Month: February 2014

Dear Friends,

Tangents:

In October, Sting previewed his upcoming Broadway play, The Last Ship, at a special performance at New York’s Public Theater, bringing people into his creative process.  It inspired his album of the same name, his first in nearly a decade, which celebrates a passing way of life in his shipbuilding coastal hometown in the north of England.  PBS will air the concert film, The Last Ship on Great Performances tomorrow night February 21^st at 9 PM.

Tonight Sting and Paul Simon are in concert in Vancouver; I am so looking forward to seeing them – two awesomely talented artists.

Photos of the day

Australia’s Scott Kneller, Finland’s Jouni Pellinen and Switzerland’s Armin Niederer perform a jump during the men’s freestyle skiing skicross 1/8 final in Rosa Khutor, Thursday, February 20. Dominic Ebenbichler/Reuters

The Olympic rings are reflected in the goggles of Norway’s Haavard Klemetsen as he makes his attempt during the ski jumping portion of the Nordic combined Gundersen large hill team competition, Thursday, Feb. 20, in Krasnaya Polyana. Dmitry Lovetsky/AP

Norway’s Joergen Graabak (r.) crosses the finish line to win gold ahead of silver medal winner Germany’s Fabian Riessl (l.) during the cross-country portion of the Nordic combined Gundersen large hill team competition, Thursday, Feb. 20, in Krasnaya Polyana. Matthias Schrader/AP.

Market Closes for February 20^th, 2014

Market Index	Close	Change
Dow Jones	16133.23	+92.67   +0.58%
S&P 500	1839.78	+11.03   +0.60%
NASDAQ	4267.547	+29.593   +0.70%
TSX	14210.37	+90.64
		+0.64%

International Markets

Market Index	Close	Change
NIKKEI	14449.18	-317.35
		-2.15%
HANG SENG	22394.08	-270.44
		-1.19%
SENSEX	20536.64	-186.33
		-0.90%
FTSE 100	6812.99	+16.28
		+0.24

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.546	2.441
CND. 30 Year Bond	3.047	3.048
U.S. 10 Year Bond	2.7500	2.7356
U.S. 30 Year Bond	3.7215	3.7083

Currencies

BOC Close	Today	Previous
Canadian $	0.90118	0.90290
US $	1.10966	1.10755
Euro Rate 1 Euro=		Inverse
Canadian $	1.52232	0.65689
US $	1.37188	0.72893

Commodities

Gold	Close	Previous
London Gold Fix	1323.36	1311.69
Oil	Close	Previous
WTI Crude Future	102.92	103.31
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam
Feb. 20 (Bloomberg) — Canadian stocks rose a 12th day, extending the longest advance in almost two decades, after Quebecor Inc. bought airwaves to expand its wireless services and Loblaw Cos. reported better-than-estimated earnings.

Quebecor surged 8 percent after spending C$233 million ($210 million) yesterday to buy spectrum in four provinces. Loblaw climbed 4.8 percent. TransAlta Corp. sank 7.2 percent as it cut its dividend and agreed to sell its stake in a U.S. electricity generation company to raise cash. Tim Hortons Inc. and CCL Industries Inc. rose at least 1.8 percent after the companies boosted their dividends.

The Standard & Poor’s/TSX Composite Index rose 90.64 points, or 0.6 percent, to 14,210.37 at 4 p.m. in Toronto. The benchmark equity gauge has jumped 5.4 percent in 12 days for the longest rally since March 1995. The index is trading at its highest level since 2011.

“I like this market, not just because it keeps on going up, but that there’s some logic to it,” said David Cockfield, fund manager at Northland Wealth Management in Toronto. He helps manage about C$270 million with the firm. “It seems to be a much more rational market, where things go up for a rational reason like better earnings.”

The S&P/TSX is 0.4 percent below its peak of 14,270.53 reached on April 5, 2011, the highest level since June 2008. Of the 241 stocks in the benchmark Canadian equity gauge, 159 have advanced this year. The S&P/TSX trades at 19.6 times earnings, its highest valuation since April 2011, according to data compiled by Bloomberg.

Eight of 10 industries in the S&P/TSX rose and trading volume was 10 percent above the 30-day average.

Large-cap fund managers posted their best return relative to the S&P/TSX in 12 years in 2013, with 94 percent of managers besting the benchmark equity gauge’s 13 percent gain, according to a report from Russell Investments. The median return for the year was 19 percent, after fund managers avoided the slump in gold stocks by being about 3.5 percent underweight in the industry last year, the report said.

Loblaw climbed 4.8 percent to C$44.29, the biggest gain since July, to pace gains as consumer staples stocks rallied 2 percent as a group. The company posted adjusted fourth-quarter earnings of 65 Canadian cents a share, ahead of analysts’ projections of 55 cents. Same-store sales rose 0.6 percent, boosted by timing of the Canadian Thanksgiving holiday, the company said in a statement.

Quebecor rallied 8 percent to C$25.50, for the biggest gain since November 2009. The company is positioned to become Canada’s fourth national wireless operator after purchasing seven licenses in the 700-megahertz spectrum, useful for penetrating dense urban areas.

The Canadian government netted C$5.27 billion from the auction, including C$3.29 billion from Rogers Communications for 22 licenses. Rogers, BCE Inc. and Telus Corp. account for about 90 percent of wireless customers in Canada.

BlackBerry Ltd. advanced 4.5 percent to C$10.41 after Facebook Inc. agreed to buy mobile-messaging company WhatsApp Inc. for as much as $19 billion, highlighting the potential value of BlackBerry’s messenger service.

Tim Hortons added 1.8 percent to C$58.98, the biggest advance since December. The company raised its quarterly dividend 23 percent to 32 Canadian cents a share.

The quick-serve coffee retailer posted an 11 percent jump in sales in the fourth quarter, due to an increase in franchise fees from higher levels of renovations and restaurant development, the company said.

CCL Industries, which produces packaging and labels for consumer products, jumped 6.3 percent to a record C$87.17 after boosting its quarterly dividend to 25 Canadian cents a share.

TransAlta, an Alberta electricity producer, slumped 7.2 percent to C$13.76, the biggest decline in five years. The company trimmed its dividend 38 percent to 72 Canadian cents a share and sold its 50 percent stake in CE Generation, Blackrock development and Wailuku to MidAmerican Renewables, its partner in the holdings, for $193.5 million.

USA

By Nick Taborek
Feb. 20 (Bloomberg) — U.S. stocks rose, erasing most of yesterday’s drop, as improving manufacturing data tempered concern about the economy and Facebook Inc.’s $19 billion purchase of a messaging startup fueled optimism about deals.

Tesla Motors Inc. surged 8.4 percent after predicting sales of its Model S sedan will jump. Safeway Inc. rallied 2.1 percent as people familiar with the situation said the grocer is weighing a sale. Facebook gained 2.3 percent after agreeing to buy WhatsApp Inc., the fourth deal of at least $16 billion this year. Citrix Systems Inc. rose 5.9 percent as Evercore Partners Inc. said the company’s parts are worth more than the stock price reflects. Wal-Mart Stores Inc. slipped 1.8 percent as the largest retailer forecast profit below estimates.

The Standard & Poor’s 500 Index rose 0.6 percent to 1,839.78 at 4 p.m. in New York after retreating yesterday following an early advance that took it within one point of its closing record. The Dow Jones Industrial Average increased 92.67 points, or 0.6 percent, to 16,133.23. About 6.4 billion shares changed hands on U.S. exchanges, in-line with the three-month average.

“The underlying strength of the U.S. consumer, of U.S. corporations, is still there,” James Liu, a Chicago-based global market strategist at J.P. Morgan Funds, which oversees about $400 billion, said by phone. “On the emerging markets side, the question is whether there is contagion for the U.S. market. And I think the answer that we’ve seen is no.”

The S&P 500 slumped as much as 5.8 percent after reaching a record on Jan. 15 as investor concern about the Federal Reserve’s reductions in stimulus fueled a rout in emerging markets. The benchmark gauge has rebounded 5.6 percent since.

Investors have been dismissing lower-than-forecast U.S. economic data over the past two weeks, pointing to harsh winter weather as a reason for unexpected weakness in reports from housing to hiring. The Bloomberg ECO U.S. Surprise Index, which measures how much recent data has beaten or missed economists’ estimates, fell to minus 0.423 today, the lowest since September 2011.

Fed Chair Janet Yellen last week said the economy has strengthened enough to withstand continued cuts to monetary stimulus, adding that only a notable change in the outlook for the economy would prompt the central bank to slow the pace of tapering.

The Markit Economics preliminary index of U.S. manufacturing increased to 56.7 in February, surpassing economists’ estimates, while Labor Department figures indicated fewer Americans filed applications for unemployment benefits last week. The Conference Board’s index of U.S. leading indicators, a gauge of the outlook for the next three to six months, rose in January in line with estimates, while the Philadelphia Fed’s Business Outlook Survey for February unexpectedly declined.

Hewlett-Packard Co. and 17 other companies in the S&P 500 report results today. Earnings beat analysts’ estimates at about 74 percent of the 433 companies in the benchmark index that have posted results so far this season, according to data compiled by Bloomberg.

The Facebook acquisition was the fourth major deal this year, with Comcast Corp.’s $45.2 billion purchase of Time Warner Cable Inc. the biggest. Actavis Plc announced Feb. 18 a $21 billion deal to buy Forest Laboratories Inc. and Suntory Holdings Ltd. agreed in January to pay $16 billion for Beam Inc.

“M&A is alive and well, corporate balance sheets remain strong,” John Carey, a fund manager at Pioneer Investment Management Inc., a Boston-based firm that manages about $220 billion worldwide, said by phone. “There may be some fluctuations in the market, but when people come back and focus on the underlying fundamentals here in the U.S., I think they’re going to keep coming back to stocks.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, slipped 4.6 percent to 14.79 today, following a two-day gain of 14 percent.

All 10 of the main industries in the S&P 500 rose today, as phone companies rallied 2 percent to lead gains. Verizon Communications Inc. climbed 3.4 percent to $48.12 and AT&T Inc. added 1 percent to $33.18, among the biggest advances in the Dow.

Safeway Inc. added 2.1 percent to $35.32 as it considers a sale. CVC Capital Partners Ltd. and Leonard Green & Partners LP are among the firms in talks with Safeway about buying some or all of the grocery chain as it weighs a sale, people with knowledge of the matter said.

The second-largest U.S. grocery-store chain said it plans to distribute its remaining 37.8 million shares of the Blackhawk Network Holdings Inc. gift-card business to Safeway investors and explore ways to monetize its 49 percent stake in Mexican retailer Casa Ley SA.

Tesla jumped 8.4 percent to a record $209.97. The electric- car maker said Model S deliveries will increase to 35,000 this year as sales to China begin, from about 22,450 last year. Tesla posted fourth-quarter earnings of 33 cents a share excluding some items, exceeding the 26-cent average of analyst estimates compiled by Bloomberg.

Citrix rallied 5.9 percent to $60.59. The software maker may be able to increase value by repurchasing stock, starting a dividend or committing to operating margin expansion, according to an Evercore report. The company’s individual segments may be worth $65 a share, according to the report.

Facebook rose 2.3 percent to $69.63 as the world’s biggest social network said it will pay $12 billion in stock, $4 billion in cash and $3 billion in restricted shares for WhatsApp. It is the largest Internet deal since Time Warner’s $124 billion merger with AOL in 2001, according to data compiled by Bloomberg.

