Month: December 2013

Dear Friends,

Tangents:

Margie Warrell, Forbes.com:

“Everyone of us are called to greater courage in some unique way.  No one is immune to fear.  No one is forever free of self doubt.  Connecting to  a purpose much bigger than ourselves is what enables us to step through our fears of not being enough, to think bigger, to play bolder, and to act with the bravery needed to make the important contribution only we can make…

Courage.  Resilience.  Forgiveness.  Dedication to a cause far bigger than ourselves. These are the timeless messages of the great Madiba’s life.  I can think of no more meaningful way to honor his passing than to reflect on the legacy we are creating each day in how we choose to live our own lives.  Does your life tell a story of courage, resilience, forgiveness and commitment to a cause greater than yourself?  Something to reflect.”

-Quotes from Mandela:

Do not judge me by my successes, judge me by how many times I fell down and got back up again.

Difficulties break some men but make others.  No axe is sharp enough to cut the soul of a sinner who keeps on trying, one armed with the hope that he will rise even in the end.

Resentment is like drinking poison and then hoping it will kill your enemies.

I learned that courage was not the absence of fear, but the triumph over it.  The brave man is not he who does not feel afraid, but he who conquers that fear.

Lead from the back – and let others believe they are in front.

Photos of the day

An egret prepares to fly near the Galle Face beach in Colombo, Sri Lanka. Dinuka Liyanawatte/Reuters

A rainbow shines over buildings after heavy rain poured in Gaza City. Hatem Moussa/AP

Motorists negotiate snow covered roads along West Western Avenue in Muskegon, Mich. Ken Stevens//The Muskegon Chronicle/AP

Market Closes for December 9^th, 2013

Market  Index	Close	Change
Dow  Jones	16025.53	+5.33    +0.03%
S&P 500	1808.37	+3.28    +0.18%
NASDAQ	4068.751	+6.230    +0.15%
TSX	13312.78	+32.06
		+0.24%

International Markets

Market  Index	Close	Change
NIKKEI	15650.21	+350.35
		+2.29%
HANG  SENG	23811.17	+68.07
		+0.29%
SENSEX	21326.42	+329.89
		+1.57%
FTSE 100	6559.48	+7.49
		+0.11%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.670	2.689
CND.   30 Year Bond	3.253	3.278
U.S.   10 Year Bond	2.8425	2.8535
U.S.   30 Year Bond	3.8704	3.8884

Currencies

BOC Close	Today	Previous
Canadian $	0.94011	0.94007
US   $	1.06371	1.06375
Euro Rate  1 Euro=		Inverse
Canadian   $	1.46114	0.68440
US  $	1.37363	0.72800

Commodities

Gold	Close	Previous
London Gold   Fix	1240.93	1228.47
Oil	Close	Previous
WTI Crude Future	97.34	97.65
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Dec. 9 (Bloomberg) — Canadian stocks rose a second day for the biggest two-day gain in more than a month after commodity producers advanced on rising gold and copper prices.

Detour Gold Corp. and Semafo Inc. rallied at least 4.8 percent as gold snapped two days of losses. Royal Bank of Canada and Bank of Nova Scotia paced gains among financial stocks. Air Canada, the nation’s largest airline, dropped 2.8 percent after analysts with National Bank Financial lowered their rating on the stock. Africa Oil Corp. tumbled 9 percent after the company said that it has plugged and abandoned a well in Kenya.

The Standard & Poor’s/TSX Composite Index rose 32.06 points, or 0.2 percent, to 13,312.78 at 4 p.m. in Toronto. The measure has advanced 0.9 percent in the past two days, the most since Oct. 25. The benchmark equity gauge has risen 7.1 percent this year, the fourth-worst performer among developed markets ahead of Austria, Hong Kong and Singapore.

“The unemployment numbers were good on Friday and we’re seeing some follow-through here,” said John Kinsey, a fund manager with Caldwell Securities Ltd. in Toronto. He helps manage about C$1 billion ($937.9 million) with the firm. “It’s primarily the financials and gold doing well today. The market had a nice run in the fall and was perhaps overextended. Now we have a bit of a base and maybe we’ll head up again.”

Housing starts in Canada fell to a seasonally adjusted annual rate of about 192,000 units in November, a 3 percent decline from about 198,000 in October, as construction of multiple-unit projects such as condominiums fell.

The weekly Bloomberg Nanos Canadian Confidence Index, a measure of consumer sentiment, increased to 59.3 in the period ended Dec. 6 and is nearing a one-year high of 59.8. The share of respondents who think real-estate prices will increase over the next six months rose to 40.3 from 40.0 the previous week, the highest level since March 2012.

Five of 10 industries in the S&P/TSX advanced on trading volume 5.1 percent higher than the 30-day average.

Royal Bank, the nation’s largest lender, climbed 1 percent to C$69.75 and the Bank of Nova Scotia added 0.5 percent to C$64.30 as financial stocks rose 0.3 percent as a group.

Canada’s largest banks slipped 2 percent after reporting quarterly earnings last week.

Semafo jumped 4.8 percent to C$2.60 and Detour Gold climbed 7.8 percent to C$3.86, as all but two of the 24 members of the S&P/TSX Gold Index increased. Detour Gold is the worst- performing stock in the S&P/TSX this year, slumping 84 percent.

Gold rose from a five-month low as investors weighed the outlook for reduced U.S. stimulus as early as next week against speculation physical demand may increase at lower prices. Gold for February delivery advanced 0.4 percent in New York.

Barrick Gold Corp. rallied 3.9 percent to C$17.01 and Canadian Natural Resources Ltd. added 1.1 percent to C$34.58 after a cover story in Barron’s included the two stocks among 10 that may be winners in 2014.

First Quantum Minerals Ltd. gained 2 percent to C$17.55 and Teck Resources Ltd. increased 0.9 percent to C$25.21. Copper rose 0.2 percent to a four-week high in New York.

Africa Oil sank 9 percent to C$8.99, falling the most in a year, after the company said its Bahasi well in Kenya has been stopped after finding sand and shale with only “minor shows” of gas.

Air Canada, the best-performing stock in the S&P/TSX this year, fell 2.8 percent to C$7.71, the biggest decline in three weeks. Cameron Doerksen, an analyst with National Bank Financial, lowered his rating for the stock to sector perform, the equivalent of a hold, from outperform, or buy. The primary reason for the downgrade was the stock is approaching Doerksen’s target price of C$8, according to a research report from the bank. Air Canada has soared 341 percent this year.

USA

By Nick Taborek

Dec. 9 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to a fresh record, as investors weighed the timing of any cuts to Federal Reserve monetary support amid budget negotiations in Washington.

Sysco Corp. jumped 9.7 percent after the food distributor agreed to buy closely held US Foods in a deal valued at about $3.5 billion. Gilead Sciences Inc. advanced 1.6 percent after getting approval for a hepatitis C pill that may generate more than $6 billion in annual sales. McDonald’s Corp. dropped 1.1 percent after November sales missed analysts’ estimates.

The S&P 500 climbed 0.2 percent to 1,808.37 at 4 p.m. in New York, surpassing its previous record of 1,807.23 set on Nov. 27. The Dow Jones Industrial Average rose 5.33 points, or less than 0.1 percent, to 16,025.53. About 5.6 billion shares changed hands on U.S. exchanges, 8.9 percent below the three-month average.

“People are getting more comfortable with the idea of tapering and the concept that the reason for the taper is that the economy is getting stronger,” Walter Todd, who oversees about $950 million as chief investment officer of Greenwood Capital Associates LLC in Greenwood, South Carolina, said by phone. “At the end of the day that’s a good thing not a bad thing. For the next week it’s just going to be speculation around the timing.”

The S&P 500 gained 1.1 percent on Dec. 6, halting a five- day slump that erased 1.2 percent from the gauge, as jobs growth in November beat estimates and the unemployment rate fell to a five-year low.

The index fell less than 0.1 percent last week, snapping an eight-week rally that was the longest in almost a decade, as improving economic data spurred concern that the Fed will reduce its stimulus sooner than expected.

Fed policy makers will probably begin reducing $85 billion in monthly bond buying at a Dec. 17-18 meeting, according to 34 percent of economists surveyed on Dec. 6 by Bloomberg, an increase from 17 percent in a November survey. In November, 53 percent predicted a tapering in March, compared with 40 percent in the poll of 35 economists.

Fed Bank of St. Louis President James Bullard, who votes on policy this year, said in a speech today the odds of tapering bond purchases have risen along with gains in the labor market, and any reduction should be modest to account for low inflation.

“A small taper might recognize labor-market improvement while still providing the committee the opportunity to carefully monitor inflation during the first half of 2014,” Bullard, a supporter of record stimulus, said in St. Louis.

His Dallas counterpart, Richard Fisher, said in a Chicago speech that the Fed needs to begin tapering “at the earliest opportunity,” as the current pace of stimulus “comes at a cost that far exceeds its purported benefits.”

The central bank will also be watching the outcome of U.S. budget talks. Fed officials cited the drag from fiscal policy in their Oct. 30 statement and Jeffrey Lacker, president of the Richmond Fed, said in a speech today that U.S. budget uncertainty is also weighing on business hiring and investment decisions.

Congressional negotiators are nearing a deal to trim automatic spending cuts and break a three-year stretch of failed fiscal talks in Washington. Aides to Republican Representative Paul Ryan and Democratic Senator Patty Murray, chief negotiators on a special panel, say they are optimistic for a compromise by a Dec. 13 deadline.

The 29-member budget conference panel was set up by the legislation that ended the 16-day government shutdown in October, with the goal of getting both chambers of Congress back to regular order in devising a budget plan for Congress.

