Omnicom.

Interpublic Group of Cos. jumped 4.7 percent to $16.61.

AT&T Inc. rose 0.8 percent to $35.88 as phone stocks advanced the most in the S&P 500.

Saks Inc. added 4.2 percent to $15.95. Toronto-based Hudson’s Bay Co. will buy the luxury department-store retailer for $16 a share in cash, or $2.4 billion, according to a joint statement today.

Facebook gained 4.2 percent to $35.43, the highest price since the month of its initial public offering. The world’s largest social network last week reported that ads on smartphones and tablets generated 41 percent of revenue in the second quarter, up from 14 percent a year earlier.

Caterpillar Inc. rose 1.2 percent to $83.02 for the biggest gain in the Dow. The largest maker of mining equipment said it will buy back $1 billion of common stock from Societe Generale.

Pfizer Inc. added 0.6 percent to $29.54. The world’s biggest drugmaker said it will split up its three major internal businesses and shuffle the management that leads them, part of the company’s preparation for a further break up.

Synta Pharmaceuticals Corp. soared 41 percent to $7.15 for the biggest gain in more than four years. A small trial of its drug in breast cancer met goals warranting expansion of the study.

U.S. financial companies, fueled by the fastest earnings growth in the S&P 500, are poised to reclaim their position as the market’s biggest industry for the first time since the credit crisis.

Banks, brokers and insurance companies make up 16.8 percent of the S&P 500, almost double the level from 2009 and closing in on technology companies at 17.6 percent, according to data compiled by Bloomberg. Bank of America and Morgan Stanley are helping lead gains in the index this month after profits topped analyst estimates. Intel Corp. and Microsoft Corp. are among the worst after earnings trailed forecasts.

For bulls, the change signals banks will lead the economy even after the Fed begins to reduce stimulus. Bears say S&P 500 profits would be down this quarter if not for banks. They note that the last time financials were the biggest industry was in 2008 and the consequences were disastrous.

“The fact that we are seeing banks perform reasonably well provides a certain sense of confidence in the underlying economy,” Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which oversees about $130 billion, said in a July 25 phone interview. “Without the financials working, it would be hard to imagine that all the rest would be working at all.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Fear is man’s greatest enemy,

and it manifests itself in forms as diverse as shame, jealousy, anger, insolence, arrogance…

What causes fear?  Lack of confidence in oneself.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

Our lives improve only when we take chances – and the first

and most difficult risk we can take is to be honest

with ourselves.

-Walter Anderson, 1903-1965

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:

Mick Jagger turns 70 years old today!

Today is the anniversary of the unveiling of the Vimy Ridge Memorial on July 26^th, 1936.  It took 11 years to build and honors the 11,285 Canadian soldiers killed in France during the First World War, their final resting places unknown.

And also on this day, in 1945, British Prime Minister Winston Churchill lost the general election to the Labour Party’s Clement Attlee.  Churchill tendered his resignation.

After hearing the news of Labour’s election, James Agate, Ego, July 26^th, 1945, reported:

I rang up the head waiter at one of my favourite restaurants and said, “Listen to me carefully, Paul.  I am quite willing that in future you address me as ‘comrade’ or ‘fellow-worker’, and chuck the food at me in the manner of Socialists to their kind.  But that doesn’t start until tomorrow morning.  Tonight I am bringing two friends with the intention that we may together eat our last meal as gentlemen.  There will e a magnum of champagne and the best food your restaurant can provide.  You, Paul, will behave with your wonted obsequiousness.  The sommelier, the table waiter, and the commis waiter will smirk and cringe in the usual way.  From tomorrow you will get no more tips.  Tonight you will all be tipped royally.”  The head waiter said, “Bien, m’sieu.”   That was at a quarter-past six.  At a quarter-past nine I arrived and was escorted by bowing menials to my table, where I found the magnum standing in its bucket, and three plates each containing two small slices of spam!  Who would have thought a head waiter to have so much wit in him?

Photos of the Day –July 26th, 2013

Two girls walk past beach huts built in 1911 on the North Bay in Scarborough, northern England. Nigel Roddis/Reuters

Hot air balloons, including a 115-foot-tall flying lighthouse, are inflated during the 31st annual QuickChek New Jersey Festival of Ballooning in Readington Township, N.J. Mel Evans/AP

Market Closes for July 26^th, 2013

Market  Index	Close	Change
Dow  Jones	15558.83	+3.22    +0.02%
S&P 500	1691.65	+1.40    +0.08%
NASDAQ	3613.165	+7.977    +0.22%
TSX	12645.38	-23.76
		-0.19%

International Markets

Market  Index	Close	Change
NIKKEI	14129.98	-432.95
		-2.97%
HANG  SENG	21968.95	+67.99
		+0.31%
SENSEX	19748.19	-56.57
		-0.29%
FTSE 100	6554.79	-33.16
		-0.50%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.452	2.462
CND.   30 Year Bond	2.956	2.971
U.S.   10 Year Bond	2.5624	2.5721
U.S.   30 Year Bond	3.6190	3.6474

Currencies

BOC Close	Today	Previous
Canadian $	0.97271	0.97246
US   $	1.02805	1.02832
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36515	0.73252
US  $	1.32790	0.75307

Commodities

Gold	Close	Previous
London Gold   Fix	1333.86	1333.84
Oil	Close	Previous
WTI Crude Future	104.59	105.56
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

July 26 (Bloomberg) — Canadian stocks slid for a fourth day, the longest stretch in seven weeks, as commodities fell after China ordered companies to cut excess production capacity.

Advantage Oil & Gas Ltd. lost 5.9 percent as crude posted a weekly decline. Dundee Precious Metals Inc. retreated 2.8 percent as the price of gold slipped. Celestica Inc., an electronics manufacturer, surged 6.3 percent after second- quarter profit topped analysts’ estimates. Canfor Corp., a lumber and paper producer, jumped 7.3 percent for the biggest gain in two years on better-than-expected earnings.

The Standard & Poor’s/TSX Composite Index fell 21.24 points, or 0.2 percent, to 12,647.90 at 4 p.m. in Toronto. The gauge fell 0.3 percent this week, the first decline in five weeks. Trading volume was 25 percent lower than the 30-day average.

“We’re waiting for more earnings,” said Irwin Michael, a fund manager with ABC Funds in Toronto. His firm manages C$800 million ($778 million). “Oil is lower and copper is down. People are a little nervous.”

Six of 10 industries in the S&P/TSX retreated, led by a 0.9 percent decline in oil and gas producers. The S&P/TSX Energy Index slumped to a two-week low as 42 of 58 stocks fell.

China ordered more than 1,400 companies in 19 industries to cut excess production capacity this year. Steel, ferroalloys, electrolytic aluminum and cement are among areas affected, the Ministry of Industry and Information Technology said this week.

Advantage Oil & Gas slumped 5.9 percent to C$3.70 and Canadian Natural Resources Ltd. retreated 4.5 percent to C$32.20. Crude for September delivery dropped 0.7 percent to settle at $104.70 a barrel in New York. Oil fell 3.1 percent this week for the first weekly drop in more than a month.

Dundee Precious Metals sank 2.8 percent to C$5.21. Gold for December delivery declined 0.6 percent to settle at $1,321.90 an ounce in New York.

First Majestic Silver Corp. lost 1.7 percent to C$13.32 and Silver Wheaton Corp. slipped 0.5 percent to C$23.76 as silver fell 1.9 percent.

Potash Corp. of Saskatchewan Inc. fell 0.6 percent to C$38.14, extending losses for a fourth day. Raymond James Financial Inc. analyst Steven Hansen lowered his rating for the stock to market perform from outperform.

Yesterday, the fertilizer producer cut its earnings forecast and reported profit that missed analysts’ estimates after a drop in potash prices.

Celestica soared 6.3 percent to C$10.40. The company said third-quarter earnings may reach 17 cents to 23 cents a share, compared with analysts’ estimates for 20 cents a share.

Canfor, based in Vancouver, rallied 7.3 percent to C$21.45, the biggest gain since July 2011. The company posted second- quarter adjusted profit of 61 Canadian cents a share, topping the 38-cent average of eight analysts surveyed by Bloomberg.

Lumber production and shipments increased during the quarter.

US

By Lu Wang

July 26 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index erasing losses in the final 30 minutes of trading, as investors weighed corporate earnings and consumer confidence before central-bank meetings next week.

Starbucks Corp. jumped 7.6 percent after reporting profit that beat estimates. Amazon.com Inc. advanced 2.8 percent as Oppenheimer & Co. lifted its stock-price projection. Expedia Inc. sank 27 percent on disappointing sales and profit. Zynga Inc. plunged 14 percent after abandoning plans to enter online gambling and forecasting earnings that fell short of estimates.

The S&P 500 climbed 0.1 percent to 1,691.65 at 4 p.m. in New York, reversing an earlier drop of 0.8 percent. The benchmark index finished the week down less than 0.1 percent, snapping a four-week rally. The Dow Jones Industrial Average added 3.22 points, or less than 0.1 percent, to 15,558.83. About 5.36 billion shares changed hands, or 16 percent below the three-month average.

“The market has been so used to the pace of accommodation and any reduction in the accommodation could be a slight drag in the short term,” Anastasia Amoroso, a global market strategist at JPMorgan Funds, said in a phone interview. The firm manages about $400 billion. “The market is in the process of an adjustment to rising rates, coming to the realization that rising rates do not mean the death of equities.”

Consumer confidence unexpectedly increased in July to the highest level in six years as Americans’ views of their finances improved, according to the Thomson Reuters/University of Michigan final index of U.S. consumer sentiment. The measure advanced to 85.1 in July from 84.1 at the end of June.

Economists in a Bloomberg survey called for 84, according to the median projection after a preliminary reading of 83.9.

Consumer prices in Japan excluding food rose 0.4 percent in June, more than economists estimated and the biggest jump since 2008, damping speculation the country will need to expand stimulus. In China, the government directed more than 1,400 companies in industries from steelmaking to papermaking to cut excess capacity by year-end.

The S&P 500 is up 5.3 percent this month, heading for its biggest monthly advance since October 2011. The gauge fell in June, after seven successive months of gains, as investors examine economic data for clues on when the Fed will start to reduce its $85 billion of monthly bond purchases.

Support from central banks and better-than-estimated earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low to record highs. The Fed has said economic data will determine the timing and pace of any reduction in its bond-buying.

The Fed will start trimming its purchases in September, according to a Bloomberg survey of economists. Fed Chairman Ben S. Bernanke said last week it is “way too early to make any judgment” as to whether policy makers will start tapering purchases in September. The Fed’s Open Market Committee next meets to review policy on July 30-31.

Investors will watch next week’s data on U.S. gross domestic product and the monthly labor report, as well as monetary policy announcements by the Fed and the European Central Bank, to gauge the market outlook.

U.S. economic growth probably slowed to 1 percent in the second quarter from the 1.8 percent pace in the previous period while employers added 185,000 workers in July, down from 195,000 in June, economists surveyed by Bloomberg forecast. The ECB is likely to leave its benchmark rate at a record low of 0.5 percent, according to the median estimate of economists in a Bloomberg survey.

Equity valuations have climbed 16 percent this year, with the S&P 500 trading at 16.1 times reported earnings, close to the highest level since May 2010, data compiled by Bloomberg show.

Investors are also watching company earnings reports. Of the 260 companies in the S&P 500 that have posted quarterly results so far, 73 percent have exceeded analysts’ estimates for profit and 57 percent have topped sales projections, data compiled by Bloomberg show.

“Fundamentals have been good, but the fundamentals from here are not going to support a run higher,” Timothy Hoyle, the director of research at Radnor, Pennsylvania-based Haverford Investments, which oversees about $6 billion of assets, said in a phone interview. “Earnings are coming in through efficiencies, lower expenses, and lower interest costs. We don’t still see end market demand in the economy and that’s what’s going to take to get the stock market to make a leg up.”

The Chicago Board Options Exchange Volatility Index, or VIX, dropped 1.9 percent today to 12.72. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, is down 29 percent this year.

Five of 10 main industries in the S&P 500 gained. Health- care and telephone companies rose the most, climbing at least 0.4 percent. Commodity stocks fell more than 0.3 percent for the worst performance.

Starbucks rose 7.6 percent to a record $73.36. Chief Executive Officer Howard Schultz’s push into food is starting to pay off, driving traffic into U.S. stores and lifting sales and profit. The world’s largest coffee-shop operator posted third- quarter earnings of 55 cents a share, higher than the 53 cent profit forecast by analysts, and raised its projection for fiscal 2013 profit.

Amazon climbed 2.8 percent to an all-time high of $312.01.

Jason Helfstein, an analyst with Oppenheimer, raised his share- price estimate for the world’s largest online retailer to $367 from $325, citing better-than-estimated growth in gross profits and stable sales during the second quarter. Amazon reported a surprise net loss yesterday.

Activision Blizzard Inc. surged 15 percent to $17.46, the highest level since September 2008. The company and a management group led by Chief Executive Officer Bobby Kotick agreed to buy out parent Vivendi SA’s controlling stake in the biggest U.S. video-game publisher for $8.17 billion.

Cliffs Natural Resources Inc., the worst-performing stock in the S&P 500 so far this year, jumped 7.2 percent to $19.71.

