Month: August 2014

Dear Friends,

Tangents:

The first photos of Earth from Space were seen on this day, August 7^th in 1959.  Here are a couple of them:

The U.S. satellite Explorer VI transmitted the first picture of Earth from space.  For the first time we had a likeness of our planet based on more than projections and conjectures.  But it would take years for the general public to see the pictures.  Stewart Brand, founder, Whole Earth Catalog, conceived an idea in 1966 to sell buttons which read, “Why Haven’t We Seen A Photograph of the Whole Earth Yet?”  The photographs of Earth that were made by NASA’s Apollo program were made public in 1969.  The first Earth Day was in 1970.  The ecology movement really took off after the photos were released.

Photos of the Day

Australian Ballet dancer Kismet Bourne climbs out of an empty oceanside pool in Sydney after she and three other dancers took advantage of the empty pool to promote their February 2015 production of Swan Lake. Jason Reed/Reuters

Women paint paper replicas of soldier’s hats for the Vu Lan Festival at Dong Ho village, outside Hanoi, Vietnam. Vietnam is celebrating the month-long festival of the hungry ghosts. Many Taoists and Buddhists believe that the living are supposed to please the ghosts by offering them food and burning paper effigies of daily items for spirits to use in the afterlife. Kham/Reuters

Market Closes for August 7^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Jacob Barach

Aug. 7 (Bloomberg) — Canadian stocks fell to a three-week low as the conflict over Ukraine worsened and earnings from Air Canada and Trinidad Drilling Corp. disappointed investors.

Air Canada, the country’s biggest carrier, dropped 8.1 percent after saying yields would continue to decline this year as it packs fuller planes. Trinidad Drilling sank 4.4 percent after earnings fell short of analyst estimates. Lightstream Resources Ltd., an oil exploration company, lost 8 percent after production fell.

The Standard & Poor’s/TSX Composite Index fell 83.32 points, or 0.6 percent, to 15,118.77 at 4 p.m. in Toronto. Health-care shares led declines among the main industries in the equity gauge, falling 2 percent.

Russia slapped import bans on an array of food goods from the U.S. and Europe and threatened to target the automotive, shipping and aerospace industries, striking back at sanctions over the conflict in Ukraine. The curbs target nations that sanctioned or supported punitive measures against Russia and also include Canada, Australia and Norway.

Air Canada dropped for a sixth day, the longest streak since 2011. The shares fell 8.1 percent to C$8.51. Yield, or average fare per mile, declined 2.1 percent in the second quarter, the company said today. Chief Executive Officer Calin Rovinescu said yields will continue to fall this year as the airline adds more economy class seats and operates longer flights with a view to boosting profit.

Trinidad Drilling slipped 4.4 percent to C$9.99. The company reported lower-than-estimated revenue and results were affected by re-activitating rigs to meet additional demand, leading to additional costs.

Lightstream Resources slumped 8 percent to C$6.31. The company cited reduced field activity for the drop in second- quarter production.

Semafo Inc. rose 10 percent to C$5.32. The gold producer said that it sees output reaching the upper-end of its estimates for the year. The company also beat analyst’s earnings estimates.

Pason Systems Inc., which rents oilfield equipment, jumped 11 percent to C$31.68. The company boosted its dividend and reported higher earnings from the previous year.

US
By Lu Wang and Elena Popina

Aug. 7 (Bloomberg) — U.S. stocks fell, sending the Dow Jones Industrial Average to the lowest level since April, as concern that the Ukraine conflict is escalating offset better- than-estimated earnings and a drop in American jobless claims.

Health-care companies tumbled 1.2 percent as Aetna Inc. dropped 4 percent. Tyson Foods Inc. slid 2 percent after Russia banned billions of dollars of food imports from the U.S. and other nations in retaliation for sanctions. 21st Century Fox Inc. climbed 5 percent as “X-Men: Days of Future Past” and “Rio 2” led to a jump in income at its film business.

The Standard & Poor’s 500 Index fell 0.6 percent to 1,909.57 at 4 p.m. in New York, closing below its average price for the past 100 days for the first time since April. The Dow dropped 75.07 points, or 0.5 percent, to 16,368.27, close to its 200-day moving average. About 6.2 billion shares traded hands on U.S. exchanges, 6.8 percent above the three-month average.

“The uncertainty over the situation in Ukraine has overshadowed the positive economic data we saw earlier today,” John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York said in a phone interview. “The market has adapted to the positive data, but when it comes to geopolitical tensions, it’s hard to adapt. Tensions rise and we’re reaching the last level before the situation spins out of control.”

The S&P 500 has lost 3.9 percent since reaching a record of 1,987.98 on July 24, and is about 60 points away from wiping out its gains for 2014. The U.S. equities benchmark extended losses in afternoon trading, with the gauge falling below 1,905 for the first time in more than two months.

Equities stemmed their declines as e-mini S&P 500 futures recovered after briefly falling below 1,900 and the Dow managed to hold above its average price in the past 200 days.

The S&P 500 fell below its 100-day moving average of 1,913.72 after NATO Secretary General Anders Fogh Rasmussen urged Russia to “step back from the brink” by pulling back troops and halting aid for rebels.

Russia has massed troops along its border with Ukraine, prompting the U.S. to say there’s a risk of an invasion.  President Putin retaliated yesterday against European Union and U.S. sanctions by ordering restrictions on food imports from countries that seek to punish Russia.

European Central Bank President Mario Draghi said the risks to the recovery from conflicts including that in Ukraine are increasing. Headwinds facing the 18-nation euro area’s recovery are intensifying after Italy slipped back into recession and the standoff between Russia and the U.S. and its allies escalated into the worst such conflict since the Cold War.

Draghi has said large-scale asset purchases are an option for dealing with a severe economic shock, leaving investors seeking clarification on what the trigger could be.

In the U.S., data showed fewer Americans filed applications for unemployment benefits last week, sending the average over the past month to an eight-year low, a sign the labor market continues to gain momentum.

The government’s employment report last week showed companies in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997. U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first- quarter contraction was transitory.

News Corp. and CBS Corp. are among 17 S&P 500 members that report their financial results today, according to data compiled by Bloomberg. About 75 percent of companies to have posted earnings this season beat analysts’ estimates for profit, while 65 percent exceeded sales projections.

Profit probably rose 9.4 percent in the second quarter, while sales gained 4.2 percent, according to analyst estimates compiled by Bloomberg.

“You just have some geopolitical fear out there that investors always place some risk premium on,” Greg Woodard, a strategist in Fairport, New York, at Manning & Napier Inc., which has about $54 billion under management, said in a phone interview. “If you have underlying fundamentals improving, you have individual companies doing well, and you get some volatility as a result of macroeconomic worries, we’d view that as an opportunity to selectively buy.”

The Chicago Board Options Exchange Volatility Index, which usually moves in the opposite direction to the S&P 500, rose 1.8 percent to 16.66 today. The VIX soared 34 percent last week, the most since January.

Eight out of 10 major industries in the S&P 500 declined.  Phone, health-care  and raw-materials companies lost more than 0.9 percent for the biggest losses. Utilities climbed 1.1 percent.

Aetna paced declines among health-care companies, sliding 4 percent as Goldman Sachs Group Inc. cut its rating on the company to neutral from buy. Humana Inc. slumped 3.4 percent and WellPoint Inc. lost 3.6 percent.

Tyson Foods, the largest meat producer in the U.S., slipped 2 percent. While Russia is the second-biggest market for U.S. chicken, its share of export volume has fallen to 7 percent from 40 percent in the mid-1990s, according to a joint statement yesterday from the U.S.-based National Chicken Council and USDA Poultry & Egg Export Council.

“As a result, we do not expect that a Russian ban on U.S.poultry imports will have a great impact on our industry,” the groups said. “Free and fair trade –- particularly with food -– should never be used as a political bargaining chip.”

Scripps Networks Interactive Inc. declined 5.7 percent. The owner of HGTV and the Travel Channel reported second-quarter revenue that missed analyst estimates.

