Month: July 2014

Dear Friends,

Tangents:

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

Photos of the Day

A man takes advantage of the heavy rain to give his Siberian husky a bath outside their house in Paranaque city, metro Manila

A vendor sells dates at a market ahead of the holy fasting month of Ramadan near Riyadh, Saudi Arabia.

Market Closes for June 26^th , 2014

Market Index	Close	Change
Dow Jones	16846.13	-21.38
		+0.13%
S&P 500	1957.22	-2.31   +0.12%
NASDAQ	4379.046	-0.710   -0.02%
TSX	15030.74	+56.09
		+0.37%

International Markets

Market Index	Close	Change
NIKKEI	15308.49	+41.88
		+0.27%
HANG SENG	23197.83	+331.13
		+1.45%
SENSEX	250622.67	-251.07
		-0.99%
FTSE 100	6735.12	+1.50
		+.02%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.242	2.271
CND. 30 Year Bond	2.799	2.822
U.S. 10 Year Bond	2.5286	2.5592
U.S. 30 Year Bond	3.3557	3.3815

Currencies

BOC Close	Today	Previous
Canadian $	0.93519	0.93268
US $	1.06930	1.07218
Euro Rate 1 Euro=		Inverse
Canadian $	1.45555	0.68703
US $	1.36121	0.73464

Commodities

Gold	Close	Previous
London Gold Fix	1317.32	1319.30
Oil	Close	Previous
WTI Crude Future	105.84	107.25
BRENT	109.360	109.360

Market Commentary:

Canada

June 26 ( Bloomberg)

Canadian stocks rose, erasing an early decline, as energy an dindutrial stocks pushed the benchmarke index higher for a second straight day.  Enerflex Ltd. And Enerplus Corp. added at least 2.6 percent to pace gains among energy companies.  Perpetual Energy Inc. jumped 20 percent after it got a rating upgrade and announced a new joint venture.  AutoCanda Inc. dropped 4.5 percent a day after announcing it would sell C$350 million in new shares.

The Standard & Poor’s/TSX Composite Index rose 56.09 points, or 0.4 percent, to 15,030.74 at 4pm in Toronto.  The gauge is up 10 percent for the year, and closed at a record June 19.

Industrial companies gained the most among 10 groups in the benchmark index, rising 0.7 percent.  Air Canada and WestJet Airlines Ltd. Rose at least 2.6 percent to pace gains in the groups.

Perpetual Energy jumped 20 percent to C$1.96 as Canadian Imperial Bank of Commerce raised its rating to the equivalent of buy from the equivalent of hold. Perpetual also announced a $120 million joint venture to pump natural gas in Alberta.

AutoCanada fell 4.5 percent to C$79.38.  The car dealership owner announced a stock offering yesterday, saying it would sell new shares for C$78.  AutoCanada is up 73 percent this year.

QLT Inc. jumped 14 percent to C$6.59 after Auxilium Pharmaceuticals Inc. said it would buy the company in a $345 million stock transaction.  The deal allows Auxilium, a specialty drug company based in Chersterbook, Pennsylvania, to re-domicile in Canada and take advantage of the country’s tax rate.

Concordia Healthcare Corp. gained 3.2 percent to C$32.75 after its chief executive officer said it had already had one company approach the drug maker with a merger deal and was still a target.

Lumenpulse Inc. rose 2.6 percent to C$21.20 after saying it would buy assets from U.K.-based Projection Lighting Ltd. For GBP 16.6 million.

USA

By Jeff Kearns and Steve Matthews

June 26 ( Bloomberg)

James Bullard, president of the Federal Reserve Bank of St. Louis, said the U.S. economy is improving enough to withstand an increase in short-term interest rates next year as growth picks up. “I’m starting to think the economy could tolerate at least  little bit of the central bank getting back to a more normal stance,” Bullard, who favors raising the benchmark rate in the first quarter of 2015, said at an event today in New York.

The Federal Open Market Committee is closer to its goals fur full employment and low stable inflation than many investors realize, Bullard said.  He predicted the pace of economic growth will accelerate to 3 percent this year after an unexpectedly deep first quarter contraction.

“Inflation is picking up now.  It is still below target but it has been moving up in recent months,” he said in response to a question at a forum organized by the Council on Foreign Relations.  “I don’t think financial markets have internalized how close we are to our ultimate goals, and I don’t think the FOMC has internalized how close we are.”

The FOMC is debating how long to keep the benchmark federal funds rate near zero after completing a bond-purchase program that’s set to end late this year.  The committee repeated on June 18 that it expects the rate to remain near zero for a “considerable time” after the purchases end.

 

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

A member of the Amazonian Tatuyo tribe looks on in her village in the Rio Negro near Manaus, a World Cup host city, in Brazil. The Tatuyo have enjoyed three weeks of brisk business thanks to the World Cup.

Panda Xin Xin hangs out in his cage during the opening ceremony of the Panda Complex at the National Zoo in Kuala Lumpur, Malaysia. Two pandas are on loan to Malaysia for 10 years

Market Closes for June 25^th , 2014

Market   Index	Close	Change
Dow   Jones	16867.51	+49.38
		+0.29%
S&P 500	1959.53	+9.55    +0.49%
NASDAQ	4379.757	+29.401    +0.68%
TSX	14974.65	+12.28
		+.08%

International Markets

Market   Index	Close	Change
NIKKEI	15266.61	-109.63
		-0.71%
HANG   SENG	22866.70	-13.94
		-.06%
SENSEX	25313.74	-55.16
		-0.22%
FTSE 100	6733.62	-53.45
		-0.79%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.271	2.294
CND.   30 Year Bond	2.822	2.835
U.S.   10 Year Bond	2.5592	2.6052
U.S.   30 Year Bond	3.3815	3.4337

Currencies

BOC Close	Today	Previous
Canadian $	0.93268	0.92961
US   $	1.07218	1.07572
Euro Rate   1 Euro=		Inverse
Canadian   $	1.46132	0.68431
US   $	1.36294	0.73371

Commodities

Gold	Close	Previous
London Gold   Fix	1319.30	1314.85
Oil	Close	Previous
WTI Crude Future	107.25	107.26
BRENT	109.360	109.360

Market Commentary:

Canada

June 25 (Bloomberg) — Canadian stocks rose, after plunging the most since February yesterday, as a jump in Valeant Pharmaceuticals International Inc. offset losses among consumer- staples companies.

Valeant gained 4.3 percent on a report that Paulson & Co. supported the drugmaker’s attempt to buy Allergan Inc. Metro Inc. and Jean Coutu Group Inc. fell at least 1 percent, pacing losses among consumer-staples companies. Ithaca Energy Inc. and Veresen Inc. rose more than 2.3 percent as energy stocks advanced.

The Standard & Poor’s/TSX Composite Index rose 12.28 points, or 0.1 percent, to 14,974.65 at 4 p.m. in Toronto, climbing for the first time in four days. The price-to-earnings ratio for the benchmark Canadian equity gauge is 20.2, the highest since 2011. The measure has advanced 2.5 percent in June, closing at a record on June 19, and is up 4.5 percent for the quarter.

Five of 10 industries advanced in the S&P/TSX on trading volume 4.8 percent lower than the 30-day average. Consumer- staples companies had the biggest drop, falling 0.4 percent.

The S&P/TSX Gold Index advanced 0.6 percent, after a 2.9 percent loss yesterday, the worst since May 27. Gold for August delivery added 0.1 percent to $1,322.60 an ounce in New York, after an earlier loss of as much as 1.2 percent. The gold price reached $1,326.60 yesterday, a two-month high.

The U.S. economy fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previous reported 1 percent drop, the Commerce Department said today in Washington. The U.S. is Canada’s largest trading partner. Linamar Corp. lost 1 percent to C$61.66 and Martinrea International Inc. retreated 0.6 percent to C$12.64 to pace declines among automotive-related companies. Metro fell 1.1 percent to C$65.08 and Jean Coutu dropped 1 percent to C$22.49.

Valeant gained 4.3 percent, the most since April, to C$134.93 after a Reuters report said Paulson has six million shares in Allergan and supports the Valeant deal. That would make it the Botox maker’s 11th biggest shareholder, according to data compiled by Bloomberg.

Atlantic Power Corp. sank 1.5 percent to C$3.86 after Rupert Merer, analyst at National Bank Financial, cut his rating for the electric power generator company to underperform, the equivalent of a sell, from sector perform.

“With a likely dividend cut, high debt and many moving parts, we remain cautious,” Merer said in a note to clients today.

USA

June 25 (Bloomberg) — U.S. stocks rose for the first time in three days as investors speculated the economy is recovering from a first-quarter contraction and Monsanto Co. announced a $10 billion stock buyback plan.

Monsanto, the largest seed company, rallied 5.1 percent. CBS Corp. jumped 6.2 percent after the U.S. Supreme Court ruled that Aereo Inc. is violating broadcaster rights. Oil refiners such as Valero Energy Corp. and Marathon Petroleum Corp fell after the U.S. Commerce Department opened the door to more crude exports.

The Standard & Poor’s 500 Index added 0.5 percent to

1,959.53 at 4 p.m. in New York, rebounding after a 0.6 percent drop yesterday. The U.S. equity benchmark is up 1.9 percent in June, poised for a fifth month of gains. The Dow Jones Industrial Average climbed 49.38 points, or 0.3 percent, to 16,867.51 today. The Russell 2000 Index was up 0.8 percent.

“The market is partying on,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm manages about $247 billion. “If you think about it over a slightly longer-term basis, Fed tightening is not on the horizon, corporate outlook is fine, and if you look at dividend yields, stocks are attractive from a valuation point of view.”

Profits as a percentage of the S&P 500’s price, known as earnings yield, total 5.6 percent, exceeding the 2.6 percent yield on the 10-year Treasury note, according to data compiled by Bloomberg. The U.S. equity benchmark pays 1.9 percent in dividends.

U.S. stocks are poised for the third-slowest month in six years. About 5.6 billion shares have changed hands each day in June, trailing every month since 2008 except for the previous two Augusts, data compiled by Bloomberg show.

Trading is likely to get a boost on June 27, when Russell Investments concludes the annual revisions to its equity benchmark gauges. Russell’s U.S. stock indexes, including the Russell 1000 Index and the Russell 2000, are used as benchmarks for $5.2 trillion in assets, according to the company’s website. In the previous two years, the reconstitution day ranked in the top two busiest trading sessions, data compiled by Bloomberg show.

With the end of the quarter approaching, investors should expect about $20 billion in selling of equities and some buying of bonds as pension fund managers rebalance their portfolios, Boris Rjavinski, a strategist at UBS AG, estimated in a June 23 report. Economic data today showed that the U.S. gross domestic product shrank 2.9 percent in the first quarter, the worst reading since 2009. Orders for business equipment climbed in May, a sign that corporate investment is helping revive the economy after a slump at the start of the year. Monsanto also raised its full-year earnings forecast and posted better-than- expected fiscal third-quarter profit.

Americans returned to stores and car dealerships, companies placed more orders for equipment and manufacturing picked up as temperatures warmed, indicating the early-year setback was temporary. Combined with more job gains, such data underscore the view of Federal Reserve policy makers that the economy is improving and in less need of monetary stimulus.

Bookings for non-military capital goods excluding aircraft rose 0.7 percent after a 1.1 percent drop in April, data from the Commerce Department showed. Demand for all durable goods — items meant to last at least three years — decreased 1 percent, reflecting declines in the volatile transportation and defense categories.