The largest iron-ore producer in the U.S. posted second-quarter earnings of 82 cents a share, surpassing the average analyst estimate of 59 cents. Revenue in the period also topped forecasts and Cliffs increased its capital-expenditure outlay for 2013 to $1 billion from no more than $850 million.

Tesla Motors Inc. gained 4.3 percent to $129.39 after Deutsche Bank AG analyst Dan Galves boosted his rating on the stock to buy from hold. He said shares of the electric-car maker could more than double in the next three to four years, citing a rise in U.S. orders and lowered concern over quality issues after a Consumer Reports review.

Expedia sank 27 percent to $47.20 for the biggest retreat in the S&P 500. The online travel agency posted second-quarter earnings, excluding some items, of 64 cents a share, falling short of the 81 cents analysts predicted on average.

Zynga plunged 14 percent to $3.01 after abandoning plans to enter the online-gambling business in the U.S. The maker of the social-networking game “FarmVille” also forecast third-quarter sales and earnings that fell short of analysts’ estimates as fewer users access its titles on Facebook Inc.’s website.

Vertex Pharmaceuticals Inc. slumped 7.9 percent to $80.71.

The company said U.S. regulators placed a partial clinical hold on its trial of a drug for hepatitis C after patients receiving a high dose of the medicine showed signs of potential liver toxicity.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

How is this dream to be broken,

how shall we wake up from this dream

that we are little men and women,

and all such things?

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Wisdom doesn’t automatically come with old age.

Nothing does – except wrinkles.  It’s true, some wines

improve with age.  But only if the grapes were good

in the first place.

-Abigail Van Buren, 1918-2013

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:

George:  The patron saint of England since his “adoption” by Edward III.  The popularity of St. George in England stems from the time of the early Crusades, for he was said to have come to the assistance of the crusaders at Antioch in 1098.  Many of the Normans under Robert Curthose, son of William The Conqueror, took him as their patron.

Edward Gibbon and others argued that George of Cappadocia (d. 361), the Arian bishop of Alexandria, became the English patron saint, but it is more generally accepted that he was a Roman officer martyred (c. 300) near Lydda during the Diocletian persecution.  He is also the patron saint of Aragon and Portugal.

The legend of St. George and the Dragon is simply an allegorical expression of the triumph of the Christian hero over evil, which St. John the Evangelist envisioned through the image of a dragon.  The legend forms the subject of the ballad “St. George for England” in Percy’s Reliques (1765), and a gently humorous version of the tale, entitled “The Reluctant Dragon” was included by Kenneth Grahame in Dream Days (1898), by evocation of orphan childhood.  –adapted from Brewar’s, 16^th ed.

Photos of the Day –July 25th, 2013

A male (r.) and female American Kestrel, formerly known as the Sparrow Hawk, have a family spat near Newberry, Fla., while teaching their newly fledged young how to make their way in the wild. The American Kestrel is the smallest falcon in North American. The Kestrel feeds on dragon flies, grasshoppers, small rodents, and birds. Phil Sandlin/AP

Customers enjoy a drink in Ice Pub Prague in central Prague, Czech Republic. The interior of the bar is made of ice, and customers are served with drinks in glasses made of ice. Temperatures in the Czech Republic are expected to rise up to 40 degrees Celsius (104 degrees Fahrenheit) on Sunday, Czech Hydrometeorological Institute reported. David W Cerny/Reuters

Market Closes for July 25^th, 2013

Market  Index	Close	Change
Dow  Jones	15555.61	+13.37    +0.09%
S&P 500	1690.27	+4.33    +0.26%
NASDAQ	3605.188	+25.588    +0.71%
TSX	12667.37	-4.93
		-0.04%

International Markets

Market  Index	Close	Change
NIKKEI	14562.93	-168.35
		-1.14%
HANG  SENG	21900.96	-67.97
		-0.31%
SENSEX	19804.76	-285.92
		-1.42%
FTSE 100	6587.95	-32.48
		-0.49%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.462	2.476
CND.   30 Year Bond	2.971	2.983
U.S.   10 Year Bond	2.5721	2.5804
U.S.   30 Year Bond	3.6474	3.6397

Currencies

BOC Close	Today	Previous
Canadian $	0.97246	0.96951
US   $	1.02832	1.03145
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36506	0.73257
US  $	1.32747	0.75332

Commodities

Gold	Close	Previous
London Gold   Fix	1333.84	1320.98
Oil	Close	Previous
WTI Crude Future	105.56	105.10
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

July 25 (Bloomberg) — Canadian stocks fell for a third day as investors weighed earnings from commodity producers including Teck Resources Ltd. and Goldcorp Inc.

Goldcorp, the biggest gold producer by market value, dropped 1.2 percent after taking a $1.96 billion writedown due to falling gold prices. Potash Corp. of Saskatchewan Inc. slumped 2.1 percent as it lowered its 2013 profit forecast. Teck Resources rose 3 percent as its profit beat estimates. Encana Corp. gained 1.7 percent after an analyst with TD Securities Inc. raised his rating for the stock.

The Standard & Poor’s/TSX Composite Index fell 3.16 points, or less than 0.1 percent, to 12,669.14 at 4 p.m. in Toronto.

Trading volume was in line with the 30-day average.

“The Canadian numbers have been less than inspiring,” said Michael O’Brien, a fund manager with TD Asset Management Inc. in Toronto. The firm manages C$216 billion ($210 billion).

“Expectations for these companies were pretty low coming into the quarter. Everybody knew it was going to be a horrendous quarter so people wanted to see just how bad it is and then pick at the pieces.”

Five of 10 industries in the benchmark index fell, led by a 0.8 percent decline in shares of utilities. Atco Ltd. lost 2 percent to C$44.11 as the electric power distributor fell for the fourth time in five days.

Industrial stocks rose the most, adding 0.4 percent as a group, as Canadian Pacific Railway Ltd. advanced 3 percent to C$131.26 to snap four days of losses.

Fifteen companies in the S&P/TSX report earnings today and tomorrow, including TransCanada Corp. and Canadian Utilities Ltd.

Potash Corp., the world’s largest fertilizer producer, sank 2.1 percent to C$38.35, the lowest close since November. The Saskatoon, Saskatchewan-based company said it expects profit of $2.45 to $2.70 a share this year, compared with an April forecast of $2.75 to $3.25 and the $2.84 average of 30 estimates compiled by Bloomberg.

Potash Corp. reported second-quarter profit of 73 cents a share, short of the 80 cent analysts’ average. Prices for potash are down because of plentiful producer inventories and historically low import volumes in India.

Goldcorp fell 1.2 percent to C$28.88 after writing down the value of its assets and announcing it will slow down some project spending due to lower gold prices. The Vancouver-based company reported adjusted earnings of 14 cents a share, trailing the 23-cent average of 19 estimates compiled by Bloomberg.

Gold-mining companies have announced at least $13 billion of writedowns in the past two months after the precious metal’s steepest quarterly drop in London trading in more than nine decades.

Teck Resources, Canada’s largest diversified miner, climbed 3 percent to C$24.41 after reporting adjusted earnings of 34 cents a share, topping analysts’ average forecast of 32 cents.

Teck said output at its Quintette coal mine in British Columbia won’t begin until a recovery in the market for metallurgical coal, and development of its Quebrada Blanca Phase 2 copper project has also been slowed.

Encana added 1.7 percent to C$18.09 after Menno Hulshof, analyst with TD Securities, raised his rating for the company to buy from hold on a positive operations outlook as well as cost- cutting plans. The stock has four buys, 16 holds and 6 sells, according to data compiled by Bloomberg.

Encana yesterday reported second-quarter adjusted earnings of 34 cents a share, topping estimates for 17 cents.

US

By Lu Wang and Katie Brennan

July 25 (Bloomberg) — U.S. stocks rose, halting two days of losses for the Standard & Poor’s 500 Index, as investors weighed corporate earnings and economic reports for clues on when the Federal Reserve may reduce stimulus measures.

Facebook Inc. rallied 30 percent after the world’s most popular social-networking service posted second-quarter revenue and profit that beat analysts’ estimates. Visa Inc. advanced 4.2 percent to a record as profit topped forecasts. Homebuilders sank 4.8 percent as a group after PulteGroup Inc. and D.R. Horton Inc. reported lower-than-expected orders.

The S&P 500 rose 0.3 percent to 1,690.25 at 4 p.m. in New York, after earlier falling as much as 0.4 percent. The Dow Jones Industrial Average added 13.37 points, or 0.1 percent, to 15,555.61. More than 6.4 billion shares traded hands on U.S. exchanges today, in line with the three-month average.

“It seems like market participants on a day-to-day basis want to trade more on the prospect of what that means for the Fed’s tapering plan,” Jeff Layman, chief investment officer of BKD Wealth Advisors in Springfield, Missouri, said in a phone interview. His firm has $2.3 billion under management. “I’d much rather see the market supported by positive underlying economic trend and real activity, rather than supported by the hope that the Fed will continue to artificially suppress the rate.”

The S&P 500 completed its first two-day drop in a month yesterday, after climbing to within 3 points of 1,700 for a third straight day, as housing and manufacturing data fueled speculation the Fed may reduce its asset-buying this year.

Support from central banks and better-than-estimated corporate earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low.

The benchmark gauge rose to session highs today after a Wall Street Journal article suggested the Fed will reassure investors it won’t be quick to raise interest rates at its next policy-making meeting on July 30-31. Fed Chairman Ben S.

Bernanke said last week it is “way too early to make any judgment” as to whether policy makers will start tapering purchases in September.

The central bank has said economic data will determine the timing and pace of any reduction in its $85 billion in monthly bond-buying, known as quantitative easing. The Fed will start trimming purchases in September, according to a Bloomberg survey of economists.

Separate reports showed today that orders for durable goods rose more than forecast in June while more Americans filed for unemployment benefits last week as annual auto-plant shutdowns continued to affect data.

“We are kind of stuck in that middle ground where data is not bad enough to be encouraging about more quantitative easing, but it’s not good enough to convince people that there is enough there fundamentally to justify sharply higher prices,” Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in an interview.

Equity valuations have climbed 16 percent this year, with the S&P 500 trading at 16.3 times reported earnings, close to the highest level since May 2010, according to data compiled by Bloomberg. The index closed at record on July 22.

Of the 237 S&P 500 companies that have posted quarterly results, 74 percent have exceeded analysts’ profit estimates and 57 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, dropped 1.6 percent today to 12.97, halting two days of gains. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, is down 28 percent this year.

Nine of the 10 S&P 500 main groups advanced, as utilities and commodity producers rose at least 0.5 percent.

Facebook surged 30 percent to $34.36, the highest level in 14 months. Revenue rose 53 percent to $1.81 billion in the latest quarter, beating the average analyst estimate of $1.62 billion. Profit excluding certain items of 19 cents a share also exceeded the 14-cent average projection of analysts.

Visa advanced 4.2 percent to a record $194.61 as the biggest bank-card network reported a fiscal third-quarter profit that beat analysts’ estimates.

TripAdvisor Inc. jumped 16 percent to $71.10 after posting second-quarter earnings per share of 52 cents. That exceeded the average analyst projection of 48 cents.

Boston Scientific Corp. rallied 13 percent to $10.83. The second-biggest maker of heart-rhythm devices reported profit that beat analysts’ estimates and raised its forecast amid signs that demand for defibrillators is starting to stabilize.

Better-than-expected results from International Paper Co. and Dow Chemical Co. boosted raw-materials producers to the best performance in the S&P 500. International Paper, the world’s largest maker of office paper, jumped 6.3 percent to $50.19. Dow Chemical rose 1.8 percent to $34.99 as stronger transportation and packaging demand helped its plastics unit.

Qualcomm Inc. added 3.3 percent to $63.42. The largest seller of semiconductors for mobile phones forecast fiscal fourth-quarter sales that may exceed analysts’ estimates, buoyed by smartphone demand in emerging markets.

Oneok Inc. surged 26 percent to a record $53.77 for the biggest gain in the S&P 500. The company plans to spin off its distribution business, forming one of the largest natural gas utilities in the U.S. with 2 million customers in at least three states.

E*Trade Financial Corp. climbed 7.9 percent to $14.69. The online brokerage with six chief executive officers since 2007 said it plans to sell a market-making unit that handles orders for its customers and announced earnings that beat estimates.

The S&P Supercomposite Homebuilding Index slumped 4.8 percent to the lowest level since December as all its 11 members declined for a second day.

PulteGroup fell 10 percent to $16.55 for the biggest retreat in the S&P 500. The largest U.S. housebuilder by market value said second-quarter earnings included 17 cents a share in charges that left the total below analyst estimates.

D.R. Horton slid 8.6 percent to $19.38, the lowest this year. The largest U.S. homebuilder by volume said orders increased 12 percent. That’s below analysts’ forecast of 28 percent growth, according to Adam Rudiger, an analyst at Wells Fargo & Co.

Home Depot Inc. the biggest U.S. home-improvement retailer, slipped 1.6 percent to $78.99.

Caterpillar Inc. declined 1.6 percent to $82.14. The largest manufacturer of mining and construction machinery was cut to market perform, an equivalent of neutral, from outperform at BMO Capital Markets by equity analyst Joel Tiss. The company yesterday issued a forecast that missed analyst estimates.