Harman International Industries Inc., which makes technology for auto-navigation systems, slid 4 percent as it forecast 2015 earnings below projections.

Fox rose 5 percent. Fourth-quarter profit topped analysts’ estimates one day after the company dropped its $75 billion bid for Time Warner Inc. Box-office sales from “X-Men: Days of Future Past” and “Rio 2,” along with the addition of the YES Network, helped overcome a tough climate for cable ads and Fox Broadcasting’s struggle to develop hits to succeed the fading “American Idol.”

Symantec Corp. climbed 1 percent. The biggest computer- security software maker is getting a boost as demand picks up for anti-hacking tools, with revenue and profit topping estimates in the fiscal first quarter.

Have a wonderful evening everyone.

Be magnificent!

Nations cohere because there is mutual regard among

individuals composing them.

Some day we must extend the national law

to the universe,

even as we have extended the family law

to form nations – a larger family.

-Mahatma Gandhi, 1869-1948

As ever,

Carolann

The best time to make friends is before you need them.

-Ethel Barrymore,  1879-1959

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

August 6, 1945 – Atomic bomb dropped on Hiroshima.

If I had only known, I would have been a locksmith. –Albert Einstein.

Photos of the Day

A girl prepares to release paper lanterns with messages of peace on them into the Motoyasu River near the Atomic Bomb Dome in Hiroshima, western Japan, on the 69th anniversary of the atomic bombing. Kyodo News/AP

The sun shines through a sunflower on a field near Zossen, eastern Germany. Tim Brakemeier/dpa/AP

Market Closes for August 6^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

Aug. 6 (Bloomberg) — Canadian stocks rose for the first time in four days, rebounding from a three-week low, as gold prices rallied amid rising tension in Ukraine and Tim Hortons Inc. jumped after sales surged.

Tim Hortons added 7.4 percent after reporting the highest same-store sales growth in the U.S. in two years. Agnico Eagle Mines Ltd. climbed 3 percent as gold advanced the most in six weeks. Canaccord Genuity Group Inc. sank 8.9 percent as earnings fell short of estimates. National Bank of Canada added 0.5 percent as lenders snapped a three-day losing streak.

The Standard & Poor’s/TSX Composite Index added 14.38 points, or 0.1 percent, to 15,202.09 at 4 p.m. in Toronto. The benchmark Canadian equity gauge closed at a record on July 30 and is the second-best performer among developed markets in the world this year with a 12 percent gain.

Materials producers jumped 0.9 percent as gold surged amid rising tension in Ukraine. NATO said there’s a risk of Russia sending troops into Ukraine under the “pretext” of a humanitarian or peacekeeping mission after President Vladimir Putin massed soldiers on his country’s western border.

Canada reported the largest merchandise trade surplus in more than two years in June as exports reached a record C$45.2 billion on gains in crude oil and metals. The surplus was C$1.86 billion, the highest since December 2011, Statistics Canada said in Ottawa. Economists forecast the trade account would be balanced.

Tim Hortons rallied 7.4 percent to C$64.52, a record, as sales of frozen hot chocolate and crispy chicken sandwiches boosted profit and revenue ahead of estimates in the second quarter. U.S. same-store sales rose 5.9 percent, the most since the first quarter of 2012, according to data compiled by Bloomberg.

Canaccord Genuity slumped 8.9 percent to C$11.36, the biggest decline since April 2013. Excluding some items, Canaccord reported a 24 percent increase in expenses in the fiscal first quarter.

National Bank added 0.5 percent to C$48.38 and Canadian Imperial Bank of Commerce rose 0.4 percent to C$100.20 as the S&P/TSX Banks Index rallied 0.1 percent to erase earlier losses and snap a three-day slide.

US
By Elena Popina and Joseph Ciolli

Aug. 6 (Bloomberg) — The Standard & Poor’s 500 Index was little changed, after U.S. equities slipped to a two-month low yesterday, as declines in Sprint Corp. and Time Warner Inc. on failed deals offset gains in consumer-staples shares.

Sprint slid 19 percent after a deal to merge with T-Mobile US Inc. collapsed. Time Warner tumbled 13 percent after Rupert Murdoch’s 21st Century Fox Inc. withdrew its unsolicited takeover bid. Molson Coors Brewing Co. and Kellogg Co. paced gains in consumer-staples shares.

The Standard & Poor’s 500 Index rose less than 1 point to 1,920.24 at 4 p.m. in New York. The gauge erased an earlier loss after dropping below its average level for the past 100 days. The Dow Jones Industrial Average added 13.87 points, or less than 0.1 percent, to 16,443.34. About 6.5 billion shares changed hands on U.S. exchanges today, 12 percent above the three-month average.

“There’s going to be a lot of noise intraday going forward, but we still see the fundamental trend moving higher,” Sam Turner, a fund manager with Richmond, Virginia-based Riverfront Investment Group LLC, said in a phone interview. His firm oversees $4.6 billion. “We might slip back to flush out the remaining weak hands, but we’re recommending buying this dip.”

The S&P 500 slid 1 percent yesterday to the lowest level since May as tensions escalated over Ukraine. The benchmark gauge has lost 3.4 percent since reaching a record of 1,987.98 on July 24. It tumbled the most since June 2012 last week as companies around the globe posted disappointing results, Argentina defaulted and Banco Espirito Santo SA was ordered to raise capital.

Russian President Vladimir Putin is showing no sign of backing down over Ukraine. He ordered restrictions on food imports to strike back at the U.S. and other countries that have imposed sanctions on Russia over the turmoil in Ukraine. Putin’s decree bans or limits food and agricultural imports for one year from countries that have imposed or supported sanctions, according to the Kremlin website.

NATO Deputy Secretary General Alexander Vershbow said that Russia has amassed about 20,000 troops along its border with eastern Ukraine.

Stocks have also been weighed down by concerns that the improving economy may force the Federal Reserve to raise interest rates sooner than expected. Data last week showed U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first- quarter contraction was transitory.

The S&P 500 has soared 184 percent since the start of the bull market in March 2009, boosted by three rounds of central bank stimulus and better-than-forecast corporate earnings. The benchmark equity gauge has gone without a 10 percent correction since 2011. It trades at 17.4 times the reported earnings of its companies, after reaching the highest level since 2010 in June.

Keurig Green Mountain Inc. and Prudential Financial Inc. are among 25 S&P 500 companies reporting earnings today. About 75 percent of those that have posted results this season have beaten analysts’ estimates for profit, while 64 percent exceeded sales projections, data compiled by Bloomberg show.

Profit probably rose 9.4 percent in the second quarter, while sales gained 4.2 percent, according to analyst estimates compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, which usually moves in the opposite direction to the S&P 500, fell 3 percent to 16.37 today. The VIX soared 34 percent last week, the most since January.

Four out of 10 major industries in the S&P 500 advanced. Consumer-staples companies added 0.9 percent. Phone and utility shares dropped 1.3 percent.

Sprint slid 19 percent, the most ever. Regulatory concerns outweighed the potential benefits of a merger with T-Mobile US that would combine the third and fourth-largest U.S. wireless carriers, a person familiar with the talks said. Sprint also named Marcelo Claure, the founder of mobile-phone distributor Brightstar Corp., as its new chief executive officer.

T-Mobile retreated 8.4 percent.

Time Warner dropped 13 percent, the most since 2008, as Murdoch’s Fox withdrew its $75 billion offer. The billionaire chairman of Fox gave up after Time Warner’s board refused to engage in talks and Fox’s stock price slid 11 percent since the offer became public. Time Warner also reported earnings that beat estimates and said it plans to buy back $5 billion of its shares.

Fox climbed 3.3 percent as it authorized a $6 billion buyback plan. The company also reported after the close of regular trading that fourth-quarter profit beat analysts’ estimates.

Walgreen Co. retreated 14 percent for its worst performance since 2007. The biggest U.S. drugstore chain said it will pay about $15.3 billion for the shares in Alliance Boots it doesn’t already hold, and won’t use the deal to move its tax address abroad.

