Month: July 2014

Dear Friends,

Tangents:

Annually, July 25^th marks the Pilgrimage of St. Anne d’Auray, Brittany, France.  Thousands of pilgrims will make their way to Sainte Anne d’Auray today to attend celebrations and worship at the basilica.

The basilica was built in the 19C, when pilgrims were too numerous to fit in the small chapel of Yves Nicolazic. Around 800,000 visitors travel here every year (it is the third place of pilgrimage in France after Lourdes and Lisieux).

You’ll be amazed by the number of hotels in this small town of 2,000 inhabitants.

Let’s go back to the place of worship. It began in 1622 when, in the hamlet of Ker Anna, a farmer, Yves Nicolazic had “visions” … Only a year later, in the night of July 25 to 26… Sainte Anne, the grandmother of Jesus will introduce herself … And later still, when the mother of Mary led the farmer with some other believers to the statue of St. Anne … hidden in the place where once stood a chapel. Anne asked them to rebuild it… 924 years later.

This is the beginning of the legend … Sainte Anne (St. Anne), mother of the Virgin Mary and grandmother of Jesus chose Yves Nicolazic.  The miracles continued and popular enthusiasm began: the farmer was married for many years but had no children.  Soon after, he was blessed with 4… Then the Catholic pilgrimages began…
The place was venerated already during the 5th C, at the beginning of the evangelization of Brittany. The chapel was ruined for many centuries. The building which replaced it soon became too small for pilgrims. A chapel, a cloister, a Scala Sancta and a miraculous fountain were added.

The chapel of the 17th C was replaced in 1865 with the present church. It still hosts thousands of pilgrims during the feast of Anne (25 and 26 July).

You can see the Scala Sancta in some movies where the pilgrims were climbing. Breton women in knee cap in reciting prayers roamed the stairs … Another world …

Near the basilica, a place dedicated to John Paul II, only pope to have come to Brittany. More than 150,000 people came to see him in 1996.

You can also visit the house of Yves Nicolazic, which is located near the Basilica (free admission). And every year, at Saint Anne d’Auray, and for those who have not obtained the favors of Saint Guirec, the singles can meet, during a weekend held in May and find true love!

-Taken from Bretagne-tours.com

Photos of the Day

The pack of riders cycles on its way during the 208.5km 19th stage of the Tour de France cycling race between Maubourguet and Bergerac.Jean-Paul Pelissier/Reuters

A seahorse swims in its basin in the zoo in Frankfurt, Germany. Michael Probst/AP

Market Closes for July 25^th, 2014

Market   Index	Close	Change
Dow   Jones	16960.57	-123.23
		-0.72%
S&P 500	1978.34	-9.64    -0.48%
NASDAQ	4449.563	-22.545    -0.50%
TSX	15455.04	+60.59
		+0.39%

International Markets

Market   Index	Close	Change
NIKKEI	15457.87	+173.45
		+1.13%
HANG   SENG	24216.01	+74.51
		+0.31%
SENSEX	26126.75	-145.10
		-0.55%
FTSE 100	6791.55	-29.91
		-0.44%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.113	2.156
CND.   30 Year Bond	2.667	2.709
U.S.   10 Year Bond	2.4655	2.5007
U.S.   30 Year Bond	3.2377	3.2913

Currencies

BOC Close	Today	Previous
Canadian $	0.92465	0.93087
US   $	1.08149	1.07427
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45244	0.68850
US   $	1.34299	0.74460

Commodities

Gold	Close	Previous
London Gold   Fix	1307.44	1293.00
Oil	Close	Previous
WTI Crude Future	106.34	105.32

Market Commentary:

Canada
By Eric Lam

July 25 (Bloomberg) — Canadian stocks rose a fourth day to a record as TransForce Inc. and MDC Partners Inc. jumped on better-than-forecast earnings and metal producers advanced with gold amid mounting conflicts overseas.

TransForce, which provides staff for trucking companies, surged 10 percent as revenue climbed after a series of acquisitions. MDC Partners, an advertising firm, gained 4.9 percent as the company also raised its dividend. Semafo Inc. and Iamgold Corp. increased at least 4.1 percent as gold rallied the most in a week.

The Standard & Poor’s/TSX Composite Index rose 60.59 points, or 0.4 percent, to 15,455.04 at 4 p.m. in Toronto, extending a record. The S&P/TSX advanced 1.2 percent this week for a second weekly gain. The equity index trades at 21.1 times earnings, the highest level since 2010.

“The index is benefiting from its rich resource content,” said Martin Roberge, a strategist at Canaccord Genuity Corp., in a note to clients. “It is very sensitive to global economic growth prospects, and the strong flash manufacturing PMIs released this week bode well for further outperformance.”

The combined average purchasing managers’ index measure across the U.S., Europe, Japan and China so far this year is 52.7, ahead of levels in 2012 and 2013, suggesting potential further gains for the S&P/TSX, Roberge said.

Semafo surged 7.4 percent to C$4.82 and Iamgold added 4.1 percent to C$4.07 as raw-materials stocks jumped 2.1 percent as a group, the most in the S&P/TSX. Seven of 10 industries in the benchmark equity gauge rose on trading volume 13 percent lower than the 30-day average.

Gold for December delivery rose 1 percent to settle at $1,305.30 an ounce in New York, the biggest gain since July 17.

Royal Bank of Canada, the nation’s second-largest lender by assets, added 0.7 percent to C$79.89 and Canadian Imperial Bank of Commerce advanced 0.2 percent to C$100.34, the highest close since 2007. Financial stocks have rallied 1 percent in the past four days.

TransForce jumped 10 percent to C$27.82, a record, after reporting second-quarter profit and sales ahead of analysts’ estimates. Acquisitions including Vitran, Clarke Transport and Clarke Road Transport contributed C$102.3 million to sales in the quarter, the company said.

TransForce also agreed to buy Contrans Group Inc. in a cash deal for C$14.60 a share, or a total equity purchase price of about C$495 million.

MDC advanced 4.9 percent to C$23.92, a one-month high. The company raised its 2014 estimate for adjusted earnings before interest, taxes, depreciation and amortization, Chief Executive Officer Miles Nadal said in a release.

SNC-Lavalin Group Inc., the Montreal-based construction and engineering firm, added 2.2 percent to C$57.74, the highest in three years, after its Candu unit signed a cooperation agreement with the China Nuclear Power Engineering Co. for construction of reactors in Romania.

Dragonwave Inc., a network communications equipment provider, plunged 14 percent to C$1.72, the biggest decline since September. The company said it will sell shares for C$1.80 a unit to raise about C$25 million.

US
By Oliver Renick

July 25 (Bloomberg) — U.S. stocks fell, pulling the Standard & Poor’s 500 Index down from a record, as earnings at Amazon.com Inc and Visa Inc. missed estimates and durable goods data fueled concern corporate investment remains stop-and-go.

Amazon plunged 9.7 percent after trailing analysts’ predictions for the second successive quarter. Visa sank 3.7 percent percent after lowering its full-year revenue forecast. Pandora Media Inc. slid 10 percent after the number of active listeners reported by the biggest Internet radio service missed some analysts’ estimates. Baidu Inc. rose 11 percent after earnings topped projections.

The S&P 500 slipped 0.5 percent to 1,978.34 at 4 p.m. in New York. The Dow Jones Industrial Average lost 123.23 points, or 0.7 percent, to 16,960.57 today. About 5 billion shares changed hands on U.S. exchanges today, 12 percent below the three-month average.

“The market is really looking at micro level numbers on a lot of these companies,” Ian Kerrigan, global investment specialist at JP Morgan Private Bank in Seattle, said in a phone interview. “There is skepticism going into the weekend. We have a lot of important numbers coming out next week with GDP, inflation and jobs, so we might see some profit-taking today.”

Goldman Sachs Group Inc. said equities are at risk of a temporary selloff, citing rising bond yields and high valuations for lowering its rating on stocks.

The S&P 500 closed little changed for the week. The gauge was up 0.5 percent over the past four days as corporate earnings reports boosted confidence in the economy and inflation data signaled the Federal Reserve won’t be compelled to raise interest rates in the near future. The Fed announces its next policy decision at the conclusion of a two-day meeting on July 30.

Fed Chair Janet Yellen said last week the central bank must press on with stimulus with record easing to combat persistent weakness in the job market. A report on Aug. 1 will show employers added 231,000 jobs in July and the unemployment rate held at 6.1 percent, according to economists in a Bloomberg survey.

The S&P 500 has advanced 7 percent this year, as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter. Investors will get a reading on second- quarter growth on July 30.

Data today showed orders for U.S. business equipment rose in June following a revised drop the prior month, indicating corporate investment could hold back growth.

“Durable goods orders continue to be anemic relative to where they should be in the capex cycle,” Lincoln Ellis, managing director at Green Square Capital Management LLC in Memphis, Tennessee, said in a phone interview. “CEOs in America are very cautious about reinvesting in capital expenditures because they understand the underlying economy continues to be lackluster.”

Investors have also been watching geopolitical tensions in the Middle East and Ukraine. The U.S. today accused Russia of shelling Ukrainian military positions across its border, raising tensions after the ruling coalition in Kiev broke apart.

Russia’s central bank unexpectedly increased borrowing costs for a third time this year as the intensifying conflict and the threat of wider sanctions squeeze the economy and undercut the ruble.

Israel and Hamas are considering a U.S.-backed proposal for a temporary cease-fire as the conflict in the Gaza Strip intensified.

Goldman Sachs cut its rating on stocks to neutral, the equivalent of hold, for the next three months, according to a quarterly research report from its portfolio strategy group on July 25.

“The acceleration in economic growth is largely behind us and geopolitical risks are elevated,” a group of 11 strategists, including David Kostin, Kathy Matsui and Peter Oppenheimer, said in the report, known as the global opportunity asset locator.

Eleven companies on the S&P 500 reported earnings today. Of the members that have posted results so far, 79 percent have beaten estimates for profit and 66 percent have exceeded projections for sales.

“The results season has been going fine, not spectacular, but fine,” Matthew Beesley, head of global equities at Henderson Global Investors Holdings Ltd., said. “There’s a worry that growth is slowing worldwide, so people have been watching corporate data very closely. It’ll be the financial results that will be moving markets, as none of the geopolitical events going on right now have much effect.‘‘

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, rose 6 percent to 12.55 to erase a decline for the week.

Eight of the 10 main S&P 500 groups retreated today. Consumer-discretionary shares, a sector that includes Amazon, sank 1.2 percent to pace declines and financials lost 0.6 percent as a group.

Amazon tumbled 9.7 percent, the most since April. The world’s largest online retailer reported a second-quarter loss of $126 million, compared with the average estimate by analysts for $66.7 million, as its cloud-computing business showed signs of cooling and investments in new distribution warehouses and gadgets curtailed earnings.

‘‘I’m not overly concerned with Amazon’s losses,” said Patrick Spencer, managing director and head of U.S. equity sales at Robert W. Baird & Co. “They’re focusing on building a business rather than reaping short-term earnings.”

Visa dropped 3.6 percent. The world’s largest payments network said revenue for the accounting year ending Sept. 30 may climb 9 percent to 10 percent from a year earlier. That’s lower than an April forecast of 10 percent to 11 percent.

Pandora lost 10 percent for the steepest drop in three months. The number of active listeners grew 7.5 percent to 76.4 million users in the second quarter, the company said yesterday. That missed the 76.6 million estimate of Corey Barrett, an analyst at Pacific Crest Securities, and a projection of 77 million by Mark Mahaney at RBC Capital Markets.

Baidu advanced 11 percent, rising for a sixth day to extend an all-time high. The operator of China’s largest Internet search service reported second-quarter net income of 3.55 billion yuan ($572.5 million), beating the analysts’ average prediction of 2.85 billion yuan.

VeriSign Inc. climbed 12 percent for the biggest advance in the S&P 500 and its steepest climb since 2009. The company reported earnings that beat analysts’ estimates.

 

Have a wonderful weekend everyone.

 

Be magnificent!

Nonviolence and cowardice go ill together.

I can imagine a fully armed man to be at heart a coward.

Possession of arms implies an element of fear, if not cowardice.

But true nonviolence is impossible without the possession of unadulterated fearless ness.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

There are only two options regarding commitment.  You’re either in or out.  There’s

no such thing as a life in-between.

-Pat Riley, 1945-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Zelda Fitzgerald (nee Sayre) was born on this day in 1900.  She was the beautiful daughter of a well-to-do family from Montgomery, Alabama. Zelda was a  free-spirited, rebellious girl when met author F. Scott Fitzgerald in July 1918.  He noted in his journal that on September 7^th he fell in love with Zelda and the two were married in a small ceremony at New York’s St. Patrick’s Cathedral in April 1920.  A failed ballet dancer and artist, she had a modestly successful career as a novelist, her most famous work being Save Me the Waltz (1932), which she wrote at Phipps Clinic in Baltimore, while recovering from her second mental breakdown.  From the very beginning, the two carried on an extremely codependent, unhealthy, yet enduring and intense love affair.  Diagnosed as a schizophrenic, she died in a fire at the Highland Hospital sanitarium where she had been admitted for depression.  Fitzgerald once wrote on e of Zelda’s doctors, “perhaps fifty percent of our friends and relatives would tell you in all honest conviction that my drinking drove Zelda insane – the other half would assure you that her insanity drove me to drink.  Neither judgement would mean anything.”

Zelda wrote this love letter to Scott:

I look down the tracks and see you coming – and out of every haze and mist your darling rumpled trousers are hurrying to me – Without you, dearest dearest I couldn’t see or hear or feel or think – or live – I love you so and I’m never in all our lives going to let us be apart another night.  It’s like begging for mercy of a storm or killing Beauty or growing old, without you.  I want to kiss you so…-from The Fifty Greatest Love Letters of All Time, edited by David H. Lowenhers.

