Month: July 2014

Dear Friends,

Tangents:

On this day…

1960 “To Kill a Mockingbird,” Harper Lee’s Pulitzer Prize-winning novel, was published.

In 1914, Babe Ruth made his major-league debut in Fenway Park as a pitcher for the Red Sox. He pitched seven innings and led Boston to a 4-3 win over against Cleveland.

Something to note for the weekend:

On Sunday, Jane Goodall will introduce National Geographic’s Kingdom of the Apes, a fascinating look into the social structures of gorilla packs in the Rwandan mountains.  The clash between the oldest male, Titus, and his son, Rano, is a true story f the fight for leadership within the gorilla community.  The show highlights the remarkable similarities between gorilla conflicts and human power struggles.  It airs on Nat Geo Wild on July 13 at 9PM.

Photos of the Day

A group of riders cycles on its way during the 234.5 km seventh stage of the Tour de France cycling race from Epernay to Nancy, France. Jean-Paul Pelissier/Reuters

Native Brazilian with faces painted in the colors of the German national flag stand in front the news conference room of Germany’s national soccer team in the village of Santo Andre north of Porto Seguro, Brazil. Arnd Wiegmann/Reuters

Market Closes for July 11^th, 2014

Market Index	Close	Change
Dow Jones	16943.81	+28.74
		+0.17%
S&P 500	1967.57	+2.89   +0.15%
NASDAQ	4415.492	+19.289   +0.44%
TSX	15125.50	+11.02
		+0.07%

International Markets

Market Index	Close	Change
NIKKEI	15164.04	-52.43
		-0.34%
HANG SENG	23233.45	-5.54
		-0.02%
SENSEX	25024.35	-348.40
		-1.37%
FTSE 100	6690.17	+17.80
		+0.27%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.213	2.238
CND. 30 Year Bond	2.769	2.788
U.S. 10 Year Bond	2.5160	2.5359
U.S. 30 Year Bond	3.3366	3.3698

Currencies

BOC Close	Today	Previous
Canadian $	0.93145	0.93883
US $	1.07360	1.06516
Euro Rate 1 Euro=		Inverse
Canadian $	1.46090	0.68451
US $	1.36075	0.73489

Commodities

Gold	Close	Previous
London Gold Fix	1338.62	1335.85
Oil	Close	Previous
WTI Crude Future	100.83	102.93

Market Commentary:

Canada
By Oliver Renick

July 11 (Bloomberg) — Canadian stocks rose, with the benchmark gauge paring its worst weekly drop since May, as gains among gold miners offset a slump in energy stocks.

Barrick Gold Corp. jumped 3.8 percent and IamGold Corp. climbed 3.6 percent as miners rallied. Crew Energy Inc. and Legacy Oil + Gas Inc. dropped at least 3.7 percent as energy shares slid 1 percent as a group. Parex Resources Inc. surged 17 percent after saying its oil and gas reserves had increased.

The Standard & Poor’s/TSX Composite Index rose 0.1 percent to 15,125.50 at 4 p.m. in Toronto. The gauge has fallen 0.6 percent this week, the most since May 30, after closing at a record on July 9.

Canadian employment unexpectedly fell in June, with the second decline in three months led by the biggest drop in part- time work in almost two years. The country’s dollar fell with the last major data before Bank of Canada Governor Stephen Poloz’s July 16 interest-rate decision supporting his view there is plenty of slack in the world’s 11th largest economy.

Seven of the 10 main groups in the benchmark gauge rose today. Gold miners led raw-materials producers higher as the precious metal capped the longest run of weekly gains since 2011.

Barrick Gold jumped 4.8 percent to C$20.71 and IamGold rose 3.6 percent to C$4.36.

Parex Resources jumped 17 percent to a record C$14.87. The oil and gas explorer increased its proved plus provable reserves by 80 percent. At least two research firms, including Desjardins Securities, raised their rating on the stock.

Energy stocks lost the most, as West Texas Intermediate crude dropped to an eight-week low and capped a third weekly decline.

Crew Energy fell 3.7 percent to C$10.95 and Legacy Oil + Gas lost 3.8 percent to C$8.59. Painted Pony Petroleum Ltd. retreated 5.1 percent to C$12.17, the lowest in a month.

US
By Joseph Ciolli

July 11 (Bloomberg) — U.S. stocks rose, paring the biggest weekly loss since April, as a rally in Amazon.com Inc. and EBay Inc. led an afternoon rebound from declines spurred by concern over financial stress in Europe.

EBay and Amazon.com increased at least 2.3 percent amid optimism in the companies’ growth potential. Wells Fargo & Co. slipped after reporting per-share earnings that did not rise for the first time in 18 quarters. Fastenal Co. sank 4.2 percent after sales fell short of analysts’ estimates. Gap Inc. declined after same-store sales unexpectedly fell. Lorillard Inc. jumped 4.6 percent after Reynolds American Inc. said it’s in talks to buy the cigarette maker.

The Standard & Poor’s 500 Index rose 0.1 percent to 1,967.57 at 4 p.m. in New York after losing 0.3 percent earlier. It fell 0.9 percent this week. The Dow Jones Industrial Average added 28.74 points, or 0.2 percent, to 16,943.81. The Nasdaq 100 Index rose 0.6 percent. About 4.9 billion shares changed hands on U.S. exchanges today, 16 percent below the three-month average.

“People are going to keep one eye on earnings and one eye on peripheral debt,” Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., which oversees about $160 billion, said in a phone interview. “Debt concerns may trump earnings in the short-term, but as long as we have solid numbers for this quarter, markets overall should be fine.”

The S&P 500 fell 0.4 percent yesterday as signs of financial stress among Portuguese banks fueled concern over the strength of the European recovery. Portugal’s second-largest lender sought to reassure investors today by revealing its exposure to related companies after a missed payment on short- term debt by a member of the group.

The S&P 500 trimmed losses of as much as 1 percent yesterday amid speculation the day’s initial selloff was overdone. The gauge slipped 1.1 percent in the first two days of the week on concern equities had risen too far, too fast.

The S&P 500 ended last week at an all-time high, and the index has not had a drop of 10 percent in more than two years. The gauge trades at a valuation of 18 times reported earnings, the highest since 2010.

More than 140 companies in the S&P 500, including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc. and Johnson & Johnson, will report quarterly results between now and July 23, according to data compiled by Bloomberg.

“With the start of earnings season, we’re expecting the U.S. to rebound,” Nick Skiming, who helps manage $10 billion at Ashburton Ltd., said by phone from Jersey, in the Channel Islands. “The U.S. is pretty clearly on the road to recovery. Their GDP, unemployment, and manufacturing figures are all fairly decent. From an economic view, it is the better place to put your money, a natural safe haven.”

The Chicago Board Options Exchange Volatility Index fell 4.1 percent today to 12.08. The gauge known as the VIX has surged 17 percent this week, its biggest rally since April. It finished last week at a seven-year low.

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. The projections have decreased from the start of April, when analysts predicted a 7.3 percent jump in earnings and a 3.7 percent sales increase.

Earnings for banks are forecast to fall 3.9 percent in the second quarter, according to data compiled by Bloomberg. It’s the only sector expected to see declining profits, the data show.

Wells Fargo dropped 0.6 percent to $51.49. The bank reported quarterly profit of $1.01 per share, in line with estimates. The result ended a 17-quarter streak of rising per- share earnings at the bank.

All but two of the 10 main S&P 500 industries advanced today. Phone stocks climbed 0.8 percent to pace gains. Verizon Communications Inc. added 1.4 percent for the biggest jump in the Dow.

Whirpool Corp. increased 1.1 percent to $140.76. The Benton Harbor, Michigan-based company agreed to pay $1 billion for a controlling stake in Italian appliance maker Indesit Co., its largest acquisition since buying former rival Maytag Corp. eight years ago.

EBay rose 2.3 percent and Amazon.com jumped 5.6 percent to pace gains in the Dow Jones Internet Composite Index. The gauge capped its first weekly decline since May 9 as investors resumed selling earlier this week in some of the bull market’s biggest winners.

Sales at EBay grew more than 12 percent in June, data compiled by ChannelAdvisor show. Amazon.com’s sales have exceeded those for EBay by an average of 4 percent over the last four quarters, according to a Piper Jaffray Cos. report.

U.S. Steel Corp. climbed 3.2 percent to $27.64. The Obama administration imposed duties on steel pipe from South Korea and eight other countries in a victory for U.S. Steel Corp. and the United Steelworkers union, which said they were hurt by unfair competition from overseas, according to two people told of the decision.

Energy producers sank 0.8 percent, as crude oil declined for a third week. Chevron Corp. sank 1.4 percent to $128.47 for the biggest decline in the Dow.

Radian Group Inc. declined 5.4 percent to $13.77 and MGIC Investment Corp. plummeted 9.5 percent to $8.36. The two companies are among mortgage insurers that would need to fill a financial gap under new financial-strength rules proposed by the Federal Housing Finance Agency.

Genworth Financial Inc., which dropped 2.6 percent to $16.62, said yesterday that it may need as much as $550 million at its mortgage insurer to meet the standards by June 30, 2015.

Gap dropped 0.8 percent to $40.65. The biggest U.S. apparel-focused retailer said sales at stores open at least a year fell 2 percent in June, compared with a 7 percent gain in the year-earlier period. Retail Metrics Inc., a research firm that tracks the industry, had projected a 0.8 percent gain.

Rent-A-Center Inc. slid 11 percent to $25.88 after saying second-quarter adjusted earnings will be 36 cents to 38 cents a share, missing the average analyst prediction of 48 cents. The operator of rent-to-own electronics and furniture stores cited weaker-than-expected demand.

Fastenal retreated 4.2 percent to $46.15. The provider of industrial and construction supplies reported second-quarter revenue of $949.9 million, missing the average analyst estimate of $952.3 million.

Lorillard gained 4.6 percent to $66.01. The company confirmed the talks with Reynolds, the producer of Camel cigarettes. British American Tobacco Plc, the U.K. company which owns 42 percent of Reynolds, said it expects to support the transaction by subscribing for additional shares to maintain its stake. Reynolds lost 0.8 percent to $61.75.

 

Have a wonderful weekend everyone.

 

Be magnificent!

Though they may take various roads, all are on the way.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Even if you fall on your face, you’re still moving forward.

-Victor Kiam, 1926-2001

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:

Marcel Proust was born on this day in 1871.  Happy 143^rd birthday. He died in 1922.

In 1971, The town of Illiers, where Proust spent some of his childhood and ate madeleines, changes its name, adding Proust’s fictional version of it, Combray. It remains Illiers-Combray to this day.

Also in 1971, celebrating Proust’s centenary, a ball is held in Paris with attendees, including a bejeweled Elizabeth Taylor, wearing gowns designed by Yves St. Laurent, Valentino and Christian Dior all inspired by Proust and his work.

In 1972, an unnamed editor of a New York publishing house jokes that Proust’s novel, Remembrance of Things Past, is “the story of a man who fell in love with a cookie.”

In 1982, writer Cameron Crowe originally conceived of “Fast Times at Ridgemont High” as Marcel Proust as a Ridgemont senior.

1983: In a review of a new collection of Proust’s letters: “Like Dante or Machiavelli, Proust’s reputation rests on a single work. Students and admirers read his letters and early writings … to search for precursors of the vivid characterizations and penetrating analyses, the profound themes and translucent style that make ‘Remembrance of Things Past’ a monument of literature.”