Walgreen, which considered redomiciling in Switzerland to lower its tax rate, has come under political pressure not to do a so-called tax inversion. U.S.-based companies, including drugmakers AbbVie Inc. and Pfizer Inc., have struck or attempted deals to cut their own rates by establishing their tax headquarters abroad.

Groupon Inc. slumped 13 percent. The company forecast third-quarter earnings of no more than 2 cents a share, excluding some items, compared with the average analyst estimate of 3 cents a share.

Cognizant Technology Solutions Corp. tumbled 13 percent, the most in more than two years. The provider of outsourcing services lowered its annual revenue forecast as tech-service deals took longer to close amid weakness in certain U.S. and U.K.-based customers.

Bank of America Corp. gained 1.3 percent. The second- biggest U.S. lender raised its quarterly dividend to 5 cents a share and dropped plans to buy back stock after the Fed approved its resubmitted capital plan for 2014.

The dividend increase, from 1 cent per share, was postponed in April after the Charlotte, North Carolina-based company said it made an error in its original Fed submission. The central bank said today it didn’t object to the company’s revised plan.

Molson Coors gained 5.8 percent, the most in the S&P 500, as it reported second-quarter earnings and revenue that surpassed analysts’ projections.

Kellogg advanced 2.3 percent as Sky News reported, without saying where it got the information, that the cereal company appointed Barclays Plc. to assess an offer for United Biscuits Holding Ltd.

Valero Energy Corp. and Marathon Oil Corp. added more than 1.2 percent as energy shares rebounded. Energy companies in the S&P 500 fell 2.1 percent yesterday and plunged 4.1 percent last week, the most since June 2012.

Activision Blizzard Inc. advanced 2.6 percent. The largest U.S. video-game maker posted second-quarter results that beat analysts’ estimates, citing online sales of World of Warcraft and Diablo titles. The company also raised its full-year forecast.

Pandora Media Inc. added 1.6 percent as it reached a partnership agreement with Merlin, the rights agency that represents independent record companies, in its first direct deal with music labels. Pandora will create customized channels for artists, letting them communicate with fans, according to a statement today.

AOL Inc. rose 7.5 percent after revenue topped forecasts.

Have a wonderful evening everyone.

Be magnificent!

Give with faith, and never without faith.

Give with dignity.  Give with humility.  Give with joy.

And give with the understanding of the effects of your gift.

Taittiriya Upanishad

As ever,

Carolann

We are not interested in possibilities of defeat.

-Queen Victoria, 1819-1901

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Went to a concert in Vancouver on the weekend featuring Santana and Rod Stewart – both are still amazing musicians who can really put on a show at 67 and 69 years of age respectively.  Santana is as great as ever – maybe better than ever – what a guitarist!  If you get an opportunity to catch a concert somewhere before the tour is over, do so.  We went to a restaurant in Yaletown for the first time named West Oak and I highly recommend it – the food gets 5 stars for sure; check it out if you haven’t had a chance yet –  westoakrestaurant.com.

Photos of the Day

A girl walks along the shore while she plays with a ball at Ipanema beach at sunset in Rio de Janeiro. Pilar Olivares/Reuters

A makeshift marker in a sunflower field denotes evidence at the site of the downed Malaysian airliner MH17 near the village of Rozsypne in the Donetsk region of the Ukraine. Sergei Karpukhin/Reuters

Market Closes for August 5^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary

Canada
By Eric Lam

Aug. 5 (Bloomberg) — Canadian stocks fell to a three-week low amid rising tension in Ukraine and a slump in commodities after a report showed the Chinese service industries stagnated in July.

Imperial Metals Corp. plunged 39 percent after the copper and gold producer reported a breach in the waste storage facility at its Mount Polley mine in British Columbia. Lundin Mining Corp. and Copper Mountain Mining Corp. retreated more than 1.5 percent as copper capped the biggest decline in eight weeks. Silver Standard Resources Inc. retreated 4.6 percent as silver prices dropped. Bonavista Energy Corp. lost 5 percent to pace declines among oil producers as crude dropped to a six- month low.

The Standard & Poor’s/TSX Composite Index lost 27.55 points, or 0.2 percent, to 15,187.71 at 4 p.m. in Toronto, the lowest close since July 15. The S&P/TSX was closed yesterday for a holiday in Ontario. The benchmark Canadian equity gauge closed at a record on July 30.

Russian President Vladimir Putin ordered the government to prepare a response to U.S. and European sanctions as Poland warned that a renewed buildup of Russian troops on Ukraine’s border suggests a possible invasion.

Putin is showing no sign of backing down over Ukraine since the U.S. and the European Union tightened sanctions last week. Polish Foreign Minister Radoslaw Sikorski said Russia had restored its combat readiness on the Ukraine border. He did not give any indication that an incursion was imminent.

The services Purchasing Managers’ Index for China declined to 50.0, the dividing line between expansion and contraction, from June’s 53.1, HSBC Holdings Plc and Markit Economics said today. A similar official gauge released Aug. 3 dropped to a six-month low of 54.2.

Bonavista Energy fell 5 percent to C$13.68, the biggest loss in a year, and Penn West Petroleum Ltd. lost 2.3 percent to C$8.12 as energy stocks declined 0.4 percent as as group. Five of 10 industries in the S&P/TSX retreated.

Crude fell for the sixth time in seven days in New York amid forecasts that U.S. supplies will rebound from near six- year lows.

Imperial Metals sank 39 percent to C$10.19, its biggest loss ever. The storage facility at Mount Polley was breached early yesterday morning, Imperial said in a statement, releasing an undetermined amount of water and tailings, the materials left over after processing ore to extract valuable metals. The breach has been stabilized, although the cause of the incident is still unknown, the company said today.

Valeant Pharmaceuticals International Inc. fell 6 percent to C$121.44, the lowest close since January, after Allergan Inc. said Valeant’s second-quarter earnings results and disclosures were “insufficient, inconsistent” and lacking supporting data.

Glass Lewis & Co. in a report meanwhile criticized Allergan’s “cumbersome” bylaws and recommended shareholders support a special meeting to help Valeant’s efforts to take over the company. Valeant, backed by activist investor Bill Ackman, is pursuing a hostile takeover of Allergan.

US
By Joseph Ciolli and Jeremy Herron

Aug. 5 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index sinking to the lowest since May, amid concern that tension in Ukraine may escalate. The dollar rose after American services data added to evidence growth is gathering pace.

The Standard & Poor’s 500 Index slid 1 percent, while the dollar strengthened to an almost nine-month high versus the euro. Treasury two-year note yields touched the lowest level in more than two weeks at 4:43 p.m. in New York. Ten-year yields trimmed earlier gains sparked by speculation interest rates may rise early next year. U.S. crude tumbled to a six-week low.

President Vladimir Putin ordered the government to prepare a response to U.S. and European sanctions as Poland warned that a renewed buildup of Russian troops on Ukraine’s border raises the specter of a possible invasion. Service industries in the U.S. expanded in July at the fastest pace since December 2005, driving speculation economic growth is robust enough for the Federal Reserve to raise its benchmark interest rate before the middle of 2015.

“The market had been jittery,” Lou Shaduk, managing director of equity trading at Stifel Nicolaus & Co. in Baltimore, said in an interview. “You have Polish Minister Sikorski talking about Russian forces poised to pressure or invade Ukraine and that’s all the buyers needed today to go into hiding.”

The S&P 500 extended losses and Treasuries reversed after Polish Foreign Minister Radoslaw Sikorski said Russia had restored its combat readiness on the Ukraine border. He did not give any indication that an incursion was imminent.

Putin is showing no sign of backing down since the U.S. and the European Union tightened sanctions last week, with Russia massing forces on its neighbor’s border in the biggest military buildup since troops were withdrawn from the area in May.

Selling accelerated after the S&P 500 slipped below last week’s closing level of 1,925.15 and yesterday’s intraday low of 1,921.2. The gauge has lost 3.4 percent since reaching a record high of 1,987.98 on July 24 and came within 70 points of erasing its gain for the year.