Western Digital Corp. dropped 5.9 percent to $63.53. The maker of hard drives forecast first-quarter adjusted earnings per share of $1.95 to $2.05, less than the average analyst estimate of $2.06. Competitor Seagate Technology LLC slipped 4.7 percent to $42.12.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

You must learn how to be lucid in all your actions;

that is, you must not only be aware of the time, the place, and the circumstances,

in which the action takes place, but also of yourself, the player, of your body

and what is happening at any moment.

It is not only a question of seeing things as they are, but of seeing yourself at the same time,

and the reactions that take place within you.

In other words, you absorb the whole thing within you and you become complete.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

There are no shortcuts in evolution.

-Louis D. Brandeis, 1856-1941

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 Poem

Parting [1979]

Jasmine hung in clusters upon the vine,

water-lily buds spread everywhere upon the lake,

all along the boundary hedges

the thorny ironwood had flowered.

As I stood gazing,

“This is how spring should be,”

you said, and left.  That day.

 

Today

on the branch of a copper-leaf tree

a solitary bird shivers

ruffling its feathers,

a cloud

is set for a lifetime’s wandering,

and along the shores of the lake

standing on one leg

a lone heron

practices austerities.

-by Cheran

Translated by Lakshimi Holmstöm

 

Photos of the Day –July 24th, 2013

Linda Cerruti performs her routine in the synchronized swimming solo final at the FINA Swimming World Championships in Barcelona, Spain. David J. Phillip/AP

A toad swims between lily leaves in a little pond in Lofer, near Salzburg, Austria. Meteorologists forecast the hot and sunny weather to continue the next days. Kerstin Joensson/AP

Market Closes for July 24^th, 2013

Market  Index	Close	Change
Dow  Jones	15542.24	-25.50    -0.16%
S&P 500	1684.13	-8.26    -0.49%
NASDAQ	3579.600	+0.326    +0.01%
TSX	12659.93	-85.45
		-0.67%

International Markets

Market  Index	Close	Change
NIKKEI	14731.28	-47.23
		-0.32%
HANG  SENG	21968.93	+53.51
		+0.24%
SENSEX	20090.68	-211.45
		-1.04%
FTSE 100	6620.43	+22.99
		+0.35%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.476	2.403
CND.   30 Year Bond	2.983	2.920
U.S.   10 Year Bond	2.5804	2.5021
U.S.   30 Year Bond	3.6397	3.5726

Currencies

BOC Close	Today	Previous
Canadian $	0.96951	0.97180
US   $	1.03145	1.02902
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36097	0.73477
US  $	1.31945	0.75789

Commodities

Gold	Close	Previous
London Gold   Fix	1320.98	1343.10
Oil	Close	Previous
WTI Crude Future	105.10	107.18
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

July 24 (Bloomberg) — Canadian stocks fell the most in a month as a report showing a manufacturing slowdown in China spurred losses in commodity shares, while Loblaw Cos. rose on better-than-estimated earnings.

Shares in materials producers on the Standard & Poor’s/TSX Composite Index declined 3 percent for the biggest slump in four weeks. Torex Gold Resources Inc. and Barrick Gold Corp. slid more than 5.4 percent. Suncor Energy Inc. lost 1.1 percent as crude tumbled the most in more than a month. Loblaw, Canada’s largest grocer, gained 3.2 percent as profit climbed on higher food and clothing sales.

The equity gauge fell 73.08 points, or 0.6 percent, to 12,672.30 at 4 p.m. in Toronto. The index declined two straight days for the first time in a month, paring its gain for the year to 1.9 percent. Trading volume was 5.8 percent higher than the 30-day average at this time of the day.

“We’ve had a pretty good run here, so the market is taking a bit of a pause as we need to see more earnings reports,” said David Cockfield, a fund manager with Northland Wealth Management in Toronto. The firm manages C$225 million ($219 million).

“Metal producers, in general, are looking at less robust markets for the foreseeable future.”

China’s manufacturing weakened more than estimated in July, according to a preliminary purchasing managers’ index reading of 47.7 released by HSBC Holdings Plc and Markit Economics. Levels below 50 indicate contraction.

Torex Gold plunged 10 percent to C$1.38 and Barrick Gold, the world’s largest producer of gold, lost 5.4 percent to C$17.67. Gold for December delivery sank 1.1 percent, the most in two weeks.

Teck Resources, Canada’s largest diversified miner, fell 2.7 percent to C$23.69. First Quantum Minerals Ltd., a copper producer, retreated 1.4 percent to C$17.13. HudBay Minerals Inc., which produces zinc, copper, gold and silver, lost 6 percent to C$7.25. Copper slipped 0.6 percent in New York, snapping the longest rally in nine months.

Cenovus Energy Inc. sank 5.5 percent to C$30.49 as second- quarter profit slumped 55 percent on higher currency losses and lower hedging gains. More than 50 Canadian companies in the S&P/TSX are scheduled to report earnings over the next week.

Suncor lost 1.1 percent to C$32.85 and Canadian Natural Resources Ltd. retreated 1.2 percent to C$33.80. Energy stocks fell 1.3 percent as a group after crude for September delivery dropped 1.7 percent to settle at $105.39 a barrel in New York, the biggest decline since June 21.

Loblaw gained 3.2 percent to C$49.47. The grocer reported second-quarter adjusted profit of 67 Canadian cents a share, ahead of analysts’ estimates of 59 cents, according to data compiled by Bloomberg.

The company, which agreed to buy Shoppers Drug Mart Corp. this month, said it expects “mid-single” digit operating income growth for 2013.

Rogers Communications Inc. rose 1.8 percent to C$41.95.

Canada’s biggest wireless carrier signed up 98,000 customers to long-term contracts in the second quarter, compared with the 74,000 average estimate of seven analysts surveyed by Bloomberg.

US

By Lu Wang and Katie Brennan

July 24 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its first-two day drop in a month, as investors weighed global manufacturing data and earnings reports from Caterpillar Inc. and Apple Inc. Caterpillar slipped 2.4 percent after cutting its forecast.

Broadcom Corp. sank 15 percent after predicting revenue that trailed estimates. Utility shares and homebuilders tumbled amid rising interest rates. Apple advanced 5.1 percent after profit and sales topped forecasts. Ford Motor Co. rose to a 36-month high after raising its full-year earnings target. Facebook Inc. surged 19 percent after the markets closed as the company reported earnings that beat estimates.

The S&P 500 slid 0.4 percent to 1,685.94 at 4 p.m. in New York, after earlier climbing within 3 points of 1,700 for a third straight day. The Dow Jones Industrial Average lost 25.50 points, or 0.2 percent, to 15,542.24, retreating from a record close yesterday.York, extending a record. About 6.3 billion shares traded hands on U.S. exchanges today, in line with the thee-month average.

“The earnings are validating and supporting the market as opposed to pushing the market higher,” Mark Freeman, who oversees about $15.8 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said by telephone. “It just speaks to how far we have come and the amount of positive expectations that have already been cleared by the market.”

The S&P 500 declined yesterday as investors weighed earnings amid speculation on when the Federal Reserve may scale back its asset purchases. Support from central banks and better- than-estimated corporate earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low.

The rally has pushed valuations close to the highest level since May 2010, with the S&P 500 trading at 16.3 times reported earnings, data compiled by Bloomberg show.

When the benchmark index rose to a record close on July 22, the gauge had gained for 12 of the previous 13 trading days, a stretch that hasn’t happened since September 1995, data compiled by Bloomberg show. The 14-day relative-strength index for 83 S&P 500 stocks exceeded 70 that day, the most since May 21, Bloomberg data show. RSI measures the degree to which gains and losses outpace each other and some analysts who watch charts to predict market moves consider a reading over 70 as indicating the stock has risen too far too fast.

“The market has had a big run and we are a bit overbought here,” Bruce Bittles, chief investment strategist at RW Baird & Co., said in a telephone interview from Sarasota, Florida. His firm oversees $100 billion. “There is a lot of optimism coming into the market short-term, so I wouldn’t be surprised if we rested in here for a while.”

The Fed has said economic data will determine the timing and pace of any reduction in its $85 billion in monthly asset purchases. A report today showed sales of new U.S. homes rose more than forecast in June to the highest level in five years.

Separate data from London-based Markit Economics showed manufacturing indexes based on surveys of purchasing managers rose in the U.S. and Germany this month, while China’s manufacturing contracted more than economists estimated.

Investors have turned to corporate earnings, with some 48 members of the S&P 500 reporting today, for additional clues about the health of the U.S. economy. Of the 169 companies in the benchmark gauge that have posted quarterly results so far, 72 percent have exceeded analysts’ profit estimates and 56 percent have topped sales projections, data compiled by Bloomberg show.

Facebook, which is not a member of the S&P 500, jumped 19 percent to $31.66 at 4:25 p.m. in New York. The operator of the world’s most popular social-networking service reported sales and profit that exceeded estimates as the company attracted more marketers to its mobile-advertising services.

The Chicago Board Options Exchange Volatility Index, or VIX, rose 4.2 percent today to 13.19. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high in June and has since fallen 36 percent.

All 10 S&P 500 main industries fell except for technology companies, which added 1 percent. Utility and commodity shares fell the most, sinking at least 1 percent.

Caterpillar dropped 2.4 percent to $83.44 for the steepest loss in the Dow. The world’s largest maker of mining and construction machinery posted earnings that trailed analysts’ estimates for a third straight quarter and cut its forecast as mining-equipment sales declined on slower commodity demand.

The commodities supercycle, or longer-than-average period of rising prices, is coming to an end and Caterpillar “is tied to the wrong products at the wrong time in the cycle,” short seller Jim Chanos said July 17. Caterpillar’s resource- industries unit is the company’s largest segment by revenue.

Rising Treasury yields, fueled by speculation the Fed will taper bond-buying, accelerated declines among shares of companies that have the highest dividend yields. Utility stocks plunged 1.6 percent today and telephone shares slid 0.6 percent.

The two industries yield the most in the S&P 500.

AT&T Inc. dropped 1.1 percent to $35.40. The largest U.S. phone company posted profit that fell just below analysts’ estimates as costs rose for smartphone discounts used to persuade more customers to sign long-term contracts.

The S&P Supercomposite Homebuilding Index slipped 4.2 percent, with all 11 members declining amid concern rising interest rates may hurt a housing recovery. Lennar Corp. declined 3.8 percent to $33.92. Toll Brothers Inc. retreated 6.2 percent to $32.31.

Broadcom tumbled 15 percent to $27.01 for the biggest drop in the S&P 500. The maker of chips that connect mobile devices to the Internet late yesterday issued a revenue forecast that trailed analysts’ estimates amid slowing smartphone sales.

Motorola Solutions Inc. dropped 6.6 percent to $56.04. The bar-code and two-way radio manufacturer lowered its 2013 sales forecast for the second time since April, citing weak orders.

Walter Energy Inc. plunged 18 percent to $11.53. The metallurgical-coal producer cut its quarterly dividend to 1 cent from 12.5 cents as a condition for amending a $2.73 billion credit pact.

Apple rose 5.1 percent to $440.51, the biggest gain since November. The world’s most valuable technology company, which hasn’t refreshed its iPhone and iPad since last year, managed to top analysts’ earnings projections, even as profit declined from a year earlier and sales were largely flat. The company is slated to release updated versions later this year of its iPhone and iPad, Apple’s top-selling devices. The stock tumbled 40 percent from a record $702.10 on Sept. 19 through yesterday.

“Apple is certainly not a forgotten name, but clearly not looked at with the same intensity as it was when it’s trading at $600, $700,” Rick Bensignor, head of trading strategy at Wells Fargo Securities in New York, said in a phone interview.

“People are just going to look at it to get a sense of some psychology – has it found a bottom?”

Ford gained 2.5 percent to $17.37, the highest since January 2011. The second-largest U.S. automaker raised its forecast after second-quarter earnings climbed more than estimates as the Focus compact and Fusion sedan led a stable of competitive cars.

Eli Lilly & Co. jumped 3.1 percent to $52.55. The maker of the antidepressant Cymbalta and diabetes treatment Humalog reported profit that beat analysts’ estimates and raised its full-year forecast after sales grew faster than expected and cost-cutting programs took effect.

EMC Corp. added 5.6 percent to $26.75. The world’s biggest maker of storage computers posted earnings and sales that matched analysts’ projections. The company said it will buy back $3.5 billion shares in 2013 and the first half of next year.

Electronic Arts Inc., the second-largest U.S. video-game maker, rallied 6.7 percent to $25.41 for the biggest advance in the S&P 500. Growth in sales of Web-delivered titles led to a smaller-than-projected first-quarter loss.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

This craving for position, for prestige, for power, to be recognized by society

as being outstanding in some way, is a wish to dominate others, and this wish to dominate

is a form of aggression.  And what is the reason for this aggressiveness?  It is fear isn’t it?

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Courage is the price that life exacts for granting

peace.

-Amelia Earhart, 1897-1939

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:

110 years ago, on July 23^rd, 1903, Henry Ford and his Ford Motor Company, sold the very first Model A car to a dentist in Chicago.

Whether you think you can or think you can’t, you are right. –Henry Ford.

-from, The Garden, Summer:

Water is living; water springs from earth,

Whether from mountains poured in melting stream

Or risen in the stones, a bubbling birth

Struck by some Moses from a somber dream,

Some Pisgah vision, some divining-rod

That finds in rock the hidden hint of God.

