Month: October 2014

Dear Friends,

Tangents:

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

Photos of the Day

Brokers monitor stock prices from their booths during a trading session at the Karachi Stock Exchange in Pakistan.

Engineers make their way down the north leg of the Gateway Arch in St. Louis, Mo., as they attempt to get samples of staining on the aging monument. The National Park service is hoping to sample the stains and figure out what caused them so they can be removed.

Market Closes for October 16^th, 2014    

Market Index	Close	Change
Dow Jones	16117.24	-24.50
		-0.15%
S&P 500	1862.76	+0.27   +0.01%
NASDAQ	4217.391	+2.073   +.05%
TSX	14052.97	+183.09
		-1.32%

International Markets

Market Index	Close	Change
NIKKEI	14738.38	-335.14
		-2.22%
HANG SENG	22900.94	-239.11
		-1.03%
SENSEX	25999.34	-349.99
		-1.33%
FTSE 100	6195.91	-15.73
		-0.25

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.1524	1.919
CND. 30 Year Bond	2.9353	2.467
U.S.    10 Year Bond	1.926	2.1358
U.S. 30 Year Bond	2.492	2.9176

Currencies

BOC Close	Today	Previous
Canadian $	0.88784	0.88776
US $	1.12633	1.12643
Euro Rate 1 Euro=		Inverse
Canadian $	1.44209	0.69344
US $	1.28034	0.78104

Commodities

Gold	Close	Previous
London Gold Fix	1238.52	1241.77
Oil	Close	Previous
WTI Crude Future	82.70	81.78

Market Commentary:

Canada

By Oliver Renick and Eric Lam

     Oct. 16 (Bloomberg) — Canadian stocks rallied the most in a year, rebounding from a four-day selloff, as energy stocks surged on speculation recent losses were overdone. Parex Resources Inc. jumped 8.4 percent after TD Securities recommended buying the shares. Athabasca Oil Corp. and ARC Resources Ltd gained at least 6.7 percent as energy stocks surged the most in three years. Westport Innovations Inc. jumped 14 percent. The Standard & Poor’s/TSX Composite Index climbed 1.3 percent to 14,052.97 at 4 p.m. in Toronto, the biggest advance since July 2013.

     “People are seeing really deep value in the energy and mining sectors,” said Paul Reynolds, chief executive officer at Canaccord Genuity Group Inc., on the phone from New York. “We’re encouraging our clients to look at those names and accumulate positions.”

    The index has fallen 10 percent since Sept. 3, trimming its advance for the year to 3.2 percent and erasing about C$286.6 billion from stocks through yesterday. Trading volume today was 39 percent higher than the 30-day average, according to data compiled by Bloomberg.

    The S&P/TSX Energy Index climbed 3.2 percent, the biggest increase since November 2011, as the industry rebounded from an 11-day losing streak. The energy gauge had slumped 13 percent in the past 11 days, erasing gains for the year in the longest slump since 1997.

    West Texas Intermediate oil rebounded from an earlier loss after a government report showed U.S. crude inventories expanded last week, exacerbating a global glut. WTI for November delivery rose 92 cents to settle at $82.70 a barrel in New York after dropping below $80 for the first time since June 2012.

    “If you have cash to deploy, now’s the time to do it,” said Les Stelmach, a fund manager at Franklin Bissett Investment Management in Calgary. Parex Resources, an oil and gas exploration company, jumped 8.4 percent to C$11, the most since July. TD Securities analyst Jamie Somerville raised the stock to buy from hold.

    Athabasca Oil surged 10 percent to C$4.39, rebounding from an all-time low yesterday. ARC Resources increased 6.7 percent to C$28.04, the biggest advance in two years.

    The S&P/TSX trades at 18.1 times reported earnings, down from a peak of 21 set in June, according to data compiled by Bloomberg.

    Air Canada, the nation’s largest airline, soared 4.3 percent to C$7.05, snapping six days of losses, and WestJet Airlines Ltd. climbed 6.4 percent. A measure of U.S. airlines recently entered a bear market amid rising concern of the spread of Ebola.

US

By Joseph Ciolli

    Oct. 16 (Bloomberg) — U.S. stocks recovered from early losses as St. Louis Federal Reserve Bank President James Bullard said policy makers should consider delaying the end of bond purchases to halt the decline in inflation expectations.

    Chesapeake Energy Corp. surged the most in almost six years, leading a rally in energy producers, on plans to sell natural gas and oil shale fields for $5.4 billion. Netflix Inc. plunged 19 percent after saying a price increase had slowed subscriber growth, while EBay Inc. sank 4.7 percent after its sales forecast missed estimates.

