Month: October 2013

Dear Friends,

Tangents:

What the Pollen Says

Humans are biological survivors, part of an unbroken genetic stream linked to the remote past.  Yet the history of civilizations – rising, flourishing, crashing – is episodic.

Why do prosperous civilizations vanish?  One team of scientists, studying ancient pollens in the Middle East, believes it can explain the sudden collapse of the grand cultures that flourished there some 3,200 years ago.  The cause – so the pollen says – was long-term drought.

The strength of those vanished civilizations – Egyptian, Hittite, Mycenaean, a dense network of trading culture in the eastern Mediterranean – can hardly be disputed.  Until now, no one has been certain what caused them to collapse.  As part of a new, comprehensive effort to reconstruct the nature of life in ancient Israel, a team of scientists in 2010 began studying core samples taken from beneath the Sea of Galilee.

They analyzed pollen samples from those cores at 40-year intervals, creating a fine-grained portrait of climatic changes during the period in question.  What the pollen samples showed was a broad shift in vegetation consistent with drought at its most intense around 1250 to 1100 BC.

Drought is both a cause of cultural disturbance and a cause of other causes.  It induces a cascade of changes, disrupting agriculture, trade and social cohesion.  The coherence that produces a civilization can swiftly fall apart under those pressures, whether it occurs in the Middle East in the Late Bronze Age or in the American Southwest in the 12^th century, when the people known as the Anasazi reached their cultural peak and then collapsed.

The pollen findings from the Sea of Galilee are interesting in and of themselves, but now, in an era of intensifying drought in so many places, they require more attention as reminders of how vulnerable even the strongest human societies may be to natural forces.  –NY Times.

Education is not the filling of a pail, but the lighting of a fire. –William Butler Yeats.

Photos of the day

The 1987 mural titled ‘We The Youth’ by artist Keith Haring in the Point Breeze neighborhood of Philadelphia, has gotten a makeover. The city’s Mural Arts Program has worked for months to restore the only collaborative public mural by Haring that is still intact and at its original site. Matt Rourke/AP

A sculpture by Australian artist Ken Unworth is displayed during the world’s largest annual free-to-the-public outdoor art exhibition, ‘Sculptures By The Sea’ in Sydney in Australia. The exhibition features sculptures which were made by both Australian and overseas artists. Rob Griffith/AP

Market Closes for October 30^th, 2013

Market  Index	Close	Change
Dow  Jones	15618.76	-61.59    -0.39%
S&P 500	1763.31	-8.64    -0.49%
NASDAQ	3930.620	-21.718    -0.55%
TSX	13455.33	+14.72
		+0.11%

International Markets

Market  Index	Close	Change
NIKKEI	14502.35	+176.37
		+1.23%
HANG  SENG	23304.02	+457.48
		+2.00%
SENSEX	21033.97	+104.96
		+0.50%
FTSE 100	6777.70	+2.97
		+0.04%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.421	2.408
CND.   30 Year Bond	3.015	3.007
U.S.   10 Year Bond	2.5342	2.5034
U.S.   30 Year Bond	3.6403	3.6127

Currencies

BOC Close	Today	Previous
Canadian $	0.95466	0.95525
US   $	1.04749	1.04685
Euro Rate  1 Euro=		Inverse
Canadian   $	1.43885	0.69059
US  $	1.37361	0.72801

Commodities

Gold	Close	Previous
London Gold   Fix	1344.60	1344.12
Oil	Close	Previous
WTI Crude Future	96.77	98.20
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 30 (Bloomberg) — Canadian stocks rose, erasing earlier losses, as earnings from Yamana Gold Inc. pushed gold shares higher and investors analyzed a statement from the U.S. Federal Reserve for clues on when it may scale back stimulus.

OceanaGold Corp. climbed 16 percent after raising its copper production target and cutting its cost estimates. Yamana Gold gained 4.8 percent as earnings topped forecasts. Wi-Lan Inc. jumped 6.5 percent as the company considers strategic options including a sale after losing a patent case. B2Gold Corp. fell 1.1 percent as third-quarter revenue declined amid rising costs.

The Standard & Poor’s/TSX Composite Index rose 14.72 points, or 0.1 percent, to 13,455.33 at 4 p.m. in Toronto, erasing earlier losses of as much as 0.6 percent. The benchmark Canadian equity gauge has advanced 5.2 percent in October, heading for the biggest monthly gain in two years.

“The tension is going to shift back to the economy and the Fed is clarifying further that what they do will be very dependent on economic data,” Youssef Zohny, portfolio manager with Stenner Investment Partners of Richardson GMP Ltd., said from Vancouver. Richardson GMP manages about C$16 billion ($15.3 billion). “It seems like the Fed decision was being anticipated. Investors are going to be keeping an eye out for the data starting next week, which will likely be more important than this announcement.”

The U.S. central bank said it sees improvement in economic activity even as it maintained its $85 billion in monthly purchases. The Fed said it needs to see more evidence that the economy will continue to improve. The central bank will keep stimulus measures at the current level until March 2014, economists forecast in a Bloomberg survey this month.

OceanaGold soared 16 percent to C$1.71 and Yamana rallied 4.8 percent to C$10.71 to pace gains among raw-materials stocks as five of 10 industries in the S&P/TSX advanced. Trading volume was in line with the 30-day average.

OceanaGold raised its 2013 copper production guidance to 18,000 to 20,000 tons from 15,000 to 18,000 tons. The company produced 6,150 tons of copper in the third quarter and 74,697 ounces of gold.

The company also lowered its cash costs forecasts for the year to $550 to $650 an ounce from $650 to $800 an ounce earlier.

Yamana reported adjusted earnings of 9 cents a share in the third quarter, compared with analysts’ estimates for 8 cents.

Production climbed 4 percent from the second quarter and revenue increased, the company said.

Cameco Corp. increased 4.6 percent to C$19.87. The company said revenue this year is now forecast to grow 30 percent to 35 percent, compared with earlier projections of 25 percent to 30 percent.

Cameco reported third-quarter adjusted earnings of 53 Canadian cents a share, ahead of analysts’ estimates of 18 cents.

Copper Mountain Mining Corp. jumped 5.3 percent to C$1.78 as revenue climbed 42 percent compared with a year ago. Copper rose the most in five weeks in New York as inventories tracked by the London Metal Exchange shrank for a 40th straight session.

B2Gold dropped 1.1 percent to C$2.69 after reporting third- quarter revenue of $128.7 million, short of analysts’ estimates for $134.7 million. The company now forecasts 2013 cash costs of $675 to $690 an ounce, compared with $630 to $660 earlier.

Wi-Lan, the Ottawa-based patent licensing company, climbed 6.5 percent to C$3.30. Wi-Lan will consider changes to dividend policy or other forms of return of capital, as well as “the acquisition or disposition of assets, joint ventures, the sale of the company, alternative operating models or continuing with the current business plan,” it said today in a statement.

The company lost a patent-infringement trial against Apple Inc. on Oct. 23 in which Wi-Lan was seeking $248 million in royalties for wireless technology used in mobile devices.

USA

By Nick Taborek and Aubrey Pringle

Oct. 30 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index halting a four-day winning streak, after the Federal Reserve fueled bets it will begin to cut stimulus even as it maintained the pace of monthly bond buying as expected.

LinkedIn Corp. lost 9.3 percent after its quarterly sales outlook missed analysts’ predictions. Western Union Co. tumbled 12 percent after saying costs tied to regulatory compliance will prevent operating profit from rising next year. General Motors Co. gained 3.2 percent as quarterly profit topped estimates.

Buffalo Wild Wings Inc. surged 9 percent after raising its full- year earnings forecast. Facebook Inc. jumped 10 percent after the market closed as it released results.

The S&P 500 fell 0.5 percent to 1,763.31 at 4 p.m. in New York after rising yesterday to a third straight record. The index has jumped 24 percent this year, on track for its best annual gain since 2003. The Dow Jones Industrial Average lost 61.59 points, or 0.4 percent, to 15,618.76 today. About 6.4 billion shares changed hands on U.S. exchanges, 7.4 percent above the three-month average.

“People are looking at it and saying, ‘OK it’s about what we expected, so there’s no real upside, and we’ve traded it up, so now let’s back off a little bit,’” Brad McMillan, chief investment officer for Waltham, Massachusetts-based Commonwealth Financial Network, said in a phone interview. His firm has more than $71 billion under management. “Everyone was buying in the anticipation of continued stimulus. That is more or less exactly what they’ve got.”

The Fed decided to press on with the $85 billion in monthly bond purchases that have helped propel the S&P 500 higher by more than 160 percent from a 12-year low in 2009. The gauge has surged 4.9 percent in October, heading for the biggest monthly gain in two years, as lawmakers ended a 16-day government shutdown and agreed to extend the U.S. borrowing authority, avoiding a possible debt default.

While Fed policy makers said fiscal policy is “restraining economic growth,” the central bank said it sees signs of “underlying strength.” The Fed removed a sentence from its previous policy statement that had said tighter financial conditions could slow the improvement in the economy, sparking speculation it could cut stimulus in the coming months.

“When you look at the reaction in the market, investors are really taking the opinion that the taper may actually come sooner than previously thought,” Chris Gaffney, senior market strategist at EverBank Wealth Management, said by phone from St. Louis. “Everything indicates that people, when they read that statement, they felt like the Fed continues to have a positive view on the economy and they would be starting to taper maybe before the expected March date.”

The central bank was expected to maintain the pace of assets purchases at the current level until March 2014, according to a Bloomberg survey this month.

The Fed left unchanged its statement that it will probably hold its target interest rate near zero “at least as long as” unemployment exceeds 6.5 percent, so long as the outlook for inflation is no higher than 2.5 percent. A report today showed the cost of living in the U.S. rose 0.2 percent as projected in September, capping the smallest year-to-year gain in five months.

Separate data based on payrolls showed companies added fewer workers than projected in October, adding to signs that growth slowed in the weeks before the shutdown. The government closure will reduce economic growth by 0.3 percentage points this quarter at an annual rate, according to a Bloomberg News survey of economists.

While the S&P 500’s rally has lifted equity valuations to a four-year high, with the index trading at 16 times estimated operating earnings, that’s still below the multiples at the market’s two previous peaks, when the ratio reached 16.5 in October 2007 and 25.7 in March 2000, data compiled by Bloomberg show.

Investors have also been assessing better-than-expected corporate earnings from the third quarter. Profits have grown by an average of 5 percent among the 312 S&P 500 companies that have reported results so far, while sales have gained 2.9 percent. Profits for the broad equity gauge probably increased 3.7 percent during the quarter as sales climbed 2.4 percent, according to analysts’ estimates compiled by Bloomberg. Some 35 members of the S&P 500 reported results today.

Facebook, which is not in the gauge, rallied 10 percent to $54.11 at 4:34 p.m. in New York. The world’s largest social network reported third-quarter sales that topped analysts’ estimates as advertisers boosted spending on promotions targeting users on smartphones and tablets. The stock fell 0.8 percent to $49.01 in the regular session for a fourth day of losses. It closed at a record $54.22 on Oct. 18.

All 10 main S&P 500 groups dropped at least 0.2 percent today. Utilities and consumer-staples stocks fell the most, dropping more than 0.6 percent.

LinkedIn lost 9.3 percent, the most since May, to $224.11.

The world’s biggest professional-networking site said fourth- quarter revenue will be $415 million to $420 million. That trailed the average analyst estimate of $438.9 million.

Western Union Co. tumbled 12 percent to $16.85 for the biggest slide in the S&P 500 and its lowest level since July 2.

The largest money-transfer business reported a drop in third- quarter profit. Operating income won’t increase next year because of additional investments needed to comply with new and existing regulations, Chief Executive Officer Hikmet Ersek said.

U.S. Steel Corp. slid 2.9 percent to $24.72. The largest U.S. producer of the metal will permanently close parts of two plants as it cuts costs after four unprofitable quarters. The company was downgraded to hold from buy at Deutsche Bank by equity analyst David Martin.

General Motors gained 3.2 percent to $37.23. The largest U.S. automaker posted third-quarter profit that beat estimates as North American earnings, boosted by redesigned large pickups, helped buffer international losses.

Buffalo Wild Wings jumped 9 percent to $141.22 after saying late yesterday it expects full-year earnings growth of 28 percent, up from a previous estimate of 25 percent. That implies adjusted profit of $3.83 a share, surpassing the average analyst projection of $3.64.

Electronic Arts Inc. rallied 7.8 percent to $26 for the biggest gain in the S&P 500. The second-largest U.S. video-game publisher was raised to strong buy from hold by Needham & Co. by equity analyst Sean McGowan.

Sealed Air Corp. jumped 6.4 percent to $30.35. The manufacturer of packaging materials raised its full-year profit forecast above analyst estimates.

Gilead Sciences Inc. gained 4.6 percent to a record $72.67.

The drug maker reported third-quarter adjusted profit that beat analyst estimates as antiviral revenue rose 14 percent. The company raised its product sales forecast for the year.

 

Have  a wonderful evening everyone.

 

Be magnificent!

 

As long as there is division in any form

there must be conflict.

You are responsible, not only to your children,

but to the rest of humanity.

Unless you deeply understand this, not through words or ideas or the intellect,

but feel this in your blood, in your way of looking at life, in your actions,

you are supporting organized murder which is called war.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Don’t be too timid and squeamish about your actions.  All life is an experiment.

The more experiments you make the better.

-Ralph Waldo Emerson, 1803-1882.

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Gary and I were in  Vancouver this past weekend to assess what we have to do in order to clear out my Mom’s home before the closing date sale is completed on  November 15^th – it’s a lot- three floors of decades of a life of accumulation of memorabilia from a very sentimental person’s perspective – in addition to the standard – i.e., furniture, dishes, appliances and all the other de rigueur stuff that becomes our unbelievably blessed western standard of living  – contrast A Fine Balance, Rohinton Mistry, for instance….

I lifted the latch to the kitchen door and meandered along the long back lawn kept anonymous from the outside world by the towering leafy trees, to the back shed.  I opened the door, whereupon I learnt that raccoons had discovered this wonderful sanctuary in her absence, made it their home, and completely ripped to shreds all the stacked up upholstery for her outdoor furniture  – et alia.