Water is living; water tells its tale,

It’s legendary music; coots and swans

Swim to the summons in their various plume,

Olive as water glossy in the gloom,

Blue-white as sumptuous as mountain snows

Sun-smitten where the sources first arose,

-The high land paramount, the land paravail, –

And circle at that bidding, dark or pale,

Around the pool, explore the little creek,

And delicately drink with dipping beak

The silver water from the urn of bronze.

-V. Sackville-West

Photos of the Day –July 23rd, 2013

Kate, the Duchess of Cambridge, carries her new born son, the Prince of Cambridge, who was born on Monday, into public view for the first time, outside the Lindo Wing of St. Mary’s Hospital, in London, Tuesday, July 23, 2013. The boy will be third in line to the British throne. John Stillwell/AP

Michael and Carole Middleton leave the Lindo Wing of St Mary’s Hospital the day after their daughter, Britain’s Catherine, Duchess of Cambridge, gave birth to a baby boy, in London. Suzanne Plunkett/Reuters

Market Closes for July 23^rd, 2013

Market  Index	Close	Change
Dow  Jones	15567.74	+22.19    +0.14%
S&P 500	1692.43	-3.10    -0.18%
NASDAQ	3579.274	-21.115    -0.59%
TSX	12740.04	-18.34
		-0.14%

International Markets

Market  Index	Close	Change
NIKKEI	14778.51	+120.47
		+0.82%
HANG  SENG	21915.42	+498.92
		+2.33%
SENSEX	20302.13	+143.01
		+0.71%
FTSE 100	6597.44	-25.73
		-0.39%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.403	2.356
CND.   30 Year Bond	2.920	2.877
U.S.   10 Year Bond	2.5021	2.4804
U.S.   30 Year Bond	3.5726	3.5501

Currencies

BOC Close	Today	Previous
Canadian $	0.97180	0.96718
US   $	1.02902	1.03394
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36062	0.73496
US  $	1.32225	0.75629

Commodities

Gold	Close	Previous
London Gold   Fix	1343.10	1335.35
Oil	Close	Previous
WTI Crude Future	107.18	106.91
BRENT	109.359	109.36

Market Commentary:

Canada

By Eric Lam

July 23 (Bloomberg) — Canadian stocks fell after climbing to a four-month high yesterday, as a decline among industrials and financial stocks overshadowed gains for copper producers.

Canadian National Railway Co. lost 3.2 percent after the company discussed possible weakness in shipping in the second half of the year. Aimia Inc., a credit card loyalty program manager, jumped 3.8 percent after agreeing to buy a technology provider to U.S. retailers. Teck Resources Ltd. and First Quantum Minerals Ltd. gained at least 1.6 percent.

The Standard & Poor’s/TSX Composite Index lost 13 points, or 0.1 percent, to 12,745.38 at 4 p.m. in Toronto. The drop snapped a four-day rally and left the gauge up 2.5 percent for the year. Trading volume was in line with the 30-day average at this time of day.

“For Canada, today is a bit of a pause” after four days of gains, said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4 billion ($3.89 billion). “There’s a natural inclination to look for laggards when we’re at highs and the whole Canadian market has lagged this year.”

Six of 10 industries in the S&P/TSX retreated. Financial stocks dropped 0.4 percent as a group. National Bank of Canada slid 1.4 percent to C$77.96, snapping a streak of eight straight advances. Bank of Nova Scotia dropped 1 percent to C$58.35.

Industrial shares slid the most, declining 1.5 percent.

Canadian National slumped 3.2 percent to C$101.69. Luc Jobin, the company’s chief financial officer, said on a conference call with analysts yesterday the railroad may face a “challenging” second half due to weakness in shipping bulk products such as grain. Canadian Pacific Railway Ltd. fell 1.8 percent to $130.18.

Canada’s Transport Department also said today it is setting new emergency requirements for railway companies, including having at least two employees operating shipments of dangerous goods and stronger policies about setting brakes, after a deadly train derailment and explosion in Quebec on July 6 killed about 50 and destroyed much of downtown Lac-Megantic.

Health-care stocks declined 0.7 percent, led by a 0.8 percent drop at Valeant Pharmaceuticals International Inc. The drugmaker was sued by a pension fund over allegations its Medicis unit conspired to preserve a monopoly on its acne drug Solodyn.

AlarmForce Industries Inc., a home security system provider, rose 2 percent to C$10, erasing earlier losses, after firing President and Chief Executive Officer Joel Matlin. The company said Matlin will continue as a director. Anthony Pizzonia, the chief financial officer, will serve as the interim CEO while AlarmForce searches for a replacement.

Aimia, which manages customer loyalty programs including the Aeroplan credit-card service, jumped 3.8 percent to C$15.68.

The company agreed to buy Smart Button, a technology provider for national retailers in the U.S., for about $18 million.

Telus Corp. advanced 0.6 percent to C$30.83 after the wireless carrier increased the number of shares it may purchase in a buyback to 31.9 million common shares from 15 million shares, or about 4.9 percent of outstanding stock as of May 17.

Copper miners Teck Resources gained 1.6 percent to C$24.35 and First Quantum Minerals rallied 6.6 percent to C$17.37 as the metal’s price rose for a fourth day ahead of a preliminary report on manufacturing in China tomorrow.

Chinese Premier Li Keqiang said the slowest economic growth policy makers will tolerate is 7 percent, Beijing News reported today. China, Canada’s second-largest trading partner, is the world’s largest consumer of raw materials. Its economy is forecast to grow 7.6 percent in 2013 and 2014, according to the median estimate from a Bloomberg survey of economists.

US

By Lu Wang

July 23 (Bloomberg) — The Standard & Poor’s 500 Index fell, halting a streak of four straight gains, as investors weighed corporate earnings amid speculation on when the Federal Reserve may scale back its asset purchases.

Travelers Cos. sank 3.8 percent after posting the biggest quarterly decline since 2008 in a key measure of the company’s value as higher interest rates pressured its bond portfolio.

Netflix Inc. dropped 4.5 percent amid slower-than-expected subscriber gains. Apple Inc. lost 1.7 percent before the company reports results after the close of regular trading. Texas Instruments Inc. climbed 4 percent after forecasting sales and profit that may exceed estimates.

The S&P 500 dropped 0.2 percent to 1,692.39 at 4 p.m. in New York. The Dow Jones Industrial Average gained 22.19 points, or 0.1 percent, to a record 15,567.74.

“What you’re seeing is revenues are coming in pretty lackluster and profits seem to be doing a little better than gains in sales,” Hank Herrmann, Overland Park, Kansas-based chief executive officer of Waddell & Reed Investment Management Co., said by phone. His firm manages $104 billion. “The market had a period of digesting the confusion over Fed tapering. For the moment, it’s focused on individual company fundamentals.”

The S&P 500 extended a record yesterday, adding to a rally from last week after Fed Chairman Ben S. Bernanke said the central bank remains flexible about the duration of its asset- purchase program. Fed stimulus has helped fuel a surge in stocks worldwide, with the S&P 500 jumping as much as 151 percent from its March 2009 low.

The benchmark equity gauge erased earlier gains of as much as 0.2 percent today after the Richmond Fed’s gauge of manufacturing in the mid-Atlantic region unexpectedly fell in July. The factory index slid to minus 11. Readings greater than zero signal expansion in the area that includes the Carolinas, the District of Columbia, Maryland, Virginia and West Virginia.

The median projection in a Bloomberg survey of economists called for a reading of 9.

Investors have been weighing data to determine the timing and pace of any stimulus reduction by the Fed. Half of the economists in a July 18-22 Bloomberg survey expect the central bank to trim at its September meeting the pace of its monthly bond buying to $65 billion from the current $85 billion. That’s up from 44 percent in last month’s poll.

The S&P 500 fell as much as 5.8 percent after Bernanke said on May 21 the Fed could reduce its bond purchases as early as in September. The gauge rallied 7.8 percent from June 24 through yesterday.

“The big step the market has made is that the market now accepts that it needs to be prepared for the Fed beginning to taper sometime in the next four to five months,” Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, said by phone. The firm manages $4.2 billion. “People have accepted a low growth scenario for the U.S., but they also see it a low risk market. The U.S. market is guardedly healthy.”

In Asia, Chinese Premier Li Keqiang said the slowest economic growth policy makers will tolerate is 7 percent, Beijing News reported. China, the world’s second-largest economy, is the biggest consumer of energy and raw materials.

Investors have increasingly turned their attention to earnings, with 35 S&P 500-listed companies releasing results today. Of the 130 companies on the gauge to have already reported, 71 percent have beat analysts’ profit estimates while about 52 percent have surpassed revenue expectations, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, added 2.8 percent today to 12.63, halting a streak of four straight declines. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, is down 30 percent this year.

Six of 10 S&P 500 main industries fell, with technology and health-care shares retreating at least 0.3 percent to lead losses.

Travelers dropped 3.8 percent to $82.21 for the biggest retreat in the Dow. Book value, a measure of assets minus liabilities, slipped to $66.65 per share from $68 three months earlier, the second-largest U.S. commercial insurer said today in a regulatory filing as it announced second-quarter results.

The decline was driven by a $1.77 billion drop in net unrealized gains in its $62.8 billion portfolio of fixed-maturity securities.

Netflix slumped 4.5 percent to $250.26 after saying it added 630,000 new U.S. customers for its Internet TV service in the second quarter, fewer than the average analyst projection of 700,000. The company forecast earnings of 30 cents to 56 cents a share in the third quarter, while the average analyst estimate called for 43 cents. Netflix shares have surged 183 percent this year through yesterday.

Waters Corp. slipped 5.9 percent to $99.17. The maker of laboratory products and instruments cut its full-year earnings forecast to a range of $5 to $5.10 a share. Analysts had estimated $5.21, according to the average estimate.

Broadcom Corp. fell 4.3 percent to $31.83. The maker of chips that help mobile devices connect to the Internet may be losing its market share, Michael McConnell, an analyst with Pacific Crest Securities LLC., said in a note. He cut the stock’s rating to sector perform, an equivalent of neutral, from outperform. The company is due to report results after the market close today.

Tobacco companies fell. The industry may face limits on selling menthol cigarettes in the U.S. after regulators determined the minty flavoring may encourage people to start smoking. Lorillard Inc. dropped 4.5 percent to $44.08. Altria Group Inc. retreated 2.4 percent to $36.

Texas Instruments climbed 4 percent to $38.93 after forecasting third-quarter sales of $3.09 billion to $3.35 billion. Analysts on average had forecast $3.2 billion. The world’s largest analog-chip maker predicted earnings will reach 49 cents to 57 cents a share, according to a statement. Analysts had projected 51 cents.

United Technologies Corp. gained 3 percent to $105.12 for the biggest gain in the Dow. The company boosted the lower end of its 2013 profit forecast after rising demand for jet engines and aerospace components helped second-quarter earnings exceed analysts’ estimates.

Lockheed Martin Corp. added 2 percent to $117.92. The world’s largest defense contractor raised its full-year profit forecast as it reported second-quarter earnings that beat analysts’ estimates. Profit rose at the Lockheed divisions that make missiles and provide training and logistics services, while it fell at the aeronautics unit.

Peabody Energy Corp. added 5 percent to $17.14 for the biggest gain in the S&P 500. The largest U.S. coal producer reported a surprise profit and forecast lower mining costs.

Wendy’s Co. jumped 8.2 percent to $7.23, a five-year high.

The fast-food chain reported earnings that beat estimates and boosted its dividend. The company said it will sell 425 restaurants to franchisees while reducing company ownership to around 15 percent from 22 percent.

Sourcefire Inc. rallied 28 percent to $75.49. Cisco Systems Inc., the biggest maker of networking equipment, agreed to acquire the cybersecurity company for about $2.7 billion. Cisco slid 0.6 percent to $25.56.

CapitalSource Inc. surged 22 percent to $11.97, the most since October 2008. PacWest Bancorp. said it agreed to buy the lender in a deal that will create California’s eighth-biggest commercial bank. CapitalSource investors will get about $11.64 a share in PacWest stock and cash, according to a joint statement.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Freedom is a state of mind – not freedom from something.

Krishnamurti, 1895-1986

As ever,

 

 

Carolann

 

I believe in pink.

I believe that laughing is the  best calorie burner.

I believe in kissing, kissing a lot.

I believe that happy girls are the prettiest girls.

I believe that tomorrow is another day and I believe in miracles.

-Audrey Hepburn, 1929-1993

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:

There’s a Super Full  Moon tonight – don’t forget to look!

July 22nd is Pied Piper of Hamelin Day.  The story is that the town of Hamelin (Hameln), in Westphalia, was infested with rats in 1284, and that mysterious piper in  a parti-coloured suit appeared in the town and offered to rid it of vermin for a certain sum, an offer accepted by the townspeople.  The Pied Piper fulfilled his contract but payment was not forthcoming.  On the following St. John’s Day, he reappeared and again played his pipe.  This time all the children followed him and disappeared into a cave (or went to Transylvania to set up a new German colony, depending on the version).  The story became popular in Britain from Robert Browning’s poem of 1842 of the same name.