1988: The copyright of “Remembrance of Things Past” expires in France and becomes public domain, sparking a “Proust boom.” “Proust Belongs to You,” one French literary magazine declares. The novel is reissued in a luxury edition by his publisher Gaillimard, and four other publishers put out new versions, one including 312 pages of biographical notes. Videos about his life run in the Paris Metro. The novel is “one of the most celebrated works of the 20th century,” The Los Angeles Times writes, “a luxuriant unfolding of memory by a narrator of exquisite sensitivity.”

Happiness is beneficial for the body, but it is grief that develops the powers of the mind.  -Marcel Proust.

Photos of the Day

Visitors admire the Victory of Samothrace scultpture at the Louvre museum in Paris. The 2,200-year-old, 29-ton statue is back after almost a year of restoration. The statue is one of the five most popular works at the Louvre. Remy de la Mauviniere/AP

People look at a creation by French artist Elsa Tomkowiak in the Graslin Theater during the ‘A journey to Nantes’ art festival in Nantes, western France. Stephane Mahe/Reuters

Market Closes for July 10^th, 2014

Market   Index	Close	Change
Dow   Jones	16915.07	-70.54
		-0.42%
S&P 500	1964.68	-8.15    -0.41%
NASDAQ	4396.203	-22.831    -0.52%
TSX	15114.48	-100.71
		-0.66%

International Markets

Market   Index	Close	Change
NIKKEI	15216.47	-86.18
		-0.56%
HANG   SENG	23238.99	+62.92
		+0.27%
SENSEX	25372.75	-72.06
		-0.28%
FTSE 100	6672.37	-45.67
		-0.68%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.238	2.245
CND.   30 Year Bond	2.788	2.788
U.S.   10 Year Bond	2.5359	2.5503
U.S.   30 Year Bond	3.3698	3.3740

Currencies

BOC Close	Today	Previous
Canadian $	0.93883	0.93870
US   $	1.06516	1.06530
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44948	0.68990
US   $	1.36083	0.73485

Commodities

Gold	Close	Previous
London Gold   Fix	1335.85	1326.95
Oil	Close	Previous
WTI Crude Future	102.93	102.29

Market Commentary:

Canada
By Eric Lam

July 10 (Bloomberg) — Canadian stocks retreated from a record and joined a global selloff as signs of financial stress in Portugal increased concern that instability will return to Europe.

Crew Energy Inc. and TransGlobe Energy Corp. dropped at least 2 percent to pace declines among energy stocks. Banro Corp. plunged 29 percent after production was significantly hampered at one of its projects as the processing plant has problems handling the ore. Fortuna Silver Mines Inc. slumped 9.9 percent after analysts at Canaccord Genuity Corp. cut their rating for the stock.

The Standard & Poor’s/TSX Composite Index fell 100.71 points, or 0.7 percent, to 15,114.48 at 4 p.m. in Toronto, the most in two weeks after reaching a record close yesterday. The benchmark Canadian equity gauge has gained 11 percent this year.

A selloff in Europe spread to North America amid concern about the missed debt payments by the parent of Banco Espirito Santo SA. The MSCI All-Country World Index, which tracks both developed and emerging markets, sank as much as 1 percent.

Crew Energy fell 2 percent to C$11.37 and TransGlobe Energy lost 2.9 percent to C$7.38. The S&P/TSX Energy Index sank 0.9 percent, reaching a one-month low as 65 of 69 members retreated.

Crude for August delivery rallied 0.6 percent to snap a nine-day decline, the longest stretch since 2009, New York Mercantile Exchange data show. Prices have fallen about 2.4 percent this month.

Manulife Financial Corp. retreated 0.9 percent to C$21.47 as financial stocks decreased 0.2 percent as a group.

Royal Bank of Canada, the nation’s second-largest lender by assets, lost 0.2 percent to C$78.34 to snap a nine-day winning streak and retreat from a record.

Fortuna Silver Mines sank 9.9 percent to C$5.83 as the S&P/TSX Materials Index slumped 1.6 percent, the most in the benchmark Canadian equity gauge. Trading volume for S&P/TSX stocks was 26 percent higher compared with the 30-day average.

John Kratochwil, analyst at Canaccord Genuity, reduced Fortuna’s rating to a hold from a buy. The company said cash costs at its Caylloma mine in Peru were higher than earlier guidance in the second quarter.

Gold for August delivery rose 1.1 percent to settle at $1,339.20 an ounce on the Comex in New York, the highest since March. Gold is seen as an safe haven alternative investment in times of increasing volatility.

US
By Joseph Ciolli

July 10 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index resuming a selloff started earlier this week, as signs of financial stress in Portugal fueled demand for haven assets.

Home Depot Inc. and Lowe’s Cos. fell at least 1.4 percent after a Deutsche Bank AG analyst lowered his estimates for their profits based on weak results at rivals. Shares in high-dividend yielding companies such as Verizon Communications Inc. advanced as U.S. Treasuries gained.

The S&P 500 fell 0.4 percent to 1,964.68 at 4 p.m. in New York, trimming an earlier decline of 1 percent that was the most since May 15. The Dow Jones Industrial Average lost 70.54 points, or 0.4 percent, to 16,915.07. The Russell 2000 Index fell 1 percent, paring a drop of 1.9 percent.

“People will shoot first and ask questions later when news like this hits,” said Lawrence Creatura, a fund manager at Federated Investors Inc. in Rochester, New York. His firm manages about $363.8 billion. “The concern of an event like this is always determining whether it’s occurring in isolation or whether it’s the first domino. It’s a classic flight to safety across the equity, commodities and bond markets.”

European stocks and Portuguese bonds tumbled with investor concern deepening over missed debt payments by a company linked to the Iberian nation’s second-largest lender. Portugal’s central bank said Banco Espirito Santo SA is protected after its parent missed the payments. U.S. Treasuries and gold rallied.

Today’s decline came after speculation that U.S. stocks have risen too far, too fast fueled losses earlier in the week as Raymond James & Associates Inc. said equities are vulnerable and Citigroup Inc.’s chief U.S. equity strategist cited concerns for a “severe” pullback. The S&P 500 ended last week at an all-time high and the Dow Jones Industrial Average topped 17,000 for the first time.

The Chicago Board Options Exchange Volatility Index rose 8.5 percent today to 12.64. The gauge known as the VIX finished last week at a seven-year low before rallying 16 percent during the first two days of the week, the biggest surge since April.

The S&P 500 has not had a drop of 10 percent in more than two years, and has not fallen by more than 1 percent on a closing basis since April. The gauge trades at a valuation of 18 times reported earnings, the highest since 2011 when it was in the middle of a 19 percent slide, its biggest during the current five-year bull market.

Equities trimmed steeper losses amid speculation the day’s initial selloff was overdone.

“Everyone expected the worst, and the contagion fears were brought back to fruition, but as the day has gone on those fears have abated a bit,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “Right now the market is saying that their concerns are not going to be as widespread as they were when they walked in this morning.”

U.S. equities yesterday halted a two-day selloff as optimism about corporate earnings and jobs growth outweighed concern that Federal Reserve concern that investors may be growing complacent about risk.

A report today showed fewer Americans than forecast filed applications for unemployment benefits last week, adding to signs the job market continues to strengthen. The latest government payrolls report showed job growth blew past expectations in June and the unemployment rate fell to the lowest level since before the financial crisis peaked six years ago.

More than 140 companies in the S&P 500, including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc. and Johnson & Johnson, will report quarterly results between now and July 23, according to data compiled by Bloomberg.

Profit at S&P 500 companies probably rose 5 percent in the three months through June, while sales gained 3 percent, estimates show. The forecasts have decreased from the start of April, when analysts predicted a 7.3 percent jump in earnings and 3.7 percent sales increase.

Earnings for banks are forecast to fall 3.3 percent in the second quarter, according to data compiled by Bloomberg. It’s the only sector expected to see declining profits, the data show.

Goldman Sachs dropped 0.8 percent and JPMorgan Chase lost 0.8 percent as banks had the fourth-worst performance among 24 S&P 500 groups.

Eight of the 10 main groups in the S&P 500 retreated today. Shares in energy producers and makers of consumer-discretionary products tumbled at least 0.9 percent to pace losses as investors shifted out of stocks whose performance is linked to economic growth.

Exxon Mobil Corp. retreated 1 percent to $102.57 as crude prices climbed after a nine-day losing streak. Chevron Corp. fell 0.9 percent to $130.25.

Home Depot sank 1.7 percent to $79.40 for the biggest decline in the Dow, while Lowe’s lost 1.4 percent to $47.20. Deutsche Bank’s Michael Baker lowered his earnings estimates for the two biggest U.S. home-improvement retailers by 1 cent a share each after Lumber Liquidators Holdings Inc. reported weaker-than-estimated results. Lumber Liquidators sank 22 percent to $55.25 for its biggest drop in three years.

Tractor Supply Co. lost 2.4 percent to $59.92. The farm- supplies retailer forecast second-quarter earnings below analysts estimates.

L Brands Inc. decreased 2.7 percent to $60.21. The owners of the Victoria’s Secret and Bath & Body Works chains reported that June sales rose 2 percent, falling short of the consensus analyst forecast of 2.7 percent.

Utility and phone shares rose at least 0.6 percent to lead advances today, as investors shifted into sectors with high dividend-yielding stocks often favored in a risk-averse environment.

Verizon added 1.5 percent to $49.64 for the biggest rise in the Dow. The stock extended gains after Chief Executive Officer Lowell McAdam said on CNBC that Verizon was not interested in buying a satellite company.

Utilities yield 3.7 percent and phone stocks pay at 4.9 percent, the highest the S&P 500. The yield on benchmark 10-year Treasury notes fell one basis point, or 0.01 percentage point, to 2.54 percent today.

 

Have a wonderful evening everyone.

 

Be magnificent!

Our contribution

to the progress of the world must, therefore,

consist in setting our own house in order.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

College is something you complete.  Life is something you experience.  So don’t worry about

your grade, or the results or success.  Success is defined in myriad ways, and you will find it,

and people will no longer be grading you, but it will come from your own

internal sense of decency.

-Jon Stewart, 1962-

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 Wall Street Journal published its first edition 125 years ago yesterday.  It consisted of four pages priced at 2 cents.  The Journal published an anniversary issue as a commemoration which is very interesting, especially some of the items from the front page of the July 8, 1889 issue:

The column entitled “The Average Movement of Price”  contained statistics on price movements on 12 active stocks.  Today’s Dow Jones Industrial Average began in 1896 with those same 12 stocks.  The only original stock in the present-day 30-stock index is General Electric.

There is an ad on the front page from Rand McNally & Company that begins in bold letters “WE FURNISH MAPS…”   Rand McNally is now owned by Patriarch Partners, but is still known as a publisher of maps.  It started in 1856 to print timetables and tickets for the railroads.

Readers of the first edition are informed that “The first bale of cotton from the South was sold at auction in front of the Cotton Exchange today and was bought by Henry Clews & Co. at 16 1/8.”

The bale of cotton from Georgia bought by Clews who was a  financier and served as an economic consultant to President Ulysses S. Grant.  The bale was said to be headed to Liverpool.

Readers are also informed on the front page of the first edition of the WSJ that “Mr. Duncan A. McTavish of the British Bank of North America died this morning aged 72.”

Duncan McTavish, born in Scotland, was a representative of the Bank of British North America in New York.  A detailed obituary in the Banker’s Magazine said “his business life was marked by success without sensation.”