Photos of the Day

A couple look at stone sculptures at the Remic Rapids in the Ottawa River during sunset at Ottawa July 23. Chris Wattie/Reuters

A man rows a boat on a river in front of new properties in Taiyuan, Shanxi province, China. Reuters

Market Closes for July 24^th , 2014

Market   Index	Close	Change
Dow   Jones	17083.80	-2.83
		-0.02%
S&P 500	1987.98	+0.97    +0.05%
NASDAQ	4472.109	-1.587    -0.04%
TSX	15394.45	+0.07
		—

International Markets

Market   Index	Close	Change
NIKKEI	15284.42	-44.14
		-0.29%
HANG   SENG	24141.50	+169.63
		+0.71%
SENSEX	26271.85	+124.52
		+0.48%
FTSE 100	6821.46	+23.31
		+0.34%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.156	2.128
CND.   30 Year Bond	2.709	2.674
U.S.   10 Year Bond	2.5007	2.4673
U.S.   30 Year Bond	3.2913	3.2636

Currencies

BOC Close	Today	Previous
Canadian $	0.93087	0.93225
US   $	1.07427	1.07267
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44639	0.69137
US   $	1.34640	0.74273

Commodities

Gold	Close	Previous
London Gold   Fix	1293.00	1304.85
Oil	Close	Previous
WTI Crude Future	105.32	107.62

Market Commentary:

Canada
By Eric Lam

July 24 (Bloomberg) — Canadian stocks were little changed, after reaching a record yesterday, as Domtar Corp. sank on worse-than-forecast earnings and commodities prices retreated.

Domtar, the pulp and paper manufacturer, plunged 7.1 percent as downtime at their mills led to higher unit costs. Teck Resources added 1.3 percent after reporting coal production costs will be lower than previously forecast. Potash Corp. of Saskatchewan Inc. added 0.3 percent after raising its full-year earnings forecast on higher Chinese demand for its fertilizer. Alacer Gold Corp. and OceanaGold Corp. fell at least 4.3 percent as gold declined to a five-week low.

The Standard & Poor’s/TSX Composite Index rose less than a point to 15,394.45 at 4 p.m. in Toronto. The equity index trades at 20.8 times earnings, the highest level since 2010.

Six of 10 industries in the S&P/TSX rose on trading volume 3.1 percent lower than the 30-day average.

Pacific Rubiales Energy Corp. slipped 0.8 percent to C$20.30. Bond investors are becoming increasingly concerned Pacific Rubiales will fail to strike a deal with Colombia’s state-owned Ecopetrol SA to continue drilling at the Rubiales field after its contract expires in 2016.

Domtar sank 7.1 percent to C$41.64, the biggest decline since April 2013, after the company said it took lack-of-order downtime totaling 51,000 tons of paper which resulted in higher unit costs.

Teck Resources, Canada’s largest diversified mining company, rose 1.3 percent for a fourth day of gains after it said its coal mining costs will be 5 percent lower than previously expected this year after job cuts. A ton of coal will cost $52 to $57 to produce, down from an earlier estimate of $55 to $60, Teck said in a statement. Teck expects to produce 6 million metric tons of coal in the third quarter.

Rogers Communications Inc., the nation’s largest wireless carrier, rose 1.1 percent to C$42.88 as the company met analysts’ estimates amid a turnaround plan to return to growth.

Talisman Energy Inc. dropped 1.8 percent to C$11.76 and Crew Energy Inc. fell 1.1 percent to C$10.35. Crude for September delivery slipped 1 percent in New York after gasoline inventories expanded a third week in the U.S.

Bombardier Inc. dropped 1.1 percent to C$3.70, falling for a third day. The aircraft manufacturer will slash about 1,800 jobs from its aerospace business and split the unit into three, in a move to cut costs and improve operations. Bombardier eliminated 1,700 jobs in January, after the company postponed the commercial debut of its CSeries jet for a fourth time.

US
By Oliver Renick

July 24 (Bloomberg) — The Standard & Poor’s 500 Index extended a record as Facebook Inc. rallied on higher revenue, and growth in global manufacturing offset a drop in home sales. Caterpillar Inc. sank on a disappointing forecast, leaving the Dow Jones Industrial Average little changed.

Facebook jumped 5.2 percent to a record after saying second-quarter sales surged 61 percent. Under Armor Inc. surged 15 percent after increasing its 2014 profit target. Caterpillar sank 3.1 percent after forecasting full-year profit that fell short of estimates. D.R. Horton Inc. plunged 12 percent to lead homebuilders lower. Amazon.com Inc. sank 6.2 percent in late trading after reporting a loss wider than analysts’ projected.

The S&P 500 added 0.1 percent to a record 1,987.98 at 4 p.m. in New York. The Dow average slipped 2.83 points, or less than 0.1 percent, to 17,083.80. About 5.7 billion shares changed hands on U.S. exchanges today, in line with the three-month average.

“Earnings are coming in better than expected and the market has taken a queue from that but the economy overall is kind of a mixed bag,” John Kvantas, director of equity research at USAA Investments, said in a phone interview. He helps oversee $63 billion in mutual fund assets. “Housing isn’t coming back and I think there was some hope for more improvement there.”

The S&P 500 rose 0.2 percent yesterday as Apple Inc. helped push technology companies higher, while health-care stocks rallied on earnings. The gauge has advanced 7.6 percent this year amid better-than-estimated corporate results and central- bank support. The index trades at 18.2 times the reported earnings of its members, the highest since 2010.

Global equities advanced today as data showed euro-area manufacturing and services grew in July while Chinese factory activity rose to an 18-month high. Economic reports in the U.S. were mixed, with fewer new U.S. homes sold in June than forecast while jobless claims unexpectedly fell.

U.S. equities pared gains in afternoon trading after Espirito Santo Financial Group SA, the owner of a 20.1 percent stake in Portuguese lender Banco Espirito Santo SA, sought protection from creditors. Global financial markets were roiled early this month on concern that the corporate debt troubles in Portugal could spread.

A Markit Economics Ltd. factory gauge for the U.S. unexpectedly declined to 56.3 in July from 57.3 the previous month. Readings above 50 indicate expansion.

The International Monetary Fund lowered its outlook for global growth this year as expansions weaken from the U.S. to China and military conflicts raise the risk of a surge in oil prices.

Investors are also weighing the threat of new European Union sanctions targeting Russia over the Krelmin’s actions in Ukraine. The EU is preparing to sanction top Russian security officials, including the chiefs of the main successor agency to the Soviet-era KGB and foreign intelligence, over the conflict in Ukraine, according to a draft document obtained by Bloomberg.

The U.S. is pushing Europe to toughen its stance toward President Vladimir Putin a week after the Malaysian jet was hit by a missile American officials say was probably fired from a Russian-supplied launcher. Russia denies involvement.

Ukrainian Prime Minister Arseniy Yatsenyuk resigned after two parties quit the ruling coalition and President Petro Poroshenko signaled his support for early elections.

Fifty companies in the S&P 500 report earnings today. About 77 percent of those that have posted results this season have beaten analysts’ estimates for profit, while 64 percent exceeded sales projections, according to data compiled by Bloomberg.

Profits at S&P 500 members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

“I’m quite impressed with the results I’ve seen till now,” said Pierre Mouton, who helps oversee $8 billion at Notz, Stucki & Cie. in Geneva. “In most cases, we’ve had companies beating on revenues and earnings, and posting positive outlooks. I don’t think the market can go much higher in the short term because it’s overbought, but I don’t expect any meaningful correction.”

Six of the 10 main S&P 500 groups advanced today, with consumer shares advancing at least 0.3 percent to pace gains.

Facebook climbed 5.2 percent, the most since April, to $74.98. The operator of world’s biggest social network said mobile advertisements helped profit more than double as sales surged.

Tractor Supply Co. jumped 6.6 percent after releasing its financial results to help producers of consumer-discretionary products rally.

Under Armour surged 15 percent for the largest increase in the group. The maker of compression T-shirts and other athletic apparel raised its annual growth forecast. Nike Inc. jumped 1.6 percent for the biggest gain in the Dow.

Zillow Inc. jumped 15 percent and Trulia Inc. rallied 32 percent after a report said Zillow is seeking to acquire Trulia, according to people with knowledge of the matter, in a move to combine the two most-visited U.S. real estate websites.

Amazon.com sank 6.2 percent to $336.35. The world’s largest online retailer reported its biggest quarterly loss since 2012 as Chief Executive Officer Jeff Bezos builds more distribution warehouses, adds grocery deliveries and develops new smartphones and tablets. The shares closed 0.1 percent higher today.

Industrial stocks slid 0.5 percent to pace declines in the S&P 500. Precision Castparts sank 5.5 percent for the biggest loss after reporting profit and sales that missed estimates.

Caterpillar tumbled 3.1 percent, the most since May and the biggest decline in the Dow. The largest maker of mining machinery forecast full-year sales and earnings that fell short of analysts’ estimates as it said there’s no sign of an upturn in the industry in 2014.

Housing shares plunged, with an S&P index of home builders sinking 4.9 percent for its biggest drop in a year. Meritage Homes Corp. sank 3.9 percent and Toll Brothers Inc. slid 4.1 percent as all 11 members of the index retreated.

D.R. Horton dropped 12 percent for the biggest loss and its worst day since November 2009. The largest U.S. homebuilder by revenue said its fiscal-third quarter earnings declined as the company’s sales margin shrank.

Airline stocks slumped, as a third fatal airline crash in the past week left 2014 on track for the worst year in almost a decade for passenger fatalities.

United Continental Holdings Inc. slid 2.4 percent and American Airlines Group Inc. lost 2.7 percent even as the two carriers disclosed dividends earlier in the day.

The disappearance of a McDonnell Douglas MD-83 aircraft on the fringes of the Sahara desert today follows the loss of an ATR-72 turboprop in storms in Taiwan yesterday and the downing of Malaysian Air Flight MH17 over Ukraine last week.

AT&T Inc. fell 1.1 percent. The second-largest U.S. wireless carrier fell short of earnings estimates as more customers started paying for devices with installment plans, an option that’s reducing profits as it cuts monthly service bills.

Qualcomm Inc. dropped 6.7 percent. The chipmaker projected that net income in the current quarter that will fall short of the average analyst estimate. The company cited challenges to its technology-licensing business in China.

TripAdvisor Inc. slumped 5.2 percent. The online travel service posted second-quarter adjusted earnings of 55 cents a share, missing the 61-cent projection of analysts in a Bloomberg survey.

The Nasdaq Biotechnology Index slipped 1.4 percent after four days of gains. Celgene Corp. lost 3.3 percent as its 2014 profit forecast fell short of the average analyst estimate.

Puma Biotechnology Inc. slid 8.8 percent after yesterday surging 295 percent following a successful medical trial. Adage Capital Management LP, the Boston hedge fund started by two former money managers at Harvard University’s endowment, made almost $1 billion yesterday on its 19 percent stake in the company.

 

Have a wonderful evening everyone.

 

Be magnificent!

The sum-total of the experience of the sages of the world is available to us

and would be for all time to come.

Moreover, there are not many fundamental truths,

but there is only one fundamental truth which is Truth itself,

otherwise known as nonviolence.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

If you smile when no one else is around, you really mean it.

-Andy Rooney, 1919-2011

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Summer Tip:

Wild Swimming: visit www.outdoorswimmingsociety.com for safety advice for swimming outdoors.

Photos of the Day

A bee is seen on a flower in a forest near the village of Berezhok, north of Minsk, Belarus. Vasily Fedosenko/Reuters

German pianist Stefan Aaron plays an orange piano on a ‘flying carpet’ platform suspended from a helicopter, over the Munich airport. The concert is the fourth station of the ‘Orange Piano Tour’, which brings the artist to places around the world. Lukas Barth/Reuters

Market Closes for July 23^rd, 2014

Market   Index	Close	Change
Dow   Jones	17086.63	-26.91
		-0.16%
S&P 500	1987.01	+3.48    +0.18%
NASDAQ	4473.695	+17.679    +0.40%
TSX	15394.38	+79.25
		+0.52%

International Markets

Market   Index	Close	Change
NIKKEI	15328.56	-14.72
		-0.10%
HANG   SENG	23971.87	+189.76
		+0.80%
SENSEX	26147.33	+121.53
		+0.43%
FTSE 100	6798.15	+2.81
		+0.04%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.128	2.122
CND.   30 Year Bond	2.674	2.664
U.S.   10 Year Bond	2.4673	2.4619
U.S.   30 Year Bond	3.2636	3.2507

Currencies

BOC Close	Today	Previous
Canadian $	0.93225	0.93135
US   $	1.07267	1.07371
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44408	0.69248
US   $	1.34625	0.74280

Commodities

Gold	Close	Previous
London Gold   Fix	1304.85	1307.62
Oil	Close	Previous
WTI Crude Future	107.62	104.42

Market Commentary:

Canada
By Jacob Barach

July 23 (Bloomberg) — Canadian stocks reached a record for a second day as BCE Inc. agreed to buy the remainder of Bell Aliant Inc. and oil producers advanced amid increasing tensions between government and rebel forces in Ukraine.

Bell Aliant rose 12 percent after BCE agreed to pay C$3.95 billion ($3.68 billion) for the shares it didn’t already own. BCE already controls the Halifax-based phone, TV and Internet service provider through a 44 percent stake. Talisman Energy Inc. advanced 13 percent after saying it has been approached about “various transactions” by Repsol SA.

The Standard & Poor’s/TSX Composite Index rose 79.25 points, or 0.5 percent, to 15,394.38 at 4 p.m. in Toronto. The equity index has rallied 13 percent this year.

The S&P/TSX Health Care Index rose 1.4 percent to lead gains as eight of 10 industries in the benchmark equity gauge advanced.

Encana Corp. and Crew Energy Inc. rose at least 2.5 percent as Brent crude oil climbed 0.7 percent to $108.03 a barrel.

Pro-Russian separatists shot down two Ukrainian fighter jets in the same eastern region where Malaysian Air Flight MH17 was destroyed, a Defense Ministry spokesman, Oleksiy Dmytrashkovsky, said by phone.