“I would attribute the dip in S&P to the rumor that Russia’s getting ready to invade Ukraine,” Walter “Bucky” Hellwig, a Birmingham, Alabama-based senior vice president at BB&T Wealth Management, said by phone. “That created additional technical difficulties with high-frequency trading.”

Among stocks moving today, Target Corp. lost 4.4 percent after cutting its estimate for second-quarter profit on an expense stemming from a December data breach. Pioneer Natural Resources Co. sank 5.7 percent and Halliburton Co. dropped 3.4 percent to lead an index of energy stocks lower by 2.1 percent, the most among 10 S&P 500 groups.

U.S. airline stocks followed European carriers lower after business newspaper Vedomosti reported Russia may limit or ban trans-Siberian flights by European Union airlines, citing people familiar with the matter. Delta Air Lines Inc. fell 2.8 percent and United Continental Holdings Inc. slid 3.5 percent.

Treasuries retreated with equities earlier in the day as concern grew that the improving U.S. economy may force the Fed to act on rates sooner than anticipated, as the central bank remains on pace to wind down its monthly bond purchases in October. Fed Chair Janet Yellen has said officials will keep its benchmark low for a “considerable time” after the bond buying ends.

The pickup among service providers, combined with the strongest rate of growth in more than three years at American factories, shows the world’s largest economy was strengthening at the start of the third quarter. Faster payroll growth is helping fuel consumer demand, raising the odds a self- reinforcing cycle of increased hiring and spending is under way.

The Bloomberg Dollar Spot Index rose to the highest level in five months as the greenback appreciated 0.3 percent to $1.3375 per euro. The yen reversed an earlier decline against the dollar on haven demand amid the tension over Ukraine.

“In the last couple weeks we’ve been getting reports that the economy is definitely recovering,” John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said in a phone interview. “People are now focusing on the fact that the Fed isn’t going to be this accommodative forever.”

The stimulus and better-than-forecast corporate earnings have propelled the S&P 500 higher by as much as 194 percent since a bear-market low in March 2009. Hedge-fund manager David Einhorn is struggling to find value amid the five-year rally that pushed equity valuations to near the highest since 2010.

“We had a difficult time finding new investments this quarter,” Einhorn said today on a conference call discussing results at Greenlight Capital Re Ltd., the Cayman Islands-based reinsurer where he is chairman. “As the market continues to rise in the face of conflicting economic data, global unrest, and looming overdue Fed exit from quantitative easing we remain cautiously positioned.”

The S&P 500 gained 0.7 percent yesterday, rebounding from the worst week since 2012, as Portugal’s bailout of Banco Espirito Santo SA eased concern about Europe’s most indebted lenders, while earnings from companies including Berkshire Hathaway Inc. beat estimates. The index sank 2.7 percent last week, its worst since June 2012. It has gone without a 10 percent correction since 2011.

“The market is down on fears that Russia is going to invade Ukraine,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in an interview. “There was a feeling amongst traders that yesterday’s rally didn’t have sustainability. People came in today unimpressed with yesterday’s strength so we were sitting on wobbly legs even before this chatter around Ukraine came out.”

West Texas Intermediate crude slid 0.9 percent to close at $97.38. Refineries probably operated at 92.8 percent of capacity on Aug. 1, down 0.7 percentage point from the prior week, according to a Bloomberg survey before a government report tomorrow.

Silver slid to a six-week low, while platinum and palladium retreated as the dollar’s advance reduced the appeal of commodities as investments.

Copper sank 1.2 percent to settle at $3.2045 a pound in New York, leading industrial metals lower after data from China, the world’s biggest consumer of commodities, showed growth in the country’s services industries slowed. Zinc and lead retreated in London.

China’s non-manufacturing sector stagnated in July as a private index fell to a record low, suggesting the government’s stimulus measures are failing to gain traction outside manufacturing. A gauge of Chinese shares in Hong Kong slid 0.7 percent.

Have a wonderful evening everyone.

Be magnificent!

Duties to self, to the family, to the country,

and the world are not independent of one another.

One cannot do good to the country

by injuring himself or his family.

Similarly one cannot serve the country

by injuring the world at large.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Justice is the right of the weakest.

-Joseph Joubert, 1754-1824

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Happy August!

August: formerly called Sextilis in the Roman calendar, as the sixth month from March, when the year began.  The name was changed to Augustus in 8 BC in honor of Augustus [ 63 BC – 14 AD ], the first Roman emperor, whose “lucky month” it was.  It was the month in which he began his first consulship, celebrated three triumphs, received the allegiance of the legions on the Janiculum, reduced Egypt and ended the civil wars.

The Old English name for August was Weodmonath, “weed month” weod meaning grass or herbs.  In the French Revolutionary calendar the equivalent month was Thermidor – “gift of heat” – which lasted from July 20^th to August 18^th.

On this day, in 1990, the World Wide Web was established.

August 1, 1789, US customs was established.

Photos of the Day

The art installation ‘Atlantis’ by Tea Makipaa is on display in the pond of the Kunsthalle Rostock museum in Rostock, Germany. The installation is part of the Finnish contemporary art exhibition ‘Nature and More.’ Bernd Wuestneck/dpa/AP

In a multiple exposure photo, Scott Morgan of Canada performs a vault during the men’s gymnastics apparatus final at the 2014 Commonwealth Games in Glasgow, Scotland. Russell Cheyne/Reuters

A child plays at an interactive playground called ‘Tangle,’ where children create art by weaving colorful elastic bands around poles at a skating rink in the Marina Bay Sands mall in Singapore. Edgar Su/Reuters

Market Closes for August 1^st, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

Aug. 1 (Bloomberg) — Canadian stocks fell, completing the worst two-day slump since January, as crude oil prices declined to offset a gain in gold after U.S. employers added fewer jobs than forecast.

Element Financial Corp. and AGF Management Ltd. lost more than 1.9 percent to pace declines among financial stocks. Vermilion Energy Inc. and Enerplus Corp. fell at least 2 percent. Eldorado Gold Corp. jumped 6.9 percent after raising its production forecast. Pacific Rubiales Energy Corp. rose 5.7 percent after Bloomberg News reported executives are considering buying the company to fend off a potential outside offer.

The Standard & Poor’s/TSX Composite Index fell 115.48 points, or 0.8 percent, to 15,215.26 at 4 p.m. in Toronto, giving it a weekly decline of 1.6 percent. The index fell 1.3 percent yesterday, the first time it moved by 1 percent or more since April. The benchmark Canadian equity gauge closed at a record high on July 30.

Vermilion Energy lost 3.6 percent and Enerplus Corp. retreated 2 percent. West Texas Intermediate crude for September delivery declined 0.3 percent, falling a fifth day. Prices are down 4.1 percent this week, the biggest weekly decline in seven months. U.S. refineries cut their utilization rate last week for the first time in more than a month, according to government data.

Energy stocks in the S&P/TSX tumbled 1.4 percent as a group. Seven of 10 industries in the Canadian stock index retreated on trading volume that was 16 percent greater than the 30-day average.

Eldorado Gold jumped 6.9 percent. Gold for December delivery rose 0.9 percent to $1,294.80 an ounce in New York, after prices fell 3 percent in July as a U.S. equity rally eroded demand for the metal as a haven.

U.S. employers added 209,000 jobs in July, short of the median forecast for 230,000 additions forecast by economists. Wages and hours were unchanged from June. The jobless rate climbed to 6.2 percent as more people entered the labor force.

Pacific Rubiales added 5.7 percent for a third day of gains. Executives hired Banco Itau BBA SA and Citigroup Inc. to arrange a loan and seek partners for a possible management buyout, according to people with direct knowledge of the matter.

The plan is a defensive move after Alfa SAB, the Mexican auto parts and petrochemical company, raised its Pacific Rubiales stake more than 20 times in just over two months, the two people said asking not to be named because talks are private.

US
By Joseph Ciolli and Jacob Barach

Aug. 1 (Bloomberg) — The Standard & Poor’s 500 Index fell for a second day, giving it the biggest weekly drop in two years, as concern over Argentina and Portugal overshadowed data that signaled the Federal Reserve may have leeway to keep rates low.