“What’s important in goods is the non-defense capital orders, which are essentially a proxy for business spending,” Darrell Cronk, New York-based deputy chief investment officer at Wells Fargo Private Bank, said in a phone interview. Cronk helps oversee $170 billion. “When you factor in the numbers, that’s a good story that suggests in May there was bump in business spending.”

The CBOE OEX Volatility Index, also known as the old VIX, fell 6 percent to 9.76. Two days ago, the index fell to 8.9, its first close below 9 since calculations started in 1986.

Pacific Investment Management Co.’s theory of the “new neutral” led traders to speculate that the money manager sold S&P 500 options in April and May to benefit from stable prices, according to four people who heard about the trading and asked not to be named. Pimco’s chief investment officer, Bill Gross, declined to discuss specific trades in an interview last week. Monsanto climbed 5.1 percent to $126.73. The company raised its fiscal full-year forecast for ongoing earnings to $5.10 to $5.20 a share from $5 to $5.20 previous. Net income was $1.62 a share, beating the $1.55 average of analysts’ estimates compiled by Bloomberg.

CBS advanced 6.2 percent to $62.48. The Supreme Court’s 6-3 ruling is a triumph for broadcast companies. They said Aereo was threatening the underpinnings of the industry by selling programming online without paying licensing fees.

Bristol-Myers Squibb Co. gained 3 percent to $49.73 after stopping a late-stage study of a top experimental drug after skin cancer patients showed “superior overall survival.” The company said it’s testing nivolumab in more than 35 studies against multiple tumor types.

Schlumberger Ltd. jumped 6.4 percent to $113.85, for the biggest gain since November 2011. Chief Executive Officer Paal Kibsgaard said in a company webcast that earnings for the largest energy service company by market capitalization may reach $10 a share in 2017. Oil refiners fell as the Commerce Department widened its definition of what’s traditionally been considered a refined product eligible for shipping to customers abroad. That means more of the oil being pumped from U.S. shale formations may be eligible for export after being run through small-scale processing units.

Valero, which owns and operates refineries in the U.S., Canada and Aruba, fell 8.3 percent to $51.35, the biggest decline since November 2011. Marathon Petroleum lost 6.3 percent to $80.97.

General Mills Inc. retreated 3.6 percent to $51.76 for a fourth day of losses. The company reported quarterly earnings that trailed analysts’ estimates and said it began a review of its North American manufacturing and distribution network as part of a wider effort to reduce costs.

ImmunoGen Inc. fell 8.2 percent to $12.04. Morgan Stanley rated shares of the biotechnology company at underweight, similar to a sell recommendation, with a price estimate of $10.

 

Have a wonderful evening everyone.

 

Be magnificent!

“Wonder rather than doubt is the root of all knowledge.” – Abraham Joshua Heschel

 

As ever,

 

Brianna

“If you actions inspire others to dream more, learn more, do more, you are a leader.” – John Quincy Adams

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

Buyan, a male Siberian brown bear, is given a shower by a zoo employee on a hot day at the Royev Ruchey zoo in Russia’s Siberian city of Krasnoyarsk

Youth play soccer on the Arabian Sea shore in Mumbai, India. In a country where cricket dwarfs every other sport, the ongoing World Cup soccer tournament in Brazil has evoked a lot of interest in the game.

Market Closes for June 24^th, 2014

Market   Index	Close	Change
Dow   Jones	16818.13	-119.13
		-0.70%
S&P 500	1949.98	-12.63    -0.64%
NASDAQ	4350.355	-18.321    -0.42%
TSX	14962.37	-143.26
		-0.95%

International Markets

Market   Index	Close	Change
NIKKEI	15376.24	+6.96
		+0.05%
HANG   SENG	22880.64	+75.83
		+0.33%
SENSEX	25368.90	+337.58
		+1.35%
FTSE 100	6787.07	-13.49
		-0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.284	2.334
CND.   30 Year Bond	2.826	2.865
U.S.   10 Year Bond	2.5781	2.6261
U.S.   30 Year Bond	3.3991	3.4549

Currencies

BOC Close	Today	Previous
Canadian $	0.93075	0.93137
US   $	1.07440	1.07300
Euro Rate   1 Euro=		Inverse
Canadian   $	1.46164	0.68416
US   $	1.36037	0.73510

Commodities

Gold	Close	Previous
London Gold   Fix	1318.29	1317.99
Oil	Close	Previous
WTI Crude Future	106.63	106.82
BRENT	109.360	109.360

Market Commentary:

Canada

June 24 (Bloomberg) — Canada’s biggest pension fund is investing in Indian infrastructure assets after Prime Minister Narendra Modi vowed to build 100 new cities and revive growth in the $1.8 trillion economy.

Canada Pension Plan Investment Board said yesterday that it will pay $166 million for a stake in a unit of Larsen & Toubro Ltd., India’s largest engineering company. Investing in infrastructure will be core to the fund’s growth in the South Asian country, Andre Bourbonnais, senior vice president of private investments, said in an interview.

“Investors are confident of the long-term economic growth potential in India,” Ambareesh Baliga, managing partner of global wealth management at Mumbai-based Edelweiss Financial Services Ltd., said by phone. “Companies with proven track record and good balance sheets will get the maximum advantage. L&T is right there at the top.”

Modi has promised high-speed trains, low-cost airports that connect smaller towns and simple rules for industrial projects to help spur economic growth from near the slowest pace in a decade. Larsen & Toubro has surged 57 percent this year, the best performance on the S&P BSE Sensex index.

Canada Pension is committed to investing an equal amount for an additional stake in L&T Infrastructure Development Project Ltd. in 12 months after the initial purchase, according to a statement issued yesterday. L&T Infrastructure operates 19 toll roads, a power transmission line and a metro in Hyderabad. The L&T stake is Canada Pension’s first direct investment in India’s infrastructure and the latest push in its efforts to grow in the South Asian country. In February, the Toronto-based fund announced it had set up a $500 million fund with Piramal Enterprises Ltd., one of India’s top diversified companies, to finance home projects in the country.

In November, the pension fund contributed $200 million to an alliance with the Shapoorji Group to buy office buildings in major Indian cities. Bourbonnais said finding the right partners is key to Canada Pension’s expansion in India, which poses its unique challenges, including being “fairly bureaucratic.”

“In emerging markets, the selection of the partner is absolutely key,” he said.

Bourbonnais said the strongest electoral mandate for a government in 30 years will provide the political stability needed for additional investment. The partnership with L&T will allow Canada Pension to leverage this investment into new ones.

“We can use the joint venture to buy other toll road assets,” he said.

USA

June 24 (Bloomberg) — The Treasury sold $30 billion of two-year notes at the highest yield in more than three years as investors bet the economy will be strong enough for the Federal Reserve to remain on pace to raise interest rates next year.

The securities were sold at a yield of 0.511 percent, the most since the May 2011 monthly auction drew 0.56 percent. The auction’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount of debt offered, was 3.23, the lowest since March versus an average of 3.39 at the past 10 sales.

There is a 60 percent probability the Fed will raise rates to at least 0.5 percent by July of next year, based on fed funds futures, versus a 43.2 percent chance at the end of May. Following their June 17-18 policy meeting, Fed officials released forecasts, represented as dots on charts, showing that starting next year interest-rates would rise from zero faster than previously expected.

“We’ve had a decent concession of the last few days and yields at 50 basis points helped bring in some interest,” said Thomas Simons, a government-debt economist in New York at Jefferies Group LLC, one of 22 primary dealers that bid at Treasury auctions. “As we get closer to the Fed raising rates, we will drift higher.”

The yield on the current two-year note was little changed at 0.47 percent at 2:14 p.m. in New York, according to Bloomberg Bond Trader Prices. The yield on the benchmark 10-year note fell three basis points to 2.59 percent. Indirect bidders, an investor class that includes foreign central banks, purchased 23.1 percent of the notes, compared with an average of 26.2 percent for the past 10 sales.

Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, purchased 23.3 percent of the notes at the sale, compared with an average of 24.4 percent for the past 10 auctions.

Two-year notes have returned 0.3 percent this year, compared with a gain of 2.6 percent by the broad Treasuries market, according to Bank of America Merrill Lynch indexes. The two-year securities advanced 0.3 percent in 2013, while Treasuries fell 3.4 percent.

Fed policy makers said on June 18 that they expect their year-end rate will reach 1.13 percent in 2015 and 2.5 percent in 2016. Trading in the futures and swaps markets indicate the benchmark rate will remain below 2 percent through March 2017.

Today’s offering is the first of four auctions of coupon- bearing debt this week. The Treasury will sell $35 billion of five-year securities tomorrow and $29 billion of seven-year notes the next day. It will also auction $13 billion of two-year floating-rate notes tomorrow.

The sales, plus a $7 billion offering of 30-year Treasury Inflation Protected Securities on June 19, will raise $40.6 billion of new cash, as maturing securities held by the public total $73.4 billion, according to the U.S. Treasury.

 

Have a wonderful evening everyone.

Be magnificent!

As ever,

 

Brianna
“Along with Success comes a reputation for Wisdom” – Euripedes

 

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

Dancers wait to perform for actor Forest Whitaker (not seen) inside the UN House at an Internally Displaced People’s camp in Juba, South Sudan.

Portraits of the last veterans of WWI and artifacts from the Museum of the Great War of the Pays de Meaux, are displayed at Gare de L’Est railway station in Paris during an exhibition to celebrate the centenary of the WWI.

Market Closes for June 23^rd, 2014

Market   Index	Close	Change
Dow   Jones	16937.26	-9.82
		-0.06%
S&P 500	1962.61	-.026    -0.06%
NASDAQ	4368.676	+0.640    +0.01%
TSX	15105.63	-3.34
		-0.02%

International Markets

Market   Index	Close	Change
NIKKEI	15369.28	+19.86
		+0.13%
HANG   SENG	22804.81	-389.25
		-1.68%
SENSEX	25031.32	-74.19
		-0.30%
FTSE 100	6800.56	-24.64
		-0.36%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.334	2.294
CND.   30 Year Bond	2.865	2.835
U.S.   10 Year Bond	2.6261	2.6052
U.S.   30 Year Bond	3.4549	3.4337

Currencies

BOC Close	Today	Previous
Canadian $	0.93137	0.92961
US   $	1.07300	1.07572
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45975	0.68505
US   $	1.36044	0.73506

Commodities

Gold	Close	Previous
London Gold   Fix	1317.99	1314.85
Oil	Close	Previous
WTI Crude Future	106.82	107.26
BRENT	109.360	109.360

Market Commentary:

Canada

June 23 (Bloomberg) — Canada’s dollar is poised to test a technical level that marks the boundary between bullish and bearish outlooks for the currency versus its U.S. peer, according to Royal Bank of Canada, citing technical analysis.

The Canadian currency broke out of a six-week range June 20 after a report showed the nation’s consumer prices rose beyond the central bank’s target for the first time in more than two years, George Davis, chief technical analyst at the bank’s RBC Capital Markets unit, wrote in a client note. If it closes today stronger than C$1.0734, that will clear the way to advance to a trendline at C$1.0635, Davis wrote.

“This level is very, very important technically, as the trendline is drawn off of the lows dating back to September 2012,” Davis wrote. “A daily close below C$1.0635 would nullify our bullish view” on the U.S. dollar versus the loonie over the intermediate to long term.