Wal-Mart dropped 1.8 percent to $73.52. Chief Executive Officer Doug McMillon, who took the post earlier this month, is trying to revive Wal-Mart’s U.S. same-store sales growth after lower food-stamp payments, higher taxes and struggles to keep shelves fully stocked contributed to four straight quarterly declines. Chief Financial Officer Charles Holley said today that the economic trends, as well as higher health care costs, will continue to hurt the domestic business.

Apple Inc. fell 1.2 percent to $531.15. The iPhone maker’s market share in China declined to 7 percent in the fourth quarter from 9 percent a year earlier, market researcher Canalys said in an e-mailed statement. Samsung Electronics Co. maintained its lead over competitors as it increased its market share to 19 percent from 17 percent, the research firm said.

The S&P 500 today recouped most of yesterday’s 0.7 percent slide triggered after minutes from the Fed’s January meeting showed policy makers may soon change their guidance for interest rates as unemployment falls toward a threshold for considering an increase in borrowing costs. Several officials also said that, barring an “appreciable change in the economic outlook,” they would favor reducing the pace of bond purchases by $10 billion at each meeting.

The Fed decided at its January meeting to press on with a second cut of $10 billion to its bond buying. Three rounds of stimulus have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.

The International Monetary Fund said yesterday the global recovery is still weak and “significant downside risks remain,” citing increasing political tensions from Ukraine to Thailand, China’s slowdown and the Fed’s tapering of its stimulus as reasons for falling stocks and currencies in emerging markets.

Equity futures slumped before the open of exchanges amid continued turmoil in emerging markets. The MSCI Emerging Markets Index dropped 0.9 percent as at least seven people died in new clashes after a truce declared last night by Ukrainian President Viktor Yanukovych and opposition leaders foundered.

 

Have a wonderful evening everyone.

 

Be magnificent!

Guard your tongue, for it is highly dangerous;

unguarded words can cause terrible distress.

A single bad word can destroy a vast quantity of good.

A wound caused by fire will eventually heal;

but a wound caused by the tongue leaves a scar that never heals.

Valluvar, 1479-1531

As ever,

 

Carolann

 

I’ll play it first and tell you what it is later.

-Miles Davis, 1926-1991

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day in 1945, 30,000 marines landed on Iwo Jima.

Reading about the escalating violence in Kiev and Thailand, Syria, North Korea…will we ever learn???  Violence/ war is not the answer.  I visited a client yesterday at her home; she grew up in Dusseldorf and was there during the war.  She was showing me pictures of what the city looked like in 1945 – full of crumbling buildings.  Practically every building had bombed – it looked like a wasteland.

51 years ago – on February 19^th, 1963, feminist crusader Betty Friedan’s book, The Feminine Mystique is published.  Ditto about learning.

I came across this fantastic photo today – not since 1979 have the Great Lakes been almost entirely frozen over:

Reuters

Sightseers on frozen Lake Superior near Cornucopia, Wis., check out the icicles that formed at the mouth of a sea cave.

Photos of the day

Ted Ligety of the US clears a gate during the second run of the men’s alpine skiing giant slalom event at the Rosa Khutor Alpine Center, Wednesday, Feb. 19. Picture taken with multiple exposure function. Dominic Ebenbichler/Reuters

Norway’s Ingvild Flugstad Oestberg (l.) and Marit Bjoergen celebrate winning the gold after the women’s cross-country team sprint competitions, Wednesday, Feb. 19, in Krasnaya Polyana. Matthias Schrader/AP

Market Closes for February 19^th, 2014

Market Index	Close	Change
Dow Jones	16040.56	-89.84   -0.56%
S&P 500	1828.75	-12.01   -0.65%
NASDAQ	4237.953	-34.830   -0.82%
TSX	14119.73	+42.26
		+0.30%

International Markets

Market Index	Close	Change
NIKKEI	14766.53	-76.71
		-0.52%
HANG SENG	22664.52	+76.80
		+0.34%
SENSEX	20722.97	+88.76
		+0.43%
FTSE 100	6796.71	+0.28
		—

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.441	2.443
CND. 30 Year Bond	3.048	3.042
U.S. 10 Year Bond	2.7356	2.7069
U.S. 30 Year Bond	3.7083	3.6760

Currencies

BOC Close	Today	Previous
Canadian $	0.90290	0.91306
US $	1.10755	1.09522
Euro Rate 1 Euro=		Inverse
Canadian $	1.52125	0.65735
US $	1.37353	0.72804

Commodities

Gold	Close	Previous
London Gold Fix	1311.69	1322.05
Oil	Close	Previous
WTI Crude Future	103.31	102.43
BRENT	109.360	109.360

Market Commentary:

Canada
By Eric Lam and Callie Bost

Feb. 19 (Bloomberg) — Canadian stocks rose an 11th day, extending the longest advance in almost two decades, as banks gained and energy stocks rallied amid a takeover.

Canadian Natural Resources Ltd. jumped 4.9 percent for the biggest intraday gain since October after agreeing to buy Devon Energy Corp.’s oil and natural-gas fields. Crew Energy Inc. and Birchcliff Energy Ltd. climbed at least 2.8 percent as energy shares added 1.1 percent. Air Canada soared 4.8 percent, halting a four-day slide. Sherritt International Corp. plunged 12 percent as the metals miner cut its dividend.

The Standard & Poor’s/TSX Composite Index rose 79.38 points, or 0.6 percent, to 14,156.85 at 2:36 p.m. in Toronto.  The benchmark equity gauge has jumped 5 percent in 11 days for the longest rally since March 1995 and is trading at the highest level since 2011.

“Commodities didn’t have a very good year last year,”  John Kinsey, who helps manage about C$1 billion ($910 million) at Caldwell Securities Ltd. in Toronto, said in a telephone interview. “We’re looking for that to change this year, with Europe, Japan and China stimulating growth and the U.S. looking like it’s gaining some traction. All of that combined bodes well for commodities and it looks like that has been helping out recently.”

The S&P/TSX is 0.8 percent below its peak of 14,270.53 reached on April 5, 2011, the highest level since June 2008. The Canadian equity benchmark trades at 19.5 times earnings, its highest valuation since April 2011.

Gains in Canadian stocks this year have been led by gold and silver producers, after the materials-producers group plunged 31 percent in 2013. Detour Gold Corp. has soared more than 130 percent in 2014, while OceanaGold Corp. and Fortuna Silver Mines Inc. advanced about 60 percent. Materials producers retreated today as gold dropped from a three-month high and silver ended its longest winning streak in more than three decades.

Six of 10 main industries in the gauge advanced today. Industrials jumped 0.5 percent and financials gained 0.6 percent. Royal Bank of Canada jumped 1.3 percent to C$72.04 and Bank of Montreal rose 0.9 percent to C$72.33, for a 10th straight advance.

Canadian Natural added 4.9 percent to C$41.08, the highest level since February 2012. Canadian Natural will purchase the assets from Devon Energy in a deal worth C$3.13 billion ($2.86 billion).

The purchase will add production near Canadian Natural’s fields in western Canada, the company said today in a statement.  Canadian Natural expects production to climb about 7 percent this year, while Devon’s assets will provide about $75 million in cash.

West Texas Intermediate crude rose for a second day, touching the highest intraday level since Oct. 10, and natural gas futures surged past $6 per million British thermal units for the first time since 2010 as inclement weather in the U.S. stoked demand for heating fuels.

Crew Energy increased 3.3 percent to C$7.81, the highest level since November 2012. Birchcliff Energy climbed 2.8 percent to C$10.

Air Canada rose 4.8 percent to C$5.87. The stock had lost 28 percent in four days of losses through yesterday after the carrier forecast a drop in first-quarter profit on Feb. 12 because of a weaker Canadian dollar and “severe” winter weather. Air Canada was the best performer in the S&P/TSX last year, rising 323 percent.

Sherritt International lost 12 percent, its biggest drop since October 2009, to C$3.03. The metals producer reported adjusted losses per share of 13 Canadian cents during the fourth quarter, missing analysts’ estimates of 1 Canadian cent earnings per share for the period. Sherritt also cut its quarterly dividend to 1 Canadian cents from 4 Canadian cents and said it wouldn’t pursue its Sulawesi nickel project.

USA
By Nick Taborek

Feb. 19 (Bloomberg) — U.S. stocks fell, after the Standard & Poor’s 500 Index rose to within one point of a record close, as the International Monetary Fund warned of risks to global growth and Federal Reserve indicated stimulus cuts will likely continue.

U.S. Steel Corp. lost 7 percent after the Department of Commerce rejected its claim that South Korea is selling steel tubing in the U.S. below cost. JPMorgan Chase & Co. and Bank of America Corp. lost at least 1.6 percent as financial shares led declines. Nabors Industries Ltd., CF Industries Holdings Inc. and Garmin Ltd. jumped at least 5 percent after earnings beat analysts’ estimates. Signet Jewelers Ltd. added 18 percent after agreeing to buy Zale Corp. for $21 a share.

The S&P 500 slipped 0.7 percent to 1,828.75 at 4 p.m. in New York after climbing as high as 1,847.5. The Dow Jones Industrial Average decreased 89.84 points, or 0.6 percent, to 16,040.56. About 6.9 billion shares changed hands on U.S. exchanges, 8.9 percent above the three-month average.

“So far tapering seems to be orderly and they seem to be committed to it,” Erik Davidson, the San Francisco-based deputy chief investment officer for Wells Fargo Private Bank, which oversees $170 billion, said by phone. “While it is data- dependent, it is long-term data dependent, certainly not short- term-noise data-dependent. Investors should recognize that this is the beginning of a very, very, very long process.”

Investors had dismissed weaker-than-forecast economic data over the past two weeks, helping stocks recover from their worst start of a year since 2010. The S&P 500 had slumped as much as 5.8 percent since reaching a record on Jan. 15 as concern over Fed tapering fueled an exodus in emerging markets. The index has since rebounded, leaving it down less than 1.1 percent in 2014.

U.S. equities rose last week as Fed Chair Janet Yellen pledged to maintain her predecessor’s policies by scaling back stimulus in “measured steps.” Economic growth has strengthened and there is “broad improvement” in the labor market, she said, adding that only a notable change in the outlook for the economy would prompt the central bank to slow the pace of tapering.

“Several” Fed officials said that in “the absence of an appreciable change in the economic outlook, there should be a clear presumption in favor of continuing to reduce the pace” of the Fed’s bond purchases at each meeting, according to minutes released today.

The Fed decided at its January meeting to press on with a second cut of $10 billion to its bond buying. Three rounds of stimulus have helped push the S&P 500 up as much as 173 percent from a 12-year low in 2009.

Homebuilders declined today, led by losses of at least 1.9 percent in MDC Holdings Inc. and M/I Homes Inc., after a report showed the pace of U.S. home construction declined more than forecast in January, indicating an unusually harsh winter probably played a role in slowing projects.

“The weak data, that’s being discounted simply because of the harsh weather, which is understandable,” Bruce Bittles, chief investment strategist at RW Baird & Co., said by telephone from Sarasota, Florida. His firm oversees $120 billion. “I think we won’t know anything about the state of the economy until March or maybe even April.”

The S&P 500 trades at almost 17 times reported operating earnings, near the highest level since 2010, according to data compiled by Bloomberg. The ratio increased about 20 percent in 2013, the biggest jump in four years, while corporate profits rose 5.6 percent. The index rallied 30 percent last year.

The IMF said today the global recovery is still weak and “significant downside risks remain,” citing increasing political tensions from Ukraine to Thailand, China’s slowdown and the Fed’s tapering of its stimulus as reasons for falling stocks and currencies in emerging markets.