JPMorgan Chase & Co. and Morgan Stanley slumped more than 2.1 percent as a committee ruled that Argentina’s default will trigger $1 billion of credit-default swaps. LinkedIn Corp. jumped 12 percent after projecting revenue that beat forecasts. Procter & Gamble Co. increased 3 percent as profit topped estimates amid cost reductions.

The S&P 500 fell 0.3 percent to 1,925.15 at 4 p.m. in New York, bringing its weekly loss to 2.7 percent, the worst since June 2012. The Dow Jones Industrial Average declined 69.93 points, or 0.4 percent, to 16,493.37, after erasing its gains for the year yesterday. About 7.3 billion shares changed hands on U.S. exchanges today, 27 percent above the three-month average.

“Whether it’s the Portuguese bank, Argentina or continued unrest in the Middle East, these things are seemingly mattering more to investors now,” Matt McCormick, who helps oversee $11 billion as a fund manager at Cincinnati-based Bahl & Gaynor Inc., said in a phone interview. “All of a sudden, geopolitical things that didn’t matter a few weeks ago are starting to be more relevant concerns, and they’re serving as catalysts to sell. Investors are getting more risk-averse.”

U.S. stocks joined a global selloff yesterday, sending the S&P 500 to its first monthly decline since January, after companies from Exxon Mobil Corp. to Samsung Electronics Co. reported results that disappointed investors, Argentina defaulted and Banco Espirito Santo SA was ordered to raise capital.

Banco Espirito Santo shares were suspended today by Portugal’s securities regulator after they dropped as much as 50 percent in Lisbon. Global financial markets were roiled last month after another holding company in the group missed payments on commercial paper.

Argentina’s failure to pay interest on its bonds is a credit event that will trigger settlement of $1 billion of default insurance, according to the International Swaps & Derivatives Association. Argentina is the first nation to trigger default swaps since Greece restructured its debt in 2012.

The S&P 500, which is still up 4.2 percent this year, has gone without a 10 percent correction since 2011. The benchmark index is down 3.2 percent from a record of 1,987.98 reached on July 24. It trades at 17.5 times the reported earnings of its companies, near the highest level since 2010.

Market volatility is rising after the S&P 500 ended its longest stretch of calm since 1995. The index has posted gains or losses of more than 1 percent three times in the past two weeks, compared with none during the 62 days through July 16, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, known as the VIX, rose 0.5 percent today to 17.03. The gauge surged 27 percent yesterday to the highest level since April 11. The volatility measure fell to the lowest since 2007 on July 3.

Stocks fluctuated earlier in the day as data showed employers in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997. The 209,000 advance fell short of the 230,000 increase forecast by economists.

The jobless rate climbed to 6.2 percent from 6.1 percent in June as more people entered the labor force. Wages and hours were unchanged from June.

Pacific Investment Management Co.’s Bill Gross said the Federal Reserve will remain accommodative with wage growth in the U.S. unchanged.

Wages “are not raging,” Gross, manager of the world’s biggest bond fund, said during a radio interview on “Bloomberg Surveillance” with Tom Keene. “American wages on Main Street are Janet Yellen’s number one concern.”

Concern has grown that the improving economy may force the Fed to raise interest rates sooner than expected. Data earlier this week showed U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory.

Manufacturing expanded in July at the fastest pace in more than three years, data today showed, signaling U.S. factories will help power the economy after a second-quarter rebound. The Thomson Reuters/University of Michigan’s final sentiment index for July fell to 81.8 from 82.5 in June.

The Fed this week cut its monthly bond buying to $25 billion in its sixth consecutive $10 billion reduction. The Fed’s Open Market Committee reiterated that it’s likely to reduce bond buying in “further measured steps” and to keep interest rates low for a “considerable time” after ending purchases. The central bank said slack in the labor market persists even though the economy is picking up.

Fed Bank of Dallas President Richard Fisher said he believes the timing has moved up for the first main interest rate increase from close to zero because of a strengthening economy and higher inflation.

“It would seem to me and I have been arguing this that the date of so-called liftoff has been moved forward,” Fisher said today in a CNBC interview. “I believe personally we have moved that forward significantly,” possibly as soon as “sometime early next year,” he said.

Chevron Corp. and Procter & Gamble are among six S&P 500 members that reported earnings today. Some 76 percent of the 379 companies that have released results this season have beaten analysts’ estimates for profit, while 65 percent have exceeded sales projections.

Seven out of the S&P 500’s 10 main industries dropped as phone and financial shares slumped the most, losing more than 0.8 percent. Consumer-staples companies rallied 0.8 percent.

P&G jumped 3 percent for the biggest advance in the Dow.  Fourth-quarter profit beat analysts’ estimates, helped by cost reductions and an increase in razor prices. A.G. Lafley, who returned as P&G’s chief executive officer last year, has focused on cutting costs and regaining customers in areas such as detergents and beauty.

LinkedIn rallied 12 percent. The company gave a third- quarter sales forecast that topped estimates as the largest professional-networking website rolled out new products to reignite growth.

Expedia Inc. advanced 6.4 percent for the largest increase in the S&P 500. The provider of online travel services reported second-quarter profit of $1.03 per share, more than the average estimate of 76 cents in a Bloomberg survey. Revenue of $1.49 billion also beat projections.

GoPro Inc. slumped 15 percent. The camera maker which sold about $1 billion last year in equipment to surfers, skiers and sky divers reported a net loss of $19.8 million for the second quarter, almost four times bigger than its $5.1 million loss in the year-earlier period.

Have a wonderful weekend everyone.

Be magnificent!

I cannot imagine anything nobler or more national than that for, say, one hour in a day,

we should all do the labor that the poor must do,

and thus identify ourselves with them and through them with all mankind.

Mahatma Gandhi,1869-1948

As ever,

Carolann

Formal education will make you a living; self-education

will make you a fortune.

-Jim Rohn, 1930-2009

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

Photos of the Day

Harry Owen of Wales performs on the rings during the Men’s All-Around gymnastics competition during the Commonwealth Games 2014 in Glasgow, Scotland. Kirsty Wigglesworth/AP

A woman swims in the Mediterranean Sea during a sunny summer day in Nice, southeastern France. Eric Gaillard/Reuter

Market Closes for July 30^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

July 30 (Bloomberg) — Canadian stocks rose to a record as companies including Genworth MI Canada Inc. and Cenovus Energy Inc. reported better-than-expected earnings and U.S. growth expanded faster than forecast in the second quarter.

MEG Energy increased 3.1 percent after boosting its year- end production targets. Cenovus Energy gained 2.4 percent as both oil and natural gas production came in ahead of estimates. Penn West Petroleum Ltd. plunged 14 percent as an accounting review may force a delay in the release of its financial results.

The Standard & Poor’s/TSX Composite Index rose 78.27 points, or 0.5 percent, to 15,524.82 at 4 p.m. in Toronto. The equity index trades at 21.3 times earnings, the highest level since 2010.

The U.S. Federal Reserve continued to trim monthly asset purchases, tapering monthly bond buying to $25 billion to stay on pace to end the program in October. The labor market still has room for improvement, while inflation has risen closer to its goal, the central bank said in its latest decision.

The U.S. economy grew at a 4 percent annualized rate, the most since the third quarter of 2013, after shrinking 2.1 percent from January through March, Commerce Department figures showed today. Gains in consumer spending and business investment boosted growth.

MEG Energy gained 3.1 percent to C$38.98, the most since April, to pace gains among energy stocks as eight of 10 industries in the S&P/TSX advanced on trading volume 23 percent higher compared with the 30-day average.

The Calgary-based oil sands developer increased its year- output forecast to 65,000 to 70,000 barrels a day from an earlier 60,000 to 65,000 barrels a day forecast with second- quarter production up 115 percent compared with a year ago.

Cenovus rallied 2.4 percent as oil sands production across its Foster Creek and Christina Lake projects averaged almost 125,000 barrels a day, up 33 percent from year-ago levels. Cash flow also jumped 37 percent on higher commodity prices.