    The Standard & Poor’s 500 Index ended the session up 0.27 point, or less than 0.1 percent, at 1,862.76 at 4 p.m. in New York after falling as much as 1.5 percent. The index is down 7.4 percent from its last record on Sept. 18. The Dow Jones Industrial Average slipped 24.5 points to 16,117.24 as Goldman Sachs Group Inc. led declines after reporting a drop in trading revenue. The Russell 2000 Index added 1.3 percent and extended a three-day advance to 3.5 percent, its biggest since June.

    “The Bullard comments were a short-term shot of adrenaline,” Chad Morganlander, a money manager at St. Louis- based Stifel Nicolaus & Co., which oversees about $160 billion, said in a telephone interview. “The overall markets are hooked on QE and liquidity being withdrawn.”

    The S&P 500 held near its lowest level since April and clung to a 0.8 percent gain for the year following a slump triggered by concern about slowing economic growth in Europe and China and the spread of Ebola. Benchmark indexes recovered today as Bullard said the Fed to rethink plans to end its quantitative easing program.

    “Inflation expectations are declining in the U.S.,” Bullard said. “That’s an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE.” Speaking in an interview today with Bloomberg News, Bullard said U.S. economic fundamentals remain strong and he blamed the market turmoil on downgrades in the outlook for Europe.

    Fed officials are scheduled to next gather on Oct. 28-29 and have said they expect to end asset purchases after that meeting. U.S. 10-year Treasury yields were up 1.4 basis points to 2.15 percent today after falling below 2 percent yesterday for the first time since June 2013. The Fed aims for 2 percent inflation, as measured by the personal consumption expenditures price index, which was 1.5 percent in August and hasn’t exceeded 2 percent since March 2012. Expectations of future inflation, which are important because they can affect spending by businesses and households, have dipped in recent months alongside a decline in oil prices.

    A Bloomberg measure of market forecasts for average inflation over the next five years was 1.48 percent, compared with 2.1 percent in June.

    UnitedHealth Group Inc., Nike Inc. and Chevron Corp. rose more than 1.6 percent for the best gains in the Dow, while Goldman Sachs’s drop shaved 30 points off the index. Energy, industrial and commodity stocks led gains among five of the 10 main industries in the S&P 500. Energy producers have led the S&P 500’s slump since Sept. 18, losing 12 percent as a group.

    Chesapeake Energy Corp. surged 17 percent to $20.79, the most since December 2008. The company plans to sell natural gas and oil shale fields to Southwestern Energy Co. for $5.4 billion in its biggest-ever divestment. The transaction includes 1,500 wells and drilling rights across 413,000 acres in the southern Marcellus Shale and eastern Utica Shale in Pennsylvania and West Virginia, Chesapeake said in a statement.

    Southwestern slumped 10 percent to $31.97, while QEP Resources Inc., a natural gas and oil exploration company, jumped 6.8 percent. Baker Hughes Inc., the third-largest oilfield-services provider, sank 3 percent to $52.01 after saying oil prices below $75 a barrel for a few months may lead to reduced spending on energy exploration and production. U.S. crude futures rebounded after slipping below $80 for the first time since June 2012. Brent rose from the lowest in almost four years.

    Netflix, the world’s largest subscription-streaming service, tumbled 19 percent to $361.70 in its biggest decline since 2012. The company blamed a recent $1 price increase for the shortfall, and offered a guarded outlook for this period. Netflix had gained 22 percent this year through yesterday.

    EBay fell 4.7 percent to $47.88. Revenue for the current period will be $4.85 billion to $4.95 billion, the company said in a statement yesterday. Profit before certain items will be 88 cents to 91 cents a share. Analysts on average projected sales of $5.16 billion and profit of 91 cents, according to data compiled by Bloomberg.

    Goldman Sachs fell 2.6 percent to $172.58, the lowest since August, after posting a bigger drop in trading revenue than competitors including JPMorgan Chase & Co. Profit topped analysts’ estimates as firm cut the portion of revenue it set aside for employee pay and reaped gains from investments made with its own money. Trading revenue fell 11 percent from the second quarter, excluding accounting gains and a benefit tied to paying off subordinated debt. JPMorgan and Citigroup Inc. each posted a 2 percent increase.

    United Rentals Inc. jumped 6.7 percent, its biggest gain since July 2013, after revenue and adjusted earnings beat estimates and the company said it accelerated its share buyback program. Stephen Schwarzman, Blackstone Group LP’s chief executive officer, said the recent declines in financial markets are an “overreaction” and the U.S. economy continues to do well.