Clashes between Ukraine police and anti-government activists killed at least 25 people and left hundreds injured in the bloodiest episode of the country’s three-month standoff. Violence in Bangkok killed five people.

“Capital outflows, higher interest rates, and sharp currency depreciation in emerging economies remain a key concern,” according to the IMF report prepared ahead of the Group of 20 meeting in Sydney over the weekend. “A new risk stems from very low inflation in the euro area, where long-term inflation expectations might drift down, raising deflation risks in the event of a serious adverse shock to activity.”

Earnings have beaten analysts’ estimates at 75 percent of the 416 companies in the S&P 500 that have released results so far in the reporting season, according to data compiled by Bloomberg. Sales have topped projections at 64 percent.

Hedge-fund manager David Einhorn cautioned against betting on the extension of a U.S. stock-market rally that he said was fueled by conditions that are difficult to sustain.

“In 2013, the market rewarded many companies for beating earnings after they had lowered guidance,” Einhorn said today on a conference call discussing results at Greenlight Capital Re Ltd., the Cayman Islands-based reinsurer where he is chairman. “This trend is not likely to continue indefinitely.”

Eight of 10 main industries in the S&P 500 fell today, as financial firms lost 1.3 percent to lead declines. JPMorgan Chase & Co. slid 2.1 percent to $57.26, snapping a 10-day rally, and Bank of America Corp. dropped 1.6 percent to $16.20.

U.S. Steel Corp. lost 7 percent to $24.86 for the steepest drop in the S&P 500. The nation’s largest producer of the metal by volume fell after the Commerce Department left South Korea off a preliminary list of countries whose imports of steel tubing used by oil and gas drillers would be charged anti- dumping duties.

Eli Lilly rallied 5.1 percent to $58.09. The pharmaceutical company said its Ramucirumab drug improved survival in a study of patients with non-small cell lung cancer. The company plans to submit its first application for the drug to regulators this year.

Garmin jumped 9.6 percent to $51.68. The maker of navigation systems said gains in its fitness, marine and aviation segments will help push revenue to between $2.6 billion and $2.7 billion this year. Analysts had predicted sales of $2.59 billion.

Nabors Industries Ltd. surged 13 percent to $21.15. The oil and gas drilling contractor reported fourth-quarter operating revenue above analysts’ estimates.

CF Industries rallied 5.1 percent to $237.62 after the maker of chemicals used in fertilizer said fourth-quarter sales exceeded analyst estimates.

Signet Jewelers rallied 18 percent to $93.65. The operator of the Kay and Jared brands agreed to buy Zale for about $1.4 billion, expanding its leadership as the largest jewelry chain in the U.S. Zale surged 40 percent to $20.92.

 

Have a wonderful evening everyone.

 

Be magnificent!

Violence is not merely killing another.

It is violence when we use a sharp word,

when we make a gesture to brush away a person,

when we obey because there is fear.

So violence isn’t merely organized butchery in the name of God,

in the name of society, or country.

Violence is much more subtle, much deeper,

and we are inquiring into the very depths of violence.

Krishnamurti,1895-1986.

As ever,

 

Carolann

 

Wisdom is the reward you get for a lifetime

of listening when you’d have preferred to talk.

-Doug Larson, 1926-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Planet Pluto was discovered on this day in 1930.

Also on this day in 1885,

129 years ago

Mark Twain‘s Adventures of Huckleberry Finn is published in the United States.

Photos of the day

Canada’s Travis Gerrits jumps during the men’s freestyle skiing aerials qualification round, Monday, Feb.17. Mike Blake/Reuters

(L. to r.) United States’ Trevor Jacob, Spain’s Lucas Eguibar, Canada’s Kevin Hill, United States’ Alex Deibold, and Russia’s Nikolay Olyunin compete during the men’s snowboard cross semifinal at the Rosa Khutor Extreme Park, Tuesday, Feb. 18. Jae C. Hong/AP

Market Closes for February 18^th, 2014

Market  Index	Close	Change
Dow  Jones	16130.40	-23.99    -0.15%
S&P 500	1840.76	+2.13    +0.12%
NASDAQ	4272.785	+28.760    +0.68%
TSX	14077.47	+22.71
		+0.16%

International Markets

Market  Index	Close	Change
NIKKEI	14843.24	+450.13
		+3.13%
HANG  SENG	22587.72	+51.78
		+0.23%
SENSEX	20634.21	+170.15
		+0.83%
FTSE 100	6796.43	+60.43
		+0.90%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.443	2.465
CND.  30 Year Bond	3.042	3.049
U.S.   10 Year Bond	2.7069	2.7410
U.S.  30 Year Bond	3.6760	3.6917

Currencies

BOC Close	Today	Previous
Canadian $	0.91306	0.91029
US  $	1.09522	1.09855
Euro Rate  1 Euro=		Inverse
Canadian  $	1.50692	0.66360
US  $	1.37591	0.72679

Commodities

Gold	Close	Previous
London Gold  Fix	1322.05	1318.40
Oil	Close	Previous
WTI Crude Future	102.43	100.35
BRENT	109.360	109.360

Market Commentary:

Canada
By Eric Lam

Feb. 18 (Bloomberg) — Canadian stocks rose a 10th day, the longest streak in almost two decades, as BlackBerry Ltd. snapped four days of losses after an analyst upgrade.

BlackBerry, the smartphone maker, increased 3.2 percent after analysts with FBR & Co. raised the stock’s rating to market perform as the company shifts into different businesses.

Nevsun Resources Ltd. jumped 5.7 percent after raising its estimate of copper resources at a mine in Eritrea. Just Energy Group Inc., which sells natural gas to residences, added 6.5 percent as the commodity’s price surged to a three-week high in New York amid winter storms across the U.S.

The Standard & Poor’s/TSX Composite Index rose 22.71 points, or 0.2 percent, to 14,077.47 at 4 p.m. in Toronto. The benchmark equity gauge has jumped 4.4 percent in 10 days for the longest rally since March 1995 and is trading at its highest level since 2011. Canadian markets were closed yesterday for the Family Day holiday in Toronto.

“If the market goes up too quickly we may see a correction, but if the market continues to grind up we won’t have one,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.7 billion ($4.3 billion). “As we get closer to bank earnings season, people are feeling good about the economy and bidding them higher.”

Six of 10 industries in the S&P/TSX advanced on trading volume 17 percent higher than the 30-day average.

A gauge of health-care stocks rose the most after Valeant Pharmaceuticals International Inc. jumped 4.6 percent to a record C$160.38. Leerink Partners LLC said it was unlikely Valeant would bid for Forest Laboratories Inc. after Actavis Plc, the world’s second-largest generic-drug maker by market value, agreed to buy Forest for about $25 billion.

BlackBerry added 3.2 percent to C$10.37, the first gain in five days. Analyst Scott Thompson at FBR raised his 12-month price target to $10 from $6.75. The company’s management, now led by John Chen, is shifting away from the competitive smartphone business and into other areas including mobile device management and BlackBerry Messenger.

Just Energy Group added 6.5 percent to C$8.84, the highest in a year, and Atlantic Power Corp., which owns power generation projects, surged 7.4 percent to C$3.05 to pace gains among utilities stocks. The industry added 0.6 percent as a group today, as storms and frigid weather across Canada and the U.S. have boosted heating demand and kept families indoors.

Natural gas futures jumped 6.5 percent and are up 31 percent this year, as the inclement weather has cut stockpiles to the lowest in 10 years.

Nevsun Resources surged 5.7 percent to C$4.64 after increasing its total indicated resource estimate for the combined operations at its Bisha mine in Eritrea by 29 percent. This includes an additional 247 million pounds of copper and 47 million pounds of zinc.

Air Canada, the nation’s largest airline, dropped 2.4 percent to C$5.60 for a fourth day of declines since reporting worse-than-projected earnings on Feb. 12. The stock, the best performer in 2013, has slumped 28 percent during that time.

“We are currently at a crossroads” with short-term data suggesting a pullback in the near future for both the S&P/TSX and S&P 500, said Javed Mirza, a technical analyst at RBC Capital Markets, in a report to clients yesterday. The U.S. equities benchmark fluctuated today near an all-time high.

If the Canadian gauge falls below the early February lows of 13,450, then it is likely a longer correction is developing, Mirza said. A “sideways move” in price in the next one to three weeks would instead suggest a rally over the next one to two quarters, the analyst wrote.

USA
By Nick Taborek and Corinne Gretler

Feb. 18 (Bloomberg) — Most U.S. stocks rose, with the Standard & Poor’s 500 Index climbing to within eight points of a record, as a $25 billion deal to acquire Forest Laboratories Inc. offset slower growth in New York-area manufacturing.

Forest Laboratories surged 28 percent after Actavis Plc agreed to buy the maker of the Alzheimer’s drug Namenda. Coca- Cola Co. dropped 3.8 percent as fourth-quarter profit fell. D.R. Horton Inc. and PulteGroup Inc. lost more than 1.2 percent as a gauge of homebuilder confidence declined by the most on record in February amid bad weather that hurt sales.

The S&P 500 added 0.1 percent to 1,840.76 at 4 p.m. in New York, near its record close of 1,848.38 set last month. The Dow Jones Industrial Average fell 23.99 points, or 0.2 percent, to 16,130.40. About 6.3 billion shares changed hands on U.S. exchanges, in line with the three-month average. The U.S. market was closed yesterday for the Presidents’ Day holiday.

“Weaker economic numbers have been shrugged off,” Eric Green, director of research and fund manager at Penn Capital Management, said by phone. The Philadelphia-based firm oversees about $7 billion. “It seems like the consensus view is that weather is a huge issue in the numbers. The outlook looks pretty benign right now. We can probably reach new highs in the near term in the equity markets.”

The S&P 500 finished its best week of the year within 0.5 percent of its all-time high on Feb. 14, amid better-than- forecast earnings and continued confidence in the strength of the world’s biggest economy.

Equities rose last week as Federal Reserve Chair Janet Yellen pledged to maintain her predecessor’s policies by scaling back stimulus in “measured steps.” Economic growth has strengthened and there is “broad improvement” in the labor market, she said, adding that only a “notable change in the outlook” for the economy would prompt the central bank to slow the pace of tapering.

The Fed will release minutes from its Jan. 28-29 meeting tomorrow, giving investors details on central bank policy makers’ decision to trim bond purchases by $10 billion for a second time. Three rounds of stimulus have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009. Investors have dismissed weaker-than-forecast economic data including January’s payrolls over the past two weeks, helping stocks recover from their worst start of a year since 2010. The S&P 500 had slumped as much as 5.8 percent since reaching a record on Jan. 15 as concern over Fed tapering fueled an exodus in emerging markets. The index has since climbed 5.7 percent, paring its 2014 loss to 0.4 percent.

Data today showed manufacturing in New York, northern New Jersey and southern Connecticut slowed this month. The Fed Bank of New York’s general economic index fell to 4.48 in February from 12.5 in January. Economists in a Bloomberg News survey predicted the index would decline to 8.5. Positive readings mean that activity expanded.

While the Fed has started slowing the pace of its bond buying, the Bank of Japan boosted lending programs today. The People’s Bank of China sold repurchase contracts for the first time since June, draining funds from the banking system.

“It seems as if central banks are driving markets again in the short run,” Jean-Paul Jeckelmann, who helps manage $1.5 billion in equities as chief investment officer of Banque Bonhote & Cie. in Neuchatel, Switzerland, said in an interview. “On one side, the BOJ increased the size of lending facilities, on the other the PBOC drained liquidity from the money markets. The story around central banks is far from over.”