Indeed, there are man

The earliest mention of the story seems to have been on a stained glass window placed in the Church of Hamelin c. 1300. The window was described in several accounts between the 14th and 17th centuries.  It was destroyed in 1660. Based on the surviving descriptions, a modern reconstruction of the window has been created by historian Hans Dobbertin. It features the colorful figure of the Pied Piper and several figures of children dressed in white.

This window is generally considered to have been created in memory of a tragic historical event for the town. Also, Hamelin town records start with this event. The earliest written record is from the town chronicles in an entry from 1384 which states: “It is 100 years since our children left.” Although research has been conducted for centuries, no explanation for the historical event is agreed upon. In any case, the rats were first added to the story in a version from c. 1559 and are absent from earlier accounts.

Photos of the Day –July 22nd, 2013

Tony Appleton, a town crier, announces the birth of the royal baby, outside St. Mary’s Hospital exclusive Lindo Wing in London. Palace officials say Prince William’s wife Kate has given birth to a baby boy. The baby was born at 4:24 p.m. and weighs 8 pounds 6 ounces. The infant will become third in line for the British throne after Princes Charles and William. Lefteris Pitarakis/AP

A youth cools off in a fine mist of water as she enjoys the sun at ‘Paris Plage’ (Paris Beach), along the banks of the River Seine in Paris. The beach atmosphere in the heart of the French capital includes stretches of imported sand and various free sporting activities for the public. Christian Hartmann/Reuters

Market Closes for July 22^nd, 2013

Market  Index	Close	Change
Dow  Jones	15545.55	+1.81    +0.01%
S&P 500	1695.53	+3.44    +0.20%
NASDAQ	3600.389	+12.774    +0.36%
TSX	12758.38	+73.25
		+0.58%

International Markets

Market  Index	Close	Change
NIKKEI	14658.04	+68.13
		+0.47%
HANG  SENG	21416.50	+54.08
		+0.25%
SENSEX	20159.12	+9.27
		+0.05%
FTSE 100	6623.17	-7.50
		-0.11%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.356	2.357
CND.   30 Year Bond	2.877	2.885
U.S.   10 Year Bond	2.4804	2.4783
U.S.   30 Year Bond	3.5501	3.5585

Currencies

BOC Close	Today	Previous
Canadian $	0.96718	0.96444
US   $	1.03394	1.03687
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36314	0.73360
US  $	1.31840	0.75850

Commodities

Gold	Close	Previous
London Gold   Fix	1335.35	1295.23
Oil	Close	Previous
WTI Crude Future	106.91	108.13
BRENT	109.36	109.36

Market Commentary:

Canada

By Katie Brennan

July 22 (Bloomberg) — Canadian stocks rose to the highest in four months, as raw-material producers climbed after gold surged the most in a year and industrial metals rallied.

Metals miners accounted for all 10 of the biggest gains in the Standard & Poor’s/TSX Composite Index. Eldorado Gold Corp. surged 9.6 percent as analysts at JPMorgan Chase & Co. recommended buying the shares. Barrick Gold Corp., the world’s largest producer of the precious metal, added 6.2 percent.

Financial stocks gained for a fourth day, with Royal Bank of Canada advancing 0.9 percent to stretch its winning streak to eight days.

The S&P/TSX rose 73.25 points, or 0.6 percent, to 12,758.38 at 4 p.m. in Toronto. The benchmark gauge has rallied 1.9 percent during a four-day winning streak to the highest since March 20. Trading volume was 9.3 percent below the 30-day average.

“These big jumps in financials and positive moves in the commodities may be enough to get people on the sidelines wanting to get back in,” Barry Schwartz, fund manager with Baskin Financial Services Inc. in Toronto, said in a phone interview.

He helps manage about C$500 million ($484 million).  “This may be the beginning of the bear in the Canadian market going back into his cave to hibernate.”

The S&P/TSX has advanced 7.8 percent since June 24, rebounding from a 7.2 percent rout that started May 22. The gauge is up 2.6 percent for the year.

Eight of the ten industries in the S&P/TSX advanced, led by a 3.8 percent surge among producers of raw materials. The S&P/TSX Materials Index is down 26 percent this year, even after a 13 percent surge in the past month, Gold advanced 3.3 percent today, the biggest gain since June 2012, to settle at $1,337.30 an ounce as speculation the Federal Reserve will maintain stimulus spurred demand for the metal. Silver rallied 5.4 percent, the most since April 25.

Copper rose for a third day. Aluminum, lead, nickel, tin and zinc also gained.

Eldorado Gold jumped 9.6 percent to C$8.11, the highest in seven weeks, after JPMorgan analyst John Bridges rated the stock “overweight” in new coverage. Barrick Gold climbed 6.2 percent to C$17.56.

Banks, brokerages and insurers in the S&P/TSX climbed 0.4 percent as a group, extending a gain of 2.7 percent gain from last week.

Royal Bank of Canada, the nation’s largest lender by assets, gained 0.9 percent to a record C$65.56. The stock has advanced 12 of the past 13 sessions for a 8.4 percent jump.

Telephone stocks declined the most in the index, falling 2.4 percent. Telus Corp. lost 3.1 percent to C$30.65 and Rogers Communications Inc. dropped 2.2 percent to C$41.15.

US

By Lu Wang and Katie Brennan

July 22 (Bloomberg) — U.S. stocks rose, as monthly flows into equity exchange-traded funds reached a five-year high, after housing data and earnings from companies including McDonald’s Corp. fueled speculation stimulus would continue.

Financial companies climbed the most among 10 industries in the Standard & Poor’s 500 Index as Bank of America Corp. added 1.2 percent. Newmont Mining Corp. jumped 5.8 percent, leading gains among gold producers, as the metal’s price surged the most in a year. McDonald’s slid 2.7 percent after revenue missed forecasts. Yahoo Inc. dropped 4.3 percent after saying activist investor Daniel Loeb is leaving the board. Homebuilders fell, with D.R. Horton Inc. losing 2.2 percent, as sales of previously owned houses unexpectedly dropped in June.

The S&P 500 rose 0.2 percent to 1,695.53 at 4 p.m. in New York, extending a record. The Dow Jones Industrial Average added 1.81 points, or less than 0.1 percent, to 15,545.55. About 5.2 billion shares traded hands on U.S. exchanges today, 19 percent below the three-month average.

“The earnings reflect a growing economy, but not a robust economy, not a runaway economy,” John Carey, a fund manager at Boston-based Pioneer Investment Management Inc., said by telephone. His firm oversees $211.5 billion. “There was concern that the economy may be doing a little better than the Fed was estimating and that might lead to an earlier tapering. Now with fairly modest economic growth and slow earnings growth, I don’t think people are going to be as worried about the tapering.”

The S&P 500 rallied 0.7 percent last week to a record, after better-than-forecast earnings and Federal Reserve Chairman Ben S. Bernanke said the central bank remains flexible about the duration of its asset-purchase program. Fed stimulus has helped fuel a surge in stocks worldwide, with the S&P 500 jumping 151 percent from its March 2009 low.

Investors have increasingly turned to stocks this month, as U.S. equity exchange-traded funds are getting money at the fastest rate since September 2008. After adding $10.2 billion to ETFs last week, the July total stands at $29.7 billion, according to data compiled by Bloomberg. Mutual funds that invest in U.S. equities had $4.55 billion of inflows during the week through July 10, ending seven consecutive weeks of withdrawals.

Individuals have 69 percent of their assets in mutual funds, almost a percentage point more than the average since 1992 and four points more than in 2012, Goldman Sachs Group Inc. said in a note to clients. Investors are demonstrating the “strongest risk appetite in five years,” according to the note dated July 19.

“What we’ve seen since June is market participants reengage pretty actively,” Arvin Soh, a New York-based portfolio manager with GAM, said by phone. His firm has more than $48 billion under management. “We’re off to a good start in the earnings season. Confidence is pretty high. Certainly, if you were say to say ‘do we know of many people that are bearish right now?’ Absolutely not.”

Data today showed purchases of previously owned houses fell 1.2 percent to a 5.08 million annualized rate last month, according to the National Association of Realtors. The median forecast of 79 economists surveyed by Bloomberg called for a 5.26 million pace. The pace of the demand was the second strongest since November 2009 following May’s downwardly revised 5.14 million rate.

In Asia, Japanese election results from the weekend strengthen Prime Minister Shinzo Abe’s ability to carry out his policy of monetary easing, fiscal stimulus and deregulation.

The broadest rally in U.S. stocks since at least 1990 has lifted shares of everything from the smallest companies to the biggest banks, signaling the bull market for America’s largest corporations will last at least until the end of the year, if history is a guide.

The S&P 500’s advance to a record last week coincided with highs in the Russell 2000 Index of smaller companies, the Dow Jones Transportation Index, the S&P 500 Financials Index and a gauge of economically sensitive equities overseen by Morgan Stanley. Since 1990, the S&P 500 has gained for six months on average after those measures peaked, according to data compiled by Bloomberg.

While bears say the breadth shows indiscriminate buying just as profit growth slows and the Fed prepares to curtail stimulus, gains across stock measures have proved an accurate forecaster of performance. In four market tops during the last 23 years, small-cap stocks and the cyclical gauge never peaked after the S&P 500.

About 84 percent of stocks in the index traded above their average prices from the past 50 days as of the end of last week, according to data compiled by Bloomberg. While that’s below a 19-month high of 93 percent reached in May, it’s up from its 2013 bottom of 12.8 percent in June. There were 84 stocks in the index that closed at a 52-week high yesterday and only one at a 52-week low.

More than 150 S&P 500 companies, including Apple Inc., Amazon.com Inc. and Facebook Inc., report their earnings this week. Of the 108 companies on the gauge to have already reported quarterly results, 71 percent have exceeded analysts’ profit estimates and 52 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, lost 2 percent today to 12.29 for a fourth straight decline. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, hit a six-month high in June and has since fallen 40 percent.

Five of 10 S&P 500 main industries gained as financial and health-care shares rose more than 0.4 percent.

The KBW Bank Index advanced 1 percent to the highest level since October 2008. Bank of America increased 1.2 percent to $14.92. Financial companies have exceeded expectations so far in the earnings season more than any of other S&P 500 industry, with reported total profits 8.7 percent higher than forecast, data compiled by Bloomberg show.

Newmont, the biggest U.S. gold producer, climbed 5.8 percent to $30.35. Barrick Gold Corp., the world’s largest gold miner, jumped 6.2 percent to $17.56. Bullion futures rose above $1,300 an ounce in New York for the biggest gain in more than a year as speculation the Fed will maintain stimulus spurred demand for the metal.

Hasbro Inc. added 3.3 percent to $46.87 as higher sales in its games unit offset quarterly results that trailed estimates.

The world’s second-largest toymaker said sales of games such as “Monopoly” and “Magic: The Gathering” rose 19 percent to $255.4 million in the second quarter.

Federal-Mogul Corp. surged 31 percent, the most since October 2008, to $13.95. The auto-parts maker controlled by investor Carl Icahn returned to a profit in the second quarter.

McDonald’s fell 2.7 percent, the most in the Dow, to $97.58. The world’s largest restaurant chain posted second- quarter revenue that trailed analysts’ estimates and said economic weakness would hurt sales for the remainder of 2013.

Yahoo tumbled 4.3 percent to $27.86. The company will buy back $1.16 billion of shares held by Third Point LLC, leaving the fund with about 20 million shares, or less than a 2 percent stake. Loeb, who runs the fund, is leaving the board along with two other directors, Harry Wilson and Michael Wolf, added last year to end a proxy fight.

The S&P Supercomposite Homebuilding Index slumped 1.8 percent as all 11 members retreated. D.R. Horton declined 2.2 percent to $21.58. Lennar Corp. fell 2.1 percent to $34.80.

PulteGroup Inc. slid 1.1 percent to $19.14.

Gannett Co. dropped 1.9 percent to $25.87. The publisher of USA Today said second-quarter sales slipped less than 1 percent after print ads continued to slump even as licensing for its TV stations gained 62 percent from a year earlier.

DreamWorks Animation SKG Inc. fell 4.5 percent to $23.77.

The company may incur a writedown of as much as $50 million on the new movie “Turbo” because of a disappointing opening at the box office, James Marsh, a Piper Jaffray analyst in New York, wrote in a note to clients.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

When a man has an idea of what he must be and how he must act,

and undermines this by not ceasing to act in the opposite way,

he must realize that his principles, his beliefs, his ideals,

will inevitably fall prey to hypocrisy and dishonesty.

It is the ideal that begets the opposite of itself.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Science does not know its debt to imagination.

-Ralph Waldo Emerson, 1803-1882

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:

“Summer is a  time when we often seek out books that will charm or entertain us – something sunny to be savored from a  hammock or a beach chair.  But summer reading can touch us more deeply, changing us in ways that linger long after vacation season is over….The love of a book, like any great romance, depends on a peculiar chemistry between souls that’s hard to quantify and even harder to predict.  That’s the essential mystery of reading, that we never quite know when the magic will strike…” –Danny Heitman.

A friend of mine recently gave me a book to read which is an amazing story.  She brought it to me and said, “You have to read this.”   She is very erudite, and I truly respect her opinion on all things, so I started reading it right away.  It is entitled The Garden of Evening Mists by Tan Twan Eng.  It is definitely a page turner.  It was short-listed for The Man Booker Prize in 2012. I highly recommend it.  It will open your eyes/mind to a whole different world.  Happy reading from that hammock or beach chair!

