Month: July 2013

Dear Friends,

Tangents:

JULY

“This is the season for picnics, when the weather is set and fair and the ground quite dry; little rain has fallen with us for weeks.   It is perfect to spread out the rug on a newly-mown field and to sit back for a while and feel you are part of the countryside, smelling the grass and the hedgerows and listening to the sounds of the insects around you.  You may find yourself sharing a hamper full of exotic food and sparkling champagne in the peace and beauty of the Glyndbourne garden, the music of the first act still ringing in your ears….In contrast, when the spirit moves you, at a moment’s notice you may gather up a slice of bread, wash a lettuce, hard-boil egg, fill a bottle with newly-made elderflower cordial and settle at the end of your own garden or somebody else’s – unpack your basket and enjoy the solitude of the countryside where you cannot hear the telephone ringing…” –from A Countrywoman’s Notes by Rosemary Verey.

Photos of the Day –July 16th, 2013

A climate-controlled gondola of the SkyView, a 200-foot tall Ferris wheel, rises over Atlanta, Georgia. The giant ferris wheel opened to the public Tuesday. Jaime Henry-White/AP

A Prince Harry lookalike turns up to donate toys to the hospital as a publicity stunt outside the Lindo Wing at St Mary’s Hospital in London. Britain’s Kate, the Duchess of Cambridge will give birth to her first child, who will be third-in-line to the throne, at the hospital in mid-July. Kirsty Wigglesworth/AP

Market Closes for July 16^th, 2013

Market  Index	Close	Change
Dow  Jones	15451.85	-32.41    -0.21%
S&P 500	1676.26	-6.24    -0.37%
NASDAQ	3598.500	-8.991    -0.25%
TSX	12516.89	-11.46
		-0.09%

International Markets

Market  Index	Close	Change
NIKKEI	14599.12	+92.87
		+0.64%
HANG  SENG	21312.38	+9.07
		+0.04%
SENSEX	19851.23	-183.25
		-0.91%
FTSE 100	6556.35	-29.76
		-0.45%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.407	2.414
CND.   30 Year Bond	2.924	2.918
U.S.   10 Year Bond	2.5317	2.5409
U.S.   30 Year Bond	3.5855	3.5967

Currencies

BOC Close	Today	Previous
Canadian $	0.96343	0.95889
US   $	1.03796	1.04288
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36517	0.73251
US  $	1.31524	0.76031

Commodities

Gold	Close	Previous
London Gold   Fix	1291.14	1285.00
Oil	Close	Previous
WTI Crude Future	106.00	106.32
BRENT	109.27	109.32

Market Commentary:

Canada

By Eric Lam

July 16 (Bloomberg) — Canadian stocks fell, dragged down by a drop in health-care companies, as investors awaited earnings and watched for signals from central bank officials.

WestJet Airlines Ltd. lost 3.7 percent to pace declines among industrial stocks. Barrick Gold Corp. and Iamgold Corp. added at least 5.9 percent as gold rose for a second day. Wi-Lan Inc. rallied 14 percent after plunging the most in 12 years yesterday. Teck Resources Ltd. gained 2.3 percent as copper advanced.

The Standard & Poor’s/TSX Composite Index fell 11.46 points, or 0.1 percent, to 12,516.89 at 4 p.m. in Toronto. The gauge has gained 0.7 percent this year. Trading was in line with the 30-day average.

“The summer rally has already happened so now it’s tough to continue further,” said Paul Gardner, a fund manager with Avenue Investment Management in Toronto. The firm manages about C$300 million ($288 million). “You’re waiting for earnings to come in and earnings have generally been pretty good.”

More than 60 Canadian companies on the TSX are scheduled to report second-quarter earnings in the next two weeks.

Bank of Canada Governor Stephen Poloz is set to deliver his first interest-rate decision since taking over the job in June from former governor Mark Carney, who departed to run the Bank of England. Poloz, who has said Canada’s expansion requires “patience,” will probably keep his benchmark interest rate at 1 percent tomorrow where it’s been since September 2010, according to a Bloomberg economist survey.

The world’s 11th largest economy has been slowed by weak foreign demand, leading to the longest streak of trade deficits in a quarter century.

The U.S. Federal Reserve will publish tomorrow its latest beige book, which updates local economic conditions. Fed Bank of Kansas City President Esther George, speaking today on Fox Business News, said the U.S. was on the “right path” for economic recovery and that cuts in the pace of stimulus are “appropriate.” Central bank stimulus has helped fuel a surge in stocks worldwide.

Valeant Pharmaceuticals International Inc. fell for the first time in five days, dropping 2.8 percent to C$94.93 for the biggest loss in a month. Health-care stocks lost the most among 10 industries in the S&P/TSX, declining 2.4 percent.

WestJet, the Calgary-based discount airline, slumped 3.7 percent to C$20.69. North American low-cost airline demand jumped 6.1 percent year-over-year in June, according to a report from George Ferguson, an air transport analyst with Bloomberg Industries.

Load factor, a measure of aircraft capacity and use, rose 20 basis points to 84.7 percent for the industry, with WestJet and JetBlue Airways Corp. registering the only declines, Ferguson said.

Wi-Lan, a patent licensing company based in Ottawa, rallied 14 percent to C$3.83, the biggest gain in two years. The stock yesterday plunged 31 percent, the most since 2001, after losing a U.S. patent infringement trial against Alcatel-Lucent and Ericsson AB.

A jury in Tyler, Texas, said the two companies didn’t infringe on three Wi-Lan patents, while phones made by HTC Corp. and Sony Corp. were cleared for infringement for a fourth patent.

Barrick Gold, the world’s largest producer of the metal, climbed 5.9 percent to C$16.62 while Iamgold increased 6.8 percent to C$4.86. Gold futures for August delivery gained 0.5 percent to settle at $1,290.40 an ounce in New York, for the sixth advance in seven sessions.

Fortuna Silver Mines Inc. rallied 5.3 percent to C$3.61 as silver for September delivery rose 0.5 percent.

Teck Resources, Canada’s largest diversified miner, rose 2.3 percent to C$23.73 as copper advanced for the first time in three days.

US

By Alex Barinka and Nikolaj Gammeltoft

July 16 (Bloomberg) — U.S. stocks fell, halting the longest rally in the Standard & Poor’s 500 Index since January, as Coca-Cola Co.’s profit dropped and a Federal Reserve official called for cuts to stimulus.

Coca-Cola slid 1.9 percent as the beverage company said volumes missed estimates amid slowing economic growth in China and Europe. Goldman Sachs Group Inc. dropped 1.7 percent even after profit beat analysts’ projections. Automakers plunged 1.8 percent after Goldman downgraded the group to neutral from buy, with Ford Motor Co. sliding 3 percent. Baidu Inc. jumped 4 percent after agreeing to acquire 91 Wireless for $1.9 billion.

The S&P 500 fell 0.4 percent to 1,676.26 at 4 p.m. in New York, after rising eight straight sessions to a record close yesterday. The Dow Jones Industrial Average lost 32.41 points, or 0.2 percent, to 15,451.85. Almost 5.5 billion shares traded hands on U.S. exchanges today, or 15 percent below the three- month average.

“Hawkish comments from Kansas City Fed President George as to the timing of adjustments to the Fed’s bond purchases are putting modest pressure on the indices,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in an interview. His firm oversees $290 billion. “Outside of that, earnings are in the early stages and many are waiting for chairman Bernanke’s testimony to Congress tomorrow for further direction about future Fed policy.”

The S&P 500’s decline accelerated after Fed Bank of Kansas City President Esther George said the U.S. was on the “right path” for economic recovery and that cuts in the pace of stimulus are “appropriate.” George, speaking on Fox Business Network, also said inflation appears to be “moderate” and the benchmark interest rate should not be held too low for too long.

Fed Chairman Ben S. Bernanke bolstered the rally last week after he backed sustained monetary stimulus. Bernanke will deliver his semi-annual monetary policy report to Congress this week, starting tomorrow at the House Financial Services Committee.

Central bank stimulus has helped fuel a surge in stocks worldwide, with the benchmark U.S. index jumping as much as 149 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.

A report today showed the cost of living in the U.S. rose in June as gasoline prices increased the most in four months.

The consumer-price index increased 0.5 percent after a 0.1 percent gain the prior month, Labor Department figures showed.

The median forecast in a Bloomberg survey called for a 0.3 percent rise.

Separate data showed that industrial production rose in June by the most in four months, signaling U.S. manufacturing is improving heading into the second half of the year. Output at factories, mines and utilities climbed 0.3 percent, the biggest advance since February, after being little changed in May.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, jumped 4.6 percent to 14.42. The gain snapped eight consecutive declines, the longest streak of losses since October 2011.

About 72 percent of the S&P 500 companies that have reported earnings so far have beaten analyst forecasts, data compiled by Bloomberg show. Yahoo! Inc. fell 1.9 percent at 4:41 p.m. in New York after reporting sales that missed estimates.

Coca-Cola declined 1.9 percent to $40.23 for the biggest drop in the Dow. Profit fell 4 percent, the second quarterly decline in a row, as sales were sapped by economic weakness in China and Europe, shifting tastes in the U.S. and unseasonable weather in places such as India.

Goldman Sachs dropped 1.7 percent to $160.24 even as the bank reported earnings that topped analysts’ estimates on a jump in fixed-income trading and investment-banking revenue. The stock had gained 28 percent this year through yesterday.

Automakers plunged 1.8 percent as a group, the biggest decline among 24 industries in the S&P 500. Goldman cut the industry to neutral for the first time since 2009, saying car stocks typically lag when interest rates rise. Data yesterday showed sales at car and parts dealers gained the most in seven months in June.

Ford Motor Co. slid 3 percent to $16.60 after Goldman removed the carmaker from its conviction buy list. The firm maintained a buy rating on the stock. Delphi Automotive Plc fell 1.8 percent to $54 after Goldman downgraded the parts supplier to neutral from buy.

General Motors Co. dropped 0.9 percent to $36.18, reversing an earlier gain of as much as 1.2 percent. The company said its global first-half sales climbed 3.9 percent on gains in the U.S. and China. Goldman added the stock to its conviction buy list.

Charles Schwab Corp. sank 3.3 percent to $21. The company reported second-quarter adjusted profit of 18 cents a share, below estimates for 19 cents a share.

Cintas Corp. retreated 1.7 percent to $47.06. The uniform maker forecast earnings for the 2014 fiscal period of $2.66 to $2.75 a share. That’s less than the $2.79 per share projected by analysts.

Energy shares dropped 0.6 percent as Marathon Petroleum Corp. became the second oil refiner to say second-quarter results would miss estimates.

Marathon fell 4.3 percent to $69.93, the most in the S&P 500. The company said late yesterday that it expects second- quarter earnings of $1.75 to $1.85 a share, below estimates of $2.62 a share. Competitor Valero Energy Corp. last week issued a forecast that fell short of forecasts. Valero slid 1.7 percent to $34.78 today.

HCA Holdings Inc. climbed 4.4 percent to $38.86. The largest for-profit U.S. hospital chain preliminary earnings beat analysts’ estimates on an increase in patient admissions. Tenet Healthcare Corp. added 3.4 percent to $45.19 for the second- biggest gain in the S&P 500.

DaVita HealthCare Partners Inc. dropped 1.9 percent to $117.96 as Goldman Sachs cut its rating on the provider of kidney-dialysis services to sell from neutral. The stock had slipped only 0.7 percent since the U.S. Medicare system proposed cutting payments by 9.4 percent next year, showing investors may be too optimistic regarding a final dialysis rate, Goldman said.

Baidu Inc. rose 4 percent to $105.69, the highest since February. The owner of China’s largest search engine agreed to buy app store 91 Wireless for $1.9 billion in its biggest announced acquisition, hoping to gain a greater share of the mobile user market.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

As long as you pursue pleasure, you are attached to the sources of pleasure;

and as long as you are attached to the sources of pleasure,

you cannot escape pain and sorrow.  The soul shines in the hearts of all living beings.

When you see the soul in others, you forget your own desires and fears,

and lose yourself in the service of others.

The soul shines equally in people on the farthest island, and in people close at hand.

Mundaka Upanishad

As ever,

 

Carolann

 

I must govern the clock, not be governed by it.

-Golda Meir, 1898-1978

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 15, 1606, Rembrandt.

Rembrandt was born in Leiden, the Netherlands on this day in 1606, Rembrandt Harmenszoon van Rijn.  He was the son of a miller.  Despite the fact that he came from modest means, he was able to study art, and by age 22, took his first pupils.  He married Saskia van Uylenburgh, the cousin of a successful art dealer, in 1634.  Rembrandt’s family life was marked by misfortune.  Between 1635 and 1641 Saskia gave birth to four children, but only the last, Titus survived.  Saskia in 1642, at the age of 30.  Hendrickje Stoffels, who became Rembrandt’s housekeeper in 1649, eventually became his wife and was the model for many of his paintings.  Despite Rembrandt’s success as an artist, teacher, and art dealer, his flamboyant living forced him to declare bankruptcy in 1656.  His beloved Hendrickje in 1663, and his son Titus, in 1668 at only 27 years of age.  Eleven months later, on October 4^th, 1669, Rembrandt died in Amsterdam.

Our doubts are traitors, and make us lose the good we oft might win by fearing to attempt. –William Shakespeare.