A total of 12 S&P 500 companies were due to report earnings today. About 74 percent of those that have posted results for the fourth quarter have beaten estimates for profit and 64 percent have exceeded sales projections, according to data compiled by Bloomberg. Companies in the gauge are exceeding analyst revenue forecasts by the most since 2012, a sign rising consumer demand is fueling economic expansion.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, climbed 2.2 percent to 13.87 today, its first increase in seven sessions. The VIX has gained 1.1 percent this year.

Seven out of 10 main groups in the S&P 500 rose, as health- care shares advanced 0.9 percent for the biggest increase.

Forest Labs jumped 28 percent to $91.04. Actavis, the world’s second-largest generic-drug maker by market value, is buying Forest for about $25 billion in a deal that will transform it into a developer of brand-name drugs. Actavis rallied 5 percent to $201.47.

The deal is a win for billionaire investor Carl Icahn, Forest’s second-largest holder who gained seats on the company’s board in 2012 and 2013, and pushed for a sale. It also comes after Comcast Corp. last week announced the year’s biggest deal, a $45 billion agreement to acquire Time Warner Cable Inc.

Other pharmaceutical companies also rallied today. Drug maker Mylan Inc. climbed 4.8 percent to a record $48.30, and Regeneron Pharmaceuticals Inc. added 2.7 percent to $332.78, also an all-time high.

Zynga Inc. increased 5.8 percent to $5.15. The social gaming company reached a 19-month high after King Digital Entertainment Plc, the maker of popular smartphone games including “Candy Crush Saga,” filed to raise $500 million in an initial public offering in the U.S. today. The amount King Digital is seeking to raise is a placeholder used to calculate fees and may change.

J.M. Smucker Co. rallied 3.8 percent to $95.31 after being upgraded to overweight at Stephens Inc. The jam maker slumped 3.5 percent on Feb. 14 after forecasting a bigger sales decline than analysts had anticipated.

Coca-Cola fell 3.8 percent to $37.47 for the steepest drop in the Dow and its biggest loss since August 2011. Chief Executive Officer Muhtar Kent, facing slowing growth in emerging markets, said the company will pare supply and data-management costs and overhaul marketing programs to generate $1 billion in savings by 2016. Global sales volume rose 2 percent for the year and 1 percent for the quarter, less than the 4 percent annual and 3 percent quarterly growth reported a year ago.

Kansas City Southern lost 4.5 percent to $91.67. JPMorgan Chase & Co. cut the railroad operator to neutral from overweight, citing risks from proposed legislation in Mexico that would open access to third parties and require rates in some private contracts to be published.

An S&P index of homebuilders slid 1 percent, with 10 of its 11 members declining. The National Association of Home Builders/Wells Fargo sentiment gauge slumped to 46 this month from 56 in January. Snowstorms last week from the South to the Northeast helped reduce homebuyer traffic to its slowest pace since April.

Purchases and sales expectations also declined as builder confidence deteriorated from coast to coast, signaling construction will contribute less to economic growth at the start of 2014.

D.R. Horton lost 1.3 percent to $23.31 and PulteGroup slid 1.2 percent to $19.79.

Waste Management Inc. slid 4.5 percent to $41.72. The garbage hauling company reported fourth-quarter profit that missed estimates and forecast earnings for the year below the average analyst projection.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Being human,

I feel profoundly the necessity of putting an end to violence,

and I will make sure to put an end to it in myself.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Humor is mankind’s greatest blessing.

-Mark Twain, 1835-1910

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Happy Valentine’s Day!

So, it was an interesting evening with economist Nouriel Roubini last night.  One of the more cogent insights was his reflection on the 100^th anniversary of the onset of the First World War this year – 1914-2014.  He feels that there is a comparison to be made between the tensions that existed within Europe then which led to the outbreak of war and the tensions that are on the rise between China and Japan right now.  Both countries have boats patrolling the disputed waterways between the islands both claim and all it would take for an escalation is for one side to make some stupid mistake which can easily happen under such tensions.

Another point is the spectre of declining job creation as a result of ever more impressive technology whereby more workers are replaced by robots and software.

Photos of the day

China’s Cheng Shuang performs a jump during the women’s freestyle skiing aerials qualification round in Rosa Khutor, February 14. Lucas Jackson/Reuters

A person climbs on the Bolshoi Dome, one of the ice hockey venues, before the medals ceremony, February 14. /Marko Djurica/Reuters

Market Closes for February 14^th, 2014

Market Index	Close	Change
Dow Jones	16154.45	+126.86   +0.79%
S&P 500	1838.10	+8.27   +0.45%
NASDAQ	4244.027	+3.355   +0.08%
TSX	14058.86	+57.21
		+0.41%

International Markets

Market Index	Close	Change
NIKKEI	14313.03	-221.71
		-1.53%
HANG SENG	22298.41	+132.88
		+0.60%
SENSEX	20366.82	+173.47
		+0.86%
FTSE 100	6663.62	+4.20
		+0.06%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.465	2.457
CND. 30 Year Bond	3.049	3.049
U.S. 10 Year Bond	2.7410	2.7338
U.S. 30 Year Bond	3.6917	3.6837

Currencies

BOC Close	Today	Previous
Canadian $	0.91029	0.91068
US $	1.09855	1.09808
Euro Rate 1 Euro=		Inverse
Canadian $	1.50431	0.66476
US $	1.36936	0.73027

Commodities

Gold	Close	Previous
London Gold Fix	1318.40	1302.52
Oil	Close	Previous
WTI Crude Future	100.30	100.35
BRENT	109.360	109.360

Market Commentary:
Canada
By Eric Lam

Feb. 14 (Bloomberg) — Canadian stocks rose a ninth day, the longest streak in a decade, as gains in gold companies offset weaker-than-forecast data on U.S. and Canadian manufacturing.

OceanaGold Corp. and Detour Gold Corp. rallied at least 4 percent as gold mining companies led gains in the Standard & Poor’s/TSX Composite Index. Just Energy Group Inc. jumped 11 percent after reporting third-quarter earnings ahead of estimates as it added customers. Silvercorp Metals Inc. plunged 13 percent after reducing its dividend.

The S&P/TSX rose 53.11 points, or 0.4 percent, to 14,054.76 at 4 p.m. in Toronto. The benchmark equity gauge has jumped 4.2 percent in nine days for the longest rally since November 2003 and closed at its highest level since April 2011. Canadian markets will be closed on Feb. 17 for the Family Day holiday in Toronto.

“It’s gold, gold, gold,” said Philip Petursson, director of institutional equities at Manulife Asset Management Ltd. in Toronto. The firm manages about C$265 billion ($241 billion).

“Gold has been the dominant driver of performance on the TSX and it’s kind of surprised me it’s done as well as it has. Lump in the other precious metals in there too, and it’s been reflected in the producers the past few weeks.”

Canadian factory sales unexpectedly declined 0.9 percent to C$49.9 billion in December, led by slumping sales in aerospace products and motor vehicles. The median estimate of 17 economists was for little change to the measure, according to data compiled by Bloomberg.

Federal Reserve figures showed U.S. factory production slumped 0.8 percent in January, the most since May 2009, amid severe winter weather conditions. Median estimates had called for a 0.1 percent advance.

Detour Gold climbed 5.7 percent to C$9.89, the highest since September, and OceanaGold jumped 4 percent to C$2.59 as raw-materials stocks rallied 1.3 percent as a group, the most in the S&P/TSX. Eight of 10 industries in the benchmark Canadian equity gauge advanced on trading volume 1.7 percent higher than the 30-day average.

Detour Gold has been the best-performing stock in the S&P/TSX in 2014 with a 141 percent gain, after being the worst performer a year ago.

All but two of 23 members of the S&P/TSX Gold Index advanced as the industry measure rallied 2 percent for the highest close since August. Gold climbed 1.4 percent to $1,318.60 an ounce in New York and rallied 4.4 percent in five days, the biggest weekly advance since August.

First Majestic Silver Corp. increased 4.5 percent to C$13.38 and Silver Standard Resources Inc. gained 4.5 percent to C$11.35 as silver futures rallied 5 percent in New York. Silver prices have risen for 10 days, the longest rally since 2008, and are up 11 percent this year.

Silvercorp Metals plunged 13 percent to C$3.16, the biggest drop since September 2011, after cutting its quarterly dividend to 0.5 Canadian cents a share from 2.5 cents as net income plunged 58 percent in the third quarter.

Just Energy Group, which sells electricity and natural gas to residences in Canada and the U.S., soared 11 percent to C$8.30. The company’s subscriber base rose to 4.6 million in the third quarter, a 7 percent increase from year-ago numbers.

Air Canada, the nation’s largest airline, dropped 3.4 percent to C$5.74 for a third day of losses since forecasting a drop in first-quarter profit on Feb. 12. The stock closed at the lowest level since November.

US
By Callie Bost and Jeff Sutherland

Feb. 14 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to within 10 points of its all-time high, amid better-than-forecast earnings and continued confidence in the strength of the world’s largest economy.

Occidental Petroleum Corp. gained 3.8 percent after saying it will split its operations in California as one of the final steps of a breakup plan. Cliffs Natural Resources Inc. and Campbell Soup Co. added more than 5 percent as earnings beat forecasts. Men’s Wearhouse Inc. tumbled 5.3 percent after its acquisition target, Jos. A. Bank Clothiers Inc., proposed to buy the Eddie Bauer brand.

The S&P 500 rose 0.5 percent to 1,838.63 at 4 p.m. in New York, capping its largest weekly gain of the year. The Dow Jones Industrial Average added 126.80 points, or 0.8 percent, to 16,154.39. The Nasdaq Composite Index climbed 0.1 percent to the highest level since 2000. About 6 billion shares changed hands on U.S. exchanges, the lowest volume since Jan. 3.

“I think the market is still believing that the economy is moving in the right direction,” Robert Pavlik, chief market strategist at Banyan Partners LLC, which manages $4.5 billion, said in a phone interview. “Folks are looking to buy on the dips. The pullback is still fresh and they’re looking for opportunities.”

The S&P 500 has jumped 5.6 percent from a three-month low on Feb. 3 amid speculation economic growth is strong enough to withstand further cuts to Federal Reserve monetary stimulus. The index reached a closing high of 1,848.38 on Jan. 15, before dropping 5.8 percent on signs of slowing growth in China and a rout in emerging-market currencies. The Dow remains 2.5 percent below its record reached Dec. 31.

Equities rallied for a second straight week, with the S&P 500 gaining 2.3 percent over the five days, as Fed Chair Janet Yellen said economic growth has strengthened and there is “broad improvement” in the labor market. She repeated the Fed’s outlook for further stimulus reductions in “measured steps,” adding that only a “notable change in the outlook” for the economy would prompt policy makers to slow the pace.

Federal Open Market Committee officials have twice reduced the size of the monthly asset-purchase program, lowering bond buying to $65 billion in February from $85 billion last year. Three rounds of stimulus under previous Chairman Ben S. Bernanke have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.

Data today showed U.S. industrial output unexpectedly declined in January by the most since May 2009, adding to evidence severe winter weather weighed on the economy. The 0.8 percent decrease at manufacturers followed a revised 0.3 percent gain the prior month that was weaker than initially reported, figures from the Fed showed. The median forecast in a Bloomberg survey of economists called for a 0.1 percent advance.

Consumer confidence in the U.S. was stronger than projected in February as Americans grew more upbeat about the economy. The Thomson Reuters/University of Michigan preliminary index of U.S. consumer sentiment held at 81.2 this month. The median estimate in a Bloomberg survey of 74 economists called for a decline to 80.2.