The Canadian currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, appreciated 0.2 percent to C$1.0732 per greenback at 1:44 p.m. Toronto time. It closed at C$1.0758 on June 20, a the strongest since Jan. 6, after trading between C$1.0810 and C$1.0961 since May 8.

The nation’s consumer-price index increased 2.3 percent in May from a year earlier, a report showed June 20. The last time it exceeded the Bank of Canada’s 2 percent target was February 2012.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.

USA

June 23 (Bloomberg) — Americans snapped up previously owned homes in May in the biggest monthly sales gain in almost three years, a sign the residential real estate market is regaining its footing after a stumble early in the year.

Purchases climbed 4.9 percent, the biggest increase since August 2011, to a 4.89 million annualized rate, figures from the National Association of Realtors showed today in Washington. The level was the strongest since October. The report also showed price appreciation is slowing as more homes become available.

A more balanced market, including a wider selection of properties, smaller price gains and still-low borrowing costs, may encourage more Americans to buy as employment strengthens. Improving demand will probably spur a pickup in construction, and builders such as Hovnanian Enterprises Inc. are optimistic.

“The housing recovery is going to continue,” said Tom Simons, an economist at Jefferies LLC in New York, who projected sales would rise to a 4.8 million pace. “Income levels are going up, rates are at least not going up anymore, and prices are stabilizing, so all that blends into a good picture for affordability.”

Stocks fell, after the Standard & Poor’s 500 Index closed at a record, as industrial shares sank. The S&P 500 declined less than 0.1 percent to 1,961.68 at 12:33 p.m. in New York.

Another report today showed manufacturing was also strengthening. The Markit Economics preliminary June U.S. factory index increased to 57.5, the highest since May 2010, from 56.4 a month earlier, the London-based group said. Readings exceeding 50 in the purchasing managers’ gauge indicate expansion. The news abroad was less upbeat. Euro-area manufacturing and services activity weakened in June amid a further slowdown in France’s economy, underscoring the fragility of the recovery in the 18-nation region, other reports showed.

The median forecast of 70 economists surveyed by Bloomberg projected U.S. sales of existing houses would climb to a 4.74 million rate. Estimates ranged from 4.63 million to 4.9 million. The prior month’s pace was revised to 4.66 million from a previously reported 4.65 million.

The median home price rose 5.1 percent from May 2013 to reach $213,400, today’s report showed, matching the April increase as the smallest 12-month gain since the year ended March 2012.

Compared with a year earlier, purchases decreased 8.2 percent before seasonal adjustment. The number of previously owned homes on the market increased 6 percent from a year earlier to 2.28 million, the most since August 2012. At the current sales pace, it would take 5.6 months to sell those houses compared with 5.7 months at the end of the prior month. The month’s supply is consistent with a balanced market, Lawrence Yun, NAR chief economist, said at a news conference today as the figures were released. First-time buyers accounted for 27 percent of all purchases and are still having trouble getting into the market, Yun said.

Distressed sales, comprising foreclosures and short sales, in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 11 percent of the total, the fewest since records began in October 2008.

The slump in sales that began about a year ago when mortgage rates shot up “is pretty effectively over,” Yun said at the news conference. Given gains in employment, it is “hard to foresee how sales could slide back now.” He projected sales will soon top the 5 million pace and stay around those levels for the rest of the year. For all of 2014, sales will total 4.93 million, down from 5.09 million last year, Yun said. The drop reflects the slump at the beginning of the year as unusually frigid temperatures kept prospective buyers indoors, he said.

Sales of existing single-family homes increased 5.7 percent to an annual rate of 4.3 million. Purchases of multifamily properties — including condominiums and townhouses — held at a 590,000 pace.

Purchases improved in all four regions, led by an 8.7 percent increase in the Midwest. Yun said some of the advance represented transactions that had been delayed by the poor weather earlier in the year.

Existing home sales, tabulated when a purchase contract closes, account for more than 90 percent of the residential market. New-home purchases, which make up about 7 percent and are tabulated when contracts are signed, are considered a timelier barometer.

The housing recovery still has a ways to go. Existing-home sales had plunged to a 13-year low of 4.11 million in 2008, three years after a record 7.08 million houses were sold in 2005.

Borrowing costs, which climbed in the second half of 2013, have retreated recently. The average 30-year, fixed-rate mortgage was 4.17 percent in the week ended June 19, down from 4.41 percent at the beginning of April, according to data from Freddie Mac in McLean, Virginia. Overall, mortgage costs are still near historically low levels.

Residential construction is picking up this quarter after a weather-induced slump at the start of the year. Builders broke ground on homes at a 1 million annualized pace in May following 1.07 million in April, the best two-month reading since late 2013, a Commerce Department report showed this month.

Sentiment is also rebounding. The National Association of Home Builders/Wells Fargo confidence index climbed to 49 in June from 45 the prior month, the biggest gain since July 2013. The gauges for current sales, the outlook for future purchases and prospective buyer traffic all improved to the highest level since January.

Increasing property prices hurt affordability for prospective buyers trying to get into the market, at the same time they also help homeowners feel wealthier and may keep boosting profits for developers.

Hovnanian Enterprises, 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 boosting the market. “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,” Hovnanian said.

Some industry groups are growing concerned about the rebound. The Mortgage Bankers Association last week lowered its forecast for combined new and existing home sales in 2014 to 5.28 million — a decline of 4.1 percent that would be the first annual drop in four years. The group also cut its prediction on mortgage lending volume for purchases.

 

Have a wonderful evening everyone.

“Don’t walk behind me; I may not lead. Don’t walk in front of me; I may not follow. Just walk beside me and be my friend.” – Albert Camus

Be magnificent!

As ever,

 

Brianna

“To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment.” – Ralph Waldo Emerson

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

Costa Rica’s Bryan Ruiz celebrates after scoring his side’s first goal over Italy’s goalkeeper Gianluigi Buffon during the group D World Cup soccer match between Italy and Costa Rica at the Arena Pernambuco.

A soccer fan reacts to Brazil’s scoreless tie against Mexico during their 2014 World Cup Group A soccer match in a public viewing area in Sao Paulo, June 17.

Market Closes for June 20^th, 2014

Market   Index	Close	Change
Dow   Jones	16947.08	+25.62
		+0.15%
S&P 500	1962.87	+3.39    +0.17%
NASDAQ	4368.037	8.710    -0.20%
TSX	15108.97	-3.25
		-0.02%

International Markets

Market   Index	Close	Change
NIKKEI	15349.42	-11.74
		-0.08%
HANG   SENG	23194.06	+26.33
		+0.11%
SENSEX	25105.51	-96.29
		-0.38%
FTSE 100	6825.20	+17.09
		+0.25%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.294	2.262
CND.   30 Year Bond	2.835	2.825
U.S.   10 Year Bond	2.6052	2.6206
U.S.   30 Year Bond	3.4337	3.4660

Currencies

BOC Close	Today	Previous
Canadian $	0.92961	0.92420
US   $	1.07572	1.08201
Euro Rate   1 Euro=		Inverse
Canadian   $	1.46288	0.68358
US   $	1.35991	0.73535

Commodities

Gold	Close	Previous
London Gold   Fix	1314.85	1321.54
Oil	Close	Previous
WTI Crude Future	107.26	106.43
BRENT	109.360	109.360

Market Commentary:

Canada

By Ari Altstedter

June 20 (Bloomberg) — Canada’s dollar climbed to the strongest level since January and the nation’s bonds fell as a gauge of inflation exceeded the central bank’s target for the first time in two years, fueling bets the economy is picking up.

The loonie, as the currency is called, rose against most major counterparts as bankers’ acceptance contracts signaled investors were boosting wagers on higher interest rates. The currency fell to the weakest level since 2009 in March after Bank of Canada Governor Stephen Poloz told reporters he couldn’t rule out a rate cut if the economy worsened.

“If these numbers persist, you can’t deny it’s there, and then maybe you have to change your rhetoric a little bit,” Darcy Browne, managing director of currencies at Canadian Imperial Bank of Commerce, said of inflation by phone from Toronto. “While there’s a threat of hiking, the Canadian dollar is going to strengthen.”

The loonie, nicknamed for the image of the aquatic bird on the C$1 coin, appreciated 0.6 percent to C$1.0758 per U.S. dollar at 5 p.m. in Toronto. It touched C$1.0752, the strongest since Jan. 7, after weakening on March 20 to C$1.1279. One loonie buys 92.95 U.S. cents. The Canadian dollar gained 0.9 percent this week in its second five-day advance.

The currency is the top performer for the past three months in a basket of 10 developed-market currencies tracked by the Bloomberg Correlation Weighted Index, strengthening 4.5 percent. It has lost 2 percent this year. Hedge funds and other large speculators cut wagers on Canada’s dollar weakening against the greenback, known as net shorts, to the least in seven months. The difference in the number of bets on a decline in the loonie versus those on a gain was 21,533 as of June 17, the least since Nov. 22, figures from the Washington-based Commodity Futures Trading Commission show. Net shorts numbered 24,108 on June 10.

The Canadian government’s two-year note dropped, pushing the yield to as high as 1.15 percent, the most since Jan. 6. Benchmark 10-year bond yields rose as much as seven basis points, or 0.07 percentage point, the most since March 19, to 2.33 percent before trading at 2.29 percent. The 2.5 percent security maturing in June 2024 lost 29 cents to C$101.84.

The loonie strengthened past its 200-day moving average of C$1.0781, a technical signal it may gain more, after a report showed the consumer price index gained 2.3 percent in May from a year earlier. Core CPI, which leaves out eight volatile products including food and energy, increased 1.7 percent, from 1.4 percent the previous month. A separate report showed retail sales rose more than forecast in April.

The central bank’s goal for inflation is 2 percent. Economists in a Bloomberg survey forecast today’s data would show the CPI held at that level, which it reached in April for the first time since April 2012. It last exceeded 2 percent in February 2012.

“The Bank of Canada had communicated all along any uptick in inflation is transitory, it’s just energy and food, don’t worry about it,” said Greg Anderson, head of global foreign exchange strategy at Bank of Montreal, by phone from New York.

“Well, here it is, CPI, stripped of energy and food, and it’s surging higher. It is untenable, they’re going to have to change their forecasts massively.”

The central bank kept its benchmark interest rate at 1 percent on June 4, with policy makers reiterating concern that low inflation and weak exports are hindering the nation’s economy. Poloz said “the downside risks to the inflation outlook” remain, even after data two weeks earlier showed consumer prices rose at 2 percent. Since taking over at the Bank of Canada last June, Poloz shifted policy statements from cautioning about the need for interest-rate increases to a neutral view that leaves open the possibility of a cut, increasing pressure on the nation’s dollar. Poloz’s references to the importance of a weaker currency to support exports and persistent warnings about the threat of low inflation have kept up the pressure.

“The Bank of Canada will replace talking about uncomfortably low inflation with instead talking about uncomfortably weak recovery of the export sector,” Bank of Montreal’s Anderson said. “That’s the only way they can take a little more hawkish stance on rates without having the currency appreciate.”

Poloz said March 18 at a press conference that “if the balance of risks were to shift so that the risks on the downside for inflation were increased, then we would need to reconsider” lowering the rate.

The yield on June 2015 bankers’ acceptance contracts reached 1.46 percent today, the highest since April 4, suggesting investors are moving up their expected date for the Bank of Canada to begin raising interest rates.