“Our fundamental view is that any tapering-related pullback will be a temporary selloff,” said Dan Morris, who helps oversee about $520 billion as global investment strategist at TIAA-CREF Asset Management in New York. “Valuations and earnings are good. We don’t see a bubble in U.S. stocks.”

The S&P 500 has gained 27 percent in 2013 as the Fed refrained from trimming its $85 billion a month of bond purchases. The gauge is trading at 16.2 times the projected earnings of its constituents, compared with a 10-year average of almost 14.9.

Household wealth in the U.S. increased from July through September as improvement in the home and equity markets boosted American balance sheets. Net worth for households and non-profit groups rose by $1.92 trillion in the third quarter, or 2.6 percent from the previous three months, to $77.3 trillion, the Federal Reserve said today from Washington.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, fell 2.2 percent to 13.49.

Eight of 10 main S&P 500 industries advanced today, with materials companies climbing 0.5 percent to pace the gains.

Financial firms rose 0.4 percent as a group, a day before five U.S. agencies will finish the Volcker rule, which aims to reduce the chances that banks will put federally insured depositors’ money at risk by largely banning proprietary trading.

JPMorgan Chase & Co. climbed 0.8 percent to $56.51 and Goldman Sachs Group Inc. added 0.3 percent to $167.67.

Sysco gained 9.7 percent to $37.62. The company will pay $3 billion in common stock and $500 million in cash. Sysco, which will also assume about $4.7 billion US Foods’ debt, said it has secured fully committed bridge financing for the transaction.

Gilead climbed 1.6 percent to $75.19. The Food and Drug Administration said it gave approval for sofosbuvir, which Gilead will call Sovaldi, for use with other drugs depending on the type of illness.

Given Imaging Ltd. surged 27 percent to $30.06, the highest since October 2007. Covidien Plc plans to acquire the medical technology company’s outstanding stock for $30 a share, or about $860 million.

Ruby Tuesday Inc. rallied 5.3 percent to $7.18. The restaurant chain hired Goldman Sachs to explore a sale, Debtwire reported on Dec. 6.

McDonald’s fell 1.1 percent to $95.72 for the biggest drop in the Dow. The world’s largest restaurant chain said sales at stores open at least 13 months rose 0.5 percent last month, trailing analysts’ estimates as rivals lured diners amid a choppy U.S. economic recovery. Analysts projected a 0.6 percent increase, the average of 14 estimates from Consensus Metrix.

Abercrombie & Fitch Co. lost 2.2 percent to $34.10, bringing its decline this year to 29 percent. Chief Executive Officer Mike Jeffries got a new contract with the teen-apparel retailer amid weakening earnings and a call by shareholder Engaged Capital LLC for him to be replaced.

Dean Foods Co. lost 1.9 percent to $18.08. Morgan Stanley reduced its rating on the food-and-beverage producer to equal weight, similar to hold, from overweight, or buy. The shares had posted a year-to-date gain of 20 percent through Dec. 6, even after falling as much as 19 percent from a four-year high in August.

Edwards Lifesciences Corp. slid 5.4 percent to $62.73. The maker of artificial heart valves said 2014 earnings per share will be in a “wide range” around $3, citing “uncertain timing” of new competition in the U.S. and Europe. Analysts were predicting profit next year of $3.49 a share.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The person who can wear the mantle of a Master

is one who is devoted to the cause of non-violence and non-possession

who is driven by the quest for truth and the right perspective,

who is capable of solving his own emotional mental problems and

who can show others the  way to overcome their emotional and mental problems.

Acharya Mahaprajna, 1920-2010

As ever,

 

Carolann

 

Minds are like parachutes.  They only function

when they are open.

-Sir James Dewar, 1842-1923.

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:

-by Gerard Baker, Editor in Chief of The Wall Street Journal:

Nelson Mandela (1918-2013)

“As I walked out the door toward the gate that would lead to my freedom, I knew if I didn’t leave my bitterness and hatred behind, I’d still be in prison.”

The tragic central reality of so much human conflict through history is its self-sustaining nature. Injustice breeds resentment. Resentment generates rage. Rage curdles into a lust for revenge. It takes uncommon courage to break this vicious cycle. The genius of Nelson Mandela was his immediate understanding that genuine freedom required not just the removal of the shackles that constrained him and his fellow blacks under apartheid. True liberation meant discarding the mental chains that tied them—and the rest of us—to the instantly gratifying but ultimately destructive pursuit of vengeance. But reason does not always bend to the will. The greatness of Mr. Mandela resided in his character: the extraordinary moral strength to subordinate the natural urge for revenge to the greater good of reconciliation. South Africa is a better nation because of this remarkable man’s leadership. The world is a better place because of his example.

We remember his life and legacy, reflect on his own his words, share the tributes of leaders around the globe and, finally, take a look at a South Africa that must go on without him.

Photos of the day

A well-wisher holds his child up for a photograph in front of a poster of Nelson Mandela on which others have written their messages of condolence and support, in the street outside his old house in Soweto, Johannesburg, South Africa. Flags were lowered to half-staff and people in black townships, in upscale mostly white suburbs and in South Africa’s vast rural grasslands commemorated Nelson Mandela with song, tears, and prayers. Ben Curtis/AP

People watch as a United Launch Alliance Atlas 5 rocket, carrying a classified payload from the U.S. government’s National Reconnaissance Office, lifts-off on Thursday night at the Vandenberg AFB, California. Gene Blevins/Reuters

Market Closes for December 6^th,  2013

Market  Index	Close	Change
Dow  Jones	16020.20	+198.69    +1.26%
S&P 500	1803.87	+18.84    +1.06%
NASDAQ	4062.521	+29.356    +0.73%
TSX	13279.64	+79.24
		+0.60%

International Markets

Market  Index	Close	Change
NIKKEI	15299.86	+122.37
		+0.81%
HANG  SENG	23743.10	+30.53
		+0.13%
SENSEX	20996.53	+38.72
		+0.18%
FTSE 100	6551.99	+53.66
		+0.83%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.689	2.673
CND.   30 Year Bond	3.278	3.279
U.S.   10 Year Bond	2.8535	2.8680
U.S.   30 Year Bond	3.8884	3.9138

Currencies

BOC Close	Today	Previous
Canadian $	0.94007	0.93894
US   $	1.06375	1.06504
Euro Rate  1 Euro=		Inverse
Canadian   $	1.45794	0.68590
US  $	1.37056	0.72963

Commodities

Gold	Close	Previous
London Gold   Fix	1228.47	1225.44
Oil	Close	Previous
WTI Crude Future	97.65	97.38
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Dec. 6 (Bloomberg) — Canadian stocks rose, for the biggest gain in a month, on signs economic growth is strengthening after employers added more workers than forecast and the U.S. jobless rate reached a five-year low.

Royal Bank of Canada climbed 1.3 percent after analysts at TD Securities recommended buying the shares. Bombardier Inc. climbed 2 percent after reporting a deal to sell 30 aircraft to a China-based company. Precision Drilling Corp. added 4.5 percent after tumbling the most in two years yesterday after its biggest shareholder sold its stake in the oilfield services company.

The Standard & Poor’s/TSX Composite Index rose 80.32 points, or 0.6 percent, to 13,280.72 at 4 p.m. in Toronto, the biggest gain since Nov. 8. The benchmark equity gauge fell 0.9 percent in the past five days, its third straight weekly drop and the biggest since June.

“The numbers out of the States were pretty impressive, and maybe now good news is actually good news,” said David Cockfield, a fund manager with Northland Wealth Management in Toronto. His firm manages about C$225 million ($212 million).

“There’s been reports suggesting the U.S. is running out of steam, well this is a strong vote in the other direction.”

Investors have been scrutinizing economic data to anticipate when the Federal Reserve will begin to taper its $85 billion monthly bond-purchasing program.

Canada’s jobless rate held at 6.9 percent, the lowest since 2008 for a third month in November, and employment rose by 21,600 as companies added part-time workers. American payrolls rose by 203,000, ahead of the median economist projection for 185,000 additions. The U.S. unemployment rate fell to 7 percent.

Bombardier climbed 2 percent to C$4.69, the biggest increase in three weeks, as industrial stocks advanced 1.3 percent. Six of 10 industries rose in the benchmark Canadian equity gauge on trading volume that was 16 percent lower compared with the 30-day average.

Bombardier reported late yesterday Nantong Tongzhou Bay Aviation Industry had signed a letter of intent to acquire 30 of its Q400 NextGen series aircraft. Based on the list price for the Q400, a firm order would be valued at about $995 million, the company said in a press release.

Bank of Nova Scotia added 1 percent to C$63.98. Canada’s third-largest lender posted a 12 percent increase in quarterly profit as contributions from its takeover of ING Groep NV’s Canadian business led to record earnings in domestic consumer lending.

Royal Bank, the nation’s largest lender, rallied 1.3 percent to C$69.05 after Mario Mendonca, an analyst at TD Securities, raised his rating for the stock to buy from hold.

The stock has eight buys and nine holds, according to data compiled by Bloomberg.

Canadian Western Bank increased 3.2 percent to C$37.77 for a third day of gains. On Dec. 4, the lender reported quarterly earnings of 65 Canadian cents, exceeding the average estimate of 62 cents from a Bloomberg survey of analysts. The stock has gained about 9.2 percent since then, reaching a record.

Precision Drilling advanced 4.5 percent to C$9.75. The stock tumbled 9.1 percent yesterday, the most since August 2011.

Alberta Investment Management Corp. sold its entire stake in the company, Chief Executive Officer Leo De Bever said in a phone interview with Bloomberg News.