Photo of the Day –July 19th, 2013

Saratoga Race Course pony boy Jesse Costa rides Vegas early morning in Saratoga Springs, N.Y. The 150th horse racing meet at Saratoga opens on Friday, July 19th. Mike Groll/AP

A true friend never gets in your way unless you happen to be going down. –Arnold H. Glasgow, 1905-1998.

Market Closes for July 19^th, 2013

Market  Index	Close	Change
Dow  Jones	15543.36	-5.18    -0.03%
S&P 500	1691.02	+1.65    +0.10%
NASDAQ	3587.615	-23.662    -0.66%
TSX	12684.78	+55.93
		+0.44%

International Markets

Market  Index	Close	Change
NIKKEI	14589.91	-218.59
		-1.48%
HANG  SENG	21362.42	+17.20
		+0.08%
SENSEX	20149.85	+21.44
		+0.11%
FTSE 100	6630.67	-3.69
		-0.06%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.357	2.398
CND.   30 Year Bond	2.885	2.920
U.S.   10 Year Bond	2.4783	2.5302
U.S.   30 Year Bond	3.5585	3.6300

Currencies

BOC Close	Today	Previous
Canadian $	0.96444	0.96373
US   $	1.03687	1.03764
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36253	0.73393
US  $	1.31408	0.76099

Commodities

Gold	Close	Previous
London Gold   Fix	1295.23	1284.37
Oil	Close	Previous
WTI Crude Future	108.13	108.04
BRENT	109.36	110.02

Market Commentary:

Canada

By Katie Brennan

July 19 (Bloomberg) — Canadian stocks rose, capping a fourth straight week of gains for the benchmark index, as an increase in metals prices boosted materials producers and China planned to remove the floor on lending rates.

Centerra Gold Inc. added 4.2 percent as the metal’s price climbed for a second week. Athabasca Oil Corp. jumped 6.7 percent as oil rose to a 16-month high. BlackBerry Ltd. fell 1.3 percent, reversing an earlier rally of as much as 2.2 percent.

The Standard & Poor’s/TSX Composite Index rose 56.28 points, or 0.5 percent, to 12,685.13 at 4 p.m. in Toronto. The benchmark gauge rallied 1.8 percent for the week. Trading volume was 8.4 percent below the 30-day average at this time of day.

“Materials, energy and financials are really the main areas,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. He helps manage about $1 billion ($953 million). “There’s a large commodity factor in the Toronto market. Gold and energy or oil stocks are up and it is nice to see them following the commodities. Financials have had a nice run and are pausing a bit today but are still up.”

A government report showed inflation in June quickening for a second month in June as the prices of gasoline and automobiles rebounded. The consumer price index rose 1.2 percent from a year ago following a 0.7 percent gain in May, matching the Bloomberg economist surveys forecast, Statistics Canada said today from Ottawa.

Bank of Canada Governor Stephen Poloz said this week that inflation will remain below his 2 percent target until mid-2015 and stay “subdued” over the next few months.

The People’s Bank of China said it will remove the floor on lending rates offered by financial institutions starting tomorrow. The announcement builds on pledges by Premier Li Keqiang to expand an overhaul of interest rates, a development the World Bank says must be a priority in reform of the financial system.

Four of 10 groups in the S&P/TSX advanced, led by a 2 percent gain among producers of raw materials.

Centerra Gold added 4.2 percent to C$4.27 and Detour Gold Corp. increased 6.7 percent to C$10. The price of the metal rose 0.7 percent to $1,294 an ounce in New York. Silver and copper also advanced.

Athabasca Oil jumped 6.7 percent to C$7 and Penn West Petroleum Ltd. gained 6.3 percent to C$12.91. Oil was up 1 cent to $108.05 a barrel after climbing as much as 1.2 percent.

Financial shares rose 0.2 percent for the fourth gain in five sessions. The S&P/TSX Commercial Banks Index rose for the seventh straight day to trade near a record high.

BlackBerry dropped 1.3 percent to C$9.30. The stock was up as much as 2.2 percent after BMO Capital Markets analyst Timothy Long upgraded his rating from underperform to market perform, an equivalent of hold. Long said the stock had less downside after plunging 38 percent since June 27, the day before the company reported disappointing sales.

US

By Alex Barinka and Nikolaj Gammeltoft

July 19 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index a fourth straight week of gains, as better-than-forecast results from General Electric Co. offset disappointing earnings from Google Inc. and Microsoft Corp.

GE surged 4.6 percent to the highest in almost five years, pacing gains among industrial shares. Pfizer Inc. advanced 2.1 percent to boost health-care stocks. Technology shares sank 2 percent. Microsoft, the world’s largest software maker, plunged 11 percent and Google, owner of the most popular Internet search engine, lost 1.6 percent. Advanced Micro Devices Inc. retreated 13 percent after saying its gross margin would narrow in the current quarter.

The S&P 500 rose 0.2 percent to a record 1,692.09 at 4 p.m. in New York, erasing an earlier decline of as much as 0.3 percent. The Dow Jones Industrial Average lost 4.8 points, or less than 0.1 percent, to 15,543.74. The Nasdaq 100 Index slid 1.1 percent to 3,044.93, the biggest drop in a month. About 5.9 billion shares traded hands on U.S. exchanges today, or 7.3 percent below the three-month average.

“Earnings have held up reasonably well,” said Henk Potts, who helps oversee $282 billion as an equity strategist at Barclays Plc’s wealth unit in London. “We’ve seen some winners and some losers coming through. There has been disappointment around technology, but we don’t necessarily think that is going to be a long-term trend.”

U.S. stocks rallied yesterday, sending the S&P 500 and the Dow average to records, as earnings from Morgan Stanley and UnitedHealth Group Inc. beat estimates and jobless-benefit claims declined to a two-month low. The S&P 500 climbed 0.7 percent in the past five days and is up 19 percent this year.

About 84 percent of stocks in the index traded above their average prices from the past 50 days as of yesterday, according to data compiled by Bloomberg. While that’s below a 19-month high of 93 percent reached in May, it’s up from its 2013 bottom of 12.8 percent in June. Some 108 stocks in the index closed at a 52-week high yesterday; none finished at a 52-week low.

Equities futures got a brief boost today after the People’s Bank of China said it will remove the floor on lending rates offered by financial institutions starting tomorrow. The announcement builds on pledges by Premier Li Keqiang to expand an overhaul of interest rates, a development the World Bank says must be a priority in reform of the financial system.

Federal Reserve stimulus and better-than-forecast corporate earnings have helped fuel a surge in stocks worldwide, with the S&P 500 jumping 150 percent from its March 2009 low. Yesterday’s rally pushed the gauge’s valuation to 15.3 times estimated profit, the highest since April 2010, data compiled by Bloomberg show.

Investors have increasingly turned to stocks this month, as U.S. equity exchange-traded funds are getting money at the fastest rate since September 2008. About $27.9 billion was sent to American share ETFs in the last 13 days, about four times the amount deposited last month and the most in almost five years, according to data compiled by Bloomberg from about 1,500 funds.

Mutual funds that invest in U.S. shares had $4.55 billion of inflows during the week through July 10, ending seven consecutive weeks of withdrawals, according to data from the Washington-based Investment Company Institute released yesterday.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, dropped 8.8 percent to 12.56, its lowest level since May 17. The measure has fallen 11 out of the past 12 trading sessions.

Of the companies on the S&P 500 that have reported earnings so far, about 72 percent have topped analysts’ estimates, according to data compiled by Bloomberg. About 53 percent have beaten revenue projections.

Earnings among financial companies in the S&P 500 have outperformed the index average, with 80 percent of the firms surpassing estimates. The group’s results have exceeded forecasts by an average of 8.7 percent.

Banks and insurers are predicted to report earnings growth of 26 percent this quarter, data compiled by Bloomberg show.

Excluding financial stocks, analysts forecast S&P 500 companies will report a 2 percent drop in profit, the data show.

Capital One Financial Corp. climbed 3.1 percent to $69.14, the highest since October 2007. The lender that gets more than half its revenue from credit cards posted a second-quarter profit that beat analysts’ estimates by 8.3 percent as a boost in U.S. consumer confidence helped fuel spending.

Seven of 10 groups in the S&P 500 advanced. Health-care stocks rallied 1.4 percent as Pfizer gained 2.1 percent to $29.09.

Industrial shares added 1.2 percent. GE surged 4.6 percent to $24.72, the highest since September 2008. Demand for jet engines and drilling equipment drove the company’s order backlog to a record. Adjusted profit from continuing operations fell 8 percent to $3.7 billion, or 36 cents a share. That exceeded the 35-cent average analyst estimate.

Whirlpool Corp. rallied 8 percent to $128.91 for the biggest gain in the S&P 500. The maker of home appliances raised its 2013 earnings target as it anticipates to benefit from U.S. energy tax credits.

Schlumberger Ltd. rose 5.4 percent to $82.74, a two-year high, helping energy shares rally 1.4 percent. The world’s largest oilfield-services provider announced a $10 billion share buyback plan as quarterly profit rose and it forecast “double- digit” customer spending increases on crude exploration.

Chipotle Mexican Grill Inc. jumped 8.6 percent to $408.97, the highest in a year. The burrito chain that recently started selling tofu posted second-quarter profit that topped the average analyst estimate, as an increase in traffic boosted sales at its established restaurants.

Technology stocks led declines today, slumping 2 percent for a second day of losses. Earnings from the group have disappointed the most among 10 industries in the benchmark gauge. The 17 companies that have reported have missed estimates by an average 3.6 percent. The average result for all companies has come in 2.7 percent above forecasts, the data show.

Analysts predict the technology group will report a 8 percent decline in profit, compared with a 2.4 percent increase estimated for the S&P 500 as a whole.

“It is a bit of a lukewarm earnings overall with a couple of high-profile misses,” said James Dunigan, who helps oversee $118 billion as chief investment officer in Philadelphia at PNC Wealth Management. “We will start to see more of a micro view than a macro view of the market, looking at individual stocks and individual sectors across the board.”

Microsoft sank 11 percent to $31.40, the biggest drop since January 2009, after reaching a five-year high on July 16. The software company said fourth-quarter profit missed analysts’ projections by the biggest margin in at least a decade amid weaker demand for personal computers running Windows.

Google fell 1.6 percent to $896.60 after second-quarter sales and profit fell short of estimates as mobile advertising crimped average prices. The stock slid as much as 3.9 percent earlier in the session.

AMD sank 13 percent to $4.03 for the biggest drop in the S&P 500. The second-largest maker of personal-computer processors forecast a drop in third-quarter gross margin, even as it predicted higher sales.

Intel Corp. slipped 0.9 percent for a third day of losses, and EBay Inc. slid 2.5 percent. Both reported on July 17 sales forecasts that fell short of estimates.

Intuitive Surgical Inc. plunged 6.8 percent to $392.67, the lowest since October 2011. The robot surgery company cut its revenue forecast and earnings missed targets. Intuitive has lost about $6 billion in value over five months after disclosures about adverse events with its products, a recent recall and,now, a regulatory warning it hasn’t adequately reported on issues concerning the devices.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

As an individual, a specific entity, you have physical, mental, and nervous limits, among others.

If you know your own limits and try to stay within these limits,

you are free.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

When someone shows you who they are,

believe them the first time.

-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:

Birthday: July 18, 1918, Nelson Mandela.

After great pain, a formal feeling comes-

The Nerves sit ceremonious, like Tombs-

The stiff Heart questions was it He, that bore,

And Yesterday, or Centuries before?

 

The Feet, mechanical, go round-

Of Ground, or Air, or Ought-

A Wooden way

Regardless grown,

A Quartz contentment, like a stone-

 

This is the Hour of Lead-

Remembered, if outlived,

As Freezing persons, recollect the Snow-

First-Chill-then Stupor-then the letting go-

-Emily Dickinson

Photos of the Day –July 18th, 2013

Learners from the Melpark Primary School in Johannesburg listen to the history of former president Nelson Mandela as they celebrate the 95th birthday of Mandela during their school assembly. The presidency has issued a statement that Mandela’s condition is steadily improving after fears that he was close to death during ongoing hospital treatment. Denis Farrell/AP

Genetically engineered Pterophyllum Scalara fish glow in a tank under a blacklight while being displayed at the 2013 Bio Expo in Taipei, Taiwan. Pichi Chuang/Reuters

Market Closes for July 18^th, 2013

Market  Index	Close	Change
Dow  Jones	15548.54	+78.02    +0.50%
S&P 500	1689.37	+8.46    +0.50%
NASDAQ	3611.277	+1.277    +0.04%
TSX	12628.85	+60.08
		+0.48%

International Markets

Market  Index	Close	Change
NIKKEI	14808.50	+193.46
		+1.32%
HANG  SENG	21345.22	-26.65
		-0.12%
SENSEX	20128.41	+179.68
		+0.90%
FTSE 100	6634.36	+62.43
		+0.95%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.398	2.371
CND.   30 Year Bond	2.920	2.906
U.S.   10 Year Bond	2.5302	2.4888
U.S.   30 Year Bond	3.6300	3.5752

Currencies

BOC Close	Today	Previous
Canadian $	0.96373	0.96087
US   $	1.03764	1.04073
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36049	0.73503
US  $	1.31114	0.76269

Commodities

Gold	Close	Previous
London Gold   Fix	1284.37	1275.23
Oil	Close	Previous
WTI Crude Future	108.04	106.48
BRENT	110.02	110.00

Market Commentary:

Canada

By Katie Brennan

July 18 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest in almost seven weeks, as lenders climbed and U.S. Federal Reserve Chairman Ben S. Bernanke said it’s too early to determine when the central bank will reduce stimulus.