Canadian retail sales increased 1.1 percent to C$41.6 billion ($38.5 billion), Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News forecast a 0.6 percent increase, based on the median of 19 projections, and the gain exceeded the 1 percent highest forecast.

USA

By Callie Bost and Jeremy Herron

June 20 (Bloomberg) — U.S. stocks rose, with benchmark indexes extending records amid optimism over the economy, as deal activity spurred a rally in health-care shares and energy producers gained with oil prices. Copper advanced a sixth day.

The Standard & Poor’s 500 Index added 0.2 percent to 1,962.91 at 4 p.m. in New York and the Dow Jones Industrial Average climbed 0.2 percent to an all-time high. Shire Plc surged 17 percent as AbbVie Inc. weighed a higher offer for the European drugmaker. Emerging-market shares completed their first weekly drop in June on concern higher oil costs will curb growth. Copper capped the longest rally in six months and coffee advanced for its best day in a month.

U.S. and European stocks rallied this week after the Federal Reserve said interest rates will remain low as the economic recovery shows signs of accelerating. Commodities led by oil rose for a second week as President Barack Obama said he’s sending U.S. military advisers to assist the Iraqi army battle an insurgency and is prepared to take more action.

“This is an energy bunny sort of market that wants to keep marching higher and for a good reason,” Terry Sandven, chief equity strategist at Minneapolis-based U.S. Bank Wealth Management, which oversees $120 billion, said by phone. “The U.S. economy is showing varying signs of improvement. Earnings are rising, interest rates are low and inflation is elevated, but not at extremes. That’s a favorable environment for equities to march higher.” The S&P 500 has climbed 1.4 percent this week. The index has closed higher six straight days, its longest streak since April. The gauge is trading at 16.6 times the projected earnings of its members, up from 15.5 times at the beginning of the year.

Fed Chair Janet Yellen emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.

Among stocks moving, CarMax Inc., the biggest U.S. auto dealer by market valuation, surged 17 percent after its profit and revenue topped estimates on higher vehicle sales. AutoNation Inc. added. 5.1 percent. Oracle Corp. slid 4 percent to lead an index of technology shares lower after reporting fourth-quarter profit and sales that fell short of analysts’ estimates.

Five out of 10 main industries in the S&P 500 advanced today, with energy shares adding 1 percent for the biggest increase. Drug companies rallied amid the AbbVie discussions. Cross-border deals are accelerating as U.S. companies seek lower taxes and ways to spend almost $2 trillion protected from U.S. taxes in cash abroad. Merck & Co. increased 1.1 percent and Eli Lilly & Co. climbed 3.6 percent to pace gains. The Stoxx 600 finished little changed, paring gains in the final minutes of trading to trim a weekly gain to 0.3 percent. AbbVie Inc. is considering raising ts takeover bid for Shire Plc a fourth time after the European drugmaker rejected its latest offer for about $46.5 billion, said two people with knowledge of the matter.

TSB Banking Group Plc rallied 12 percent on its first day of trading. Lloyds Banking Group Plc sold a 35 percent stake in the lender, more than the 25 percent it had planned, because of strong demand from investors.

“We’re still overweight global equities,” said Kelvin Tay, chief investment officer for South Asia Pacific at UBS Wealth Management. “Where risk assets are concerned, you tend to benefit from low interest rates, and from the Fed’s statement, we don’t think that interest rates are going to go up anytime soon. There is some concern that the situation in Iraq could escalate and bring oil prices up another notch.” The MSCI Emerging Markets Index slid 0.5 percent, bringing this week’s loss to 0.4 percent. Russia’s equities ended two days of gains as fighting erupted between Ukrainian government troops and insurgents.

The Micex fell 0.6 percent, pushing its weekly decline to 1 percent. After the market closed, Ukraine announced a week-long unilateral cease-fire in its easternmost regions. Earlier, NATO condemned Russia for massing new troops in a move that cast a pall over talks.

Gilts fell as Barclays Plc brought forward its forecast for the first increase in Bank of England interest rates to this year from the second quarter of 2015. The 10-year yield increased three basis points to 2.76 percent, after reaching 2.79 percent on June 13, the highest since March 11.

German 10-year yields increased two basis points to 1.34 percent. Italy’s rose three basis points to 2.95 percent.

The S&P GSCI index of 24 commodities added 0.1 percent for a seventh day of gains, the longest streak in 11 months that left the gauge at the highest level since February 2013. West Texas Intermediate crude climbed 0.8 percent to $107.26, the highest settlement since Sept. 18. Brent crude slipped 25 cents to close at $114.81 a barrel in London, trimming a second weekly gain.

Copper for delivery in three months rose 1.4 percent to settle at $6,820 a metric ton in London, the biggest gain since May 12. Zinc rose to a 16-month high on concern supply will remain tight amid shrinking inventories.

 

Have a wonderful evening everyone.

 

Be magnificent!

“Always do your best; what you plant now you will harvest later.” – Og Mandino

 

As ever,

 

Brianna

“With the New day comes new strengths and new thoughts.” – Eleanor Roosevelt

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

Tibetans on horseback throw praying papers as they gather for a traditional festival called ‘Wei Sang,’ in Hongyuan county, Sichuan province, China.

A vendor walks down the stairs as fans watch the 2014 World Cup Group C soccer match between Ivory Coast and Colombia at the national stadium in Brasilia, Brazil

Market Closes for June 19^th, 2014

Market Index	Close	Change
Dow Jones	16921.46	+14.84
		+0.09%
S&P 500	1959.48	+2.50   +0.13%
NASDAQ	4359.326	-3.510   -.08%
TSX	15112.22	+2.97
		+0.02%

International Markets

Market Index	Close	Change
NIKKEI	15361.16	+245.36
		-1.62%
HANG SENG	23167.73	-13.99
		-0.06%
SENSEX	25201.80	-44.45
		-0.18%
FTSE 100	6808.11	-29.55
		+0.44%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.262	2.292
CND. 30 Year Bond	2.825	2.813
U.S. 10 Year Bond	2.6206	2.5970
U.S. 30 Year Bond	3.4660	3.3958

Currencies

BOC Close	Today	Previous
Canadian $	0.92420	0.92228
US $	1.08201	1.08426
Euro Rate 1 Euro=		Inverse
Canadian $	1.47245	0.67914
US $	1.36085	0.73484

Commodities

Gold	Close	Previous
London Gold Fix	1321.54	1272.67
Oil	Close	Previous
WTI Crude Future	106.43	106.90
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

June 19 (Bloomberg) — Canadian stocks have rallied to a record amid a resurgence in energy producers and gold mining shares, delivering investors the second-best returns among the world’s largest markets this year.

About $1.5 trillion in value has been restored to Canadian equities since March 2009, with the Standard & Poor’s/TSX Composite Index gaining 100 percent. The S&P/TSX Composite closed yesterday at 15,109.25, topping the previous high of 15,073.13 reached six years earlier on June 18, 2008. It is up 11 percent this year, trailing only the 19 percent advance in India’s S&P BSE Sensex among the world’s 10 biggest markets.

The Canadian government’s June 17 approval of Enbridge Inc.’s Northern Gateway pipeline to British Columbia’s Pacific coast will potentially open up new markets for oil producers. As well, sectarian violence in Iraq, escalating tensions between Ukraine and Russia and the harshest North American winter in three decades have fueled concerns about energy supply and boosted oil and natural gas prices this year.

“It’s about time, is what I would say,” Barry Schwartz, fund manager at Baskin Financial Services Inc. in Toronto, said in a phone interview. His firm manages about C$700 million ($646 million). “It’s the resource stocks that had been sliced in half and are finally waking up.”

The S&P/TSX rose 2.56 points, or less than 0.1 percent, to 15,111.76 at 9:40 a.m. in Toronto, extending the record with a sixth day of gains. Raw-materials producers plunged 49 percent in the previous three years for the worst performance among 10 industries in the S&P/TSX. Energy stocks lost 7.1 percent in that time as the price spread between local Western Canadian Select oil widened to record levels against global benchmarks, hurting profits for local producers.

Oil producers and mining companies have since rallied 20 percent and 13 percent this year respectively, the top two performers in the S&P/TSX. Detour Gold Corp., the worst stock in 2013 as gold slumped the most in more than 30 years, has rebounded this year with a 239 percent advance. Gold prices have risen 6.4 percent in 2014.

Natural gas producers Birchcliff Energy Ltd. and Crew Energy Inc. have jumped more than 77 percent this year after frigid weather stoked demand for gas to heat homes and businesses in the Northeast and Midwest. Natural gas futures have surged 44 percent since Aug. 9.

A year after U.S. stocks surged to a record, Canada has caught up. Foreign investors are pouring cash into equities and the weakening Canadian dollar is helping earnings for exporters, such as New Gold Inc. and Osisko Mining Corp.

“The comeback has taken longer due to our exposure to resources,” said Gareth Watson, vice president of investment management and research at Richardson GMP Ltd. in an interview. His firm manages C$28 billion.

The Canadian benchmark took more than 63 months to climb from its March 2009 low and surpass its pre-crisis high. The S&P 500 Index achieved the same feat in less than 49 months.

Shares of Valeant Pharmaceuticals International Inc., the Laval, Quebec-based drugmaker, have soared almost 900 percent since 2009 amid an acquisition spree including an $8.7 billion purchase of eye-care firm Bausch & Lomb Inc. and its continued $54.2 billion hostile pursuit of rival Allergan Inc.

Canadian stocks aren’t likely to rise much further because the global economy isn’t strong enough to drive commodity prices higher, according to Sadiq Adatia, chief investment officer at Sun Life Global Investments Inc. The World Bank cut its global growth forecast earlier this month amid weaker outlooks for the U.S., Russia and China.

“The TSX will have a hard time keeping its gains as the fundamentals in Canada are not strong,” Adatia said in a phone interview. His firm manages C$8.1 billion. “Because they have such high levels of debt, the Canadian consumer can’t sustain the economy.” Canadian household debt levels climbed to a record 164.2 percent of disposable income in the third quarter last year, according to data from Statistics Canada. Valuations are at a three-year high, with the benchmark equity gauge trading at a price-to-earnings ratio of 20.2, according to data compiled by Bloomberg.

The S&P/TSX has risen almost twice as much as the S&P 500 this year, helping attract international investors looking for better returns. Foreigners bought C$3.64 billion in shares during April, an eighth month of purchases and the most since November, according to data from Statistics Canada. Earnings are forecast to continue improving. Per-share profit for companies in the S&P/TSX will probably rise 26 percent in 2014, according to analyst estimates compiled by Bloomberg.

Profits are being helped by declines in the Canadian dollar, which are making domestic goods cheaper compared with competition from abroad. The currency has fallen 2 percent this year against the U.S. dollar, reaching the lowest level since 2009 in March.

New Gold, Osisko Mining and oil producer Canadian Natural Resources Ltd. cited the exchange rate for reducing costs or boosting profit in the first quarter. The Canadian economy will expand 2.2 percent this year and 2.5 percent in each of the following two years, economists predict. Those would be the strongest growth rates since 2011.

“As long as the economy is rising, earnings go higher, it’s a fertile environment for increasing stock prices,” said Schwartz at Baskin Financial. “There seems to be in our minds no end to this rally in sight.”

USA

By Jacob Barach and Jeremy Herron

June 19 (Bloomberg) — Gold rose the most since September as the dollar weakened, while global stocks advanced to a record after the Federal Reserve said rates will remain low as the economy grows. Emerging-market currencies climbed.