Well, here’s something I have since learned and thought I’d share with you…

Racccoons Masked trickster, urban success story:

Clever and charismatic, the raccoon – from the Algonquin arukun, “he who scratches with his hands” – is as at home in the city as in the country.  In Native cultures, raccoon is the Trickster who uses his wits to lead enemies astray, leaving them stranded and bewildered.  The Cheyenne call him macho-an, “one who makes magic,” and his bandit’s mask lends him an aura of mischievousness and wily intelligence.  His scientific name, Procyon lotor, refers to the washing behavior thought to be instinctive.  In reality, what raccoons really like to do is experience their food, handling it a much as possible and dunking and soaking it in water when available.  Maybe it’s that human like behavior and their five-fingered “hands” that have always made raccoons seem subtly akin to us, or at least to the lost wild in ourselves.

Raccoons have lived on our continent, virtually unchanged, for more than a million years.  -exerpeted from The Humane Society of the United States.

Photos of the day

Elmo the cat sits amid poinsettias in a greenhouse in Barth, northern Germany. 50,000 plants in different colors and sizes are grown in these gardens. Bernd Wuestneck/dpa/AP

Camels are escorted to Radio City Music Hall for the first day of rehearsals for the 2013 Radio City Christmas Spectacular in New York. The animals will be a part of the ‘Living Nativity’ scene. Amanda Schwab/Starpix/AP

Market Closes for October 29^th, 2013

Market  Index	Close	Change
Dow  Jones	15680.35	+111.42    +0.72%
S&P 500	1771.95	+9.84    +0.56%
NASDAQ	3952.338	+12.209    +0.31%
TSX	13440.61	+68.77
		+0.51%

International Markets

Market  Index	Close	Change
NIKKEI	14325.98	-70.06
		-0.49%
HANG  SENG	22846.54	+39.96
		+0.18%
SENSEX	20929.01	+358.73
		+1.74%
FTSE 100	6774.73	+48.91
		+0.73%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.408	2.424
CND.   30 Year Bond	3.007	3.023
U.S.   10 Year Bond	2.5034	2.5206
U.S.   30 Year Bond	3.6127	3.6170

Currencies

BOC Close	Today	Previous
Canadian $	0.95525	0.95745
US   $	1.04685	1.04444
Euro Rate  1 Euro=		Inverse
Canadian   $	1.43913	0.69486
US  $	1.37472	0.72742

Commodities

Gold	Close	Previous
London Gold   Fix	1344.12	1353.16
Oil	Close	Previous
WTI Crude Future	98.20	98.40
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 29 (Bloomberg) — Canadian stocks rose to the highest level in two years, after U.S. economic reports fueled speculation Federal Reserve policy makers will continue stimulus measures as they begin two days of meetings.

Thomson Reuters Corp. climbed to a two-year high after disclosing it will buy back some of its shares and cut 3,000 positions in a bid to focus on growth. Sears Canada Inc. jumped 6 percent after deciding to terminate five leases, including its flagship location in Toronto. Bank of Nova Scotia and Toronto- Dominion Bank rose more than 1 percent to pace gains among the nation’s largest lenders as financial shares rallied.

The Standard & Poor’s/TSX Composite Index rose 68.77 points, or 0.5 percent, to 13,440.61 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 5.1 percent in October, for the biggest monthly gain in two years.

“The recent government shutdown and continued uncertainty about U.S. fiscal policy are expected to keep growth little changed through the end of the year,” said Paul Ferley, assistant chief economist with RBC Capital Markets, in a note today. “These recent developments weigh in favor of the Fed leaving the pace of asset purchases unchanged.”

Central bank policy makers meet today and tomorrow to consider whether to scale back the $85 billion a month of stimulative bond purchases. The Fed support has helped fuel a rally in global equities.

Retail sales in the U.S. declined 0.1 percent in September, restrained by the biggest decrease at auto dealers since October 2012. Confidence among U.S. consumers declined in October by the most since August 2011 as the 16-day government shutdown took a toll on outlooks.

President Barack Obama’s nomination of Janet Yellen, vice chairman of the Fed, to succeed Ben S. Bernanke as chairman at the end of January has added to speculation the central bank will not make any changes to its policy.

“When you have a new person coming in, they won’t do anything dramatic at all,” said David Cockfield, fund manager with Northland Wealth Management in Toronto. He helps manage C$225 million ($216 million) with the firm. “In times like these you do as little as possible and with the threat of further interparty fighting, you want to remain soft, accommodative and don’t introduce anything else that will cause stress or strain.”

Thomson Reuters gained 3.4 percent to C$38.60, the highest since April 2011, as consumer discretionary stocks added 1.2 percent as a group. Eight of 10 industries advanced on trading volume 7.2 percent lower compared with the 30-day average.

Thomson Reuters, a provider of news and information services, plans to cut 3,000 positions, or about 5 percent of the workforce, to focus on growth markets and boost profitability.

The company also reported higher-than-projected earnings of 48 cents a share in the third quarter, compared with 44 cents estimated by analysts.

Sears Canada increased 6 percent to C$14.35, the highest close in almost two years. The department store retailer is selling five store leases to Cadillac Fairview Corp. for C$400 million, including its flagship location in the Toronto Eaton Centre.

In the U.S., parent Sears Holdings Corp. is considering separating its Lands’ End and auto center units to raise cash.

Toronto-Dominion Bank rallied 1 percent to C$95.15 and Scotia Bank advanced 1.1 percent to C$63.54 as both lenders extended record highs. The S&P/TSX Banks Index climbed 1 percent, extending a record as it gained for the 13th time in the last 14 sessions.

Talisman Energy Inc. rose 2.6 percent to C$13.25 and Suncor Energy Inc. added 1.4 percent to C$38. Crude slipped for the first time in four days.

Imax Corp., the big-screen cinema technology company, gained 1.8 percent to C$30.94. Imax will develop and produce in- home theater systems in partnership with Hong Kong-based TCL Multimedia Technology Holdings Ltd. The first products will be introduced in China and other unspecified global markets in 2015.

US

By Nick Taborek and Michael P. Regan

Oct. 29 (Bloomberg) — Stocks rose in the U.S. and Europe as earnings beat analysts’ estimates at companies from BP Plc to Xylem Inc. The dollar gained and oil and gold paced losses in commodities, while Treasuries increased as the Federal Reserve began a two-day policy meeting.

The Standard & Poor’s 500 Index added 0.6 percent to 1,771.95 at 4 p.m. in New York, reaching a record for a third straight day. The Stoxx Europe 600 Index climbed 0.4 percent after BP raised its dividend and Spanish and Italian bonds gained. The Bloomberg U.S. Dollar Index, a gauge of the currency against 10 major peers, strengthened 0.4 percent. West Texas Intermediate crude slipped from a one-week high and gold futures dropped 0.5 percent to $1,345.50 an ounce, retreating from the highest level in five weeks.

Earnings and Fed stimulus have helped extend the S&P 500’s advance to 24 percent in 2013, which would mark its best yearly rally in a decade. Per-share profit has beaten the average analyst estimate at three-quarters of the 284 companies in the index that have reported their latest results, data compiled by Bloomberg show. The Fed began a two-day meeting today after consumer confidence fell, an Oct. 22 report revealed growth in American jobs slowed in September and data yesterday showed factory output and home sales missed forecasts.

“It still seems that the Fed has created this good-news- is-bad-news, bad-news-is-good-news scenario,” Randy Bateman, who oversees $15 billion as chief investment officer of Huntington Asset Advisors in Columbus, Ohio, said by telephone.

“The anticipation is that the Fed will retain its purchasing of $85 billion in monthly Treasury and mortgage securities, which is going to continue to help the housing market. That will be taken fairly well by the market.”

Xylem, the water company whose pumps helped clean tunnels in New York flooded by Hurricane Sandy, surged 12 percent for the biggest gain in the S&P 500 and largest advance for the stock since it was spun off from ITT Corp. two years ago. The company posted earnings that beat estimates by 40 percent and raised annual profit and sales forecasts.

Pfizer Inc., the world’s biggest drugmaker, jumped 1.7 percent after profit beat analysts’ estimates on cost cuts and increased sales of its top vaccine and pain drugs. Masco Corp., which makes faucets and kitchen and bath cabinets, rose 2.6 percent as its sales topped forecasts.

Apple Inc., the world’s most valuable company, slipped 2.5 percent after earlier rallying as much as 1.8 percent. The maker of the iPhone said revenue in the current quarter will be $55 billion to $58 billion, compared with the $55.5 billion average of analysts’ estimates compiled by Bloomberg. Gross margins will be 36.5 percent to 37.5 percent, versus the 38 percent projection.

The Nasdaq Composite Index closed up 0.3 percent at 3,952.34, above its highest closing level in 13 years. Earlier, Nasdaq OMX Group Inc. indexes stopped updating for almost an hour starting at around 11:53 a.m. amid a data-feed error.

Commerce Department figures showed today that retail purchases excluding vehicles gained 0.4 percent following a 0.1 percent increase in August and matched the median forecast of economists surveyed by Bloomberg. Total sales dropped 0.1 percent. A report from S&P/Case-Shiller showed house prices climbed at a faster rate in August, jumping 12.8 percent from the previous year.

The Conference Board’s consumer confidence index fell to 71.2 in October from 80.2 the month prior, below the median forecast in a survey of economists for a reading of 75.

Two shares advanced for each that declined in the Stoxx Europe 600 Index. BP jumped 5.6 percent, the most in almost three years.

Oil, insurance, telephone and technology companies posted the biggest gains in Europe while banks and household products companies led losses. UBS AG lost 7.7 percent after saying it probably won’t be able to reach its profitability goal in 2015.

This year’s rally in equities has pushed valuations on benchmark indexes in the U.S. and Europe to the highest levels in more than three years. The S&P 500  trades for 16.8 times reported earnings, the most since May 2010. The Stoxx 600 is valued at 20.9 times reported earnings and 14.9 times projected profit, the most expensive valuations since the end of 2009, according to data compiled by Bloomberg. The European gauge has rallied 15 percent this year following a similar gain in 2012.

The MSCI Emerging Markets Index rose for a second day, advancing 0.1 percent. India’s S&P BSE Sensex index added 1.7 percent, snapping a five-day slump, after the central bank further eased emergency measures imposed in July to support the rupee. Brazil’s Ibovespa index slid 1 percent as Eike Batista’s OGX Petroleo e Gas Participacoes SA sank after ending talks with bondholders without an agreement, outweighing gains by lender Itau Unibanco Holding SA. Argentina’s Merval sank 4.6 percent, the most in two years.

The Czech PX Index rose 2.7 percent, the most since January, after parties pledging to increase company taxes failed to gain control of parliament in general elections over the weekend.

The Shanghai Composite Index fell 0.2 percent to a seven- week low after the People’s Bank of China’s first cash injection in two weeks failed to reduce money-market rates.

WTI oil fell 0.5 percent to $98.20 a barrel, its first drop in four days, before government data tomorrow that’s forecast to show crude stockpiles rose to a four-month high in the U.S., the world’s biggest consumer of the fuel.

Coffee futures capped the longest route in more than four decades as wet weather signaled bigger crops than forecast in Brazil, the world’s largest grower. Increasing precipitation in Brazil this week will improve conditions for crops that have been able to flower multiple times amid ample rain, MDA Weather Services in Gaithersburg, Maryland, said yesterday. Soil moisture will also gain in Colombia, the second-biggest producer, the forecaster said.

Arabica coffee for delivery in December fell 0.6 percent to $1.0695 a pound on ICE Futures U.S. in New York, after touching $1.066, the lowest since March 2009. A decline today would be the 11th straight, the longest slump since at least 1972.

Australia’s dollar slid to a two-week low after Reserve Bank Governor Glenn Stevens said the nation’s terms of trade are likely to worsen and its currency may be “materially lower” than current levels. The Aussie weakened 1 percent to 94.78 U.S. cents.

Spain’s government bonds rose for a second day, pushing 10- year yields to the lowest level since May, as a report showed retail sales rose in September, adding to evidence the nation’s recovery is gaining momentum. The rate dropped five basis points to 4.05 percent. Italy’s 10-year yield fell six basis points to 4.14 percent.

Ten-year Treasury yields were down two basis points at 2.50 percent. Treasury five-year notes were the most expensive in four months relative to two- and 10-year securities before the U.S. sells $35 billion of 2018 debt today.

The so-called butterfly spread measuring differences between the yields was negative 30 basis points, a level not seen since June 18, based on closing prices. The figure reflects increased demand for the middle security over the outliers.

The Treasury sold $32 billion of two-year securities yesterday with a bid-to-cover auction ratio, which gauges demand by comparing total bids with the amount of securities offered, at 3.32, the highest level since April.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

When you believe that the truth is living, moving, that it does not have one home or rest in any temple,

mosque, or church, in any religion, master or philosopher – in short, that nothing can lead you to it –

you will see also that you are this living thing in every respect;

it is your anger, your brutality, your violence, your despair.

It is the agony and the pain that you live through.  The truth is in the comprehension of all of this;

you cannot comprehend it unless you are determined to see it in your life.

Krishnamurti, 1895-1986

 

As ever,

 

Carolann

 

I don’t know which is more discouraging,

literature or chickens.

-E.B. White, 1899-1985

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:

Isn’t this beautiful fall weather for those of us living on the left coast?  Enjoy it while it lasts – rain is coming later in the week.

Today is the anniversary of the dedication of the Statue of Liberty  –  a gift from the people of France; President Grover Cleveland dedicated the statue in New York Harbor on October, 28^th, 1886.

I think I’ve now seen the biggest TV screen in existence at  recently renovated Tappo Restobar on Richards Street in Vancouver.  Now that football season has officially arrived, they are opening on Sundays for brunch – Mediterranean inspired menu – best minestrone soup!

In life, as in a football game, the principal to follow is: Hit the line hard.  –Theodore Roosevelt.