Canadian retail sales rose 0.7 percent in May, led by record automobile purchases, exceeding the 0.6 percent median forecast of in a Bloomberg economist survey with 16 responses.

US
By Oliver Renick

July 23 (Bloomberg) — The Standard & Poor’s 500 index rose to an all-time high, as Apple Inc. boosted technology companies and health-care shares rallied amid earnings. Boeing Co.’s results dragged the Dow Jones Industrial Average lower.

Apple surged to the highest since 2012 after signaling the wait for new products is nearing an end. Biogen Idec Inc. rallied 11 percent after raising its full-year forecast, while Intuitive Surgical Inc. jumped 18 percent as results topped estimates. Boeing sank 2.3 percent as a cost for a tanker rekindled concern the planemaker would struggle with a new aircraft program. Facebook Inc. rose 0.8 percent in late trading after reporting profit that topped estimates.

The S&P 500 added 0.2 percent to a record 1,987.19 at 4 p.m. in New York. The Dow Jones Industrial Average slipped 25.63 points, or 0.2 percent, to 17,087.91. Boeing is the sixth- largest component of the Dow by weighting at 4.8 percent.

“The general tone of earnings has been positive not just on the bottom line but also top-line, and we’ve seen inflation numbers that gave comfort to those who believe the market will be supported by the Fed,” Russ Koesterich, chief investment strategist at New York-based BlackRock Inc., said via phone.

The S&P 500 rose yesterday after inflation data signaled the Federal Reserve won’t be compelled to raise interest rates in the near future and earnings reports boosted optimism about the economy. Chair Janet Yellen has said rates will stay low for a “considerable time” after the central bank stops its monthly bond purchases. It is on track to end them in October.

The Fed may have scope to keep interest rates at zero for longer than investors anticipate as inflation stays muted and a 2014 slowdown prolongs the labor-market recovery, the International Monetary Fund said in a conference call today.

The IMF cut its U.S. growth forecast for this year to 1.7 percent from 2 percent predicted in June, citing a first-quarter contraction.

The S&P 500 has advanced 7.5 percent this year amid better- than-estimated corporate earnings and central bank stimulus, as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter. The gauge trades at 18.4 times the reporting earnings of its members, the highest since 2010.

Investors are also watching developments in Ukraine, where the Defense Ministry today said rebels in the eastern part of the country downed two government fighters.

The European Union yesterday threatened to restrict Russia’s access to capital markets and sensitive energy and defense technologies unless President Vladimir Putin expedites a probe into the downing of the Malaysia Airlines plane.

In the Middle East, Israeli Justice Minister Tzipi Livni said the nation doesn’t plan to stop its Gaza Strip offensive as long as the Palestinian territory’s Hamas rulers continue to pose a threat. U.S. Secretary of State John Kerry flew to Israel in pursuit of an elusive truce deal.

“Usually we have a lot lighter of volume in this time of year and negative geopolitical news would drive the market down more than it has, but the economy is better fundamentally than most people think it is,” Kurt Cambier, senior partner at Littleton, Colorado-based Centennial Capital Partners, said in a phone interview.

Thirty seven companies on the S&P 500 including PepsiCo Inc., Dow Chemical Co., Boeing Co. and Facebook Inc. will post earnings today. Profits at S&P 500 members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

Of the members of the gauge that have reported results so far, 78 percent have exceeded analysts’ estimates for profit and 65 percent have beaten revenue projections, according to data compiled by Bloomberg.

“There may be some times when the geopolitical landscape hogs the spotlight but it’s always about earnings, and they’re coming in better than expected,” Karyn Cavanaugh, senior market strategist at New York-based Voya Investment Management LLC, said by phone. Voya oversees about $220 billion. “People say we’re at all-time highs and that we have to come down, but we’re not out of the ball park with valuations yet.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, fell 6 percent to 11.51.

Five of the 10 main S&P 500 groups advanced today, led by a0.8 percent gain among health-care stocks. The Nasdaq Biotechnology Index jumped 2.2 percent.

Intuitive Surgical rallied 18 percent, the biggest gain in the index and its steepest rise in five years. The maker of robotics used in surgeries reported profit that surpassed analysts’ estimates.

Biogen Idec jumped 11 percent. The world’s biggest maker of multiple sclerosis drugs raised its 2014 profit forecast after quarterly results beat forecasts.

Puma Biotechnology Inc. surged 295 percent. The company said a clinical trial of its experimental drug blocked the return of breast cancer in women with a type of early-stage disease.

The Nasdaq 100 Index of technology stocks added 0.6 percent to the highest level since September 2000, with Biogen and Intuitive leading gains. Yahoo! Inc. jumped 3.3 percent.

Apple added 2.6 percent to $97.19, the highest since September 2012. The company stoked anticipation for new devices on a conference call, with Chief Executive Officer Tim Cook talking about an “incredible pipeline” that “we can’t wait to show you.” Apple earlier reported a drop in iPad demand and projected third-quarter revenue below analysts’ predictions.

Microsoft Corp. was little changed near a 14-year high. The company’s ’s main software business topped estimates, benefiting from improving corporate demand for computers and software delivered over the Web.

Facebook rose 0.8 percent to $71.89 in late trading. The operator of the world’s biggest social networking website reported quarterly results that surpassed estimates. Facebook closed the regular session up 2.9 percent to the highest in four months.

PepsiCo Inc. climbed 1.9 percent. The softdrink maker reported better-than-projected profit and raised its annual forecast after reducing costs.

Delta Air Lines Inc. rose 3.9 percent. The company benefited from strong domestic demand to post profit that topped estimates. Delta is the first U.S.-based carrier to report earnings for the traditionally strong second quarter.

Boeing sank 2.3 percent for the steepest decline in the Dow. The world’s biggest plane maker took the after-tax charge related to development of the KC-46A military tanker. It also raised its full-year profit forecast, as it reaps gains from faster production that is driving jetliner deliveries to record levels.

Broadcom Corp. slipped 1.6 percent. The chipmaker reported earnings that surpassed estimates.

Juniper Networks Inc. dropped 9.6 percent. The network- infrastructure company gave a forecast for third-quarter revenue and profit that fell short of analysts’ estimates amid a slowdown in sales of networking equipment to phone companies.

Xilinx Inc. tumbled 14 percent for the biggest drop in the S&P 500. The maker of microprocessors use in phone networks said it expects sales to remain little changed or fall as much as 4 percent in the quarter through September.

 

Have a wonderful evening everyone.

 

Be magnificent!

For me, nonviolence is not a mere philosophical principle.

It rules my life.  It is the rule and breath of my life.

It is a matter not of the intellect but of the heart.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Champions keep playing until they get it right.

-Billie Jean King, 1943-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

July 22nd:  Pied Piper of Hamelin, Germany.

The story is that the town of Hamelin in Westphalia was infested with rats in 1284, and that a mysterious piper in a parti-coloured suit appeared in the town and offered to rid it of vermin for a certain sum, which offer was accepted by the towns-people.  The Pied Piper fulfilled his contract, but payment was not forthcoming,  On the following St. John’s Day, he reappeared and again played his pipe.  This time all the children followed him and he led them to a mountain cave, where all disappeared save two: one blind, the other dumb or lame.  Another version is that they were led to Transylvania where they formed a German colony.  The story, familiar in England from Robert Browning’s poem (1842), appeared earlier in James Howell’s Familiar Letters (1645-55).  The legend has its roots in the story of the Children’s Crusade. –from Brewer’s Dictionary of Phrase & Fable.

Photos of the Day

An unidentified Santa takes a moment to snap a photo as Santas from all over the world gather for the traditional July Santa Congress in Copenhagen. The Santas stuck to their traditional schedule, reserving half the day to dip their feet in the waters of Oresund, the sound between Copenhagen and the Swedish coast. Mogens Flindt/Polfoto/AP

A child paints a picture of cyclists as the pack with Australia’s Simon Gerrans passes, during the sixteenth stage of the Tour de France cycling race that started in in Carcassonne and will finish in Bagneres-de-Luchon, France. Christophe Ena/AP

Market Closes for July 22^nd, 2014

Market Index	Close	Change
Dow Jones	17113.54	+61.81
		+0.36%
S&P 500	1983.53	+9.90   +0.50%
NASDAQ	4456.016	+31.312   +0.71%
TSX	15315.13	+65.14
		+0.43%

International Markets

Market Index	Close	Change
NIKKEI	15343.28	+127.57
		+0.84%
HANG SENG	23782.11	+394.97
		+1.69%
SENSEX	26025.80	+310.63
		+1.21%
FTSE 100	6795.34	+66.90
		+0.99%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.122	2.135
CND. 30 Year Bond	2.664	2.672
U.S. 10 Year Bond	2.4619	2.4674
U.S. 30 Year Bond	3.2507	3.2571

Currencies

BOC Close	Today	Previous
Canadian $	0.93135	0.93131
US $	1.07371	1.07376
Euro Rate 1 Euro=		Inverse
Canadian $	1.44586	0.69163
US $	1.34660	0.74261

Commodities

Gold	Close	Previous
London Gold Fix	1307.62	1312.55
Oil	Close	Previous
WTI Crude Future	104.42	104.59

Market Commentary:

Canada
By Eric Lam

July 22 (Bloomberg) — Canadian stocks rose to a record after Canadian National Railway Co. reported better-than- estimated earnings and oil producers advanced.

Canadian National climbed 0.7 percent to extend an all-time high after soaring grain cargoes led to higher profit and cash- flow targets for 2014. Penn West Petroleum Ltd. and Pacific Rubiales Energy Corp. gained more than 4.4 percent to pace gains among energy stocks ahead of a U.S. government report tomorrow that may show crude inventories fell.

The Standard & Poor’s/TSX Composite Index rose 65.14 points, or 0.4 percent, to 15,315.13 at 4 p.m. in Toronto. The equity index has rallied 12 percent this year.

Canadian National added 0.7 percent to a record C$74.36 for an eighth day of gains, the longest winning streak since September. Industrial companies rallied 1.2 percent as a group as eight of 10 industries in the benchmark equity gauge advanced.

HudBay Minerals Inc. jumped 2.8 percent to C$11.21, the highest since February 2013, after TD Securities analyst Greg Barnes raised his rating for the stock to buy from hold. The mining company has climbed 28 percent this year and has nine buys, 10 holds and one sell, according to data compiled by Bloomberg.

Ballard Power Systems Inc. increased 0.5 percent to C$4.46, amid a rally in fuel-cell producers. An affiliate of FuelCell Energy Inc. won 4.9 million euros in awards from the German government to support a research project. FuelCell rose 12 percent in U.S. trading.

Major Drilling Group International Inc., a contract drilling company working in the energy industry, soared 9.8 percent to C$8.76, the biggest gain since September 2012. The company yesterday agreed to buy operations of Taurus Drilling Services for C$27.7 million in cash, shares and debt.

Pretium Resources Inc. sank 7.4 percent, the biggest drop since December, to C$7.85. The gold mining company said it plans to sell shares to raise $60 million to fund environmental and engineering activities at its Brucejack project in British Columbia.

US
By Oliver Renick

July 22 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index closing two points from a record, as data showed inflation has failed to gain a toehold and earnings from Comcast Corp. to Chipotle Mexican Grill Inc. topped estimates.

Herbalife Ltd. shares surged the most since trading began in 2004 as hedge-fund manager Bill Ackman struggled to convince investors the seller of weight-loss shakes is guilty of fraud. Chipotle jumped 12 percent after reporting earnings and sales that beat projections. Comcast added 1.5 percent after profit topped estimates on higher revenue from Internet customers. Travelers Cos. dropped 3.8 percent as earnings slid 26 percent.

The S&P 500 rose 0.5 percent to 1,983.53 at 4 p.m. in New York. The index climbed as high as 1,986.24, topping its previous intraday record. The Dow Jones Industrial Average increased 61.81 points, or 0.4 percent, to 17,113.54. About 5.3 billion shares changed hands on U.S. exchanges today, 8 percent above the three-month average.

“The equity market seems destined to trend higher,” Terry Sandven, chief equity strategist at Minneapolis-based U.S. Bank Wealth Management, which oversees $120 billion, said by phone. “We think there is still some modest upside if you continue to see earnings rise. The inflation numbers are supportive of higher stock prices. It reflects U.S. economic growth that is neither too slow nor too fast.”

The S&P 500 has advanced 7.3 percent this year through yesterday amid better-than-estimated corporate earnings and central bank stimulus, as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter.

Data today showed the consumer price index increased 0.3 percent in June, paced by a jump in gasoline that is now reversing, bolstering Federal Reserve Chair Janet Yellen’s view that recent increases were temporary.

Investors have been scrutinizing inflation data to determine when the Fed will begin raising its benchmark interest rate. Last week Yellen told lawmakers the central bank plans to press on with record easing to combat persistent weakness in the job market.

Inflation has failed to get a toehold as slowing global demand has prevented companies from exercising pricing power. If prices remain in check, Fed policy makers can keep interest rates low well into 2015.

A separate report showed sales of previously owned U.S. homes climbed in June to an eight-month high, a sign the housing market is making more headway.

The S&P 500 fell 0.2 percent yesterday on concern that the crisis in Ukraine could lead to deeper sanctions against Russia. European Union governments labored to identify more Russian businesspeople and companies to sanction and pressed President Vladimir Putin to speed a probe into the downing of Malaysian Air flight MH17 or face isolation.

“It’s a day-by-day encounter for markets, with every speech and communication from politicians giving us the direction for the day,” Lorne Baring, who helps oversee about $500 million as managing director at B Capital SA in Geneva, said by telephone, referring to Russia.

The S&P 500 closed at a record 1,985.44 on July 3 and trades at 18.3 times reported earnings, near the highest level in four years. The index has not had a drop of more than 10 percent since 2011.

Earnings at the gauge’s members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

Some 36 companies listed on the S&P 500 report earnings today, including Coca-Cola Co., McDonald’s Corp., Microsoft Inc. and Apple Inc. About 76 percent of S&P 500 companies that have posted results this season have beaten analysts’ estimates for profit, while 67 percent exceeded sales projections, according to data compiled by Bloomberg.