Gold futures rallied 3.3 percent and the Bloomberg Dollar Spot Index dropped to its lowest level in almost a month. The Standard & Poor’s 500 Index gained 0.1 percent to extend an all- time high at 4 p.m. in New York, and the MSCI All-Country World Index climbed 0.5 percent. Ten-year Treasury yields added four basis points to 2.63 percent after plunging yesterday. Brent crude rose to a nine-month high.

Fed Chair Janet Yellen said yesterday she expects rates to stay low for a “considerable time” after monthly bond purchases end. Policy makers reduced long-term estimates for growth and interest rates, while also cutting purchases by $10 billion. Reports today showed signs of steady progress in the U.S. labor market and improving consumer confidence. President Barack Obama said he’s sending as many as 300 U.S. military advisers to assist the Iraqi army battle an insurgency.

“People perceived what Yellen said yesterday as less hawkish, and that’s bringing in money to the gold market,” Scott Gardner, who helps manage $450 million at Verdmont Capital SA in Panama City, said in a telephone interview. “The dollar is moving lower, and gold is gaining because of that.”

Gold futures for August delivery rose 3.3 percent to settle at $1,314.10 in New York. Last year, gold fell 28 percent after some investors lost faith in the precious metal as a store of value amid an equity rally and muted inflation. Silver surged to a 13-week high. Yellen told reporters at the end of a two-day meeting in Washington yesterday that accommodative monetary policy, rising home and equity prices and the improving global economy should help stoke above-trend growth in the U.S. Yellen emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.

The Conference Board’s U.S. leading economic indicators gauge, a measure of the outlook for the next three to six months, increased 0.5 percent in May after a 0.3 percent gain in April, the New York-based group said today.

Other reports todays showed fewer Americans filed applications for unemployment insurance payments last week and consumer confidence improved.

The MSCI All-Country World Index, one of the broadest measures of global equities, added 0.5 percent to a record. The Stoxx Europe 600 Index rose 0.6 percent as all 19 industry groups in the regional benchmark advanced. The MSCI AC Asia Pacific Index added 1.2 percent.

Among stocks moving in the U.S. today, BlackBerry Ltd. jumped 9.7 percent after reporting a narrower loss than analysts had projected. Red Hat Inc. advanced 2.9 percent after increasing its annual revenue forecast. Starbucks Corp. climbed 2.2 percent after UBS AG boosted its rating on the world’s largest coffee-shop chain.

“People are really taking a more constructive view to see what happens with the market here going forward,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said by phone. “I think you have to see if the trend continues.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, fell yesterday to the lowest since February 2007. It was little changed today at 10.66.

Commodities rallied for a sixth day, with the S&P GSCI gauge of 24 raw materials climbing 0.7 percent to the highest since August. Zinc for delivery in three months climbed 0.8 percent to the highest level in almost 16 months in London on concern production will fail to keep up with demand amid supply curbs and shrinking inventories. Aluminum and lead rose.

Crude advanced after a government report showed U.S. inventories shrank and amid concern that violence in Iraq will disrupt supplies.

Iraqi security forces expelled the rebel Islamic State in Iraq and the Levant, an al-Qaeda breakaway, from the Baiji refinery after overnight fighting, according to a police command statement. Exxon Mobil Corp. and BP Plc began removing employees from the country. Brent’s premium over WTI increased for a fourth day.

U.S. equities briefly extended losses today after Obama said he is prepared to take additional “targeted, precise” action in Iraq if necessary. The S&P 500 fell 0.7 percent last week as violence in Iraq pushed oil prices higher.

“The market is digesting the information regarding the Federal Reserve,” Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., which oversees about $160 billion in assets, said by phone. “We think this is a seriously dovish statement from the Federal Reserve and that the Fed is willing to accept inflation well above 2 percent before any action will be taken. The overall broader markets are sniffing that out.”

Currencies jumped versus the dollar as a slump in foreign- exchange volatility to a record boosted demand for higher- yielding assets. The Philippine peso, Malaysian ringgit and Indonesian rupiah gained at least 0.5 percent versus the U.S. currency.

JPMorgan Chase & Co.’s Global FX Volatility Index fell to 5.57 percent, the least since Bloomberg started collecting the data in 1992, helping fuel demand for carry trades, where investors seek to profit from differences in interest rates.  The euro gained 0.1 percent $1.36036, after climbing 0.4 percent yesterday. The dollar was little changed versus the yen.

Spain’s 10-year rate tumbled four basis points to 2.72.

Australia’s 10-year yield declined eight basis points to 3.67 percent after earlier sliding to 3.64 percent, the lowest since May 29. Germany’s 10-year bund yield fell five basis points to 1.32 percent after sliding to 1.30 percent on May 16, the least in more than a year.

The search for yield amid low borrowing costs could sow the seeds of a new crisis, the two newest members of the Bank of England’s Monetary Policy Committee said yesterday. Spain can borrow for 10 years at the same rate as Britain, said Kristin Forbes a professor at the Massachusetts Institute of Technology who will join the MPC next month.

 

Have a wonderful evening everyone.

 

Be magnificent!

“Be Brave enough to live creatively.  The creative place where no one else has ever been.” – Alan Alda

 

As ever,

 

Brianna

“Unrest of spirit is a mark of life.” – Karl Menninger

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

A boy cools himself in the waters of a tube well on a hot summer day at Manawala village on the outskirts of the northern Indian city of Amritsar.

A rainbow is seen from the Argentine side of the Iguazu River at the Iguazu Falls. Forming a border between Argentina and Brazil, Iguazu Falls, South America’s largest, attracts more than 1 million visitors a year.

Market Closes for June 18^th, 2014

Market Index	Close	Change
Dow Jones	16906.62	+98.13
		+0.58%
S&P 500	1956.98	+14.99   +0.77%
NASDAQ	4362.836	+25.602   +0.59%
TSX	15109.525	+53.36
		+0.35%

International Markets

Market Index	Close	Change
NIKKEI	15115.80	+139.83
		+0.93%
HANG SENG	23181.72	-21.87
		-0.09%
SENSEX	25246.25	-274.94
		-1.08%
FTSE 100	6778.56	+11.79
		+0.17%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.262	2.292
CND. 30 Year Bond	2.801	2.813
U.S. 10 Year Bond	2.5844	2.5970
U.S. 30 Year Bond	3.4008	3.3958

Currencies

BOC Close	Today	Previous
Canadian $	0.92263	0.92228
US $	1.08386	1.08426
Euro Rate 1 Euro=		Inverse
Canadian $	1.47257	0.67908
US $	1.35864	0.73603

Commodities

Gold	Close	Previous
London Gold Fix	1278.07	1272.67
Oil	Close	Previous
WTI Crude Future	105.97	106.90
BRENT	109.360	109.360

Market Commentary:

Canada

Five years into a bull market, Canadian stocks have rallied to a record amid a resurgence in energy producers and gold mining shares.  A year after U.S. stocks surged to a record, Canada has caught up. About $1.5 trillion in value has been restored to Canadian equities since March 2009, with the Standard & Poor’s/TSX Composite Index gaining 100 percent. The S&P/TSX closed at 15,109.25, topping the previous high of 15,073.13 reached six years earlier on June 18, 2008. It is up 11 percent this year for the second-best performance among the world’s 10 biggest markets.

Sectarian violence in Iraq, escalating tensions between Ukraine and Russia and the harshest North American winter in three decades have fueled concerns about energy supply and boosted oil and natural gas prices this year. Foreign investors are pouring cash into equities and the weakening Canadian dollar is helping earnings for exporters, such as New Gold Inc. and Osisko Mining Corp.

“It’s about time, is what I would say,” Barry Schwartz, fund manager at Baskin Financial Services Inc. in Toronto, said in a phone interview. “It’s the resource stocks that had been sliced in half and are finally waking up.”

USA

Stocks rallied, sending one of the broadest measures of global equities to an all-time high, and Treasuries gained as the Federal Reserve said U.S. growth is bouncing back and repeated that rates will remain low for a “considerable time.” Brent crude climbed to a nine-month high.

The MSCI All-Country World Index advanced 0.6 percent to a record 427.70 at 4 p.m. in New York. The Standard & Poor’s 500 Index jumped 0.8 percent for a fourth day of gains and a record close, as Fed Chair Janet Yellen said valuations are within historic norms. Ten-year Treasury yields fell six basis points to 2.59 percent. The Bloomberg Dollar Spot Index dropped 0.4 percent from a one-week high. Brent futures settled above $114 as Iraqi forces battled extremists north of Baghdad.

Yellen said accommodative monetary policy, rising home and equity prices and an improving global economy are some factors that should produce above-trend growth in the U.S. The Federal Open Market Committee continued to trim bond-buying that has fueled a rally in equities around the world and helped push the S&P 500 up 189 percent from a bear-market low in 2009. The FOMC repeated today that it’s likely to “reduce the pace of asset purchases in further measured steps” and to keep rates low after the bond-buying ends. A report yesterday showed inflation quickened in May by the most in more than a year.

“There was some expectations that this could be a little more hawkish given that some inflation measures had come up,” Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ U.S. Intermediary Business, said by phone. State Street Corp. oversees $2.4 billion. “Now that the Fed has not interpreted that in a way that means the economy is overheating, I think the market will be pleased with that result.”

A pickup in inflation lessens the threat of a prolonged drop in prices that hurts economic growth, giving Fed officials reason to continue to scale back their unprecedented bond-buying program. Steady labor-market gains has also bolstered confidence about the recovery.

“Economic activity is rebounding in the current quarter and will continue to expand at a moderate pace thereafter,” Yellen said at a press conference in Washington today.

Policy makers today predicted their target interest rate will be 1.13 percent at the end of 2015 and 2.5 percent a year later, higher than previously forecast. They lowered their long- run estimated rate, reflecting a slower growth rate for the U.S. economy.

“The markets are definitely relieved to see a fairly dovish comment,” said Youssef Zohny, portfolio manager at Stenner Investment Partners of Richardson GMP Ltd. in Vancouver. Richardson GMP manages about C$28.3 billion ($26 billion). “There wasn’t too much change, and really the no change is what markets are cheering.”

It took the MSCI All-Country World Index about 6 1/2 years to surpass the record it set in October 2007, more than a year longer than the S&P 500 as slower advances in Europe and emerging markets held the broader measure back. More than $46 trillion of stocks are tracked by the MSCI gauge, which fell 60 percent in about 16 months during the 2008 credit crisis.

The Chicago Board Options Exchange Volatility Index, known as the VIX, lost 12 percent to 10.61 today, the lowest level since 2007. The measure of volatility has dropped 23 percent this year, and is within two points of its record low reached in 1993.

The S&P 500 has climbed 7.5 percent since a low on April 11, as data showed the economy is recovering from the impact of extreme weather earlier this year. The benchmark index is trading at 16.5 times the projected earnings of its members, up from 15.5 times at the beginning of the year.

Canada’s S&P/TSX Composite Index advanced 0.4 percent today for a fifth day of gains to close at an all-time high six years to the day after its last record.

Emerging-market stocks ended five days of declines, with the MSCI Emerging Markets Index adding 0.4 percent. Brazil’s Ibovespa rose the most among the world’s major benchmarks as commodity producers rallied.