Photos of the day

A woman and her daughter struggle against strong winds and rain in central Brussels. According to local media, the winds could reach speeds of over 62 miles per hour. Francois Lenoir/Reuters

People stop on a bridge over the river Garry to view the autumn scene near Killiecrankie, Scotland. Russell Cheyne/Reuters

Market Closes for October 28^th, 2013

Market  Index	Close	Change
Dow  Jones	15568.93	-1.35    -0.01%
S&P 500	1762.11	+2.34    +0.13%
NASDAQ	3940.129	-3.232    -0.08%
TSX	13382.07	-17.35
		-0.13%

International Markets

Market  Index	Close	Change
NIKKEI	14396.04	+307.85
		+2.19%
HANG  SENG	22806.58	+108.24
		+0.48%
SENSEX	20570.28	-113.24
		-0.55%
FTSE 100	6725.82	+4.48
		+0.07%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.424	2.417
CND.   30 Year Bond	3.023	3.023
U.S.   10 Year Bond	2.5206	2.5034
U.S.   30 Year Bond	3.6170	3.5964

Currencies

BOC Close	Today	Previous
Canadian $	0.95745	0.95686
US   $	1.04444	1.04509
Euro Rate  1 Euro=		Inverse
Canadian   $	1.43994	0.69447
US  $	1.37867	0.72534

Commodities

Gold	Close	Previous
London Gold   Fix	1353.16	1351.78
Oil	Close	Previous
WTI Crude Future	98.40	97.55
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle

Oct. 28 (Bloomberg) — Canadian stocks fell from a two-year high, as energy and industrial shares dropped before the U.S. Federal Reserve meets to consider extending monetary stimulus.

Canadian Natural Resources Ltd. and Advantage Oil & Gas Ltd. dropped at least 1.7 percent as natural gas prices slid.

Canadian Pacific Railway Ltd. fell 1.3 percent to pace losses among industrial shares after Pershing Capital Management LP cut its stake in the company by four percentage points. Taseko Mines Ltd. added at least 8.3 percent as miners advanced.

The Standard & Poor’s/TSX Composite Index fell 27.58 points, or 0.2 percent, to 13,371.84 at 4 p.m. in Toronto. The gauge rallied 2 percent last week to the highest since July 2011. It’s risen 4.6 percent in October, poised for its best month in two years. Trading volume was 9 percent below the 30- day average at this time of day.

“The market is somewhat directionless,” Brian Huen, the Toronto-based managing partner at Red Sky Capital Management Ltd., said by phone. His firm oversees C$225 million ($215 million). “We have lots of earnings coming out later this week and the FOMC meeting, and that’s what going to start driving investor sentiment. Until we get more news flow, I think we’re going to be range-bound.”

The benchmark index swung between a gain of 0.1 percent and a drop of 0.2 percent today, with seven of 10 main groups retreating. The gauge had advanced eight of the nine sessions prior to today.

The Federal Open Market Committee starts a two-day meeting tomorrow to consider when to start trimming $85 billion of bond purchases that have helped bolster global equities. A report today showed factory production in the U.S. rose less than forecast last month, reviving prospects for an extension of economic stimulus by the Fed.

Some 50 companies in the S&P/TSX will report earnings in the next four days, including Barrick Gold Corp., Suncor Energy Inc. and Bombardier Inc.

Canadian consumer confidence fell for a fourth straight week, the Bloomberg Nanos Canadian Confidence Index showed today. The weekly measure of the economic mood of Canadians dropped to 57.7 in the seven days through Oct. 25, from 58.0 the previous week.

Consumer staples stocks retreated 0.6 percent, dragged lower by Maple Leaf Foods Inc., which fell 3.2 percent to C$15.47.

Industrial shares halted a six-day rally, sliding 0.8 percent. Canadian Pacific fell from an all-time high, retreating 1.3 percent to C$148.17. Bill Ackman’s Pershing Square completed a previously announced sale of the railway operator’s shares, reducing its to 9.8 percent from 13.8 percent in July. Canadian National Railway Co. dropped 1 percent to C$114.03.

Bombardier Inc., Canada’s largest plane maker, dropped 1.9 percent to C$5.27 after a UBS analyst reported that the new CSeries aircraft has logged fewer test flight hours than the bank estimates are needed before the planes can be shipped.

Energy stocks fell 0.5 percent, led lower by gas producers.

Canadian Natural Resources slid 1.9 percent to C$32.68 and Advantage Oil & Gas fell 1.7 percent to C$4.15. Natural gas prices plummeted 3.7 percent.

Atlantic Power Corp. plunged 6.2 percent to C$5 for its biggest slide since June. Bank of Nova Scotia cut its rating on the power generation company’s stock to underperform.

Raw materials producers gained 0.2 percent, reversing an earlier drop of as much as 0.7 percent for the best performance in the benchmark index. Gold advanced for the third straight session on speculation the Fed will delay tapering.

Detour Gold rose 3.8 percent to C$9.12 and Eldorado Gold Corp. gained 3 percent to C$7.49. Taseko Mines jumped 8.3 percent to C$2.73.

Fairfax Financial Holdings Ltd., which has an investment portfolio worth $24.1 billion, jumped 1.2 percent to C$473.58.

The Toronto-based insurer and financial services company climbed to the highest level since 1999 after investments in Irish banking and Canadian cattle feed surged, more than offsetting any potential loss from a $4.7 billion bid for smartphone maker BlackBerry Ltd.

USA

By Nick Taborek and Alexis Xydias

Oct. 28 (Bloomberg) — U.S. stocks rose, leaving the Standard & Poor’s 500 Index poised for the best annual gain since 2003, as weaker-than-forecast economic data fueled bets the Federal Reserve will maintain stimulus at its meeting.

Burger King Worldwide Inc. rose 5.8 percent after third- quarter sales topped estimates. Dendreon Corp. jumped 11 percent as people familiar with the matter said the drugmaker is seeking a buyer. Merck & Co. slid 2.6 percent after reporting revenue that fell short of estimates. Apple Inc. dropped 2.2 percent after the market close as the maker of iPhones and iPads released results.

The S&P 500 rose 0.1 percent to 1,762.11 at 4 p.m. in New York. The gauge has rallied 23.6 percent this year, which would be the best annual gain since a 26.4 percent surge in 2003. The Dow Jones Industrial Average fell 1.35 points, or less than 0.1 percent, to 15,568.93. About 5.9 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“The most bullish thing a market can do is go up, and that’s what it’s been doing,” Bruce Bittles, chief investment strategist at RW Baird & Co., said by phone from Sarasota, Florida. His firm oversees $100 billion. “With Janet Yellen coming on stream and the latest jobs data that was a disappointment, that suggests that the Fed will continue to ease and print money until at least March and probably beyond.”

The S&P 500 rallied 0.9 percent last week for its third straight weekly gain, as signs of slower economic recovery fueled bets the Fed will wait until March before scaling back bond purchases. The gauge has jumped 4.8 percent this month as lawmakers agreed to raise the government’s borrowing limit.

Fed policy makers meet Tuesday and Wednesday to consider whether economic growth is strong enough to start trimming $85 billion of bond purchases. This month’s 16-day government shutdown took at least $24 billion out of the economy and will spur central-bank policy makers to wait until March to scale back the stimulus, a Bloomberg survey showed this month.

Data today added to concern that growth slowed in the weeks before the shutdown. Factory output rose 0.1 percent in September, slower than the 0.3 percent forecast by economists in a Bloomberg survey. Another report showed fewer Americans than forecast signed contracts to buy previously owned homes in September, the fourth straight month of declines. A report last week showed hiring grew at a slower-than-estimated pace.

“Investors are going to be overly focused on this Fed meeting,” Scott Wren, senior equity strategist at St. Louis, Missouri-based Wells Fargo Advisors LLC., which oversees about $1.3 trillion, said by phone. “I suspect that when the statement is released there’s going to be very little change to it.”

Better-than-expected earnings and the Fed stimulus have driven the S&P 500 up more than 160 percent since March 2009.

The rally has lifted equity valuations, with the index trading at 16.7 times reported earnings.

Profits have beaten the average analyst estimate at 76 percent of the 249 S&P 500 companies that have released results so far in the latest reporting season, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, the gauge known as VIX that measures options traders’ estimate of future price swings in S&P 500, has slid 20 percent so far this month. The gauge climbed 1.7 percent to 13.31 today.

Five out of 10 main industries in the S&P 500 advanced, as consumer-staples companies rose 1.2 percent to pace gains.

Burger King rose 5.8 percent to $20.90. The fast food chain reported third-quarter revenue beat analyst estimates as overseas gains in comparable-store sales offset a decline in the U.S. and Canada.

Hershey Co. gained 3.1 percent to $100.14, giving the chocolate maker’s stock a record close three days before Halloween.

J.C. Penney Co. rallied 8.8 percent to $7.39 for the biggest gain in S&P 500. Chief Executive Officer Myron Ullman said at a conference he still expects positive comparable sales in the third quarter, Reuters reported.

Bristol-Myers Squibb Co. rallied 6.7 percent to $52.02, the highest since December 2001. The company’s experimental rheumatoid arthritis drug reduced symptoms of the disease and was about as effective as a current standard treatment sold by AbbVie Inc., a study found.

Dendreon surged 11 percent to $2.81. The maker of Provenge prostate-cancer treatment is working with JPMorgan Chase & Co. to find suitors after sales of the prostate-cancer treatment failed to meet expectations, said one of the people, who asked not to be named as the process is private.

The company, whose market value once topped $7 billion, has generated about $2 billion in losses over the past decade. That market capitalization now hovers at about $400 million.

Apple fell 2.2 percent to $518.46 as of 4:50 p.m. in New York. After the close of regular trading, the world’s most- valuable company predicted lighter-than-estimated gross margins.

Its sales forecast for the crucial holiday quarter topped analysts’ projections. Profit for the just-ended quarter fell 8.6 percent to $7.51 billion, or $8.26 a share, above the $7.92 projected by analysts on average and the third-consecutive period of declines.

Merck dropped 2.6 percent to $45.35 in regular trading for the biggest drop in the Dow. Third-quarter earnings, excluding one-time items, were 92 cents a share, beating by 5 cents the average of analyst estimate compiled by Bloomberg. Sales fell 4 percent to $11 billion, hurt by patent expirations and foreign currency exchange, the second-biggest U.S. drugmaker said. The revenue fell short of the $11.1 billion projected by analysts.

Edwards Lifesciences Corp. slid 5 percent to $73.24 after forecasting fourth-quarter profit below analysts’ estimates. The maker of replacement heart valves is facing increased competition from Boston Scientific Corp. which said today it received approval for its Lotus heart valve, a second-generation device, in Europe. Medtronic Inc. plans to present data on its CoreValve at a medical meeting tomorrow.

The smallest stocks are rallying almost twice as fast as bigger companies in the U.S., a bullish economic signal from businesses whose profits are most dependent on domestic demand.

Shares of companies from Rite Aid Corp. to Teledyne Technologies Inc. in the Russell 2000 Index have advanced 32 percent in 2013, compared with 19 percent for the Dow. The spread is the widest for any year since 2003, according to data compiled by Bloomberg. Three of the last four times small-caps outperformed by this much, the economy grew faster the next year and stocks stayed in a bull market for another year or more, based on data from the past 34 years.

Gains in smaller companies that are more dependent on U.S. growth show investors are betting the world’s largest economy will pick up even after jobs growth slowed and the government shutdown weighed on gross domestic product. Smaller firms are surpassing analyst earnings estimates by more than Dow companies and are forecast to grow faster next year.

“If you’re focused on the U.S., and the U.S. is performing very well, then of course your revenues and earnings are going to be much better,” Kully Samra of Charles Schwab Corp., which has $2.15 trillion of assets globally, said by phone Oct. 24 from London. “Other regions are at different stages of dealing with structural issues, and the U.S. has already dealt with them.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

We should never try to follow another’s path for that is his way, not yours.

When that path is found, you have nothing to do but fold your arms

and the tide will carry you to freedom.

Therefore when you find it, never swerve from it.

Your way is the best for you,

but that is no sign it is the best for another.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

We cannot do great deeds unless we are willing

to do the small things that make up the sum

of greatness.

-Theodore Roosevelt, 1858-1919

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:

Apparently changing climate is threatening to the coffee industry, which fills 1.6 billion cups a day.  It may not be long before that after-dinner espresso costs more than the wine.  More importantly, there are some 26 million farmers who depend on coffee to feed their families.  Coffee is the most valuable tropical export crop and the world’s favorite drink.  It is now the second most traded commodity after oil, with exports worth $15 billion US per year.  The plant is peculiarly vulnerable to climate change according to the New Scientist.

On this day in 1964, the Rolling Stones made their US television debut, appearing on The Ed Sullivan Show.

Pablo Picasso was born on October 25^th, 1881.

128 years ago, on October 25^th, 1885, Johannes Brahm’s 4^th Symphony in E  premiered.

Our greatest weakness lies in giving up.  The most certain way to succeed is always to try just one more time. –Thomas A. Edison

Photo of the day

A man takes a photograph of a sculpture by artist Lucy Humphrey titled ‘horizon’ on a rocky cliff which is part of the ‘Sculpture by the Sea’ exhibition at Sydney’s Tamarama Beach in Australia. The free and temporary outdoor exhibition, now in its 17th year, stretches for 1.24 miles along the coastline. David Gray/Reuters

Market Closes for October 25^th, 2013

Market  Index	Close	Change
Dow  Jones	15570.28	+61.07    +0.39%
S&P 500	1759.77	+7.70    +0.44%
NASDAQ	3943.361	+14.401    +0.37%
TSX	13400.39	+75.63
		+0.57%

International Markets

Market  Index	Close	Change
NIKKEI	14088.19	-398.22
		-2.75%
HANG  SENG	22698.34	-137.48
		-0.60%
SENSEX	20683.52	-41.91
		-0.20%
FTSE 100	6721.34	+8.16
		+0.12%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.417	2.423
CND.   30 Year Bond	3.023	3.025
U.S.   10 Year Bond	2.5034	2.5179
U.S.   30 Year Bond	3.5964	3.6119

Currencies

BOC Close	Today	Previous
Canadian $	0.95686	0.95985
US   $	1.04509	1.04183
Euro Rate  1 Euro=		Inverse
Canadian   $	1.44260	0.69320
US  $	1.38036	0.72445

Commodities

Gold	Close	Previous
London Gold   Fix	1351.78	1346.70
Oil	Close	Previous
WTI Crude Future	97.55	96.71
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle

Oct. 25 (Bloomberg) — Canadian stocks rose for the eighth time in nine days, capping the benchmark index’s third straight weekly gain, as energy producers and miners rallied amid higher commodity prices.