“The weather is so horrible everywhere, much of the data could be very distorted,” Bruce Bittles, chief investment strategist at RW Baird & Co., said by telephone from Sarasota, Florida. His firm oversees $120 billion. “The Fed is going to wait until the weather clears and until we get some more numbers in March and April to consider the data. The picture will start to clear on how great or how poor the economy is.”

Equities have also climbed this week amid better-than- forecast corporate earnings. Seven S&P 500-listed companies reported earnings today. Seventy-five percent of the 400 companies that have posted results this season beat analysts’ estimates for profit and 64 percent exceeded sales projections, data compiled by Bloomberg show.

Earnings at S&P 500 companies rose by 8.4 percent in the fourth quarter of 2013 and sales by 2.9 percent, according to analyst estimates compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, fell 4 percent to 13.57. The gauge has fallen for seven straight days, the longest stretch since July, erasing its gain for the year.

Occidental Petroleum gained 3.8 percent to $95.76. The largest oil producer in the continental U.S. will split its operations in California into a separate publicly traded company. Occidental has embraced asset sales from North Dakota to the Persian Gulf to focus on its most profitable operations after lackluster returns in 2011 and 2012.

Cliffs Natural rose 5.8 percent to $23.16. The U.S. iron miner being targeted by an activist shareholder reported earnings that beat analysts’ estimates. The board also appointed Gary Halverson, former president and chief operating officer, as chief executive officer.

Casablanca Capital LP, the company’s fourth-largest shareholder, has pressed Cliffs to spin off foreign assets and double its dividends. The shares have rallied 20 percent this month.

Campbell Soup climbed 5 percent to $43.01 as second-quarter adjusted earnings of 76 cents a share topped analysts’ forecasts for 73 cents as U.S. soup sales increased 5 percent. The company also reaffirmed it full-year estimates.

Marijuana stocks rallied today after the Treasury Department said it would allow banks to accept accounts from those businesses, letting an industry that is illegal in a majority of U.S. states open business checking accounts and accept credit cards.

Tranzbyte Corp., which sells pot in Colorado, jumped 29 percent to 3 cents. Tranzbyte was the most-traded stock among companies with a market value of at least $50 million, according to data compiled by Bloomberg. Growlife Inc. climbed 8.6 percent to 38 cents and Medical Marijuana Inc. rose 6.8 percent to 32 cents.

Men’s Warehouse tumbled 5.3 percent to $44.07. Jos. A. Bank, which has been resisting a merger with Men’s Wearhouse, said it will buy the Eddie Bauer brand for an enterprise value of $825 million. Jos. A. Bank added 0.4 percent to $55.12.

Weight Watchers sank 28 percent to $22.10, the lowest level since April 2009. Fourth-quarter adjusted earnings per share was 58 cents, missing the 61 cents estimated by analysts. Full-year earnings will be between $1.30 and $1.60 per share, the weight- control program provider said.

GNC Holdings Inc. plunged 15 percent to $44.72. The company expects 2014 adjusted earnings to be between $3.18 and $3.24 per share, compared with an estimate by analysts of $3.46. Fourth- quarter earnings and sales also missed analysts’ targets.

Agilent Technologies Inc. fell 8 percent to $55.25. The company lowered its full-year forecast for adjusted earnings to between $2.96 and $3.16, from its earlier projection for $3.03 to $3.33.

VF Corp. slipped 5.1 percent to $56.85 after the apparel manufacturer reported fourth-quarter earnings per share that fell short of forecasts. VF has retreated 8.8 percent this year.

J.M. Smucker Co. dropped 3.5 percent to $91.81, the lowest level in almost a year. The peanut butter and jelly maker cut its earnings and sales forecasts for the current fiscal year after third-quarter results missed analysts’ estimates.

 

Have  a wonderful weekend everyone.

 

Be magnificent!

What is then worth having?

Mukti, freedom.

Swami Vivekananda, 1863-1902

 

As ever,

 

Carolann

Romance is everything.

-Gertrude Stein, 1874-1946

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day in 1997, the Dow Jones Industrial Average pierced 7000 for the first time ever. The blue-chip average finished that day at 7022.44. –WSJ.

Just in time for Valentine’s Day:

Facebook ranked 50 major U.S. cities to see where people might have the best odds for turning their status from “single” to “in a relationship.” If you’re serious about looking for a relationship, don’t move to San Francisco, Washington, D.C., or New York. They were on the top of the list for the least likely cities to find love. The most romantic city, with its snow-capped Rocky Mountain backdrop, growing downtown bar scene and college-town setting, is Colorado Springs. –Gerald
Baker, Editor in Chief, WSJ.

I am off to a dinner meeting with celebrated American economist Nouriel Roubini tonight.  I’ll have some news on his perspective of the current state of affairs for you tomorrow.

Photos of the day

In this image made with a multiple exposure, Joss Christensen of the United States competes in the men’s ski slopestyle qualifying at the Rosa Khutor Extreme Park, Thursday, Feb. 13. Christensen went on to win the gold medal in the event. Gero Breloer/AP

A drone camera captures Australia’s Russell Henshaw jumping during the men’s ski slopestyle final at the Rosa Khutor Extreme Park, Thursday, Feb. 13. Sergei Grits/AP

Market Closes for February 13^th, 2014

Market Index	Close	Change
Dow Jones	16027.59	+63.65   +0.40%
S&P 500	1828.88	+9.62   +0.53%
NASDAQ	4240.672	+39.384   +0.94%
TSX	13997.94	+97.45
		+0.70%

International Markets

Market Index	Close	Change
NIKKEI	14534.74	-265.32
		-1.79%
HANG SENG	22165.53	-120.26
		-0.54%
SENSEX	20193.35	-255.14
		-1.25%
FTSE 100	6659.42	-15.61
		-0.23%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.457	2.485
CND. 30 Year Bond	3.049	3.070
U.S. 10 Year Bond	2.7338	2.7608
U.S. 30 Year Bond	3.6837	3.7201

Currencies

BOC Close	Today	Previous
Canadian $	0.91068	0.90929
US $	1.09808	1.09975
Euro Rate 1 Euro=		Inverse
Canadian $	1.50210	0.66573
US $	1.36793	0.73104

Commodities

Gold	Close	Previous
London Gold Fix	1302.52	1291.55
Oil	Close	Previous
WTI Crude Future	100.35	100.37
BRENT	109.360	109.360

Market Commentary:
Canada
By Eric Lam

Feb. 13 (Bloomberg) — Canadian stocks rallied, with the benchmark index closing above 14,000 for the first time in almost three years, as financial shares rose on improving earnings and mining companies gained as gold topped $1,300 an ounce.

Barrick Gold Corp. and Goldcorp Inc. added at least 3.6 percent after reporting fourth-quarter earnings. Canadian Tire Corp. climbed 3.1 percent as earnings topped estimates and same- store sales increased. Teck Resources Ltd. sank 6.7 percent as results were hampered by declining coal and copper prices.

Bombardier slumped 8.9 percent after cutting its profit targets.

Nautilus Minerals Inc. dropped 10 percent as the undersea metals explorer terminated its pact with Papua New Guinea.

The Standard & Poor’s/TSX Composite Index rose 101.16 points, or 0.7 percent, to 14,001.65 at 4 p.m. in Toronto to close above the 14,000 level for the first time since April 2011. The benchmark index has jumped 3.8 percent in eight straight days of gains, the longest rally since September 2010.

“It has to do with expectations, for instance with Barrick the numbers were negative but expectations weren’t that high so as a result the stock moves higher,” said Bruce Campbell, fund manager with StoneCastle Investment Management Inc. in Kelowna, British Columbia. He manages about C$100 million ($90.9 million) with the firm. “In some cases stocks are starting off weaker and then moving up after some panic dumping. The market probably eases up barring something more macro that scares everyone.”

Canadian shares fell earlier as U.S. data showed retail sales declined the most since June 2012 in January, sliding 0.4 percent as poor weather kept customers away from auto showrooms and stores. Jobless claims unexpectedly increased to 339,000 last week, from 331,000 in the prior period.

Barrick Gold, the world’s largest gold producer by sales, added 6.1 percent to C$22.08 and Goldcorp rose 3.6 percent to C$29.64.

Barrick reported a net loss of $2.83 billion, ahead of a loss of $3.01 billion a year earlier. Goldcorp’s average cost to produce and sell gold, adjusted for the sale of silver and other metals, was $467 an ounce, compared with the $484 average of five estimates compiled by Bloomberg.

B2Gold Corp. increased 6.1 percent to C$2.96 and Iamgold Corp. climbed 4.2 percent to C$4.43 as the S&P/TSX Gold Index rallied 4 percent. The price of gold increased 0.4 percent to $1,300.10 an ounce in New York for a seventh straight session, the longest rally since 2011.

Telus Corp. rose 0.7 percent to C$37.33 after adding more than expected wireless customers in the fourth quarter. The Vancouver-based wireless carrier reported a 3.4 percent increase in sales.

Home Capital Group Inc., a mortgage and credit card services company, soared 8.6 percent to C$83.13, the most since 2009. The company said 2014 earnings will rise 13 percent to 18 percent and boosted its quarterly dividend to 32 Canadian cents a share from 28 cents.

Canadian Tire jumped 3.1 percent to C$97.69, the most since August, as consumer discretionary stocks advanced 0.5 percent as a group. Nine of 10 industries in the gauge rose on trading volume 62 percent higher than the 30-day average.

Canadian Tire, the home hardware and sports equipment retailer, reported fourth-quarter earnings of C$2.35 a share, ahead of analysts’ estimates of C$2.26. Same-store sales, a measure of performance among locations open for at least a year, rose 4 percent in Canadian Tire stores in the quarter.

Teck Resources slumped 6.7 percent to C$26, the most since June. Sales declined to C$2.38 billion from C$2.73 billion a year ago as copper prices declined 10 percent in the fourth quarter compared with a year earlier.

Nautilus Minerals plunged 10 percent to 22.5 Canadian cents after terminating its agreement with Papua New Guinea as the country has not completed purchase of its 30 percent stake in the offshore Solwara 1 project. The company will seek damages.

Bombardier slumped 8.9 percent to C$3.68, the lowest since December 2012, after it lowered its projection for earnings before interest and taxes in its planemaking business to 5 percent of revenue from 6 percent. Earnings in its rail division will also fall short of targets.

US

By Callie Bost and Nikolaj Gammeltoft

Feb. 13 (Bloomberg) — U.S. stocks rose, after benchmark indexes ended a four-day rally yesterday, as better-than- forecast earnings and a $45.2 billion takeover of Time Warner Cable Inc. overshadowed a drop in retail sales.

Time Warner Cable jumped 7 percent as Comcast Corp. agreed to acquire the cable company. CBS Corp. and Goodyear Tire & Rubber Co. gained at least 4.5 percent on optimism about earnings. Applied Materials Inc., the largest supplier of semiconductor-manufacturing equipment, climbed 5.4 percent after predicting rising sales amid customer upgrades. Cisco Systems Inc. dropped 2.5 percent after forecasting quarterly revenue below some estimates.

The Standard & Poor’s 500 Index rose 0.6 percent to1,829.83 at 4 p.m. in New York, after falling as much as 0.6 percent earlier. The index reversed losses after dropping below its average price over the past 50 days. The Dow Jones Industrial Average added 63.65 points, or 0.4 percent, to 16,027.59. The Nasdaq-100 Index rallied 0.9 percent to the highest level since 2000. About 6.6 billion shares changed hands on U.S. exchanges, 4 percent higher than the three-month average at the close.