Central Railroad Co. of New Jersey announced on the front page that “A dividend of one and a half per cent has this day been declared payable August 1^st prox. for the quarter ending June 30^th ulto.  The transfer books will close on Monday, the 15^th inst., and open on Friday, August 2d.  By order of the board.  J. W. Watson, Treasurer.”  This railroad started in 1831 as “Elizabethtown & Somerville Railroad” and adopted the “Central Railroad of New Jersey” name in 1849.  After the railroad boom years ended, CNJ went through numerous forms until in 1988, as part of a complicated transaction related to taxes, its shell acquired packaging company Triangle Industries and took its name.

Photos of the Day

Waves brought about by Typhoon Neoguri hits a lighthouse in Seogwipo on Jeju Island. Typhoon Neoguri weakened from its original status as a super typhoon but remained intense, with gusts of more than 250 km per hour (155 mph). It was powering through the Okinawa island chain where emergency rain and high-seas warnings were in effect. Ko Sung-sik/Yonhap/Reuters

People watch Estafeta Street from balconies as police control the street a few minutes before the start of the running of the bulls at the San Fermin festival, in Pamplona, Spain. Revelers from around the world arrive to Pamplona every year to take part in some of the eight days of the running of the bulls glorified by Ernest Hemingway’s 1926 novel ‘The Sun Also Rises.’ Alvaro Barrientos/AP

Market Closes for July 9^th, 2014

Market   Index	Close	Change
Dow   Jones	16985.61	+78.99
		+0.47%
S&P 500	1972.83	+9.12    +0.46%
NASDAQ	4419.035	+27.572    +0.63%
TSX	15215.19	+78.01
		+0.52%

International Markets

Market   Index	Close	Change
NIKKEI	15302.65	-11.76
		-0.08%
HANG   SENG	23176.07	-365.31
		-1.55%
SENSEX	25444.81	-137.30
		-0.54%
FTSE 100	6718.04	-20.41
		-0.30%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.245	2.249
CND.   30 Year Bond	2.788	2.785
U.S.   10 Year Bond	2.5503	2.5557
U.S.   30 Year Bond	3.3740	3.3723

Currencies

BOC Close	Today	Previous
Canadian $	0.93870	0.93654
US   $	1.06530	1.06369
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45327	0.68810
US   $	1.36419	0.73304

Commodities

Gold	Close	Previous
London Gold   Fix	1326.95	1319.42
Oil	Close	Previous
WTI Crude Future	102.29	103.40

Market Commentary:

Canada
By Eric Lam

July 9 (Bloomberg) — Canadian stocks rose to a record, following a two-day slide, as materials companies advanced with gold and Royal Bank of Canada rallied amid data showing housing starts unexpectedly advanced last month.

Royal Bank, the nation’s second-largest lender by assets, rose 0.9 percent to extend its longest winning streak in four years. Alacer Gold Corp. added 6.7 percent as gold prices increased for the first time in four days. Copper Mountain Mining Corp. jumped 4.1 percent after reporting record second- quarter production results for its mine in British Columbia. Bankers Petroleum Ltd. sank as crude prices slid a ninth day.

The Standard & Poor’s/TSX Composite Index rose 78.01 points, or 0.5 percent, to 15,215.19 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 12 percent this year, topping its previous record in June, for the third-best performance among the world’s developed markets.

Canadian housing starts unexpectedly rose for a third month in June led by single-family dwellings, adding to signs the nation’s real estate market is defying predictions of a slowdown.

Consumer confidence approached its 2014 high last week on optimism about real estate prices, according to the Bloomberg Nanos Canadian Confidence Index.

Nine of the 10 industries in the S&P/TSX rose on trading volume 9.1 percent higher than the 30-day average.

Royal Bank rose 0.9 percent to a record C$78.50. The stock has climbed for nine days, the longest streak since February 2010. The S&P/TSX Banks Index rallied 0.6 percent, for its eighth advance in the past nine days.

Copper Mountain Mining jumped 4.1 percent to C$3.05, the highest since March 2013. Production from the Copper Mountain mine in British Columbia rose 4 percent from the prior quarter to 19.9 million pounds in the second quarter.

Bankers Petroleum retreated 1.4 percent to C$7.01 to pace declines among energy stocks. West Texas Intermediate crude dropped for a ninth day, the worst losing streak since 2009, after a report showed U.S. supplies increased.

USA
By Joseph Ciolli and Callie Bost

July 9 (Bloomberg) — U.S. stocks rebounded from a two-day selloff as optimism over corporate earnings and jobs growth overshadowed central-bank concern that investors may be growing complacent about the economic outlook.

Alcoa Inc. jumped 5.7 percent to the highest in almost two years after kicking off earnings season with better-than- forecast results. American Airlines Group Inc. rallied 4.3 percent after raising its margin forecast. Facebook Inc. advanced 3.5 percent to pace gains among a gauge of technology shares. Bob Evans Farms Inc. slid 4.4 percent as quarterly revenue missed estimates.

The Standard & Poor’s 500 Index rose 0.5 percent to 1,972.83 at 4 p.m. in New York after a 1.1 percent slide the two previous days. The Dow Jones Industrial Average added 78.99 points, or 0.5 percent, to 16,985.61. About 5.4 billion shares changed hands on U.S. exchanges today, 8.3 percent below the three-month average.

“The market can go down, but it won’t stay down,” John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York, said in a phone interview. “The fact that the market is still questioning all these things that are going on is a very healthy sign. I still think the Fed is going to be more concerned about making absolutely sure that the U.S. economic recovery is under way and staying under way.”

Equities initially turned lower after Federal Reserve meeting minutes 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. Officials are also debating the timing for the first increase in the main interest rate since 2006.

Fed officials expressed concern about low volatility in equity, currency and fixed-income markets, according to minutes of their June meeting, when policy makers trimmed monthly bond purchases to $35 billion. At the same time, “it was noted that monetary policy needed to continue to promote the favorable financial conditions required to support the economic expansion,” according to the minutes.

The Chicago Board Options Exchange Volatility Index finished last week at a seven-year low before rallying 16 percent the previous two days, the most since April. The gauge known as the VIX slipped 2.8 percent to 11.65 today.

The Fed meeting took place before a June payrolls report that showed job growth blew past expectations and the unemployment rate fell to the lowest level since before the financial crisis peaked six years ago, creating a firm foundation for a stronger U.S. economic expansion.

“We saw a knee-jerk reaction down, but we usually get some short-term volatility after events like these,” Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said by phone. “I think people are continuing to see improvement in labor market conditions, especially on the heels of the most recent jobs report. A lot of people are viewing the fact that the Fed is going to continue to be accommodative to the economy.”

Fed Chair Janet Yellen said last month that accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth. She emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.

U.S. equities retreated a second day yesterday amid growing investor concern that stocks have rallied too fast after benchmark indexes ended last week at all-time highs. Raymond James & Associates Inc. said stocks are vulnerable to losses and Citigroup Inc.’s chief U.S. equity strategist cited concerns for a “severe” pullback.

The S&P 500 has not had a drop of 10 percent in more than two years. The gauge trades at a valuation of 18 times reported earnings, the highest since 2011 when it was in the middle of a 19 percent slide, its biggest during the current five-year bull market.

Equity losses in the previous two days were concentrated in technology shares and small-caps with high valuations. Twitter Inc. and Pandora Media Inc., which trade at more than 150 times estimated earnings, plunged about more than 9 percent. Facebook Inc. and TripAdvisor Inc. sank at least 5.3 percent.

Facebook rose 3.5 percent to $64.97 today. The stock paced gains in the Nasdaq 100 Index of large technology shares, which had fallen for two straight days.

More than 130 companies in the S&P 500 are scheduled to report quarterly results in the next two weeks, including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs and Johnson & Johnson.

Profit at S&P 500 companies probably rose 5 percent in the three months through June, while sales gained 3 percent, estimates compiled by Bloomberg show. The forecasts are lower than they were at the start of April, when analysts predicted a 7.3 percent rise in earnings and 3.7 percent sales increase.

“We’re looking for continued economic growth, which will drive corporate earnings,” John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said in a phone interview. “There’s still money on the sideline. As long as earnings keep going up and stocks are fairly valued, the market can keep going.”

All but one of the 10 main S&P 500 groups advanced today, with shares in makers of consumer-discretionary products adding 1.2 percent to pace gains. Utility stocks fell 0.2 percent.

Alcoa advanced 5.7 percent to $15.69 for its best day since March and the biggest gain in the S&P 500. The struggling U.S. aluminum producer, which is shifting its focus to manufacturing auto and aerospace components, reported better-than-forecast profit on the strength of its traditional aluminum smelting business.

American Airlines gained 4.3 percent to $41.99. The carrier said second-quarter pretax margins would exceed the company’s previous forecast. The company also said it sees strong global travel demand and no “material pockets of weakness.”

Reynolds American Inc. rose 2.2 percent to $62.67. The U.K.’s Daily Mail speculated British American Tobacco Plc may purchase the rest of the cigarette producer. BAT holds about 42 percent of Reynolds, according to data compiled by Bloomberg.

Bob Evans Farms slid 4.4 percent to $47.57. The Columbus, Ohio-based operator of family restaurants reported quarterly revenue that failed to meet analyst estimates.

The Container Store Group plunged 8.4 percent to $24.80. The retailer of storage and organization products reported quarterly earnings that missed analysts’ estimates and said it’s “experiencing retail ‘funk.’”

Gigamon Inc. tumbled 32 percent to $12.29. The designer of networking products reported preliminary second-quarter revenue of as much as $35 million. That was lower than its earlier forecast of as much as $42 million, and missed analyst estimates of $40.3 million.

 

Have a wonderful evening everyone.

 

Be magnificent!

Every day we see or read of appalling things happening in the world as the result of violence in man.

You may say, “I can’t do anything about it,” or “How can I influence the world?”

I think you can tremendously influence the world if you yourself are not violent,

if you lead actually every day a peaceful life – a life which is not competitive, ambitious, envious –

a life which does not create enmity.

Small fires can become ablaze.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Draw strength from the knowledge that education will break the backs of poverty,

disenfranchisement, and violence; that war is never inevitable but only a terrible

failure of the imagination; and that love is stronger than hatred.

-Wally Lamb, 1950-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

From Fanny Burney’s Diary, at Weymouth, July 8^th, 1789:

The King [George III] bathes, and with great success;  a [bathing] machine follows the royal one into the sea, filled with fiddlers, who play “god Save the King”, as His Majesty takes his plunge! –from The Book of Days.

Photos of the Day

A woman faces the Mediterranean Sea as she sits on the Promenade des Anglais in Nice, southeastern France. Lionel Cironneau/AP

The pack of riders cycles on its way during the fourth stage of the Tour de France cycling race from Le Touquet-Paris-Plage to Lille, France.Jean-Paul Pelissier/Reuters

Market Closes for July 8^th , 2014

Market   Index	Close	Change
Dow   Jones	16906.62	-177.59
		-0.69%
S&P 500	1963.71	-13.94    -0.70%
NASDAQ	4391.465	-60.065    -1.35%
TSX	15137.18	-35.75
		-0.24%

International Markets

Market   Index	Close	Change
NIKKEI	15314.41	-65.03
		-0.42%
HANG   SENG	23541.38	+0.46
		——
SENSEX	25582.11	-517.97
		+1.98%
FTSE 100	6738.45	-85.06
		-1.25%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.249	2.304
CND.   30 Year Bond	2.785	2.833
U.S.   10 Year Bond	2.5557	2.6156
U.S.   30 Year Bond	3.3723	3.4405

Currencies

BOC Close	Today	Previous
Canadian $	0.93654	0.93665
US   $	1.06369	1.06763
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45353	0.68803
US   $	1.36120	0.73465

Commodities

Gold	Close	Previous
London Gold   Fix	1319.42	1319.63
Oil	Close	Previous
WTI Crude Future	103.40	104.06

Market Commentary:

Canada

By Eric Lam

July 8 (Bloomberg) — Canadian stocks fell a second day, paring earlier losses, as Valeant Pharmaceuticals International Inc. extended a slide while phone and technology shares slumped.