Trilogy Energy Corp. surged 8.3 percent to lead gas companies higher after a report said China Petrochemical Corp. plans to sell half its stake in two shale gas blocks in Canada.

Centerra Gold Inc. jumped 4.2 percent to pace gains among gold miners. CGI Group Inc., the designer of the website for the new U.S. health-care exchanges, fell 0.8 percent amid blame for software snags on the portal.

The Standard & Poor’s/TSX Composite Index rose 74.66 points, or 0.6 percent, to 13,399.42 at 4 p.m. in Toronto. The gauge rallied 2 percent in the past five days, the biggest weekly gain since July. It’s risen 4.8 percent in October, poised for its best month in two years.

“There’s been a nice uptick in some of the material names,” said Matt Skipp, chief investment officer with Sw8 Asset Management Inc. in Toronto. The firm manages about C$54 million ($52 million). “People are looking for places to put money, and Canada is hanging on the positive side at the moment.”

While the benchmark Canadian index traded at a two-year high after rallying 7.8 percent so far in 2013, U.S. stocks have surged 23 percent this year, with the S&P 500 closing at a record today.

Eight of 10 groups in the S&P/TSX advanced today. Utility stocks gained 1.3 percent to pace gains. Canadian Utilities Ltd. rose 2.3 percent to C$38.08 and ATCO Ltd. gained 2.5 percent to C$48.47.

Energy stocks rallied 1 percent as a group to the highest since March 2012, with gas producers pacing gains. Trilogy Energy jumped 8.3 percent to C$31.58, a three-month high.

Precision Drilling Corp. added 4.4 percent to C$11.05 and Enerplus Corp. climbed 2.8 percent to C$18.12.

China Petrochemical plans to sell the stakes in its two biggest shale blocks in Canada to spread costs and speed up their development, Reuters reported, citing Feng Zhiqiang, chairman of North America operations of Sinopec International Petroleum Exploration and Production Corp.

Materials stocks increased 0.6 percent, erasing an earlier drop of as much as 1 percent as gold prices reversed. Gold for December delivery added 0.2 percent in New York to the highest in a month.

Centerra Gold surged 4.2 percent to C$4.19, while Alacer Gold Corp. jumped 1.3 percent to C$3.22 and Semafo Inc. rose 2.4 percent to $2.98.

CGI Group dropped 0.8 percent to C$35.59, pushing its loss for the week to 4 percent. Canada’s biggest technology company continues to bear responsibility for glitches on the new www.healthcare.gov exchange website. Canada’s biggest technology company posted its second straight weekly loss.

Cameco Corp., a uranium company, erased earlier gains and slipped 0.4 percent to C$19.27 after an earthquake struck northeast of Tokyo and a tsunami warning was issued for the Fukushima region.

USA

By Lu Wang

Oct. 25 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to a record, as Amazon.com Inc. and Microsoft Corp. sales beat estimates while a drop in consumer confidence added to speculation the Federal Reserve will delay scaling back monetary stimulus.

Amazon.com surged 9.4 percent as consumers flocked to the largest online retailer ahead of the holiday shopping season, helping to curtail losses. Microsoft jumped 6 percent as the company relied on corporate software demand to make up for weak consumer personal-computer purchases. Eastman Chemical Co. slumped 5.2 percent after cutting its full-year forecast.

The S&P 500 rose 0.4 percent to 1,759.77 at 4 p.m. in New York. The Nasdaq 100 Index climbed 0.6 percent to 3,383.83. The Dow Jones Industrial Average added 61.07 points, or 0.4 percent, to 15,570.28. About 6 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“Earnings have been good enough and the liquidity spigot is open so that people see very little risk in the system,” Charlie Smith, chief investment officer of Pittsburgh-based Fort Pitt Capital Group Inc., said in a phone interview. His firm oversees $1.5 billion. “It’s like a giant game of musical chairs. The attitude on the part of most investors is that they have to play while the Fed got the music going.”

The S&P 500 has jumped 4.7 percent this month as lawmakers agreed to raise the government’s borrowing limit, avoiding a sovereign default. Equities rallied for a third week, with the benchmark index up 0.9 percent, as signs of slower economic recovery fueled bets the Fed will wait until March before scaling back bond purchases.

Exchange-traded funds that invest in U.S. equities took in more than $2.3 billion the last four days, bringing this month’s flows to about $15.8 billion, data compiled by Bloomberg show.

October is on track for the biggest intake since July.

Stocks briefly pared gains today as a person in Kentucky Republican Rand Paul’s office said the Senator is considering placing a hold on the nomination of Janet Yellen to lead the Fed. Equities rallied earlier this month when President Barack Obama chose Yellen to succeed Ben S. Bernanke as Fed chairman.

As a top deputy to Bernanke, Yellen supported the central bank’s bond-buying programs that have helped propel the S&P 500 up 160 percent from a 12-year low in 2009.

Better-than-expected earnings and continued monetary stimulus have driven the S&P 500 up 23 percent this year. While the rally lifted equity valuations to a four-year high, with the index trading at 15.9 times estimated operating earnings, that’s still below the multiples at the market’s two previous peaks, when the ratio reached 16.5 in October 2007 and 25.7 in March 2000, data compiled by Bloomberg show.

“Valuation is still reasonable and the economy appears to getting better,” Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Capital Management, said by phone from Atlanta. His firm oversees about $48 billion.

“The market does look a bit extended so it wouldn’t surprise me if we saw some near-term pullback.”

Data today showed consumer confidence in the U.S. dropped in October to a 10-month low, showing the reopening of the federal government failed to reassure households. The Thomson Reuters/University of Michigan final consumer sentiment index for October decreased to 73.2 from 77.5 the prior month. The median estimate in a Bloomberg survey called for a decline to 75 compared with a preliminary reading of 75.2.

Orders for U.S. durable goods rose in September by the most in three months as stronger demand for commercial and military aircraft outweighed a drop in business equipment.

Sixteen S&P 500 reported earnings today. Of the 244 members of the gauge that have released results so far, 76 percent exceeded analysts’ predictions for profit, while 54 percent beat sales estimates, data compiled by Bloomberg showed.

Earnings for the broad equity gauge probably increased 3.7 percent in the third quarter as sales climbed 2.4 percent, according to analysts’ estimates compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, slipped 0.8 percent to 13.09, trimming its gain for the week to 0.4 percent.

All 10 S&P 500 groups gained today as phone and utility shares climbed more than 1 percent to lead the advance.

Technology shares increased 0.4 percent.

Amazon jumped 9.4 percent to an all-time high of $363.39.

Chief Executive Officer Jeff Bezos has poured money into the company’s delivery network, cloud-computing services and line of Kindle e-readers and tablets, sacrificing near-term profits to fuel growth. That could put Amazon on track to outpace the e- commerce market, where sales are seen climbing 15.5 percent to $83.2 billion, according to EMarketer Inc.

Microsoft rallied 6 percent to $35.73. The world’s largest software maker is undergoing unprecedented changes, conducting its first-ever CEO search to replace Steve Ballmer and starting an organizational overhaul aimed at bolstering sales by focusing on devices and services.

United Parcel Service Inc. added 1.2 percent to a record $95.61. The world’s largest-package delivery company beat analysts’ estimates for third-quarter earnings. The company said revenue from each domestic parcel rose 1 percent and daily package volume was up 2.3 percent.

Alexion Pharmaceuticals Inc. climbed 7.3 percent to a record $125.17. The maker of a drug for rare blood diseases boosted its full-year earnings forecast to as much as $3.04 a share. That compared with the average analyst estimate of $3.03.

National Oilwell Varco Inc. rose 4.5 percent to $82.72. The biggest U.S. maker of oil-field equipment reported third-quarter earnings that topped analysts’ estimates and said it expects orders for the current quarter to be good, “maybe great.”

Zynga Inc. advanced 5.5 percent to $3.73. The maker of social-networking games reported its first quarter under Chief Executive Officer Don Mattrick, recording a smaller-than- forecast loss as purchases of items used in games exceeded the company’s forecast.

Eastman Chemical slumped 5.2 percent to $77.94. The producer of chemicals said it expects full-year earnings to be as low as $6.30 a share, trailing the average analyst estimate of $6.47 in a Bloomberg survey.

Express Scripts Holding Co. declined 4.5 percent to $60.88, the lowest since May. The largest U.S. processor of prescription drug claims reduced its 2013 cash flow forecast, citing delays in some non-client integration activities.

Yahoo! Inc. lost 2.5 percent to $32.25 after Yahoo Japan Corp. forecast full-year sales and profits that missed analysts’ estimates.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

Truth has no path, and that is the beauty of truth, it is living.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

The reward of a thing well done, is to have done it.

-Ralph Waldo Emerson, 1803-1882

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

The United Nations was founded on this day in 1945.  It’s a wonderful concept isn’t it?  U n i t e d  N a t i o n s.

On October 24^th, 1664, King Charles II wrote to his sister Henrietta:

“You have heard of our taking of New Amsterdam, which lies just by New England.  ‘Tis a place of great importance to trade.  It did belong to England heretofore, but the Dutch by degrees drove our people out and built a very good town, but have got the better of it, and ‘tis now called New York.”

When I go to New York every October for the annual Barron’s investment conference, one of the things I try to sneak in is a walk along the streets of the Upper East Side to see the Halloween decorations.  Many of them are spectacular, amazingly imaginative and spooky.  If anyone happens to be going there before October 31^st, check out the display in front of the brownstone at 72^nd and 5^th.  It is amazing.  I tried to take a photo with my phone but it was already nighttime, so it didn’t turn out very well.  The attachment  is supposed to be a photo of a ghost with flashing purple eyes!

Photos of the day

A child looks through a magnifying glass at the ‘Cosmology of Life’ miniature wooden sculptures by Indonesia’s Toni Kanwa during a preview of the contemporary art exhibition titled ‘If The World Changed’ at a museum in Singapore. The exhibition features works by 82 artists from 13 countries.Edgar Su/Reuters

A shepherd guides a flock of sheep in Lyon, France, as ‘Confederation Paysanne’ farmers’ union members protest against the electronic chip system imposed on their animals. Robert Pratta/Reuters

Market Closes for October 24^th, 2013

Market  Index	Close	Change
Dow  Jones	15509.21	+95.88    +0.62%
S&P 500	1752.07	+5.69    +0.33%
NASDAQ	3928.960	+21.886    +0.56%
TSX	13324.75	+81.43
		+0.61%

International Markets

Market  Index	Close	Change
NIKKEI	14486.41	+60.36
		+0.42%
HANG  SENG	22835.82	-164.13
		-0.71%
SENSEX	20725.43	-42.42
		-0.20%
FTSE 100	6713.18	+38.70
		+0.58%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.423	2.425
CND.   30 Year Bond	3.025	3.025
U.S.   10 Year Bond	2.5179	2.4926
U.S.   30 Year Bond	3.6119	3.5871

Currencies

BOC Close	Today	Previous
Canadian $	0.95985	0.96293
US   $	1.04183	1.03850
Euro Rate  1 Euro=		Inverse
Canadian   $	1.43765	0.69558
US  $	1.37998	0.72465

Commodities

Gold	Close	Previous
London Gold   Fix	1346.70	1333.51
Oil	Close	Previous
WTI Crude Future	96.71	96.36
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 24 (Bloomberg) — Canadian stocks rose, after snapping six days of gains yesterday, as resource companies including Agnico Eagle Mines Ltd. reported improving earnings and manufacturing in China grew more than forecast.

Agnico Eagle surged 19 percent and Goldcorp Inc. rallied 4.5 percent as both gold-mining companies reported better-than- projected earnings. Teck Resources Ltd., Canada’s largest diversified miner, advanced 3.8 percent as profit rose on increasing coal sales. Potash Corp. of Saskatchewan Inc. lost 1.6 percent after pricing for the fertilizer plunged. Wi-Lan Inc. sank 23 percent after losing a patent suit against Apple Inc.

The Standard & Poor’s/TSX Composite Index rose 81.43 points, or 0.6 percent, to 13,324.75 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 7.2 percent in 2013 and is trading at a two-year high.

“Materials stocks have been beaten down so much that it doesn’t take much to get them going, and an earnings beat is one of those things,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc., in an interview from Toronto. The firm manages about C$4 billion. “And you also have the China PMI number. Expectations are low, so all you need is a little positive push to get stocks going.”

A preliminary purchasing managers’ index reading for China of 50.9 came in ahead of a 50.4 median estimate from analysts surveyed by Bloomberg. Readings above 50 indicate expansion.

Raw-materials producers gained 2.9 percent as a group, the most in the S&P/TSX, as six of 10 industry groups in the benchmark index advanced. The gauge of commodity producers has lost 26 percent this year. Trading volume for S&P/TSX stocks was about 23 percent higher compared with the 30-day average.

Agnico Eagle jumped 19 percent to C$31.82, the most in almost five years. The company reported earnings that beat analysts’ estimates and said 2013 production and costs will be better than it previously forecast.

Agnico is among gold producers seeking to curb costs and cut spending after the metal slumped into a bear market in April.

Goldcorp, the largest gold miner by market value, gained 4.5 percent to C$27.76 as costs rose less than expected. The company, which operates mines in North and South America, wrote down the value of its assets by $1.96 billion in July and is slowing some project spending and seeking to cut costs. The company is building new mines in Canada and Argentina.

Barrick Gold Corp. gained 4.1 percent to C$20.95 and B2Gold Corp. rose 5.8 percent to C$2.73 as the S&P/TSX Gold Index rallied to a one-month high. Gold for December delivery climbed 1.2 percent to a three-week high.

Teck Resources increased 3.8 percent to C$30.54. The company’s coal sales climbed 36 percent from a year earlier to 7.57 million metric tons in the third quarter, while mine operating costs fell 14 percent to C$50 a ton.

Wi-Lan sank 23 percent to C$3.16, for the lowest close since June 2010. Apple won a patent-infringement trial and fended off a demand for $248 million in royalties for wireless technology used in mobile devices.

Potash Corp. declined 1.6 percent to C$32.41. The price of potash, a key nutrient used in farming, plunged 28 percent after the company’s biggest rival announced plans to raise output.

Potash Corp. received an average price of $307 a metric ton for its potash in the third quarter, compared with $429 a year ago, the company said in a statement.