Photos of the Day –July 15th, 2013

A Peking opera troupe performs at the 49th International Festival of Carthage at the Roman Theatre of Carthage in Tunis, Tunisia. Anis Mili/Reuters

A cygnet is lifted for inspection by the Queen’s Swan Uppers during the annual Swan Upping ceremony on the River Thames between Shepperton and Windsor in southern England. The five-day census of the swan population dates back to the twelfth century when the Crown claimed ownership of all mute swans. Luke MacGregor/Reuters

Market Closes for July 15^th, 2013

Market  Index	Close	Change
Dow  Jones	15484.26	+19.96    +0.13%
S&P 500	1682.44	+2.25    +0.13%
NASDAQ	3607.492	+7.412    +0.21
TSX	12530.23	+68.05
		+0.55%

International Markets

Market  Index	Close	Change
NIKKEI	14506.25	+33.67
		+0.23%
HANG  SENG	21303.31	+26.03
		+0.12%
SENSEX	20034.48	+76.01
		+0.38%
FTSE 100	6586.11	+41.17
		+0.63%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.414	2.431
CND.   30 Year Bond	2.918	2.923
U.S.   10 Year Bond	2.5409	2.5812
U.S.   30 Year Bond	3.5967	3.6279

Currencies

BOC Close	Today	Previous
Canadian $	0.95889	0.96205
US   $	1.04288	1.03944
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36266	0.73386
US  $	1.30664	0.76532

Commodities

Gold	Close	Previous
London Gold   Fix	1285.00	1284.08
Oil	Close	Previous
WTI Crude Future	106.32	105.95
BRENT	109.32	109.22

Market Commentary:

Canada

By Katie Brennan

July 15 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level in almost six weeks, after Loblaw Cos. agreed to the biggest takeover of a Canadian retailer and existing home sales rose in June.

Loblaw jumped 5.4 percent afteragreeing to buy Shoppers Drug Mart Corp. for C$12.4 billion ($11.9 billion). Shoppers surged 24 percent to a record. Endeavor Silver Corp. added 12 percent as the company restated its second-quarter revenue higher. Catamaran Corp. gained 1.5 percent after ISI Group boosted its rating on the stock. Colossus Minerals Inc. plunged 50 percent after delaying gold output at a mine in Brazil.

The Standard & Poor’s/TSX Composite Index rose 66.17 points, or 0.5 percent, to 12,528.35 at 4 p.m. in Toronto, the highest since June 4. The benchmark gauge jumped 2.7 percent last week, its biggest five-day rally since November, to erase a loss for the year.

“The Loblaw deal put a good tone to everything and consumer stocks are all generally higher as a result,” said Bob Decker, fund manager with Aurion Capital Management in Toronto.

He helps manage C$6 billion ($5.8 billion) at the firm. “The housing data is a testament to the resilience of the Canadian housing market and will continue to frustrate bearish commentators.”

Canadian 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, as the nation’s housing market defies predictions of a major correction. Recent data suggest the market for residential real estate, while moderating, remains robust.

China’s gross domestic product rose 7.5 percent in the April-to-June quarter from a year earlier. The pace was slower than the 7.7 percent in the first quarter and above the year-ago rate. Comments last week by China’s finance minister that 6.5 percent or 7 percent growth wouldn’t be a “big problem” raised concern the economy of Canada’s second-largest trading partner was cooling faster than estimated.

“It was good the China GDP number didn’t hit the more bearish whisper numbers that were out there,” Decker said. “It was not as bad as feared.”

Eight of the 10 industries in the S&P/TSX advanced, led by a 7 percent surge among producers of consumer staples. Trading volume was 24 percent lower than the 30-day average.

Loblaw, the country’s largest grocery operator by market value, surged 5.4 percent to C$50.13 for the biggest gain since December. The cash and stock deal for the country’s leading drugstore chain is the largest between two Canadian companies since Suncor Energy Inc. bought Petro-Canada in 2009. Shoppers surged 24 percent to C$60.12, helping consumer-staples stocks rise to a record as a group.

Health-care companies jumped 1.2 percent as a group.

Catamaran added 1.5 percent to C$51.91 after an analyst at ISI Group boosted the stock to a strong buy with a price target of $62. Valeant Pharmaceuticals International Inc. gained 1.1 percent to C$97.69.

Endeavor Silver added 12 percent to C$3.77, pacing gains among producers of raw materials. The company revised its second-quarter sales result to $71.3 million, 12 percent higher than originally reported on July 10.

The silver and gold miner said part of the adjustment resulted from its understating realized prices for metals in certain sales. Endeavour is scheduled to report results Aug. 6.

Colossus Minerals plunged 50 percent to C$0.80, the lowest since December 2008. The company is delaying the start of gold production at its Serra Pelada mine venture in Brazil until the fourth quarter after some de-watering wells and pumps did not perform as expected. Stifel Nicholas analyst Craig Stanley downgraded the stock to hold from buy.

US

By Alex Barinka and Nikolaj Gammeltoft

July 15 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its longest winning streak since January, as better-than-estimated earnings at Citigroup Inc. overshadowed a disappointing retail sales report.

Citigroup jumped 2 percent after profit beat analysts’ estimates as stock-trading revenue surged and losses on unwanted assets declined. Leap Wireless International Inc. more than doubled after AT&T Inc. agreed to buy the company for $1.2 billion. Boeing Co. climbed 3.7 percent as a U.K. agency said last week’s fire on a 787 aircraft is unrelated to battery blazes that grounded the fleet earlier this year.

The S&P 500 climbed 0.1 percent to 1,682.50 at 4 p.m. in New York. The index has gained for eight straight days, the longest stretch since Jan. 25. The Dow Jones Industrial Average added 19.96 points, or 0.1 percent, to 15,484.26. Both gauges reached record closing highs. About 4.9 billion shares traded hands on U.S. exchanges today, 25 percent below the three-month average and the lowest level of the year for a full-day session.

“We have our focus on earnings,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.6 billion in assets, said by phone. “Citigroup had a good report this morning and the question is whether earnings will be strong enough to push us higher. That’s where the short-term focus will be.”

The S&P 500 closed at a record last week after Federal Reserve Chairman Ben S. Bernanke backed sustained monetary stimulus. The gauge added 3 percent through the five days, for a third week of gains and its biggest rally since Jan. 4.

An unprecedented three rounds of central bank stimulus have helped drive the S&P 500 up 149 percent from a 12-year low in 2009. The index slumped as much as 5.8 percent after Bernanke signaled on May 22 that the Fed could start scaling back bond purchases as soon as September. Stocks have since recovered all those losses as data on hiring and housing bolstered confidence in the economic recovery.

Profit at companies listed on the S&P 500 rose 2 percent last quarter, down from a projection of 8.7 percent six months ago, according to analyst estimates compiled by Bloomberg.

“Many companies are lowering expectations before we get into the quarter on the hope that they beat them,” Michael Mullaney, chief investment officer for Fiduciary Trust Co. in Boston, said by telephone. His firm manages $9.5 billion. “We don’t know how much longer companies can get blood from the stone.”

Retail sales rose less than projected in June. The 0.4 percent gain followed a 0.5 percent increase in May that was less than previously reported, Commerce Department figures showed today. The median forecast of 82 economists surveyed by Bloomberg called for a 0.8 percent advance. Another report showed manufacturing in the New York region expanded in July at the fastest pace in five months as the area’s factory activity stabilized amid a slowdown in growth.

China’s gross domestic product rose 7.5 percent in the April-to-June quarter from a year earlier, according to the National Bureau of Statistics in Beijing. That equaled the median forecast in a Bloomberg News survey. The economy expanded at a 7.7 percent pace in the first quarter.

“The Chinese GDP data reassured investors that China will not derail the global growth recovery,” Stephane Ekolo, chief European strategist at Market Securities, wrote in an e-mail.

Citigroup rose 2 percent to $51.81. The third-biggest U.S. bank by assets posted adjusted earnings of $1.25 a share for the second quarter, beating the $1.18 average estimate of 27 analysts surveyed by Bloomberg News.

Chief Executive Officer Michael Corbat, 53, has fired thousands of workers and scaled back operations in some countries to cut costs since replacing Vikram Pandit, 56, in October. Citi Holdings, the unit created in 2009 as a home for the company’s unwanted assets after the financial crisis, posted its smallest loss ever.

Financial companies in the S&P 500 rose 0.4 percent as a group, while the KBW Bank Index added 0.6 percent to its highest level since October 2008.

Leap Wireless surged 112 percent to $16.95. AT&T, the second-biggest U.S. wireless carrier, lost 0.7 percent to $35.55. The deal adds pressure on smaller competitors such as Sprint Corp. and Dish Network Corp. to bulk up through mergers and acquisitions of their own.

Sprint rallied 4.2 percent to $6.72 and Dish jumped 3.1 percent to $44.45.

Smaller regional companies such as U.S. Cellular Corp. or NTelos Holdings Corp. also may become takeover bait, said Chetan Sharma, a wireless-industry analyst in Issaquah, Washington.

U.S. Cellular soared 8.3 percent to $38.77 and NTelos gained 6.1 percent to $17.81.

Boeing gained the most in the Dow, climbing 3.7 percent to $105.66 after the stock had its biggest drop in two years on July 12. U.K. regulators are still seeking the cause of last week’s fire on a Boeing Co. 787 parked at London’s Heathrow airport after saying they see no direct link to battery blazes that grounded the fleet earlier this year.

Tiffany & Co., the world’s second-largest jewelry retailer, added 3.6 percent to $79.78. Stifel Financial Corp. upgraded its recommendation on the shares to buy from hold, with a price target of $92.

Monster Beverage Corp. rose 1.6 percent to $60.80. Stifel said the maker of energy drinks is likely to beat second-quarter earnings estimates and raised the price target to $70 from $62.

All 11 members of an S&P index of homebuilders fell as the gauge slumped 3 percent. D.R. Horton Inc. dropped 4.6 percent to $21.72. PulteGroup Inc. sank 3.4 percent to $19.54. Lennar Corp. declined 4.1 percent to $35.55.

Wagers that U.S. stock volatility will decline have reached their highest level in almost two years as the Fed pledges to preserve stimulus and data from jobs to home sales show economic growth.

Put trading on the Chicago Board Options Exchange Volatility Index exceeded calls by 73 percent on July 11, the most since October 2011, according to data compiled by Bloomberg. The VIX, a gauge of S&P 500 option prices, dropped 0.4 percent to 13.79 today, extending its declines to an eighth day, the longest streak of consecutive losses in 21 months. The gauge is down 23 percent for the year.

“The government stands as a backstop to the marketplace, so there is no real fear about the downside,” Alan Salzbank, who helps oversee about $620 million in options and stocks as a managing partner at Gargoyle Asset Management LLC in Englewood, New Jersey, said by phone on July 12. “The VIX at this point is really in a tough spot, because when the government can’t control things any longer, the VIX will explode. But in the meantime, they’re keeping it bottled up by continuing with QE.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

When a man is deprived of the foundation that provides him everything,

his poverty loses its best virtue, simplicity, to become no more than disgraceful and sordid.

His wealth is no longer splendid, but becomes merely extravagant.

His appetites no longer remain within natural limits; they no longer have the one goal

of meeting the needs of his life; they become an end in themselves,

setting fire to his existence, and dancing madly by the light of the flames.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Lost time is never found again.

-Benjamin Franklin, 1706-1790

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On July 12, 1912 – 101 years ago – Sarah Bernhardt starred in the first feature-length movie to premiere in the United States.  The French-made Queen Elizabeth lasted 40 minutes and cost $1 to see.

Also on this day in 1954 – 59 years ago – the 19-year-old Elvis Presley quit his job at Crown Electric and sought his dream of a musical career by signing a contract with Sun Records.

And on this day in 1962 – 51 years ago! The Rolling Stones, fronted by Keith Richards, made their debut performance at the Marquee Club in London.

Birthdays to note:

July 12^th, 1817: Henry David Thoreau was born.

1895: Buckminster Fuller was born on this day

1904: Pablo Neruda, the poet was born.

–from Henry David Thoreau:

 

I am a parcel of vain strivings tied

By chance bond together,

Dangling this way and that, their links

Were made so loose and wide,

Methinks,

For milder weather.

 

A bunch of violets without their roots,

And sorrel intermixed,

Encircled by a wisp of straw

Once coiled about their shoots,

The law

By which I’m fixed.

 

A nosegay which Time clutched from out

Those fair Elysian fields,

With weeds and broken stems, in haste,

Doth make the rabble rout

That waste

The day he yields.

 

And here I bloom for a short hour unseen,

Drinking my juices up,

With no root in the land

To keep my branches green,

But stand

In a bare cup.

 

Some tender buds were left upon my stem

In mimicry of life,

But ah!  the children will not know,

Till time has withered them,

The woe

With which they’re rife.

 

But now I see I was not plucked for naught,

And after in life’s vase

Of glass set while I might survive,

But  by a kind hand brought

Alive

To a strange place.

 

That stock thus thinned will soon redeem its hours,

And by another year,

Such as God knows, with freer air,

More fruits and fairer flowers

Will bear,

While I droop here.

Photos of the Day –July 12th, 2013 Belgian shrimp fisherman Xavier Vanbillemont rides a cart horse to haul a net out of the sea during low tide at the coastal town of Oostduinkerke, Belgium. This traditional method of catching shrimp along the North Sea coast, which dates back to some 500 years, attracts tourists every summer. Yves Herman/Reuters

A runner is caught between the horns of a bull during the sixth running of the bulls of the San Fermin festival in Pamplona, Spain. Susana Vera/Reuters

Market Closes for July 11^th, 2013

Market  Index	Close	Change
Dow  Jones	15464.30	+3.38    +0.02%
S&P 500	1680.08	+5.06      +0.30%
NASDAQ	3600.080	+21.776      +0.61
TSX	12460.47	-32.79
		-0.26%

International Markets

Market  Index	Close	Change
NIKKEI	14506.25	+33.67
		+0.23%
HANG  SENG	21277.28	-160.21
		-0.75%
SENSEX	19958.47	+282.41
		+1.44%
FTSE 100	6544.94	+1.53
		+0.02%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.431	2.440
CND.   30 Year Bond	2.923	2.923
U.S.   10 Year Bond	2.5812	2.5702
U.S.   30 Year Bond	3.6279	3.6230

Currencies

BOC Close	Today	Previous
Canadian $	0.96205	0.96427
US   $	1.03944	1.03706
Euro Rate  1 Euro=		Inverse
Canadian   $	1.35805	0.73635
US  $	1.30652	0.76539

Commodities

Gold	Close	Previous
London Gold   Fix	1284.08	1285.04
Oil	Close	Previous
WTI Crude Future	105.95	104.88
BRENT	109.22	108.32

Market Commentary:

Canada

By Katie Brennan

July 12 (Bloomberg) — Canadian stocks fell, following the biggest rally in 11 months, as raw-materials companies declined amid signs China may tolerate slower growth and a U.S. Federal Reserve official urged slower stimulus.