Eight of the 10 main S&P 500 groups advanced today, as health-care and technology stocks rose at least 0.8 percent to lead gains. Producers of consumer staples had the only decline.

ARM Holdings Plc jumped 7 percent. The chip designer whose products power Apple’s iPhone and iPad, said royalty growth will accelerate in the second half as the smartphone market recovers.

Intel Corp., the world’s biggest maker of semiconductors, rallied 2.1 percent for the biggest gain in the Dow, while Apple added 0.8 percent.

Chipotle jumped 12 percent to an all-time high. The restaurant chain said second-quarter net income rose 25 percent and revenue jumped to $1.05 billion, buoyed by an increase in traffic at existing outlets and by sales in new stores.

Comcast rose 1.5 percent. The largest cable company in the U.S. said second-quarter revenue increased 3.5 percent to 16.8 billion, while analysts estimated almost $17 billion. The company is in the process of buying Time Warner Cable Inc.

Apache Corp. gained 4.6 percent, its biggest advance in a year, after hedge fund Jana Partners LLC disclosed a $1 billion stake in the oil and natural gas company.

DuPont Co. slipped 0.9 percent. The U.S. chemicals producer posted lower-than-estimated revenue after some farmers switched to genetically modified soybeans from corn.

Travelers declined 3.8 percent for its steepest slide in nearly three years. The only property-casualty insurer in the Dow average said second-quarter profit missed estimates on catastrophe costs.

Coca-Cola dropped 2.9 percent, the most since February. The world’s largest beverage company, reported second-quarter sales that missed analysts’ estimates amid sluggish demand for drinks such as juice and Diet Coke in North America.

McDonald’s fell 1.3 percent. The largest restaurant chain by sales posted second-quarter profit that trailed analysts’ estimates after a U.S. slump lingered. The company’s business faces a crowded field and last year it added many new items, slowing down its kitchens.

Harley-Davidson Inc. dropped 5.4 percent, its biggest slump in two years, after lowering its forecast for new motorcycle shipments in 2014 to no more than 275,000, after previously predicting at least 279,000.

Kimberly-Clark Corp. slid 3.1 percent, the biggest decline since February, after the manufacturer of consumer hygiene products reported second-quarter earnings that missed some analysts’ estimates.

Netflix Inc. declined 4.6 percent to the lowest in a month.  The online movie and TV-streaming service forecast third-quarter profit below analysts’ estimates.

Herbalife surged 25 percent, rebounding from an 11 percent slide yesterday after Ackman compared the company to Enron Corp. in television appearances. Speaking today during what he billed as the most important presentation of his career, Ackman said he estimates that the company’s nutrition clubs lose $12,000 per year, on average.

 

Have a wonderful evening everyone.

 

Be magnificent!

Man has been steadily progressing towards ahimsa.

Then came a stage when man was ashamed of leading the life of a wandering hunter.

He therefore took to agriculture and depended principally on mother earth for his food.

Thus from being a nomad he settled down to civilized stable life, founded villages and towns,

and from a member of a family he became a member of a community and a nation.

All these are the signs of progressing towards ahimsa and diminishing violence.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Always remember that the future comes one day at a time.

-Dean Acheson, 1893-1971

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Yesterday was the anniversary when the first men, Neil Armstrong and Buzz Aldrin walked on the moon, on July 20^th, 1969.

Annette Dutenhoffer wrote this in a column this morning:

Another little boy watched that TV broadcast too, 9-year-old Chris Hadfield. Years later that Ontario farm boy fulfilled his dream and grew up to be commander of the International Space Station. During his five-month stay there, he became an online celebrity, posting videos that shared insights into his life and work in space. His most popular video, though no longer posted, had more than 22 million views on YouTube. It was a performance of David Bowie’s song, “Space Oddity,” showing Mr. Hadfield singing and floating with his guitar in space, while awe-inspiring views of the earth go by in the background.

Many things point to humanity’s yearning to know more of the infinite than our finite earth-bound perspective can give us: the 22 million views of Hadfield’s video; the surge of interest in private space travel, asteroid mining, and Mars in general; the jaw-dropping beauty of two decades of images from the Hubble Space Telescope; and, of course, the never-ending theories about the origin and makeup of Earth and the universe. I suspect the weightlessness we see the astronauts experiencing entices us to think that maybe even a glimpse of infinity might cut us loose from the burdens that weigh us down. ..

Although not all of us want to be space travelers, who hasn’t gazed up to the heavens on a dark, starry night and wondered about the magnificence of it all? We look to the broad expanse of the heavens for profound answers.

The splendor of the cosmos, the planets in their orbits, the grandeur of the celestial bodies, point to the beauty and harmony of spiritual reality. In the 1920s, astronomer Edwin Hubble discovered that the universe continues to expand….Just think, your vibrant potential is expanding and is boundless.

Before Hadfield departed for his mission on the space station in December 2012, he said, “To be able to command the space station, yes, it’s professional, and yes, I’ll take it seriously, and yes, it’s important for Canada, but for me, as just a Canadian kid, it makes me want to shout and laugh and do cartwheels.” I share his exuberance and desire to shout and laugh and do cartwheels when I think of the unlimited, eternal, and spiritual splendor of man and the universe.

Photos of the Day

A whirling dervish performs a traditional Sufi dance during the Muslim fasting month of Ramadan in the Ottoman-era Tekkiye Suleimaniye mosque complex in Damascus. Omar Sanadiki/Reuters

A young rider is sad at the end of a ride on the Seaside Heights NJ carousel. The historic 82-year-old carousel is being sold this fall after surviving superstorm Sandy and a devastating boardwalk fire intact. Its owners say it is too expensive to maintain and insure. It is one of only about 150 carousels left in the US. Wayne Parry/AP

Market Closes for July 21^st, 2014

Market   Index	Close	Change
Dow   Jones	17051.73	-48.45
		-0.28%
S&P 500	1973.63	-4.59    -0.23%
NASDAQ	4424.703	-7.443    -0.17%
TSX	15249.99	-16.58
		-0.11%

International Markets

Market   Index	Close	Change
NIKKEI	15215.71	-154.55
		-1.01%
HANG   SENG	23387.14	-67.65
		-0.29%
SENSEX	25715.17	+73.61
		+0.29%
FTSE 100	6728.44	-21.01
		-0.31%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.135	2.162
CND.   30 Year Bond	2.672	2.711
U.S.   10 Year Bond	2.4674	2.4818
U.S.   30 Year Bond	3.2571	3.2881

Currencies

BOC Close	Today	Previous
Canadian $	0.93131	0.93165
US   $	1.07376	1.07337
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45213	0.68864
US   $	1.35238	0.73944

Commodities

Gold	Close	Previous
London Gold   Fix	1312.55	1311.10
Oil	Close	Previous
WTI Crude Future	104.59	103.13

Market Commentary:

Canada
By Jacob Barach

July 21 (Bloomberg) — Canadian stocks fell from a record, led by losses in energy companies, amid a retreat in global equities as international pressure on President Vladimir Putin intensified.

Canyon Services Group Inc. dropped 3.2 percent after FirstEnergy Capital Corp. lowered its rating on the stock to market perform from outperform. Valeant Pharmaceuticals International Inc. climbed 2.9 percent after the company said it has contacted regulators concerning Allergan Inc.’s past statements about its Bausch & Lomb unit.

The S&P/TSX lost 16.58 points, or 0.1 percent, to 15,249.99 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 12 percent this year, the third-best performance among the world’s developed markets.

The S&P/TSX Energy Index dropped 0.2 percent. Eight of 10 industries in the benchmark equity gauge fell. Trading in S&P/TSX stocks was 17 percent below the 30-day average at the close.

Canyon Services lost 3.2 percent to C$16.94. FirstEnergy Capital also lowered its ratings on Precision Drilling Corp. and Western Energy Services Corp. Both stocks fell at least 1 percent.

Valeant advanced 2.9 percent to C$134.67. The company told the Autorite des marches financiers, Quebec’s regulators, and the U.S. Securities and Exchange Commission that Allergan has falsely asserted that Bausch & Lomb’s pharmaceutical sales were stagnating or declining, an “apparent attempt to mislead investors and manipulate the market.”

Separately, Allergan said it will cut 1,500 jobs and eliminate another 250 vacant positions as it tries to fend off a hostile takeover from Valeant.

European Union foreign ministers meeting in Brussels tomorrow will consider tougher sanctions on Russian individuals and companies as world leaders pressure Putin to do more to end the violence in eastern Ukraine.

Russian President Putin said the Malaysian airline disaster shouldn’t be used for political purposes. He again blamed the downing of the plane on the Ukraine conflict and said that international investigators, whose probe of the crash site has been hampered by armed, pro-Russian separatists, should have full access to the wreckage.

US
By Oliver Renick

July 21 (Bloomberg) — U.S. stocks fell, after the best Standard & Poor’s 500 Index rally since April, as concern tension in Ukraine could lead to deeper sanctions against Russia kept investors on the sidelines before major earnings reports.

Herbalife Inc. sank 11 percent as hedge-fund manager Bill Ackman vowed to reveal fraud at the company. Yum! Brands Inc. dropped 4.3 percent and McDonald’s Corp. lost 1.5 percent after the two halted buying meat products from a Shanghai supplier under investigation. Hasbro Inc. fell 2.7 percent after reporting revenue that missed analysts’ estimates. BB&T Corp. slid 4 percent as adjusted profit fell short of targets.

The S&P 500 lost 0.2 percent to 1,973.63 at 4 p.m. in New York, paring a loss of as much as 0.6 percent. The Dow Jones Industrial Average dropped 48.45 points, or 0.3 percent, to 17,051.73 after losing almost 126 points this morning. Trading in S&P 500 stocks was 6 percent below the 30-day average.

“The geopolitical situation is an overarching damper on the market and underneath that this week we’re right in the heart of second quarter earnings,” Matthew Kaufler, manager of Federated Investor Inc.’s Clover Value Fund, said in an interview. “While the market is net focused on earnings, we’re still trying to keep a pulse on what’s going on around the world.”

A total of 10 S&P 500 companies are reporting earnings today, including Chipotle Mexican Grill Inc., Netflix Inc. and Botox-maker Allergan Inc. Some 145 companies in the gauge report this week. Apple Inc., McDonald’s Corp. and Coca-Cola Co. are schedule to report results tomorrow.

The S&P 500 rallied 1 percent on July 18, rebounding from its biggest loss since April 10 that came after the downing of a Malaysian Airlines passenger jet in Ukraine and the Israeli ground invasion of the Gaza Strip.

The index pared losses today after President Barack Obama said he prefers a diplomatic solution to the hostilities in Ukraine and Malaysia’s prime minister said rebels in eastern Ukraine agreed to hand over bodies of crash victims and grant access to the crash site.

Obama added that Russian President Vladimir Putin has “direct responsibility” to compel separatists in Ukraine to let international investigators recover remains and collect evidence from the crash site.

“The burden is now on Russia,” Obama said. “Russia will only further isolate itself from the international community” and costs will “only increase” if it doesn’t get separatists to cooperate.

The administration is pushing European governments to expand sanctions against Russia, even at some peril to their own economies, in an effort to break Putin’s support for the pro- Russian rebels. Putin has defied rising international anger over the downing of the airliner, suggesting leaders in the U.S. and Europe were using the incident for “selfish political gains.”

“If Obama had said something concerning further sanctions then there would’ve been some fundamental bite, but there was nothing to it,” Matt Maley, equity strategist at Boston-based Miller Tabak & Co LLC, said in a phone interview. “The market is looking for something to have real impact, something concrete like a cut-off in oil supply or more sanctions.”

In the Middle East, diplomatic efforts to end two weeks of Gaza Strip fighting intensified after battles killed dozens of Palestinians and 13 Israeli soldiers in the conflict’s bloodiest single day.

The S&P 500 ended last week up 0.5 percent, rallying on the final day after better-than-estimated sales at Google Inc., the world’s third-largest company, spurred a rebound in shares.

The equities benchmark has advanced almost 7 percent this year amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter.

The gauge closed at a record 1,985.44 on July 3 and trades at 18.3 times reported earnings, near the highest level in four years. The index has not had a drop of more than 10 percent since 2011.

“People are naturally cautious against these geopolitical events and the market having had such a strong rally,” said Patrick Spencer, the London-based head of equity sales at Robert W. Baird & Co., which oversees more than $100 billion. “Markets are nervous given we haven’t had a correction yet so people are thinking we’re overdue. People are just looking for reasons for the market to sell off.”

The Chicago Board Options Exchange Volatility Index jumped 6.2 percent to 12.81. The gauge known as the VIX was little changed last week despite a 32 percent jump on July 17, the biggest one-day rally in 15 months.

About 76 percent of S&P 500 companies that have posted results this season have beaten analysts’ estimates for profit, while 69 percent exceeded sales projections, according to data compiled by Bloomberg.

Earnings at the index’s members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

Nine of the 10 main groups in the gauge retreated today, with indexes of health-care and consumer stocks dropping at least 0.4 percent to pace declines. General Electric Co. sank 1.8 percent for the steepest slide in the Dow.

Herbalife shares fell the most in three months, losing 11 percent to $54.02, after billionaire Bill Ackman vowed to show Enron Corp.-like fraud at the seller of supplements and weight- loss shakes. Ackman, head of Pershing Square Capital Management LP, said his firm has devoted $50 million of investors’ money to prove that Herbalife is a pyramid scheme. The results of the investigation will be released in New York tomorrow, Ackman said in an interview on Bloomberg Television.

Herbalife responded to the statements today on Twitter, saying it was confident in the integrity of the company and that “the truth will prevail.”

“Ackman’s theatrics are increasingly desperate,” the company said through its HerbalifeTruth account. Herbalife “is proud of role that nutrition clubs play in helping people lose weight and stay healthy.”