TransGlobe Energy Corp. lost 1 percent after second-quarter production at one of its facilities was affected by pump failures. Air Canada sank 3.1 percent, extending a loss after WestJet Airlines Ltd. said yesterday it’ll start flying twin- aisle jets as early as next year. Valeant dropped 1.1 percent for a sixth day of losses. Telus Corp. lost 2.1 percent after the government moved to boost competition.

The Standard & Poor’s/TSX Composite Index fell 35.75 points, or 0.2 percent, to 15,137.18 at 4 p.m. in Toronto, paring earlier losses of as much as 1 percent. The benchmark Canadian equity gauge has fallen 0.5 percent in the past two days to trim its gain this year to 11 percent.

Eight of the 10 industries in the S&P/TSX fell on trading volume 29 percent higher than the 30-day average.

Phone stocks slid 1 percent as a group, dropping to the lowest level since March, after the government yesterday set aside additional airwaves for smaller wireless carriers in an attempt to create more competition in the country.

Telus retreated 2.1 percent to C$38.47 and BCE Inc. slipped 0.6 percent to C$47.92.

Energy shares slid 0.3 percent as a group, as Advantage Oil & Gas Ltd. retreated 3 percent to C$6.72 and Raging River Exploration Inc. slipped 1.1 percent to C$10.35.

Brent crude fell below $110 a barrel for the biggest drop in more than two months, reversing a rally that started when Islamist militants seized the northern Iraqi city of Mosul almost a month ago.

TransGlobe fell 1 percent to C$7.80 after reporting average production in the second quarter at its West Gharib facility in Egypt was 9,980 barrels a day due to faulty pumps.

Air Canada tumbled 3.1 percent to C$9.55, the biggest decline in two weeks. WestJet said yesterday it plans to fly wide-body jets on routes between Alberta and Hawaii beginning in late 2015, stepping up a challenge to Air Canada, the nation’s largest air carrier.

Valeant Pharmaceuticals lost 1.1 percent to C$130.43. The stock has slid 5.6 percent in the past six sessions. Valeant is trying to acquire Allergan Inc.

Datawind Inc. sank 7.8 percent to C$4.38, the worst- performing initial offering in Canada so far this year, according to data compiled by Bloomberg. Datawind is a Mississauga, Ontario-based company that sells budget-priced tablet devices in emerging markets. The company raised about C$30 million in its IPO.

US

By Joseph Ciolli

July 8 (Bloomberg) — U.S. shares extended a selloff today, with the Nasdaq Composite Index sliding the most in two months, as Raymond James & Associates said equities are vulnerable to losses and Citigroup Inc. cited investor concerns for a “severe” pullback.

Twitter Inc. and Pandora Media Inc., which trade at more than 150 times earnings, plunged at least 7 percent to pace a Dow Jones gauge of Internet shares to the biggest drop since May. The Nasdaq Biotechnology Index headed for its steepest two- day slide since April. Goldman Sachs Group Inc. and JPMorgan Chase & Co. sank more than 1.6 percent to lead bank shares lower. Alcoa Inc., the largest American aluminum producer, rose 1.3 percent in late trading after reporting earnings that topped estimates.

The Standard & Poor’s 500 Index lost 0.7 percent to 1,963.71 at 4 p.m. in New York. The Dow Jones Industrial Average fell 117.59 points, or 0.7 percent, to 16,906.62. The Russell 2000 Index sank 1.2 percent, while the Nasdaq Composite slid 1.4 percent, the most since May 6. About 6.4 billion shares changed hands on U.S. exchanges today, 7.3 percent above the three-month average.

“Many investors wonder if the ride is over,” Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., said in a report today. “As stock indices hit new highs, there are those that fear further gains, given defensive positioning, but more worry about buying in now just in time for a severe pullback.”

The Chicago Board Options Exchange Volatility Index, the measure known as VIX that tracks investors’ volatility expectations for the S&P 500, jumped 9.8 percent yesterday from a seven-year low. The index added 5.7 percent to 11.98 today, giving it the biggest two-day rally since April 11.

U.S. benchmark indexes ended last week at all-time highs, with the Dow topping 17,000 for the first time. The S&P 500 has not had a drop of 10 percent in more than two years. The gauge trades at a valuation of 18 times reported earnings, the highest since 2011 when it was in the middle of a 19 percent slide, its biggest during the current five-year bull market.

“I do think we are vulnerable to a 10 percent to 12 percent decline in the weeks ahead, albeit within the construct of a secular bull market that has years left to run,” Jeffrey Saut, chief investment strategist at Raymond James wrote in a post on the firm’s website.

The Russell 2000 tumbled 1.8 percent yesterday, the most since April 25. The index last week recovered nearly all its losses from a two-month selloff of Internet and small-cap shares, coming within a point of an all-time high. Gauges of Internet and biotechnology companies also had climbed back from their lows for the year, retracing more than half of their earlier losses.

Small-caps and Internet shares were the biggest victims of the market retreat earlier this year as investors dumped the biggest winners of the bull market amid concern valuations advanced too far. Investors resumed selling those industries this week after a rally drove valuations on the Nasdaq Composite to 35 times reported earnings, about double that of the S&P 500.

The Dow Jones Internet Composite Index sank 3 percent today, the most since May 6. The gauge had rallied 15 percent from a low on May 8 to erase its losses for the year before falling 4.3 percent in the past two days. The barometer surged 54 percent in 2013.

Twitter sank 7 percent to $37.41, while Pandora dropped 7.3 percent to $25.79. Both stocks had the biggest declines since May 6. Facebook Inc. and TripAdvisor Inc., which rallied more than 98 percent in 2013, lost at least 3.9 percent.

The Nasdaq Biotechnology index has fallen 4.6 percent in the past two days, the most since April 11. It had surged 23 percent since a low that month.

“There’s clearly some profit-taking in names that have done extremely well,” Peter Tuz, who helps manage more than $450 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a phone interview. “Some of the stocks have pretty lofty P/E ratios, so if anything does go awry with earnings or guidance, they could have bigger declines. It’s just a little bit of rebalancing, which isn’t atypical for the start of a new quarter.”

While data from employment to housing is indicating the world’s largest economy is recovering after the worst contraction in gross domestic product since 2009, International Monetary Fund Managing Director Christine Lagarde this week signaled a cut in the institution’s global expansion forecasts, saying investment is still weak and risks remain in the U.S.

The Federal Reserve will release minutes from its June meeting tomorrow. Policy makers trimmed bond purchases last month by $10 billion for the fifth consecutive time, saying economic growth is rebounding and the job market is improving.

Officials are debating the timing for the first increase in the main interest rate since 2006. Policy makers have kept their target for overnight lending between banks in a range of zero to 0.25 percent since December 2008.

Goldman Sachs yesterday joined banks including JPMorgan Chase & Co. and Bank of Tokyo-Mitsubishi UFJ Ltd. in bringing forward it estimates for Fed rate increases after data last week showed the economy added more workers than estimated in June.

In Europe, signs the economic recovery is losing momentum sent stocks lower for a third day. U.K. manufacturing unexpectedly slumped the most in 16 months in May and German exports contracted more than estimated, data showed today.

Alcoa rose 1.3 percent to $15.05 in late trading after unofficially kicking off earnings season. The company reported second-quarter earnings and sales that beat analysts’ expectations after an increase in the price of aluminum including regional delivery premiums.The stock finished the regular session 0.8 percent higher at $14.85.

Citigroup Inc., JPMorgan Chase, Goldman Sachs, Yahoo! Inc. and Johnson & Johnson are among companies reporting financial results in the next week.

Bank shares dropped 1.2 percent for the fourth-worst performance among 24 S&P 500 groups. Goldman Sachs retreated 1.7 percent to $164.91 and JPMorgan Chase lost 1.6 percent to $55.76. Both fell to one-month lows.

Profit for S&P 500 members probably climbed 5 percent in the three months through June, while sales rose 3 percent, according to analyst estimates compiled by Bloomberg. The forecasts are lower than they were at the beginning of April, when analysts projected earnings to rise 7.3 percent and sales to increase 3.7 percent.

Three rounds of monetary stimulus from the Fed and better- than-forecast corporate earnings have driven the S&P 500 up more than 190 percent from a low reached in March 2009.

“Equities are near all-time highs and the air will only get thinner,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “We need a strong results season now to support equities because investors will keep wondering when the Fed will hike rates and this can bring some nervousness to the market.”

 

Have  a wonderful evening everyone.

 

Be magnificent!

When there is space between you and the object you are observing

you well know there is no love, and without love, however hard you try to reform the world

or bring about a new social order or however much you talk about improvements,

you will only create agony.

So it is up to you.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

There are times when fear is good. It must keep its watchful place

at the heart’s controls.

–Aeschylus, 525 BC-456 BC.

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:

I spent the weekend reading Donna Tartt’s The Goldfinch, which won the Pulitzer prize for fiction this year.  I am surprised really.  Have any of you read it?  I would really appreciate your comments, because I am not sure how I feel about it; I found it disturbing.  I look forward to hearing from you.

The Fiesta de San Fermin which Hemmingway made famous in The Sun Also Rises begins today in Pamplona, Spain.  It’s hard to believe, but July 2^nd marked the 50^th anniversary of Hemmingway’s death.  He remains one of my favorite writers ever and his books are indelibly printed in my memory.  I pick them up from time to time to read again.  The writing is so beautiful.

One of the most beautiful and frequently quoted examples of Hemingway’s style is the opening paragraph of A Farewell to Arms:

In the late summer of that year we lived in a house in a village that looked across the river and the plain to the mountains. In the bed of the river there were pebbles and boulders, dry and white in the sun, and the water was clear and swiftly moving and blue in the channels. Troops went by the house and down the road and the dust they raised powdered the leaves of the trees. The trunks of the trees too were dusty and the leaves fell early that year and we saw the troops marching along the road and the dust rising and leaves, stirred by the breeze, falling and the soldiers marching and afterward the road bare and white except for the leaves.

Photos of the Day Sunflowers are in full bloom in a field near Priestewitz, eastern Germany. Jan Woitas/dpa/AP

The pack climbs Cray pass during the first stage of the Tour de France cycling race over 190.5 kilometers (118.4 miles) with start in Leeds and finish in Harrogate, England, July 5. Laurent Cipriani/AP

Market Closes for July ^7th, 2014

Market  Index	Close	Change
Dow  Jones	17023.31	-44.95
		-0.26%
S&P 500	1976.52	-8.92    -0.45%
NASDAQ	4451.531	-34.394    -0.77%
TSX	15147.58	-67.38
		-0.44%

International Markets

Market  Index	Close	Change
NIKKEI	15379.44	-57.69
		-0.37%
HANG  SENG	23540.92	-5.44
		-0.02%
SENSEX	26100.08	+138.02
		+0.53%
FTSE 100	6823.51	-42.54
		-0.62%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.304	2.329
CND.  30 Year Bond	2.833	2.846
U.S.   10 Year Bond	2.6156	2.6383
U.S.  30 Year Bond	3.4405	3.4694

Currencies

BOC Close	Today	Previous
Canadian $	0.93665	0.93883
US  $	1.06763	1.06516
Euro Rate  1 Euro=		Inverse
Canadian  $	1.45258	0.68843
US  $	1.36057	0.73499

Commodities

Gold	Close	Previous
London Gold  Fix	1319.63	1319.94
Oil	Close	Previous
WTI Crude Future	103.40	104.06

Market Commentary:

Canada

By Gerrit De Vynck

July 7 (Bloomberg) — Canadian stocks fell the most in two weeks, pulled down by energy stocks, as the price of West Texas Intermediate crude extended its longest losing streak since 2009.