Pretium Resources Inc. lost 4 percent and Alamos Gold Inc.

dropped 3.7 percent as falling metals prices weighed on raw- materials producers. Catamaran Corp. added 0.9 percent, pacing gains among health-care companies. Niko Resources Ltd. surged 3.4 percent after entering an agreement for a $60 million loan.

The Standard & Poor’s/TSX Composite Index fell 31.09 points, or 0.3 percent, to 12,462.17 at 4 p.m. in Toronto, erasing an earlier gain of 0.2 percent. The loss pared the index’s weekly gain to 2.7 percent, its biggest five-day advance since November. Trading was 27 percent below the 30-day average.

“It has been a zigzag worth of news coming out from the Fed,” said Irwin Michael, fund manager with ABC Funds in Toronto. He helps manage about C$800 million ($759 million).

“The market is moving on how people are processing the information coming out.”

The benchmark gauge jumped the most since August 2012 yesterday, erasing a loss for the year, after Fed Chairman Ben S. Bernanke backed sustained monetary stimulus for the economy of Canada’s biggest trading partner. Stocks slumped today after Philadelphia Fed Bank President Charles Plosser said the central bank should begin tapering its $85 billion in monthly bond buying in September and end the stimulus by year-end.

China’s Finance Minister, Lou Jiwei, speaking yesterday at the U.S.-China Strategic and Economic Dialogue in Washington, said he remains confident of achieving a 7 percent growth rate this year. That’s lower than the government’s target for 2013 of 7.5 percent. A report due on July 15 may show economic growth slowed for a second quarter in the three months ended March 31.

China, the world’s biggest consumer of industrial metals and energy, is Canada’s second-largest trading partner.

Six of the gauge’s ten groups declined. Raw-materials producers lost the most, falling 1.7 percent, as prices for metals from silver to copper dropped.

Pretium Resources, a diversified miner, slid 4 percent to C$7.52. Alamos Gold tumbled 3.7 percent to C$13.41 after agreeing to buy precious metals producer Esperanza Resources Corp. for about C$69.4 million.

Health-care companies gained the most, as Catamaran Corp. added 0.9 percent to C$51.16.

Railroad companies drove industrial stocks up 0.5 percent after BMO analyst Fadi Chamoun wrote in a note that railroads’

market share in heavy crude oil shipments will “materially increase” over the next two years.

Canadian National Railway Co. added 0.9 percent to C$104.93 and Canadian Pacific Railway Ltd. rose 1.7 percent to C$131.73.

Niko Resources surged 3.4 percent to $8.64 after the company entered an agreement for a $60 million loan that will be funded by a group of institutional investors. Net proceeds from the loan will be used to fund working capital requirements.

US

By Inyoung Hwang and Alex Barinka

July 12 (Bloomberg) — U.S. stocks rose for a seventh day, extending a record for the Standard & Poor’s 500 Index, as better-than-estimated bank earnings overshadowed a reduced profit forecast from United Parcel Service Inc.

Financial stocks rose the most out of 10 S&P 500 groups after Wells Fargo & Co. reported earnings that topped analysts’ estimates. UPS fell 5.8 percent as it lowered its forecast for earnings in 2013, citing a slowing economy in the second quarter. Boeing Co. plunged 4.7 percent after a parked 787 Dreamliner caught fire at London’s Heathrow Airport.

The S&P 500 advanced 0.3 percent to a record 1,680.19 at 4 p.m. in New York. The Dow Jones Industrial Average added 3.38 points, or less than 0.1 percent, to 15,464.3, also an all-time high. More than 5.4 billion shares traded hands on U.S. exchanges today, or 15 percent below the three-month average.

“Earnings are going to be very important,” Stephen Wood, the New York-based chief market strategist who helps oversee $173 billion at Russell Investments, said by telephone. “It’s going to be the story of the week and the story of the month.”

The S&P 500’s advance today extended a record from yesterday, when the gauge jumped 1.4 percent after Fed Chairman Ben S. Bernanke backed sustained monetary stimulus. The index has added 3 percent in the past five days for a third week of gains and its biggest rally since Jan. 4. The surge has helped to erase losses since Bernanke first signaled the Fed may trim its $85 billion in monthly bond purchases later this year.

Equities retreated earlier today after Fed Bank of Philadelphia President Charles Plosser, who has opposed the central bank’s current round of asset purchases, said the Fed should begin tapering in September. The benchmark gauge halted the decline after Fed Bank of St. Louis President James Bullard said the central bank shouldn’t cut back until inflation accelerates toward the Fed’s 2 percent goal.

The debate among policy makers in the past six weeks has sent markets lurching as investors speculate on the timing and rate of any cuts in bond buying. Central bank stimulus has helped fuel a rally in stocks worldwide, with the benchmark U.S. index surging 148 percent from its March 2009 low.

The S&P 500 sank as much as 5.8 percent after reaching a record May 21, the day before Bernanke said the Fed may start paring stimulus efforts as soon as September if the economy improves in line with its forecasts. The index has rebounded 6.8 percent from a June 24 bottom, the fastest rally since December 2011, as economic data from hiring to housing tempered concern over possible tapering.

“The Fed’s hope is that investors shift over time from liquidity-driven strength to economy-driven strength,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.6 billion in assets, said by phone. “I don’t know if we’ve seen true economic strength here yet, but we’re a lot closer than we were a couple of years ago.”

A report today showed consumer confidence unexpectedly cooled in July as Americans became less optimistic about the outlook for the economy. Separate data indicated wholesale prices in the U.S. rose more than projected in June, reflecting higher costs for energy and automobiles.

The Chicago Board Options Exchange Volatility Index, or VIX, slid 1.2 percent to 13.84. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, has declined seven straight days, the longest streak of losses since October 2011. The index reached a six-month high on June 20 and has fallen 32 percent since.

Investors have also turned their attention to earnings results this week. Profit at companies listed on the S&P 500 rose 2 percent last quarter, down from a projection of 8.7 percent six months ago, according to analyst estimates compiled by Bloomberg. Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, Bloomberg data show.

Reports from JPMorgan and Wells Fargo, the first of the six largest U.S. lenders to report, drove bank stocks 1.5 percent higher as a group. The lenders were the only two S&P 500 companies to release earnings today.

Wells Fargo rose 1.8 percent to $42.63. The largest U.S. home lender said second-quarter profit climbed 19 percent as the company clamped down on expenses.

JPMorgan slipped 0.3 percent to $54.97 after Chief Executive Officer Jamie Dimon warned investors that higher interest rates could lead to a “dramatic reduction” in the bank’s profits by eroding demand for mortgage refinancing.

The biggest U.S. bank by assets reported a 31 percent increase in second-quarter profit that beat analysts’ estimates as revenue from trading stocks and bonds climbed.

Netflix Inc. gained 5.4 percent to $257.26, the highest level since August 2011. The largest subscription video- streaming service rose to its highest in more than 23 months as expectations for strong customer growth prompted Barclays Plc to boost its price target for the shares.

Alexion Pharmaceuticals Inc. surged 13 percent to $114.26.

Roche Holding AG, the largest maker of cancer drugs, is seeking billions of dollars in financing for a potential takeover of the maker of a drug for rare blood diseases, people with knowledge of the situation said.

Alexion led the Nasdaq 100 Index to a 13th straight gain, matching its longest rally since 1992.

Regeneron Pharmaceuticals Inc. added 7.3 percent to $266 after Joshua Schimmer, a New York-based analyst at Lazard Capital Markets Ltd., lifted his rating on the maker of the eye medicine Eylea to buy from neutral.

WebMD Health Corp. surged 25 percent, the most since 2008, to $33.82. The company said second-quarter revenue rose to as much as $125 million, above analyst estimates for $117 million.

The health information services provider raised its full-year earnings outlook to as much as $11 million, from a previously anticipated loss of as much as $13 million. Shares have more than doubled this year.

UPS said a slowing U.S. economy hurt second-quarter profit and revenue. The world’s largest package delivery company and rival FedEx Corp. are often viewed as economic bellwethers because they transport goods across the world.

UPS tumbled 5.8 percent to $86.12, the most since December 2008. FedEx slid 2 percent to $102.29.

Boeing plunged 4.7 percent to $101.87 for the biggest retreat in the Dow. London Heathrow airport closed to flights after a fire involving a Boeing 787 jet operated by Ethiopian Airlines Enterprise, while a second Dreamliner was forced to abandon a trip with technical issues.

The aircraft, Boeing’s newest model and beset by battery- related fire incidents that grounded the global fleet earlier this year, was sprayed with fire-retardant foam after the Heathrow event.

Precision Castparts Corp., the maker of metal forgings for jet engines and a Boeing supplier, slid 1.1 percent to $234.69.

 

Have a wonderful weekend everyone.

Be magnificent!

 

Those who are focused on the objects of the senses, become attached to those objects.

From attachment comes desire; and from desire comes anger; from anger comes confusion of mind;

from confusion of mind comes loss of memory; from loss of memory comes loss of intelligence;

and from loss of intelligence comes destruction.

The Bhagavad Gita

 

As ever,

Carolann

 

Endurance is nobler than strength, and patience than beauty.

-John Ruskin, 1819-1900

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

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com

 

 

 

Dear Friends,

Tangents:

The Poem:

Green

The dawn was apple-green,

The sky was green wine held up in the sun,

The moon was a golden petal between.

She opened her eyes, and green

They shone, clear like flowers undone

For the first time, now for the first time seen.

-D.H. Lawrence

On July 11^th, 1914, Babe Ruth  made his major league baseball debut.

On July 11^th, 1960, Harper Lee published To Kill a Mockingbird.  Over fifty million copies have sold to date.

On this date in 1977, Martin Luther King Jr. is posthumously awarded the Presidential Medal of freedom for his leadership during the Civil Rights Movement.

Never believe that a few caring people can’t change the world.  For, indeed, that’s all who ever have.  –Margaret Mead.

Photos of the Day –July 11th, 2013

Milla, a female snow leopard, and her baby are nose to nose in the Zoo de Servion, in Servion, Switzerland. Jean-Christophe Bott/Keystone/AP

Zumreta Ahmetasevic prays amidst gravestones during a funeral ceremony at the memorial center in Potocari, near Srebrenica, Bosnia. People are commemorating the 18th anniversary of a 1995 massacre and reburying recently identified victims exhumed from mass graves. Amel Emric/AP

Market Closes for July 11^th, 2013

Market  Index	Close	Change
Dow  Jones	15461.07	+169.41    +1.11%
S&P 500	1676.29	+23.67      +1.43%
NASDAQ	3578.304	+57.545      +1.63
TSX	12491.95	+185.02
		+1.50%

International Markets

Market  Index	Close	Change
NIKKEI	14472.58	+55.98
		+0.39%
HANG  SENG	21437.49	+532.93
		+2.55%
SENSEX	19676.06	+381.94
		+1.98%
FTSE 100	6543.41	+38.45
		+0.59%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.440	2.508
CND.   30 Year Bond	2.923	2.955
U.S.   10 Year Bond	2.5702	2.6797
U.S.   30 Year Bond	3.6230	3.6861

Currencies

BOC Close	Today	Previous
Canadian $	0.96427	0.95834
US   $	1.03706	1.04347
Euro Rate  1 Euro=		Inverse
Canadian   $	1.35795	0.73640
US  $	1.30909	0.76389

Commodities

Gold	Close	Previous
London Gold   Fix	1285.04	1253.09
Oil	Close	Previous
WTI Crude Future	104.88	105.83
BRENT	108.32	108.47

Market Commentary:

Canada

By Katie Brennan

July 11 (Bloomberg) — Canadian stocks rose the most in 11 months as commodity producers rallied amid speculation central banks will keep acting to stoke economic growth in China and the U.S., the country’s two biggest trading partners.

OceanaGold Corp. and Dundee Precious Metals Inc. surged at least 14 percent as metals prices jumped. Canadian Natural Resources Ltd. added 1.9 percent as energy shares rallied.

BlackBerry Ltd. lost 1.1 percent as two executives left the smartphone maker. Corus Entertainment Inc. slumped 6.9 percent after reporting fiscal third-quarter revenue that fell short of estimates.

The Standard & Poor’s/TSX Composite Index gained 186.33 points, or 1.5 percent, to 12,493.26 at 4 p.m. in Toronto. The gain, the most since August 2012, extended a four-day rally to 3 percent and erased a loss for the year. Trading was in line with the 30-day average at this time of the day.

“The central banks have made it clear that they are going to support the economy,” Barry Schwartz, fund manager with Baskin Financial Services Inc., said from Toronto. He helps manage more than C$500 million ($482 million) with the firm.

“Indirectly, they want to make everybody richer and one way you do it is make the stock market go higher.”

The rally, the S&P/TSX’s longest since May 22, has helped erase a 4.3 percent plunge between June 19 and June 24. That rout started when Federal Reserve Chairman Ben S. Bernanke said after a June 18-19 meeting that the central bank may reduce its $85 billion of monthly bond purchases this year.

Bernanke said after the markets closed yesterday that “highly accommodative monetary policy for the foreseeable future is what’s needed,” and minutes of the Fed’s June meeting showed officials would want to see more signs of job growth before reducing support.

Fed stimulus has helped fuel gains in global stocks and the prospect for less support roiled markets in recent weeks as investors guessed the timing of any reduction. Benchmark U.S indexes closed at records today.