    “We’ve got an overreaction going on because of health concerns and foreign policy concerns and all this stuff coming together that’s just scaring people,” Schwarzman said on a conference call today with investors and analysts. “There’s this sense that we’re out of control, and that’s being reflected into markets. The U.S. economy is doing quite nicely.”

Have a wonderful evening everyone.

“Good Advice is almost certain to be ignored, but that’s no reason not to give it.” – Agatha Christie 

Be magnificent! 

“The true delight is in finding out rather than in the knowing.” – Isaac Asimov

Brianna

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

Photos of the Day
Pope Francis greets the faithful as he arrives in St. Peter’s Square to attend the weekly general audience at the Vatican.

Dancers from the Deep Roots Dance Company rehearse during a training session in an old theater in downtown Havana, Cuba.

Market Closes for October 15^th, 2014    

Market Index	Close	Change
Dow Jones	16141.74	-173.45
		-1.06%
S&P 500	1862.49	-15.21   -0.81%
NASDAQ	4215.317	-11.854   -0.28%
TSX	13869.88	-166.80
		-1.19%

International Markets

Market Index	Close	Change
NIKKEI	15073.52	+137.01
		+0.92%
HANG SENG	23140.05	+92.08
		+0.40%
SENSEX	26349.33	-34.74
		-0.13%
FTSE 100	6211.64	-181.04
		-2.83%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.919	1.947
CND. 30 Year Bond	2.467	2.493
U.S.    10 Year Bond	2.1358	2.1991
U.S. 30 Year Bond	2.9176	2.9562

Currencies

BOC Close	Today	Previous
Canadian $	0.88776	0.88488
US $	1.12643	1.13010
Euro Rate 1 Euro=		Inverse
Canadian $	1.43070	0.69896
US $	1.26600	0.78989

Commodities

Gold	Close	Previous
London Gold Fix	1241.77	1232.86
Oil	Close	Previous
WTI Crude Future	81.78	81.84

Market Commentary:

Canada

By Eric Lam

     Oct. 15 (Bloomberg) — Canadian stocks fell, dropping to an eight-month low a day after the nation’s main index slumped into a correction, led by declines among banks and industrial producers amid concern global economic growth is slowing.

     Athabasca Oil Corp. and Lightstream Resources Ltd. sank at least 5.9 percent as energy producers fell for an 11th straight day, the longest streak since 1997. Toronto-Dominion Bank and Bank of Montreal slumped at least 2.6 percent as financial stocks declined the most in more than two years. AuRico Gold Inc. added 3.6 percent as gold prices posted the longest rally in two months.

     The Standard & Poor’s/TSX Composite Index sank 1.2 percent to 13,869.88 at 4 p.m. in Toronto, the 10th decline in 12 days and the lowest close since February. It’s lost 5.4 percent in the past four days. The index yesterday capped a 10 percent drop from its record on Sept. 3, meeting the common definition of a correction. The S&P/TSX is still up 1.8 percent for 2014.

     The MSCI All-Country World Index, which tracks both developed and developing markets, dropped 1 percent to the lowest level since February. The gauge has declined for five straight days, the longest streak since March.

     All 10 industries in Canada’s benchmark index declined today. Trading volume was 57 percent higher than the 30-day average, according to data compiled by Bloomberg.

    Bank of Montreal tumbled 3.1 percent to C$78.33, the biggest drop since December, and Toronto-Dominion retreated 2.6 percent to C$51.24, the lowest close since April. The S&P/TSX Financials Index sank 2.3 percent, the biggest drop since June 2012. The group has lost 4.8 percent in four days.

     Air Canada dropped 2.3 percent to C$6.76 for a sixth straight day of losses and WestJet Airlines Ltd. sank 3.7 percent to C$27.23, lowest closing price since July. Airlines have sold off amid rising concern over the spread of Ebola. The Bloomberg U.S. Airlines Index extended its retreat since Sept. 2 to 22 percent, meeting the common definition of a bear market.

     Retail sales in the U.S. dropped 0.3 percent in September, more than economists forecast, on a broad pullback in spending that indicates American consumers provided less of a boost for the economy in the third quarter. Canadian existing home sales fell 1.4 percent from a four-year high in September, the first decline in eight months, led by Calgary and Edmonton in oil-rich Alberta.

    The S&P/TSX Energy Index was little changed, paring an earlier decline of as much as 3.2 percent. The group, which accounts for about a quarter of the broader S&P/TSX, has plunged 20 percent from a June peak, erasing its advance for the year.