Hasbro lost 2.7 percent to $51.78. The toys and game maker reported second-quarter revenue that fell short of estimates. Rival Mattel Inc. last week said earnings and sales fell short of forecasts.

BB&T Corp. sank 4 percent to $37.33. North Carolina’s second-largest bank reported profit that missed estimates and disclosed that the U.S. Department of Housing and Urban Development is auditing its originations of  government-backed loans.

Yum Brands fell 4.3 percent and McDonald’s dropped 1.5 percent. Shanghai Husi Food Co. is being investigated on allegations it sold chicken and beef past its expiration date.  Yum said that would result in shortages of some menu items.

Allergan Inc. jumped 2.2 percent to $171.14. The maker of the Botox wrinkle remover said it will cut 1,500 jobs as it tries to fend off a hostile takeover from Valeant Pharmaceuticals International Inc. The company also reported adjusted profit that topped analysts’ estimates.

EMC Corp. climbed 5 percent to $28.33. Elliott Management Corp. has amassed an active stake of more than $1 billion in EMC and is pushing the world’s biggest maker of storage computers to spin off its VMware Inc. unit, a person familiar with the matter said.

 

Have a wonderful evening everyone.

 

Be magnificent!

To make a decision is an illusion.

Behind the decision is the hidden belief

that everyone is the same.

Swami Prajnanpad, 1891-1974

 

As ever,

 

Carolann

 

Courage is grace under pressure.

-Ernest Hemingway, 1899-1961

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Nelson Mandela was born on this day in 1918.

There is nothing like returning to a place that remains unchanged to find the ways in which you yourself have altered. –Nelson Mandela

If you don’t have plans for the weekend, the folk festival is on in Vancouver at Jericho Beach.  Joan Baez, among others, will be performing.  Should be great.

Photos of the Day

The pack with Italy’s Vincenzo Nibali, wearing the overall leader’s yellow jersey, passes a field with sunflowers during the thirteenth stage of the Tour de France cycling race over 197.5 kilometers (122.7 miles) with start in Saint-Etienne and finish in Chamrousse, France. Christophe Ena/AP

Russian President Vladimir Putin leaves after his meeting with Russian Orthodox Patriarch Kirill (l.) as he attends celebrations marking the 700th anniversary of St. Sergius of Radonezh in the Trinity St. Sergius monastery in Sergiyev Posad, Russia. Mikhail Klimentyev/RIA-Novosti/Presidential Press Service/AP

Market Closes for July 18^th, 2014

Market Index	Close	Change
Dow Jones	17100.18	+123.37
		+0.73%
S&P 500	1978.22	+20.10   +1.03%
NASDAQ	4432.145	+68.698   +1.57%
TSX	15266.57	+62.09
		+0.41%

International Markets

Market Index	Close	Change
NIKKEI	15215.71	-154.55
		-1.01%
HANG SENG	23454.79	-66.08
		-0.28%
SENSEX	25641.56	+80.40
		+0.31%
FTSE 100	6749.45	+11.13
		+0.17%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.162	2.135
CND. 30 Year Bond	2.711	2.691
U.S. 10 Year Bond	2.4818	2.4441
U.S. 30 Year Bond	3.2881	3.2653

Currencies

BOC Close	Today	Previous
Canadian $	0.93165	0.92932
US $	1.07337	1.07606
Euro Rate 1 Euro=		Inverse
Canadian $	1.45172	0.68884
US $	1.35250	0.73937

Commodities

Gold	Close	Previous
London Gold Fix	1311.10	1319.20
Oil	Close	Previous
WTI Crude Future	103.13	103.19

Market Commentary:

Canada
By Eric Lam

July 18 (Bloomberg) — Canadian stocks rose, driving the benchmark index to a record, with energy producers climbing as crude oil capped the first weekly gain in a month.

Pine Cliff Energy Ltd. jumped 25 percent to an all-time high after agreeing to buy natural gas assets for C$100 million in cash. Torex Gold Resources Inc. and Sherritt International Corp. fell at least 2.2 percent to pace declines among raw- materials producers. Canadian Pacific Railway Ltd. added 3.3 percent for a fourth day of gains.

The Standard & Poor’s/TSX Composite Index rose 62.09 points, or 0.4 percent, to 15,266.57 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 12 percent this year, the second-best performer among the world’s developed markets. The benchmark equity gauge previously closed at a record on July 16.

Canada’s inflation rate unexpectedly increased to 2.4 percent in June, the most in more than two years, on higher food and clothing costs. The increase exceeded economist forecasts and comes two days after the central bank said it will ignore quicker price gains.

Encana Corp. added 1.4 percent to C$23.23 and Canadian Oil Sands Ltd. rose 1.2 percent to C$23.78 as energy stocks gained 0.8 percent as a group. Nine of 10 industries in the S&P/TSX advanced on trading volume 18 percent lower compared with the 30-day average.

Encana is preparing to sell its Deep Panuke offshore project in Nova Scotia later this year, according to people familiar with the matter, as Canada’s largest natural gas producer shifts production toward more oil.

West Texas Intermediate posted the first weekly gain in a month amid rising international tensions in Europe and the Middle East. WTI has climbed 3.2 percent since dropping below $100 a barrel on July 15 for the first time in two months.

Torex Gold lost 2.4 percent to C$1.60 and Sherritt International dropped 2.2 percent to C$4.36.  Gold for August delivery fell 0.6 percent to $1,309.40 an ounce in New York, after rallying 1.3 percent yesterday when a Malaysia Airlines plane was shot down over Ukraine and Israel sent ground forces into the Gaza Strip.

First Quantum Minerals Ltd. decreased 1 percent to C$24.86 and Lundin Mining Corp. dropped 1.3 percent to C$6.09 as copper fell to the lowest in more than two weeks in New York. Nickel declined the most since May 15.

US
By Jacob Barach and Callie Bost

July 18 (Bloomberg) — U.S. stocks jumped, with the Standard & Poor’s 500 Index rebounding from its worst drop since April, as Google Inc. rose after sales beat analysts’ estimates and concerns eased over crises in the Ukraine and Middle East.

Google, the world’s third-largest company by market value, jumped 3.7 percent after second-quarter revenue exceeded analysts’ projections as the company sold more advertising alongside Web-search results. Johnson & Johnson, Boeing Co. and Nike Inc. jumped more than 1 percent to lead gains in the Dow Jones Industrial Average. Advanced Micro Devices Inc. tumbled 16 percent after it forecast sales below estimates.

The S&P 500 rose 1 percent to 1,978.22 at 4 p.m. in New York, marking its biggest gain in three months and capping a weekly advance of 0.5 percent. The Dow climbed 123.37 points, or 0.7 percent, to 17,100.18. The Russell 2000 Index of smaller companies rallied 1.6 percent, paring its weekly loss to 0.7 percent. Trading in S&P 500 companies was 6.1 percent above the 30-day average for this time of day.

“I think when all these things hit the headlines, there’s a knee-jerk reaction,” Jim Paulsen, who helps oversee $357 billion in assets as chief investment strategist at San Francisco-based Wells Capital Management Inc., said in a phone interview. “Traders reacted yesterday and it’s bringing in investors today. Maybe they’re thinking of buying and all of a sudden stocks got a lot cheaper.”

The gain in the S&P 500 erased almost all of yesterday’s 1.2 percent decline in the S&P 500 as the market resumed an advance that has added more than $1 trillion to share values in 2014. Stocks rose as Google’s results helped bolster Wall Street forecasts for annual S&P 500 earnings growth of about 8 percent this year amid an expansion in gross domestic product forecast by economists to exceed 3 percent in the next two quarters.

The S&P 500 yesterday ended a string of 62 straight days without a gain or decline of more than 1 percent.

A Malaysian Airlines jet went down yesterday over eastern Ukraine, killing all 298 people on board, just a day after the U.S. and the European Union imposed further sanctions on Russia over the conflict. Russia and Ukraine blamed each other for the downing of the jet as moves to investigate the crash got under way. President Barack Obama said the violence in Ukraine is facilitated by Russia’s support for separatists and called for an immediate cease-fire.

Stocks extended losses late yesterday after Israel began a ground operation in the Gaza Strip.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, rallied 32 percent yesterday, the most since April 2013, closing at 14.54, a three-month high. The VIX dropped 17 percent today to 12.06.

Equities have rallied this year amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter. The S&P 500 closed at a record on July 3 while the Dow reached an all-time high on July 16.

The index of U.S. leading indicators rose in June for the fifth straight month, showing the economy continues to gain momentum following a slowdown at the start of 2014. A gauge of consumer sentiment declined this month. The Thomson Reuters/University of Michigan preliminary July index of sentiment decreased to 81.3 from 82.5 the prior month.

More than 140 companies in the S&P 500 are scheduled to report earnings next week, including Netflix Inc., McDonald’s Corp., Boeing, Apple Inc. and Microsoft Corp.

About 77 percent of the 82 companies in the S&P 500 that have posted results this earnings season beat analysts’ profit projections, and 70 percent exceeded sales estimates, data compiled by Bloomberg show. Profit by the gauge’s members increased 6.2 percent in the second quarter, and revenue rose 3.3 percent, according to analysts’ estimates compiled by Bloomberg.

About 5.8 billion shares changed hands on U.S. exchanges today, in line with the three-month average.

“We had a bit of a low expectation going into the second quarter, given the first quarter,” Jim Russell, who helps oversee $120 billion as a senior equity strategist at U.S. Bank Wealth Management in Cincinnati, said by phone. “We do feel the second quarter finished much stronger than it began. We think the economic drumbeat is growing louder and more constructive for the markets moving forward.”

Google rose 4.2 percent to $605.11 today in its biggest gain since October. Chief Executive Officer Larry Page is adding new features in mobile, video and Web services to boost user traffic and attract marketers as he seeks to bolster Google’s main ad business. The number of clicks on ads on YouTube, search and other Google sites increased 33 percent in the latest quarter, making up for a decline in ad prices.

All 10 main industries in the S&P 500 advanced. Health-care and technology stocks climbed more than 1.3 percent for the best performances.

The Bloomberg U.S. Airlines Index rose 2 percent to rebound from yesterday’s 3.2 percent slide. American Airlines Group Inc., Spirit Airlines Inc. and United Continental Holdings Inc. rose more than 2 percent to lead all 11 stocks in the index higher.

General Electric Co. slipped 0.6 percent as it reported profits that matched estimates. The company said it will hold an initial public offering for the Synchrony Financial unit, its Capital’s North American consumer operations, this month.

AMD tumbled 16 percent, the biggest drop since 2012. The third-quarter sales projection may indicate the chipmaker isn’t benefiting from a rebound in corporate spending on computers that has buoyed other companies in the personal-computer industry.

 

Have  a wonderful weekend everyone.

 

Be magnificent!

We do not progress from error to truth, but from truth to truth.

Thus we must see that none can be blamed for what they are doing, because they are,

at this time, doing the best they can.  We learn only from experience.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

If you can’t feed a hundred people, then feed just one.

-Mother Teresa, 1910-1997

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

The World

-William Brighty Rands

Great, wide, beautiful, wonderful World,
With the wonderful water round you curled,
And the wonderful grass upon your breast-
World, you are beautifully drest.

The wonderful air is over me,
And the wonderful wind is shaking the tree,
It walks on the water, and whirls the mills,
And talks to itself on the tops of the hills.

You friendly Earth, how far do you go,
With the wheatfields that nod and the rivers that flow,
With the cities and gardens, and cliffs, and isles,
And people upon you for thousands of miles?

Ah, you are so great, and I am so small,
I tremble to think of you, World, at all;
And yet, when I said my prayers today,
A whisper inside me seemed to say,
“You are more than the Earth, though you are such a dot:
You can love and think, and the Earth cannot.”

Photos of the Day

Britain’s Queen Elizabeth meets construction workers as she attends the official opening of the refurbished Reading Station, west of London. Ben Gurr/Reuters

Peoples cool off in fountains, in Nice, southeastern France. Temperatures in the area rose to 32 degrees Celsius (90 Fahrenheit). Lionel Cironneau/AP

Market Closes for July 17^th, 2014

Market Index	Close	Change
Dow Jones	16976.81	-161.39
		-0.94%
S&P 500	1958.12	-23.45   -1.18%
NASDAQ	4363.445	-62.522   -1.41%
TSX	15204.48	-21.86
		-0.14%

International Markets

Market Index	Close	Change
NIKKEI	15370.26	-9.04
		-0.06%
HANG SENG	23520.87	-2.41
		-0.01%
SENSEX	25561.16	+11.44
		+0.04%
FTSE 100	6738.32	-46.35
		-0.68%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.135	2.197
CND. 30 Year Bond	2.691	2.749
U.S. 10 Year Bond	2.4441	2.5260
U.S. 30 Year Bond	3.2653	3.3374

Currencies

BOC Close	Today	Previous
Canadian $	0.92932	0.93069
US $	1.07606	1.07447
Euro Rate 1 Euro=		Inverse
Canadian $	1.45553	0.68703
US $	1.35265	0.73929

Commodities

Gold	Close	Previous
London Gold Fix	1319.20	1299.63
Oil	Close	Previous
WTI Crude Future	103.19	101.20

Market Commentary:

Canada
By Eric Lam

July 17 (Bloomberg) — Canadian stocks fell from a record after a Malaysian passenger jet went down over Ukraine and reports that Israel sent ground forces into the Gaza Strip and

Birchcliff Energy Ltd. and Painted Pony Petroleum Ltd. retreated at least 3.4 percent to pace declines among energy stocks. Canadian Pacific Railway Ltd., the country’s second- largest railroad, rose 2.3 percent as profit beat estimates, powered by a rise in grain and coal shipments. Eldorado Gold Corp. and Agnico Eagle Mines Ltd. increased more than 4 percent as gold posted the biggest gain in four weeks.

The Standard & Poor’s/TSX Composite Index fell 21.86 points, or 0.1 percent, to 15,204.48 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 12 percent this year, the third-best performer among the world’s developed markets.