MEG Energy Corp. rose 3.1 percent to C$30.58 and Crew Energy Inc. jumped 2.6 percent to C$6.21. The price of crude rose 0.3 percent to $97.65 a barrel in New York for a sixth day of gains.

Thompson Creek Metals Co. increased 4.4 percent to C$2.40 to snap five days of losses. Fraser Phillips, an analyst at RBC Capital Markets, said in a research report that he met with CEO Jacques Perron yesterday and was told the company has enough cash in its balance sheet.

“Our analysis clearly suggests that recent concerns about the balance sheet are overblown and the shares should recover some of the ground they have lost over the past two trading sessions,” Phillips said in a report to clients yesterday.

USA

By Nick Taborek and Callie Bost

Dec. 6 (Bloomberg) — U.S. stocks rose, halting a five-day slide for the Standard & Poor’s 500 Index, as investors weighed better-than-forecast jobs growth to gauge the strength of the economy and timing of Federal Reserve stimulus cuts.

Intel Corp. gained 2.3 percent after Citigroup Inc. advised investors to buy the stock. Rite Aid Corp. added 2.3 percent after November sales at stores open more than a year rose more than analysts’ estimated. J.C. Penney Co. dropped 8.7 percent after disclosing that regulators asked for information about its finances.

The S&P 500 gained 1.1 percent to 1,805.09 at 4 p.m. in New York. The advance trimmed the index’s drop this week to less than 0.1 percent, the first weekly slide in two months. The Dow Jones Industrial Average rose 198.69 points, or 1.3 percent, to 16,020.20. About 5.8 billion shares changed hands on U.S. exchanges, 5 percent below the three-month average.

“It appears that the market is getting increasingly comfortable with a taper scenario that parallels an incrementally stronger economy,” Jim Russell, who helps oversee $112 billion as a senior equity strategist for U.S. Bank Wealth Management, said by phone. “The higher number could more easily be accepted because the market had traded down, anticipating what was likely to be a stronger number today, and of course we got that.”

The 203,000 increase in payrolls followed a revised 200,000 advance in October, Labor Department figures showed today. The median forecast of 89 economists surveyed by Bloomberg called for a 185,000 advance. A report Dec. 4 from the ADP Research Institute indicated companies boosted payrolls in November by the most in a year.

The pickup in employment, combined with faster wage gains and more hours, provides American workers with the means to spend and signals companies are confident that demand will improve. The jobless rate fell to a five-year low of 7 percent.

A separate report today showed consumer spending rose more than forecast in October, a sign the biggest part of the economy is gaining momentum from a firming employment.

Household purchases, which account for about 70 percent of the economy, climbed 0.3 percent after a 0.2 percent increase the prior month, the Commerce Department reported today.

The Thomson Reuters/University of Michigan preliminary December consumer sentiment index rose to 82.5 from 75.1 in November, a report showed today. Economists forecast an increase to 76, according to the median estimate in a Bloomberg survey.

“This morning’s data on jobs doesn’t change the overall picture on the job market,” John Canally, economic strategist at LPL Financial Corp., said in a phone interview from Boston.

His firm oversees about $414.7 billion. “This wasn’t a slam dunk report saying the Fed will taper in December. It’s the taper-no taper game, and this was the no-taper reaction.”

The S&P 500 had fallen five straight sessions after closing at a record Nov. 27, its longest slump since September, as improving economic data fueled speculation the Fed will start paring its $85 billion in monthly bond purchases sooner than projected. The index has still surged 27 percent this year, challenging 2003 for the biggest annual gain in 15 years.

The Fed says it will consider slowing the pace of stimulus if the economy improves in line with its forecasts. In a Nov. 19 Bloomberg Global Poll, 80 percent of investors said they expected the central bank to delay a decision until at least March 2014. Policy makers next meet Dec. 17-18.

Data yesterday showed the economy expanded in the third quarter at a faster pace than initially reported, led by the biggest increase in inventories since early 1998. A separate report showed applications for U.S. employment benefits unexpectedly decreased last week.

Bill Gross, manager of the world’s biggest bond fund, said the pace of jobs growth last month signals there is a 50 percent chance the Fed will taper this month.

“It’s at least 50-50 now,” Pacific Investment Management Co.’s Gross said in a radio interview on “Bloomberg Surveillance” with Tom Keene and Mike McKee. “There was some logic for a January starting point, but it’s clear the Fed wants out.”

The monetary stimulus has helped propel the S&P 500 higher by as much as 167 percent since a bear-market low in March 2009.

The rally has pushed valuations higher, with the gauge trading for about 16.8 times its companies’ reported earnings, up 18 percent from the beginning of the year when it traded at 14.2 times profit.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, plunged 8.6 percent, the most since Oct. 16, to halt a record-tying eight-day rally that added 23 percent to the measure.

All 10 main S&P 500 groups advanced at least 0.5 percent.

Industrial and consumer-staples shares paced gains, rallying more than 1.4 percent. Procter & Gamble Co. added 2.2 percent to $84.52 and Boeing Co. advanced 1.9 percent to $135.18.

Intel jumped 2.3 percent to $24.82 for the biggest gain in the Dow. Citigroup raised its recommendation on the shares to buy from neutral, saying stability in corporate demand for personal computers will benefit the world’s biggest chipmaker.

Boston Scientific Corp. advanced 4.5 percent to $11.85.

Cowen Group Inc. analyst Joshua Jennings upgraded the medical- device manufacturer to the equivalent of buy from hold, with a target price of $14 per share.

General Motors Co. rose 2.8 percent to $40.17, the highest level since it began trading in 2010 after a 2009 bankruptcy.

Hayman Capital Management LP disclosed yesterday it has taken a stake in the largest U.S. automaker.

Rite Aid gained 2.3 percent to $5.75. The drug-store chain operator reported November same-store sales advanced 2.8 percent, surpassing the 2.1 percent median forecast by analysts in a Bloomberg survey.

J.C. Penney plunged 8.7 percent to $8.08, extending a three-day slide to 20 percent. A letter from the Securities and Exchange Commission on Oct. 7 requested “information regarding the company’s liquidity, cash position, and debt and equity financing, as well as the company’s underwritten public offering of common stock,” the struggling retailer said in a quarterly filing.

Sears Holdings Corp. fell 3.8 percent to $48.09, capping a 24 percent decline for the week after Edward Lampert, the hedge- fund manager who for the past eight years tried to turn around the retailer, cut his stake to below 50 percent.

Today’s retreat came after Sears said it plans to spin off its Lands’ End Inc. unit to shareholders. The stock has fallen eight straight sess.ions and trades at a three-month low.

Gap Inc. slid 1.9 percent to $39.46, a fourth-straight drop, even as sales at stores open at least a year increased 2 percent from last year. The biggest U.S. specialty-apparel retailer offered discounts of as much as 50 percent at its three brands during Thanksgiving and Black Friday.

Family Dollar Stores Inc. dropped 2.4 percent to $65.98, the lowest since July. Sterne, Agee & Leach Inc. equity analyst Charles Grom downgraded the discount retailer to underperform from neutral, with a 12-month target price of $56 per share. The stock has not advanced for eight straight sessions.

Ulta Salon, Cosmetics & Fragrance Inc. plunged 21 percent, the biggest drop in almost five years, to $93.76. The cosmetics and hair-care products retailer reported fourth-quarter profit and revenue forecasts that missed analysts’ estimates.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

A diamond is lost in the mud;

all are seeking it.

Some go to the East – or to the West,

Wishing to find it.

Is it lost in the river?

Or in the rocks?

Kabir, your servant, appreciates it

for its just value.

He will take it away,

warmly sheltered

in a corner of his heart.

Kabir, 1440-1518

As ever,

 

Carolann

 

The greatest glory in living lies not in never falling,

But in rising every time we fall.

-Nelson Mandela, 1918-2013.

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day, December 4^th, 1862, Thomas Carlyle wrote to his brother Dr. John Carlyle:

This day is my sixty-seventh birthday.  Time, Death, Eternity:  what an element this is that all of us have!  We are such stuff as dreams are made of; and our little life is rounded with a sleep! –In my utter solitude I live much in these contemplations; which are not joyous, but perhaps better, and have a grandly quieting character, and lift one above the world and its beggarhoods.  If I were only done with my Book!  But really now it is getting to be high time.  My weariness of it, occasionally, no tongue can tell; at other times I am rather pleased to feel myself shaping, according to ability, so long as I live, something cosmic and true out of the  chaotic mendacious and unknown.  O that I had done with it, done!

This Book was Frederick the Great, on which he worked for fourteen years; the last volume was published in 1865.

Photos of the day

A man walks his dogs as joggers make their way through a tree-lined Johannesburg suburban street in thick early morning mist in Johannesburg, South Africa. Most parts of South Africa are experiencing heavy rains as the southern hemisphere heads towards mid summer with soaring temperatures. Denis Farrell/AP

The US Capitol Christmas tree is lit against the early morning sky in Washington. The tree was officially lit Tuesday night to kick off the holiday season in the Nation’s Capital. J. David Ake/AP

Market Closes for December 4^th, 2013

Market  Index	Close	Change
Dow  Jones	15889.77	-24.85    -0.16%
S&P 500	1792.81	-2.34    -0.13%
NASDAQ	4038.001	+0.803    +0.02%
TSX	13304.92	-14.95
		-0.11%

International Markets

Market  Index	Close	Change
NIKKEI	15407.94	-341.72
		-2.17%
HANG  SENG	23728.70	-181.77
		-0.76%
SENSEX	20708.71	-146.21
		-0.70%
FTSE 100	6509.97	-22.46
		-0.34%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.652	2.588
CND.   30 Year Bond	3.262	3.179
U.S.   10 Year Bond	2.8333	2.7825
U.S.   30 Year Bond	3.8974	3.8444

Currencies

BOC Close	Today	Previous
Canadian $	0.93667	0.93929
US   $	1.06761	1.06464
Euro Rate  1 Euro=		Inverse
Canadian   $	1.45039	0.68947
US  $	1.35854	0.73609

Commodities

Gold	Close	Previous
London Gold   Fix	1243.88	1223.39
Oil	Close	Previous
WTI Crude Future	97.20	96.04
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Dec. 4 (Bloomberg) — Canadian stocks fell to a one-month low after a report showed U.S. employers hired more workers than forecast, spurring concern the Federal Reserve will begin tapering stimulus.