Royal Bank of Canada and Toronto-Dominion Bank each climbed 1.5 percent to record highs. Husky Energy Inc. and Trilogy Energy Corp. jumped more than 3.8 percent as oil rose to an almost 16-month high. Rubicon Minerals Corp. advanced 4.8 percent as gold increased for the third time in four days.

The Standard & Poor’s/TSX Composite Index rose 60.08 points, or 0.5 percent, to 12,628.85 at 4 p.m. in Toronto.

Trading volume was in line with the 30-day average.

“Investors are focusing on earnings in the U.S. to reengage the market,” said Jeffrey Bradacs, a fund manager with Manulife Asset Management Ltd. He helps oversee about C$1.5 billion ($1.4 billion). “Financials have outperformed and beat expectations.”

Banks, brokerages and insurers in the S&P/TSX climbed 1.2 percent as a group, the most among 10 industries. In the U.S., Morgan Stanley gained after reporting a 66 percent increase in second-quarter profit. Bank of America Corp. and Goldman Sachs Group Inc. reported earnings this week that beat analysts’ forecasts.

More than 80 Canadian companies in the TSX are scheduled to report earnings in the next two weeks.

Royal Bank, Canada’s largest lender by assets, rose 1.5 percent to a record C$64.78. Toronto-Dominion, the second- largest bank, advanced 1.5 percent to C$87.48, also a record high.

Canadian banks are rising as the nation’s housing market defies predictions of a major slowdown. Existing home sales rose 3.3 percent in June, almost matching the previous month’s gain that was the fastest in more than two years, according to Canadian Real Estate Association data on July 15.

Canadian wholesale sales rose at the fastest pace in more than two years in May, reaching a record on sales of fertilizer and food. Sales rose 2.3 percent to C$50.3 billion, Statistics Canada said today in Ottawa, compared with the median estimate for a 0.3 percent gain in a Bloomberg survey with 15 responses.

Fed policy makers have been debating the timing and pace of any cuts in the U.S. central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.

The Fed’s $85 billion in monthly asset purchases “are by no means on a preset course,” Bernanke said yesterday in his semiannual testimony to Congress. He added that the Federal Open Market Committee will “be responding to the data.”

Husky Energy Inc. added 4.1 percent to C$30.60. Trilogy Energy Corp. jumped 3.8 percent to C$31.02. Oil rose 1.5 percent to $108.04 a barrel on the New York Mercantile Exchange, the highest settlement level since March 2012.

Rubicon Minerals Corp. advanced 4.8 percent to C$1.31. Gold futures for December delivery rose 0.5 percent to settle at $1,285.50 an ounce on the Comex in New York.

US

By Nikolaj Gammeltoft and Alex Barinka

July 18 (Bloomberg) — U.S. stocks rose, sending benchmark indexes to records, as earnings from Morgan Stanley and UnitedHealth Group Inc. beat estimates and jobless claims fell amid testimony from Federal Reserve Chairman Ben S. Bernanke.

Morgan Stanley rallied 4.8 percent as stock-trading revenue bolstered profit. International Business Machines Corp. added 2 percent after raising its full-year earnings target.

UnitedHealth jumped 6.7 percent after profit beat estimates as membership surged. Intel Corp. lost 3.7 percent after forecasting third-quarter sales that may fall short of some analysts’ predictions. EBay Inc. tumbled 6.7 percent after its forecast for third-quarter sales missed estimates.

The Standard & Poor’s 500 Index gained 0.5 percent to 1,689.37 at 4 p.m. in New York. The index surpassed its previous intraday high of 1,687.18 set on May 22. The Dow Jones Industrial Average added 78.02 points, or 0.5 percent, to 15,548.54, also a record. More than 6 billion shares traded hands on U.S. exchanges today, or 5.4 percent below the three- month average.

“The underlying concept of what Bernanke is trying to accomplish is taking hold in the marketplace, and that’s a good thing,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in an interview. His firm oversees about $8 billion. “The market gets the idea that a tapering is coming, the economy is improving and rates are still going to be low for a time. The initial jobless claims were better than expected. Earnings are coming in OK. All in all it’s hard not to be bullish on the market here.”

Fed stimulus and better-than-forecast corporate earnings have fueled a surge in stocks worldwide, with the benchmark U.S. index jumping as much as 150 percent from its March 2009 low.

Today’s S&P 500 rally pushed the estimated 2013 price-to- earnings ratio to 15.3, the highest since April 2010.

About 81 percent of stocks in the index traded above their average prices from the past 50 days as of yesterday, according to data compiled by Bloomberg. While that’s below a 19-month high of 93 percent reached in May, it’s up from its 2013 bottom of 27.8 percent in June. There were 56 stocks in the index that closed at a 52-week high yesterday and none at a 52-week low.

The S&P 500 rose yesterday as Bernanke said the pace of economic recovery will determine when the Fed reduces its asset purchases. In a prepared report, he said the central bank’s asset purchases are not on a preset course. In testimony to the Senate Banking Committee today, Bernanke said data since the Fed’s June meeting is mixed and it is “way too early to make any judgment” as to whether policy makers will start tapering purchases in September.

“Bernanke is really guiding the market so that there are no real shocks when Fed actions do take place,” Jonathan Aldrich-Blake, who helps oversee about $10 billion at Ashburton Ltd., said by phone from Jersey, Channel Islands. “The ‘bad news is good news’ we saw in the market earlier this year is starting to die down as people have more belief in this recovery.”

Equity futures rose today after a report showed fewer Americans than forecast filed applications for unemployment benefits as the effects of auto-plant shutdowns began to ebb.

Separate data from the Conference Board indicated an index of leading indicators in the U.S. economy was unchanged in June.

Stocks extended gains after a report showed the Philadelphia Fed’s general economic index increased to 19.8 in July from 12.5 the prior month. Readings greater than zero signal expansion in the area, which covers eastern Pennsylvania, southern New Jersey and Delaware.

“Jobless claims were a little bit better than expected which gives some comfort,” Richard Sichel, who oversees about $1.9 billion as chief investment officer at Philadelphia Trust Co., said by phone. “And then you have earnings rolling full steam now so it becomes a stock-by-stock market.”

Stocks may also be getting a boost as equity exchange- traded funds and mutual funds are attracting money at the fastest rate since January. Investors pulled in about $27 billion to equity ETFs so far this month after $19.1 million of outflows in June, according to Bloomberg data tracking about 1,500 securities.

Mutual funds that invest in U.S. shares had $4.55 billion of inflows during the week through July 10, ending seven consecutive weeks of withdrawals, according to data from the Washington-based Investment Company Institute released yesterday.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, dropped 0.1 percent to 13.77 for the 10th decline in 11 sessions. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high on June 20 and has fallen 33 percent since.

Some 32 companies, including Google Inc. and Microsoft Corp., were scheduled to post quarterly results today. Per-share earnings topped estimates at about 73 percent of S&P 500 members that have reported for the quarter so far, data compiled by Bloomberg show.

Google slid 5.5 percent to $860.36 at 4:33 p.m. New York time. The owner of the world’s most popular Internet search engine reported second-quarter sales that fell short of analysts’ estimates as advertising tied to mobile devices crimped average prices.

Microsoft, which also reported after the markets closed, dropped 4.8 percent as profit missed analysts’ projections after Windows sales were hurt by shrinking demand for personal computers and the company wrote down the value of unsold inventory of its Surface tablet.

Futures on the Nasdaq 100 Index dropped 1 percent to 3,047.50 after the technology-heavy gauge fell 0.2 percent during the regular session.

Eight of 10 groups in the S&P 500 advanced today, led by a 1.3 percent surge among financial companies. The KBW Bank Index added 1.7 percent to its highest level since October 2008.

Morgan Stanley jumped 4.4 percent to $27.70 after posting a 66 percent earnings increase that beat analysts’ predictions as trading revenue rose and the profit margin at its wealth- management unit climbed.

Bank of America Corp., which yesterday reported earnings that beat estimates, gained 3.1 percent to 14.76. SLM Corp., the student lender known as Sallie Mae, advanced 4.4 percent to $24.44 after reporting second-quarter core earnings that beat analysts’ estimates as private education delinquencies fell.

Shares in companies whose earnings are most closely tied to economic growth rose to a record. The Morgan Stanley Cyclical Index added 1.1 percent to the highest level since the gauge started in 1978.

Automakers climbed 2.3 percent as a group, the biggest gain among 24 industries in the S&P 500. Johnson Controls Inc. led the advance, as shares surged 8.3 percent to $40.43, the most in the benchmark gauge. The largest U.S. auto-parts maker will sell its HomeLink line of installed garage-door openers to Gentex Corp. for $700 million as it seeks a buyer for the rest of its automotive electronics unit.

The Bloomberg U.S. Airlines Index climbed 1.9 percent to the highest since November 2007 as nine of 10 members advanced.

Boeing Co., which is not in the index, jumped 2.7 percent to $107.63. U.K. authorities said a beacon made by Honeywell International Inc. was likely the cause of last week’s fire on one of the planemaker’s 787 Dreamliner jets. Honeywell added 0.6 percent to $82.97, reversing a dip of as much as 0.5 percent.

IBM gained 1.8 percent to $197.99 after predicting earnings will be at least $16.90 a share in 2013, up from its earlier prediction for $16.70. The company is betting that faster- growing market such as cloud computing and data analysis can offset a slowdown in information-technology spending.

UnitedHealth jumped 6.5 percent to $70.55, the most in the Dow. The biggest U.S. health insurer reported second-quarter profit that beat analyst estimates as a Brazilian acquisition and gains in U.S. plans swelled enrollment by 25 percent.

Sherwin-Williams Co. fell 8.3 percent to $167.94. The paint maker’s $2.34 billion bid to acquire Mexican competitor Consorcio Comex SA was rejected by the country’s antitrust regulator, which said the combined company would be able to set artificially high prices.

Intel dropped 3.8 percent to $23.24 for the biggest slide in the Dow. The world’s largest semiconductor maker said late yesterday sales in the current period may miss estimates as a slump in the personal-computer market erodes its largest business.

EBay tumbled 6.7 percent, the most in almost two years, to $53.52. Third-quarter sales will be $3.85 billion to $3.95 billion as e-commerce growth rates in Europe and Korea slow and currencies weaken against the U.S. dollar, the online marketplace provider said. That’s less than the average analyst projection of $3.97 billion.

American Express Co. fell 3.6 percent to $74.01 after the biggest credit-card issuer reported revenue that missed some estimates. The drop extends a two-day decline to 5.4 percent, the most since November 2011, after some analysts said yesterday that a European Commission proposal to cap bank-card fees would crimp profit.

Phone stocks dropped 0.9 percent as a group, for the biggest drop among 10 S&P 500 industries. Verizon Communications Inc. slumped 1.5 percent to $49.97. The second-largest U.S. phone company said the surge in demand for high-speed wireless Internet cut into profit margins and boosted the need for network investments.

Amphenol Corp. plunged 9.7 percent to $76.35 for the biggest drop in the benchmark gauge. The maker of fiber-optic connectors and other telecommunications equipment for companies such as Apple Inc. cut its profit and sales forecasts for the year.

Celgene Corp. declined 2.6 percent to $133.05 after saying it will stop a late-stage trial of its Revlimid drug for treatment of leukemia in elderly patients because of the number of deaths in the study.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The absurd denial of the truth is natural in man.

Man does not want to be, but to appear to be.

He does not want to see what he is, but tries only to see himself as the person other people take him for, when they talk about him.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

Know how to live the time that is given you.

-Dario Fo,  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:

I read an amazing story today reported by correspondent Liz Fuller-Wright about an ancient forest that was recently discovered off the coast of Alabama, sixty feet underwater, 10 miles from shore, which has been buried for tens of thousands of years.  She writes, “While most of the once-majestic trees are gone, sonar data has found between 50 and 100 stumps, as well as an unknown number of logs.  The forest itself has been dead at least 50,000 years, say scientists at the Lawrence Livermore Laboratory in California who dated samples from the trees by looking for carbon-14, a radio-active isotope that is found in every living organism but that steadily decays after the organism dies.  The scientists had expected to find that the trees were about 12,000 years old – the age of the last big ice age, when sea levels were low – so they were surprised to find that the trees had no carbon-14 at all, which puts them older than 50,000 years.

Another surprise: The wood still seemed fresh.   Ben Raines, one of the first scuba divers to explore the site, tweeted a picture showing the sap-rich wood:

BEN RAINES/AI.COM/AP

TREE REMAINS: Fish swim past a stump that remains from an ancient forest found in the Gulf waters 10 miles off the coast of Mobile, Ala.

As the story goes, a fisherman went out to sea shortly  after hurricane Katrina scoured the Gulf Coast.  He found an unusual run of red snapper, and after fishing it for several days, he asked a scuba-diving friend to check out what could be causing the usually flat and boring seafloor to teem with life.  ‘It’s a forest,’  the diver reported.