Global equities rallied, with China’s benchmark gauge adding 3.2 percent. The government will soften its stance on monetary policy, Nomura International (HK) Ltd. said, after Premier Li Keqiang said growth must stay above a certain floor.

The nation’s economy slowed for eight of the last nine quarters.

Data in Canada today showed an index of new home prices rose in May. Other reports this week also indicated housing- market strength, as building permits rose a fifth month in May and housing starts fell less than economists predicted in June.

All 10 industries in the S&P/TSX advanced at least 0.3 percent. Raw-materials producers paced the gains, adding 4.6 percent to the highest level since June 19.

Gold producers rallied for a third day, adding 6.9 percent.

The price of the metal for August delivery rose to a two-week high. Dundee Precious Metals led the group with a 16 percent advance, the most since September 2009, to C$4.96. OceanaGold jumped 14 percent to C$1.47.

Fortuna Silver Mines Inc. climbed 7 percent to C$3.54 as silver rallied to the highest level since June 19.

Utility companies added 1.8 percent as a group, led by a 4.1 percent gain in Atlantic Power Corp. The company, which holds indirect interests in power plants in the U.S., closed at C$4.56.

Canadian Natural Resources added 1.9 percent to $33.29 and Niko Resources Ltd. gained 2 percent to C$8.36, driving the S&P/TSX Energy Index to a 1.4 percent increase, its fourth straight gain.

BlackBerry retreated 1.1 percent to C$9.7, the lowest level in eight months, after it said two executives who were closely involved with its new smartphone operating system left the company. The stock dropped 4.9 percent yesterday as the vice president of U.S. sales departed.

Corus Entertainment Inc. slumped 4.9 percent, the most in the index, to C$23.55. The Toronto-based media company reported fiscal third-quarter revenue that fell short of estimates.

US

By Inyoung Hwang and Alex Barinka

July 11 (Bloomberg) — U.S. stocks jumped, sending the Standard & Poor’s 500 Index to a record closing level, as Federal Reserve Chairman Ben S. Bernanke backed sustained monetary stimulus.

All 10 groups in the S&P 500 rallied, with technology and raw-materials shares posting the biggest gains. Freeport-McMoRan Copper & Gold Inc. and Newmont Mining Corp. led gold producers higher as the precious metal’s price soared. Advanced Micro Devices Inc. rose 12 percent as analysts recommended that investors buy the shares. An S&P gauge of homebuilders added 7.1 percent as all 11 members advanced.

The S&P 500 gained 1.4 percent to 1,675.02 at 4 p.m. in New York. The index topped the closing record of 1,669.16 reached May 21, erasing losses since Bernanke first suggested the Fed might curb stimulus this year. The Dow Jones Industrial Average jumped 169.26 points, or 1.1 percent, to 15,460.92 today, also a record. About 6.5 billion shares traded hands on U.S. exchanges today, in line with the three-month average.

“The story in stocks for this year is about confidence replacing uncertainty and anxiety,” Hank Smith, who oversees $7 billion as chief investment officer at Radnor, Pennsylvania- based Haverford Trust Co., said by telephone. “It’s really more about an improvement in sentiment. That’s being a big driver for equity returns and we are still a long ways away from worrying about there being too much optimism or exuberance.”

Central bank stimulus has helped fuel a rally in stocks worldwide, with the benchmark U.S. index surging 148 percent from its March 2009 low. The S&P 500 has advanced for six straight days, the longest winning streak since March 11, and is heading toward its biggest weekly gain since Jan. 4.

Bernanke said yesterday that “highly accommodative monetary policy for the foreseeable future” was needed in the world’s largest economy. The Fed chairman spoke just three hours after the central bank released minutes of the June 18-19 gathering showing that about half of the 19 participants in the Federal Open Market Committee wanted to halt $85 billion in monthly bond purchases by year end.

At the same time, the minutes showed many Fed officials wanted to see more signs employment is improving before backing a trim to bond purchases known as quantitative easing.

“Everybody’s hanging on the Fed’s every word,” Malcolm Polley, who manages $1.1 billion as chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said by telephone. “Even though Bernanke’s comments after the last FOMC meeting really weren’t hawkish, the market has wanted more clarity in terms of what he meant. Bernanke was as clear as one can be, saying ‘We’re not going to step on the brakes. We’re just going to let up on the accelerator.’ The more dovish comments he made yesterday clarifies that position.”

The S&P 500 sank as much as 5.8 percent after reaching a record on May 21, the day before Bernanke said the central bank may start paring stimulus efforts as soon as September if the economy improves in line with its forecasts. The equity gauge has rebounded 6.5 percent from a June 24 bottom as economic data from hiring to housing tempered concern over the possible scaling back of Fed stimulus.

Data today showed the number of Americans filing for unemployment benefits unexpectedly increased to a two-month high. Swings in jobless applications are typical in July as auto plants close for annual retooling. The Labor Department last week released its jobs report for the month of June, showing the economy added 195,000 jobs, exceeding estimates, while the unemployment rate was unchanged at 7.6 percent.

“Fed policy has been helpful no question, but the driver of equity returns off of the March 2009 bottom has been fundamentals, not Fed policy,” Haverford’s Smith said. “You’ve had over the past four years tremendous earnings growth confirmed by dividend growth. That has been the primary driver of the market but yet Fed policy has been helpful.”

Investors are watching earnings results this week. Profit at companies listed on the S&P 500 rose 1.8 percent last quarter, down from a projection of 8.7 percent six months ago, according to analyst estimates compiled by Bloomberg. Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, Bloomberg data show.

The Chicago Board Options Exchange Volatility Index, or VIX, slid 1.4 percent to 14.01, the lowest level since May 24.

The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, has declined six straight days, the longest streak of losses since January. The index reached a six-month high on June 20 and has fallen 32 percent since.

Technology, raw-material and utility companies rallied more than 1.6 percent for the biggest gains out of 10 S&P 500 groups.

Investors bought shares of stocks most tied to economic growth, sending the Morgan Stanley Cyclical Index up 1.8 percent to a record close.

The Nasdaq Composite Index rose 1.6 percent to 3,578.30, the highest since September 2000, as technology shares soared 1.7 percent as a group. Intel Corp. climbed 3.2 percent to $23.99 and Microsoft Corp. rallied 2.8 percent to $35.69, the highest since 2007. The two stocks had the best performance in the Dow today.

Hewlett-Packard Co. increased 1.7 percent to $26.38 after a report showed its sales of personal computers in the U.S. fell less than 1 percent in the second quarter. Sales for all PC makers gained 8.5 percent from the previous quarter and posted their smallest year-on-year drop of the last seven quarters, according to market researcher Gartner Inc.

AMD added 12 percent to $4.45 for the largest advance in the S&P 500. Bank of America’s Merrill Lynch unit and Canaccord Genuity Ltd. raised their ratings on the maker of processors for personal computers to buy from underperform, and to buy from hold, respectively. Canaccord said increased production of games consoles may boost demand for its hardware in the third quarter.

Freeport advanced 4.6 percent to $28.53. Gold futures rallied 2.6 percent for a fourth day of gains. Newmont Mining added 5.7 percent to $28.12 after reaffirming its forecast for gold and copper production this year in a statement late yesterday.

The S&P Supercomposite Homebuilding Index rallied 7.1 percent for the biggest gain since October 2011. D.R. Horton Inc. surged 9.2 percent to $22.98 and Lennar Corp. jumped 8.3 percent to $37.44.

Celgene Corp. rose 7.9 percent to a record $134.92 after its Revlimid cancer drug met the goal of a study aimed at showing the medicine could be an initial treatment for patients with multiple myeloma.

Bank shares were the only group to fall among 24 S&P 500 industries, losing 0.6 percent as regional banks tumbled.

Regions Financial Corp. slid 2.5 percent to $9.88 and KeyCorp tumbled 1.9 percent to $11.57. The KBW Regional Banking Index erased 1.5 percent as 48 out of 50 members declined.

JPMorgan Chase & Co. increased 0.6 percent to $55.14 while Wells Fargo & Co. slipped 0.4 percent to $41.89. The two lenders report second-quarter results tomorrow, the first of the six largest U.S. banks.

Bernanke’s plan for paring central bank bond purchases are estimated to squeeze profit and erode capital through 2014 at the six largest U.S. lenders, overshadowing second-quarter earnings that are projected to rise by an average of 20 percent.

Market gyrations that began mid-quarter damped earnings at firms including Goldman Sachs Group Inc. and Bank of America Corp., analysts’ estimates show. Trading and home-lending that started strong slumped after Bernanke indicated May 22 that the Fed could slow monthly bond purchases.

Have a wonderful evening everyone.

Be magnificent!

Free yourself from anger and desire, which are the causes of sin and conflict,

and thereby make yourself whole.  This is the essence of yoga;

this is the means by which you come to know the soul, and thereby attain the highest spiritual state.

Learn to meditate.  Close your eyes; calm your breathing; and focus your attention

on the center of consciousness.  Thus you will master the senses, the emotions, and the intellect –

and thereby free yourself from desire and anger.

The Bhagavad Gita

As ever,

Carolann

 

Humility is attentive patience.

-Simone Weil, 1909-1943

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

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com

 

 

 

Dear Friends,

Tangents:

Tired of people talking loudly on cellphones or jangly, obnoxious ring tones?  So were the staff at the website The Art of Manliness, so they asked artist Ted Slampyak to create 1940-s era propaganda posters urging phone users to be more polite.  Check them out at http://bit.ly/politephones.  I was pleased to find that when we recently took an Amtrak train from Penn Station to Philadelphia, passengers had the choice of a “quiet” train (no cell phones or loud talking) or a regular train.

Music: The Waterboys have created an entire album from the poems of W.B. Yeats.  An Appointment with Mr. Yeats finds the Celtic rock band returning to the 1980s sound they dubbed “the big music.”  Critics say it is The Waterboys’ best record since “Fisherman’s Blues.”

Poem:

BEGINNING

In the beginning,

in the list of begats,

one begat

got forgot:

work begets work

(one poem

bears

the next).

In other words,

once there was air,

a bird

could be got.

Not taken.

Not kept.

But conjured up.

-Lia Purpura

Film: Gary and I went to see the movie Before Midnight last night.  Great film.  Great acting. Highly recommended.

Photos of the Day –July 10th, 2013

Omega Pharma-Quick Step team rider Sylvain Chavanel of France cycles past Mont Saint-Michel during the 32 km individual time trial eleventh stage of the centenary Tour de France. Eric Gaillard/Reuters

A postman delivers letters to a house in Henton, southern England. The British government plans to privatize the state postal operator. Eddie Keogh/Reuters

Market Closes for July 10^th, 2013

Market  Index	Close	Change
Dow  Jones	15291.66	-8.68    -0.06%
S&P 500	1652.62	+0.30      +0.02%
NASDAQ	3520.759	+16.496      +0.47
TSX	12306.93	+9.84
		+0.08%

International Markets

Market  Index	Close	Change
NIKKEI	14416.60	-56.30
		-0.39%
HANG  SENG	20904.56	+221.55
		+1.07%
SENSEX	19294.12	-145.36
		-0.75%
FTSE 100	6504.96	-8.12
		-0.12%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.508	2.474
CND.   30 Year Bond	2.955	2.930
U.S.   10 Year Bond	2.6797	2.6340
U.S.   30 Year Bond	3.6861	3.6477

Currencies

BOC Close	Today	Previous
Canadian $	0.95834	0.94955
US   $	1.04347	1.05313
Euro Rate  1 Euro=		Inverse
Canadian   $	1.35811	0.73632
US  $	1.30153	0.76833

Commodities

Gold	Close	Previous
London Gold   Fix	1253.09	1251.50
Oil	Close	Previous
WTI Crude Future	105.83	103.53
BRENT	108.47	108.71

Market Commentary:

Canada

By Eric Lam

July 10 (Bloomberg) — Canadian stocks rose a third day, erasing earlier losses as oil rallied and investors analyzed U.S. Federal Reserve minutes for signs on when the central bank might slow the pace of stimulus.

BlackPearl Resources Inc. surged 15 percent as crude jumped to a 15-month high. Alimentation Couche-Tard Inc. climbed 6.3 percent to lead gains among producers of consumer staples, rebounding from its biggest decline in year after reporting earnings yesterday. BlackBerry Ltd. dropped to an eight-month low after announcing late yesterday its vice president of U.S. sales had left.

The Standard & Poor’s/TSX Composite Index rose 9.84 points, or 0.1 percent, to 12,306.93 at 4 p.m. in Toronto, erasing an earlier decline of as much as 0.4 percent. The index has lost 1 percent this year.

“The market got carried away and misinterpreted what Bernanke said at his press conference, and the losses were a little overdone,” said David Baskin, president of Baskin Financial Services in Toronto. The firm manages C$500 million ($476 million). “Basically people today are saying ’No big deal’ to this.”

Canadian equities plunged 4.3 percent between June 19 and June 24, tracking a similar drop among U.S. stocks, as Fed Chairman Ben S. Bernanke said after the June 18-19 meeting that the central bank may reduce the pace of monthly bond purchases as soon as in September.

Fed stimulus has helped fuel gains in global stocks and the prospect for less support roiled markets in recent weeks as investors guessed the timing of any reduction. The minutes, released at 2 p.m. today in Washington, showed that while several members judged that a reduction in asset purchases “would likely soon be warranted,” many officials want to see more signs employment is picking up before they’ll taper stimulus.

The meeting occurred before data last week showed U.S. hiring last month exceeded expectations while the unemployment rate remained unchanged at 7.6 percent. With today’s gain, the S&P/TSX has recovered much of its loss after the meeting, closing 0.5 percent below its June 18 level.

Separate data showed China’s imports and exports declined in June, raising concerns that Canada’s second-largest trading partner faces slowing economic growth. Overseas shipments slid 3.1 percent from a year earlier, compared with the median estimate of a 3.7 percent gain.