Canyon Services Group Inc. and RMP Energy Inc. fell at least 4.9 percent to pace losses among energy companies on the benchmark Canadian index. Telus Corp. and Rogers Communications Inc. dropped more than 1.5 percent as phone companies slid.
BlackBerry Ltd. jumped 5.7 percent.

The Standard & Poor’s/TSX Composite Index fell 42.03 points, or 0.3 percent, to 15,172.93 at 4 p.m. in Toronto. The gauge is up 11 percent this year.

Energy companies fell 0.8 percent as a group as West Texas Intermediate fell for a seventh day and Brent oil dropped ahead of a planned increase in exports from Libya.

Canyon Service Group fell 8.6 percent to C$18.17 and RMP Energy decreased 4.9 percent to C$9.42.

Telecommunications companies lost 1.1 percent, the most among the 10 industries in the benchmark index, as the Canadian government said it will auction additional wireless spectrum next year to smaller carriers in a bid to fuel competition for telephone services. Telus, BCE Inc. and Rogers Communications together control 90 percent of the nation’s wireless customers.

BlackBerry gained 5.7 percent to C$12.01, its biggest gain since June 20, the day after it reported better-than-forecast earnings. Chief Executive Officer John Chen has said he has stabilized the company to the point where he is working toward revenue growth next year.

Avino Silver & Gold Mines Ltd. gained 2.5 percent to C$2.35 after saying it would sell up to $25 million in new shares. The company said it plans to use the money to acquire and develop the Bralorne mine in British Columbia.

Crown Point Energy Inc. lost 4 percent to 37 Canadian cents after saying it sold its El Valle oil concession in Argentina for $525,000.

Alimentation Couche-Tard Inc. fell 1.9 percent to C$28.80 after the convenience store operator missed analyst estimates for its fourth-quarter earnings.

USA

By Joseph Ciolli

July 7 (Bloomberg) — U.S. stocks fell from records, led by a plunge among small companies, as investors weighed valuations and speculated the Federal Reserve may raise interest rates sooner than expected.

GT Advanced Technologies Inc. sank 16 percent after Canaccord Genuity Group Inc. downgraded the stock to hold from buy. Expedia Inc. slid 1.7 percent after agreeing to make a $658 million acquisition. Peabody Energy Corp. fell 3.7 percent to lead energy producers lower. PetSmart Inc. gained 2.5 percent after a second large shareholder prodded the company to consider selling itself.

The Standard & Poor’s 500 Index fell 0.4 percent to 1,977.65 at 4 p.m. in New York. The Dow Jones Industrial Average dropped 44.05 points, or 0.3 percent, to 17,024.21. The Russell 2000 Index of small companies slid 1.8 percent, the most since April. About 5.1 billion shares changed hands today on U.S. exchanges, 14 percent below the three-month average. U.S. equities markets were closed July 4 for the Independence Day holiday.

“Rates are going to go up before people expect,” Tom Stringfellow, president and chief investment officer of San Antonio-based Frost Investment Advisors LLC, which manages about $10 billion, said in a phone interview. “And when rates do go up, I expect some sort of a knee-jerk reaction. But I don’t believe for a moment that the Fed’s going to raise rates at a speed that derails this stable environment.”

Both the S&P 500 and the Dow average advanced 1.3 percent last week, with the 30-stock gauge closing above 17,000 for the first time, as monthly payroll addition exceeded 200,000 for a fifth month in June.

The Russell 2000 last week recovered nearly all its losses from a two-month selloff of Internet and small-cap shares, coming within a point of an all-time high.

Goldman Sachs Group Inc. brought forward its forecast for the Fed to raise interest rates, joining companies including JPMorgan Chase & Co. and Bank of Tokyo-Mitsubishi UFJ Ltd. in moving up estimates following the jobs data last week.

The central bank will increase its benchmark rate in the third quarter of 2015, rather than the first three months of 2016, Goldman Sachs Chief Economist Jan Hatzius wrote in a report yesterday.

Policy makers have kept their target for overnight lending between banks in a range of zero to 0.25 percent since December 2008. The central bank will publish the minutes of its June
17-18 meeting on July 9.

Fed Chair Janet Yellen said on July 2 that concerns about financial stability shouldn’t prompt a change in current policy.
Three rounds of monetary stimulus from the Fed and better than- forecast corporate earnings have driven the S&P 500 up more than 190 percent from its March 2009 bottom.

The equities benchmark is trading at 16.7 times the projected earnings of its members, higher than the five-year average multiple of 14.3. The Chicago Board Options Exchange Volatility Index, the measure known as VIX that tracks investors’ estimate of future volatility, slumped last week to the lowest level since February 2007. The gauge surged 9.8 percent to 11.33 today, the biggest gain since June 24.

“Valuations are pretty stretched, and we don’t see a lot of revenue growth, which might be negative for the market,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co., which oversees $110 billion, said in a phone interview. “There may be some concern about earnings, but this is basically a market being driven by an improving economy and guarantees by the Federal Reserve that they’re not going to raise interest rates.”

Alcoa Inc. will unofficially open the second-quarter earnings-reporting season tomorrow. Profit at companies in the S&P 500 increased 5 percent in the three months through June, estimates compiled by Bloomberg show.

Seven of the 10 main S&P 500 groups retreated today, with materials producers sliding 0.8 percent for the biggest loss.

Peabody Energy fell 3.7 percent, as energy stocks lost 0.6 percent as a group. Chesapeake Energy Corp. dropped 4.6 percent as the price of natural gas posted the biggest one-day drop in four months in New York.

Delta Air Lines Inc. sank 4.4 percent to the lowest since April and United Continental Holdings Inc. fell 3.2 percent as airlines retreated.

GT Advanced Technologies dropped 16 percent to $16.50.  Canaccord said the company is unlikely to get a boost in earnings in 2016 unless Apple Inc. uses its sapphire in all models of the iPhone.

Expedia fell 1.7 percent to $80.85. The online travel- booking service agreed yesterday to buy Australia’s Wotif.com Holdings Ltd. for about $658 million, seeking to expand its presence in the Asia-Pacific region.

Archer-Daniels-Midland Co. climbed 1.6 percent to $46.50.  Miller Tabak + Co. raised its rating on the stock to buy from hold after ADM said it will acquire Wild Flavors GmbH for $3 billion. The takeover will help the world’s top corn crusher diversify from grain processing and gain a bigger foothold in overseas markets for food and beverages made with more natural raw materials.

PetSmart gained 2.5 percent to $68.95. Shareholder Longview Asset Management LLC sent a letter to the board of the pet- supply retailer today saying the company should consider a sale.
PetSmart, under pressure from hedge fund Jana Partners LLC to pursue alternatives including a sale, said earlier it is reviewing changes to its capital structure to return more money to shareholders.

 

Have a wonderful evening everyone.

 

Be magnificent!

As long as individuality survives, that is,

as long as you continue to see others as separate from you,

a feeling of hostility towards them cannot fail to prevail.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

If wrinkles must be written upon our brows,

let them not be written upon the heart.

The spirit should not grow old.

-James A. Garfield, 1831-1881

 

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:

Fourth of July may be the most American of holidays. Here are some of the numbers behind Independence Day in the U.S.

• 238 years

The number of years the U.S. has been independent from Britain, who now is America’s seventh leading trading partner, according to Foreign Trade Statistics by the U.S. Census Bureau.

• 2.5 million

The estimated number of people who were living in the 13 colonies in July 1776, according to Historical Statistics of the U.S.

• 318.4 million

The estimated population of the U.S.’s 50 states in July 2014, according to the U.S. Census Bureau.

• $203.6 million

The value of Chinese fireworks purchased in the U.S. in 2013. More than 90% of the fireworks imported to the U.S. come from China.

• 97%

The percentage of imported American flags that come from China.

• 34.8 million
• The number of Americans who will be traveling by automobile over the July 4 holiday, according to AAA. About 80% of travel will be by car.

We are tied to the ocean. And when we go back to the sea, whether it is to sail or to watch – we are going back from whence we came. –John F. Kennedy

July 4^th, 1785, Lord Byng, Viscount Torrington wrote in his Diary:

Our breakfast [at Oxford] was excellent; plenty of strawberries and cream.  I then tried, in vain, to get into the Ashmolean Museaum…to know if the woman were yet living who used to show (so well) the picture of the famous sailor, Sir Martin Frobisher: viz., “Sir Martin Furbisher, an antient navigator, sail’d all round the world and shot the Gulph… There’s the pistol in his hand he shot it with”…

We had been so long on horseback and tormented by flies, in a hot sun (even from ten till three o’clock) that we were as fatigued and peevish as any nervous wretches could be.  At one gateway, Colonel Bertie’s horse went on his knees to endeavour to drink, to the great alarm of his rider, who thought he had slipped into a deep hole; nor was it possible to refrain from laughter at this camel-like operation.

I visited the Mecedes museum when I was in Stuttgart last week; it is an amazing experience.  A real trip down memory lane.  When I read the above diary entry by Lord Byng today, I was reminded of one of the exhibits, wherein Kaiser Willhelm II, upon viewing Daimler’s and Maybach’s creations, remarked something to the effect that he thought the car would be a passing fad  and would never replace the horse!

Photos of the Day

Kevin Taylor of Savannah, Ga., heads out to surf the waves on the north beach of Tybee Island as Hurricane Arthur makes its way up the East Coast. The storm has bypassed the Georgia coast as predicted, but forecasters are warning beach goers to beware of dangerous rip currents in its wake.Stephen B. Morton/AP

Workers finish to prepare a gangway over the Trevi Fountain in Rome. Rome’s 18th-century Trevi Fountain, famed as a setting for the film ‘La Dolce Vita,’ is getting a $2.9 million restoration courtesy of the Fendi fashion house, and is closed to public. The gangway, that will be opened tomorrow, will allow tourists to view the fountain and even to flip a coin into the fountain: tradition says that doing so ensures a prompt return to the Eternal City.Alessandra Tarantino/AP

Market Closes for July 4^th, 2014

Market   Index	Close	Change
Dow   Jones	17068.26	Closed
S&P 500	1985.44	Closed
NASDAQ	4485.926	Closed
TSX	15220.69	+13.58
		+0.09%

International Markets

Market   Index	Close	Change
NIKKEI	15437.13	+88.84
		+0.58%
HANG   SENG	23546.36	+14.92
		+0.06%
SENSEX	25962.06	+138.31
		+0.54%
FTSE 100	6866.05	+0.84
		+0.01%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.329	2.322
CND.   30 Year Bond	2.846	2.842
U.S.   10 Year Bond	2.6383	2.6264
U.S.   30 Year Bond	3.4694	3.4617

Currencies

BOC Close	Today	Previous
Canadian $	0.93883	0.94005
US   $	1.06516	1.06377
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44808	0.69057
US   $	1.35949	0.73557

Commodities

Gold	Close	Previous
London Gold   Fix	1319.94	1319.40
Oil	Close	Previous
WTI Crude Future	104.06	104.06

Market Commentary:

Canada
By Gerrit De Vynck

July 4 (Bloomberg) — Canadian stocks rose for the sixth time in seven days as industrial and financial companies pushed the benchmark index to a record.