Royal Bank of Canada, the nation’s largest lender, lost 0.8 percent to pace declines among financial stocks. CGI Group Inc. dropped 3.9 percent after Newsweek reported that James Chanos has taken a short position on the company, citing people familiar with the matter. Air Canada, the nation’s largest airline, rose 3.5 percent after Bank of Montreal analysts raised their price estimate for the stock.

The Standard & Poor’s/TSX Composite Index fell 14.95 points, or 0.1 percent, to 13,304.92 at 4 p.m. in Toronto, the lowest since Nov. 7. The benchmark equity gauge has risen 7 percent this year, the fourth-worst performer among developed markets ahead of Austria, Hong Kong and Singapore.

“This is a case where good news is perceived as bad news,” said Bob Decker, fund manager with Aurion Capital Management in Toronto. He helps manage about C$6 billion ($5.62 billion) with the firm. “We’re in a transition zone between when QE was driving the market and when earnings growth and economic activity will drive the market, so it’s created a choppy environment.”

U.S. companies boosted payrolls by 215,000 in November, a report from the ADP Research Institute said, ahead of the 170,000 median projection from a Bloomberg survey of economists.

November non-farm payrolls and unemployment rate data are scheduled to be released by the Bureau of Labor Statistics on Dec. 6.

Bank of Canada Governor Stephen Poloz kept his main interest rate unchanged at 1 percent, where it’s been for more than three years, as expected by economists surveyed by Bloomberg. The risks of inflation staying below target “appear to be greater” in an economy that’s two years away from reaching full output, the central bank said.

Financial stocks lost 0.6 percent as a group as nine of 10 industries in the S&P/TSX declined.

AGF Management Ltd. slumped 9.3 percent, the most since 2009, to C$13. The company reported assets under management of C$34.4 billion as of the end of November, a 12 percent decline compared with a year ago.

Royal Bank slipped 0.8 percent to C$69 and Bank of Nova Scotia lost 0.8 percent to C$63.68. The two banks are scheduled to report earnings in the next two days, along with Toronto- Dominion Bank and Canadian Imperial Bank of Commerce.

Thompson Creek Metals Co. slumped 9.2 percent to C$2.48, the biggest decline since May 2012. Daniel Earle, an analyst with TD Securities, said the mining company will not be able to generate enough cash to repay $1 billion in debt maturities in 2017 and 2019 assuming the price of gold is $1,300 an ounce and $3 a pound for copper.

CGI Group, the developer behind the U.S. government’s medical-insurance exchange website, lost 3.9 percent to C$37.03, for the largest retreat since September. The Newsweek report said Chanos, who predicted the collapse of Enron Corp. in 2001, includes CGI Group among his largest short positions. The stock has rallied 62 percent this year.

Air Canada, the best-performing stock in the S&P/TSX this year, gained 3.5 percent to C$8. Fadi Chamoun, an analyst with BMO Capital Markets, raised his share-price target for Air Canada to C$10 while maintaining an outperform rating, the equivalent of a buy. Air Canada has soared 357 percent this year.

“The combination of lower costs and growing revenues should enable strong improvement in margins and return on invested capital,” Chamoun said in a report.

USA

By Nick Taborek and Nikolaj Gammeltoft

Dec. 4 (Bloomberg) — U.S. stocks fell a fourth day, the longest slump in 10 weeks for the Standard & Poor’s 500 Index, as investors weighed economic data for clues on the timing of Federal Reserve stimulus cuts amid optimism over a budget deal.

Sears Holdings Corp. plunged 8.3 percent after Edward Lampert, the hedge-fund manager who for the past eight years tried to turn around the company, cut his stake to below 50 percent. Teradata Corp. lost 6.2 percent after Morgan Stanley reduced its rating on the stock. CF Industries Holdings Inc. jumped 11 percent after the fertilizer producer said its considering partnership structures.

The S&P 500 fell 0.1 percent to 1,792.81 at 4 p.m. in New York. The gauge fluctuated during the session, rising as much as 0.3 percent and declining 0.9 percent at its lowest. The Dow Jones Industrial Average dropped 24.85 points, or 0.2 percent, to 15,889.77. About 6.6 billion shares changed hands on U.S. exchanges, 7.6 percent above the three-month average.

“The market just seems real jittery,” Walter Todd, who oversees about $950 million as chief investment officer of Greenwood Capital Associates LLC in Greenwood, South Carolina, said by phone. “We’ve got maybe 20 trading days left in the year, and it’s been a really good year. Investors are a little bit on edge. They’d like to close the books out today if they could.”

The S&P 500 has surged 26 percent this year, poised for the best annual gain since 2003, as the Fed has refrained from reducing its monthly bond purchases. Central-bank policy makers have been scrutinizing data to determine whether the economy is robust enough to withstand a reduction in their support. They specifically cited during their last meeting fiscal drag and budget standoffs as being among “several significant risks” that remained.

Data today showed companies boosted payrolls in November by the most in a year. Labor Department data on Friday may show the unemployment rate fell to 7.2 percent, matching the lowest level since 2008.

A separate report indicated service industries in the U.S. expanded at a slower pace than forecast in November, showing uneven progress in the biggest part of the economy. Purchases of new U.S. homes surged in October by the most in three decades, signaling buyers are starting to take higher mortgage rates in stride.

Gains in manufacturing, technology and housing kept the economy expanding at a “modest to moderate” pace from early October through mid-November, the Fed said today in its Beige Book business survey, which contains anecdotal reports from the 12 Fed district banks.

The Fed has said it will start paring stimulus if the economy improves in line with its forecasts. Policy makers, who next meet Dec. 17-18, will probably wait until their March 18-19 session before reducing monthly bond purchases to $70 billion from $85 billion, according to the median estimate in Bloomberg’s latest survey of economists conducted on Nov. 8.

“Everyone’s worried about the taper,” Ben Schwartz, the Chicago-based chief market strategist at broker Lightspeed Financial Inc., said in a phone interview. “It’s a really delicate situation with the amount the market has run up this year. People are kind of questioning their positions and there’s still a lot of uncertainty with the economy.”

The S&P 500 has retreated 0.8 percent in the past four sessions after closing at a record on Nov. 27. The gauge reversed an early decline today as optimism grew that U.S. budget negotiators are near a deal that could avoid another government shutdown next year.

The two leaders of the bipartisan panel aiming to reach an agreement on savings to replace some automatic spending cuts set to start in January are hatching a narrow deal in which both parties would have to compromise.

Negotiations are continuing and “there are still issues to be resolved,” Senate Budget Committee Chairman Patty Murray, a Washington Democrat, said today.

Congress on Oct. 16 passed legislation funding the government through Jan. 15 as part of the agreement to end a partial shutdown, the first in 17 years.

“It seems like an olive branch is being extended from both parties right now on the budget,” Michael Mullaney, who oversees more than $10 billion as Boston-based chief investment officer for Fiduciary Trust Co., said in a telephone interview.  “That’s positive.”

The S&P 500’s rally this year has pushed valuations higher, with the gauge trading for about 16.8 times its companies’ reported earnings, up 18 percent from the beginning of 2013 when it traded at 14.2 times profit.

Investment newsletter writers are the most bullish on the U.S. stock market in more than two and a half years, with 57.1 percent predicting further gains, according to a survey by research provider Investors Intelligence. The last time the reading exceeded this level was in April 2011, when 57.3 of advisers were bullish and the S&P 500 fell 11 percent in the next four months. The bullishness measure last rose above 60 percent in October 2007, the start of a bear market.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, rose 1 percent to 14.70, the highest level in six weeks. The measure has rallied seven straight sessions, its longest advance since April 2012.

Six of 10 main S&P 500 industries retreated today, with energy and consumer-staples stocks dropping 0.4 percent to pace declines.

An S&P gauge of homebuilders retreated 0.6 percent for a fifth day of losses, even as new-home sales surged. Lennar Corp. dropped 2.2 percent to $34.52 and PulteGroup Inc. slid 0.4 percent to $18.35.

The Bloomberg U.S. Airlines Index fell 1.2 percent for a fourth day of losses, as the price of crude futures touched the highest level since October. JetBlue Airways Corp. declined 1.8 percent to $8.41 and Spirit Airlines Inc. dropped 1.5 percent to $43.90.

Teradata slid 6.2 percent to $42.53 for the biggest drop in the S&P 500. The data storage provider was cut to underweight from equal weight at Morgan Stanley, which said it is cautious on information-technology hardware companies because cloud- computing adoption is moving faster than previously estimated.

Sears slid 8.3 percent to $50.92, the lowest in almost three months. Lampert’s ESL Investments Inc. owns 48 percent of the Hoffman Estates, Illinois-based department store chain, down from 55 percent reported as recently as October, according to a filing yesterday with the U.S. Securities and Exchange Commission.