“It’s the latest in a long line of softening economic data from China,” said John Wilson, co-chief investment officer with Sprott Asset Management LP in Toronto. He manages about C$250 million across three funds. “That exports were negative was a bit of a surprise. It’s consistent with the idea that growth in China is slowing.”

Shares in raw-materials producers retreated 0.2 percent, even as commodities extended a rally to a seventh day. Consumer staples stocks gained the most in the benchmark gauge, rising 1.4 percent as a group as four of 10 industries in the S&P/TSX advanced. Trading volume was 18 percent lower than the 30-day average.

Couche-Tard, the largest public convenience-store operator in North America, rallied 6.3 percent to C$62. The stock recovered losses from yesterday when the company reported fourth-quarter earnings that fell short of analysts’ estimates.

Energy shares jumped 0.4 percent as crude in New York surged to its highest since March 2012, with gains accelerating after the Fed minutes were released. BlackPearl Resources soared 15 percent to C$1.75, the biggest advance since August 2011.

Gold producers gained, as the price of the precious metal climbed to a one-week high. Alacer Gold Corp. rallied 3.4 percent to C$2.43 and Torex Gold Resources Inc. jumped 8.2 percent to C$1.32.

Fortis Inc., which invests in electricity distribution, slipped 1.1 percent to C$32.05, dragging utilities stocks to the worst performance in the benchmark gauge. The S&P/TSX Utilities Index retreated 0.9 percent, with nine of 11 members lower.

Technology shares dropped 0.1 percent for the eighth decline in the past nine sessions, led lower by BlackBerry. The smartphone maker, formerly Research In Motion Ltd., sank 3.9 percent to C$9.80, the lowest since November. The Waterloo, Ontario-based company said in an e-mail yesterday that Richard Piasentin, vice-president of U.S. sales, has left the company.

The stock has plunged 35 percent since June 27, the day before BlackBerry posted worse-than-expected earnings in its most recent quarter. The company said at its shareholder meeting yesterday that it’s looking for partners to help get its software on more devices as sales of its phones struggle.

US

By Inyoung Hwang and Alex Barinka

July 10 (Bloomberg) — U.S. stocks were little changed as investors analyzed minutes from the Federal Reserve’s last meeting for signs on when the central bank might slow the pace of stimulus efforts.

Financial companies fell the most out of 10 S&P 500 groups as Bank of America Corp. and Wells Fargo & Co. slumped more than 1.2 percent. Nabors Industries Ltd. fell 6.3 percent after forecasting operating income below analysts’ estimates. Family Dollar Stores Inc. added 7.1 percent as the retailer’s earnings topped analyst estimates. Hewlett-Packard Co. rose 1.8 percent after Citigroup Inc. advised investors to buy the stock.

The Standard & Poor’s 500 Index added less than 0.1 percent to 1,652.62 at 4 p.m. in New York, after rising and falling as much as 0.3 percent during the day. The Dow Jones Industrial Average dropped 8.68 points, or 0.1 percent, to 15,291.66. About 5.7 billion shares traded hands on U.S. exchanges, or 13 percent below the three-month average.

“The minutes largely reiterated what the chairman said in June,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said by e- mail. His firm oversees $290 billion. “Tapering, whether it will be this year or next, is inevitable. The market was initially encouraged that the Fed is waiting on additional data, but possibly taken aback by the fact that about half the participants indicated that asset purchases should end later this year.”

Minutes from the central bank’s June 18-19 meeting, released today in Washington, showed that while several members judged that a reduction in asset purchases “would likely soon be warranted,” many officials want to see more signs employment is picking up before they’ll begin slowing the pace of $85 billion in monthly bond purchases.

Fed officials met before last week’s Labor Department jobs report for the month of June exceeded expectations, with the economy adding 195,000 jobs and the unemployment rate unchanged at 7.6 percent.

The S&P 500 rallied 2.4 percent over the past four days as the June employment data eased concern over a scaling back of Fed stimulus. The index has recovered from a 4.8 percent drop between June 19 and 24, triggered when Fed Chairman Ben S.

Bernanke said the central bank may reduce its bond-buying this year and end the program in 2014 as economic risks subside. The benchmark gauge is up 16 percent for the year, and within 1 percent of a record high set on May 21.

Data today showed inventories at U.S. wholesalers unexpectedly declined in May by the most since September 2011 as sales surged, pointing to a pickup in orders and production.

In China, a report from the General Administration of Customs in Beijing showed that exports fell 3.1 percent in June from a year earlier. The median estimate in a Bloomberg survey had called for a 3.7 percent gain. Imports dropped 0.7 percent last month, compared with the median projection of a 6 percent increase. China’s trade surplus with the U.S. slipped to $17.49 billion in June from $19.35 billion in May.

Investors have also been watching corporate earnings. Alcoa Inc. unofficially started the U.S. earnings season on July 8 with results that beat analysts’ estimates. JPMorgan Chase & Co. and Wells Fargo are among companies releasing results later this week.

The Chicago Board Options Exchange Volatility Index, or VIX, slid 1 percent to 14.21. 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 31 percent since.

Financial companies lost 0.6 percent. U.S. regulators proposed a plan yesterday that said the eight largest firms would need to retain capital equal to at least 5 percent of assets, while their banking units would have to hold a minimum of 6 percent. Bank of America dropped 1.2 percent to $13.37.

Wells Fargo sank 1.5 percent to $42.07. Nabors Industries fell 6.3 percent to $14.99 after the company said it expects second-quarter operating income of $88 million to $91 million, below estimates of $110.1 million. The owner and operator of land drilling rigs cited adverse weather and intense competition, particularly for pressure pumping in the U.S. and Canada.

Best Buy Co. plunged 4.2 percent to $28.47. Cleveland Research Co. wrote in a report that a seasonal slowdown during the May to June period appears more pronounced this year for the world’s largest consumer-electronics retailer.

Fastenal Co. slid 2.8 percent to $45.77 after the seller of industrial and construction supplies reported second-quarter sales of $847.6 million, lower than analyst estimates for $857.4 million. Hewlett-Packard

 

Health-care, utility and technology shares rose the most among 10 S&P 500 groups, climbing at least 0.5 percent.

Hewlett-Packard increased 1.8 percent, the most in the Dow, to $25.93. Citigroup upgraded its recommendation for the computer maker to buy from sell and doubled its price estimate for the shares to $32. A survey among chief information officers signaled a “positive inflection” for HP’s services, Citigroup analysts said.

Cisco Systems Inc. gained 1 percent to $25.41, the highest level since May 2010, after surging 2.2 percent yesterday.

Microsoft Corp. advanced 1 percent to $34.70.

Family Dollar Stores jumped 7.1 percent to $68.50. The second-biggest U.S. dollar-store retailer reported fiscal third- quarter earnings of $1.05 a share, beating analyst estimates of $1.03 a share. Same-store sales climbed 2.9 percent as average transaction value and customer traffic increased for the quarter ended June 1.

Dollar General Corp. increased 5.8 percent to $54.78.

Dollar Tree Inc. added 2.8 percent to $54.29.

 

Have a wonderful evening everyone.

Be magnificent!

 

We are always comparing what we are with what we should be.

This measuring ourselves all the time against something or someone

is one of the primary causes of conflict.  Now why is there any comparison at all?

If you do not compare yourself with another

you will be what you really are.

Krishnamurti, 1895-1986

As ever,

Carolann

 

Endurance is patience concentrated.

-Thomas Carlyle, 1795-1881

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com

 

 

 

Dear Friends,

Tangents:

SUMMER

Heavy July.  Too rampant and too lush;

High Summer, dull, fulfilled, and satiate,

Nothing to fear, and little to await.

The very birds are hush.

Dark over-burdened woods: too black, their green.

No leaping promise, no surprise, no keen

Difficult fight against a young, a lean

Sharp air and frozen soil; no contest bright

Of fragile courage winning in despite.

Easy July, when all too warmly blows

The surfeit of the rose

Risking no harm;

And those aggressive indestructible

Bores, the herbaceous plants, that gladly take

Whatever’s given and make no demand

Beyond the careless favour of a stake;

Humble appeal, not arrogant command,

Like some tough spinster, doughty, duteous,

All virtue and no charm…

-from The Garden, V. Sackville-West

On July 9^th, 1962, Bob Dylan recorded Blowin’ In the Wind.

Photos of the Day –July 9th, 2013

Members of the media film a 39,000-year-old female Woolly mammoth, which was found frozen in Siberia, Russia, upon its arrival at an exhibition hall in Yokohama, Japan. Toru Hanai/Reuters

Workers attach photos by Kai Wiedenhoefer to the backside of the East Side Gallery in Berlin. Eight of his photographs of borders and separation walls will be exhibited here until Sept. 13. Paul Zinken/dpa/AP

Market Closes for July 9^th, 2013

Market  Index	Close	Change
Dow  Jones	15300.34	+75.65    +0.50%
S&P 500	1652.32	+11.86      +0.72%
NASDAQ	3504.263	+19.432      +0.56
TSX	12297.09	+88.22
		+0.72%

International Markets

Market  Index	Close	Change
NIKKEI	14472.90	+363.56
		+2.58%
HANG  SENG	20683.01	+100.82
		+0.49%
SENSEX	19439.48	+114.71
		+0.59%
FTSE 100	6513.08	+63.01
		+0.98%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.474	2.477
CND.   30 Year Bond	2.930	2.923
U.S.   10 Year Bond	2.6340	2.6356
U.S.   30 Year Bond	3.6477	3.6334

Currencies

BOC Close	Today	Previous
Canadian $	0.94955	0.94712
US   $	1.05313	1.05587
Euro Rate  1 Euro=		Inverse
Canadian   $	1.34608	0.74290
US  $	1.27817	0.77709

Commodities

Gold	Close	Previous
London Gold   Fix	1251.50	1237.21
Oil	Close	Previous
WTI Crude Future	103.53	103.14
BRENT	108.71	107.54

Market Commentary:

Canada

By Eric Lam

July 9 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level in three weeks, as an advance in precious metals prices overshadowed disappointing earnings from companies including Alimentation Couche-Tard Inc.

OceanaGold Corp. and Argonaut Gold Inc. rallied at least 7.1 percent as gold climbed. Alimentation Couche-Tard, which operates convenience stores across North America and Europe, slumped 5 percent after adjusted earnings fell short of forecasts due in part to higher expenses in Europe. Jean Coutu Group Inc., the pharmacy company, fell 2.1 percent after posting first-quarter revenue short of estimates.

The Standard & Poor’s/TSX Composite Index rose 88.22 points, or 0.7 percent, to 12,297.09 at 4 p.m. in Toronto. The gauge has rallied 3.9 percent since hitting its low for the year on June 24. Trading volume was 18 percent below the 30-day average at this time of the day.

“We’re seeing some buying in the gold sector, likely because the entire sector was so oversold,” said Arthur Salzer, chief executive officer of Northland Wealth Management in Toronto. The firm manages C$225 million ($213 million). “There was so much optimism in Couche-Tard and Jean Coutu, that once in a while the stocks get ahead of themselves. The underlying numbers were quite good but maybe not what people were hoping for.”

The International Monetary Fund cut its projection for global growth in 2013 for a fifth time, to 3.1 percent from 3.3 percent in April as a U.S. expansion weakens, China’s economy levels off and Europe’s recession deepens. U.S. growth was trimmed to 1.7 percent from 1.9 percent, while China’s was lowered to 7.8 percent from 8 percent.

Raw-materials stocks paced gains in the S&P/TSX, rising 1.7 percent as a group. OceanaGold jumped 8.5 percent to C$1.28 and Argonaut Gold gained 7.1 percent to C$5.58 as gold futures for August delivery advanced 0.9 percent to $1,245.90 an ounce in New York. The S&P/TSX Gold Index climbed 1.1 percent as 18 of 25 members advanced.

First Majestic Silver Corp. rallied 4.7 percent to C$11.70 and Pan American Silver Corp. rose 3.2 percent to C$12.13 as silver prices gained.

BlackBerry Ltd., maker of the BlackBerry 10 line of smartphones, added 1 percent to C$10.20 after investors re- elected the company’s existing directors at an annual general meeting today and approved the company’s name change from Research In Motion Ltd.

Chief Executive Officer Thorsten Heins said at the meeting the company is “100 percent open to partnerships” to drive scale and will explore “every opportunity” to create value.

Consumer-staples companies, which include both Jean Coutu and Couche-Tard, lost the most in the S&P/TSX, declining 0.9 percent as a group.

Couche-Tard, the largest publicly traded convenience store chain operator in North America, sank 5 percent to C$58.35, for its biggest decline since May 2012. The Laval, Quebec-based company said fourth-quarter adjusted earnings were 61 cents a share, while analysts surveyed by Bloomberg had estimated 78 cents. Merchandise and service gross margins in the U.S., where Couche-Tard operates the Circle K convenience-store chain, declined 0.1 percent in the quarter.

Jean Coutu lost 2.1 percent to C$17.44. The Longueuil, Quebec-based company reported first-quarter revenue of C$681.6 million, falling short of forecasts for C$688.2 million.

Adjusted earnings for the period were 26 Canadian cents a share, in line with analysts’ estimates.

US

By Alex Barinka and Inyoung Hwang

July 9 (Bloomberg) — U.S. stocks rose for a fourth day amid optimism companies will report better-than-forecast earnings and that economic growth is strong enough to withstand any reduction in Federal Reserve stimulus.

Nine out of 10 groups in the S&P 500 advanced. FedEx Corp. rallied 4.4 percent, to lead industrial shares higher. An S&P gauge of homebuilders added 5.5 percent as all 11 members advanced. Kroger Co. climbed 2.7 percent after saying it will buy Harris Teeter Supermarkets Inc. in a deal valued at $2.5 billion. Alcoa Inc. slipped even after posting earnings that beat analysts’ estimates and maintaining its forecast for global aluminum demand.