Buyers of potash, a form of potassium used to boost crop yields, have deferred purchases since the end of July after OAO Uralkali, the world’s largest producer, quit a sales accord with its Belarusian rival and announced plans to boost output and take a larger market share.

USA

By Lu Wang

Oct. 24 (Bloomberg) — U.S. stocks rose, putting the Standard & Poor’s 500 Index three points from a record, as corporate earnings beat estimates and signs of slower economic growth fueled bets the Federal Reserve will maintain stimulus.

Homebuilders rallied 3.3 percent as a group after PulteGroup Inc.’s profit surged. McKesson Corp. jumped 4.9 percent after boosting its annual forecast and agreeing to buy Germany’s Celesio AG for about 3.9 billion euros ($5.4 billion).

Citrix Systems Inc. climbed 4.9 percent as it raised its share buyback. Xerox Corp. tumbled the most in four years after its forecast trailed analysts’ estimates.

The S&P 500 gained 0.3 percent to 1,752.07 at 4 p.m. in New York. The Dow Jones Industrial Average rose 95.88 points, or 0.6 percent, to 15,509.21. About 6.5 billion shares changed hands on U.S. exchanges, 10 percent above the three-month average.

“We are right at the heart of earnings season so everything at this point of time is very earnings driven,” Mark Spellman, a portfolio manager at Value Line Funds in New York, said by phone. His firm manages $2.3 billion. “Earnings have been as good if not slightly better than expected. We’ve done a lot on the cost side. What people want to see is continued progress in the sales line.”

The S&P 500 has advanced 4.2 percent this month, closing at a record of 1,754.67 on Oct. 22, as lawmakers agreed to raise the U.S. borrowing limit, avoiding a possible debt default. The benchmark gauge fell 0.5 percent yesterday, halting five days of gains, as forecasts at companies from Caterpillar Inc. to Broadcom Corp. disappointed investors.

Some 47 companies in the S&P 500 posted results today, the busiest day of the third-quarter season. Microsoft Corp. surged 5 percent to $35.40 at 4:27 p.m. in New York after reporting sales and profit that topped estimates. The stock slipped 0.1 percent during the regular session.

Amazon.com Inc. rallied 4.7 percent to $347.72 in extended trading, adding to today’s 1.7 percent gain. The company’s revenue beat analysts’ estimates as consumers flocked to the world’s largest online retailer, fueling sales growth while net losses shrank.

Of the 217 S&P 500 members that have released earnings so far, 77 percent exceeded analysts’ predictions for profit, while 53 percent beat sales estimates, according to data compiled by Bloomberg.

Earnings for members of the gauge probably increased 2.5 percent in the third quarter as sales climbed 2.2 percent, according to analysts’ estimates compiled by Bloomberg.

“We want to look at the quality of these earnings as far as looking at revenues and making sure there is actual growth and not just manufactured growth,” David James, director of research at Alpha, Ohio-based James Investment Research Inc., said in a phone interview. His firm oversees more than $4.5 billion.

Better-than-expected earnings and monetary stimulus from the Federal Reserve have driven the S&P 500 up 23 percent this year. The 16-day government shutdown dispute weighed on fourth- quarter growth and will prompt Fed policy makers to wait until March before starting to scale back the $85 billion of monthly bond purchases, a Bloomberg survey showed last week.

Data today added to signs that economic growth is slowing, as U.S. manufacturing expanded in October at a weaker pace than forecast, according to the Markit Economics preliminary index.

Euro-area services and factory output also missed economists’ projections while manufacturing output in China strengthened more than anticipated.

Government data showed the trade deficit in the U.S. was little changed in August and more Americans than forecast filed applications for unemployment benefits last week. A report Oct. 22 showed payrolls in the U.S. climbed by less than forecast in September. U.S. consumer confidence dropped last week to an eight-month low, according to the Bloomberg Consumer Comfort Index released today.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, fell 1.6 percent to 13.20 today, extending its decline for the month to 20 percent.

Six of 10 main industries in the S&P 500 advanced, with producers of consumer discretionary products adding 1 percent to lead gains.

The S&P Supercomposite Homebuilding Index jumped 3.3 for a third straight gain, as all its 11 members climbed. PulteGroup, the second-largest U.S. homebuilder by market value, surged 7 percent to $17.85 after recording a tax-related gain and rising revenue from house sales.

Home Depot Inc., the biggest U.S. home improvement retailer, advanced 2.3 percent to $76.78 for the steepest climb in the Dow.

The Bloomberg U.S. Airlines Index climbed 2.7 percent to the highest close since July 2007. Southwest Airlines Co. added 3.7 percent to $17.02 after earnings and operating revenue matched analysts’ forecasts.

U.S. Airways Group Inc. jumped 5.9 percent to $22.67, the highest level in almost six years, as Deutsche Bank AG lifted the stock’s rating to buy from hold.

McKesson rose 4.9 percent to an all-time high of $150. The largest U.S. pharmaceutical distributor said it will acquire the 50.01 percent stake in Celesio from Franz Haniel & Cie GmbH, a family-owned investment company, for 23 euros a share.

Citrix Systems Inc., the maker of software that lets people access work files from home, rallied 4.9 percent to $58.79 after saying it plans to buy back as much as $500 million in shares.

Visa Inc. gained 2 percent to a record $202.91. The world’s biggest payments network increased its quarterly dividend by 21 percent to 40 cents a share.

Telephone shares fell 1 percent for the worst performance among 10 S&P 500 industries, as AT&T Inc. slipped 1.8 percent to $34.63 to halt a six-day rally. While the second-largest U.S. wireless carrier reported better-than-expected profit, its subscriber gains of 363,000 customers were dwarfed by Verizon Communications Inc.’s 927,000 new contract users last quarter.

Xerox fell 10 percent, the most since September 2009, to $9.61. The printer and copier pioneer lowered its full-year earnings forecast to as little as $1.08 a share, raising concerns about the company’s attempt to shift into business services.

Boston Scientific Corp. dropped 6.1 percent to $11.54. The second-biggest maker of heart devices said it plans to eliminate as many as 1,500 more jobs as the industry struggles with shrinking markets and development costs. Chief Financial Officer Jeffrey Capello will leave the role at the end of the year and be replaced by Daniel Brennan, the company said.

Symantec Corp. sank 13 percent to $21.49. The maker of security software forecast sales and profit that missed analyst estimates. Chief Executive Officer Steve Bennett said that sales staff, who are being assigned fewer clients and getting additional training, weren’t able to close as many deals.

Akamai Technologies Inc. slumped 11 percent to $46.06, the lowest since August. The company, which helps customers deliver online content faster, forecast fourth-quarter revenue and profit that fell short of some projections.

Cameron International Corp. tumbled 14 percent, the most in the S&P 500, to $53.85. The maker of oilfield equipment forecast fourth-quarter revenue that trailed analysts’ estimates and cited delays in international bookings for the tempered outlook.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

We gain our freedom when we realize our most true nature.

The man who is an artist gains his artistic freedom when he discovers the true ideal of art.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Eat food.  Not too much.  Mostly plants.

-Michael Pollan, 1955-

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:

Attended a very informative investment seminar in NYC yesterday – lots of interesting investment ideas and perspectives from money managers from around the world.  Took the red-eye home last night after the meeting, so I’ll be brief tonight and get into more details with you later  🙂 .

Tattoo

-by John Whale

According to Aetius, a physician

of some second-century repute,

the ancients had their own recipe for it:

as if preparing for their funerals

they would take some corroded bronze

previously attacked by vinegar

and grind it solemnly with vitriol

and just a touch of predictable gall

before they applied it with needles

to the relative permanence of the dermis.

 

And now, at both ends of the M62

there are reports of the stricken natives

taking this rite of the hot scratch

some way closer to their raw grief

by asking their artists to grind

the coarse ashes of their beloved

with a suitably back ink

and to bury this finer dust

through repeated puncture wounds

in the form of words which go down

deep into their sore and grieving flesh:

Just like me/ They long to be / Close to you.

Photos of the day

Autumnal trees are reflected in the water as a fisherman rows his boat during a sunny day at the Sylvenstein barrier lake in Germany. Michael Dalder/Reuters

A torch bearer carries the Olympic torch past Kizhi Pogost, world famous 18th-century wooden churches, in Kizhi Island, northern Russia. The torch relay for the Sochi Winter Games will pass through many cities that showcase the historical, cultural and ethnic richness of Russia. olympictorch2014.com/AP

Aspiring witches line up to register before the start of an audition session to work as the resident witch at the Wookey Hole Caves tourist attraction in Wookey Hole, Somerset, England. About 50 applicants auditioned for the position, each given one minute to perform in front of a panel of judges. The requirements for the job include: must be able to cackle and must not be allergic to cats. Matt Dunham/AP

Market Closes for October 22^nd, 2013

Market  Index	Close	Change
Dow  Jones	15467.66	+75.46    +0.49%
S&P 500	1754.90	+10.24    0.59%
NASDAQ	3929.566	+9.517    +0.24%
TSX	13253.39	+66.86
		+0.51%

International Markets

Market  Index	Close	Change
NIKKEI	14713.25	+19.68
		+0.13%
HANG  SENG	23315.99	-122.16
		-0.52%
SENSEX	20864.97	-28.92
		-0.14%
FTSE 100	6695.66	+41.46
		+0.62%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.483	2.550
CND.   30 Year Bond	3.072	3.120
U.S.   10 Year Bond	2.5142	2.5995
U.S.   30 Year Bond	3.6110	3.6664

Currencies

BOC Close	Today	Previous
Canadian $	0.97180	0.97080
US   $	1.02902	1.03008
Euro Rate  1 Euro=		Inverse
Canadian   $	1.41785	0.70529
US  $	1.37787	0.72576

Commodities

Gold	Close	Previous
London Gold   Fix	1340.33	1315.93
Oil	Close	Previous
WTI Crude Future	97.80	99.22
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 22 (Bloomberg) — Canadian stocks rose for a sixth day, the longest streak since April, as banks extended a record high and gold and silver prices surged after U.S. jobs data fueled speculation the Federal Reserve will extend stimulus.

Detour Gold Corp. and B2Gold Corp. rallied at least 7.2 percent as gold climbed to the highest in almost a month.

Turquoise Hill Resources Ltd. surged 10 percent to pace gains among materials producers. Canadian Imperial Bank of Commerce added 1.2 percent as the largest lenders rose a ninth day.

Pretium Resources Inc. plunged 28 percent after a consultant that withdrew from the company’s Valley of the Kings project said there are “no valid gold mineral resources” at the site.

The Standard & Poor’s/TSX Composite Index rose 61.53 points, or 0.5 percent, to 13,248.06 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has rallied 2.8 percent in the past six days, extending a two-year high.

“The weak U.S. data perpetuates this easy money environment and pushes expectations for tapering of bond-buying in the U.S. out, which is good for stock prices,” said Bob Decker, fund manager with Aurion Capital Management in Toronto.

The firm manages about C$6 billion ($5.84 billion). “Gold notionally is a beneficiary, it’s been purged from a lot of portfolios this summer, so it’s forming a base here.”

The U.S. added 148,000 workers in September, following a revised 193,000 rise in August that was larger than initially estimated. The median forecast of 93 economists surveyed by Bloomberg called for a 180,000 advance. The unemployment rate fell to 7.2 percent, the lowest since November 2008.

Turquoise Hill Resources surged 10 percent to C$5.11 and Endeavour Silver Corp. added 8.3 percent to C$4.98 as  raw- materials producers surged 2.7 percent as a group, the most in the S&P/TSX. Six of 10 industries in the benchmark Canadian equity gauge advanced. Trading volume was 19 percent above the 30-day average at this time of the day.

Detour Gold jumped 8.8 percent to C$8.79 and B2Gold added 7.2 percent to C$2.67. Semafo Inc. gained 9.5 percent to C$2.78 as 23 of 24 members of the S&P/TSX Gold Index rose. Gold for December delivery soared 2 percent to $1,342.60, reaching the highest since Sept. 30.

Bombardier Inc. increased 0.6 percent to C$5.33, a two-year high. The aircraft maker has soared 7.7 percent in the past five days, the longest rally since December 2012.

Pierre Beaudoin, chief executive officer with Bombardier, said in an interview yesterday its agreement to sell as many as 30 CSeries aircraft to a Chinese leasing company may prompt more deals in the nation.

RMP Energy Inc. jumped 9.2 percent to C$6.29, the highest close since August 2006, after analyst Anthony Petrucci with Canaccord Genuity raised his rating for the stock to buy from hold.

Bank of Montreal added 0.7 percent to C$72.63, a six-year high. Canadian Imperial gained 1.2 percent to C$86.41. The S&P/TSX Banks Index has advanced 4.6 percent in the past nine days, the longest streak since 2005. The gauge is up 13 percent this year to a record high.

Pretium Resources sank 28 percent to C$3.45, the lowest since shares began trading in December 2010.

Pretium today reported preliminary results from the processing of bulk samples from Valley of the Kings in British Columbia. The report comes two weeks after the company said Strathcona Mineral Services Ltd., which had been hired to evaluate ore samples, resigned from the project.

In withdrawing from the evaluation program, Strathcona said ore samples showed “there are no valid gold mineral resources for the VOK Zone, and without mineral resources there can be no basis for a feasibility study,” Pretium said today in a statement.

USA

By Lu Wang and Nikolaj Gammeltoft

Oct. 22 (Bloomberg) — Speculation slower growth in hiring will extend Federal Reserve stimulus lifted U.S. stocks and pushed the annual advance in the Standard & Poor’s 500 Index within a percentage point of the best yearly gain in a decade.

The S&P 500 rose 0.6 percent to 1,754.67 at 4 p.m. in New York after closing at a record yesterday, bringing its increase since December to 23.0 percent. The gauge would have to reach 1,761 to surpass the 23.5 percent surge in 2009 and be poised for the largest annual rise since 2003, when it climbed 26.4 percent. American stocks have rallied amid $85 billion in monthly bond purchases by the Fed aimed at jumpstarting the economy and record earnings.

Unlike in 2003, when gains in the S&P 500 followed a 49 percent plunge after the bursting of the technology bubble, this year’s advance is building on strength. The benchmark gauge for American equities had already doubled from its 12-year low in March 2009 through the end of 2012. Almost $13 trillion has been restored to U.S. equity values during the 4 1/2-year bull market, data compiled by Bloomberg show.