Genworth, a private residential mortgage insurer, added 4.1 percent to C$39.25 after earnings topped estimates. The S&P/TSX Financials Index rallied 0.7 percent to a record for a seventh day of gains. The gauge has advanced 2.1 percent in that time.

Penn West sank 14 percent to C$8.57, the biggest decline since November, as the company board’s audit committee and independent advisers examine financial reports stretching back more than four years. The company said it will restate some past financial statements, which may cause it to reduce capital spending plans and cash flow assumptions for 2014.

Penn West is also starting talks with lenders because the revision may cause it to violate agreements covering its debt.

US
By Lu Wang

July 30 (Bloomberg) — U.S. stocks were little changed as data showing better-than-forecast economic growth was offset by weaker earnings and the Federal Reserve’s decision to keep trimming asset purchases.

Genworth Financial Inc. declined 14 percent, the most since November, after the insurer said it was reviewing whether enough funds had been set aside for claims. Public Service Enterprise Group Inc. led a 1.7 percent retreat among utilties after earnings trailed estimates. Twitter Inc. soared 20 percent as World Cup-related demand helped the microblogging company double revenue. Amgen Inc. and Regeneron Pharmaceuticals Inc. led a rally in biotechnology shares.

The Standard & Poor’s 500 Index climbed less than 0.1 percent to 1,970.07 as of 4 p.m. in New York. The Dow Jones Industrial Average slid 31.75 points, or 0.2 percent, to 16,880.36. The Nasdaq 100 Index increased 0.4 percent.

“The GDP print this morning had given the market some pause as to how hawkish the Fed might be,” Stacey Nutt, chief investment officer at ClariVest Asset Management LLC in San Diego, California, said in an interview. His firm oversees about $4 billion. “Now it seems like they were not as hawkish as feared.”

Today’s Commerce Department report showed gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory. Consumers, whose spending accounts for 70 percent of the economy, have grown more confident as the labor market improves and rising share prices boost wealth.

Policy makers tapered monthly bond buying to $25 billion in their sixth consecutive $10-billion cut, staying on pace to end the purchase program in October. Fed officials led by Chair Janet Yellen are stepping up a debate over when to raise interest rates for the first time since 2006 as unemployment falls faster than expected and inflation picks up toward their 2 percent goal.

Gross domestic product rose at a 4 percent annualized rate after shrinking 2.1 percent from January through March, Commerce Department figures showed. The median forecast of 80 economists surveyed by Bloomberg called for a 3 percent advance.

“You’re seeing some relief from the market that there is really no major surprise from the FOMC statement,” Brad Friedlander, managing partner and co-founder of Atlanta-based Angel Oak Capital Advisors LLC, said in a phone interview. His firm oversees $4 billion. “The GDP number was important in building confidence.”

Equity markets will see a decline at some point after surging for the past several years, according to former Federal Reserve Chairman Alan Greenspan.

“The stock market has recovered so sharply for so long, you have to assume somewhere along the line we will get a significant correction,” Greenspan, 88, said today in an interview on Bloomberg Television’s “In the Loop” with Betty Liu. “Where that is, I do not know.”

Pacific Investment Management Co.’s Bill Gross said investors should say “good evening” to the prospect of future capital gains in asset markets as interest rates are set to rise while the economy grows at a slow pace.

Genworth declined 14 percent to $14.06. Second-quarter operating profit was 31 cents a share, trailing the 36-cent average estimate of 10 analysts surveyed by Bloomberg, the insurer said in a statement late yesterday.

Utilities in the S&P 500 sank 1.7 percent, the biggest drop among the 10 main industries. Public Service Enterprise, which generates and distributes electricity, lost 2.6 percent after reporting lower-than-estimated profit.

Twitter surged 20 percent to $46.30. The company said active membership in the quarter reached 271 million, with year- over-year growth at 24 percent. Sales more than doubled to $312.2 million, exceeding the $282.8 million average estimate.

U.S. Steel Corp. gained 19 percent to $33.03, the biggest gain since 2008. The country’s largest steelmaker by volume posted a surprise second-quarter profit and raised the amount of cost savings it expects to achieve in 2014.

The Nasdaq Biotechnology Index rose 1 percent. Amgen added 5.4 percent to $130.01. The world’s biggest biotechnology company by sales reported higher-than-expected earnings driven by Enbrel, the company’s top drug for arthritis. The company said it will cut more than 2,400 jobs through 2015 and close plants in two states.

Regeneron climbed 5.8 percent to $322.18. The company said the Food and Drug Administration approved its Eylea injection for the treatment of diabetic macular edema.

Edwards Lifesciences Corp. climbed 10 percent to $92.88. The biggest maker of heart valves that are inserted without cracking open the chest raised its 2014 forecast after second- quarter profit beat analysts’ estimates on device demand.

DreamWorks Animation SKG Inc., the independent cartoon- movie studio, plunged 12 percent to $19.98. The company posted a second-quarter loss and said securities regulators are investigating a writedown.

Have a wonderful evening everyone.

Be magnificent!

“Every great dream begins with a dreamer. Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world.” Harriet Tubman

As ever,

Karen

“Challenges are what make life interesting and overcoming them is what makes life meaningful.” – Joshua J.

Marine

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

A society grows great when old men plant trees whose shade they know they shall never sit in. ~Greek Proverb.

The restoration of the famous Caryatid statues at the Acropolis museum has been completed after 3-1/2 years.  They were carved by ancient Greek sculptor Alkamenes.  For 2,500 years, the six sisters stood unflinching atop the Acropolis, as the fires of war blazed around them, bullets nicked their robes, and bombs scarred their curvaceous bodies. When one of them was kidnapped in the 19th century, legend had it that the other five could be heard weeping in the night.

But only recently have the famed Caryatid statues, among the great divas of ancient Greece, had a chance to reveal their full glory.  Dimitris Pantermalis, president of the Acropolis Museum, stated, “With the pollution erased, we can read more about the history of the last 2,500 years.”

Photos of the Day

Youths run along sand dunes during the peak of summer vacation on Atalaia beach in Salinopolis, Brazil. Paulo Santos/Reuters

North Korean girls stand under a shower at Songdowon International Children’s Camp in Wonsan, North Korea. The 30-year-old camp was originally intended to deepen relations with friendly countries in the Communist or non-aligned world, but officials say they are willing to accept youth from anywhere — even the US. Wong Maye-E/AP

Market Closes for July 29^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

July 29 (Bloomberg) — Canadian stocks rose, headed for a record, as companies from WestJet Airlines Ltd. to Norbord Inc. surged on earnings that beat analysts’ estimates.

WestJet jumped 4.1 percent to a record as the air carrier flew fuller planes and revenue increased faster than costs. Norbord, which produces wood-based panel board, climbed 8 percent as second-quarter earnings and revenue topped estimates.

The Standard & Poor’s/TSX Composite Index rose 50.25 points, or 0.3 percent, to 15,495.47 at 10:28 a.m. in Toronto. The index closed at a record on July 25. The equity index trades at 21.2 times earnings, the highest level since 2010.

The U.S. Federal Reserve will announce its next policy decision on July 30 and investors will get a reading on second- quarter growth the same day. The U.S. is Canada’s largest trading partner.

WestJet soared 4.1 percent to C$28.55 to pace gains as industrial stocks rose 0.3 percent as a group. Nine of 10 industries in the S&P/TSX advanced on trading volume 4 percent lower compared with the 30-day average at this time of the day.

WestJet’s second-quarter profit jumped as passenger numbers grew 6.2 percent in the quarter, filling 79.6 percent of seats.  The Calgary-based airline, second-largest in Canada, is expanding its short-haul Encore unit and its premium economy service to compete with market leader Air Canada.

Air Canada, the largest airline in the nation, added 2.8 percent to C$9.85. It’s scheduled to report earnings on Aug. 7.

BlackBerry Ltd. climbed 0.4 percent to C$10.79, snapping a two-day loss, after agreeing to buy Secusmart GmbH, a provider of anti-eavesdropping technology whose clients include German officials such as Chancellor Angela Merkel. Financial terms weren’t disclosed for the deal. John Chen, chief executive officer of BlackBerry, is in New York today presenting the company’s plans for its securities services with media and analysts.