Express Inc. sank 23 percent to $19, the lowest in 18 months. The retailer reduced its earnings forecast for its financial year ending on Feb. 1 to no more than $1.51 a share.

It had predicted as much as $1.60. Analysts on average had estimated profit of $1.61.

CF Industries soared 11 percent to a record $237.07 for the biggest gain in the S&P 500. The largest U.S. nitrogen- fertilizer maker is in talks with financial advisers to evaluate a master-limited partnership and “MLP-like structures along with other financial options,” the company said today in a filing containing presentation slides.

Deere & Co. added 3.2 percent to $85.38. The world’s largest maker of agricultural equipment said it will repurchase as much as $8 billion in stock.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Your way is very good for you, but not for me.

My way is good for me, but not for you.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Only those who dare to fail greatly

can ever achieve greatly.

-Robert Kennedy, 1925-1968.

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:

LOLA’S SECRET POTION

She crosses lint

with the common alpine bog moss.

Mum’s the word, so liquidate it.

I’m sorry.  I cannot tell you

what brand of dish soap I use.

That’s privileged information, Owen.

 

She crosses arabesques

with the Canary Islands yellow pages.

Have  a nice day, so liquidate it.

I’m sorry. I cannot tell you

how soft-shell crabs reinvent.

That’s privileged information, Erin.

 

She crosses box turtles

with a zero-coupon-bond aqueduct.

X marks the spot, so liquidate it.

I’m sorry, Lola. I cannot tell you

when alpha and beta switch.

That’s privileged information.

-Linda Kunhardt.

Photos of the day

Christmas decorations light up Paris’s Champs-Élysées down to the Arc de Triomphe, visible in the background. Christophe Ena/AP

Fresh snow surrounds the McPolin barn on the outskirts of Park City, Utah. The National Weather Service said up to 16 inches of snow could fall in Utah’s higher elevations. Tom Smart/The Deseret News/AP

Market Closes for December 3^rd,2013

Market  Index	Close	Change
Dow  Jones	15914.62	-94.15    -0.59%
S&P 500	1795.15	-5.75    -0.32%
NASDAQ	4037.198	-8.063    -0.20%
TSX	13319.87	-99.70
		-0.74%

International Markets

Market  Index	Close	Change
NIKKEI	15749.66	+94.59
		+0.60%
HANG  SENG	23910.47	-128.08
		-0.53%
SENSEX	20854.92	-43.09
		-0.21%
FTSE 100	6532.43	-62.90
		-0.95%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.588	2.607
CND.   30 Year Bond	3.179	3.186
U.S.   10 Year Bond	2.7825	2.7951
U.S.   30 Year Bond	3.8444	3.8560

Currencies

BOC Close	Today	Previous
Canadian $	0.93929	0.93967
US   $	1.06464	1.06421
Euro Rate  1 Euro=		Inverse
Canadian   $	1.44639	0.69138
US  $	1.35857	0.73607

Commodities

Gold	Close	Previous
London Gold   Fix	1223.39	1219.99
Oil	Close	Previous
WTI Crude Future	96.04	93.82
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Dec. 3 (Bloomberg) — Canadian stocks fell, snapping four days of gains, as industrial companies declined and Bank of Montreal reported lower-than-estimated profit.

Bank of Montreal sank 4.5 percent, the most since 2010, to pace declines among financial stocks. First Quantum Minerals Ltd. dropped 1.5 percent as copper fell to the lowest in more than a week. Maxim Power Corp. plunged 15 percent after saying Rockland Capital has terminated an agreement to buy Maxim Power (USA) Inc. Air Canada, the nation’s largest airline, lost 1.8 percent for the first decline in five days. Peregrine Diamonds Ltd. soared 52 percent, the most in four years, after finding diamonds in bulk sample testing.

The Standard & Poor’s/TSX Composite Index fell 99.70 points, or 0.7 percent, to 13,319.87 at 4 p.m. in Toronto. The benchmark equity gauge has risen 7.1 percent this year, the third-worst performer among developed markets ahead of Hong Kong and Singapore.

“The banks are down, that’s leading the market down,”  said Irwin Michael, fund manager with ABC Funds in Toronto. The firm manages about C$850 million ($796.7 million). “Bank of Montreal, the fact is it’s had a good run.”

Gauges of financial and industrial stocks tumbled 1.5 percent each, the most in the S&P/TSX. Seven of 10 industries declined on trading volume 7.7 percent higher than the 30-day average.

Bank of Montreal, Canada’s fourth largest lender, sank 4.5 percent to C$70.25, the most in almost three years. The stock had rallied 22 percent from a low on June 24 through yesterday.  The company said net income for the period ended Oct. 31 was C$1.09 billion, or C$1.62 a share, little changed from C$1.08 billion, or C$1.59, a year earlier.

“While the headline looks strong, BMO reported a C$121 million gain in wealth management that is not recurring and will not likely be treated as core in the market,” John Aiken, an analyst with Barclays Capital Inc., said in a note to clients.

Royal Bank of Canada, the nation’s largest lender, dropped 1.3 percent to C$69.56. Toronto-Dominion Bank, the second- largest, lost 0.8 percent to C$96.13.

Royal Bank, Toronto-Dominion and Canadian Imperial Bank of Commerce are scheduled to report third-quarter earnings on Dec. 5.

First Quantum Minerals lost 1.5 percent to C$17 and Copper Mountain Mining Corp. declined 1.3 percent to C$1.47 as copper for March delivery fell 0.5 percent in New York. Copper prices have retreated 13 percent this year, set for a second annual drop in three years.

Air Canada, the best-performing stock in the S&P/TSX this year with a 342 percent gain, dropped 1.8 percent to C$7.73 to pace losses in industrial shares. Canadian Pacific Railway Ltd. retreated 2 percent to C$163.17 and Canadian National Railway Co. slipped 1.8 percent to C$60.36.

Bombardier Inc. tumbled 2.9 percent to C$4.65. Continued delays with the jet manufacturer’s CSeries planes may steer orders towards competitors, said George Ferguson, analyst with Bloomberg Industries, in a report.

“A filing with Canadian authorities to extend flight testing to May 2015 suggests service entry may not occur in 2014 as previously scheduled,” Ferguson said.

Maxim Power plunged 15 percent to C$2.87, the most since 2008, following the termination of the sale of Maxim Power (USA), Inc.

The Calgary-based thermal and electric energy developer had agreed to sell its U.S. unit to Patriot Power Holdings LLC, an affiliate of Rockland Capital in August. Rockland terminated the agreement due to an outstanding regulatory proceeding with the Federal Energy Regulatory Commission, Maxim said in a release.

Legacy Oil & Gas Inc. advanced 2.5 percent to C$6.25 after Chief Executive Officer Trent Yanko said his company was a “very attractive acquisition target” in an interview with Bloomberg.

Suncor Energy Inc. rose 1.8 percent to C$37.58 and Crew Energy Inc. added 5.1 percent to C$5.94 as crude for January delivery surged the most since September after TransCanada Corp. said it will begin operating the southern leg of its Keystone XL pipeline to the Gulf Coast in January.

Peregrine Diamonds soared 52 percent to 64 Canadian cents, the biggest gain since September 2009, after reporting a diamond grade of 2.7 carats a tonne from testing at its Chidliak project in Nunavut. The testing recovered about 600 carats of commercial-size diamonds, including a “significant portion” of gem diamonds, the company said in a statement.

USA

By Nick Taborek and Callie Bost

Dec. 3 (Bloomberg) — U.S. stocks declined for a third day, as investors assessed reports on car and retail sales before economic data this week that may offer clues on when the Federal Reserve will reduce stimulus.

Ford Motor Co. lost 2.9 percent, as carmaker stocks slipped amid November sales reports. Amazon.com Inc. slid 2 percent to pace declines among retailers even as online Cyber Monday sales surged to a record. Krispy Kreme Doughnuts Inc. plunged 20 percent after quarterly revenue missed analysts’ estimates.

Apple Inc. rose 2.7 percent to the highest in a year after buying data-analytics firm Topsy Labs Inc.

The Standard & Poor’s 500 Index declined 0.3 percent to 1,795.15 at 4 p.m. in New York. The Dow Jones Industrial Average dropped 94.15 points, or 0.6 percent, to 15,914.62, its first close below 16,000 since Nov. 20. About 6.3 billion shares changed hands on U.S. exchanges, 3.8 percent above the three- month average.

“It’s really a mixed picture right now,” Dan Veru, the chief investment officer who helps oversee $4.5 billion at Palisade Capital Management LLC, said in a phone interview from Fort Lee, New Jersey. “In the absence of any bigger data, investors are grasping for these little bits of micro data in trying to develop a conclusion. Any market that’s appreciated as much as the stock market has this year is going to be vulnerable to sell-offs.”

U.S. stocks fell yesterday as data showing manufacturing unexpectedly rose last month bolstered the case for the Fed to start curbing stimulus. Central-bank policy makers meet Dec. 17-18 after minutes of their last meeting in October showed officials may reduce the $85 billion in monthly bond buys should the economy improve as anticipated.

The Commerce Department will release data tomorrow on new home sales and the central bank will publish its Beige Book, which provides policy makers anecdotal accounts of business activity from the Fed districts. Reports on third-quarter gross domestic product and November non-farm payrolls are also due this week.

“There’s trepidation building with the employment numbers coming on Friday,” Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than $1 trillion, said by phone. “There’s nervousness that maybe the Fed takes a more hawkish tone at its December meeting if the jobs numbers are stronger than consensus estimates.”