“People want to buy the dips now because the market made a bottom after Feb. 3,” Donald Selkin, who helps manage about $3 billion as chief market strategist at National Securities Corp.in New York, said in a phone interview. “We got very oversold and now it’s believed that the trend is turning back up. People feel like we’ve seen a near-term bottom in the market.”

The S&P 500 closed at a record on Jan. 15 and then dropped5.8 percent through Feb. 3 on signs of slowing growth in China and a rout in emerging-market currencies. The S&P 500 has rallied 5.1 percent since then, restoring $800 billion to share values in a week, on speculation economic growth is strong enough to withstand further cuts to Federal Reserve monetary stimulus. The index is at the highest level in three weeks, 1 percent away from reaching its record.

The benchmark gauge reversed today after slipping below 1,810 in the first minutes of trading, a level representing its average price in the last 50 days that is considered significant by analysts who analyze charts.

Data today showed retail sales in the U.S. fell 0.4 percent in January, the most since June 2012, after a revised 0.1 percent drop the prior month, as inclement weather kept consumers away from auto showrooms and stores. Jobless claims increased by 8,000 to 339,000 in the week ended Feb. 8 from 331,000 in the prior period, a Labor Department report showed.

“The market has well discounted weather as the reason for recent economic weakness, and continues to be comfortable with Fed tapering so long as their economic outlook hasn’t changed,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in an interview. His firm oversees $290 billion. “Easing stress in emerging markets has also helps. Combined, those factors are helping to overcome the cautious sentiment we’ve seen as of late.”

The S&P 500 rallied earlier this week on comments by the Fed’s Janet Yellen. Yellen, delivering her first public remarks as Fed chair, said economic growth has strengthened and there is “broad improvement” in the labor market.

She repeated the Fed’s outlook for further stimulus reductions in “measured steps,” adding that only a “notable change in the outlook” for the economy would prompt policy makers to slow the pace.

“The market is wondering, ‘will any of this change the Fed’s mind?’” Krishna Memani, the New York-based chief investment officer of OppenheimerFunds Inc., which oversees $232 billion, said in a phone interview. “The threshold is much, much higher than one or two soft retail prints. We’re convinced any of that isn’t going to happen ahead of March. Any softness will be taken down with the weather-related justification and only when we are in warmer times will the Fed look at this data.”

Federal Open Market Committee officials have twice reduced the size of the monthly asset-purchase program, lowering bond buying to $65 billion in February from $85 billion last year. Three rounds of stimulus under previous Chairman Ben S. Bernanke have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.

A total of 17 companies in the S&P 500 were scheduled to post earnings today, including Cliffs Natural Resources Inc. and American International Group Inc. Almost 76 percent of those that have reported results this season have exceeded analysts’ profit estimates, data compiled by Bloomberg show.

Earnings at S&P 500 companies rose by 8.3 percent in the fourth quarter of 2013 and sales by 2.7 percent, according to analyst estimates compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, fell 1.1 percent to 14.14 today. The gauge has fallen for six straight days, the longest stretch since July.

All 10 main industries in the S&P 500 rose. Utilities, raw- materials providers and phone companies had the biggest gains, rising at least 1 percent.

Time Warner Cable jumped 7 percent to a record $144.81. Its acquisition by Comcast combines the two largest U.S. cable companies and creates a bulwark against competition from phone and satellite providers.

In sealing the deal, Comcast Chief Executive Officer Brian Roberts trumped a bid from Charter Communications Inc. and its billionaire backer John Malone, who had courted Time Warner Cable for months. The merger also will help the companies cope with an industrywide decline in cable-TV viewers following years of inroads by phone and satellite companies, as well as newer Internet services such as Hulu LLC and Aereo Inc.

Comcast fell 4.1 percent to $52.97, while Charter slipped 6.3 percent to $128.91.

“In general, an environment that would foster more mergers and acquisitions suggests corporations are willing to be more free with their cash,” John Canally, an economic strategist at LPL Financial Corp. said in a phone interview from Boston. His firm oversees about $438.4 billion. “This could be a signal of a wave of new M&A, which could be good for the small and mid-cap companies. Corporations have a ton of cash on hand and they’re getting no return on it and so they have to put it to work.”

Goodyear Tire soared 11 percent to $26.94, the highest level since May 2008. The Akron, Ohio-based tire manufacturer reported adjusted fourth-quarter earnings higher than analysts’ estimates and reaffirmed its financial targets for 2014 through 2016.

CBS, owner of the most-watched television network, increased 4.5 percent to $64.61, an all-time high. The company reported better-than-estimated quarterly profit, helped by programming deals, and expanded its stock buybacks by $1.5 billion.

Applied Materials climbed 5.4 percent to $18.87, the highest level since August 2008. The company forecast fiscal second-quarter sales growth of as much as 10 percent as memory chipmakers boost spending on factory upgrades.

Demand is increasing from companies that make semiconductors used to store data in mobile phones and from made-to-order chipmakers, or foundries, Chief Executive Officer Gary Dickerson said. A growing list of companies will spend more to keep up on new techniques required to stay competitive in producing chips used in mobile devices, according to Dickerson.

Nvidia Corp. added 3.2 percent to $17.36, the highest level since June 2011. The maker of graphics processors forecast fiscal first-quarter sales that may exceed some analysts’ predictions as demand for cards used in high-end gaming computers helps make up for a decline in laptops.

Facebook Inc. climbed 4.5 percent to a record $67.33. The social-networking site owner has soared 26 percent since Jan.30, when it announced a 63 percent surge in fourth-quarter revenue, with more than half of its advertising revenue coming from mobile devices in the period.

Cisco declined 2.5 percent to $22.27. The world’s biggest maker of network routers and switches said weakness in emerging markets and a slump in demand from telecommunications companies will lead to a revenue decline of 6 percent to 8 percent in the quarter through April. That indicates sales of $11.2 billion to $11.5 billion, while analysts projected $11.3 billion on average, according to data compiled by Bloomberg.

Whole Foods Market Inc. fell 7.2 percent to $51.46. The largest U.S. natural-goods grocer posted profit that trailed estimates and lowered its full-year forecast amid increased competition.

 

Have a wonderful evening everyone.

 

Be magnificent!

We have at the present moment everybody claiming the right of conscience

without going through any discipline whatsoever

that there is so much untruth being delivered to a bewildered world.

Truth is not to be found by anybody who has not got a sense of humility.

If you would swim on the bosom of this ocean of Truth

you reduce yourself to a zero.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Let me tell you the secret that has led me to my goal.  My strength

lies solely in my tenacity.

-Louis Pasteur, founder of microbiology, 1822-1895

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day in 1912, Hsian-T’ung, the Emperor of China, abdicated his throne, at the tender age of six, and after a four-year rule (yes, he took the crown at two). It was not a decision that a six-year old would naturally make, and indeed the young emperor did not make the decision on his own. He was forced to abdicate following Sun Yat-sen’s republican revolution, ending 267 years of Manchu rule and 2,000 years of imperial rule. This set him on a decades-long odyssey that involved exile and imprisonment, and a stint as a puppet of Japanese imperial ambitions. In 1959, he was pardoned by Mao Zedong, and later worked in a mechanical repair shop in Peking.-Paul Vigna, WSJ.

And Abraham Lincoln was born on this day in 1809.

People are just as happy as they make up their minds to be.  –Abraham Lincoln.

20 years ago, on February 12^th, 1994, two art thieves steal Edvard Munch‘s “The Scream” from Norway’s National Gallery, leaving behind a note that reads, “Thanks for the poor security.”

Photos of the day

Australia’s Torah Bright competes in the women’s snowboard halfpipe qualifying, Wednesday, Feb. 12. Sergei Grits/AP

France’s Sophie Rodriguez performs a jump during the women’s snowboard halfpipe qualification round, February 12, 2014. Dylan Martinez/Reuters

Market Closes for February 12^th, 2014

Market Index	Close	Change
Dow Jones	15963.94	-30.83   -0.19%
S&P 500	1819.26	-0.49   -0.03%
NASDAQ	4201.289	+10.244   +0.24%
TSX	13900.49	+19.50
		+0.14%

International Markets

Market Index	Close	Change
NIKKEI	14800.06	+81.72
		+0.56%
HANG SENG	22285.79	+322.81
		+1.47%
SENSEX	20448.49	+85.12
		+0.42%
FTSE 100	6675.03	+2.37
		+0.04%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.485	2.457
CND. 30 Year Bond	3.070	3.057
U.S. 10 Year Bond	2.7608	2.7240
U.S. 30 Year Bond	3.7201	3.6872

Currencies

BOC Close	Today	Previous
Canadian $	0.90929	0.90835
US $	1.09975	1.10090
Euro Rate 1 Euro=		Inverse
Canadian $	1.49511	0.66885
US $	1.35949	0.73557

Commodities

Gold	Close	Previous
London Gold Fix	1291.55	1290.80
Oil	Close	Previous
WTI Crude Future	100.37	99.94
BRENT	109.360	109.360

Market Commentary:

Canada
By Eric Lam

Feb. 12 (Bloomberg) — Canadian stocks rose a seventh day, the longest streak in three years, as commodity producers advanced with metal and oil prices and banks gained on rising home prices.

Canada Bread Co. soared 7.3 percent after Grupo Bimbo SAB agreed to acquire the business from owner Maple Leaf Foods.  Canadian Natural Resources Ltd. and First Quantum Minerals Ltd. rallied at least 2.2 percent as crude and copper prices advanced. Air Canada plunged 20 percent after reporting fourth- quarter earnings short of analysts’ estimates due to a decline in the Canadian dollar.

The Standard & Poor’s/TSX Composite Index rose 19.5 points, or 0.1 percent, to 13,900.49 at 4 p.m. in Toronto. The benchmark equity gauge jumped 3.1 percent in the past seven days, the longest rally since September 2010.

“There’s some general market optimism carried over from yesterday’s Yellen testimony, and positive news from China is driving commodities,” said Anish Chopra, fund manager at TD Asset Management Inc. in Toronto. He helps manage C$218.3 billion ($198.6 billion) with the firm. “As well, the budget from yesterday you get a picture of fiscal responsibility from the government. And if the budget will be in surplus, it gives the government room to maneuver in stimulating the Canadian economy.”

U.S. Federal Reserve Chair Janet Yellen yesterday testified she will reduce stimulus in “measured steps” amid a gradual recovery in the labor market, sending U.S. and Canadian markets higher.

Canadian Federal Finance Minister Jim Flaherty released a budget after the market close yesterday that projects a surplus of C$6.4 billion in 2015.

Canadian Imperial Bank of Commerce rose 0.4 percent to C$88.32 and Bank of Montreal rallied 1.1 percent to C$70.51 as financial stocks added 0.7 percent as a group, the second-most in the S&P/TSX. Six of 10 industries advanced and trading volume was 7.9 percent higher compared with the 30-day average.

Canadian home prices rose 4.5 percent in January from year- ago figures, as values increased in Toronto, Vancouver and Montreal, according to data from the Teranet-National Bank house price index.

Maple Leaf slipped 0.9 percent to C$15.70. The company agreed to sell Canada Bread to Grupo Bimbo, the Mexican producer of Sara Lee products, for about C$1.83 billion. Canada Bread increased 7.3 percent to C$72.20, the most since October.

Bimbo will pay C$72 a share for Canada Bread. Maple Leaf owns 90 percent of the company, and is divesting assets to focus on its packaged-meats business. The company will return available proceeds from the sale to shareholders within three years of closing.