The Standard & Poor’s 500 climbed 0.7 percent to 1,652.32 in New York, the highest in almost six weeks. The Dow Jones Industrial Average rose 75.65 points, or 0.5 percent, to 15,300.34 today. More than 5.8 billion shares traded hands on U.S. exchanges today, or 8.1 percent below the three-month average.

“Everybody’s waiting to see what earnings are going to look like,” Brian Jacobsen, who helps oversee $221.2 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, said by telephone. “Until we see more earnings roll in, we’re waiting until tomorrow for what the Fed says. A lot of the other things are preludes or noise.”

The S&P 500 has gained 2.4 percent in the last four days, its longest winning streak since May 15, as better-than- estimated economic data on employment and manufacturing tempered concern over a scaling back of Fed bond buying. Investors will gain more insight into the central bank’s plans tomorrow when Chairman Ben Bernanke speaks and the Federal Open Market Committee publishes minutes from its June meeting.

The benchmark gauge plunged as much as 5.8 percent from a record high on May 21, when Bernanke first suggested the Fed might curb stimulus this year if growth meets the central bank’s estimates. The S&P 500 has since risen 5 percent from its June low and is 1 percent off the record. The index today surpassed its level on June 18, the day before a 4.8 percent rout started as the Fed’s policy-making committee suggested tapering could occur as early as in September.

The International Monetary Fund today lowered its 2013 projection for U.S. growth to 1.7 percent from 1.9 percent in April. The IMF said global growth will struggle to accelerate as U.S. expansion weakens, China’s economy levels off and Europe’s recession deepens.

The Fed stimulus and better-than-estimated corporate earnings have helped fuel a rally that lifted the S&P 500 by as much as 147 percent from its bear-market low in 2009. The start of the earnings season, which is traditionally marked by Alcoa’s report, has been a buying opportunity during that time. The S&P 500 has risen 13 of the 17 times Alcoa has posted results in the bull market, adding an average 1.6 percent in the two weeks following the company’s release.

Earnings at companies listed on the S&P 500 rose 1.8 percent last quarter, down from a projection of 8.3 percent six months ago, according to more than 11,000 analyst estimates compiled by Bloomberg. Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, Bloomberg data show. There are no S&P 500 companies scheduled to report today.

“Expectations for second-quarter earnings had fallen quite a bit and we’re beginning to see that the downgrades were by too much,” Jacobsen said. “We could see some pleasant surprises in the earnings season.”

Alcoa, the first member of the Dow to release results, slumped 0.1 percent to $7.91. The largest U.S. aluminum producer said profit excluding one-time items was 7 cents a share, more than the 6-cent average of 15 estimates compiled by Bloomberg.

Sales fell to $5.85 billion, also exceeding the $5.79 billion average of nine estimates.

Alcoa maintained its forecast that global aluminum demand will rise by 7 percent this year, led by 11 percent growth in China. Demand will exceed supply by 315,000 tons, the company said in presentation slides for the conference call.

The Chicago Board Options Exchange Volatility Index, or VIX, slid 2.9 percent to 14.35. 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 30 percent since.

Industrial stocks rose 1.5 percent for the second-biggest gain among 10 S&P 500 groups behind materials producers.

Caterpillar Inc. surged 2.6 percent to $85.33 for the largest increase in the Dow.

FedEx jumped 4.4 percent to $103.15 amid speculation that it may be an investment target for William Ackman’s Pershing Square Capital Management LP. The company also agreed to settle a lawsuit claiming it had been “systematically overcharging” customers by billing businesses and government offices at higher residential rates. United Parcel Service Inc. added 1.6 percent to $89.73.

The S&P Supercomposite Homebuilding Index rallied 5.5 percent, rebounding after falling yesterday to a low for the year. D.R. Horton Inc. surged 7.6 percent to $21.22, the biggest gain since April. KB Home climbed 6.7 percent to $18.86.

Cisco Systems Inc. jumped 2.2 percent to $25.16 after announcing a deal with Microsoft Corp. on cloud computing infrastructure.

Tesla Motors Inc. advanced 1.5 percent to $123.45. Nasdaq OMX Group Inc. said the maker of electric cars will join the Nasdaq-100, which tracks the biggest companies on the Nasdaq, before the start of trading on July 15. The best-performing automotive stock this year will replace Oracle Corp., which is moving to the New York Stock Exchange.

Barnes & Noble Inc., which is considering separating and spinning off its divisions, jumped 5.4 percent to $18.61. The U.S. bookstore chain said Chief Executive Officer William Lynch resigned. The company promoted Chief Financial Officer Michael Huseby to president of the company and CEO of Nook Media, making him Barnes & Noble’s most senior executive.

International Business Machines Corp. dropped 1.9 percent to $191.30 for the biggest retreat in the Dow. Goldman Sachs Group Inc. downgraded the largest technology-services provider to a neutral rating from buy. The firm expects growing pressure on IBM’s growth areas in emerging markets. Goldman cut the price target for the stock to to $200 from $220.

Kroger, the largest U.S. grocery chain, climbed 2.7 percent to $37.15 after saying it will buy Harris Teeter in a deal valued at $2.5 billion. The smaller regional chain added 1.5 percent to $49.26.

Intuitive Surgical Inc. plunged 16 percent, the most in almost five years, to $419.30 after reporting preliminary results that missed analysts’ estimates as sales slowed for its surgical robots.

Have a wonderful evening everyone.

Be magnificent!

As long as the brain, which is so heavily conditioned, is measuring, “the more,” “the better,”

moving psychologically from this to that, it must inevitably bring about a sense of conflict, and this is disorder.

Not only the words more and better, but the feeling, the reaction, of achieving,

gaining – as long as there is this division, duality, there must be conflict.  And out of conflict is disorder.

Krishnamurti,1895-1986

As ever,

Carolann

 

Genius is eternal patience.

-Michelangelo, 1475-1564

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

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com

 

 

 

Dear Friends,

Tangents:

I was reading a back issue of The Economist on the weekend and came across the obituary for Nguyen Chi Thien, the Vietnamese poet who died last year at age 73.  What an amazing story of courage and resolve was his life.  Nguyen Chi Thien sent his poems out of Communist Vietnam by running through the gate of the British embassy in Hanoi in 1979 with 400 of his poems under his shirt.  They were published as “Flowers of Hell”, translated into half a dozen languages and won the International Poetry Award in 1985.  He spent many years in prison and labour camps on various pretexts, contesting the regime’s view of history and writing ”irreverent” poetry for example.  It seemed the more the regime hurt him, the more he thrived.

Here is a sample of his poetry:

They exiled me to the heart of the jungle

Wishing to fertilise the manioc with my remains.

I turned into an expert hunter

And came out full of snake wisdom and rhino fierceness.

They sank me into the ocean

Wishing me to remain in the depths.

I became a deep sea diver

And came up covered with

scintillating pearls.

The pearls were his poems.  “If people could see his heart, he had written back in 1964, during his first spell in prison, they would see it was an ancient pen and inkstand, gathering dust; on a poor roadside inn, offering only the comfort of an oil lamp.  But it was also a paddy field waiting for the flood-rains of August,

So that it can overflow into a

thousand waves,

White-crested ones that will sweep

everything away!”

Photos of the Day –July 8th, 2013

A woman dressed in traditional costume smiles as she attends the gala show of the Latvian Nationwide Song and Dance Celebration in Riga. About 12,000 singers and 15,000 dancers from all over the country are participating. Ints Kalnins/Reuters

A swimmer approaches a statue meant to depict actor Colin Firth performing as Mr. Darcy, a character in Jane Austen’s novel ‘Pride and Prejudice,’ in Serpentine Lake, Hyde Park, London. David Parry/PA/AP

Market Closes for July 8^th, 2013

Market  Index	Close	Change
Dow  Jones	15224.69	+88.85    +0.59%
S&P 500	1640.46	+8.57      +0.53%
NASDAQ	3484.831	+5.451      +0.16
TSX	12208.87	+73.96
		+0.61%

International Markets

Market  Index	Close	Change
NIKKEI	14109.34	-200.63
		-1.40%
HANG  SENG	20582.19	-272.48
		-1.31%
SENSEX	19324.77	-171.05
		-0.88%
FTSE 100	6450.07	+74.55
		+1.17%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.477	2.550
CND.   30 Year Bond	2.923	2.973
U.S.   10 Year Bond	2.6356	2.7391
U.S.   30 Year Bond	3.6334	3.7130

Currencies

BOC Close	Today	Previous
Canadian $	0.94712	0.94520
US   $	1.05587	1.05797
Euro Rate  1 Euro=		Inverse
Canadian   $	1.35875	0.73597
US  $	1.28686	0.77709

Commodities

Gold	Close	Previous
London Gold   Fix	1237.21	1223.20
Oil	Close	Previous
WTI Crude Future	103.14	1.0322
BRENT	107.54	108.10

Market Commentary:

Canada

By Katie Brennan

July 8 (Bloomberg) — Canadian stocks rose, following last week’s gain, led by advances among utility companies and energy providers as investors looked to Alcoa Inc. for the the first major report of the second-quarter earnings season in the U.S.

Just Energy Group Inc. rose 4.9 percent, pacing gains among utility companies. Health-care companies gained 1.7 percent, led by a 3.1 percent advance in Catamaran Corp., a pharmacy services provider. Turquoise Hill Resources Ltd. added 7.5 percent after its copper mine in Mongolia was cleared to ship to China.

Lightstream Resources Ltd. surged 6.6 percent.

The Standard & Poor’s/TSX Composite Index gained 73.96 points, or 0.6 percent, to 12,208.87 at 4 p.m. in Toronto. The gauge rose 0.1 percent last week and is down 1.8 percent for the year. Trading volume was 6.8 percent lower than the 30-day average.

“Investors are getting ready for the earnings season,”

John Kinsey, a fund manager with Caldwell Securities Ltd. in Toronto, said in a phone interview. He helps manage about C$1 billion ($953 million). “It is nice to see the commodities and the stocks are up today. Gold is trying very hard to put a bottom in here. We are hoping it will do so and then maybe try and climb back up again.”

Alcoa reported second-quarter earnings after the market close that beat analysts’ estimates as U.S. carmakers used more of the lightweight metal in their latest models. The largest U.S. aluminum producer, the first Dow Jones Industrial Index member to release results for the quarter, had its credit rating cut to junk by Moody’s Investors Service in May.

Earnings at companies listed on the S&P 500 rose 1.8 percent last quarter, down from a projection of 8.7 percent six months ago, according to more than 11,000 analyst estimates compiled by Bloomberg. Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, Bloomberg data show.

Canadian building permits rose a fifth straight month in May, a surprise gain that caps the longest stretch in almost a decade, led by a jump in multiple-unit housing work in Toronto that has sparked warnings from policy makers about overbuilding.

Canadian business optimism about sales and investment faded in the second quarter on signs of sluggish domestic and global demand, a central bank survey showed.

The balance of opinion for sales growth over the next 12 months fell to 9 percentage points from 24 percentage points in the Bank of Canada’s survey of about 100 executives. Investment intentions declined to a balance of 9 from 12, the Bank of Canada said today.

Seven of 10 groups in the S&P/TSX advanced, led by a 2.8 percent gain in utilities companies. Just Energy Group added 4.9 percent to C$6.45 and ATCO Ltd. rose 4.3 percent to C$44.21.

Health-care companies rose 1.7 percent as Catamaran gained 3.1 percent to C$51.56 and Valeant Pharmaceuticals International Inc. added 1.5 percent to C$95.14.

Lightstream Resources, an oil production company, gained 6 percent to C$8.16, leading gains for energy companies. The group added 1.1 percent.

Raw-materials producers fell 0.1 percent as a group.  Metal prices rose, with gold gaining the most in a week and silver and copper adding at least 1.1 percent. Bullion has slipped 26 percent this year after some investors lost faith in the metal as a store of value as Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank may slow its $85 billion of asset purchases this year.

Turquoise Hill Resources advanced 7.5 percent to C$6.20.

Mongolia cleared Rio Tinto Group’s $6.6 billion Oyu Tolgoi copper mine to begin shipments this week. Turquoise Hill is a Rio unit that owns 66 percent of the mine. The government owns 34 percent.

Shipments to Chinese smelters were postponed twice last month as Mongolia sought to ensure revenue from the mine is processed through domestic banks. Mines Minister Davaajav Gankhuyag signaled in a post yesterday that the dispute has been resolved.

US

By Lu Wang and Whitney Kisling

July 8 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index a third straight day of gains, as the start of corporate earnings season fueled increased optimism about growth in the world’s largest economy.

Alcoa Inc. increased 1.4 percent before the biggest U.S. aluminum producer reported results. The stock added another 1.3 percent in extended trading after earnings beat analysts’ estimates. Dell Inc. gained 3.1 percent as the largest shareholder-advisory firm said investors should accept founder Michael Dell’s buyout offer. Priceline.com rallied 3.9 percent after Morgan Stanley raised its recommendation on the stock.

Intel Corp. slumped 3.6 percent amid an analyst downgrade.

The S&P 500 added 0.5 percent to 1,640.46 at 4 p.m. in New York, the highest since June 18. The Dow Jones Industrial Average rose 88.85 points, or 0.6 percent, to 15,224.69. More than 6 billion shares traded hands on U.S. exchanges today, about 8 percent below the three-month average.

“I really don’t think the earnings season is going to be so much about the second quarter, but more about the pickup in second half that the market appears to be anticipating,” Gary Flam, who helps oversee $7 billion at Bel Air Investment Advisors LLC in Los Angeles, said in a phone interview. “The market is getting comfortable that the economy is strong enough to withstand reduced Fed support. The market is inching toward normalcy. We’re not in an abnormal environment where the Fed and Fed actions are dictating market movements.”

The S&P 500 gained 1.6 percent last week, as better-than- estimated economic data tempered concern over a possible scaling back of Fed stimulus measures. Employers added more jobs than forecast in June, and other data during the week showed jobless claims decreased and manufacturing improved. While the index has fallen 1.7 percent since its May 21 record, the gauge is up 15 percent for 2013.