The Dow Jones Industrial Average advanced 75.46 points, or 0.5 percent, to 15,467.66 today, the highest in a month. About 6.9 billion shares changed hands on U.S. exchanges, 17 percent higher than the three-month average.

Whirlpool Corp. climbed 12 percent after the world’s largest appliance maker lifted its forecast. Freeport-McMoRan Copper & Gold Inc. jumped 3.8 percent amid better-than-estimated earnings. Apple Inc. lost 0.3 percent, reversing an earlier gain of 1.4 percent and halting a nine-day rally. Netflix Inc. slipped 9.2 percent after Chief Executive Officer Reed Hastings attributed the stock’s rally to investor “euphoria.”

The S&P 500 rallied as much as 0.8 percent today, boosted by speculation the Fed will delay curtailing its monetary stimulus after payrolls in the U.S. climbed by less than forecast in September, indicating the economy had little momentum leading up to the 16-day shutdown of the federal government. The jobless rate fell to an almost five-year low.

“This report indicates the Fed is joining us for the holiday season at the current level of quantitative easing,” Darrell Cronk, the New York-based regional chief investment officer at Wells Fargo Private Bank, which oversees $170 billion, said by phone. “And it will probably be ringing in the New Year with us as well as it continues QE through the end of 2013. Right now the data is not suggesting any kind of tapering.”

Progress in the labor market depends on how quickly the world’s largest economy can bounce back from the loss of business caused by the government closure. The budget dispute weighed on fourth-quarter growth and will prompt Fed policy makers to wait until March before starting to scale back the $85 billion of monthly bond purchases, a Bloomberg survey showed last week.

A separate report showed construction spending in the U.S. rose in August for a fifth consecutive month, propelled by the strongest outlays on homebuilding in five years. Federal spending dropped to the lowest level in five years, showing government budget cuts will hold the industry back.

Investors are also watching corporate earnings to gauge the health of the economy. Analysts have raised their forecasts for profits in the third quarter, predicting an average increase of 2.5 percent for all companies in the gauge, according to estimates compiled by Bloomberg. That compares with a 1.7 percent projection at the beginning of the month.

Earnings at the 138 companies that have reported so far grew 5.5 percent, while sales gained 2.3 percent, according to data compiled by Bloomberg. Some 72 percent of the companies have topped analysts’ profit estimates, while 54 percent have beaten on sales.

“You’re getting a significant number of beats again and you’re seeing it widespread again,” Sandy Lincoln, the Chicago- based chief market strategist in the U.S. with BMO Global Asset Management, which oversees about $120 billion, said in a telephone interview. “I think those surprise factors continue to cause the market go higher.”

The S&P 500 will rise past 1,800 as earnings and the U.S. economy improve, Michael Shaoul, the chairman and chief executive officer of New York-based Marketfield Asset Management LLC, told Bloomberg TV.

“We feel pretty good about equities,” said Shaoul in an interview from New York. “Corporate earnings point to a re- accelerating domestic economy. 1,800 is attainable.” He did not specify a time frame.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, rose 1.3 percent to 13.33. The measure has fallen 20 percent this month.

Nine of 10 S&P 500 industry groups gained, with materials, consumer-staples and utility stocks increasing more than 1.3 percent to lead the advance. The Morgan Stanley Cyclical Index rallied 1.7 percent to a record.

Walt Disney Co., the world’s largest entertainment company, rose 2.1 percent, the most in the Dow, to a record $69. Alcoa Inc., the biggest U.S. aluminum producer, jumped 8.8 percent to $9.36 for the largest advance in two years.

An S&P index of homebuilders climbed 2.8 percent amid the rise in construction spending and a decline in Treasury 10-year note yields. All 11 members in the Supercomposite Homebuilding Index gained. Lennar Corp. advanced 4.2 percent to $36.17 while D.R. Horton Inc. rose 3 percent to $19.23.

Whirlpool climbed 12 percent to $146.19. The world’s largest appliance maker lifted its forecast for earnings this year to as much as $10.10 a share from an earlier estimate of no more than $10. That compared with the analyst estimate of $9.97.

Freeport-McMoRan jumped 3.8 percent to $36.36. The largest U.S. miner reported third-quarter profit that beat analysts’ estimates as copper costs were better than expected.

The Bloomberg U.S. Airlines Index advanced 2.2 percent to its highest level since October 2007. Delta Air Lines Inc. added 3.2 percent to a record $25.49. The carrier’s quarterly profit beat analysts’ estimates as more people flew at higher fares and fuel prices declined.

Transocean Ltd. jumped 6 percent to $49.35. The offshore drilling contractor will replace Dell Inc. in the S&P 500, the index provider said in a statement late yesterday. Revisions in the benchmark’s composition prompt some money managers to shift holdings to match the equity index.

VMware Inc. climbed 2.8 percent to $85. The biggest maker of software that lets computers run different operating systems reported quarterly profit that beat analysts’ forecasts.

Lockheed Martin Corp. added 3.8 percent to $130.05. The biggest U.S. government contractor raised its 2013 forecast as third-quarter profit jumped, defying Pentagon budget cuts.

The reduction in government spending weighed on United Technologies Corp., as the company trimmed its full-year sales projection. The stock dropped 1.4 percent to $106.13 for the biggest retreat in the Dow.

Apple lost 0.3 percent to $519.87, declining as much as 2.6 percent during the day after erasing an earlier gain. Chief Executive Officer Tim Cook, facing two straight quarters of declining profit and a stock that’s down by more than a quarter from a September 2012 record, updated the company’s lineup of iPads at an event today.

Netflix slid 9.2 percent to $322.52. Shares of the world’s largest online subscription-streaming service have more than tripled this year for the best performance in the S&P 500 as of yesterday. Netflix’s valuation is “difficult to justify,” Bank of America Corp. said in a note. The stock jumped as much as 9.6 percent earlier today, after profit beat analyst estimates.

Coach Inc. slid 7.5 percent to $50.10, the lowest since April. The largest U.S. luxury handbag maker said fiscal first- quarter profit fell 1.6 percent as stiffer competition curtailed handbag sales in North America.

EMC Corp. slipped 4.8 percent to $24.04. The world’s biggest maker of storage computers cut its full-year sales and profit forecasts after earnings fell short of estimates after U.S. federal government spending declined.

Groupon Inc., a deal-of-the-day coupon company, tumbled 6.9 percent to $9.87. The slowdown in Groupon’s domestic business worsened last month from August, Steve Weinstein, an analyst with ITG Investment Research, wrote in a note to clients.

RadioShack Corp. tumbled 18 percent, the most since July 2012, to $2.89 as the consumer-electronics retailer posted a seventh straight quarterly loss. The company also said it received commitments for $835 million in new five-year financing to boost liquidity amid a turnaround effort.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

Adaptability is not imitation.

It means power of resistance and assimilation.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Nearly all men can stand adversity, but if you want

to test a man’s character, give him power.

-Abraham Lincoln, 1809-1865

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:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.

In the  Condé Naste Traveler’s 2013 Readers’ Choice Awards, Victoria has been rated number 17 as one of the top 25 cities in the world, tied with Sydney, Australia, and Sante Fe, New Mexico.  This year, almost 80,000 people took part in the survey, casting 1.3 million votes, resulting in our beautiful city being rated in the top 25!  Victoria is described by travelers in the magazine as a “beautiful harbor town with great food” and “a pocket of charm and beauty” on the southern end of Vancouver Island.  Some other results saw Victoria rank No. 3 in the Top 5 Cities in Canada, Vancouver Island voted No. 16 for Top 25 Islands in the world, and Vancouver Island voted No. 1 for top Islands in Canada.  Beautiful Tofino also had a number 1 ranking in this year’s award.  Wickaninnish Inn was ranked number 1 in the Top 15 resorts in Canada.  If you are looking for a getaway in the near future, you won’t be disappointed with this resort.

For more information on The Readers Choice Awards 2013, check out: cntraveler.com/ readers-choice-awards.

“The difference between a successful person and others is not a lack of strength, not a lack of knowledge, but rather a lack of will.” – Vince Lombardi

Photos of the Day:

Small rubber ducks are released on a river during a donation drive in Shenzhen, Guangdong province, China. The organizer charged 10 yuan ($1.64) for the release of each duck and raised about 500,000 yuan ($82,050) for several of the cities’ charities on Sunday. China Daily/Reuters

Autumn leaves frame a view of Prague Castle at early morning in Prague, Czech Republic. David W Cerny/Reuters

Market Closes for October 21^st, 2013

Market  Index	Close	Change
Dow  Jones	15392.20	-7.45    -0.05%
S&P 500	1744.65	+0.15    0.01%
NASDAQ	3920.049	+5.771    +0.15%
TSX	13183.82	+47.73
		+0.36%

International Markets

Market  Index	Close	Change
NIKKEI	14693.57	+132.03
		+0.91%
HANG  SENG	23438.15	+98.05
		+0.42%
SENSEX	20893.89	+11.00
		+0.05%
FTSE 100	6654.20	+31.62
		+0.48%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.550	2.531
CND.   30 Year Bond	3.120	3.102
U.S.   10 Year Bond	2.5995	2.5795
U.S.   30 Year Bond	3.6664	3.6447

Currencies

BOC Close	Today	Previous
Canadian $	0.97080	0.97197
US   $	1.03008	1.02884
Euro Rate  1 Euro=		Inverse
Canadian   $	1.40923	0.70961
US  $	1.36808	0.73095

Commodities

Gold	Close	Previous
London Gold   Fix	1315.93	1316.31
Oil	Close	Previous
WTI Crude Future	99.22	100.81
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle

Oct. 21 (Bloomberg) —  Canadian stocks rose for a fifth day, the longest winning streak since May, as a rally among miners on speculation that economic growth will spur commodity demand overshadowed a drop among energy producers.

Detour Gold Corp. and Alacer Gold Corp. each added at least 6.8 percent to pace advances among producers of raw materials.

Maple Leaf Foods Inc. jumped 10 percent as the company said it might sell its 90 percent stake in Canada Bread Co. Athabasca Oil Co. slid 2.9 percent to the lowest since May to pace declines among energy producers.

The Standard & Poor’s/TSX Composite Index rose 50.44 points, or 0.4 percent, to 13,186.53 at 4 p.m. in Toronto.

Trading was 9.5 percent above the 30-day average.

“If you have global growth, companies can make longer-term decisions, which means expansion in production and employment, and therefore everyone’s using more commodities,” Paul Gardner, portfolio manager at Avenue Investment Management, said in a phone interview from Toronto. He helps manage C$300 million ($290 million). “If you have an economy back on track in the U.S., you will have normalized GDP growth, and that’s better for commodities.”

The benchmark Canadian equity gauge has rallied 2.3 percent in the past five sessions, giving it the longest string of gains streak since May that left the index at the highest level in more than two years.

U.S. equities jumped to a record last week after lawmakers ended a 16-day partial government shutdown and reached a debt agreement that averted a default. Data from China showed economic growth accelerated for the first time in three quarters, with gross domestic product gaining 7.8 percent in the third quarter. China and the U.S. are the biggest consumers of commodities and Canada’s largest trading partners.

The S&P/TSX Materials Index jumped 1.6 percent today, the most among 10 groups in the benchmark gauge. Gold producers rallied, as the metal’s price advanced for the third time in four days in New York. Speculation that the Federal Reserve would delay tapering monthly bond buying boosted gold’s appeal as a store of value.

Detour Gold rose 8.9 percent to C$8.08 and Alacer Gold added 6.8 percent to C$2.98.

Endeavour Silver Corp. gained 4.8 percent to C$4.60 as the price of the metal for December delivery jumped 1.7 percent.

Maple Leaf Foods, the Toronto-based maker of meats and packaged goods, surged 10 percent to C$14.63 for the biggest gain in 13 years. The company said it is considering selling its 90 percent stake in Canada Bread.

Bombardier Inc. jumped 4.3 percent to C$5.30, a two-year high, after the world’s third-largest airplane maker said it received 30 new firm orders for its Learjet 85 aircraft from Flexjet LLC.

Montreal-based Bombardier’s share price has risen for four straight sessions amid optimism that the company’s agreement to sell as many as 30 CSeries aircraft to a Chinese leasing company may prompt fresh deals with customers from the Asian nation.

Energy companies slid 0.1 percent as a group, halting a three-day advance, as the price of crude for November delivery dropped 1.6 percent. Inventories increased to the highest level in three months in the U.S., the world’s biggest oil-consuming country.

Athabasca Oil fell 2.9 percent to C$6.09 for its fifth straight drop. The oil-sands developer that began publicly trading in 2010 plunged last week following an Alberta court’s decision to allow an aboriginal group to appeal the provincial regulator’s approval of the company’s Dover project.

Atlantic Power Corp. dropped 5 percent to C$5.16 after the company was downgraded to underperform from neutral at Macquarie Group Ltd.

US

By Nick Taborek

Oct. 18 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its best weekly gain since July, as results from Google Inc. topped estimates and speculation grew that the Federal Reserve will delay cutting monetary stimulus.

Google rallied 14 percent to surpass $1,000 a share for the first time after reporting third-quarter sales that beat analysts’ projections.

The S&P 500 added 0.7 percent to 1,744.40 at 4 p.m. in New York, extending an all-time high. The gauge has rallied 2.4 in the past five days, for its biggest weekly advance since July 12.

“People are looking at earnings but they’re also looking at what they think is going to happen next,” Sarah Hunt, an associate fund manager and analyst who helps oversee $4.5 billion at Purchase, New York-based Alpine Woods Capital Investors LLC,said in a phone interview. “After this political problem no one is expecting this to happen again in January. People are just looking for a little bit of a better economic backdrop to continue what’s been a pretty decent environment for stocks.”

The S&P 500 closed yesterday at a record of 1,733.15 after Congress ended the standoff over the federal budget and borrowing authority. The 16-day government shutdown government reduced growth by 0.3 percentage point this quarter, economists said in a Bloomberg News survey.

The slower growth and delayed reporting of economic data will prevent Fed policy makers from paring the monthly pace of asset buying until their March 18-19 meeting, according to the median of 40 responses by economists in the survey conducted yesterday and today. Economists had expected the central bank to reduce purchases to $80 billion last month, according to a Bloomberg survey before the September meeting.