The S&P 500 has added 26 percent this year, challenging 2003 for the best annual gain in 15 years, after the Fed refrained from trimming its monthly bond purchases and corporate earnings have surpassed estimates.

The rally has pushed valuations higher, with the gauge trading for about 16.9 times its companies’ reported earnings, up 19 percent from the beginning of the year when it traded at 14.2 times profit.

“For the coming months, markets will be hesitating, and we expect volatility amid expectations of Fed tapering,” Guillaume Duchesne, an equity strategist at BGL BNP Paribas SA in Luxembourg, said by telephone. “The rebound in equity markets has been quite impressive, particularly in the U.S., so we expect some pause.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, rose 2.3 percent to 14.55, the highest level in six weeks. The measure has gained for six straight sessions, its longest rally since May 2012.

Five of 10 main S&P 500 industries retreated today, with financial stocks and producers of raw materials falling at least 0.9 percent to pace losses.

Carmakers and parts suppliers fell the most among 24 S&P 500 industries as Ford forecast today that its North American production will slip 1.8 percent in next year’s first quarter amid rising inventories.

Automakers entered their year-end sales push last month with their biggest supply of cars and trucks in eight years. If buyers don’t absorb enough supply, more automakers, including General Motors Co. and Chrysler Group LLC, may need to follow Ford in trimming output to avoid margin-slicing discounts.

Sales at Ford and GM exceeded or met analysts’ estimates for November. Ford fell 2.9 percent to $16.56 and GM dropped 2.5 percent to $38.14.

An S&P index of retailers lost 0.8 percent, extending yesterday’s 0.7 percent drop, even as online sales on Cyber Monday rose 21 percent from a year ago for a single-day record.

The gain comes after online spending increased 15 percent to a record $1.2 billion on Black Friday, according to research by ComScore Inc. Still, because of an in-store slump, total purchases during the four days beginning with the Nov. 28 Thanksgiving holiday fell for the first time since 2009, according to a survey commissioned by the National Retail Federation.

Amazon slid 2 percent to $384.66 and Ross Stores Inc. lost 1.9 percent to $73.25 for a fourth day of declines.

Abercrombie & Fitch Co. rallied 5.8 percent to $35.99 for the biggest gain in the S&P 500. Engaged Capital LLC, which owned 400,000 shares as of Aug. 30, recommended the clothing retailer consider selling itself or begin searching for a new chief executive officer to replace CEO Michael Jeffries, whose contract expires Feb. 1.

Krispy Kreme plunged 20 percent, the most since April 2011, to $19.59. The company reported third-quarter revenue of $114.2 million after yesterday’s market close, missing the average analyst estimate of $115 million.

Yum! Brands Inc., the owner of KFC and Pizza Hut, fell 2.7 percent to $75.61. The company posted a surprise gain in same- store sales in China last month as promotions lured diners to its fried-chicken chain. KFC same-store sales in China rose 16 percent in the first 10 days of the month, driven by a “Half Priced” bucket promotion, while they were down 8 percent in the last 20 days of November as the offer ended.

Apple rose 2.7 percent to $566.32, the highest since Dec. .04, 2012. The iPhone maker paid more than $200 million for Topsy, people with knowledge of the deal said, giving the world’s most valuable company new tools to spot trends as they emerge on Twitter Inc.’s social network.

Separately, UBS AG raised its recommendation on the stock to buy from neutral, or hold, and increased its price estimate for the shares to $650 from $540.

Tesla Motors Inc. jumped 17 percent, the most since May, to $144.70. The carmaker’s Model S, the electric car being investigated for a possible U.S. recall, was cleared of any safety defect in a review by Germany’s transportation regulator.

OncoMed Pharmaceuticals Inc. surged 98 percent to a record $27.70. The drug developer that first sold shares to the public in July signed a $177.25 million agreement with Celgene Corp. on as many as six potential cancer medicines. The shares of the Redwood City, California-based company had declined 18 percent from the initial public offering through yesterday.

Pacific Investment Management Co.’s Bill Gross, manager of the world’s biggest bond fund, said the unprecedented cash added to the financial system by central banks is raising the risk of a slide in global asset prices.

“Investors are all playing the same dangerous game that depends on a near perpetual policy of cheap financing and artificially low interest rates in a desperate gamble to promote growth,” Pimco’s Gross wrote in his monthly investment outlook posted on Newport Beach, California-based Pimco’s website today.

The Fed, Bank of Japan, European Central Bank and Bank of England “are setting the example for global markets, basically telling investors that they have no alternative than to invest in riskier assets or to lever high-quality assets,” he said.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Truth resides in the heart of every man.

And it is there that he must seek it, in order to be guided by it so that,

at the least, it will appear to him.

But we do not have the right to force others to see the Truth in our way.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

The key is to keep company only with people

who uplift you, whose presence calls forth

your best.

-Epictetus, AD 55-13.

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:

ATMOSPHERE

Learning to

draw tenderness, the

sky is full of

snow for her,

and she knows the

road curves around

her and the chill

of the air has no

fear, and she

sees her sorrow

gleaming in the

hardening river, she is

learning to take

tenderness from the

atmosphere.

-Susan Griffin

Photos of the day

People walk near a Christmas tree in front of the Vendome Column as part of Christmas holiday season illuminations at Place Vendome in Paris. Charles Platiau/Reuters

A swimmer passes as surfers paddle on boards in the Mediterranean sea off the shore of Tel Aviv, Israel. Temperatures rise up to 30 Celsius (86 Fahrenheit) in Israel. Ariel Schalit/AP

Market Closes for December 2^nd, 2013

Market  Index	Close	Change
Dow  Jones	16008.77	-77.64    -0.48%
S&P 500	1800.90	-4.91    -0.27%
NASDAQ	4045.260	-14.626    -0.36%
TSX	13419.57	+24.17
		+0.18%

International Markets

Market  Index	Close	Change
NIKKEI	15655.07	-6.80
		-0.04%
HANG  SENG	24038.55	+157.26
		+0.66%
SENSEX	20898.01	+106.08
		+0.51%
FTSE 100	6595.33	-55.24
		-0.83%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.607	2.554
CND.   30 Year Bond	3.186	3.149
U.S.   10 Year Bond	2.7951	2.7445
U.S.   30 Year Bond	3.8560	3.8106

Currencies

BOC Close	Today	Previous
Canadian $	0.93967	0.94187
US   $	1.06421	1.06172
Euro Rate  1 Euro=		Inverse
Canadian   $	1.44087	0.69403
US  $	1.35394	0.73859

Commodities

Gold	Close	Previous
London Gold   Fix	1219.99	1253.35
Oil	Close	Previous
WTI Crude Future	93.82	92.72
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam and Lu Wang

Dec. 2 (Bloomberg) — Canadian stocks rose a fourth day, the longest streak in almost six weeks, as industrial companies and energy producers gained after manufacturing from the U.S. to Europe and China expanded more than forecast.

Air Canada, the best-performing stock in the Standard & Poor’s/TSX Composite Index this year, increased 4.1 percent.

Talisman Energy Inc. rallied 4.5 percent after agreeing to appoint two board members backed by billionaire activist investor Carl Icahn to avoid a proxy fight. B2Gold Corp. and Semafo Inc. sank at least 11 percent as gold declined, extending the worst monthly performance since June.

The S&P/TSX rose 24.17 points, or 0.2 percent, to 13,419.57 at 4 p.m. in Toronto, the longest winning streak since October.

Trading in the index’s stocks was in line with the 30-day average.

The economic data “is pointing to the right direction,” Pierre Bouchard, a portfolio manager at Toronto-based Toron AMI, said in a phone interview. His firm oversees C$3.8 billion ($3.6 billion). “As long as we don’t have a big issue from the economic point of view, markets should keep going up. But I don’t see them up a lot necessarily because we’ve had a lot of good performance already.”

The S&P/TSX finished November up 0.3 percent as data showed growth in Canada accelerated in the third quarter at the fastest pace in two years and the global economy improved. That’s the index’s fifth consecutive monthly advance, the longest rally since October 2012.

The Institute for Supply Management’s U.S. factory index rose to 57.3 in November from 56.4 a month earlier, the Tempe, Arizona-based group’s report showed today. The median projection in a Bloomberg survey of 77 economists called for a drop to 55.1. Manufacturing in the euro-area expanded, with Markit Economics’s factory index rising to 51.6 in November, while factory growth in China also beat estimates.

The S&P/TSX has risen 7.9 percent this year, the third- worst performer among developed markets ahead of Hong Kong and Singapore, as commodities are headed for their first annual loss since 2008. Energy and raw-materials producers accounted for more than a third of the index.

Raw-materials companies sank 2.8 percent today for the only loss among 10 S&P/TSX groups, as gold stocks slid. The price of the precious metal is set for the first annual drop in 13 years as some investors lost faith in the metal as a store of value.

Gold prices today fell to the lowest level since July after signs of a strengthening U.S. economy fueled speculation that the Federal Reserve is ready to slow the pace of its monetary stimulus. Silver tumbled.

B2Gold plunged 12 percent to C$1.96 and Semafo tumbled 11 percent to C$2.47.

Nine of the 10 main industries in the gauge advanced as health-care, consumer-staples and industrial companies climbed more than 1.2 percent for the best performance.

Air Canada, the nation’s largest carrier, rallied 4.1 percent to C$7.87, the highest level since June 2008. The stock has jumped 350 percent this year as profit beat analysts’ estimates amid progress in the company’s cost-cutting plan.

Talisman Energy climbed 4.5 percent to C$12.99. Samuel Merksamer and Jonathan Christodoro will join the board this month and will be on the company’s slate of board nominees for re-election next year, according to a filing from the oil and natural gas producer. In exchange, Icahn agreed not to conduct a proxy contest at the next Talisman annual meeting.