The S&P GSCI index of 24 commodities rose 0.2 percent for a fifth day of advances. Wheat futures rose 0.9 percent to $5.956 a bushel, while corn rallied from the lowest level in more than four months as investors assessed the development of the U.S. crop.

Brent rose 0.7 percent to settle at $114.26 a barrel as Islamist militants fought the Iraq government for control of a northern refinery. West Texas Intermediate fell 0.2 percent to $106.12 after a government report showed stockpiles rose last week at Cushing, Oklahoma.

Gold advanced 0.2 percent to $1,273 an ounce in New York as the Fed’s decision boosted demand for the metal as an alternative asset. The metal’s 60-day historical volatility dropped to 11.401, the lowest since Oct. 18, 2010, according to data compiled by Bloomberg. Gold futures traded in a range of $45 an ounce this month, compared with $74 in May.

Platinum for immediate deliver jumped as much as 1.4 percent and traded 0.5 percent higher to $1,446.85 an ounce in London trading. A deal to end a strike by South African miners at the world’s largest platinum producers will be delayed after a labor union made fresh demands, according to two people familiar with the talks.

In Europe, the Stoxx 600 was little changed after gaining 0.3 percent yesterday. Royal Dutch Shell Plc and BG Group Plc rose as a gauge of oil and gas companies increased amid the spreading conflict in Iraq. Daily Mail and General Trust Plc climbed 3.1 percent as its Zoopla Property Group Plc unit rose on its stock-market debut. Boliden AB gained 3.5 percent after Nordea Bank AB upgraded the copper and zinc producer.

Argentina’s restructured debt sank the most in emerging markets to  trade at less than 71 cents on the dollar, a three- month low. Officials overseeing South America’s second-largest economy say the nation doesn’t have sufficient reserves to pay what they estimate could be $15 billion of claims from holders of defaulted bonds that didn’t participate in two debt exchanges following the country’s 2001 default.

 

Have a wonderful evening everyone.

 

Be magnificent!

“Infuse your life with action. Don’t wait for it to happen. Make it happen. Make your own future. Make your own hope. Make your own love. And whatever your beliefs, honor your creator, not by passively waiting for grace to come down from upon high, but by doing what you can to make grace happen…yourself, right now, right down here on Earth.” – Bradley Whitford

As ever,

 

Brianna

“Begin at once to live, and count each separate day as a separate life.” – Seneca

 

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

Jagger Koonce, 2, plays in the fountain as the American Queen is docked along the Hederson, Ky., riverfront on the Ohio River. Darrin Phegley/The Gleaner/AP

Algeria’s Mehdi Mostefa (l.) fights for the ball with Belgium’s Eden Hazard during their 2014 World Cup Group H soccer match at the Mineirao stadium in Belo Horizonte. Sergio Perez/Reuters

Market Closes for June 17^th, 2014

Market  Index	Close	Change
Dow  Jones	16808.49	+27.48
		+0.16%
S&P 500	1941.99	+4.21    +0.22%
NASDAQ	4337.234	+16.129    +0.37%
TSX	15055.89	+15.46
		+0.10%

International Markets

Market  Index	Close	Change
NIKKEI	14975.97	+42.68
		+0.29%
HANG  SENG	23203.59	-97.08
		-0.42%
SENSEX	25521.19	+330.71
		+1.31%
FTSE 100	14975.97	+42.68
		+0.29%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.312	2.292
CND.  30 Year Bond	2.837	2.813
U.S.   10 Year Bond	2.6523	2.5970
U.S.  30 Year Bond	3.4421	3.3958

Currencies

BOC Close	Today	Previous
Canadian $	0.92077	0.92228
US  $	1.08605	1.08426
Euro Rate  1 Euro=		Inverse
Canadian  $	1.47128	0.67968
US  $	1.35470	0.73817

Commodities

Gold	Close	Previous
London Gold  Fix	1270.59	1272.67
Oil	Close	Previous
WTI Crude Future	106.36	106.90
BRENT	109.360	109.360

Market Commentary:

Canada

By Gerrit De Vynck

June 17 (Bloomberg) — Canadian stocks rose for a fourth day, bringing the benchmark index to within 20 points of its closing record, as gains among raw-material producers offset losses in energy stocks.

Centerra Gold Inc. and Pan American Silver Corp. rose at least 2.4 percent to pace gains among materials companies. Kelt Exploration Ltd. gained 7.1 percent after saying it would buy property in the Montney natural gas area.

The Standard & Poor’s/TSX Index rose 15.46 points, or 0.1 percent, to 15,055.89 at 4 p.m. in Toronto. The benchmark gauge briefly surpassed its closing high of 15,073.13 set in June 2008. The gauge has rallied 11 percent this year, boosted by rallies among commodity stocks.

Producers of raw materials advanced 0.5 percent today. Centerra gained 3.4 percent to C$5.25 and Pan American increased 2.4 percent to C$15.02.

First Quantum Minerals Ltd. fell 1.6 percent to C$21.30 after saying it was in a pact to buy Lumina Copper Corp. for $470 million in cash and shares.  Energy companies retreated as oil futures slipped from near a nine-month  high.

Kelt Exploration, an oil and gas producer, gained 7.1 percent to C$15.15. RBC Asset Management raised its target price on the stock after the announcement.

USA

By Jeremy Herron and Callie Bost

June 17 (Bloomberg) — U.S. stocks rose a third day, the dollar gained and Treasuries fell the most in two weeks, after data showed U.S. inflation quickened as the Federal Reserve begins a policy meeting. Crude slid from an eight-month high.

The Standard & Poor’s 500 Index rose 0.2 percent at 4 p.m. in New York. The Russell 2000 Index of small companies advanced to a two-month high. The rate on 10-year Treasury notes added six basis points to 2.65 percent. West Texas Intermediate crude slid 0.6 percent and gold snapped its longest rally since February. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major counterparts, added 0.3 percent.

Fed policy makers start a two-day meeting today as a report showing an increase in consumer prices signaled inflation will move closer to the bank’s 2 percent goal. Separate data showed housing starts declined in May. The Fed will probably raise rates faster than money-market investors expect, based on a Bloomberg News survey of economists. Iraq’s military said it repelled an attack by an al-Qaeda breakaway group. The nation’s crude output hasn’t been hurt by the violence, the International Energy Agency said today.

“Overall, you’re still in a market environment where the path of least resistance is up,” John Canally, an economic strategist at LPL Financial Corp., said in a phone interview from Boston. His firm oversees about $447.1 billion. “Another bump tomorrow could be the FOMC, although the outcome is largely already priced in.

The S&P 500 has advanced 5.1 percent this year, reaching a record on June 9, as equities were boosted by better-than- forecast economic data and monthly asset purchases by the Fed.

The index is trading at 16.4 times the projected earnings of its members, up from 15.5 times at the beginning of the year.

The Russell 2000 rose 0.9 percent to the highest since April 3. It has rallied 7.4 percent from a May low, rebounding after a selloff in small-cap and Internet stocks. The gauge is 2.7 percent below its all-time high reached in March.

Financial stocks rose the most in the U.S. today with online brokers rallying as the Senate’s Permanent Subcommittee on Investigations met for a hearing to examine conflicts of interest embedded deep in the plumbing of equity markets. U.S.

stock exchanges called for greater public disclosure or elimination of incentives and fees that lawmakers said favor the interests of high-speed traders over other investors.  E*Trade Financial Corp. and Charles Schwab Corp. rallied more than 5.5 percent.

“This is a phase where you still want to be invested in U.S. equities,” said Samy Chaar, a strategist at Lombard Odier in Geneva. “The economy is very robust, you still have cash returning zero, and the Fed is still pretty active. But economic activity is maturing and this may bring some sort of discomfort for investors.”

Treasury two-year note yields reached the highest level since September as the consumer price index increased 0.4 percent in May, the biggest gain since February 2013. A pickup in inflation lessens the threat of a prolonged drop in prices that hurts economic growth, giving Fed officials reason to continue to scale back their unprecedented bond-buying program.

The central bank will reduce the pace of monthly asset purchases by $10 billion to $35 billion, economists project.  Some 62 percent of 58 economists in a Bloomberg survey predict the Fed will halt bond buying at its October meeting.

Another report today showed builders broke ground on 1 million homes in May, indicating the industry is picking up this quarter after a weather-induced slump to start the year. An S&P index of U.S. homebuilders added 0.5 percent.

WTI crude for July delivery fell 0.6 percent to $106.22. Prices capped a 4.1 percent increase last week, the most since December, when escalating violence in Iraq fanned concern that supplies from OPEC’s second-largest producer may be disrupted.

Iraq’s oil exports from its southern terminals on the Persian Gulf are poised to surge, according to a preliminary loading plan obtained by Bloomberg News, at a time when fighting has plunged the north into chaos.

U.S. and Iranian officials met in Vienna yesterday as President Barack Obama reaches out for help in combating a growing insurgency by Sunni Muslims in Iraq.

Gold for August delivery dropped 0.3 percent to settle at $1,272 in New York. The metal had gained for six straight sessions to a three-week high. Futures climbed 1.7 percent last week amid escalating tensions from Ukraine to Iraq.

The Federal Open Market Committee’s “June meeting will be in focus this week while a U.S. dollar rebound could weigh on bullion prices, provided Iraqi headlines subside,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an e- mailed note today.

The dollar rose 0.3 percent to 102.13 yen. The greenback added 0.2 percent to $1.35446 versus the euro. The shared currency was little changed at 138.34 yen. The pound halted a four-day gain versus the dollar as U.K. inflation slowed to the least in 4 1/2 years.

Soybeans futures fell 0.4 percent after earlier touching the lowest since June 5 on signs of improving conditions for crops in the U.S., the world’s biggest grower. Corn fell to the lowest since February.

The MSCI Emerging Markets Index extended a decline into a fifth day amid concern that a reduction in Fed stimulus may reduce liquidity. The gauge dropped 0.4 percent to the lowest in nearly two weeks.

The Stoxx Europe 600 Index advanced for the first time in three days as 14 of the 19 main industries climbed. The gauge closed at its lowest level since June 5 yesterday.

Shire Plc climbed to a record after a report said it has hired Citigroup Inc. as it may receive takeover offers. Whitbread Plc added 2.2 percent after sales at its Premier Inn hotels and Costa Coffee chain topped analysts’ estimates. A.P. Moeller-Maersk A/S fell 5.3 percent after China blocked the formation of a global alliance by the world’s three biggest shipping lines.

 

Have a wonderful evening everyone.

 

Be magnificent!

“Life is a song – sing it. Life is a game – play it. Life is a challenge – meet it. Life is a dream – realize it. Life is a sacrifice – offer it. Life is love – enjoy it.” – Sai Baba

As ever,

 

Brianna

 

“If you really want to do something, you will find a way.  If you don’t, you’ll find an excuse.” – Jim Rohn

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

James Joyce set his masterpiece, Ulysses on June 16, 1904.  Now the date is known as Bloomsday and it has been celebrated in Ireland since 1954, the book’s original 50^th anniversary.   Joyceans around the world party today with readings, costumed re-enactments and countless Gorgonzola sandwiches. (from Jared Bland, Globe & Mail).

In honor of James Joyce, The Afterword Reading Society today launches its Special Editions – classic ebooks published twice: once for free to all its members, and a second time for sales around the world with an afterword by its readers.  Today the National Post published the first story in its entirety, The Sisters,  from Dubliners, Joyce’s collection of short stories published 100 years ago.  Join and read at theafterword.ca.