The Fed stimulus has helped propel the S&P 500 up by more than 150 percent from its March 2009 low. The gauge has surged 22 percent this year and jumped to its previous intraday record of 1,729.86 on Sept. 19, a day after the Fed unexpectedly delayed tapering at its last policy meeting.

Investors will have to wait until Oct. 21 to get the next snapshot of economic activity, when data on sales of existing homes is released. The September U.S. jobs report, originally scheduled to be released on Oct. 4, will be issued on Oct. 22.

The report was delayed by the partial shutdown. October employment data will come out on Nov. 8, rather than Nov. 1.

In the absence of economic reports, investors have been watching third-quarter corporate earnings. Thirteen S&P 500 companies released results for the period today. Analysts have raised their forecasts for profits and now forecast an average increase of 2.5 percent for all companies in the gauge, according to estimates compiled by Bloomberg today. That compares with an expected gain of 1.4 percent as of Oct. 11.

Earnings at the 100 companies that have reported so far grew by an average of 4.4 percent, while sales gained 2 percent.

Some 70 percent of the companies have topped analysts’ profit estimates, while 56 percent have beaten on sales.

Gains in the S&P 500 have averaged 1.1 percent in the first four weeks of earnings seasons since 2003, according to data compiled by Bloomberg. That’s about twice the usual four-week gain in the index.

“My concern would be on a very short term basis that some companies are going to use the drama of the past couple of weeks as a pretext to lower the bar,” Matthew Kaufler, a portfolio manager at Federated Investors Inc. in Rochester, New York, said by phone. His firm oversees $363.8 billion. “Even if there is some weakness to forward guidance, I think that’s going to get shrugged off and we’re going to finish the year pretty strong.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“Carry out a random act of kindness, with no expectation of reward, safe in the knowledge that one day someone might do the same for you.” – Princess Diana

As ever,

 

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5838

 

Dear Friends,

Tangents:

Full moon tonight and an eclipse.

Today is Persons Day in Canada.  As hard as it is to believe, the fact is, until October 18^th, 1929, the Supreme Court of Canada did not consider women persons.  Britain’s Privy Council overruled the Supreme Court on this day in 1929 after five women, led by Alberta magistrate Emily Murphy challenged the rule.   Statues of the Famous Five, now stand outside the Senate.

There are no grades of vanity, there are only grades of ability in concealing it.  –Mark Twain, 1835-1910

Hitchcokean

-by Michael Symmons Roberts

The birds are taking over.  Not in rows on high wires,

chittering on roofs at passers-by, fixing a lone child

with their red-ringed, sink-hole eyes, not by massing

 

on our window-sills at dawn and tap-tap-tapping

with the urgency, hunger, blunt-sense of the wild,

not with a skirl and swoop like smoke cut loose from fire

 

but with a single egg inside each one of us,

lodged in the fold between lungs, not felt until the break, l

a petite mort when shell cracks and a song begins,

 

an airless, blood-borne trill, a pulse, a stretch of wing,

which may be dun wren, bird of paradise, dull rook,

and none of us can know what kind is ours,

 

nor even know for sure it’s there, this skitter,

this arrhythmia, this restlessness, this ache that makes

you walk out, mid-meal, steal a car and disappear.

 

From Drysalter, winner of this year’s Forward Prize for Best Collection.

Photos of the day

A flock of cranes flies past the rising moon in Nauen near Berlin, Germany. The cranes rest in the wetlands west of Berlin on their way from breeding places in the north to their wintering grounds in the south. Ferdinand Ostrop/AP

A cyclist rides past a mural on the side of a storage facility building in the Brooklyn borough of New York. Carlo Allegri/Reuters

Market Closes for October 18^th, 2013

Market  Index	Close	Change
Dow  Jones	15399.65	+28.00    +0.18%
S&P 500	1744.50	+11.35    +0.65%
NASDAQ	3914.278	+51.133    +1.32%
TSX	13136.00	+99.64
		+0.76%

International Markets

Market  Index	Close	Change
NIKKEI	14561.54	-24.97
		-0.17%
HANG  SENG	23340.10	+245.22
		+1.06%
SENSEX	20882.89	+467.38
		+2.29%
FTSE 100	6622.58	+46.42
		+0.71%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.531	2.561
CND.   30 Year Bond	3.102	3.118
U.S.   10 Year Bond	2.5795	2.5894
U.S.   30 Year Bond	3.6447	3.6585

Currencies

BOC Close	Today	Previous
Canadian $	0.97197	0.97161
US   $	1.02884	1.02922
Euro Rate  1 Euro=		Inverse
Canadian   $	1.40810	0.71018
US  $	1.36863	0.73066

Commodities

Gold	Close	Previous
London Gold   Fix	1316.31	1319.91
Oil	Close	Previous
WTI Crude Future	100.81	100.67
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 18 (Bloomberg) — Canadian stocks rose for a fourth day, extending a two-year high, as Royal Bank of Canada soared to a record close and energy producers surged on accelerating economic growth in China.

Royal Bank gained 1.2 percent as the market value of the nation’s largest lender rose past C$100 billion for the first time. Bankers Petroleum Ltd. and Advantage Oil & Gas Ltd. climbed more than 2.7 percent as oil companies advanced. H&R Real Estate Investment Trust and Canadian Apartment Properties REIT added at least 2.5 percent to pace gains among financial stocks. Athabasca Oil Corp. tumbled 9.9 percent after an Alberta court decided to allow an aboriginal group to appeal an approval of the company’s Dover oil-sands project.

The Standard & Poor’s/TSX Composite Index rose 99.64 points, or 0.8 percent, to 13,136 at 4 p.m. in Toronto. The benchmark Canadian equity gauge rose each of the four sessions in a holiday-shortened week, gaining 1.9 percent in the period for the best weekly gain since July. The index finished the week at the highest level since July 2011.

“There’s a lot of positive news pushing the markets up,” said Stephen Gauthier, chief investment officer with Fin-XO Securities Inc. in Montreal. His firm manages about C$550 million ($534.8 million). “Commodities have been holding up. The China numbers are a big plus. It’s a good continuation of the rally we had since the U.S. reached an accord on raising the debt limit.”

China’s economic growth accelerated for the first time in three quarters, with gross domestic product gaining 7.8 percent in the third quarter, matching the median estimate in a Bloomberg survey. The country is Canada’s second-largest trading partner.

U.S. Congressional leaders agreed to a deal this week to end a government shutdown and avert the threat of a default following weeks of stalemate.

Royal Bank, the nation’s largest company, jumped 1.2 percent to C$69.53, the seventh straight gain that left the stock at a record. The market value for Royal Bank climbed to C$100.1 billion, the first bank in Canada to break that mark.

Bank stocks, which have been undervalued compared with other Canadian companies, are getting a lift from good housing data, according Peter Routledge, a National Bank Financial analyst.

Toronto-Dominion Bank, Bank of Nova Scotia and National Bank of Canada also reached record highs, while the Bank of Montreal soared 1 percent to C$71.76, the highest since April 2007.

Bankers Petroleum added 3.2 percent to C$4.17 and Advantage Oil & Gas increased 2.7 percent to C$4.19 as oil producers rallied 0.9 percent as a group, for the highest close since March 2012. Crude advanced as much as 1 percent in New York before paring gains.

Nine of 10 industries in the S&P/TSX rose as trading volume was 6.4 percent below the 30-day average.

H&R REIT jumped 2.6 percent to C$21.65 and Canadian Apartment REIT climbed 2.5 percent to C$21.87 as financial stocks increased 0.8 percent.

Investors are buying into higher-yielding stocks such as REITs as bond yields have fallen since the U.S. resolution to its budget impasse, Gauthier said.

“Bonds continue to rally in the post-shutdown environment,” said Mark Chandler, head of Canadian fixed income strategy with RBC Dominion Securities Inc., in a report to clients.

Telus Corp. rallied 2.1 percent to C$35.22 and Rogers Communications Inc. added 1.4 percent to C$46.39 as telephone stocks advanced 1.4 percent as a group, the most in the S&P/TSX.

Bombardier Inc. increased 1.8 percent to C$5.08 after disclosing CDB Leasing Co., a Chinese company, is a customer with a firm order of 15 CSeries jetliners and an option for another 15 of the aircraft. The contract is worth as much as $2.07 billion.

BlackBerry Ltd., the smartphone maker looking to sell itself, rose 2.4 percent to C$8.64 for a second day of gains.

Lenovo Group Ltd., the Beijing-based computer manufacturer, has signed a non-disclosure agreement with BlackBerry and is considering a bid for the company, Dow Jones reported yesterday, citing people familiar with the situation.

Athabasca Oil sank 9.9 percent to C$6.27, the most since May. The Alberta Energy Regulator on Aug. 6 approved the company’s Dover proposal, noting in its 40-page decision that the project won’t have a direct impact on the Moose Lake area, a traditional territory of the Fort McKay First Nation.

The aboriginal group, which is surrounded by oil sands operations, had requested a 20-kilometer (12-mile) buffer around the project to protect their traditional hunting territory.

US

By Nick Taborek

Oct. 18 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its best weekly gain since July, as results from Google Inc. topped estimates and speculation grew that the Federal Reserve will delay cutting monetary stimulus.

Google rallied 14 percent to surpass $1,000 a share for the first time after reporting third-quarter sales that beat analysts’ projections. General Electric Co. added 3.5 percent as demand for industrial products boosted earnings. Chipotle Mexican Grill Inc. surged 16 percent to a record as customer traffic rose. UnitedHealth Group Inc. slumped 3.7 percent, extending yesterday’s 5.1 percent slide after the insurer reported sales that fell short of analyst estimates.

The S&P 500 added 0.7 percent to 1,744.50 at 4 p.m. in New York, extending an all-time high. The gauge has rallied 2.4 in the past five days, for its biggest weekly advance since July 12. The Dow Jones Industrial Average added 28 points, or 0.2 percent, to 15,399.65. About 6.6 billion shares changed hands on U.S. exchanges, 12 percent higher the three-month average.

“People are looking at earnings but they’re also looking at what they think is going to happen next,” Sarah Hunt, an associate fund manager and analyst who helps oversee $4.5 billion at Purchase, New York-based Alpine Woods Capital Investors LLC,said in a phone interview. “After this political problem no one is expecting this to happen again in January. People are just looking for a little bit of a better economic backdrop to continue what’s been a pretty decent environment for stocks.”

The S&P 500 closed yesterday at a record of 1,733.15 after Congress ended the standoff over the federal budget and borrowing authority. The 16-day government shutdown government reduced growth by 0.3 percentage point this quarter, economists said in a Bloomberg News survey.

The slower growth and delayed reporting of economic data will prevent Fed policy makers from paring the monthly pace of asset buying until their March 18-19 meeting, according to the median of 40 responses by economists in the survey conducted yesterday and today. Economists had expected the central bank to reduce purchases to $80 billion last month, according to a Bloomberg survey before the September meeting.

The Fed stimulus has helped propel the S&P 500 up by more than 150 percent from its March 2009 low. The gauge has surged 22 percent this year and jumped to its previous intraday record of 1,729.86 on Sept. 19, a day after the central bank unexpectedly delayed tapering.

Investors will have to wait until Oct. 21 to get the next snapshot of economic activity, when data on sales of existing homes is released. The September U.S. jobs report, originally scheduled to be released on Oct. 4, will be issued on Oct. 22.

The report was delayed by the partial shutdown. October employment data will come out on Nov. 8, rather than Nov. 1.

A report today from China showed the world’s second-largest economy grew by 7.8 percent in the July-September period, accelerating for the first time in three quarters, as Premier Li Keqiang spurred factory output and investment. Industrial production advanced in September by 10.2 percent as predicted by economists.

“The numbers out of China are supporting markets today after recent disappointing data,” Plassard said. “While sentiment is still positive, the rally may be short-lived as the debt-ceiling issue will come back to haunt us again soon.”

In the absence of U.S. economic reports, investors have been watching third-quarter corporate earnings. Thirteen S&P 500 companies released results for the period today. Analysts have raised their forecasts for profits and now forecast an average increase of 2.5 percent for all companies in the gauge, according to estimates compiled by Bloomberg today. That compares with an expected gain of 1.4 percent as of Oct. 11.

Earnings at the 100 companies that have reported so far grew by an average of 4.4 percent, while sales gained 2 percent.

Some 70 percent of the companies have topped analysts’ profit estimates, while 56 percent have beaten on sales.

Gains in the S&P 500 have averaged 1.1 percent in the first four weeks of earnings seasons since 2003, according to data compiled by Bloomberg. That’s about twice the usual four-week gain in the index.

“My concern would be on a very short term basis that some companies are going to use the drama of the past couple of weeks as a pretext to lower the bar,” Matthew Kaufler, a portfolio manager at Federated Investors Inc. in Rochester, New York, said by phone. His firm oversees $363.8 billion. “Even if there is some weakness to forward guidance, I think that’s going to get shrugged off and we’re going to finish the year pretty strong.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, sank 3.3 percent to 13.04 today, the lowest since August 14. The gauge plunged 17 percent in the past five days for the biggest weekly decline since March.

Nine out of 10 main industries in S&P 500 advanced, with technology and industrial companies rising at least 1.1 percent to pace gains.

Google surged 14 percent to a record $1,011.41. The owner of the world’s biggest search engine said revenue, excluding sales passed on to partner sites, of $11.92 billion exceeded the average analyst as the number of promotions sold via mobile, video and other services made up for shrinking advertising prices.

Google’s rally helped the Nasdaq 100 Index gain 3.7 this week, for its highest close since Oct. 23, 2000.

General Electric added 3.5 percent to $25.55 for the biggest gain in the Dow. The company’s earnings beat analysts’ estimates as industrial sales climbed, led by demand for jet engines and drilling equipment, and rising orders pushed its backlog to a record.

Morgan Stanley advanced 2.6 percent to $29.69. Earnings beat analysts’ estimates as equity-trading revenue jumped the most among the biggest Wall Street firms and the wealth- management profit margin climbed.

Chipotle Mexican Grill surged 16 percent, the most since May 2007, to a record $509.74. The chain is spending more on marketing and traditional advertising to help maintain revenue growth that was the fastest among restaurant chains in the S&P 500 last year.

Amazon.com Inc. rallied 5.8 percent to $328.93 to close at a record. UBS AG analyst Eric Sheridan raised his rating on the stock to buy from hold, saying he expects revenue growth to accelerate in the fourth quarter.