Activist shareholders from Icahn to Barry Rosenstein have pushed for changes at energy companies they believe have failed to realize the value of reserves. Icahn, who has amassed a 7.4 percent stake in Talisman, said in October he may seek talks with management on “strategic alternatives” and board seats.

Canacol Energy Ltd. jumped 9.9 percent to C$5.35. The company, which explores oil in South America, announced results from a well located in the Llanos Basin of Colombia.

USA

By Nick Taborek

Dec. 2 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index extending declines in the final hour of trading, amid data showed manufacturing unexpectedly climbed last month and reports on holiday retail sales.

Urban Outfitters Inc. lost 3.5 percent as retail spending fell on the weekend after Thanksgiving for the first time since 2009. EBay Inc. climbed 1.6 percent as a report showed online spending on Black Friday rose to a record. Newmont Mining Corp., the world’s second-largest gold producer, slipped 4 percent as the precious metal’s price declined. 3M Co. lost 4.4 percent after Morgan Stanley downgraded the stock.

The S&P 500 dropped 0.3 percent to 1,800.90 at 4 p.m. in New York, after earlier rising as much as 0.2 percent. The Dow Jones Industrial Average lost 77.64 points, or 0.5 percent, to 16,008.77. About 5.8 billion shares changed hands on U.S. exchanges today, 4.8 percent below the three-month average.

“It seems like a sleepy day after Thanksgiving, nothing exciting going on,” Frank Ingarra, head trader at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said by phone. His firm oversees about $1.8 billion. “Investors are probably waiting to see if there’s any news from the Fed later in the month and trying to get a read on retail sales.”

It was the second time in two days that U.S. equities tumbled in the final hour. The benchmark index lost 0.5 percent to 1,803.98 over 20 minutes just before the close on Nov. 29, when stocks traded in an abbreviated session. Today’s drop took it down 0.4 percent to 1,798.73 between 3:24 p.m. and 3:53 p.m.

“We have seen some end-of-day weakness in recent trading sessions,” Alan Gayle, senior investment strategist and director of asset allocation at RidgeWorth Capital Management, said by phone from Atlanta. His firm oversees about $49 million. “It may be turning out to be a pattern.”

The S&P 500 climbed 2.8 percent last month and has gained 26 percent this year, challenging 2003 for the best annual performance since 1998, after the Federal Reserve refrained from tapering its third round of economic stimulus. The central bank next meets Dec. 17-18. The index ended November with its eighth straight weekly advance, the longest rally in almost a decade, as data on employment and consumer sentiment boosted confidence in economic growth.

The Institute for Supply Management’s factory index rose to 57.3 in November from 56.4 a month earlier, the Tempe, Arizona- based group’s report showed today. The median projection in a Bloomberg survey of 77 economists called for a drop to 55.1.

Estimates ranged from 53.5 to 57.5. Manufacturing accounts for about 12 percent of the economy.

A separate report from Markit Economics showed the final November index of U.S. manufacturing increased to 54.7 from 51.8 the previous month. The median forecast in a Bloomberg survey of economists called for no change from the preliminary November reading of 54.3. Other reports showed manufacturing in the euro area, U.K. and China expanded faster than estimated.

The Labor Department’s jobs report on Dec. 6 is forecast to show the U.S. added 180,000 jobs last month and the unemployment rate slipped to 7.2 percent, matching the lowest level in five years. The weakest employment recovery in seven decades is proving a boon to equity markets.

Five years into a rally that has restored $14 trillion to share prices, U.S. payrolls remain 1.5 million below the level in 2008, according to data compiled by Bloomberg. Resistance to hiring from ConocoPhillips to Walt Disney Co. will help push S&P 500 profit margins above 10 percent next year, the highest ever, data show. Below-average employment was cited last month by Fed chairman nominee Janet Yellen as the biggest obstacle to raising interest rates.

December has been the second-best month for U.S. equity returns, according to data compiled by Bloomberg that starts in 1928. The average return for the month is 1.5 percent, more than twice the overall monthly mean of 0.6 percent. Should stocks match their historic gains this month, it would put the index at 1,832.90 by the end of the year.

U.S. retailers are coming off the first spending decline on a Black Friday weekend since 2009. Purchases at stores and websites fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation.

“I would have expected Thanksgiving weekend sales to be stronger, given how well financial markets have done,” Scott Clemons, chief investment strategist at Brown Brothers Harriman Wealth Management, which oversees $22 billion, said by phone.

“We’re skeptical that the price movement in stocks this year has been supported by fundamentals, so we’re lightening up.”

An S&P index of retailers fell 0.7 percent for the fifth- worst performance among 24 industries. Urban Outfitters paced declines, losing 3.5 percent to $37.66 after being downgraded to neutral from buy at Sterne, Agee & Leach Inc.

Online spending rose 15 percent to a record $1.2 billion, according to ComScore Inc., as more customers opted to shop from their couches rather than battling long lines at stores. Online retailers can expect 131 million shoppers for today’s Cyber Monday promotions, up from 129 million last year, the National Retail Federation said.

EBay climbed 1.6 percent to $51.35. The company was the second-most visited online retailer on Black Friday, behind Amazon.com Inc., ComScore said.

Eight out of 10 main industries in the S&P 500 fell. Phone companies lost 0.9 percent for the steepest decline, as a jump in Treasury yields reduced the appeal of companies paying higher dividends. Ten-year Treasury note yields increased five basis points to 2.80 percent.

Graham Holdings Co., which is changing its name from Washington Post Co., lost 3.6 percent to $649.62. The education and media company agreed to sell its headquarters building in downtown Washington to Carr Properties for about $159 million.

3M dropped 4.4 percent to $127.68 for the biggest loss in the Dow. Morgan Stanley downgraded the stock to the equivalent of sell and Oppenheimer & Co. chief market technician Carter Worth said the stock is overpriced.

Travelers Cos. slid 1.9 percent to $89. The second-largest U.S. commercial insurer was cut to neutral from buy at Goldman Sachs Group Inc.

Groupon Inc., the online discount-coupon company, slid 3.3 percent to $8.75. Goldman Sachs cut its rating on the stock to neutral from buy.

Newmont lost 4 percent to $23.83. Gold touched to the lowest level since July, as signs of the strengthening U.S. economy fueled speculation the Fed will curb its monetary stimulus.

Dow Chemical Co. added 2.4 to $39.98. The largest U.S. chemical maker by sales plans to separate chlorine-related assets including its epoxy business as the company focuses on higher-margin activities.

Freddie Mac rose 7.5 percent to $2.59. Bank of America Corp. agreed to pay the government-sponsored mortgage insurer $404 million to resolve mortgage-repurchase claims.

The deal covers about 716,000 loans created by Charlotte, North Carolina-based Bank of America from Jan. 1, 2000, to Dec. 31, 2009, and sold to Freddie Mac, the firms said today in separate statements.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, rose 3.9 percent to 14.23 today. The measure has gained five straight sessions, rallying 16 percent, for the longest winning streak this year.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

To go from opinion to perception,

from imagination to fact,

from illusion to reality,

from something that is not there,

to something that is;

that is the way forward.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

The world is a dangerous place to live; not because of the people

who are evil, but because of the people who don’t do

anything about it.

-Albert Einstein, 1879-1955.

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:

December  Sky Watch:  Venus continues to climb higher in the west after sunset as it brightens magnitude – 4.9, its most dazzling display to the year.  An easy 25 degrees high, it dangles beneath the crescent Moon on the 5^th.  The Moon floats above green Uranus on the 10^th and is to the left of Taurus’s orange star Aldebaran on the 15^th.   In its fat gibbous phase, the Moon diminishes the normally reliable Geminid meteors on the 13^th and stands to the right of Jupiter on the 18^th.  Jupiter, in Gemini, conveniently rises by 6:00 PM and shines at a brilliant magnitude – 2.7.  The Giant Planet is now a telescopic showpiece in advance of its imminent opposition on January 5.  Winter begins with the solstice at 12:11 PM on the 21^st.

New Moon: December 2^nd.

First Quarter: December 9^th.

Full Moon: December 17^th.

Last Quarter: December 25^th.

Photos of the day

Visitors enjoy the Christmas market in front of the Cologne Cathedral, in Cologne, Germany. Oliver Berg/dpa/AP

Rabbi Yehuda Teichtal (r.) and Rabbi Shmuel Segal stand in front of the Brandburg Gate in Berlin where a giant Hanukkah Menorah was installed at the launch of the eight-day Jewish Festival of Lights, named Hanukkah. Ole Spata/dpa/AP

Market Closes for November 29^th, 2013

Market  Index	Close	Change
Dow  Jones	16086.41	-10.92    -0.07%
S&P 500	1805.81	-1.42    -0.08%
NASDAQ	4059.886	+15.136    +0.37%
TSX	13395.40	+24.57
		+0.18%

International Markets

Market  Index	Close	Change
NIKKEI	15661.87	-65.25
		-0.41%
HANG  SENG	23881.29	+92.20
		+0.39%
SENSEX	20791.93	+257.02
		+1.25%
FTSE 100	6650.57	-3.90
		-0.06%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.554	2.537
CND.   30 Year Bond	3.149	3.140
U.S.   10 Year Bond	2.7445	2.7373
U.S.   30 Year Bond	3.8106	3.8150

Currencies

BOC Close	Today	Previous
Canadian $	0.94187	0.94447
US   $	1.06172	1.05880
Euro Rate  1 Euro=		Inverse
Canadian   $	1.44215	0.69341
US  $	1.35832	0.73621

Commodities

Gold	Close	Previous
London Gold   Fix	1253.35	1242.48
Oil	Close	Previous
WTI Crude Future	92.72	92.30
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Nov. 29 (Bloomberg) — Canadian stocks rose a third day, capping a fifth straight monthly advance, as data showed growth in Canada accelerated in the third quarter at the fastest pace in two years amid a gain in consumer spending.