Investors will gain more insight into the central bank’s plans when the Federal Open Market Committee publishes minutes from its June meeting on July 10. Chairman Ben Bernanke also speaks that day. He said on June 19 the Fed may pare its asset- purchase program this year and end it in mid-2014 if growth meets policy makers’ estimates.

The S&P 500 fell nearly 5 percent in the four days after Bernanke’s comments following the FOMC meeting. The gauge has since gained 4.3 percent and is about 0.7 percent below its June 18 close.

“All eyes this week are likely to be on the latest FOMC minutes and comments from Ben Bernanke in light of Friday’s better-than-expected payrolls numbers,” Michael Hewson, a market analyst at CMC Markets Plc in London, wrote in an e-mail.

“Will he offer any clues as to the timing of possible tapering or will he simply reiterate previous comments made a few weeks ago?”

Earnings at companies listed on the S&P 500 rose 1.8 percent last quarter, down from a projection of 8.7 percent six months ago, according to more than 11,000 analyst estimates compiled by Bloomberg. Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, Bloomberg data show.

The Chicago Board Options Exchange Volatility Index, or VIX, fell 0.7 percent today to 14.78. 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 in June and has since dropped 28 percent.

Eight of 10 industry groups in the S&P 500 advanced as utility companies and makers of consumer staples rose more than 1 percent. The Russell 2000 Index, a benchmark measure for smaller companies, climbed 0.4 percent to a record.

Alcoa rose 1.4 percent to $7.92 before becoming the first Dow member to report results. The stock added another 1.3 percent at 4:30 p.m. in New York after second-quarter earnings beat analysts’ estimates as U.S. carmakers used more of the lightweight metal in their latest models.

The company, which had its credit rating cut to junk by Moody’s Investors Service in May, said profit excluding one-time items was 7 cents a share, exceeding the 6-cent average of 15 estimates compiled by Bloomberg. Sales fell to $5.85 billion, exceeding the $5.79 billion average of nine estimates.

Dell rose 3.1 percent to $13.44 after Institutional Shareholder Services Inc. said investors should accept founder Michael Dell’s $24.4 billion leveraged buyout plan for the company. ISS cited a 25.5 percent premium to Dell’s unaffected share price, the certainty of value provided by an all-cash offer and the transfer of risk given Dell’s deteriorating PC business among reasons for supporting the bid.

Priceline.com added 3.9 percent to $888.63. The stock has rallied nine straight days, adding 10 percent since June 24.

Morgan Stanley upgraded the online travel agent to overweight, meaning investors should buy the stock, on expectation that the company will fetch a higher valuation as its profit margin stabilizes amid market-share gains.

Coal stocks rallied as Davenport & Co. said Walter Energy Inc. may idle some production, squeezing supplies. Walter Energy jumped 4.6 percent to $10.81. Consol Energy Inc. advanced 4 percent to $27.56 while Peabody Energy Corp. climbed 4.9 percent to $15.37.

Utility companies in the S&P 500 jumped 1.4 percent as a group. NRG Energy Inc. gained 4.2 percent to $27.23. The largest independent U.S. electricity generator said its NRG Yield Inc. unit is selling stock in an initial public offering.

Intel slumped 3.6 percent, the most in the Dow and S&P 500, to $23.19. Evercore Partners Inc. cut its 2013 and 2014 earnings estimates for the world’s largest computer-chip maker and lowered the rating to underweight from equal weight.

The earnings cut dragged technology shares lower, with the group retreating 0.2 percent. Hewlett-Packard Co., the only other stock in the Dow to retreat today, plunged 1.6 percent.

Phone stocks slipped 0.4 percent as a group to pace losses in the S&P 500. Sprint Nextel Corp. fell 1.3 percent to $7.07.

Regeneron Pharmaceuticals Inc., maker of the Eylea eye- disease medicine, dropped 1.9 percent to $229.02. Ohr Pharmaceutical Inc. has enrolled half of the 120 patients needed for a mid-stage study for an age-related eye disorder, as it seeks to compete with Regeneron.

Have a wonderful evening everyone.

Be magnificent!

 

Our responsibility is no longer to acquire, but to be.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Have patience.  All things are difficult before

they become easy.

-Saadi, 1210-1292

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

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com

 

 

 

Dear Friends,

Tangents:

Virginia Woolf wrote in her diary on July 5^th, 1924:

Just back….from Knole, where indeed I was invited to lunch alone with his Lordship [Lord Sackville].  His Lordship lives in the kernel of a vast nut.  You perambulate miles of galleries; skip endless treasures – chairs that Shakespeare might have sat on – tapestries, pictures, floors made of the halves of oaks; and penetrate at length to a round shiny table with a cover laid for one.  A dozen glasses form a circle each with a red rose in it.  One solitary peer sits lunching by himself, with his napkin folded into the shape of a lotus flower.  Knole is a conglomeration of buildings half as big as Cambridge I dare say; if you stuck Trinity, Clare and King’s together you might approximate.  But the extremities and indeed the inward parts are gone dead.  Ropes fence off half the rooms; the chairs and the pictures look preserved; life has left them.  Not for a hundred years have the retainers sat down to dinner in the great hall.  Then there is Mary Stuart’s altar, where she prayed before execution.  “An ancestor of ours took her the death warrant,” said Vita.

Vita Sackville-West, daughter of Lord Sackville and wife of Harold Nicolson, was soon to become Virginia Woolf’s lover.   A central figure in the Bloomsbury group of artists and writers, she was the model for Virginia Woolf’s Orlando.

It wasn’t raining when Noah built the ark. –Warren Buffett, b. 1930.

Photos of the Day –July 5th, 2013

The Great Mosque of Djenné is the largest mud-brick structure in the world. Built in 1906 by order of the French colonial administration in Mali, the mosque is an African icon. (Note the many palm wood platforms sticking out of the building’s walls.) Thomas Martinez

The minarettes of the mosque are repaired as the sun rises over the horizon. The mud festival is the only time of the year when everyone has complete access to the mosque, regardless of race, religion, or sex. For most people of Djenne, this is the only time they are allowed up to the roof of the mosque, and dozens rush to help repair the minarettes before they’re finished. Thomas Martinez

Market Closes for July 5^th, 2013

Market  Index	Close	Change
Dow  Jones	15135.84	+147.29    +0.98%
S&P 500	1631.89	+16.48      +1.02%
NASDAQ	3479.380	+35.710      +1.04
TSX	12134.91	-31.75
		-0.26%

International Markets

Market  Index	Close	Change
NIKKEI	14309.97	+291.04
		+2.08%
HANG  SENG	20854.67	+386.00
		+1.89%
SENSEX	19495.82	+84.98
		+0.44%
FTSE 100	6375.52	-46.15
		-0.72%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.550	2.418
CND.   30 Year Bond	2.973	2.858
U.S.   10 Year Bond	2.7391	2.5032
U.S.   30 Year Bond	3.7130	3.4931

Currencies

BOC Close	Today	Previous
Canadian $	0.94520	0.95095
US   $	1.05797	1.05158
Euro Rate  1 Euro=		Inverse
Canadian   $	1.35731	0.73675
US  $	1.28293	0.77946

Commodities

Gold	Close	Previous
London Gold   Fix	1223.20	1250.43
Oil	Close	Previous
WTI Crude Future	1.0322	101.24
BRENT	108.10	105.96

Market Commentary:

Canada

By Eric Lam

July 5 (Bloomberg) — Canadian stocks fell, with the benchmark index paring a weekly gain, as gold producers tumbled after better-than-forecast jobs reports fueled bets the U.S. Federal Reserve will begin to reduce stimulus.

Torex Gold Resources Inc. and Yamana Gold Inc. slumped at least 3 percent as the precious metal touched a one-week low.

Barrick Gold Corp., the world’s largest producer, sank to a 21- year low. Tourmaline Oil Corp. surged to a record after announcing expansion plans in Alberta. Progressive Waste Solutions Ltd. jumped the most in almost two years after an investor boosted its stake in the garbage-disposal company.

The Standard & Poor’s/TSX Composite Index fell 31.75 points, or 0.3 percent, to 12,134.91 at 4 p.m. in Toronto. The gauge rose 0.1 percent this week and is off 2.4 percent for the year.

“When you look at gold, investors were holding it as a potential inflation hedge,” said Anish Chopra, fund manager with TD Asset Management Inc. in Toronto. The firm manages C$204 billion ($192 billion). “Here you have the U.S. probably pulling back on quantitative easing because economic growth is starting to pick up. The risk of inflation gets reduced as easing gets pulled back. For sure the economic data supports tapering.”

The U.S. economy added 195,000 jobs in June, ahead of the average economist estimate of 165,000 in a Bloomberg survey.

Canada lost 400 jobs last month, better than analysts’ forecasts for a decline of 7,500.

Fed policy makers said last month they would trim stimulus before the end of the year if unemployment continues to fall.

Today’s jobs report fueled speculation the Fed would begin to curtail bond purchases in September, boosting the U.S. dollar to the biggest gain in almost eight months.

Seven of 10 groups in the S&P/TSX fell, led by a 1.6 percent plunge among raw-materials producers. Metals prices tumbled as the dollar advanced, with gold for August delivery declining 3.1 percent to $1,212.70 an ounce, the lowest since June 28.

Torex Gold Resources plunged 12 percent to C$1.17 and Yamana Gold slumped 3 percent to C$9.74. Barrick Gold sank 4.8 percent to C$14.57, the lowest since 1992.

Silver Wheaton Corp. tumbled 2.5 percent to C$19.95 and Silvercorp Metals Inc. retreated 1.1 percent to C$2.75. Silver for September delivery dropped 4.9 percent to extend the loss for the year to 38 percent, the most among the 24 raw materials in the S&P GSCI Spot Index.

Teck Resources Ltd., Canada’s largest diversified miner, lost 3.2 percent to C$21.55 and First Quantum Minerals Ltd.

slipped 1.3 percent to C$15.35. Copper fell 3.4 percent, the most since April, in New York.

Tourmaline jumped 4.4 percent to C$44.65, its highest close on record. The company said late yesterday it expects to get

10,000 barrels of oil equivalent per day production by the fourth quarter from its Spirit River Charlie Lake site in Alberta.

The oil and gas producer has surged 43 percent this year, making it the top-performing stock in the S&P/TSX Energy Index.

Progressive Waste, based in Vaughan, Ontario, soared 4.9 percent to C$23.38, the most since August 2011. Blue Harbour LP, a Greenwich, Connecticut-based investor, said in a regulatory filing today it has paid $130.8 million to raise its stake in the company to 5.6 percent, making it the third-largest investor.

US

By Lu Wang and Alex Barinka

July 5 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to the biggest rally in three weeks, after government data showed the nation added more jobs than forecast last month.

Lincoln National Corp. climbed 5.4 percent, leading a rally among life insurers as bond yields surged on bets the Federal Reserve will begin to reduce its asset buying. KeyCorp advanced as Wells Fargo & Co. said regional banks benefit more than larger rivals from new rules on capital. Tesla Motors Inc. added

4.2 percent after saying it received enough orders to double the number of electric cars in Hong Kong. Homebuilders slumped amid concern rising interest rates may curtail a housing recovery.

The S&P 500 gained 1 percent, the most since June 13, to 1,631.89 at 4 p.m. in New York. The index advanced 1.6 percent for the week. The Dow Jones Industrial Average added 147.29 points, or 1 percent, to 15,135.84. About 4.95 billion shares changed hands, 24 percent below the three-month average. U.S. markets were closed yesterday for the Independence Day holiday.

“The jobs report is pretty strong. It’s a good number for equities because it’s supportive for earnings growth, which is what we need,” Matthew Peron, head of active equities at Northern Trust Corp. in Chicago, said by telephone. His firm manages about $810 billion. “We have to digest the backup in yields, we have to see how far do they go and get used to that level of rates.”

Payrolls rose by 195,000 workers for a second straight month, the Labor Department reported today in Washington. The median forecast in a Bloomberg survey projected a 165,000 gain after a previously reported 175,000 increase in May. The jobless rate stayed at 7.6 percent, while hourly earnings in the year ended in June advanced by the most since July 2011.

Economic growth amid monetary stimulus from the Federal Reserve has helped send the S&P 500 up 141 percent from its bear-market low in 2009, including a 14 percent rally so far this year. The index has slipped 2.2 percent from its last record on May 21 after Fed Chairman Ben S. Bernanke said the central bank could begin to reduce bond purchases should the employment market show sustainable growth.

“Part of this focus on the Fed easing is that they haven’t been enthusiastic about the underlying economics,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland. “If investors can be reassured about that, then it opens the door to a more sustainable rally.”

Equities rose earlier today as European Central Bank President Mario Draghi predicted that interest rates will remain low for an extended period of time. Draghi said yesterday that key interest rates will remain at their current levels or lower for as long as necessary. The Bank of England signaled that it will leave interest rates at a record low for longer than investors had expected.

Alcoa Inc. will unofficially start the second-quarter earnings season as the biggest U.S. aluminum producer will report results after the market closes on July 8.

Profits for S&P 500 stocks probably grew 1.8 percent, according to analyst estimates compiled by Bloomberg. That’s down from a projected increase of 6.2 percent at the beginning of the quarter. Earnings are forecast to jump 5.5 percent for the third quarter and 11 percent for the final three months of this year, the data show.

“We know this is not going to be a terrific earnings season,” Northern Trust’s Peron said. “The focus will be on guidance – are we going to get improvement as the year continues, which is in expectation? The criticism of the market has been that it has been supported by Fed actions and now this is the time for that hand-off to happen.”

The Chicago Board Options Exchange Volatility Index, or VIX, slipped 8.1 percent today to 14.89, the lowest level since May 30. 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 27 percent.

Nine of 10 S&P 500 main industries gained as financial, industrial and health-care companies rose more than 1.3 percent.

JPMorgan Chase & Co. added 2.3 percent to $53.99 and Bank of America Corp. advanced 1.8 percent to $13.06.