US
By Jacob Barach and Lu Wang

July 29 (Bloomberg) — U.S. stocks fell as President Barack Obama announced new sanctions against Russia and warned its actions in Ukraine are “setting back decades of progress,” snuffing out earlier gains led by telephone stocks.

United Parcel Service Inc. slid 3.7 percent after cutting its full-year forecast. Windstream Holdings Inc. surged 12 percent on plans to spin off assets into a publicly traded real estate investment trust. Masco Corp. and Merck & Co. gained after reporting earnings that topped analysts’ projections. Twitter Inc. soared 33 percent after the market’s close as second-quarter revenue beat estimates.

The Standard & Poor’s 500 Index slipped 0.5 percent to 1,969.95 at 4 p.m. in New York. The Dow Jones Industrial Average lost 70.48 points, or 0.4 percent, to 16,912.11 after earlier in the day gaining as much as 74 points. About 6 billion shares changed hands on U.S. exchanges, up 5.3 percent from the three- month average.

“Geopolitical risk remains a risk,” Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management, said by phone. The firm oversees $5 billion. “What ultimately makes stocks go higher is earning and earnings are supporting higher valuations in the market.”  The U.S. sanctioned three Russian banks and a state-owned shipbuilder that serves Russia’s navy and oil and gas industry, joining with the European Union in escalating the penalties for Russia over its actions in Ukraine.

The EU curbed Russia’s access to bank financing and advanced technology in its widest-ranging sanctions yet. EU governments agreed to bar Russian state-owned banks from selling shares or bonds in Europe and restricted the export of equipment to modernize the oil industry, a key prop for Russia’s economy, an EU official said.

“Russia is once again isolating itself from the international community, setting back decades of progress,”  Obama said at the White House. “We can’t, in the end, make President Putin see more clearly; ultimately that’s something President Putin has to do on his own.”

American Express Co. and Newmont Mining Corp. are among S&P 500 companies reporting earnings today. About 78 percent of those that have posted results this season have beaten analysts’ estimates for profit, while 65 percent exceeded sales projections, according to data compiled by Bloomberg.

Profits probably rose 8.2 percent in the second quarter, while sales gained 3.5 percent, according to analyst estimates compiled by Bloomberg.

Economic reports today showed improving consumer sentiment while the housing market remains in a slowdown. The Conference Board’s consumer confidence index rose to 90.9, the highest since October 2007. Residential real-estate prices advanced 9.3 percent in the 12 months ended May, the slowest pace in more than a year, as a lull in the U.S. housing market limits appreciation, according to the S&P/Case-Shiller index of property values in 20 cities.

The Federal Reserve will reduce its monthly purchases for the sixth time to $25 billion from $35 billion after a two-day policy meeting starting today, according to economists surveyed by Bloomberg News. Investors will also get a reading on second- quarter economic growth tomorrow.

Three rounds of monetary stimulus from the central bank have helped propel the five-year bull market, with the S&P 500 almost tripling from 2009.

“Unless something happens dramatically in the Middle East and that’s not our expectation, our sense is that you really need to see a significant change in central bank policy before you start to see markets become a little more nervous and you have a more sustainable selloff,” Arvin Soh, a New York-based portfolio manager with GAM, said by phone. His firm manages more than $120 billion globally. “Certainly we’re expecting more volatility as the year progresses.”

The Chicago Board Options Exchange Volatility Index, known as the VIX, rose 5.7 percent to 13.28. The gauge of options costs has jumped 29 percent from a seven-year low this month.

Nine out of the S&P 500’s 10 main industries declined, led by industrial and utility companies. Phone companies jumped 2.2 percent. Verizon Communications Inc. rose 0.8 percent to $51.97 and AT&T Inc. added 2.6 percent to $36.59, among the biggest gains in the Dow.

Windstream jumped 12 percent to $11.83. The company will spin off its fiber and copper networks, as well as other real estate, as a REIT, which will lease use of the assets to Windstream with an initial estimated rent payment of $650 million per year. If state regulators and the Securities and Exchange Commission approve the transaction, it could open the door for the other phone carriers to consider similar deals.

Frontier Communications Corp. climbed 14 percent to $6.79 and CenturyLink Inc. rallied 5.8 percent to $39.90.

Cable companies, which have their own network assets, also rose on the news. Comcast Corp. increased 0.5 percent to $54.99, and Time Warner Cable Inc. added 0.6 percent to $149.86.

Merck added 1.1 percent to $58.58. The second-biggest U.S. drugmaker reported that net income more than doubled to $2 billion as the company cut costs. Excluding one-time items, second-quarter earnings were 85 cents a share, beating by 4 cents the average analyst projection.

Masco climbed 7.1 percent to $21.71. The installer of home insulation reported second-quarter profit of 32 cents a share, above the 28-cent projection by analysts.

Twitter rallied 33 percent to $51.17 as of 4:36 p.m. in New York. After the market close, the microblogging company said active membership in the second quarter reached 271 million, with year-over-year growth at 24 percent, compared with 25 percent in the prior period. Sales more than doubled to $312.2 million, exceeding the $282.8 million analyst estimate compiled by Bloomberg.

UPS lost 3.7 percent to $98.86 in regular trading. The world’s biggest package shipping company cut its 2014 outlook after reporting earnings of $1.21 a share for the quarter, below forecasts for $1.25 a share.

Herbalife Ltd. tumbled 14 percent to $58.35. Excluding some items, the nutrition company posted earnings of $1.55 a share, missing analysts’ estimates by 2 cents. The company also said sales this year will grow by 8.5 percent to 10.5 percent, slower than the range of 10 percent to 12 percent it predicted in April.

Corning Inc. slumped 9.3 percent to $20. Profit missed analysts’ estimates as demand for Gorilla Glass, the hard cover glass used for smartphones and tablets, was weaker than the company expected.

Have a wonderful evening everyone.

Be magnificent!

Nonviolence is the summit of bravery.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

One’s destination is never a place but rather

a new way of looking at things.

-Henry Miller, 1891-1980

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

We sailed over to San Juan island on the weekend and on the way home yesterday we were accompanied by a huge pod of killer whales.  What a show they gave – jumping out of the water – it was amazing!   Ah-h-h summer!

Vincenzo Nibali won the Tour de France on Sunday, becoming the first Italian in 16 years to triumph in cycling’s greatest race by chiseling a lead over his main rivals a few seconds at a time and dominating them in the mountains.  The 29-year-old Sicilian, who called himself “a flag-bearer of anti-doping” during the race, finished in a bunch behind Marcel Kittel, who won the 21st stage in a sprint

Photos of the Day

Two elderly people sit on a bench as they look at a parascending during a sunny summer day in Nice, southeastern France. Eric Gaillard/Reuters

Two Perseid meteors (c. and lower l.) streak across the sky during the annual Perseid meteor shower above a forest on the outskirts of Madrid, in the early hours. Andres Kudacki/AP

Market Closes for July 28^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

July 28 (Bloomberg) — Canadian stocks fell, after closing last week at a record, as oil producers declined and investors awaited U.S. economic data that may signal slowing growth.

Athabasca Oil Corp. sank 7.4 percent as the oil sands producer said it is still working to close an asset sale with PetroChina Co. BlackBerry Ltd. lost 1.2 percent after Chief Executive Officer John Chen said he doesn’t have any acquisition offers on his desk as he works to turn around the company. Teck Resources Ltd. and First Quantum Minerals Ltd. added at least 0.7 percent as base metals prices advanced on industrial data showing improved demand outlook in China.

The Standard & Poor’s/TSX Composite Index fell 33.58 points, or 0.2 percent, to 15,421.46 at 10:52 a.m. in Toronto. The index closed at a record on July 25. The equity index trades at 21 times earnings, the highest level since 2010.

More than 70 companies in the S&P/TSX are scheduled to report earnings this week.

Athabasca Oil dropped 7.4 percent to C$6.37 to pace declines as oil producers retreated 0.7 percent as a group, the most in the S&P/TSX. Seven of 10 industries in the benchmark Canadian equity gauge fell on trading volume 24 percent lower than the 30-day average at this time of the day.