Schlumberger Ltd. gained 2.8 percent to $93.99 as the world’s largest oilfield-services provider said quarterly net income climbed to $1.7 billion, or $1.29 a share, from $1.4 billion, or $1.07, a year earlier.

Baker Hughes Inc. gained 7.3 percent to $55.55 as the oil services provider reported third-quarter profit that beat analyst estimates and said it expects “solid, profitable” international growth in 2014.

UnitedHealth dropped 3.7 percent to $68.76, a three-month low. Shares in the largest U.S. health insurer yesterday fell the most in more than two years after the company reported worse-than-forecast results.

Home Depot Inc. slid 1.4 percent to $74.69 and Lowe’s Cos. sank 2.8 percent to $47.66. Cleveland Research analyst Eric Bosshard cut his estimates for both retailers’ third-quarter same-store sales growth, citing moderating demand.

Intuitive Surgical Inc. slumped 5.7 percent to $376.52. The maker of surgical robots said third-quarter net income declined to $156.8 million, or $3.99 a share, from $183.3 million, or $4.46, a year earlier. Revenue dropped 7.2 percent to $499 million. That fell short of the average estimate of $525.9 million from 18 analysts compiled by Bloomberg.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

To expect something is to look for something pleasant.

Searching for the pleasurable is a form of denial.

You cannot expect anything, because the expectation is within you,

and what you are waiting for is dependent on external forces.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

Leave the gun.  Take the cannoli.

-Mario Puzo and Francis Ford Coppola.

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:

COUNTING THE YEARS

As usual, as in the earlier dreams

I come to the whistling shores

the voice of the high-domed

crab stilled

but a chorus remains of the water creatures

of earlier times, of the birth time

and the dying time, the pity,

when we resurrect the travellers

the anchorman on our singular boat

that will take us home

-Kofi Awoonor, 1935-2013

Photos of the day

A visitor photographs part of Robert Pruitt’s ‘Safety Cones’ at the Gavin Brown’s Enterprise from New York’s stand at the Frieze Art Fair in central London. Andrew Winning/Reuters

Fallen leaves in autumn colors lies on roots in Munich, southern Germany. Matthias Schrader/AP

Market Closes for October 16^th, 2013

Market  Index	Close	Change
Dow  Jones	15373.83	+205.82    +1.36%
S&P 500	1721.54	+23.48    +1.38%
NASDAQ	3839.431	+45.420    +1.20%
TSX	12957.21	+25.75
		+0.20%

International Markets

Market  Index	Close	Change
NIKKEI	14467.14	+25.60
		+0.18%
HANG  SENG	23228.33	-108.19
		-0.46%
SENSEX	20547.62	-59.92
		-0.29%
FTSE 100	6571.59	+22.48
		+0.34%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.615	2.649
CND.   30 Year Bond	3.156	3.181
U.S.   10 Year Bond	2.6633	2.7276
U.S.   30 Year Bond	3.7207	3.7891

Currencies

BOC Close	Today	Previous
Canadian $	0.96836	0.96380
US   $	1.03268	1.03756
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39754	0.71554
US  $	1.35332	0.73892

Commodities

Gold	Close	Previous
London Gold   Fix	1282.43	1282.03
Oil	Close	Previous
WTI Crude Future	102.29	101.21
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 16 (Bloomberg) — Canadian stocks rose a second day, extending a two-year high, as energy and bank shares rallied while U.S. Senate leaders reached an agreement to end the nation’s budget impasse and prevent a default on its debt.

Bankers Petroleum Ltd. and Legacy Oil & Gas Inc. climbed at least 4.1 percent as the price of crude advanced. Gran Tierra Energy Inc. added 4.7 percent after boosting its 2013 production forecasts. Bank of Montreal added 0.6 percent after naming a chief operating officer. Argonaut Gold Inc. dropped 6.5 percent to pace losses among metals miners. SNC-Lavalin Group Inc. sank 4.5 percent after cutting its earnings forecast for the year.

The Standard & Poor’s/TSX Composite Index rose 25.75 points, or 0.2 percent, to 12,957.21 at 4 p.m. in Toronto. The benchmark Canadian equity gauge rallied to the highest close since July 2011 yesterday and is up 4.2 percent in 2013.

“If you’re given the choice of being executed today or you can postpone it and talk about it some more three months down the road, you’re going to take the deal,” said Michael O’Brien, fund manager with TD Asset Management Inc. in Toronto. He helps manage C$216 billion ($208 billion). “For now, a lot of people are sitting on their hands. At least in the short term, once we do get a deal we will see a lift in the markets. At this point, any deal is a good deal and a sigh of relief.”

The bipartisan leaders of the Senate reached an agreement to end the fiscal impasse and to increase U.S. borrowing authority, and the Senate and House could vote on it as soon as today. The White House press secretary said President Barack Obama supports the deal.

The agreement also would end the 16-day-old government shutdown and allow the U.S. to continue borrowing, a day before its authority lapses. House Republicans today signaled that they will let it pass largely with Democratic votes.

“We fought the good fight,” House Speaker John Boehner, a Republican, said on WLW, a radio station in his home state of Ohio. “We just didn’t win.”

Nine of 10 industries in the S&P/TSX gained, with raw- materials stocks the only group to decline. Trading volume was 19 percent lower than the 30-day average.

Legacy Oil & Gas gained 4.5 percent to C$6.95 and Bankers Petroleum rose 4.1 percent to C$4.10 as energy producers advanced 0.6 percent as a group, closing at an 18-month high.

Crude for November delivery settled 1.1 percent higher in New York, reversing an earlier decline amid optimism for an end to the impasse in Washington.

Gran Tierra Energy added 4.7 percent to C$7.84 after the company increased its production forecast for the year to 21,500 to 22,500 barrels of oil equivalent a day, from 21,000 to 22,000 barrels.

Bank of Montreal, Canada’s fourth-largest lender, rose 0.6 percent to C$70.66. The stock has gained in four straight sessions and closed the highest since June 2007.

The bank named Frank Techar, formerly chief executive officer of personal and commercial banking in Canada, to the new role of chief operating officer as part of a plan to consolidate oversight of its retail businesses.

Royal Bank of Canada, the nation’s largest lender, increased 0.3 percent to C$68.40 and Toronto-Dominion Bank gained 0.3 percent to C$92.55.

Ivanhoe Mines Ltd. jumped 6.1 percent to C$2.26 after intersecting an “unprecedented” mineralization of platinum, palladium, rhodium and gold at a discovery in South Africa.

SNC Lavalin tumbled 4.5 percent, the most since August, to C$42.13. Canada’s largest engineering company cut its annual profit forecast for the second time amid costs related to projects in North Africa.

Materials stocks fell 1.2 percent as a group. Argonaut Gold fell 6.5 percent to C$5.31 and Alamos Gold Inc. lost 4.1 percent to C$14.64.

US

By Nick Taborek

Oct. 16 (Bloomberg) — U.S. stocks rallied, sending the Standard & Poor’s 500 Index toward a record, as the Senate crafted a deal to end the government shutdown and raise the debt ceiling before tomorrow’s deadline.

All 10 main industries in the S&P 500 gained at least 0.6 percent, with financial shares advancing the most. Bank of America Corp. jumped 2.3 percent as lower legal expenses and loan losses helped profit rebound. Mattel Inc. and PepsiCo Inc. increased at least 1 percent as earnings topped analyst estimates. International Business Machines Corp. fell 5.8 percent in extended trading after releasing quarterly results.

The S&P 500 rose 1.4 percent to 1,721.54 at 4 p.m. in New York. The Dow Jones Industrial Average gained 205.82 points, or 1.4 percent, to 15,373.83. The Nasdaq Composite Index climbed 1.2 percent to the highest level since 2000. The Chicago Board Options Exchange Volatility Index fell 21 percent, the most in two years. About 6.5 billion shares changed hands on U.S. exchanges, 11 percent above the three-month average.

“Investors are relieved that it looks like we’re not going to go over the cliff,” Ben Hart, a research analyst at Radnor, Pennsylvania-based Haverford Trust Co., which oversees about $6 billion, said by phone. “It takes the worst case scenario off the table.”

The S&P 500 dropped 4.1 percent from its all-time high of 1,725.52 reached Sept. 18 as Congress struggled to reach agreement on a federal budget, forcing the first partial government shutdown in 17 years. The gauge has recovered 4 percent of the decline as optimism grew that a deal would be reached, and is within about four points of its record. The S&P 500 is up 21 percent for the year.

The bipartisan leaders of the Senate reached an agreement to end the fiscal impasse and to increase U.S. borrowing authority. The Senate and House plan to vote on it later today, and the White House press secretary said President Barack Obama supports the deal.

The framework negotiated by Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell would fund the government through Jan. 15, 2014, and suspend the debt limit until Feb. 7, setting up another round of confrontations.

The agreement concludes a four-week standoff that began with Republicans demanding defunding of Obama’s 2010 health-care law, and objecting to raising the debt limit and funding the government without policy concessions. House Speaker John Boehner said in a statement that Republicans won’t block the Senate compromise.

With no deal, the U.S. would exhaust its borrowing authority tomorrow and the government may start missing payments at some point between Oct. 22 and Oct. 31, according to the Congressional Budget Office. Fitch Ratings put the world’s biggest economy on watch for a possible credit downgrade yesterday, citing lawmakers’ inability to agree.

Investors from Pacific Investment Management Co. Co-Chief Investment Officer Bill Gross to BlackRock Inc. Chairman and Chief Executive Officer Laurence D. Fink, who oversee $5.76 trillion, consistently dismissed the likelihood of a default.

Investors should buy three-, four- and five-year Treasuries and inflation-protected securities, Gross said on Bloomberg Television on Oct. 1. The government shutdown will end “very rapidly,” BlackRock’s Fink said Oct. 3 at an event hosted by the UCLA Anderson School of Management in Beverly Hills, California.

The S&P 500’s advance over the past week has squeezed managers who borrowed and sold shares to bet on declines lawmakers would struggle to reach a deal. U.S. companies with the most short sales have climbed 4.7 percent since Oct. 9, compared with a 3.9 percent advance for the benchmark gauge, data compiled by Bloomberg and Goldman Sachs Group Inc. show.

Hedge funds, whose bearish bets on stocks have held their returns to half the Standard & Poor’s 500 Index in 2013, helped send a gauge of manager bullishness compiled by ISI Group LLC within 0.2 point of its lowest reading in 2013 last week.

Equities have surged in 2013 as the Federal Reserve maintained efforts to stimulate the economy by holding interest rates near zero percent and purchasing $85 billion of bonds each month under a program known as quantitative easing.

The rally in 2013 has been the broadest in at least 23 years, with S&P 500 companies extending the streak of quarters in which they have avoided an earnings contraction to 15 and valuations holding below historic averages. Of S&P 500 members, 443 are up so far in 2013, data compiled by Bloomberg show. The next-closest year was 1997, when 436 companies had advanced and the index was quadrupling.

Profits for companies in the index probably increased 1.4 percent during the third quarter while sales rose 2 percent, according to analysts’ estimates compiled by Bloomberg. Some 22 companies in the S&P 500 are due to post results today.

U.S. economic growth remained “modest to moderate” as consumer spending maintained gains and business investment grew, the Fed said today in its latest Beige Book business survey.

Four of the 12 Fed districts reported slower economic growth while eight others said the expansion held steady amid “uncertainty” stemming from the U.S. fiscal deadlock.

The report provides policy makers anecdotal accounts from the Fed districts two weeks before they meet to set monetary policy.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, dropped 21 percent to 14.71, the biggest decline since August 2011, after surging 16 percent yesterday. The gauge is down 18 percent for the year.

Financial, health-care and phone companies rallied more than 1.7 percent today. The Dow Jones Transportation Average climbed 1.4 percent to a record, as 19 of its 20 members advanced.

FedEx Corp. surged 2.7 percent to a record $123.26, adding to yesterday’s 4.1 percent advance. The operator of the world’s largest cargo airline authorized a buyback plan of as many as 32 million shares, its biggest repurchase program ever.

Bank of America jumped 2.3 percent to $14.56. Chief Executive Officer Brian T. Moynihan, 54, has said the “lion’s share” of costs tied to disputed mortgages are behind his bank after booking more than $45 billion tied to his predecessor’s 2008 takeover of Countrywide Financial Corp. after third-quarter profit beat estimates.

JPMorgan Chase & Co. surged 3.2 percent to $54 and Goldman Sachs Group Inc. advanced 2.9 percent to $162.25 for the biggest increases in the Dow.

KeyCorp gained 2.4 percent to $12.14 and PNC Financial Services Group Inc. advanced 1.9 percent to $73.87 after both banks beat third-quarter profit estimates. The KBW Regional Banking Index rose 1.3 percent as 48 out of 50 members gained.

Mattel climbed 1 percent to $41.97. The world’s largest toymaker topped estimates as sales of Barbie and American Girl gained. The company has been trying to boost sales amid lackluster growth of the toy industry in the U.S., the company’s largest market, as kids spend more time using electronic devices.

PepsiCo increased 2.1 percent to $82.27. The food and beverage company that investor Nelson Peltz wants to split up topped estimates as sales of snacks gained in the U.S. and Latin America.

Abbott Laboratories jumped 6.5 percent to $35.90 for the biggest gain in the S&P 500. The provider of health-care diagnostics and medical devices reported third-quarter results that surpassed analyst estimates and raised its dividend by more than half. Revenue rose 2 percent to beat company estimates on increased demand for diagnostic tests. Abbott spun off its drug business into a new company earlier this year.

Stanley Black & Decker Inc., the maker of power tools and electronic security systems, tumbled 14 percent to $76.75 for the largest drop in the S&P 500. The company cut its full-year earnings outlook on slower-than-anticipated improvement in margins in its security business and weakness in emerging markets, as well as uncertainty created by the U.S. government shutdown.

IBM fell 5.8 percent to $175.99 as of 5:01 p.m. in New York. After the close of trading, the largest technology consulting company reported its sixth straight quarter of falling sales amid sluggish demand for computer hardware and the decline of one-time growth markets.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

There is no master, there is no instructor,

there is no person to tell you what you must do.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Peace is when time doesn’t matter

as it passes by.

–Maria Schell, 1926-2005

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