The Malaysian plane crashed in the main battleground of Ukraine’s civil war, threatening to further raise tensions just days after the U.S. said the rebels are getting weapons from Russia and tightened sanctions against the country.

Israel sent troops and tanks into the Gaza Strip in an offensive intended to stop the barrage of missiles fired by Hamas and other Palestinian militants. This is Israel’s first significant ground operation in the area since 2009 as the 10- day-old conflict has escalated after an Egyptian peace plan was spurned.

The MSCI All-World Index dropped 0.9 percent while the Chicago Board Options Exchange Volatility Index jumped 32 percent, the most since April 2013.

Canadian Pacific climbed 2.3 percent to C$202.33, a record.  Leftovers from a record Canadian wheat crop helped Canadian Pacific post a 32 percent jump in grain revenue in that category. Earnings in the latest period also benefited from a 15 percent increase in coal sales.

Energy stocks declined 0.8 percent as a group, the most in the S&P/TSX, as eight of 10 industries retreated on trading volume about 1 percent above the 30-day average.

Eldorado Gold added 4.2 percent to C$8.15 and Agnico Eagle advanced 4 percent to C$44.84 as the S&P/TSX Gold Index jumped 2.7 percent. Gold for August delivery rose 1.3 percent to settle at $1,316.90 an ounce in New York, the biggest gain in four weeks, as investors sought a safe haven on concern conflicts in Ukraine and the Middle East will escalate.

US
By Joseph Ciolli and Callie Bost

July 17 (Bloomberg) — The Standard & Poor’s 500 Index fell the most in three months and the VIX had the biggest jump in more than a year amid intensifying tension in Ukraine and the Middle East.

The S&P 500 fell 1.2 percent to 1,958.12 at 4 p.m. in New York. The gauge hadn’t risen or fallen 1 percent on a closing basis for 62 days, the longest streak since 1995. The Dow Jones Industrial Average slipped 161.39 points, or 0.9 percent, to 16,976.81. The Chicago Board Options Exchange Volatility Index surged 32 percent, the most since April 2013, to 14.54. More than 6.6 billion shares changed hands on U.S. exchanges today, 15 percent above the three-month average.

“People are selling out of fear,” Todd Lowenstein, a fund manager who helps manage $16 billion at Highmark Capital Management Inc. in Los Angeles, said in a phone interview. “The market is really acute to geopolitical risk. Given where valuations are and the move lately amid all the M&A activity, when you have some geopolitical shocks, people will look for a reason to sell.”

Equities extended losses in the final hour of trading after Israel sent ground forces into the Gaza Strip. The military offensive was intended to stop the barrage of missiles fired by Hamas and other Palestinian militants, raising the stakes of the 10-day-old conflict after an Egyptian peace plan was spurned.

The crisis in Ukraine escalated after a Malaysian Airlines passenger jet crashed, killing all 295 people on board. The government in Kiev blamed pro-Russian rebels for shooting down the jet, while the separatists deny the accusation.

The Malaysian plane crashed in the main battleground of Ukraine’s civil war and is one of a number to have been downed in the region in the past month. Russian President Vladimir Putin has repeatedly denied his country has any involvement in the insurgency. The U.S. said this week that Russia is supplying the rebels with weapons.

Airlines began shifting planes away from the region, which sits astride some of the busiest air routes between Europe and Asia. Delta Air Lines Inc. said it was staying away from the entire country. Delta, American Airlines Group Inc. and United Continental Holdings Corp. retreated more than 3.4 percent.

Stocks fell earlier today after the U.S. and European Union imposed sanctions on Russian banks, energy companies and defense firms in the latest attempt to pressure the country to end support for Ukrainian rebels.

The VIX rose to the highest level since April 15. The gauge jumped 17 percent last week for its biggest rally in three months, after closing July 3 at the lowest since 2007.

The S&P 500 rallied 7.2 percent this year through yesterday amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter. The benchmark index increased 0.4 percent yesterday as companies from Time Warner Inc. to Intel Corp. rallied amid deals and better-than- forecast earnings.

A total of 24 companies on the S&P 500 report earnings today, including Google Inc. and Schlumberger Ltd. Profit by the gauge’s members increased 4.5 percent in the second quarter, and revenue rose 3.1 percent, according to analysts’ estimates compiled by Bloomberg.

SanDisk Corp. dropped the most since 2009 percent after posting profit margins and sales forecasts that fell short of some analysts’ estimates. UnitedHealth jumped to a record as earnings topped forecasts.

Economic data showed beginning home construction unexpectedly declined in June to a nine-month low as a record plunge in the South swamped gains in the rest of the U.S. The number of Americans filing applications for unemployment benefits dropped last week, showing further healing in the labor market, while the Federal Reserve Bank of Philadelphia’s factory index increased in July.

Fed Bank of St. Louis President James Bullard said gains in the U.S. labor market and accelerating inflation may prompt an earlier exit from unprecedented stimulus.

“If macroeconomic conditions continue to improve at the current pace, the normalization process may need to begin sooner rather than later,” Bullard said in remarks prepared for a speech today in Owensboro, Kentucky.

Fed Chair Janet Yellen said told lawmakers yesterday the central bank plans to press on with record easing to combat persistent weakness in the job market.

Yellen also said asset valuations in general aren’t out of line with historical norms, after a central bank report earlier in the week indicated prices for smaller social-media and biotechnology companies are substantially stretched.

With the Dow at a record and the S&P 500 close to an all- time high reached this month, financial professionals are growing more anxious. Forty-seven percent of investors, analysts and traders in a Bloomberg Global Poll said the equity market is close to unsustainable levels, while 14 percent already see a bubble. Most respondents said stock swings will increase within six months, the July 15-16 poll showed.

All 10 main industries in the S&P 500 fell today, with energy and industrial shares dropping at least 1.5 percent for the largest declines.

Airlines slumped, as Delta Air Lines Inc., American Airlines Group Inc. and United Continental Holdings Corp.retreated more than 3.4 percent.

SanDisk tumbled 14 percent, its biggest loss in five years. The company, which had rallied 53 percent this year, has held back on increasing production, seeking to avoid a repeat of supply gluts that have caused semiconductor prices to fall below the cost of manufacturing. The chipmaker expects it won’t have enough inventory to meet all orders this quarter, it said.

AutoNation Inc. dropped 8.2 percent, the most since 2009, after the largest U.S. new-vehicle retailer reported quarterly profit that missed forecasts as investment in an online sales system increased costs.

Yum! Brands Inc. retreated 6.9 percent. The owner of fast- food chains such as KFC and Taco Bell posted second-quarter profit that trailed some analysts’ estimates, dragged down by a slump at its Pizza Hut restaurants.

Mattel Inc. fell 6.6 percent, the most since January, as second-quarter earnings and sales missed analysts’ estimates.

UnitedHealth added 1.6 percent to a record $85.11. The largest U.S. health insurer by sales beat analyst earnings estimates as revenue grew from its technology and consulting unit that helped fix the Obamacare insurance website.

Microsoft Corp. increased 1 percent after saying it will eliminate as many as 18,000 jobs, the largest round of cuts in its history, as Chief Executive Officer Satya Nadella integrates Nokia Oyj’s handset unit and slims down the software maker. The restructuring amounts to about 14 percent of its workforce.

 

Have a wonderful evening everyone.

 

Be magnificent!

Do not destroy.  Iconoclastic reformers do no good to the world.

Help, if you can;  if you cannot, fold your hands, stand by, and see things go on.

Therefore say not a word against any man’s convictions, sp far as tjeu are somcere.

Secondly, take man where he stands, and from thence give him a lift.

Swami Vivekananda, 1863-1902

 

As ever,

 

Carolann

 

Things do not change; we change.

-Henry David Thoreau, 1817-1862

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day in 1951, author J.D. Salinger published the novel The Catcher in the Rye.

A few memorable gems from Catcher in the Rye:

“Among other things, you’ll find that you’re not the first person who was ever confused and frightened and even sickened by human behavior. You’re by no means alone on that score, you’ll be excited and stimulated to know. Many, many men have been just as troubled morally and spiritually as you are right now. Happily, some of them kept records of their troubles. You’ll learn from them—if you want to. Just as someday, if you have something to offer, someone will learn something from you. It’s a beautiful reciprocal arrangement. And it isn’t education. It’s history. It’s poetry.”

“The mark of an immature man is that he wants to die nobly for a cause, while the mark of the mature man is that he wants to live humbly for one.”

“A lot of people, especially this one psychoanalyst guy they have here, keeps asking me if I’m going to apply myself when I go back to school next September. It’s such a stupid question, in my opinion. I mean how do you know what you’re going to do till you do it?”

“Don’t ever tell anybody anything. If you do, you start missing everybody.”

“Some game. If you get on the side where all the hot-shots are, then it’s a game, all right – I’ll admit that. But if you get on the other side, where there aren’t any hot-shots, then what’s a game about it? Nothing. No game.”

“I’m the most terrific liar you ever saw in your life. It’s awful. If I’m on my way to the store to buy a magazine, even, and somebody asks me where I’m going, I’m liable to say I’m going to the opera. It’s terrible.”

“What really knocks me out is a book that, when you’re all done reading it, you wish the author that wrote it was a terrific friend of yours and you could call him up on the phone whenever you felt like it. That doesn’t happen much, though.”

– Holden talking about authors like Ring Lardner, Isak Dinesen, and Thomas Hardy

“I am always saying “Glad to’ve met you” to somebody I’m not at all glad I met. If you want to stay alive, you have to say that stuff, though.”

Photos of the Day

A bolt of lightning strikes the Empire State Building during a summer rain storm in New York July 15. Lucas Jackson/Reuters

Honda’s latest version of the Asimo humanoid robot walks up stairs during a presentation in Zaventem near Brussels, Belgium. Honda introduced in Belgium an improved version of its Asimo humanoid robot that it says has enhanced intelligence and hand dexterity, and is able to run at a speed of some 9 kilometers per hour (5.6 miles per hour). Francois Lenoir/Reuters

Market Closes for July 16^th, 2014

Market Index	Close	Change
Dow Jones	17138.20	+77.52
		+0.45%
S&P 500	1981.57	+8.29   +0.42%
NASDAQ	4425.969	+9.582   +0.22%
TSX	15226.34	+145.02
		+0.96%

International Markets

Market Index	Close	Change
NIKKEI	15379.30	-15.86
		-0.10%
HANG SENG	23523.28	+63.32
		+0.27%
SENSEX	25549.72	+321.07
		+1.27%
FTSE 100	6784.67	+74.22
		+1.11%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.197	2.214
CND. 30 Year Bond	2.749	2.769
U.S. 10 Year Bond	2.5260	2.5522
U.S. 30 Year Bond	3.3374	3.3732

Currencies

BOC Close	Today	Previous
Canadian $	0.93069	0.92963
US $	1.07447	1.07570
Euro Rate 1 Euro=		Inverse
Canadian $	1.45322	0.68813
US $	1.35250	0.73937

Commodities

Gold	Close	Previous
London Gold Fix	1299.63	1294.23
Oil	Close	Previous
WTI Crude Future	101.20	99.96

Market Commentary:

Canada
By Eric Lam

July 16 (Bloomberg) — Canadian stocks rose to a record, after falling to a two-week low yesterday, as the central bank kept interest rates steady and commodities advanced the most in a month on faster-than-forecast growth in China.

Barrick Gold Corp. gained 2.9 percent after announcing executive changes less than three months after a breakdown in merger talks with its largest rival. Precision Drilling Corp. jumped 4.5 percent after agreeing to a strategic technology and service agreement with Schlumberger Ltd. BlackBerry Ltd. sank 12 percent after Apple Inc. and International Business Machines Corp. agreed to a partnership to reach more businesses.

The Standard & Poor’s/TSX Composite Index rose 145.02 points, or 1 percent, to 15,226.34 at 4 p.m. in Toronto, jumping the most since April to top a record set July 9. The benchmark Canadian equity gauge has gained 12 percent this year, the third-best performer among the world’s developed markets.

Bank of Canada policy makers kept their benchmark rate on overnight loans between commercial banks at 1 percent, where it’s been for almost four years, and said faster inflation has been caused by one-time gains in energy and import prices, not changes in economic fundamentals.

Canadian factory sales jumped 1.6 percent in May, to C$51.6 billion ($48 billion), after a revised 0.2 percent decline in April, Statistics Canada said today in Ottawa.

Nine of 10 industries advanced on trading volume in line with the 30-day average. Raw-materials stocks jumped 1.3 percent as a group and the S&P/TSX Energy Index rallied 1.4 percent to pace gains in the benchmark equity gauge.

The S&P GSCI Index, which tracks a basket of commodities prices, increased 0.4 percent, the most since June 19. Economic growth beat estimates in China. Gross domestic product rose 7.5 percent in the second quarter in China, the world’s biggest consumer of energy and raw materials, data showed.

Barrick Gold rose 2.9 percent to C$20.28. Chief Executive Officer Jamie Sokalsky said he will be stepping down two years into the job. Kelvin Dushnisky and Jim Gowans will be appointed co-presidents, the company said in a release.

BlackBerry plunged 12 percent to C$10.72, the most since November, after longtime rivals Apple and IBM agreed to a deal yesterday in which IBM will push iPhones and iPads in exchange for a chance to sell software and services to more companies. A key component of BlackBerry’s turnaround strategy has been to target that same business services market.

US
By Jacob Barach

July 16 (Bloomberg) — U.S. stocks advanced, sending the Dow Jones Industrial Average to an all-time high, as companies from Time Warner Inc. to Intel Corp. rallied amid deals and earnings reports.

Time Warner surged 17 percent as Rupert Murdoch’s 21st Century Fox Inc. made a takeover bid that was rebuffed. Intel jumped 9.3 percent as its third-quarter sales forecast fueled optimism the personal-computer market is emerging from a two- year slump. International Business Machines Corp. rose 2.1 percent after agreeing with Apple Inc. to develop applications for corporate users of wireless devices.