Atrium Innovations Inc., a cosmetics and pharmaceutical products maker, soared 23 percent after agreeing to sell itself to a group led by Permira funds. Argonaut Gold Inc. increased 4.5 percent as the metal climbed the most in two weeks. Air Canada, the nation’s largest airline, jumped 5.7 percent for a third day of gains.

The Standard & Poor’s/TSX Composite Index rose 24.57 points, or 0.2 percent, to 13,395.40 at 4 p.m. in Toronto, trimming an earlier gain of as much as 0.9 percent. The benchmark equity gauge added 0.3 percent in November for a fifth month of increases, the longest streak in more than a year.

“We are seeing the Canadian stock market reacting quite favorably to the GDP figures,” said John Tsagarelis, a fund manager at Manulife Asset Management Ltd. in Toronto. He helps manage C$252 billion ($238 billion) with the firm. “It’s a broad-based increase including metals and energy, which have lagged somewhat in the past couple of weeks. It will be difficult for people to take risk off the table now.”

Canada’s economy grew at an annualized pace of 2.7 percent in the third quarter, its fastest rate in two years and ahead of the median economists’ forecast of 2.5 percent growth.

“A strengthening U.S. economy and highly stimulative Bank of Canada monetary policy will sustain above-potential growth through the end of next year,” said Paul Ferley, assistant chief economist at RBC Capital Markets, in a note to clients.

Raw-materials and energy stocks each rallied 0.4 percent as a group as seven of 10 industries in the S&P/TSX advanced.

Trading volume was 38 percent lower compared with the 30-day average at this time of the day.

BlackPearl Resources Inc. jumped 4.8 percent to C$2.41 and Cenovus Energy Inc. increased 1.7 percent to C$30.93 as crude for January delivery rose for the first time in five days, up 0.5 percent to $92.72 a barrel in New York.

Argonaut Gold added 4.5 percent to C$5.61 and B2Gold Corp. increased 3.3 percent to C$2.22 as the S&P/TSX Gold Index rallied 1 percent. Barrick Gold Corp., the largest gold producer by market value, advanced 1 percent to C$17.61.

Pan American Silver Corp. rose 5.1 percent to C$11.34. The company will buy back up to 5 percent of its stock, or about 7.57 million shares, it said in a statement.

Air Canada, the best-performing stock in the S&P/TSX this year, surged 5.7 percent to C$7.56, highest since June 2008, as industrial stocks jumped 0.6 percent for the biggest gain in the benchmark equity gauge. Air Canada has soared 332 percent this year.

Canadian Pacific Railway Ltd. increased 0.7 percent to C$161.89, a record high, after hiring Bart Demosky as the company’s chief financial officer. Demosky served as CFO at Suncor Energy Inc. Suncor, Canada’s largest oil producer, rose 0.3 percent to C$36.42.

Atrium Innovations soared 23 percent to C$24.25, a record gain. Permira will own 75 percent of Atrium, paying C$24 a share, valuing the company at about C$751 million.

USA

By Aubrey Pringle

Nov. 29 (Bloomberg) — U.S. stocks fell as investors sold shares in the final half hour of a shortened trading session, erasing earlier gains fueled by a rally in online retailers amid Black Friday sales.

Archer-Daniels-Midland Co. fell 3 percent after Australia blocked a A$2.2 billion ($2 billion) takeover of GrainCorp Ltd.

EBay Inc. and Amazon.com Inc. gained at least 1.8 percent. Best Buy Co. and Coach Inc. advanced more than 1.4 percent as retailers opened their doors to holiday shoppers. Apple Inc. rose 1.9 percent after a report showed the company sold three of every four smartphones in Japan last month.

The S&P 500 fell 0.1 percent to 1,805.81, reversing an earlier gain of as much as 0.4 percent. The gauge advanced 0.1 percent for the week, extending its winning streak to eight weeks, the longest since 2004. The Dow Jones Industrial Average lost 10.92 points, or 0.1 percent, to 16,086.41 today. Trading in S&P 500 stocks was 8.9 percent below the 30-day average. U.S. markets were closed yesterday for the Thanksgiving holiday and trading ended at 1 p.m. today.

“It’s very light trading,” John Manley, who helps oversee $233.6 billion as chief equity strategist for Wells Fargo Funds Management in New York, said in a phone interview. The Friday after Thanksgiving is “going to be subject to light volume.”

The S&P 500 rose 2.8 percent for the month. The benchmark gauge has climbed 27 percent in 2013, poised for its best year since 1998, and the Dow has gained 23 percent after the Federal Reserve refrained from tapering its third round of economic stimulus.

Minutes of the last Fed meeting released on Nov. 20 showed that officials are considering scaling back their $85 billion in monthly bond purchases “in coming months” if the economy improves as anticipated. Four out of five investors expect the Fed to delay a decision to begin reducing the stimulus until March 2014 or later, according to a Bloomberg Global Poll on Nov. 19.

Central bank bond purchases have helped push the S&P 500 up 167 percent from a bear-market low in 2009. Fed policy makers have been scrutinizing data to determine whether the economy is strong enough to withstand a reduction in stimulus.

Investors are awaiting reports on manufacturing and home sales next week, and the November release of non-farm payrolls on Dec. 6. Janet Yellen, who will replace Ben S. Bernanke as chairman of the Fed, has said she will ensure monetary stimulus isn’t removed too soon to support economic recovery in the U.S.

“There’s going to be a very sharp eye on the incoming economic data, with the economy really being important to the next steps for the Fed and the markets,” Gary Flam, managing director and portfolio manager at Los Angeles-based Bel Air Investment Advisors LLC, said by phone. Bel Air manages $7 billion in assets.

A report today showed euro-area unemployment unexpectedly declined in October, the latest indication that the bloc’s recovery is gaining traction. Separate data yesterday showed economic confidence in the euro region improved more than economists forecast to a 27-month high in November.

The Chicago Board Options Exchange Volatility Index rose 5.5 percent today to 13.7. The gauge of S&P 500 options known as the VIX declined 0.4 percent for November.

Eight of 10 main industry groups in the S&P 500 slid today, with telephone stocks falling the most. Airlines lost 1.2 percent as a group. Southwest Airlines Co. fell 1.9 percent to $18.59 and US Airways Group Inc. sunk 2.1 percent to $23.48.

ADM dropped 3 percent to $40.25. Australia’s rejection of the agricultural commodities producer’s takeover prompted a record 22 percent drop in GrainCorp, the biggest crop handler on Australia’s east coast, and a slide in the local currency.

“This proposal has attracted a high level of concern from stakeholders and the broader community,” Treasurer Joe Hockey said today, ruling U.S.-based ADM’s bid of A$12.20 a share isn’t in the national interest. “Now is not the right time for a 100 percent foreign acquisition of this key Australian business.”

Technology companies gained 0.5 percent, the most among S&P 500 groups. EBay rose 2.5 percent to $50.52 and Amazon.com jumped 1.8 percent to $393.62. Online sales are projected to climb as much as 15 percent to $82 billion during the holidays, more than three times faster than the total gain of 3.9 percent to $602.1 billion, according to the National Retail Federation.

Apple rose 1.9 percent to $556.07. The company accounted for 76 percent of smartphone sales in Japan last month after the country’s largest carrier, NTT Docomo Inc., began offering the iPhone, market researcher Kantar Worldpanel ComTech said yesterday.

Retailers climbed 0.3 percent, the second-biggest gain among 24 groups in the S&P 500. Best Buy rose 2.4 percent to $40.55 and Coach jumped 1.4 percent to $57.90. Gap Inc. and Tiffany & Co. advanced, while Macy’s Inc. and Kohl’s Corp. fell after erasing earlier gains.

Millions of Americans will hit the malls today for Black Friday. The cost of hedging against losses in U.S. retailers has slipped to the lowest level in more than three years as investors speculate that an improving labor market and falling gas prices will stimulate holiday sales.

U.S. retail sales climbed at a faster-than-expected pace in October, a measure of consumer sentiment beat estimates this month and jobless claims fell to their lowest since September last week, signaling a strengthening U.S. economy. Gasoline prices are near their lowest since February 2011, while house prices are climbing at the fastest rate since 2006.

Sales are projected to advance 2.4 percent this holiday, the smallest increase since 2009, the year the recession ended, according to researcher ShopperTrak. Faced with six fewer days between Thanksgiving and Christmas than last year, retailers are pouring on the discounts to lure customers. Many chains opened earlier than ever this year to win market share.

“The general mood is that we’re going to have growth this year in terms of holiday season shopping, though probably less than before the crisis,” Aaron Izenstark, co-founder and chief investment officer of Iron Financial LLC’s Iron Strategic Income Fund in Northbrook, Illinois, said by phone. “There is an expectation in the market that it has started out on a positive note, so I do think that is definitely driving thoughts today in the marketplace.”

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

Find the Unique and possess the Whole.

This truly is our highest, most sublime privilege.

It is in the law of this unity that is, as long as we understand it,

our immutable force.  Its living principle is the force that resides in truth –

Truth is one.

Swami Prajnanpad, 1891-1974

 

As ever,

 

Carolann

 

Once the game is over, the king and pawn go back into the same box.

-Italian Saying.

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