Lincoln, the life insurer with more than $200 billion in assets, climbed 5.4 percent to $38.98. Higher interest rates can boost profits for life insurers, which invest premiums from clients in bonds and other assets to back future payouts.

MetLife Inc., the largest U.S. life insurer, gained 2.7 percent to $47.52.

Regional lenders rose as KeyCorp, Ohio’s second-largest bank, jumped 5 percent to $12. Smaller banks face less onerous risk weightings for residential mortgages under the Basel Committee on Banking Supervision’s latest set of global standards, Wells Fargo analyst Matthew Burnell wrote in a note.

The capital rules are scheduled to be decided next week.

SunTrust Banks Inc. advanced 4.2 percent to $34.31, while Zions Bancorporation increased 4.3 percent to $30.97.

Tesla Motors Inc. added 4.2 percent to a record $120.09 after saying it received hundreds of orders for its new Model S sedan, enough to double the number of electric cars on Hong Kong’s streets. The company, headed by billionaire Chief Executive Officer Elon Musk, has forecast it will sell 21,000 units of the Model S globally this year, with deliveries to Europe and Asia beginning in the second half.

Zoetis Inc., the animal-health company spun off from Pfizer Inc., gained 3 percent to $30.17. Bank of America boosted the stock’s rating to buy.

An S&P index of homebuilders fell 3.4 percent to the lowest level since December as Treasury yields rose to the highest level in almost two years. All its 11 members retreated. Toll Brothers Inc. dropped 3 percent to $31.52 while Lennar Corp. slipped 4 percent to $33.93.

A Bloomberg index of real estate investment trusts that buy mortgage debt tumbled 3.9 percent for the biggest retreat since October 2011. Annaly Capital Management Inc., the largest of the companies, plunged 5.1 percent to $11.51 and American Capital Agency Corp., the second biggest, slumped 5.3 percent to $20.76.

Gold producers declined as the metal’s price plunged 3.1 percent. Barrick Gold Corp., the world’s largest miner of the precious metal, sank 6.3 percent to $13.76. Newmont Mining Corp. fell 4.3 percent to $27.78 for the biggest loss in the S&P 500.

Dell Inc. erased 2.1 percent to $13.03. Michael Dell and Silver Lake Management LLC won’t sweeten their $24.4 billion offer to take the personal-computer maker private, people with direct knowledge of the situation said.

Have a wonderful weekend everyone.

Be magnificent!

If you wish to free yourself from suffering, you must free yourself from pleasure,

and not free yourself from suffering.  Suffering is a reaction.

If you wish to release yourself from suffering,

you must first of all release yourself from pleasure.

Then the suffering will disappear.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

The test of good manners is to be patient

with the bad ones.

-Solomon ibn Gabriol, 1021-1058

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

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com

 

 

 

Dear Friends,

Tangents:

The “Dog Days of Summer” begin today and end on August 11^th.  These are the hottest days of the year in the northern hemisphere.  They are so named because originally they were the days when Sirius, the Dog Star, rose just before or at about the same time as sunrise, which is no longer true due to the precession of the equinoxes.  The Ancients sacrificed a brown dog at the beginning of the Dog Days to appease the rage of Sirius, believing that the star was the cause of the hot sultry weather.

Happy Thought

-Robert Louis Stevenson

The world is so full of a number of things,

I’m sure we should all be as happy as kings.

Photos of the Day –July 3rd, 2013

The Statue of Liberty, which has been closed to visitors since Superstorm Sandy, is scheduled to reopen for tours July Fourth, when Statue Cruises resumes departures for Liberty Island from Lower Manhattan. Mark Lennihan/AP/File

A Bald Eagle juvenile on its nest at Heritage Park, Kirkland, Washington, June 21, 2013. The floating launch pad for July Fourth fireworks display in suburban Seattle was moved from its usual site to avoid frightening a pair of baby bald eagles nesting in a tree on the shore of Lake Washington Mick Thompson/Reuters

Market Closes for July 3^rd, 2013

Market  Index	Close	Change
Dow  Jones	14988.55	+56.14    +0.38%
S&P 500	1615.41	+1.33    +0.88%
NASDAQ	3443.670	+10.273    +0.30%
TSX	12145.68	-32.70
		-0.27%

International Markets

Market  Index	Close	Change
NIKKEI	14055.56	-43.18
		-0.31%
HANG  SENG	20147.31	-511.34
		-2.48%
SENSEX	19177.76	-286.06
		-1.47%
FTSE 100	6229.87	-74.07
		-1.17%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.414	2.407
CND.   30 Year Bond	2.858	2.853
U.S.   10 Year Bond	2.5032	2.4693
U.S.   30 Year Bond	3.4931	3.4729

Currencies

BOC Close	Today	Previous
Canadian $	0.95175	0.94760
US   $	1.05070	1.05530
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36711	0.73147
US  $	1.30115	0.76855

Commodities

Gold	Close	Previous
London Gold   Fix	1253.51	1243.65
Oil	Close	Previous
WTI Crude Future	101.24	99.60
BRENT	105.95	104.16

Market Commentary:

Canada

By Eric Lam

July 3 (Bloomberg) — Canadian stocks fell for the first time in four days, as unrest in Egypt and a political crisis in Portugal roiled global markets.

BlackBerry extended its loss to 33 percent in the three sessions since reporting disappointing sales for its Z10 smartphone on June 28. Sandvine Corp., a broadband network tools provider, slumped 7.6 percent as second-quarter sales missed estimates. Alamos Gold Inc. rose 4 percent as the price of the precious metal advanced.

The Standard & Poor’s/TSX Composite Index fell 32.70 points, or 0.3 percent, to 12,145.68 at 4 p.m. in Toronto, trimming an earlier decline of as much as 1 percent. The gauge has fallen 2.3 percent this year. Trading volume was 32 percent below the 30-day average.

“We don’t know if the situation in Egypt will get out of hand and whether it will spread into other countries,” said Irwin Michael, fund manager with ABC Funds in Toronto. He helps manage about C$800 million ($759 million). “In Portugal, two members resigned and they’re worried about that spreading to Spain as well. The sovereign debt issue appears to be flaring up in Europe. There’s a lot of uncertainty right now, in the context of a long weekend in the U.S., so we expect the market between now and when you come in on Monday to be very volatile.”

The MSCI All-Country World Index dropped 0.5 percent as Egypt’s military ousted President Mohamed Mursi from power, suspended the constitution and announced an early presidential election in a bid to resolve the political crisis that has polarized the nation. Oil spiked to a 14-month high amid concern the turmoil will disrupt shipments in the Suez Canal. Portugal’s main equity gauge slumped 5.3 percent after two ministers resigned as the country struggles to implement budget cuts.

Nine of 10 industries in the S&P/TSX retreated today, with materials producers the only group to advance. U.S. markets closed at 1 p.m. in New York, erasing early losses to advance 0.1 percent. The American exchanges remain closed July 4 for the Independence Day holiday.

BlackBerry slid 1.4 percent to C$10.08. The company formerly known as Research In Motion Ltd. last week missed analysts’ estimates for phone shipments and profit. The Waterloo, Ontario-based smartphone maker has slipped 15 percent this year.

Sandvine sank the most since September, losing 7.6 percent to C$1.95. The company reported second-quarter sales of $23.5 million, short of analyst estimates of $24.9 million. It also posted adjusted earnings of 1 cent, in line with expectations.

Utilities stocks tumbled 1.7 percent to pace losses in the S&P/TSX. Canadian Utilities Ltd. lost 3.4 percent to C$35.50 and Atlantic Power Corp. declined 3.8 percent to C$4.08.

Energy shares slumped 0.2 percent, paring an earlier decline of as much as 0.8 percent. Crude for August delivery rallied 1.6 percent to the highest since May 3, 2012. Encana Corp. retreated 0.5 percent to C$17.85 and Enbridge Inc. slid 0.8 percent to C$44.53.

Raw-materials producers added 1.1 percent as gold and silver prices advanced in New York. Alamos Gold rose 4 percent to C$13.09 and Centerra Gold Inc. climbed 6 percent to C$3.54.

First Majestic Silver Corp. rallied 6.7 percent to C$11.61 to lead gains among silver stocks.

US

By Lu Wang and Katie Brennan

July 3 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to the highest level in two weeks, on better-than-estimated labor data as investors watched political developments in Egypt and Portugal.

Chipotle Mexican Grill Inc. advanced 3.5 percent amid an analyst upgrade. Time Warner Cable Inc. paced gains among telecommunication service providers as Macquarie Group Inc. predicted a “wave” of takeovers. Bank of America Corp. and Citigroup Inc. declined as Standard and Poor’s downgraded three European lenders. Alcoa Inc. fell 1.2 percent as JPMorgan Chase & Co. cut the stock’s rating.

The S&P 500 rose 0.1 percent to 1,615.41, the highest since June 19. The Dow Jones Industrial Average added 56.14 points, or 0.4 percent, to 14,988.55. About 3.6 billion shares traded hands, as U.S. exchanges closed at 1 p.m. New York time today.

Equities markets are shut tomorrow for the Independence Day holiday.

“Europe can’t hurt us, higher oil prices can’t hurt us,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in an interview. His firm oversees $8 billion.

“Bernanke has the market finally saying that good news is good news and less QE is not a bad thing. If we can get some revenue growth, that would be the icing on the cake.”

The S&P 500 slumped as much as 5.8 percent since May 21, the day before Federal Reserve Chairman Ben S. Bernanke said the central bank may taper bond purchases, or quantitative easing, if the U.S. economy improves in line with forecasts. The index has since climbed 2.7 percent from the June low.

Jobless claims decreased to 343,000 in the week ended June 29 from a revised 348,000 in the prior period that was higher than initially reported, the Labor Department said today in Washington. Separate reports showed companies boosted employment by 188,000 workers in June while service industries unexpectedly expanded at the slowest pace in more than three years.

The data come before the government’s monthly labor report on July 5. That report will probably show employers created 165,000 jobs in June, from 175,000 a month earlier, according to the median forecast of economists in a Bloomberg survey. The unemployment rate probably fell to 7.5 percent, matching April’s four-year low.

Oil futures surged to as high as $102.18 a barrel, the most since May 2012, as political unrest in Egypt sparked concern of Middle East supply disruptions and a report showed U.S. stockpiles shrank in the week ended June 28.

After the close of U.S. markets, Egypt’s military ousted President Mohamed Mursi from power, suspended the constitution and announced an early presidential election in a bid to resolve the political crisis that has polarized the nation. The army said July 1 it would impose its own plan if Mursi didn’t end the turmoil and meet the people’s demands within 48 hours.

In Portugal, Prime Minister Pedro Passos Coelho told voters in a televised speech from Lisbon yesterday that he’s trying to hold his government together after Foreign Affairs Minister Paulo Portas, leader of junior coalition party CDS, quit.

The Chicago Board Options Exchange Volatility Index, or VIX, fell 1.5 percent today to 16.20, reversing an earlier rise of 5.4 percent. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-year low in March and has since surged 43 percent.

Half of 10 main industries in the S&P 500 advanced as technology and consumer-discretionary stocks rose more than 0.5 percent. International Business Machines Corp. added 0.9 percent to $193.25 and Cisco Systems Inc. gained 1.1 percent to $24.59.

Chipotle climbed 3.5 percent to $384.47 for the biggest increase in the S&P 500. The fast-casual dining chain was raised to buy from hold by Argus Research Corp.

Time Warner advanced 2.7 percent to $112.45. Leap Wireless International Inc. jumped 5.7 percent to $7.07. The pay-as-you- go wireless carrier may be a takeover target for T-Mobile US Inc. or Dish Network Corp., Macquarie analysts said in a note, upgrading Leap to neutral from underperform.

Financial companies slid 0.3 percent, the most among 10 S&P 500 groups. Bank of America, the second-biggest U.S. lender by assets, retreated 0.5 percent to $12.83. Citigroup declined 1 percent to $47.67. In Europe, banks tumbled after S&P downgraded the credit ratings of Barclays Plc, Deutsche Bank AG and Credit Suisse Group AG, saying new rules and “uncertain market conditions” threaten their business.

Alcoa dropped 1.2 percent to $7.71 as JPMorgan lowered its recommendation on the shares to neutral from overweight, citing lower aluminum-price forecasts. The biggest U.S. aluminum producer will report results after the market closes on July 8, unofficially starting the second-quarter earnings season.

Profits for S&P 500 stocks probably climbed 2.4 percent, with financial and telephone companies the only two industries to have growth of more than 10 percent, according to analyst estimates compiled by Bloomberg. The estimate for the entire index is down from a projected increase of 6.2 percent at the beginning of the quarter.

“Money managers are waiting now for earnings to get a better idea of where to place funds,” John Augustine, who helps manage $27 billion as chief market strategist at Cincinnati- based Fifth Third Bancorp, said by phone. “It’s relatively unusual to have earnings growth that narrow and focused on the financial and telecom sectors. A lot of the sectors, the bar has been lowered and it may actually help them outperform estimates.”

Robert Half International Inc. lost 5.2 percent to $31.56 as Deutsche Bank AG said the Obama administration’s decision to delay a mandate requiring businesses to provide workers health insurance is negative for staffing service providers. Businesses won’t be penalized next year if they fail to provide workers health insurance. The so-called employer mandate, a key requirement under its signature 2010 health-care law, will be postponed until 2015, the Obama administration said.

Mead Johnson Nutrition Co. slumped 8.1 percent to $68.85.

John Baumgartner, an analyst with Wells Fargo & Co., cut the rating for the world’s largest baby-formula maker to market perform, an equivalent of neutral, from outperform, citing a pricing probe in China and weakening economic growth in developing countries.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Man falls from the pursuit of the ideal of plain living and high thinking

the moment he wants to multiply his daily wants.  Man’s happiness really lies in contentment.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

A man who is a master of patience is a master

of everything else.

-George Savile, 1633-1695

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