Athabasca has plunged 27 percent from a February high as the company works through a C$1.32 billion transaction with China’s state-owned PetroChina. The Calgary-based company is depending on the payment from PetroChina to fund drilling in its other projects.

NuVista Energy Ltd. lost 2.4 percent to C$10.85 and Bonavista Energy Corp. fell 1.7 percent to C$14.23 as crude in New York slipped for the fourth time in five days. Crude slid last week after government data showed gasoline stockpiles rose to a four-month high as demand declined.

BlackBerry retreated 1.2 percent to C$10.99 for a second day of losses. Chen is focused on turning the ailing business around independently and gave its chances of success as “better than 80/20” in a Bloomberg Television interview. The company’s stock has rallied 39 percent this year.

Teck Resources added 0.9 percent to C$25.60 and First Quantum Minerals increased 0.7 percent to C$26.38 as lead touched a 17-month high in London while aluminum advanced to extend a fourth weekly gain.

Profit at industrial companies in China rose 17.9 percent from a year earlier in June, more than double the previous month’s 8.9 percent increase, a sign growth is picking up in the country.

US
By Lu Wang

July 28 (Bloomberg) — U.S. stocks were little changed, after erasing an earlier loss, as merger activity and optimism over corporate earnings offset concern over crises abroad before a Federal Reserve policy decision.

Discount chain Family Dollar Stores Inc. soared 25 percent after Dollar Tree Inc. agreed to buy it for about $8.5 billion. Trulia Inc. jumped 15 percent as Zillow Inc. agreed to purchase the company in a $3.5 billion deal. Tyson Foods Inc. climbed 2.6 percent as it agreed to sell poultry businesses in Mexico and Brazil for $575 million. Cummins Inc. fell 3.2 percent to lead declines among industrial shares.

The Standard & Poor’s 500 Index added less than 0.1 percent to 1,978.91 at 4 p.m. in New York, erasing an earlier drop of as much as 0.6 percent. The Dow Jones Industrial Average rose 22.02 points, or 0.1 percent, to 16,982.59. More than 5.4 billion shares changed hands on U.S. exchanges, 5.7 percent below the three month average.

“The market has been very benign,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm manages about $250 billion. “You got a little bit geopolitical fear out there. We’re still on track and as long as wars in the rest of the world don’t upset the upper card, the second half of this year continues to look like it’s going to be a gradually improving year.’

Mergers and acquisitions are booming amid low interest rates and growing corporate cash hoarding. More than $1.1 trillion worth of takeovers have been announced this year, exceeding the total of 2013, data compiled by Bloomberg show.

Quarterly profit growth is poised for the fastest increase in almost three years. Companies in the S&P 500 have reported an11 percent gain in second-quarter earnings, data compiled by Bloomberg show. Should the pace continue, the gain would exceed all periods since the third quarter of 2011.

Pfizer Inc., Reynolds American Inc. and American Express Co. are among some 150 S&P 500 companies reporting earnings this week. About 78 percent of U.S. companies that have posted results this season have beaten analysts’ estimates for profit, while 66 percent exceeded sales projections, according to data compiled by Bloomberg.

Stocks slumped earlier in the day as fewer Americans than forecast signed contracts to buy previously owned homes in June, a sign residential real estate is struggling to strengthen. An S&P index of homebuilder shares dropped 1.2 percent to the lowest level since April.

The S&P 500 recovered today after retreating 0.5 percent on July 25 and losing as much as 0.6 percent this morning. Not since the bull market began has buying dips been a surer way of making money.

Declines in the benchmark gauge for American equity are lasting an average of 1.5 days in 2014, the shortest since at least 2009, according to data compiled by Bloomberg. Starting last year, returns on days after the index fell have averaged 0.13 percent, the highest since they were 0.38 percent in 2009.

‘‘I wouldn’t say that we’re putting on our cowboy hats and saying this is an unstoppable bull, but you have a lot of factors going in the right direction,” Patricia Edwards, Seattle-based managing director of investments at the Private Client Reserve of U.S. Bank Wealth Management, said in a phone interview. “We’re seeing continued upward momentum in the economy. You’ve got the earnings that have been coming in fairly well, and you’ve got the mergers and acquisitions.”

Outside the U.S., international pressure mounted on Israel to end its three-week offensive in the Hamas-controlled Gaza Strip, with President Barack Obama and the United Nations Security Council demanding an immediate truce.

In Europe, President Vladimir Putin faces intensifying U.S. and European sanctions aimed at forcing him to help end the separatist war in neighboring Ukraine. The Obama administration said it had satellite photos showing Russia firing across the border at Ukraine forces.

The S&P 500 ended little changed last week as investors weighed corporate earnings. The gauge closed 0.5 percent below its all-time high of 1,987.98 reached July 24. The index has rallied 7.1 percent this year, as the economy shows signs of recovering from a 2.9 percent drop in the first quarter amid renewed pledges from the Fed to continue stimulus.

The U.S. central bank announces its next policy decision at the conclusion of a two-day meeting on July 30. Investors will get a reading on second-quarter growth that same day, while the government’s labor report on Aug. 1 may show employers added 231,000 jobs this month.

“It’s another big week of earnings, with the jobs report on Friday,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in an interview. “Sentiment in the short term is a little more cautious.”

The Fed’s Open Market Committee will scale back its monthly asset purchases to $25 billion from $35 billion on July 30, according to economists surveyed by Bloomberg, keeping it on pace to end the program late this year. The policy-making committee last month repeated it’s likely to “reduce the pace of asset purchases in further measured steps” and that it expects interest rates to stay low for a “considerable time” after the bond-buying ends.

Chair Janet Yellen and her fellow policy makers are debating how long to keep interest rates near zero as the U.S. labor market improves and inflation moves closer to the Fed’s 2 percent goal.

Three rounds of monetary stimulus from the Fed and better than-forecast corporate earnings have driven the S&P 500 up 192 percent from its March 2009 bottom. The S&P 500 is trading at 18.1 times earnings of its members, around the highest valuation for the gauge since 2010.

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

The Chicago Board Options Exchange Volatility Index, known as the VIX, fell 1 percent to 12.56, reversing an earlier rally of 7.5 percent.

Seven out of the 10 S&P 500 main groups advanced as utility companies gained 1.5 percent. Industrial and consumer-staples shares declined 0.5 percent.

Dollar Tree added 1.2 percent to $54.87. Family Dollar surged 25 percent to $75.74. The deal will create a sprawling discount chain with $18 billion in sales and more locations than any other retailer in the U.S. It also fulfills the ambitions of billionaire investors Carl Icahn and Nelson Peltz, who had acquired major stakes in Family Dollar and pushed for a sale.

Trulia soared 15 percent to $65.04. The all-stock deal positions a unified Zillow and Trulia to capture a larger share of digital real estate ads as more people shift house hunting onto the Web and property agents deploy more marketing dollars onto the Internet. Zillow gained 0.9 percent to $160.32.

Tyson Foods climbed 2.6 percent to $40.56. The largest U.S. meat producer will sell poultry businesses in Mexico and Brazil as it shrinks its foreign operations and focuses on the expansion of its prepared foods segment.

Cummins slipped 3.2 percent to $145.35 even after the maker of diesel engines raised its full-year revenue forecast. Expectations were “fairly high,” Jefferies Group LLC analysts including Stephen Volkmann wrote in a note.

AcelRx Pharmaceuticals Inc. plummeted 41 percent to $6.39. The pharmaceutical company said Zalviso, a pain treatment for adult hospital patients, failed to get approval from the Food and Drug Administration, which has requested additional information on the drug.

Have a wonderful evening everyone.

Be magnificent!

Nonviolence is not a cloistered virtue to be practiced

by the individual for peace and final salvation,

but it is a rule of conduct for society,

if it is to live consistently with human dignity

and make progress towards the attainment of peace

for which it has been yearning for ages past.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

The way to get started is to quit talking and begin doing.

-Walt Disney, 1901-1966

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7