Canadian Pacific Railway Ltd. and Air Canada rose at least 1.5 percent to pace gains among industrial companies. Lassonde Industries Inc. rose to a record after agreeing to buy Apple & Eve LLC.

The Standard & Poor’s/TSX Composite Index gained 7.85 points, or 0.1 percent, to 15,214.96 at 4 p.m. in Toronto. Six of 10 industries on the index gained.

Volume was 64 percent lower than the average over the last 30 days as the U.S. celebrated the Independence Day holiday.

Industrial companies rose the most, increasing 0.6 percent. Canadian Pacific gained 1.5 percent to C$198.95 and Air Canada rose 2.6 percent to C$10.05.

Lassonde jumped 7.4 percent to C$118.03, closing at the highest price since September 1988, after the producer of food products from barbecue sauce to baked beans announced it was buying a 90 percent stake in juice-maker Apple & Eve.

Lundin Petroleum AB fell 0.8 percent to C$21.18 as the company said it would sell part of one of its Norway offshore oil properties.

ShawCor Ltd. fell 1.4 percent to C$57.66 after it announced a C$30 million contract to apply protective coating to a pipeline transporting gas from Russia to Bulgaria.

Fighting in eastern Ukraine between government troops and pro-Russian rebels continued after a 10-day cease-fire ended.

US

Markets closed today.

 

Have a wonderful weekend everyone.

 

Be magnificent!

It is not others who must change, but you.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

The best road to progress is freedom’s road.

-John F. Kennedy, 1917-1963

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:

Dog days of summer begin today ~ hottest days of the year, July 3^rd-August 11^th.

Tomorrow’s July 4^th spectacular: NBC will televise Macy’s 4^th of July Fireworks Spectacular live from New York City.  Before the pyrotechnics begin, Nick Cannon will host an all-star show, featuring Ariana Grande, Hunter Hayes, Miranda Lambert, and Lionel Richie.  The Brooklyn Bridge provides a stunning backdrop for the US’s largest Fourth of July fireworks show.  The show airs tomorrow at 8 PM and will be rebroadcast at 10 PM.

Also this week on the National Geographic channel, the miniseries The ‘90s: The last Great Decade?  Runs for three consecutive nights, beginning July 6^th at 9 PM.  The series explores the events of that decade, such as the Gulf War, the Rodney King riots, the Anita Hill hearings, the Bill Clinton presidency, and the rise of reality TV,  The miniseries will include interviews with people such as Gen. Colin Powell and “Friends” star Matthew Perry.

Good investment:  5.6 million= the price (in British pounds; $9.5 million US) brought at auction by a rare 1856 British Guiana One-Cent stamp.

Photos of the Day 07/03

Joseph Rojas and Abigail Zolotarsky embrace as lightning strikes One World Trade Center in Manhattan during sunset after a summer storm in New York. Lucas Jackson/Reuters

Sloan Hollis leads his class as kids march during First Baptist Church Weekday Education’s annual 4th of July parade, in Oxford, Miss. Bruce Newman/Oxford Eagle/AP

Market Closes for July 3^rd, 2014

Market   Index	Close	Change
Dow   Jones	17068.26	+92.02
		+0.54%
S&P 500	1985.44	+10.82    +0.55%
NASDAQ	4485.926	+28.192    +0.63%
TSX	15207.11	-2.68
		-0.02%

International Markets

Market   Index	Close	Change
NIKKEI	15348.29	-21.68
		-0.14%
HANG   SENG	23531.44	-18.18
		-0.08%
SENSEX	25823.75	-17.46
		-0.07%
FTSE 100	6865.21	+48.84
		+0.72%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.322	2.319
CND.   30 Year Bond	2.842	2.844
U.S.   10 Year Bond	2.6383	2.6264
U.S.   30 Year Bond	3.4694	3.4617

Currencies

BOC Close	Today	Previous
Canadian $	0.94005	0.93745
US   $	1.06377	1.06673
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44769	0.69076
US   $	1.36090	0.73481

Commodities

Gold	Close	Previous
London Gold   Fix	1319.40	1326.59
Oil	Close	Previous
WTI Crude Future	104.06	104.48
BRENT	109.360	109.360

Market Commentary:

Canada
By Gerrit De Vynck

July 3 (Bloomberg) — Canadian stocks were little changed, paring earlier gains, as mining and energy stocks fell with the price of gold and oil.

ShawCor Ltd. and Arc Resources Ltd. fell at least 1.7 percent, pacing losses among energy companies in the benchmark index. Calfrac Well Services Ltd. jumped 5.3 percent after more than doubling its budget for new investments. Tekmira Pharmaceuticals Corp. lost 17 percent after U.S. regulators put one of its drug studies on hold.

The Standard & Poor’s/TSX Composite Index fell 2.44 points, or less than 0.1 percent, to 15,207.35 at 4 p.m. in Toronto, after climbing as much as 0.3 percent earlier in the day. The gauge is up 12 percent this year, and closed at a record yesterday.

West Texas Intermediate crude fell for a sixth day, it’s longest falling streak in more than two years. Gold futures fell the most in almost five weeks after the U.S. added more jobs in June than analysts had predicted, stemming demand for the haven asset.

Alacer Gold Corp. and OceanaGold Corp. fell at least 3 percent to lead losses among gold miners in the index.

Unemployment in the U.S. fell to 6.1 percent, the lowest since September 2008, as the economy added 288,000 jobs in June. Analysts surveyed by Bloomberg had predicted an average increase of 215,000 new jobs.

“The numbers were good across the board, and surprisingly so,” Lawrence Creatura, a portfolio manager at Federated Investors Inc. in Rochester, New York, said by phone. He helps manage $366 billion. “So this is a clear positive surprise.”

Calfrac Well Services gained 5.3 percent to C$21.29 after saying it would increase its capital spending to C$360 million from C$150 million because of growing demand in the U.S.

Tekmira fell 17 percent to C$12.18 after the U.S. Food and Drug Administration told the Burnaby, British Columbia-based company its study into the safety of a prospective anti-Ebola drug was being put on hold.

Cathedral Energy Services Ltd. gained 1.4 percent to C$4.99 as National Bank Financial raised its rating on the stock to outperform from the equivalent of a hold.

Terrace Energy Corp. fell 2.4 percent to C$2.05 after saying it would sell 10.8 million new shares for C$1.85 million to fund new exploration and development.

USA
By Stephen Kirkland and Jeremy Herron

July 3 (Bloomberg) — Declining unemployment and a pledge that European interest rates will stay low jolted the Dow Jones Industrial Average above 17,000 for the first time, lifted the dollar and sent bonds lower.

The Standard & Poor’s 500 Index added 0.6 percent to extend an all-time high, while the Dow average climbed 0.5 percent to 17,068.26. The Stoxx Europe 600 Index added 0.9 percent, capping the biggest three-day rally in 10 weeks. The Bloomberg Dollar Spot Index rose 0.2 percent and the yield on 10-year Treasuries increased one basis point to 2.64 percent at 2:10 p.m. in New York. Gold fell the most since May and corn entered a bear market.

The U.S. unemployment rate fell to an almost six-year low of 6.1 percent, underscoring a brighter U.S. labor market that will help spur the economy. ECB President Mario Draghi said the central bank sees rates at current levels for an extended period after policy makers left borrowing costs unchanged at record lows. Sweden’s currency tumbled the most since 2011 after the central bank cut borrowing costs by more than analysts estimated. U.S. equities markets closed at 1 p.m. ahead of the Independence Day holiday.

“This is a pretty strong report,” said Jim Paulsen, chief investment strategist at San Francisco-based Wells Capital Management, in a phone interview. “This is stuff that is going to lead to upward revisions of second quarter growth rates and it starts off the third quarter in a real positive momentum place.”

The U.S. added 288,000 jobs following a 224,000 gain the prior month that was bigger than previously estimated, Labor Department figures showed. The median forecast in a Bloomberg survey of economists called for a 215,000 advance. The jobless rate is the lowest since September 2008.

Another report from the Institute for Supply Management showed services industries, which make up almost 90 percent of the world’s largest economy, expanded last month at slower pace than economists in a Bloomberg survey estimated.

Benchmark 10-year yields reached 2.69 percent, the highest since May 2, based on Bloomberg Bond Trader prices. Traders pushed the odds up to almost even that Federal Reserve Chair Janet Yellen and policy makers will lift borrowing costs by next June, while Wall Street economists moved up their estimated dates for the Federal Reserve’s first interest-rate increase since 2006.

“The stellar jobs report hits the Fed right between the eyes on how good labor market conditions out there truly are,” said Chris Rupkey, chief financial economist for Bank of Tokyo- Mitsubishi UFJ in New York. “It shows how far behind the curve they are,” he said, adding that he now expects the first rate increase in March next year instead of June.

Yellen said on June 18 that policy makers planned to hold interest rates near zero for a “considerable time” as slack in the jobs market kept inflation below its 2 percent target. The central bank has kept its benchmark rate near zero since December 2008.

U.S. benchmark indexes have extended a rebound from a selloff earlier this year that started with biotechnology and small-cap stocks. The S&P 500 has rallied 9.3 percent since reaching a two-month low in April as central bank stimulus spread from Europe to Japan and the U.S.

Among stocks that moved today, financial firms jumped 0.8 percent, led by online brokers and insurers. Life insurers such as Lincoln National Corp. and No. 1 MetLife Inc. benefit from higher bond yields, which allow them to invest clients’ premiums at higher rates.

Paccar Inc. added 5.4 percent amid speculation that the maker of Kenworth and Peterbilt trucks may receive takeover interest from Volkswagen AG, which denied it. PetSmart Inc. jumped 13 percent after Jana Partners LLC disclosed a new activist stake and urged the retailer to explore strategic options including a sale.

The ECB left its benchmark interest rate at 0.15 percent as predicted by all economists surveyed by Bloomberg News. Stocks rallied on June 5 after Draghi announced new measures to stimulate lending and said the central bank would begin preparations related for an asset-purchase plan.

Draghi reiterated that he’ll keep interest rates low as officials try to revive the region’s economy with a new round of emergency measures.

The Stoxx 600’s gain today pushed its three-day advance to 2.1 percent, the most since April. Five shares rose for every one that declined.

Gold futures retreated 0.8 percent to settle at $1,320.60 an ounce while silver slid 0.8 percent as demand for haven assets declined.

West Texas Intermediate crude fell 0.7 percent, a sixth day of losses that would be its longest losing streak since 2012.

Corn for December delivery fell 0.7 percent to $4.1525 a bushel in Chicago, on expectations farmers will produce a record crop in the U.S., the world’s largest grower and exporter. That leaves prices down 20 percent from this year’s settlement high of $5.215 in April, meeting the common definition of a bear market.

 

Have a wonderful evening everyone.

 

Be magnificent!

“If I change, will the world have any value?”

That is a wrong question, if one may point out.  It is wrong because you are the rest of humanity.

Krishnamurti, 1895-1986

As ever,

 

 

Carolann

 

We all have the ability.  The difference is how we use it.

-Stevie Wonder, 1950-

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:

Halfway Day today: 182^nd day of the year.