The Standard & Poor’s 500 Index added 0.4 percent to 1,981.57 at 4 p.m. in New York. The Dow increased 77.52 points, or 0.5 percent, to a record 17,138.20. The Russell 2000 Index of smaller companies fell 0.2 percent, after slumping 1 percent yesterday amid Federal Reserve concerns over valuations.

“I think Yellen might have derailed a few things yesterday, but today it’s back to earnings again and rightfully so,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a phone interview. “Earnings season is a big deal and you have a couple of big names that have looked good with many, many to come.”

Fed Chair Janet Yellen said today that asset valuations in general aren’t out of line with historical norms, after a central bank report yesterday indicated prices for smaller social-media and biotechnology companies are substantially stretched.

“I’m not seeing alarming warning signals,” Yellen said in response to questions from the House Financial Services Committee. While some asset values “may be on the high side and there may be some pockets where we see valuations becoming stretched,” in general “price equity ratios and other measures are not outside of historical norms,” she said.

The S&P 500 has rallied 7.2 percent this year amid better- than-estimated corporate earnings and central bank stimulus. The U.S. economy is showing signs of recovering from a 2.9 percent contraction in the first quarter.

Data today showed U.S. industrial production climbed 0.2 percent in June, capping the strongest quarter in almost four years. The Federal Reserve said in its Beige Book business survey released today that economic growth was modest to moderate in the latest period as all 12 of its districts reported stronger consumer spending and expanded manufacturing.

Equity futures climbed as a report showed China’s economic growth accelerated for the first time in three quarters. Gross domestic product rose 7.5 percent in the April-June period from a year earlier, beating the 7.4 percent median estimate in a Bloomberg News survey of economists.

“You’re starting to see the economy and leading indicators move in the direction that most people expected to start the year,” Chris Hyzy, chief investment officer of U.S. Trust in New York, said in a phone interview. That’s leading to better- than-forecast earnings for economically sensitive companies, he said, while increased merger activity is “emblematic of a corporate sector that has more comfort in the next couple of years.”

Fourteen companies in the S&P 500 including EBay Inc. and Yum! Brands Inc. are reported second-quarter results today. Profit by the gauge’s members increased 4.5 percent in the quarter, and revenue rose 3.1 percent, according to estimates compiled by Bloomberg.

Intel climbed 9.3 percent to $34.65, the highest level since 2002. The PC market has shown signs of improvement this year as corporate spending picked up and U.S. shipments returned to growth. Intel’s outlook indicates demand is starting to recover among consumers, who may be buying laptops and desktops again after years of opting for smartphones and tablets instead.

Intel also added $20 billion to its stock-repurchase program, including $4 billion planned for the third quarter.

Time Warner surged 17 percent, the most since 2000, to $83.13 for the largest gain in the S&P 500. Murdoch’s Twenty- First Century Fox is willing to pay more than $85 a share for Time Warner, according to people with knowledge of the matter, a sign the company is undeterred after being rebuffed in an initial offer. Fox shares fell 6.2 percent.

IBM gained 2.1 percent. The deal with Apple enables the iPhone maker to expand beyond individual customers and add more corporate clients through IBM’s sales force. IBM gets a boost in its effort to sell software and services to companies seeking to manage workers’ wireless devices. Apple shares fell 0.6 percent, reversing an earlier rally of 1.9 percent.

International Game Technology jumped 9.2 percent. Rome- based Gtech SpA agreed to buy the world’s biggest slot-machine maker for $4.7 billion.

General Electric Co. rallied 1.5 percent. The company is in talks with potential acquirers about selling its century-old household appliances business, said people familiar with the matter.

“This M&A just seems to have taken off, not that it was dead before, it just seems to be almost a daily event,” said Timothy Ghriskey, chief investment officer at New York-based Solaris Asset Management LLC, in a phone interview. “A bid for something like Time Warner, that’s big news. A takeover environment creates a lift to the markets. Everyone is looking for the next big name.”

The Russell 2000 fell, extending its loss to 1.2 percent over that period and erasing its gain for the year, after the Fed said valuations for smaller social-media and biotechnology companies are substantially stretched. Small-caps and Internet shares were the biggest victims of a market retreat earlier this year as investors dumped the best performers of the bull market amid concern valuations advanced too far.

The Dow Jones Internet Composite Index slid 0.5 percent today. Pandora Media Inc. retreated 1.8 percent, after a 1.2 percent loss yesterday. Groupon Inc. declined 1.6 percent.

Yahoo! Inc. fell 5.1 percent as the U.S. Web portal reported second-quarter earnings and sales that fell short of analysts’ estimates.

The Nasdaq Biotechnology Index declined 1.3 percent after tumbling 2.3 percent yesterday.       Seven of 10 main industries in the S&P 500 advanced today.  Energy companies increased 1.6 percent for the largest gain.  Technology shares jumped 1 percent.  The S&P Supercomposite Homebuilding Index rose 1.9 percent. Homebuilder confidence in July rose more than forecast to the highest level in six months as growing payrolls brightening the outlook. PulteGroup Inc. and D.R. Horton Inc. climbed more than 1.4 percent.

Financial shares dropped 0.1 percent and health-care companies lost 0.3 percent.

Bank of America Corp. dropped 1.9 percent. The second- biggest U.S. bank said profit declined 43 percent as it spent $4 billion to cover litigation costs, including a mortgage settlement with American International Group Inc.

The Chicago Board Options Exchange Volatility Index fell 8 percent to 11.00. The gauge known as the VIX jumped 17 percent last week for its biggest rally in three months, after closing July 3 at the lowest since 2007.

More than 6.3 billion shares changed hands on U.S. exchanges today, 9.2 percent above the three-month average.

 

Have a wonderful evening everyone.

 

Be magnificent!

We know that toleration is not sufficient toward another religion; we must accept it.

Thus it is not a question of subtraction, it is a question of addition.

The truth is the result of all these different sides added together.

Each religion represents one side, the fullness being the addition of all these.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

The test of good manners is to be patient

with the bad ones.

-Solomon Ibn Gabriol, 1021-1058

Carolann Steinhoff, B.Sc., CFP, CIM, CIWM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

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

Photos of the Day

Lightning strikes One World Trade Center in Manhattan as it is seen from Weehawken during a summer storm over New York, July 14.Eduardo Munoz/Reuters

Bob Grutza rides on horseback through a field of sunflowers near Maysville, Ky. Terry Prather/The Ledger Independent/AP

Market Closes for July 15^th, 2014

Market  Index	Close	Change
Dow  Jones	17060.68	+5.26
		+0.03%
S&P 500	1973.28	-3.82    -0.19%
NASDAQ	4416.387	-24.033    -0.54%
TSX	15081.32	-89.91
		-0.59%

International Markets

Market  Index	Close	Change
NIKKEI	15395.16	+98.34
		+0.64%
HANG  SENG	23459.96	+113.29
		+0.49%
SENSEX	25228.65	+221.67
		+0.89%
FTSE 100	6710.45	-35.69
		-0.53%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.214	2.212
CND.  30 Year Bond	2.769	2.769
U.S.   10 Year Bond	2.5522	2.5431
U.S.  30 Year Bond	3.3732	3.3682

Currencies

BOC Close	Today	Previous
Canadian $	0.92963	0.93346
US  $	1.07570	1.07128
Euro Rate  1 Euro=		Inverse
Canadian  $	1.45956	0.06882
US  $	1.35685	0.73700

Commodities

Gold	Close	Previous
London Gold  Fix	1294.23	1307.20
Oil	Close	Previous
WTI Crude Future	99.96	100.91

Market Commentary:

Canada

By Oliver Renick

July 15 (Bloomberg) — Canadian stocks dropped to a two- week low as energy shares declined after oil prices fell below $100 for the first time since May.

Pacific Rubiales Energy Corp. and Lightstream Resources Ltd. sank more than 5.4 percent. Argonaut Gold Inc. lost 8.8 percent after saying gold production in the second quarter fell. Pretium Resources Inc. and Detour Gold Corp. retreated at least 4.2 percent as gold prices retreated to a three-week low.

The Standard & Poor’s/TSX Composite Index lost 89.91 points, or 0.6 percent, to 15,081.32 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 11 percent this year, the third-best performance among the world’s developed markets. The index closed at a record on July 9.

The S&P/TSX Energy Index dropped 1.2 percent as eight of 10 industries in the S&P/TSX fell. West Texas Intermediate crude fell 0.9 percent to $99.96 in New York, the lowest settlement since May 6. Brent tumbled to a three-month low as supply- disruption concerns eased with Libyan output gains and as Iraqi shipments were unaffected by an insurgency.

Lightstream Resources lost 6.2 percent to C$7.11. The company said production for the second quarter averaged 42,500 barrels of oil equivalent per day, a 3 percent reduction from first-quarter levels.

Pacific Rubiales Energy retreated 5.4 percent to C$19.25.

Argonaut Gold slid 8.8 percent to C$4.16, the biggest decline since January. The Reno, Nevada-based gold mining company said production in the second quarter was 30,310 gold equivalent ounces, compared with 34,572 ounces the year before.

Pretium Resources slumped 5.3 percent to C$8.70 and Detour Gold lost 4.2 percent to C$13.62 as gold futures fell 0.7 percent to settle at $1,297.10 an ounce in New York. Yesterday, the price dropped 2.3 percent.

US

By Jeremy Herron and Lu Wang

July 15 (Bloomberg) — U.S. stocks fell after Federal Reserve comments that some sectors have excessive valuations overshadowed better-than-estimated bank earnings. The dollar strengthened while Treasuries traded little changed as Chair Janet Yellen told lawmakers stimulus was still required.

The Standard & Poor’s 500 Index fell 0.2 percent, while the Russell 2000 Index of smaller companies sank 1 percent after the Fed said in a report that valuations of some biotechnology and social-media stocks may be “substantially stretched.” JPMorgan Chase & Co. and Goldman Sachs Group Inc. jumped. U.S. crude fell below $100 a barrel for the first time since May. Ten-year Treasury yields held at 2.55 percent, near a six-week low. The dollar gained against most major peers and gold fell.

The Fed must press on with economic stimulus as “significant slack” remains in labor markets and inflation is still below the central bank’s goal, Yellen said in testimony before the Senate Banking Committee. Retail sales data today showed a broad-based increase in June, which probably helped the U.S. economy’s rebound in the second quarter. JPMorgan Chase said second-quarter profit beat analysts’ estimates and Goldman Sachs reported a surprise increase in earnings.

“The Fed wants to pay attention to valuations given that they might have to change the interest rate backdrop that has been a strong catalyst for the market,” Eric Teal, who helps oversee about $3.6 billion as the chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina, said by phone. ‘The small cap area is going to be much more interest rate sensitive.’’

Yellen repeated comments from last month that the Fed will keep benchmark interest rates low for a considerable time after ending its asset-purchase program, even as it saw improvements in the economy and job market.

“A high degree of monetary policy accommodation remains appropriate,” Yellen said today. “Although the economy continues to improve, the recovery is not yet complete.”

Yellen cited labor-market weaknesses even after an unexpectedly fast decline in unemployment put pressure on Fed officials to consider accelerating their timetable for an interest-rate increase.

Minutes from the Fed’s June meeting, released last week, showed some policy makers were concerned investors may be growing too complacent about the economic outlook and the central bank should be on the lookout for excessive risk-taking.

The Fed said in a separate report released today that “valuation metrics in some sectors do appear substantially stretched, particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.”

The Dow Jones Internet Composite Index slipped 0.7 percent. The gauge had rallied 15 percent from a low reached May 8 to erase its losses for the year before falling 3.2 percent last week. The measure surged 54 percent in 2013.

Pandora Media Inc., which trades at more than 160 times projected earnings, fell 1.2 percent. Facebook Inc. and TripAdvisor Inc., which rallied more than 98 percent in 2013, lost at least 1.1 percent.

The Nasdaq Biotechnology Index slid 2.3 percent, after falling 3.2 percent last week, the most since April. The gauge had rallied as much as 23 percent from a low reached that month.

The Standard & Poor’s Smallcap 600 Index trades at 26 times reported profit and the Nasdaq biotechnology measure has a valuation of more than 500, according to data compiled by Bloomberg. The broader S&P 500 has a price-earnings ratio of 18, the most expensive level since 2010.

The comments in the Fed report spurred a “short-term reaction” in markets, Walter “Bucky” Hellwig, a Birmingham, Alabama-based senior vice president at BB&T Wealth Management, said by phone. “What it did is throw some cold water on some of the better earnings reports that were out earlier and had the markets on a roll.”

The valuations remarks also overshadowed data today showing U.S. retail sales rose 0.2 percent in June after a 0.5 percent advance in May that was larger than previously reported. The New York Fed’s Empire manufacturing report unexpectedly rose to 25.6 for this month from 19.28 last month.

The S&P 500 climbed 0.5 percent yesterday, the most since July 3, to rebound from its worst week since April. Profit at S&P 500 companies probably rose 4.5 percent in the three months through June while sales advanced 3.1 percent, analyst estimates compiled by Bloomberg show.

JPMorgan Chase climbed 3.5 percent and Goldman Sachs rose 1.3 percent to lead an index of banks to the biggest advance among 24 groups in the S&P 500. The two lenders posted the steepest gains in the Dow Jones Industrial Average, with the 30- stock index up less than 0.1 percent today.

Both firms reported fixed-income revenue that topped estimates. Banks have seen a tapering of profits in recent quarters as the Fed slowed its bond buying program and fixed- income clients made fewer bets amid low volatility.

Wells Fargo & Co., the most valuable U.S. bank, reported a 3.8 percent increase in second-quarter profit last week on lower credit costs, while Citigroup Inc. said yesterday that net income fell 96 percent as the company agreed to pay $7 billion to resolve a mortgage-related probe. Bank of America Corp., the second-biggest U.S. lender by assets, is scheduled to report results tomorrow.

Lorillard Inc. dropped more than 10 percent after Reynolds American Inc. reached an agreement to buy its rival for $27.4 billion including debt. Reynolds lost 6.9 percent.