The underwater forest remained a closely guarded secret until Raines tracked down the rumors and headed out with a camera.  His photos reveal that new life has sprung up from these long-dead trees.  [Dr. Grant] Harley [from the University of Southern Mississippi] and paleoclimatologist Kristina DeLong, the Louisiana State University research scientist who prepared the samples for carbon dating, are eager to get back to the forest and gather more samples, in hopes of piecing together a picture of the ancient forest.

They’re just waiting for the jet stream to warm and calm the waters of the Gulf, which should happen by late summer.  They don’t want to wait any longer than that – another hurricane could sweep into the area and rebury the site at any time.”

On this day, July 17^th, in 1959, Mary Leakey found a rare hominid skull in Africa believed to be a human ancestor.  The artifact leads to new theories about the origins of civilization.

Photos of the Day –July 17th, 2013

A monkey plays in a pond surrounded by carp at a wildlife park in Hefei, Anhui province, July 16, 2013. Reuters

German electronic band Kraftwerk performs with a 3D stage set during the 47th Montreux Jazz Festival in Montreux, Switzerland. Denis Balibouse/Reuters

Market Closes for July 17^th, 2013

Market  Index	Close	Change
Dow  Jones	15470.52	+18.67    +0.12%
S&P 500	1680.91	+4.65    +0.28%
NASDAQ	3610.000	+11.499    +0.32%
TSX	12568.77	+51.88
		+0.41%

International Markets

Market  Index	Close	Change
NIKKEI	14615.04	+15.92
		+0.11%
HANG  SENG	21371.87	+59.49
		+0.28%
SENSEX	19948.73	+97.50
		+0.49%
FTSE 100	6571.93	+15.58
		+0.24%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.371	2.407
CND.   30 Year Bond	2.906	2.924
U.S.   10 Year Bond	2.4888	2.5317
U.S.   30 Year Bond	3.5752	3.5855

Currencies

BOC Close	Today	Previous
Canadian $	0.96087	0.96343
US   $	1.04073	1.03796
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36537	0.73240
US  $	1.31194	0.76223

Commodities

Gold	Close	Previous
London Gold   Fix	1275.23	1291.14
Oil	Close	Previous
WTI Crude Future	106.48	106.00
BRENT	110.00	109.27

Market Commentary:

Canada

By Katie Brennan and Eric Lam

July 17 (Bloomberg) — Canadian stocks rose to the highest in six weeks after lenders rallied as the central bank raised its 2013 growth forecast and investors analyzed testimony from U.S. Federal Reserve Chairman Ben S. Bernanke.

Royal Bank of Canada, the nation’s largest lender, climbed to a seven-week high. Pengrowth Energy Corp. surged 8.3 percent as at least two analysts upgraded the company. Cineplex Inc. advanced to a record high after offering to acquire a digital signage company. B2Gold Corp. and Torex Gold Resources Inc. sank at least 7.8 percent as the price of gold slumped.

The Standard & Poor’s/TSX Composite Index rose 51.88 points, or 0.4 percent, to 12,568.77 at 4 p.m. in Toronto, the highest close since June 4. Trading was 5.6 percent lower than the 30-day average.

“The banks are up off of U.S. banks, like Goldman Sachs, whose results so far are pretty good,” said John Goldsmith, deputy head of equities with Montrusco Bolton Investments in Toronto. The firm manages about C$5.6 billion. “Until the end of the month when Canada earnestly kicks off its earnings season, a lot of it will be led by earnings from the States.”

The Fed’s Bernanke said in prepared testimony to Congress this morning that the central bank’s asset purchases “are by no means on a preset course” and could be either reduced or expanded as conditions warrant.

Bank of Canada Governor Stephen Poloz kept his main interest rate unchanged at 1 percent in his first policy decision since taking over the job in June. He said there will be a “gradual normalization” of borrowing costs over time as slack in the economy disappears and inflation picks up.

The central bank raised its economic growth forecast for this year to 1.8 percent from an April prediction of 1.5 percent, while lowering the 2014 prediction to 2.7 percent from 2.8 percent.

Poloz is counting on exports and business investment to accelerate growth in the world’s 11th largest economy. Expansion has been slowed by weak foreign demand, leading to the longest streak of trade deficits in a quarter century.

More than 60 Canadian companies on the TSX are scheduled to report second-quarter earnings in the next two weeks. Bank of America Corp. beat analysts estimates today, posting a 63 percent gain in second-quarter profit. Goldman Sachs Group Inc. said yesterday it doubled its earnings, beating forecasts.

Eight of 10 groups in the S&P/TSX advanced, with financial stocks rising 1 percent as a group.

Royal Bank added 2 percent to C$63.80, the highest close since May 29. Bank of Nova Scotia gained 1.6 percent to C$58.04 and Canadian Imperial Bank of Commerce added 1.5 percent to C$77.12.

Pengrowth Energy surged 8.3 percent to C$5.88, the biggest gain since March 2009, after the oil producer said yesterday it has agreed to sell C$700 million of non-core assets that will be used to fund the first phase of its Lindbergh oil-sands project.

Jeremy Kaliel, analyst with CIBC World Markets, and Jonathan Fleming, analyst with Cormark Securities Inc., each raised their ratings for the stock.

Cineplex, Canada’s largest movie theater chain, added 1.4 percent to C$38.22, the highest close since its initial offering in 2003. The Toronto-based company said today it has offered to acquire London, Ontario-based EK3 Technologies Inc. for an initial price of C$40 million. That figure could rise to C$78 million if certain operating targets are achieved in 2015.

Torex Gold retreated 7.8 percent to C$1.30 and B2Gold lost 7.9 percent to C$2.55 as gold futures for December delivery fell 1 percent to settle at $1,278.80, the biggest loss since July 5.

US

By Alex Barinka and Nikolaj Gammeltoft

July 17 (Bloomberg) — U.S. stocks rose, after the Standard & Poor’s 500 Index snapped an eight-day rally yesterday, as Federal Reserve Chairman Ben S. Bernanke said the central bank’s asset purchases are not on a preset course.

Bank of America Corp. and Bank of New York Mellon Corp. gained more than 1.9 percent after earnings topped forecasts.

Yahoo! Inc. advanced 10 percent as its profit beat estimates.

American Express Co. retreated 1.9 percent after analysts said a European Union proposal would cut profits. Caterpillar Inc. dropped 1.7 percent after short seller Jim Chanos said the company is being hurt by a slowdown in commodities demand.

The S&P 500 rose 0.3 percent to 1,680.91 at 4 p.m. in New York, after falling from a record high yesterday. The Dow Jones Industrial Average climbed 18.67 points, or 0.1 percent, to 15,470.52 today. Almost 5.7 billion shares traded hands on U.S. exchanges today, or 12 percent below the three-month average.

“The market is responding to the fact that the Fed is not going to create an arbitrary definition of when and how the QE program is going to end,” Stephen Wood, the New York-based chief market strategist who helps oversee about $174 billion at Russell Investments, said by phone. “They want to maintain flexibility in their policies.”

Bernanke said the central bank’s bond purchases, or quantitative easing, “are by no means on a preset course” and could be reduced more quickly or expanded as economic conditions warrant.

“We’re going to be responding to the data,” Bernanke said today to the House Financial Services Committee. “If the data are stronger than we expect, we’ll move more quickly” to reduce purchases. If data “don’t meet the kinds of expectations we have about where the economy’s going, then we would delay that process or potentially increase purchases for a time.”

Central bank stimulus has helped fuel a surge in stocks worldwide, with the benchmark U.S. index jumping 148 percent from its March 2009 low. Fed policy makers have been debating the timing and pace of any cuts in the central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.

The U.S. economy maintained a “modest to moderate pace” of growth in recent weeks, the Fed said today in its Beige Book business survey.

“Residential real estate and construction activity increased at a moderate to strong pace in all reporting districts,” the Fed said in the survey, which is based on anecdotal reports from its 12 regional banks. “Manufacturing expanded in most districts since the previous report.”

Data today showed U.S. housing starts unexpectedly fell in June to the lowest level in almost a year. Work began on 836,000 houses at an annualized rate last month, the least since August 2012 and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, dropped 4.4 percent to 13.78. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high on June 20 and has fallen 33 percent since.

Nine out of 10 industries in the S&P 500 advanced, with phone, raw-material and financial companies increasing more than 0.5 percent.

Some 21 companies, including EBay Inc. and International Business Machines Corp., were due to release results today. Per- share earnings topped estimates at about 71 percent of S&P 500 members that have reported for the quarter so far, data compiled by Bloomberg show.

IBM rose 1.7 percent at 5:25 p.m. New York time, as the computer-services company topped earnings estimates and raised its full-year forecast after the end of regular trading. Among other companies reporting after the market close, eBay tumbled 6.3 percent and Intel Corp. slid 3.4 percent as their revenue forecasts fell short of estimates.

Bank of America added 2.8 percent to $14.31 during regular trading. The second-biggest U.S. lender beat analysts’ estimates by posting a 63 percent gain in profit that was driven by lower provisions for bad credit and a drop in expenses.

Bank of New York Mellon climbed 1.9 percent to $30.92. The world’s largest custody bank said profit rose 79 percent as the stock-market rally boosted assets and fees for overseeing them.

Yahoo rose 10 percent to $29.66, the highest level since February 2008. The company reported second-quarter earnings of 35 cents a share, beating analysts’ estimates. The company made $225 million in earnings in the quarter from its equity interest in both Alibaba Group Holding Ltd. and Yahoo Japan Corp., up from $180 million in the same period last year.

DuPont Co. jumped 5.3 percent, the most in the Dow, to $57.25 after the New York Times’s Andrew Ross Sorkin said Trian Fund Management LP’s Nelson Peltz amassed a “very big” stake in the largest U.S. chemicals company by market value. Sorkin spoke at the CNBC Institutional Investor Delivering Alpha Conference in New York.

Anne Tarbell, a spokeswoman for Trian, declined to comment on DuPont. Michael Hanretta, a spokesman for Wilmington, Delaware-based DuPont, didn’t immediately return a call seeking comment.

An index of U.S. airlines rose 3.7 percent to the highest since 2007 after Morgan Stanley said it expects “more beats than misses” for carriers’ second-quarter earnings. All 10 members in the index advanced.

United Continental Holdings Inc., the world’s largest carrier by passenger traffic, surged 8.1 percent to $33.69, climbing above its average price for the past 50 days. Delta Air Lines Inc. soared 3.3 percent to $19.92, the highest since November 2007.

St. Jude Medical Inc. advanced 5.2 percent to $51. The Minnesota-based maker of heart-rhythm devices surged after second-quarter revenue fell less than analysts had estimated.

U.S. Bancorp, the nation’s largest regional lender, fell 1.4 percent to $36.74 after the firm said it expects mortgage revenue to continue to decline this year. Second-quarter net income climbed 4.9 percent to $1.48 billion, or 76 cents per share, matching the average estimate of 34 analysts.

American Express slipped 1.9 percent to $76.80. The European Commission will propose that interchange fees paid by retailers on card transactions should be capped at 0.2 percent for debit card payments and 0.3 percent for credit cards, according to draft plans obtained by Bloomberg.

The proposal would reduce New York-based American Express’s earnings-per-share by about 3.7 percent because the company gets 11 percent of its business from Europe, Morgan Stanley analysts said in a research note. Credit Suisse analysts said the plan would hurt American Express more than MasterCard Inc. or Visa Inc., which have already agreed to provisionally cap some fees.

American Express reported earnings after the close of regular trading, beating analyst estimates.

Mattel Inc., the largest U.S. toymaker, fell 6.8 percent to $43.16. Second-quarter profit fell short of analyst forecasts, as declining demand for the aging Barbie doll line and increased costs to expand the American Girl chain hurt results. Hasbro Inc. fell 2.4 percent to $46.03.

McDonald’s Corp. slid 0.8 percent to $100.10. Janney Montgomery Scott LLC downgraded the world’s largest restaurant chain to neutral from a buy rating, with a 12-month price target of $105 a share.

Caterpillar dropped 1.7 percent to $86.67. The largest maker of construction and mining equipment “is tied to the wrong products at the wrong time in the cycle,” Chanos said today in a speech at the CNBC Institutional Investor Delivering Alpha Conference in New York.

Chanos, the president and founder of Kynikos Associates Ltd., said he’s shorting the stock and the company is “being aggressive with their acquisitional accounting.”

Jim Dugan, a spokesman for Caterpillar, declined to comment on Chanos’s statements.

American Tower Corp. fell 1.1 percent to $73.87 after short-seller Carson Block said the company is engaged in a “value-destroying investment binge” that will knock shares down 40 percent. Shares of the operator of cell-phone antennas have almost tripled since 2008.

The company has overstated the value of acquisitions in the U.S. and Brazil, and the shares are worth $44.57 a share, Block’s firm, Muddy Waters Research, wrote in a report published on its website today.

Matt Peterson, an American Tower spokesman, didn’t respond to messages seeking comment.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The spiritual can never be attained,

until the material has been extinguished.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Press on.  Nothing in the world can take the place of persistence.  Talent will not: nothing is more common than unrewarded talent.  Education alone will not: the world is full of educated failures. Persistence alone is omnipotent.

-Calvin Coolidge, 1872-1933

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