Just returned from a driving holiday in Europe –finally got to drive the autobahn in Germany – it’s pretty exciting to be able to drive over 150 km/hour!  The people in most places we visited are consumed by soccer right now – as you would expect.

July:  The seventh month, named by Mark Anthony in honour of Julius Caesar.  It was formerly called Quintilis, as it was the fifth month of the Roman year.  The old Dutch name for it was Hooy-maand – hay month, while the Anglo-Saxons knew it as Maedmonath – meadow month, because the cattle were turned into meadows to feed then.

Love is an act of endless forgiveness, a tender look which becomes a habit.  –Peter Ustinov.

Photos of the Day 07/02

Fabien Cousteau is pictured inside the marine laboratory Aquarius. Cousteau, grandson of famed French oceanographer Jacques Cousteau, emerged from the turquoise waters off the Florida Keys marking the end of a record-breaking, 31-day stay in an underwater habitat with a team of scientists and documentary filmmakers. Kip Evans/Mission Blue/Reuters

Chicago Mercantile Exchange (CME) group’s Chairman Emeritus Leo Melamed speaks during an interview with Reuters in Tokyo. Melamed, 82, was back in Japan to honor Chiune Sugihara, who over a period of roughly a month issued visas that allowed 6,000 Jews to escape war-torn Lithuania and the advancing Nazis – saving several times as many people as Oskar Schindler, made famous in the film ‘Schindler’s List.’ In 1940, Melamed, a small Jewish boy fleeing the Nazis, was put in to a remote Japanese port and saved by Sugihara, the Japanese consul who issued exit visas from Lithuania against his government’s orders. Yuya Shino/Reuters

Market Closes for July 2^nd, 2014

Market   Index	Close	Change
Dow   Jones	16976.24	+20.17
		+0.12%
S&P 500	1974.62	+1.30    +0.07%
NASDAQ	4457.734	-0.917    -0.02%
TSX	15209.79	+63.78
		+0.42%

International Markets

Market   Index	Close	Change
NIKKEI	15369.97	+43.77
		+0.29%
HANG   SENG	23549.62	+358.90
		+1.55%
SENSEX	25841.21	+324.86
		+1.27%
FTSE 100	6816.37	+13.45
		+0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.319	2.237
CND.   30 Year Bond	2.844	2.825
U.S.   10 Year Bond	2.6264	2.5205
U.S.   30 Year Bond	3.4617	3.3499

Currencies

BOC Close	Today	Previous
Canadian $	0.93745	0.93737
US   $	1.06673	1.06682
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45686	0.68641
US   $	1.36573	0.73221

Commodities

Gold	Close	Previous
London Gold   Fix	1326.59	1327.75
Oil	Close	Previous
WTI Crude Future	104.48	105.33
BRENT	109.360	109.360

Market Commentary:

Canada
By Eric Lam

July 2 (Bloomberg) — Canadian stocks rose a fifth day, with the benchmark index extending a record, as banks and metals miners advanced amid data that boosted confidence in the world’s largest economies.

Teck Resources Ltd. and First Quantum Minerals Ltd.increased at least 2.9 percent as copper jumped to a 19-week high. Royal Bank of Canada, the nation’s second-largest lender, paced gains as banks climbed a fourth day to extend a record. CAE Inc. rose 1.2 percent after winning a series of defense contracts for global customers worth about C$110 million ($103 million). BlackBerry Ltd. jumped 4.1 percent, extending a four- month high.

The Standard & Poor’s/TSX Composite Index rose 63.78 points, or 0.4 percent, to a record 15,209.79 at 4 p.m. in Toronto. Canadian markets were closed yesterday for a national holiday.

“It’s partly a bit of a catch-up from yesterday as the U.S. market was up,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.7 billion. “The Canadian banks still look pretty good here, in terms of safety and consistent growth.”

A gauge of global equities closed at an all-time high yesterday after data showed manufacturing activity expanding in countries from China to the U.K. and the U.S. The S&P 500 and Dow Jones Industrial Average both reached records.

Data from employment to housing is fueling confidence that the U.S. economy is rebounding after the worst contraction in gross domestic product since 2009. Data today indicated staffing at companies climbed in June by the most since November 2012, boosting bets growth is heating up in the world’s biggest economy.

A report yesterday showed China’s Purchasing Managers’ Index climbed to 51.0 in June, suggesting the government’s efforts to arrest a slowdown are helping to stabilize the world’s second-largest economy. China and the U.S. are Canada’s biggest trading partners.

The S&P/TSX has rallied 1.7 percent in the past five days.  The gauge rallied 6.1 percent in the past three months, capping a fourth straight quarterly advance.

Seven of the 10 main industries climbed today, with technology and consumer stocks pacing gains. BlackBerry climbed 4.1 percent to C$11.39, the highest since March 4.

Shares of the smartphone maker have surged 41 percent in the past month after the company reported a narrower loss in the fiscal first quarter than analysts had estimated.

Teck Resources, Canada’s largest diversified miner, added 4.3 percent to C$25.40, the biggest gain since January, and First Quantum Minerals rose 2.9 percent to C$23.49, highest since November 2012. The price of copper in New York rose to a 19-week high. Nickel, aluminum, zinc, tin and lead rose in London.

Royal Bank advanced 1 percent to C$77.01 and Bank of Nova Scotia rose 0.3 percent to C$71.34 to pace gains as the S&P/TSX Banks Index climbed 0.4 percent to a record.

US
By Lu Wang

July 2 (Bloomberg) — U.S. stocks were little changed, after benchmark gauges closed at record levels yesterday, as private data showed companies added more workers than estimated in June before the government’s jobs report tomorrow.

Constellation Brands Inc. rallied 2.3 percent after boosting its earnings forecast. Rackspace Hosting Inc. jumped6.3 percent after TechCrunch reported the company may go private. Bank of America Corp. advanced 1.6 percent as Deutsche Bank AG advised investors to buy the stock. Airlines posted the biggest loss among S&P 500 industries after Delta Air Lines Inc. said excess capacity in some international markets forced fares down more than expected.

The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,974.62 at 4 p.m. in New York. The Dow Jones Industrial Average added 20.17 points, or 0.1 percent, to 16,976.24. Both gauges extended closing records. The Russell 2000 Index of smaller companies lost 0.5 percent today after rallying 0.8 percent yesterday. U.S. equity markets close at 1 p.m. tomorrow ahead of the Independence Day holiday.

“The ADP data is very strong,” Jim McDonald, chief investment strategist at Chicago-based Northern Trust Corp., said by phone. His firm manages about $915 billion of assets.  “It’s another sign that we’re regaining some momentum in the latter part of the year. People are probably not going to want to have big bets on ahead of the payroll number.”

The S&P 500 moved in a range of 0.21 percentage point today from its highest and lowest points, the second-smallest fluctuation since 1993 after a 0.20 point reading in December, data compiled by Bloomberg show. About 5.2 billion shares changed hands on U.S. exchanges, 13 percent below the three- month average.

Benchmark indexes reached records yesterday, with the 30- member Dow rising within two points of 17,000. The Dow Jones Transportation Average also jumped to an all-time high, while the Russell 2000 briefly touched a record. Simultaneous gains in different industries are sometimes cited by chart analysts as evidence economic growth is pervasive enough to fuel additional gains.

Stocks are extending a rebound from the selloff earlier this year that started with biotechnology and small-cap stocks.  Equities have rallied since the S&P 500 reached a two-month low in April as central bank stimulus spread from Europe to Japan and the U.S.

Companies in the U.S. added 281,000 workers to their payrolls in June, figures from the ADP Research Institute showed today. The median projection of 47 economists surveyed by Bloomberg called for an advance of 205,000.

The private report precedes the Labor Department’s payrolls data tomorrow that may show nonfarm payrolls rose by 215,000 in June, according to the median of 89 economists’ estimates. A separate release showed today that U.S. factory orders fell 0.5 percent in May.

Data from employment to housing is fueling confidence that the world’s largest economy is rebounding after the worst contraction in gross domestic product since 2009.

“Everything that we’re seeing in the second quarter has generally been improving and in most cases accelerated improvement,” Chris Bouffard, chief investment officer at the Mutual Fund Store in Overland Park, Kansas, said by phone. His firm oversees $9 billion. “The market’s looking to say the outlook for the next few quarters is more positive than we saw certainly in the first quarter.”

Fed Chair Janet Yellen said last month that accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth. She emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.

Yellen said in a speech today that interest rates shouldn’t be the main tool to promote financial stability.

“Monetary policy faces significant limitations,” she said in prepared remarks at the International Monetary Fund in Washington. “Its effects on financial vulnerabilities, such as excessive leverage and maturity transformation, are not well understood and are less direct than a regulatory or supervisory approach.”

The comments are significant because economists worry that central banks may now be causing a worldwide reach for yield as interest rates are suppressed by monetary policy. The Fed itself has kept the benchmark lending rate near zero since December 2008.

The European Central Bank will probably keep interest rates unchanged at its meeting tomorrow after cutting its benchmark rate to a record low last month, according to the median forecast of economists in a Bloomberg survey.

The Chicago Board Options Exchange Volatility Index declined 3 percent to 10.82. The gauge, known as the VIX, is near its lowest level since February 2007.

Six out of the 10 S&P 500 main industries gained as health- care, phone and consumer-staples companies rose the most, adding at least 0.2 percent. Utilities fell 2 percent for the worst performance.

Constellation rose 2.3 percent to $90.45. The producer and marketer of wines, beers and spirits increased its earnings estimates for the fiscal year after posting better-than- estimated profit in its first quarter.

Rackspace rallied 6.3 percent to $35.88. The provider of cloud-computing services has been negotiating with a private- equity firm to borrow capital for a deal to go private, TechCrunch reported, citing an unidentified source. The deal could be announced as soon a this week, according to the news website. Rackspace hired Morgan Stanley last month to seek strategic options.

Bank of America advanced 1.6 percent to $15.85. Deutsche Bank upgraded its recommendation for the second-biggest U.S. lender to buy from hold.

Airlines slumped 3.6 percent, the most among 156 groups in the S&P 500. Delta lost 5.1 percent to $38.24 as its passenger unit revenue increased 4.5 percent last month from a year earlier, slowing from a growth rate of 7 percent in May. Strong domestic travel “offset lower-than-expected international yields driven by industry-wide capacity increases,” Delta said.

GoPro Inc. lost 14 percent to $42.04, the first drop since its initial public offering last week. The maker of wearable cameras surged 20 percent to $48.80 yesterday, doubling its IPO price in a week. The company’s market value climbed to $6 billion, compared with $2.96 billion in its IPO.

Harley-Davidson Inc. retreated 3.6 percent to $67.80 after Raymond James Financial Inc. lowered its recommendation on the Milwaukee-based motorcycle maker to market perform, the equivalent of hold, from strong buy.

Have a wonderful evening everyone.

 

Be magnificent!

Society cannot be changed unless man changes.

Man, you and others, have created these societies

for generations upon generations.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Optimism for me isn’t a passive expectation that things will get better; it’s a conviction that we can make things better – that whatever suffering we see, no matter how bad it is, we can help people if we don’t lose hope and we don’t look away.

-Bill Gates, Stanford University Commencement speech, 2014.

 

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:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the Day

Morning fog covers the valleys near Bernbeuren, southern Germany, at sunrise.

An Iraqi Christian girl whose family fled from Mosul, Iraq, arrives at a social club in Ainkawa, a suburb of Irbil with a majority Christian population. Hundreds of Iraqi villagers are fleeing advances by Sunni militants.