Intel Corp., the world’s biggest maker of semiconductors, gained more than 4 percent in extended U.S. trading after forecasting third-quarter sales that exceeded some analysts’ predictions after markets closed.

Apple Inc. and International Business Machines Corp. rose in after-hours trading as the two companies said they will work together to create business-software applications for iPhone and iPad users. Apple added 1.6 percent in extended trading, while IBM gained 2.3 percent.

The Stoxx Europe 600 Index sank 0.4 percent after yesterday rallying the most in a week. Software AG declined 19 percent after the Darmstadt, Germany-based company lowered its operating-margin forecast, dragging technology companies down for the second-biggest decline among 19 industry groups. Draegerwerk AG slumped 16 percent after the maker of medical equipment cut its projection for sales growth.

Banco Espirito Santo SA tumbled 15 percent to the lowest price in data going back to 1993. The bank’s subordinated bonds also tumbled as 847 million euros ($1.15 billion) of short-term debt sold by a company linked to the Portuguese lender falls due today.

Rioforte Investments SA, a holding company of the Espirito Santo group, owes the money to Portugal Telecom SGPS SA, according to a June 30 regulatory filing by the nation’s biggest phone company.

The British pound advanced 0.4 percent to $1.7143 and added 0.7 percent to 79.15 pence per euro. The Office for National Statistics said annualized U.K. inflation quickened to 1.9 percent in June from 1.5 percent in May. That compared with a 1.6 percent forecast by analysts surveyed by Bloomberg.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major counterparts, rose to the highest level since June 24, adding 0.2 percent. The dollar climbed 0.1 percent to 101.68 yen after rallying the most yesterday against Japan’s currency since July 3. The euro added 0.4 percent to $1.3568, the strongest level since June.

Gold futures fell 0.7 percent to settle at $1,297.10 an ounce, the lowest close since June 18 after yesterday posting the steepest one-day drop since December, 2013.

Corn futures slid 1.7 percent after yesterday rebounding from a four-year low. Seventy-six percent of corn and 72 percent of soybeans were in good or excellent condition as of July 13, the best shape for that time of year since 1994, U.S. Department of Agriculture data released yesterday showed.

West Texas Intermediate oil fell 0.9 percent to $99.96 a barrel in New York, the lowest settlement price since May 6. WTI slid amid signs of a recovery in Libyan exports, stable output in Iraq and the highest U.S. crude production in almost three decades.

The MSCI Emerging Markets Index rose 0.3 percent to close at its highest level since February 2013. South Korea’s Kospi index jumped 0.9 percent, advancing for a second day as exporters gained. Stocks in Dubai rose 3.4 percent, sending the benchmark index back into a bull market three weeks after a selloff ended the longest rally since 2005.

China reports second-quarter gross-domestic product data tomorrow, with analysts expecting the economy expanded 7.4 percent from a year earlier, matching the rate of growth in the first three months of the year. June retail sales and industrial production are also due.

Have a wonderful evening everyone.

 

Be magnificent!

 

“Take up one idea. Make that one idea your life – think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone.  This is the way to success.” – Swami Vivekananda

As ever,

 

Karen

 

“Happiness is not something ready made. It comes from your own actions”. Dalai Lama

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Bastille Day today.  It was on this day in 1789 that  a mob stormed the state prison in  Paris that held political prisoners of the French royals, marking the beginning of the French Revolution.  The Bastille was originally built as a royal castle by Charles V between 1370 and 1383.

Photos of the Day

Youths release doves at the end of the traditional Bastille Day parade on the Champs Elysees in Paris. Benoit Tessier/Reuters

The Queen’s Swan Marker David Barber carries a swan back to the river during the annual Swan Upping ceremony on the River Thames in southern England. Young cygnets are counted and swans and cygnets are assessed for signs of injury or disease during the ceremony. The five-day census of the swan population dates back to the twelfth century. Luke MacGregor/Reuters

Market Closes for July 14^th, 2014

Market   Index	Close	Change
Dow   Jones	17055.42	+111.61
		+0.66%
S&P 500	1977.10	+9.53    +0.48%
NASDAQ	4440.418	+24.928    +0.56%
TSX	15171.23	+45.73
		+0.30%

International Markets

Market   Index	Close	Change
NIKKEI	15296.82	+132.78
		+0.88%
HANG   SENG	23346.67	+113.22
		+0.49%
SENSEX	25006.98	-17.37
		-0.07%
FTSE 100	6746.14	+55.97
		+0.84%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.212	2.213
CND.   30 Year Bond	2.769	2.769
U.S.   10 Year Bond	2.5431	2.5160
U.S.   30 Year Bond	3.3682	3.3366

Currencies

BOC Close	Today	Previous
Canadian $	0.93346	0.93145
US   $	1.07128	1.07360
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45911	0.68535
US   $	1.36202	0.73420

Commodities

Gold	Close	Previous
London Gold   Fix	1307.20	1338.62
Oil	Close	Previous
WTI Crude Future	100.91	100.83

Market Commentary:

Canada
By Eric Lam

July 14 (Bloomberg) — Canadian stocks rose a second day as energy shares advanced and the nation’s largest lenders climbed after data showed home prices increased.

Athabasca Oil Corp. jumped 3.8 percent after PetroChina Co. said it is committed to completing the purchase of a stake in an oil-sands project. Royal Bank of Canada added 0.3 percent to reach a record. Bombardier Inc. rose 1.6 percent after a U.K. lessor signed letters of intent to purchase as many as 24 CSeries jets. Argonaut Gold Inc. and Alacer Gold Corp. slumped more than 5.2 percent after gold prices posted the biggest loss this year as Portuguese banking concerns eased, lessening demand for safe haven assets.

The Standard & Poor’s/TSX Composite Index rose 45.73 points, or 0.3 percent, to 15,171.23 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 11 percent this year, the third-best performer among the world’s developed markets. The index closed at a record on July 9.

Athabasca Oil climbed 3.8 percent to C$7.13 to pace gains among energy stocks. The S&P/TSX Energy Index climbed 0.9 percent, the most in the benchmark Canadian equity gauge. Seven of 10 industries in the S&P/TSX rose.

Chen Shudong, the incoming director of China National Petroleum Corp.’s Canadian unit, said in an e-mail that PetroChina is committed to completing its C$1.32 billion ($1.23 billion) purchase of the stake it doesn’t own in the Dover oil- sands project in Canada from Athabasca.

Royal Bank, the nation’s second-largest lender by assets, added 0.3 percent to C$78.54, an all-time high. The S&P/TSX Banks Index rose 0.5 percent to a record. Home prices rose 0.9 percent in June for a third month of gains, according to the Teranet-National Bank Home Price Index.

Bombardier rallied 1.6 percent to C$3.83, the biggest increase in a month. The company said July 12 that Falko Regional Aircraft Ltd. has signed letters of intent for as many as 24 CS100 aircraft. The company’s CSeries jet was absent from the world’s biggest aviation expo after an engine caught fire during May testing.

Lundin Mining Corp. increased 1.8 percent to C$6.38, a three-year high. The base metals miner said it has been “actively pursuing” the acquisition of a mining project or operating mine.

US
By Stephen Kirkland and Jeremy Herron

July 14 (Bloomberg) — U.S. stocks rose with European equities on an increase in takeover activity and Citigroup Inc. earnings. Treasuries and gold retreated, while Portuguese bonds advanced.

The Standard & Poor’s 500 Index added 0.5 percent to  1,977.11 at 4 p.m. in New York, rebounding for the biggest weekly drop since April. Citigroup jumped 3 percent after reporting adjusted profit that topped estimates. Goldman Sachs Group Inc. boosted its year-end target for the U.S. equities benchmark to 2,050. The yield on 10-year Treasuries rose three basis points to 2.54 percent. Portugal’s 10-year securities had the steepest two-day gain in a month. Gold was poised for the biggest drop in almost seven months.

Citigroup rose after better-than-expected trading revenue and lower credit costs helped second-quarter profit beat analysts’ estimates and the company resolved a mortgage-related probe. Companies from Goldman Sachs Group Inc. to Intel Corp. and Johnson & Johnson report earnings this week. Shire agreed to recommend the latest bid from AbbVie Inc. to its shareholders, while Abbot Laboratories said it will sell its generic-drug business. European Central Bank President Mario Draghi testified to lawmakers in Strasbourg after announcing a package of measures last month to shore up the economy. Federal Reserve Chair Janet Yellen testifies before Congress tomorrow.

“The second-quarter earnings season in the U.S. is likely to be the next major driver of global markets,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in an e-mail to clients today. “With all the major U.S. banks reporting this week, the market will get the best view of the ‘self-sustaining’ U.S. economy that the Fed now sees.”

The S&P 500 slid 0.9 percent last week amid signs of financial stress at a Portuguese bank and speculation that the recent rally is overdone. Profit at S&P 500 companies probably rose 4.5 percent in the three months through June, while sales gained 3.1 percent, analyst estimates compiled by Bloomberg show.

Citigroup led financial shares higher. Revenue from equity and fixed-income trading, while down 15 percent from a year earlier, fell less than the third-largest U.S. bank by assets predicted two months ago. Earlier today, Citigroup and the U.S. Justice Department announced a $7 billion agreement that resolves a probe into sales of mortgage securities leading up to the financial crisis.

Goldman Sachs raised its S&P 500 forecast for 2014 today to 2,050 from 1,900. Rising earnings and faster economic growth will push equities higher and stocks are still attractive relative to bonds, according to a research report from David Kostin, chief equity U.S. strategist at the bank.

“Earnings generally are coming in pretty positively here and revenues are as well,” said Timothy Ghriskey, chief investment officer at New York-based Solaris Asset Management LLC, in a phone interview. “It’s a very early stage in this earning’s season to declare victory, but the indications look good here. Citi’s numbers are very strong.”

Investors will also be watching statements from central banks and economic reports this week for clues to the strength of the global economy.

Yellen will deliver her semi-annual monetary policy testimony to the Senate Banking Committee tomorrow and to the House Committee on Financial Services the following day.

Minutes of the Fed’s June meeting released last week showed officials have agreed they’ll end their asset-purchase program in October if the economy holds up. At the same time, the policy makers said the central bank should continue to support favorable financial conditions needed to sustain growth, according to the minutes.

Draghi said today the ECB stands ready to take further action if needed after the central bank recently announced a targeted lending program for banks that aims to boost credit for the real economy. The so-called TLTRO program, part of a wider package of measures announced in June, offers as much as four years of low-cost funding tied to bank lending.

The Stoxx Europe 600 Index climbed 0.9 percent as all 19 industry groups rose. The gauge slid 3.2 percent last week, its biggest weekly drop since March.

Shire Plc advanced 0.7 percent after the U.K. drugmaker said it’s willing to back a 31.4 billion-pound ($53.7 billion) takeover by AbbVie Inc. Rolls-Royce Holdings Plc rose 1.3 percent after Airbus Group NV said it will use the U.K. company’s engines to upgrade its A330 plane. Airbus was little changed.

Meda AB, the Swedish producer of allergy medicine, fell 4.7 percent. Mylan Inc. is buying Abbott Laboratories’ generic-drug business and forming a new company that will be incorporated in the Netherlands. Mylan rose 2.1 percent.

“It looks like this is another merger Monday, which could be adding to optimism we’re seeing today,” Jeffrey Saut, chief investment strategist at Raymond James & Associates Inc., said by phone. Raymond James oversees $450 billion in assets. “You had all these mergers and takeover announcements over the weekend. It’s not just here in the U.S., it’s been a global phenomenon throughout the first half of this year.”

Banco Espirito Santo SA tumbled 7.5 percent and its subordinated bonds fell to a record. The bank’s parent sold a 4.99 percent stake to meet loan repayments and the firm named Vitor Bento chief executive officer today. Financial troubles at the group sparked concern last week that the region was vulnerable to financial shocks, triggering a selloff that helped erase $1 trillion from the value of global equities.

“Last week was a reminder that the European financial crisis is far from over,” said Christian Zogg, who manages the equivalent of about $11 billion as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “The Portuguese bank Espirito Santo was doing some harm to sentiment.  The situation seems to be under control so far.”

Portugal’s 10-year yield fell six basis points to 3.81 percent. The rate is down 18 basis points in the past two trading days, the biggest drop since the period through June 9.

The MSCI Emerging Markets Index added 0.5 percent, advancing after the first weekly decline in three. The Shanghai Composite Index added 1 percent, the most in a month, and the Hang Seng China Enterprises Index of mainland shares traded in Hong Kong added 0.8 percent. Thai shares extended the longest winning streak in almost four years.

China’s economy, the world’s second-largest, probably expanded 7.4 percent in the three months to June 30 from a year earlier, according to the median of 44 economists’ estimates compiled by Bloomberg before data scheduled for July 16.

The ruble retreated 0.4 percent per dollar and the Micex Index slipped 1.1 percent. Russia and Germany called for a resumption of Ukraine crisis talks after an artillery shell landed in Russian territory, killing one person.

The yen fell against all of its 16 major peers amid speculation central banks will maintain accommodative monetary policy that boosts demand for higher-yielding assets.

The Japanese currency declined 0.2 percent to 101.585 per dollar. It fell 0.3 percent to 138.34 per euro. The 18-nation shared currency was little changed at $1.36184.

Gold dropped 2.3 percent to settle at $1,306.70, the biggest drop since Dec. 19. The metal will be lower by the end of December as the economy improves, Jeffrey Currie, head of commodities research at Goldman Sachs, said in a July 11 interview. Currie expects prices will be $1,050 by the end of 2014, maintaining a forecast from the start of the year.

Corn futures extended a decline to a four-year low on signs of ample  supplies in the U.S., the world’s biggest producer. Soybeans and wheat rebounded.

 

Have a wonderful evening everyone.

 

Be magnificent!

Selfishness in man is a beginning.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Live as if you were to die tomorrow.  Learn as if

you were to live forever.

-Mahatma Gandhi, 1869-1948

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7