Canadian Natural Resources advanced 2.2 percent to C$38.50 and Athabasca Oil Corp. climbed 4.1 percent to C$7.96 as the price of crude added 0.4 percent to $100.37 a barrel in New York. Prices pared an earlier gain after U.S. stockpiles rose more than expected last week. Energy stocks rallied 1 percent as a group, most in the Canadian equity gauge.

First Quantum Minerals climbed 2.6 percent to C$20.93 as copper rose in New York after Chinese trade data showed imports of the metal expanded to a record. Deliveries of unwrought copper and products to China surged 53 percent from a year earlier to 536,000 metric tons.

Air Canada tumbled 20 percent to C$6.22, the most since 2009, after saying profit in the first quarter will decline because of severe weather conditions and a weaker Canadian dollar. The company reported adjusted fourth-quarter earnings of 1 Canadian cent a share, short of analysts’ projections for 11 cents. Air Canada was the best-performing stock in the S&P/TSX in 2013, surging 323 percent.

Rogers Communications Inc., Canada’s largest wireless operator, slumped 5.3 percent to C$43.28, the biggest decrease since June. Guy Laurence, the company’s new chief executive officer, said he was not happy with the last quarter’s results and will fully review the operator in search of ways to improve performance. Rogers posted earnings of 69 Canadian cents a share, missing the 74 cents projected by analysts.

Thomson Reuters Corp. slumped 6.1 percent to C$37.75, the most in five years, after reporting declining fourth-quarter and full-year operating profit. The financial news and data company blamed the drop difficulties in the European and emerging markets.

US
By Callie Bost and Jeff Sutherland

Feb. 12 (Bloomberg) — U.S. stocks fell, after the biggest four-day jump in a year for the Standard & Poor’s 500 Index, as declines in companies from Procter & Gamble Co. to Amazon.com Inc. overshadowed optimism about economic growth.

Procter & Gamble lost 1.7 percent after the world’s largest consumer-products maker cut its forecasts for profit and sales growth. Amazon.com slid 3.5 percent after UBS AG lowered the online retailer’s rating. Dow Chemical Co. fell 1 percent as an internal review concluded a breakup plan would reduce the company’s value. TripAdvisor Inc. jumped 7.2 percent as fourth- quarter revenue beat analysts’ estimates.

The S&P 500 fell less than 0.1 percent to 1,819.26 at 4 p.m. in New York, after gaining as much as 0.4 percent earlier in the day. The Dow Jones Industrial Average dropped 30.83 points, or 0.2 percent, to 15,963.94. About 6.4 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“We’re taking a breather here,” Phil Orlando, New York- based chief equity market strategist at Federated Investors Inc., which oversees about $376 billion, said in a phone interview. “Washington has essentially gotten out of the way, Yellen has told us monetary policy will be a continuation of what we’ve seen and we have a sense of what’s going to happen with the taper.”

The S&P 500 advanced 3.9 percent in the previous four days, the biggest gain for that stretch since January 2013. The benchmark gauge jumped 1.1 percent yesterday as comments by Federal Reserve Chair Janet Yellen fueled optimism the economy can weather further stimulus cuts.

Yellen, 67, delivering her first public remarks as Fed chair, said economic growth has strengthened and there is “broad improvement” in the labor market. She repeated the Fed’s outlook for further stimulus reductions in “measured steps,” adding that only a “notable change in the outlook” for the economy would prompt policy makers to slow the pace.

St. Louis Fed President James Bullard said today in New York that he expects economic expansion in 2014 of 3 percent or better. “Right now I think we’re on track” to continue tapering asset purchases and “will be able to move out of the program later this year,” he said.

Federal Open Market Committee officials have twice reduced the size of the monthly asset-purchase program, lowering bond buying to $65 billion in February from $85 billion last year.

Three rounds of stimulus under previous Chairman Ben S. Bernanke have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.

The benchmark gauge closed at a record on Jan. 15 and then dropped 5.8 percent through Feb. 3 on signs of slowing growth in China and a rout in emerging-market currencies. The recent rally has brought the index back to within 1.6 percent of its all-time high.

Data today showed China’s exports climbed in January.  Overseas shipments rose 10.6 percent from a year earlier, the General Administration of Customs said today. That beat the median economist projection for a 0.1 percent gain. Imports advanced 10 percent, more than forecast, leaving a trade surplus of $31.9 billion, the widest for January since 2009.

“What you’re seeing here is the world returning to normal,” Patrick Spencer, head of equity sales at Robert W. Baird & Co. in London, said in a phone interview. “The Chinese economy has doubled in size in dollar terms since 2008. The opportunities for the rest of us remain simply staggering. Concerns about tapering will be offset by reassurances that zero-interest policies are here for the foreseeable future.”

Equities extended gains yesterday as U.S. policy makers moved toward an agreement on the debt ceiling. After the market closed, the House of Representatives voted to suspend the debt limit until March 2015. The Senate cleared the measure today for President Barack Obama’s signature. Treasury Secretary Jacob J. Lew had said the nation’s ability to borrow may not last past Feb. 27 without an extension in the ceiling.

Since Republicans took control of the House in 2011, debates over the debt ceiling led to eleventh-hour showdowns that raised concerns that the government could default on its obligations, roiling financial markets. This time, lawmakers are sending a bill to Obama with about two weeks to spare.

A total of 14 companies in the S&P 500 were scheduled to post earnings today, including Cisco Systems Inc. and MetLife Inc. Almost 76 percent of those that have reported results this season have exceeded analysts’ profit estimates, data compiled by Bloomberg show.

Earnings at S&P 500 companies rose by 8.3 percent in the fourth quarter of 2013 and sales by 2.7 percent, according to analyst estimates compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, fell 1.5 percent to 14.30 for its fifth day of declines, the longest stretch since July.

Six out of 10 main industries in the S&P 500 fell. Energy, raw-materials and consumer-staples shares had the biggest declines, losing more than 0.3 percent.

Procter & Gamble slid 1.7 percent, the most in the Dow, to $77.49. The company said core earnings per share excluding some items will increase 3 percent to 5 percent this year, down from a previous forecast of 5 percent to 7 percent, because of currency exchange-rate fluctuations and policy changes in Venezuela.

Amazon lost 3.5 percent to $349.25. UBS lowered the shares to neutral from a buy rating, meaning it no longer recommends acquiring the stock. The brokerage cited slowing sales growth in the fourth quarter and a potential risk to revenue from Amazon Prime customers.

Dow Chemical dropped 1 percent to $46.37. The largest U.S. chemical company, facing pressure from Dan Loeb’s Third Point LLC to split itself in two, said the review found that creating separate petrochemical and specialty-chemical businesses would negatively affect Dow’s “value proposition.” A breakup also wouldn’t improve productivity or capital allocation, Dow said.

Intuit Inc. slipped 4.1 percent to $69.72. Evercore Partners Inc. analyst David Togut cut the stock’s rating to underweight from equal weight and lowered his price target to $62 a share from $72 after a consumer tax survey showed respondents may shift from tax software use.

TurboTax unit volumes may be flat to down 1 percent, versus a 4 percent gain in 2013, Togut said. He lowered his estimate for consumer tax revenue growth to 0.5 percent this year from 4.5 percent.

Lorillard Inc. erased 5 percent, the most in the S&P 500, to $47.47. The cigarette manufacturer reported fourth-quarter earnings and revenue excluding excise taxes that missed analysts’ forecasts.

LinkedIn Corp. dropped 5.2 percent to $192.34, the lowest level since July. Shares of the professional-networking site have plummeted 14 percent since Feb. 6, when LinkedIn forecast first-quarter sales that fell short of analysts’ estimates as growth slows in all three of its businesses.

FireEye Inc. retreated 11 percent to $69.08. The technology company forecast a first-quarter adjusted loss of between 51 cents a share and 56 cents, compared with the average analyst call for a loss of 37 cents. FireEye’s revenue forecast also missed projections.

Technology, phone and industrial companies gained the most among 10 groups in the S&P 500. Caterpillar Inc. jumped 1.3 percent to $96.17, the highest level in a year, for the biggest gain in the Dow.

TripAdvisor jumped 7.2 percent to a record $90.27. The online trip booking service reported fourth-quarter revenue of $212.7 million, topping analysts’ estimates of $205.6 million.

Fossil Group Inc. added 3.5 percent to $121.06. The fashion accessories designer reported fourth-quarter earnings that beat its own forecast for the period.

Cliffs Natural Resources Inc gained 2.3 percent to $21.99.

The U.S. iron-ore producer said yesterday it would stop operations at its Wabush mine in Newfoundland and Labrador by the end of the first quarter because of “unsustainably high” costs.

Casablanca Capital LP, Cliffs’ fourth-largest shareholder according to data compiled by Bloomberg, has called for the company to double its dividend, convert its U.S. assets to a master-limited partnership and significantly cut costs. Cliffs has advanced 17 percent since Feb. 4.

Trimble Navigation Ltd. rose 14 percent to $37.19, an all- time high. The measurement-instruments company said adjusted profit was 43 cents a share in the fourth quarter, more than analysts’ projections of 37 cents.

 

Have a wonderful evening everyone.

 

Be magnificent!

When you abandon every desire that rises up within you,

and when you become content with things as they are, then you experience inner peace.

When your mind is untroubled by misfortune, when you desire no pleasures,

when your emotions are tranquil, and when you are free from fear and anger,

then you experience inner calm.  When you are free from all attachments,

when you are indifferent to success and failure,

then you experience inner serenity.

When you can withdraw your senses from pleasures of the senses,

just as a tortoise withdraws its limbs,

then you experience inner wisdom.

The Bhagavad Gita

As ever,

 

Carolann

 

Go confidently in the direction of your dreams.  Live the life

you have imagined.

-Henry David Thoreau, 1817-1862

 

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Unfortunately we were experiencing problems with our email  the past few days, so I apologize for being unable to send you market updates for the past three days.  Hopefully, the problems have been resolved.

On this day in 1990, Nelson Mandela was released from prison after serving a 27 year sentence for his anti-apartheid activities.  I was listening to the news of Shirley Temple Black’s death on NPR this morning, and I was saddened to learn of the criticism leveled at her because of her dancing duet with Mr. Bo Jangles – a black man!  It was nice to hear that Shirley Temple ignored the criticism and  always praised him in every interview she conducted as being the best the best teacher she ever had (don’t look at your feet!) and that she made him a close lifelong friend until he passed away.

We must use time wisely and forever realize that the time is always ripe to do right. –Nelson Mandela, 1918-2013.

Photos of the day

Ellie a horticulturist at Kew stands on a step ladder as she makes final adjustments during a media preview of an Orchid festival at Kew Botanical Gardens in London. The exhibition of orchids is open to the public from February 8 to March 9, 2014, and it includes a new Phalaenopsis hybrid ‘Diamond Sky’ that has not been seen before. Alastair Grant/AP

An Afghan man walks along a cemetery during a snowy day in Kabul. Mohammad Ismail/Reuters

Market Closes for February 11^th, 2014

Market  Index	Close	Change
Dow  Jones	15994.77	+192.98    +1.22%
S&P 500	1819.75	+19.91    +1.11%
NASDAQ	4191.047	+42.873    +1.03%
TSX	13880.99	+86.81
		+0.63%

International Markets

Market  Index	Close	Change
NIKKEI	14718.34	+255.93
		+1.77%
HANG  SENG	21962.98	+383.72
		+1.78%
SENSEX	20363.37	+29.10
		+0.14
FTSE 100	6672.66	+81.11
		+1.23%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.457	2.408
CND.  30 Year Bond	3.057	3.011
U.S.   10 Year Bond	2.7240	2.6829
U.S.  30 Year Bond	3.6872	3.6726

Currencies

BOC Close	Today	Previous
Canadian $	0.90835	0.90641
US  $	1.10090	1.10325
Euro Rate  1 Euro=		Inverse
Canadian  $	1.50148	0.66601
US  $	1.36387	0.73321

Commodities

Gold	Close	Previous
London Gold  Fix	1290.80	1267.27
Oil	Close	Previous
WTI Crude Future	99.94	99.88
BRENT	109.360	109.360

Market Commentary:
Canada
By Eric Lam

Feb. 11 (Bloomberg) — Canadian stocks rose a sixth day, the longest streak of the year, as gold advanced amid growing demand in the U.S. and China while Federal Reserve Chairman Janet Yellen pledged to reduce stimulus in “measured steps.”