Market Closes for June 30^th, 2014

Market Index	Close	Change
Dow Jones	16824.68	-27.16
		-0.16%
S&P 500	1958.99	-1.97   -0.10%
NASDAQ	4408.180	+10.250   -+0.23%
TSX	15136.35	+42.10
		+0.28%

International Markets

Market Index	Close	Change
NIKKEI	15162.10	+67.10
		+0.44%
HANG SENG	23190.72	-30.80
		-0.13%
SENSEX	25413.78	+313.86
		+1.25%
FTSE 100	6743.94	-13.86
		-0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.237	2.262
CND. 30 Year Bond	2.780	2.825
U.S. 10 Year Bond	2.5205	2.6206
U.S. 30 Year Bond	3.3499	3.4660

Currencies

BOC Close	Today	Previous
Canadian $	0.93737	0.92228
US $	1.06682	1.08426
Euro Rate 1 Euro=		Inverse
Canadian $	1.46093	0.68450
US $	1.36942	0.73023

Commodities

Gold	Close	Previous
London Gold Fix	1327.75	1272.67
Oil	Close	Previous
WTI Crude Future	105.33	106.90
BRENT	109.360	109.360

Market Commentary:

Canada

By Andrew Mayeda

June 30 (Bloomberg) — Canadian consumer confidence rose for the first time in a month as optimism about real-estate prices surged to the highest in almost five years.

The Bloomberg Nanos Canadian Confidence Index climbed to 59.2 for the week ended June 27, from 58.5 in the prior period. The percentage of respondents who believe home values in their neighborhood will increase in the next six months rose to 44.1, the highest since the fourth quarter of 2009.

Optimism about personal finances and the economy also increased, while job-security sentiment dimmed, according to the survey-based index.

“Looking at the key drivers of consumer sentiment over the past six years, it is clear that positive views of real estate is a key factor in Canadian consumer confidence,” said Nik Nanos, chairman of Ottawa-based polling firm Nanos Research Group. Sentiment about real estate is “noticeably” above its six-year average, while personal-finance views are “marginally” below the average for the period, he said.

Canada’s housing market has been surging even as the world’s 11th largest economy struggles to shift into high gear. Canadian realtors recorded their biggest sales gain in almost four years last month, as the industry rebounded from the impact of a difficult winter, the Canadian Real Estate Association said June 16.

Housing starts rose to their strongest level in seven months in May, following a slump in construction in the first three months of the year, Canada Mortgage & Housing Corp. reported June 9.

Bank of Canada Governor Stephen Poloz said June 12 that the biggest domestic risk to the country’s financial system remains households with stretched consumer finances after a period of rapid homebuilding. Poloz also predicted a soft landing in the housing market and progress in Europe’s effort to ease its debt crisis.

Canada’s economic growth slowed in the first quarter as the harsh winter slowed housing construction, business spending and exports, and expanded less than economists forecast in April. Poloz said June 4 it remained appropriate for the central bank to keep its benchmark interest rate at 1 percent, in view of the economy’s “modest” pace of growth.

The survey-based Nanos index has two sub-indexes. The Expectations Index, based on responses about the national economy and real estate, rose to 58.7 last week from 58.2.

The share of respondents who think the Canadian economy will improve over the next six months rose to 21.8 percent from 21.1 percent the week before.

The Pocketbook Index, based on responses to questions about personal finances and job security, climbed to 59.7 from 58.9.

Those who say their finances have improved over the past year rose to 17.6 percent from 17.0 percent, according to the Nanos report.

The proportion who say they feel at least somewhat secure about their jobs dropped to 68.8 percent, the lowest since May 30, from 69.2 percent.

“A modest pickup in overall economic activity appears to have bolstered consumer sentiment,” said Joseph Brusuelas, senior economist at Bloomberg LP, “However, Canadians remain concerned about their own personal financial condition, which is reflective of the household imbalances that remain a pressing policy challenge.”

Canada’s gross domestic product grew less than economists forecast in April as goods production fell while service industries such as wholesaling expanded, Statistics Canada said today in Ottawa. Output rose 0.1 percent to an annualized C$1.62 trillion ($1.51 trillion), the same pace as in March. The median forecast in a Bloomberg economist survey was for the world’s 11th largest economy to expand 0.2 percent.

The Nanos data are based on phone interviews with 1,000 people, using a four-week rolling average of 250 respondents.

The results are accurate to within 3.1 percentage points.

USA

By Jeanna Smialek

June 30 (Bloomberg) — The number of contracts to purchase previously owned U.S. homes jumped in May by the most in more than four years, a sign the residential-real estate market is rebounding after a slow start to the year.

The pending home sales index climbed 6.1 percent, the biggest advance since April 2010, after a revised 0.5 percent increase in April, the National Association of Realtors said today in Washington. The gain exceeded the most optimistic estimate in a Bloomberg survey of economists, whose median forecast called for a 1.5 percent gain.

Housing demand is benefiting from cheaper borrowing costs, a stronger employment outlook and easier access to credit for some households. At the same time, higher prices and limited income gains are keeping the improvement in the residential real estate from becoming more broad-based.

“Housing is beginning to bounce back,” Paul Ashworth, chief U.S. economist at Capital Economics Ltd. in Toronto, whose forecast for a 4 percent gain was the highest in the Bloomberg survey. “Mortgage rates have backed down a bit recently. Home prices are still rising, which means fewer people have mortgages that are under water. The longer the housing recovery goes on, the more people will gain confidence to join in.”

The gain in May was the biggest since first-time buyers rushed to sign contracts before the expiration of a tax credit four years ago. Estimates in the Bloomberg survey of 37 economists ranged from a decline of 0.5 percent to an advance of 4 percent after a previously reported 0.4 percent April gain.

Another report showed manufacturing cooled in June from a month earlier. The Chicago Institute for Supply Management Inc.’s business barometer fell to 62.6 from 65.5 in May. The median forecast called for the gauge to fall to 63. Readings above 50 signal expansion.

Stocks rose after the data, with the Standard & Poor’s 500 Index advancing 0.1 percent to 1,962.77 at 10:35 a.m. in New York. The S&P Supercomposite Homebuilding Index increased 1.5 percent.

Purchases fell 6.9 percent from the year prior, on an unadjusted basis, after a 9.3 percent decrease in the 12 months that ended in April, the association reported.

The pending sales index was 103.9 on a seasonally-adjusted basis, the highest since September. A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR.

Pending home sales climbed in all four regions, led by an 8.8 percent gain in the Northeast. Contract signings increased 7.6 percent in West, 6.3 percent in the Midwest and 4.4 percent in the South.

Economists consider pending sales a leading indicator because they track new purchase contracts. Existing-home sales are tabulated when a contract closes, usually a month or two later.

“Solid income growth and a slight easing in underwriting standards are needed to encourage first-time buyer participation, especially as renting becomes less affordable,” NAR chief economist Lawrence Yun said as the report was released.

Home sales have been slowly emerging from a slump early this year. Purchases of new homes rose in May by the most in 22 years, increasing 18.6 percent, the biggest one-month gain since January 1992, to a 504,000 annualized pace, figures from the Commerce Department showed.

Gains in home prices have started to cool, which will help bring more properties within reach of those prospective buyers with access to credit.  The S&P/Case-Shiller index of property values increased 10.8 percent from April 2013, the smallest 12-month gain in more than a year, after rising 12.4 percent in March, the group reported last week.

Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, is optimistic that demand will continue to rise though sales have been uneven in recent months.

“While the housing market has improved dramatically overall compared to where it was a couple of years ago, the recent recovery has been a little more choppy,” Chief Executive Officer Ara Hovnanian said during an earnings conference call on June 4.

Household formation will be the primary driver of long-term housing demand, he said, and “the creation of well-paying jobs will go a long way” toward it. “Given the low levels of total U.S. housing starts, we remain convinced that we are still in the early stages of the housing industry recovery.”

Home-improvement retailers including Lowe’s Cos. also remain upbeat about the housing recovery.

“We’ve seen a bit of a downturn in housing turnover, but home prices continue to appreciate,” Chief Financial Officer Robert Hull said at a June 24 consumer conference. “As we think about the drivers of our business, both housing and income is constructive.”

 

Have a wonderful evening everyone.

Be magnificent!

As ever,

 

Brianna

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the Day

Fans watch the match between the US and Germany June 26 from an alley in Seattle’s historic Pioneer Square neighborhood. ‘Nord Alley’ has been the site of large-screen viewing parties for World Cup games every match day.

A France supporter blows a kiss prior to the Group E match between Ecuador and France at the Maracana stadium in Rio de Janeiro, June 25.

Market Closes for June 27^th, 2014

Market   Index	Close	Change
Dow   Jones	16851.84	+5.71
		+0.09%
S&P 500	1959.48	+2.50    +0.03%
NASDAQ	4397.930	+18.84    -+0.43%
TSX	15094.25	+63.51
		+0.42%

International Markets

Market   Index	Close	Change
NIKKEI	15095.00	-213.49
		-1.39%
HANG   SENG	23167.73	-13.99
		-0.06%
SENSEX	23221.52	+23.69
		-0.10%
FTSE 100	6757.77	+22.65
		+0.34%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.250	2.262
CND.   30 Year Bond	2.801	2.825
U.S.   10 Year Bond	2.5340	2.6206
U.S.   30 Year Bond	3.3665	3.4660

Currencies

BOC Close	Today	Previous
Canadian $	0.99765	0.92228
US   $	1.06650	1.08426
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45566	0.68697
US   $	1.36490	0.73266

Commodities

Gold	Close	Previous
London Gold   Fix	1316.18	1272.67
Oil	Close	Previous
WTI Crude Future	105.74	106.90
BRENT	109.360	109.360

Market Commentary:

Canada

By Gerrit De Vynk – June 27 (Bloomberg)

Canadian Stocks rallied the most in two weeks as Valeant Pharmaceuticals international Inc. settled a lawsuit and financial shares advanced.  Valeant gained 2.1 percent. Mag silver corp. fell 11 percent after saying it would sell C$75million in shares. Empire Cp., which operates grocery stores, gained 4.6 percent after Canadian Imperial Bank of Commerce raised its rating to sector outperform, the equivalent of buy, from sector perform.

The Standard & Poor’s/TSX Composite Index rose 63.51 points, or 0.4 percent, to 15,094.25 at 4pm. In Toronto, paring a weekly decline to 0.1 percent.  It is up 11 percent this year and trading near an all-time high.

Royal Bank of Canada and CIBC gained at least 0.9 percent to pace gains among financial firms, which gained 0.6 percent as a group.

Empire gained 4.6 percent to C$70.82. Yesterday the company raised its dividend and reported fourth-quarter earnings that beat analyst estimates. Empire recently bought the Safeway brand in Canada.

USA

By Nina Glinski – June 27 (Bloomberg)

Consumer sentiment improved in June as higher stock prices and an improving labor market helped bolster Americans’ views of the economy. The Thomson Reuters/University of Michigan’s final sentiment index climbed to 82.5 from 81.9 in may.  Economists surveyed by Bloomberg projected an increase to 82 after a preliminary June reading of 81.2

More employment opportunities, record stock prices and improved property values are giving consumers cause for enthusiastic attitudes, reducing the odds that consumers ill retrench.  At the same time, Americans are paying more at gas pumps and grocery-store checkout lines, underscoring the need for bigger wage gains.

 

Have a wonderful evening everyone.

Be magnificent!

As ever,

 

Brianna

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7