I saw this poem in the Financial Times this weekend, appropriately coinciding with Father’s Day, and I rather liked it…

Father

-by Jenny Lewis

My face is made from yours –
your jaw, your weak right eye:
my shin bone’s from your leg,
shattered in the moonlight
as you supervised the digging
of the trench at Kut-al-Amara.

Years on, your long-dead smile
us from walls, sideboards:
from our mother’s dressing table
casting a shadow around her heart
like your shadow in the album
as you pointed the Box Brownie
towards the Bridge of Boats

at Qurna, the army camp at Kut:
Father, those splinters of bone
were your salvation, hard shards
from which I sprang with shared
ancestry, looking for you.

From “Taking Mesopotamia” (Carcanet).

June 16th, 1967 : The three-day Monterey International Pop Music Festival – which catapulted Jimi Hendrix, the Who and Janis Joplin to stardom – opened in northern California.

Photos of the day

Britain’s Queen Elizabeth II travels by carriage after the annual Order of the Garter Service at St George’s Chapel at Windsor Castle in Windsor, southern England. The Order is the senior and oldest British Order of Chivalry, founded by Britain’s King Edward III in 1348. Chris Jackson/Reuters

A rainbow is seen from the Argentine side of the Iguazu River at the Iguazu Falls. Forming a border between Argentina and Brazil, Iguazu Falls, South America’s largest, attracts more than 1 million visitors a year. Jorge Adorno/Reuters

Market Closes for June 16^th, 2014

Market   Index	Close	Change
Dow   Jones	16781.01	+5.27
		+0.03%
S&P 500	1937.78	+1.62    +0.08%
NASDAQ	4321.105	+10.452    +0.24%
TSX	15040.43	+38.82
		+0.26%

International Markets

Market   Index	Close	Change
NIKKEI	14933.29	-164.55
		-1.09%
HANG   SENG	23300.67	-18.50
		-0.08%
SENSEX	25190.48	-37.69
		-0.15%
FTSE 100	6754.64	-23.21
		-0.34%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.292	2.313
CND.   30 Year Bond	2.813	2.832
U.S.   10 Year Bond	2.5970	2.6033
U.S.   30 Year Bond	3.3958	3.4134

Currencies

BOC Close	Today	Previous
Canadian $	0.92228	0.92113
US   $	1.08426	1.08563
Euro Rate   1 Euro=		Inverse
Canadian   $	1.47162	0.67951
US   $	1.35728	0.73677

Commodities

Gold	Close	Previous
London Gold   Fix	1272.67	1276.89
Oil	Close	Previous
WTI Crude Future	106.90	106.91
BRENT	109.360	109.360

Market Commentary:

Canada
By Eric Lam and Gerrit De Vynck

June 16 (Bloomberg) — Canadian stocks rallied, sending the Standard & Poor’s/TSX Composite Index briefly above its record close, as energy shares advanced on speculation the violence in Iraq will boost oil prices.

Veresen Inc. and BlackPearl Resources Inc. added 2.6 percent to lead gains among oil and natural gas companies. A measure of energy stocks in the S&P/TSX has advanced in 13 of the past 14 days and soared 20 percent this year. Consumer staples had the biggest advance among Canadian industries today, increasing 0.7 percent.

The S&P/TSX added 38.82 points, or 0.3 percent, to 15,040.43 at 4 p.m. in Toronto. The index climbed as high as 15,075.70, surpassing its previous closing record of 15,073.13 in June 2008. The equity benchmark is up 10 percent this year, the fifth-biggest advance among 24 developed markets.

“We’re seeing money rotate back into Canadian energy in a big way,” said Martin Pelletier, a fund manager at TriVest Wealth Counsel Ltd. on the phone in Calgary. “Clearly there’s momentum, the TSX is playing catch-up. A lot of the rally in the TSX has been primarily due to a strong recovery in energy.”

Mounting violence in Iraq threatens to plunge one of the world’s largest oil producers into a sectarian civil war like the one raging in neighboring Syria. Iraq’s army said it killed more than 279 rebels yesterday as the prospect of civil war in OPEC’s second-largest producer intensified with Sunni Muslim insurgents controlling territory north of Baghdad.

West Texas Intermediate crude was little changed today at $106.90 a barrel, near a nine-month high. Oil pared gains today after Bank of America Corp. said the complete halt of Iraqi output, concentrated at the opposite end of the country, is “highly unlikely.”

The S&P/TSX has rallied 99 percent from a five-year low in March 2009. The advance has been led by a more than 800 percent surge in Valeant Pharmaceuticals International Inc. Financial services companies jumped 168 percent during the bull market and the nation’s largest lenders including Royal Bank of Canada, Toronto-Dominion Bank and Bank of Nova Scotia touched records this year.

The equity benchmark trades at 20.1 times reported earnings, the highest level in three years, according to data compiled by Bloomberg.

In today’s trading, Veresen, an pipeline operator, added 2.6 percent to C$18.30. BlackPearl, which explores and develops oil and gas fields, climbed 2.6 percent to C$2.40

Valeant Pharmaceuticals dropped 1.6 percent for a 10th day of losses, its longest losing streak since 2004. Allergan Inc. said the company’s business model is unsustainable because it “relies on serial acquisitions and cost reductions.”

USA
By Joseph Ciolli

June 16 (Bloomberg) — U.S. stocks rose, after equities posted their first weekly drop in a month, as corporate deals and growth in American manufacturing overshadowed escalating tension in Iraq.

Covidien Plc surged 20 percent after Medtronic Inc. agreed to buy the Irish company for $42.9 billion. Williams Cos. Jumped 19 percent after agreeing to buy control of Access Midstream Partners LP for $6 billion. General Electric Co. dropped 0.8 percent after a group led by Siemens AG made a joint bid to carve up the energy unit of France’s Alstom SA. Yahoo! Inc. slid 5.8 percent, halting an eight-day rally, after Alibaba Group Holding Ltd. reported a slowdown in quarterly revenue growth.

The Standard & Poor’s 500 rose 0.1 percent to 1,937.78 at 4 p.m. in New York after fluctuating between gains and losses throughout the session. The Dow Jones Industrial Average added 5.27 points, or less than 0.1 percent, to 16,781.01. The Russell 2000 Index of small companies added 0.4 percent. About 5.4 billion shares changed hands today on U.S. exchanges, 13 percent below the three-month average.

“The market’s looking for a direction,” Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP, said in a phone interview. “The data wasn’t really robust. Some of it points to a more positive direction, but underlying, there’s still more to be proven. People are keeping an eye on Iraq and the broader geopolitical situation.”

The S&P 500 dropped 0.7 percent last week, snapping a three-week rally that had pushed equities to all-time highs, as Sunni insurgents in Iraq occupied more territory and oil prices jumped to an eight-month high.

Iraq’s sectarian violence showed no sign of abating, with Sunni Muslim militants and government forces fighting to control Tal Afar. Prime Minister Nouri al-Maliki, a Shiite, is fighting to reverse the advance of ISIL militants, who captured Iraqi’s largest northern city and other towns last week.

West Texas Intermediate crude erased gains, as Bank of America Corp. said the complete halt of Iraqi output, concentrated at the opposite end of the country, is “highly unlikely.” The price remained near a nine-month high.

Ukraine said Russia cut natural gas supplies after demanding fuel payments be made in advance, the first time shipments have been affected in this year’s crisis in relations between the two countries. Tensions escalated at the weekend with 49 servicemen killed when pro-Russia fighters shot down an aircraft.

“Investors are just trying to work the Iraqi situation through their mind and keep an even keel at this point,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a phone interview. “Numbers have been slightly better than consensus all the way through. We’re not exactly jumping, but there’s a little bit of optimism out there.”

Data today showed industrial production climbed more than forecast in May, a sign gains in manufacturing are supporting growth as the U.S. economy picks up. Output at factories, mines and utilities rose 0.6 percent after a revised 0.3 percent drop in April that was smaller than previously estimated, a report from the Federal Reserve showed.

The New York Fed’s Empire manufacturing report rose to 19.28, exceeding the average estimate of 15 in a Bloomberg survey of economists, a separate report indicated.

The Fed is watching economic data as it moves to complete a monthly stimulus program late this year. Policy makers meet this week, with a decision on rates and bond buying due June 18. The stimulus has helped propel the S&P 500 higher by as much as 188 percent from its bear-market low in March 2009.

The International Monetary Fund cut its growth forecast for the U.S. economy this year and said the Fed may have scope to keep interest rates at zero for longer than investors expect. The institution now sees the world’s largest economy growing 2 percent in 2014, down from an April estimate of 2.8 percent.

For the Fed, the forecast means “policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets,” the fund said in its annual assessment of the U.S. economy.

Investors also considered equity valuations after the S&P 500 closed at an all-time high on June 9. The measure trades at 16.4 times the projected earnings of its members as of June 13, up from a multiple of 14.8 at the start of February. The Dow closed at a record on June 10.

A measure of volatility posted the biggest gain since April last week, rebounding from a seven-year low on June 6, as the Chicago Board Options Exchange Volatility Index surged 14 percent to 12.18. The gauge known as the VIX rose 3.9 percent to 12.66 today, the highest since May 20.

Seven of the 10 main S&P 500 groups retreated today, with financial companies dropping 0.4 percent to pace declines.  Utilities rallied 0.7 percent for the biggest advance.

GE lost 0.8 percent to $26.82. Siemens and Mitsubishi Heavy Industries Ltd. made a joint bid to carve up Alstom’s energy unit, challenging a $17 billion offer by GE. The planned bid may put pressure on GE to improve the terms of its offer for the French company’s energy assets.

Yahoo, which owns 22.6 percent of Alibaba, dropped 5.8 percent to $34.81. China’s largest e-commerce company reported a slowdown in quarterly revenue growth. Alibaba’s revenue rose 38.7 percent in the quarter ended March 31, down from 62 percent in the December quarter.

Vertex Pharmaceuticals Inc. plunged 8.7 percent to $67.12 for the steepest slide in the S&P 500. The drugmaker slid after an analyst Sanford C. Bernstein said phase three trials for the company’s VX809 Cystic Fibrosis drug have a “high” probability of failure, citing conversations with scientists.

Level 3 Communications Inc. fell 4.1 percent to $42.30. The Web content delivery company will pay a 12 percent premium to TW Telecom Inc.’s closing price last week, giving the company a direct connection to business customers. TW Telecom shares surged 7.3 percent to $38.99.

Covidien rallied 20 percent to a record $86.75. Medtronic will pay about 29 percent more than Covidien’s closing price on June 13, the companies said. The combined entity, called Medtronic Plc, will be based in Ireland for tax purposes.

Medtronic dropped 1.1 percent to $60.03 for a sixth day of losses, the longest streak in a year. Sanford C. Bernstein & Co. said the deal will allow it to challenge Johnson & Johnson as the world’s biggest medical-device company.

Williams Cos. climbed 19 percent to a record $56.02. The purchase would create one of the biggest U.S. transporters of fuel at a time of increased natural-gas exploration. Access Midstream rose 1.9 percent to $66.57.

Fusion-io Inc. soared 22 percent to $11.36. SanDisk Corp. agreed to purchase the maker of flash-memory technology for about $1.1 billion. The all-cash offer of $11.25 a share is 21 percent higher than Fusion-io’s closing price on June 13.  SanDisk shares added 3.6 percent to $102.