Detour Gold Corp. and Argonaut Gold Inc. rose at least 8.7 percent. CGI Group Inc. gained 4.4 percent after being selected by APG, a Dutch pension provider, to provide application services. Horizon North Logistics Inc. jumped 8.6 percent after winning contracts to provide camp facility services for two oil- sands and natural-gas projects in Alberta and British Columbia.

The Standard & Poor’s/TSX Composite Index rose 86.81 points, or 0.6 percent, to 13,880.99 at 4 p.m. in Toronto. The benchmark equity gauge has jumped 2.9 percent in the past six days, the longest rally since Dec. 27.

“The market is stabilizing a little bit here, there’s a rally in precious metals,” said Brian Huen, fund manager at Red Sky Capital Management Ltd. in Toronto. The firm manages about C$230 million ($208.3 million). “People are focused on the Yellen testimony with Congress today and the direction of the Fed. Whatever the Fed does will be driven by economic data, and the Fed will continue on the course of tapering and providing guidance as things change. It will be gradual, I don’t think in her first take things will change that much.”

Yellen said she will maintain her predecessor’s policies by scaling back stimulus in “measured steps” amid a continuing recovery in the labor market. The Fed reduced its monthly bond purchases to $65 billion from $85 billion during its last two meetings.

Canadian Federal Finance Minister Jim Flaherty released a budget today that includes higher taxes on cigarettes, benefit cuts for retired government workers and aid for carmakers. The plan projects a deficit of C$2.9 billion for the fiscal year starting April 1, before swinging to a surplus of C$6.4 billion in 2015.

The price of gold climbed 1.2 percent in New York to settle at $1,289.80 an ounce in New York for a fifth day of gains, the longest winning streak since August 2012. The gold price had dipped earlier amid Yellen’s testimony to lawmakers. Volume for Shanghai’s benchmark bullion spot contract surged to a nine- month high yesterday and sales of American Eagle gold coins by the U.S. Mint jumped 63 percent in January.

Raw-materials stocks added 1.8 percent as a group, the biggest gain in the S&P/TSX. Nine of 10 industries in the gauge advanced on trading volume 29 percent higher compared with the 30-day average.

Detour Gold soared 12 percent to C$9.20, for the highest close since September, and Argonaut Gold climbed 8.7 percent to C$5.86 as precious metals producers accounted for nine of the top 10 movers in the S&P/TSX.

Fortuna Silver Mines Inc. increased 5.3 percent to C$4.93 and Silvercorp Metals Inc. rallied 5.3 percent to C$3.18 as the price of silver rose 0.2 percent in New York for a seventh day of gains, the longest streak since August.

CGI Group rose 4.4 percent to C$34.32, the most since September. The Montreal-based information technology company said it has secured a three-year contract with APG with an annual minimum value of 10 million euros ($13.7 million).

Horizon North Logistics soared 8.6 percent to C$7.56, the biggest gain since October 2010, after disclosing the contracts late yesterday. The company will build a 400-person camp facility in the Fort McMurray, Alberta, oil-sands region and another for 350 people in northeastern British Columbia.

“We remain positive on both mobile accommodation and Horizon North Logistics specifically,” said Greg Colman, analyst with National Bank Financial, in a note to clients today. “These contract awards reinforce those views.”

Colman maintained his outperform rating for the stock, the equivalent of a buy, with a C$9.50 12-month price target. The stock has nine buys and one hold, according to data compiled by Bloomberg.

Cineplex Inc., Canada’s largest cinema operator, lost 1.5 percent to C$40.88 after posting adjusted earnings of 32 Canadian cents a share in the fourth quarter, short of analysts’ projections of 48 cents.

Net income slumped 38 percent to C$20.2 million from C$32.7 million as same-store attendance and box-office revenues declined due to a weaker slate of films in the quarter.

USA
By Callie Bost and Jeff Sutherland

Feb. 11 (Bloomberg) — U.S. stocks rose, giving benchmark indexes the biggest four-day rally in more than a year, as comments by Federal Reserve Chairman Janet Yellen fueled bets the economy is strong enough to weather further stimulus cuts.

Cliffs Natural Resources Inc. and Mosaic Co. increased more than 2.4 percent to pace a rally among commodity shares. Boeing Co. and Goldman Sachs Group Inc. jumped at least 2.1 percent, leading gains in the Dow Jones Industrial Average. Sprint Corp. rose 2.7 percent after fourth-quarter revenue topped estimates. CVS Caremark Corp. climbed 2.7 percent as pharmacy sales rose on new medicines and new customers.

The Standard & Poor’s 500 Index gained 1.1 percent to 1,819.75 at 4 p.m. in New York. The gauge advanced 3.9 percent over four days, and climbed above its average level over the past 50 sessions for the first time in more than two weeks. The Dow rose 192.98 points, or 1.2 percent, to 15,994.77. The Nasdaq Composite Index added 1 percent, erasing a loss for the year. About 7 billion shares changed hands on U.S. exchanges, 11 percent higher than the 30-day average.

“The market likes consistency and what we’ve heard this morning has been consistent with what we’ve heard for months,” Steven Rees, head of U.S. equities at JPMorgan Private Bank, which oversees $977 billion in assets, said in a phone interview. “Tapering continues, but it continues to be the result of an economic situation that’s slowly improving. The economy is still on track to have a good year.”

Yellen, 67, delivered her first public remarks as Fed policy makers pursue plans to gradually scale back the unprecedented bond-purchase program she helped put in place.  Economic growth has strengthened and there is “broad improvement” in the labor market,’’ the chairman said. She repeated the Fed’s outlook for further reductions in “measured steps” and that asset purchases, known as quantitative easing, are not on a “pre-set course.”

While growth has picked up, “the recovery in the labor market is far from complete,” Yellen said in remarks to the House Financial Services Committee. “I am committed to achieving both parts of our dual mandate: helping the economy return to full employment and returning inflation to 2 percent while ensuring that it does not run persistently above or below that level.”

Federal Open Market Committee officials have twice reduced the size of the monthly asset-purchase program, lowering bond buying to $65 billion in February from $85 billion last year. Three rounds of stimulus under previous Chairman Ben S. Bernanke have helped push the S&P 500 as much as 173 percent higher from a 12-year low in 2009.

“Yellen will be very careful to create a degree of stability,” Stephen Wood, New York-based chief market strategist at Russell Investments, said by phone. His firm oversees over $256 billion. “No genius ideas out of left field, just very methodical. The market is not only going to like the message but they’re going to like the messenger. The Fed will be accommodative and the Fed will maintain credibility the bond market and equity market will appreciate.”

Yellen said financial-market turmoil doesn’t pose a major risk to the outlook for the U.S. economy. Asset prices aren’t at “worrisome levels” even after the S&P 500 soared 30 percent last year, Yellen said, although the Fed is on the lookout for any threat of a bubble.

The S&P 500 has rallied 4.5 percent over the past six sessions, trimming its decline for the year to 1.6 percent. The benchmark gauge closed at a record on Jan. 15 and then dropped 5.8 percent through Feb. 3 on signs of slowing growth in China and a rout in emerging-market currencies.

Equities extended gains amid speculation Congress was nearing an agreement on debt talks in Washington. The House of Representatives will vote tonight on suspending the U.S. debt limit, with a snowstorm forecast for the U.S. East Coast tomorrow, a Republican leadership aide said.

House Speaker John Boehner, an Ohio Republican, said Democrats will need to back the measure suspending the debt ceiling until March 15, 2015, which he said will get minimal Republican support. A suspension of the U.S. debt limit enacted by Congress in October expired Feb. 7. Treasury Secretary Jacob J. Lew said last week that borrowing authority may not last past Feb. 27.

Sixteen companies in the S&P 500 were scheduled to release earnings results today. Of the index members to have reported this season, 76 percent beat analysts’ profit estimates, while 66 percent exceeded sales forecasts, data compiled by Bloomberg show.

Profit for the benchmark’s stocks rose by 8.3 percent in the fourth quarter of 2013 and revenue by 2.7 percent, according to analyst estimates compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, dropped 4.9 percent to 14.51 today, for its fourth straight decline.

All 10 main industries in the S&P 500 advanced, with energy companies increasing 1.4 percent and raw-materials shares rising 1.2 percent. The Morgan Stanley Cyclical Index gained 1.4 percent, while the Dow Jones Transportation Average increased 1.2 percent. Boeing added 2.4 percent to $130.16 and Goldman Sachs jumped 2.1 percent to $164.39. Newmont Mining Corp. climbed 3.2 percent as gold prices surged 1.2 percent.

Phone shares rose 1.3 percent as a group. Sprint jumped 2.7 percent to $7.90 after saying fourth-quarter sales rose to $9.14 billion, beating the average analyst estimate calling for $8.99 billion in a Bloomberg survey.

Mosaic jumped 2.4 percent to $47.96. The largest U.S.-based potash producer expects record global shipments of the crop nutrient this year as customers become more confident that prices are unlikely to extend declines.

Cliffs Natural Resources climbed 4.5 percent to $21.50.  Cliffs has gained 11 percent this month after shareholder Casablanca Capital LP urged the biggest U.S. iron-ore producer to spin off its international assets, double its dividend and cut expenses. Cliffs was the second-worst performer in the S&P 500 last year, plunging 32 percent.

CVS Caremark added 2.7 percent to $68.77. The largest provider of prescription drugs in the U.S. posted fourth-quarter profit that topped analysts’ estimates. The new drugs and an expanded roster of clients for specialty pharmaceuticals, along with higher prices, boosted revenue from pharmacy services to $19.6 billion, the company said.

General Motors Co. gained 1 percent to $35.25 as sales in China rose 12 percent to a record 348,061 units last month.  Buick monthly deliveries gained 16 percent to surpass 100,000 units for the first time.

InvenSense Inc. climbed 11 percent to $21.69 after saying it has settled pending patent litigation proceedings with STMicroelectronics NV. The two companies entered into a patent cross-license agreement, resolving lawsuits over infringement.

ConAgra Foods Inc. dropped 6.3 percent to $29.08, the lowest level since November 2012. ConAgra cut its year-end profit forecast, reflecting a longer time frame to restore its private brands segment to planned levels of operating profit, as well as weaker-than-anticipated volumes in consumer foods.

Urban Outfitters Inc. slipped 2.8 percent to $35.61. The clothing retailer reported fourth-quarter preliminary sales of $906 million, less than analysts’ estimates of $925.97 million.  Urban Outfitters will release its fourth-quarter earnings on March 10.

 

Have a  wonderful evening everyone.

 

Be magnificent!

Hold the reins of your mind, as you would hold the reins of a restive horse.

Svetasvatara Upanishad

As ever,

 

Carolann

 

The difference between ordinary and extraordinary

is that little extra.

-Jimmy Johnson, 1975-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7