Home Depot Inc. rose 1.1 percent to $78.90 for the biggest gain in the Dow. The largest U.S. home-improvement retailer advanced as the homebuilder confidence report provided a sign the residential real estate market is stabilizing after reeling from severe winter weather earlier this year.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The connection of love is total.

In love, difference disappears and the human soul accomplishes

its object in perfection,

exceeding its own boundaries

and traversing the threshold of infinity.

Rabindranath Tagore,1861-1901

As ever,

 

Carolann

 

 

You only live once – but if you work it right, once is enough.

–Joe E. Lewis, 1902-1971

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:

Friday the 13th is generally an unlucky day, but stock investors have actually done quite well by “Friday the June 13th.” Since 1928, the S&P 500 has risen in 10 of the prior 12 times Friday the 13th has landed in June, according to S&P’s data whiz Howard Silverblatt.

Friday was regarded by the Norsemen as the luckiest day of the week, when weddings took place, but among Christians it has been regarded as the unluckiest, because it was the day of the crucifixion.  While no longer a day of compulsory abstinence for Roman Catholics, they are urged to set Friday apart for some voluntary act of self-denial.

Friday is the Sabbath for Muslims, who hold that Adam was created on a Friday and that it was on Friday that Adam and Eve ate the forbidden fruit and on Friday that they died.  It is also held unlucky among Buddhists and Brahmans.

In England it is not unlucky to be born on this day, since “Friday’s child is loving and giving.”
It is held to be a bad day for ships to put to sea, but in 1492 Columbus set sail on a Friday and sighted land on a Friday.

Full moon tonight.  The moon is in Sagittarius tonight.

Happy Father’s Day to all the fathers reading this.  Father’s Day was devised in 1910 in Spokane, Washington as a counterpart to Mother’s Day.

Birthday:  William Butler Yeats, June 13, 1865:

THE LAKE ISLE OF INNISFREE

I will arise and go now, and go to Innisfree,
And a small cabin build there, of clay and wattles made:
Nine bean-rows will I have there, a hive for the honey-bee,
And live alone in the bee-loud glade.

And I shall have some peace there, for peace comes dropping slow,
Dropping from the veils of the morning to where the cricket sings;
There  midnight’s all a glimmer, and noon a purple glow,
And evening full of the linnet’s wings.

I will arise and go now, for always night and day
I hear lake water lapping with low sounds by the shore;
While I stand on the roadway, or on the pavements grey,
I hear it in the deep heart’s core.

~William Butler Yeats

Photos of the day

Pakistani soccer fans hoist flags of countries in the World Cup in Brazil, to celebrate in Karachi’s slums, Pakistan, June 13, 2014. From the stadium in Sao Paulo to sofas in Germany, from a pub in Nairobi to a cafe in Miami, from a Rio slum to outer space, nearly half the world’s population was expected to tune in to the World Cup, soccer’s premier event which kicked off Thursday in Brazil. Fareed Khan/AP

An octopus named Hacchan predicts Japan’s victory in their 2014 World Cup soccer match against Ivory Coast by choosing the mock goal with the Japanese national flag, at Shinagawa Aqua Stadium aquarium in Tokyo, June 13, 2014. Issei Kato/Reuters

Market Closes for June 13^th, 2014

Market   Index	Close	Change
Dow   Jones	16775.74	+41.55
		+0.25%
S&P 500	1936.16	+6.05    +0.31%
NASDAQ	4310.652	+13.019    +0.30%
TSX	15001.61	+91.98
		+0.62%

International Markets

Market   Index	Close	Change
NIKKEI	15097.84	+124.31
		+0.83%
HANG   SENG	23319.17	+144.15
		+0.62%
SENSEX	25228.17	-348.04
		-1.36%
FTSE 100	6777.85	-65.26
		-0.95%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.313	2.316
CND.   30 Year Bond	2.832	2.837
U.S.   10 Year Bond	2.6033	2.5951
U.S.   30 Year Bond	3.4134	3.4101

Currencies

BOC Close	Today	Previous
Canadian $	0.92113	0.92118
US   $	1.08563	1.08557
Euro Rate   1 Euro=		Inverse
Canadian   $	1.47002	0.68026
US   $	1.35408	0.73851

Commodities

Gold	Close	Previous
London Gold   Fix	1276.89	1273.03
Oil	Close	Previous
WTI Crude Future	106.91	106.53
BRENT	109.360	109.360

Market Commentary:

Canada
By Gerrit De Vynck

June 13 (Bloomberg) — Canadian stocks rose, sending the benchmark index above 15,000 points, as energy companies were boosted by oil prices amid escalating violence in Iraq.

Legacy Oil & Gas Inc. and Crew Energy Inc. increased at least 4.8 percent, pacing gains among energy companies. Amaya Gaming Group Inc. jumped 42 percent after agreeing to acquire PokerStars. Pilot Gold Inc. fell 8 percent as the miner announced a pact to buy Cadillac Mining Corp.

The Standard & Poor’s/TSX Composite Index rose 91.98 points, or 0.6 percent, to 15,001.61 at 4 p.m. in Toronto. The gauge has risen 10 of the last 11 days, and is 0.5 percent below its all-time high of 15,073.13 reached in June 2008. The index is up 10 percent this year.

Energy companies increased 1.7 percent as a group, the biggest jump since August, as an advance by Islamist fighters in Iraq threatened to disrupt world oil supplies.

Legacy Oil & Gas rose 5.8 percent to C$9.71 and Crew Energy added 4.8 percent to C$11.51.

Amaya Gaming jumped 42 percent to C$20 after announcing the $4.9 billion deal to buy PokerStars. The purchase will make Amaya the biggest publicly held online gambling company in the world, the company said.

Pilot Gold lost 8 percent to C$1.50 after saying it would buy Cadillac at a 121 percent premium to its closing price on June 12. Cadillac, which trades on the TSX Venture Exchange, more than doubled to 20 Canadian cents.

Canadian factory sales posted a surprise decline in April, the first drop in four months. Sales fell 0.1 percent to C$50.9 billion, Statistics Canada said. Economists surveyed by Bloomberg predicted a rise of 0.5 percent.

US
By Oliver Renick

June 13 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index paring its first weekly decline in a month, as a rally in Intel Corp. and corporate deals overshadowed concern that violence in Iraq will disrupt oil supplies.

Intel jumped the most in three years after raising its sales forecasts for the second quarter and the full year. Express Inc. surged 21 percent after Sycamore Partners said it plans to buy the clothing chain. Priceline Group Inc. dropped 3 percent after agreeing to buy OpenTable Inc. for $2.6 billion in cash. Citigroup Inc. fell 1.4 percent after the U.S. Justice Department said it will seek $10 billion as part of a probe into mortgage-backed bond sales.

The S&P 500 rose 0.3 percent to 1,936.15 at 4 p.m. in New York, trimming its first weekly slide in a month to 0.7 percent. The equities benchmark nearly erased its gains in the final hour of trading before capping its first advance in four days. The Dow Jones Industrial Average climbed 41.55 points, or 0.3 percent, to 16,775.74. About 5.1 billion shares changed hands on U.S. exchanges today, 18 percent below the three-month average.

“There’s a lot of potential uncertainty surrounding the situation in Iraq,,” Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said by phone. “Any time you have conflict around the world, and especially there, where we’ve withdrawn troops from just in the past year, it can cause some nervousness.”

The S&P 500’s gain today halted its longest losing streak in two months. The gauge has advanced 6.6 percent since a low on April 11 as data showed the economy is recovering from the impact of extreme weather earlier this year. It had closed at a record for four straight sessions through June 9.

Islamist fighters in Iraq extended their advance today, entering two northeastern towns as government forces failed to halt an offensive that triggered concern over a civil war and prompted the U.S. not to rule out airstrikes.

The insurgency highlights the risks to oil supply from a nation forecast to provide about 60 percent of OPEC’s output growth for the rest of this decade, the International Energy Agency said.

Investors are also watching data to determine the strength of the world’s largest economy. Reports yesterday on jobless claims and retail sales fell short of estimates.

Wholesale prices in the U.S. unexpectedly fell in May, suggesting demand isn’t robust enough to push inflation closer to the Federal Reserve’s target.

The Thomson Reuters/University of Michigan index of consumer sentiment unexpectedly fell this month from 81.9 in May, a report today indicated.

“I think there’s some consumer fatigue,” Ian Kerrigan, global investment specialist at JP Morgan Private Bank in Seattle, said in a phone interview. “It comes down to how important the consumer is to our economy and if they don’t have that confidence to go out and spend or be employed and have that discretionary income, that definitely has an impact on the recovery.”

The Fed is watching the labor market as it moves to complete a monthly stimulus program late this year. Policy makers meet next week, with a decision on rates and bond buying due June 18. The stimulus has helped propel the S&P 500 higher by as much as 188 percent from its bear-market low in March 2009.

The Chicago Board Options Exchange Volatility Index slid 4.4 percent to 12.01. The gauge, known as the VIX, has jumped 12 percent this week.

Nine of the 10 main S&P 500 groups advanced today, with technology stocks rallying behind Intel. An S&P 500 index of semiconductor companies surged 2.9 percent for its 16th gain in the past 17 sessions, leaving it at the highest in 10 years.

Intel jumped 6.8 percent to $29.87, the biggest gain in three years. The world’s largest semiconductor maker raised its second-quarter revenue forecast and said annual sales will increase for the first time since 2011, buoyed by improving business demand for personal computers.

Applied Materials Inc., which manufactures and services semiconductor wafer fabrication equipment, gained 2.9 percent to $22.37, poised for the highest close in almost seven years. Micron Technology Inc., the largest U.S. maker of memory chips, gained 1 percent to $31.17.

“Large companies like Intel have broad geographic coverage, disparate lines of business, so positive news can be a sign that things are good generally,” Lawrence Creatura, Rochester-based portfolio manager at Federated Investors Inc., which oversees $366 billion in assets. “It can help market sentiment.”

Express jumped 21 percent to $16.45. Sycamore Partners told the company’s board it would like to perform due diligence to determine an offer price. Sycamore owns a 9.9 percent stake in Express.

International Game Technology surged 11 percent to $15.86, the highest in three months. The world’s largest maker of slot machines, which has been exploring a sale for two months, has received bids from include lottery operator GTech SpA and billionaire Ron Perelman’s MacAndrews & Forbes Holdings Inc., Reuters reported.

OpenTable rallied 48 percent to $104.48. Priceline, the online travel agent, offered $103 a share, 46 percent above OpenTable’s closing price yesterday. Priceline dropped 2.5 percent to $1,195.61.

Finisar Corp. sank 22 percent to $19.71. The maker of fiber-optic communications devices forecast first-quarter earnings that missed analysts’ estimates.

Citigroup slid 1.4 percent to $47.59 for a fourth day of losses. The Justice Department asked the bank for more than $10 billion to settle a probe into its sale of mortgage-backed bonds in the run up to the 2008 financial crisis, according to a person familiar with the negotiations.
Have a wonderful weekend everyone.

 

Be magnificent!

In the physical world there is an indestructible continuity of relations

between hot and cold, light and darkness, movement and repose,

as well as between the bass and treble notes of a piano.

This is because opposites do not bring confusion to the world; they bring harmony.

Rabindranath Tagore,1861-1901

 

As ever,

 

Carolann

 

Train yourself to let go of the things you fear to lose.

-George Lucas, 1944-

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