     West Texas Intermediate crude held at a two-year low after swinging between gains and losses. The price fell earlier as low as $80.01 a barrel. Athabasca Oil plunged 7 percent to C$3.99 and Lightstream Resources sank 5.9 percent to C$3.67 as 46 of 69 energy producers in the group declined.The S&P/TSX trades at 17.8 times reported earnings, down from a peak of 21 set in June, according to data compiled by Bloomberg.

US

 By Oliver Renick and Joseph Ciolli

     Oct. 15 (Bloomberg) — The Standard & Poor’s 500 Index pared its biggest intraday plunge since 2011 as small-cap shares rebounded amid speculation the selloff was overdone. Treasuries trimmed their largest rally in five years.

     The S&P 500 slid 0.8 percent at 4 p.m. in New York, after earlier dropping 3 percent to briefly erase its gains for the year. The Russell 2000 Index of smaller companies jumped 1 percent. The rate on 10-year Treasuries fell 4 basis points to 2.16 percent, after dropping below 2 percent for the first time since June 2013. The Stoxx Europe 600 Index plunged 3.2 percent, leaving it down more than 10 percent from a June high.

    Commodities reached a five-year low as oil extended a rout. The Bloomberg Dollar Spot Index lost 0.7 percent and gold rose 0.9 percent. “Investor sentiment has clearly been pummeled of late as some signs of surrender are forming,” Tobias Levkovich, Citigroup Inc.’s chief U.S. equity strategist in New York, wrote in a note today. “While no one ever rings a bell at the bottom and there is not generally a cathartic, cataclysmic crescendo of capitulation, fear is emerging which intimates that a floor may be within reach.”

     Equities plummeted early as data showed retail sales in the U.S. dropped 0.3 percent in September, more than economists forecast, while China reported weaker-than-estimated consumer inflation. Fed Chair Janet Yellen voiced confidence in the durability of the U.S. economic expansion in the face of slowing global growth at a closed-door meeting last weekend, according to two people familiar with her comments.

    Stocks bounced in the afternoon after the S&P 500’s losses snowballed to 3 percent. The index came to within 4 points of erasing the day’s decline. Had the recovery gone all the way, it would’ve been the biggest reversal since May 2010, when the S&P 500 erased a drop of more than 3 percent, data compiled by Bloomberg show.

     The Russell 2000 was down 2 percent at its lowest point, before turning higher in the final half-hour of trading. The index has fallen more than 10 percent from a record reached in March. The S&P 500 hasn’t had a decline of that magnitude in three years. The benchmark gauge has fallen 6.2 percent from its Sept. 18 record, trading below its 200-day average, amid concern a global slowdown will hurt the American economy just as the Federal Reserve weighs when to raise interest rates.

     Retail sales in the U.S. dropped more than forecast in September, reflecting a broad-based pullback that signaled consumers took a breather. Another report showed manufacturing in the Fed Bank of New York’s region slowed more than projected in October. The bank’s so-called Empire State index dropped to 6.2 from an almost five-year high of 27.5 in September. Readings greater than zero signal growth.

       Yellen told the Group of 30 that the economy looked to be on track to achieve growth of around 3 percent going forward, according to the people familiar with her comments during the meeting in Washington. Businesses were “generally optimistic” as economic activity continued to grow at “modest to moderate” pace, according to the Fed’s Beige Book report released today.

    Overseas, data showed China’s consumer-price gains declined to the lowest in five months. Reports in Europe this week showed German investor confidence slid to the weakest level in almost two years while U.K. inflation unexpectedly stalled.

    “The market was already in a bad, bad mood ahead of the largely known weakness in retail sales this morning,” Andrew Wilkinson, chief market analyst at Interactive Brokers LLC, wrote in a note today. “Even the best report of the year would have failed to make much impact on investor sentiment captivated by signs of the bear and other factors such as the spread of the Ebola virus.”

    Almost 12 billion shares changed hands in the U.S., the most since October 2011. Financial companies in the S&P 500 plunged 2 percent for the biggest losses.

    Intel Corp. and JPMorgan Chase & Co. sank more than 2.7 percent to pace losses in the Dow Jones Industrial Average. Wal- Mart Stores Inc. dropped 3.6 percent after cutting its annual sales forecast and predicting slower profit growth over the next three years. KeyCorp retreated 5.8 percent after the lender’s quarterly revenue trailed analysts estimates. Bank of America Corp. sank 4.6 percent after revenue declined.

     Netflix Inc. plunged 25 percent in late trading. After the market close, the company reported third-quarter subscriber growth that missed the company’s forecast, saying a recent price increase may have hurt signups to its monthly video-streaming service.

     Investors are watching earnings for signs of the economy’s strength. More than 50 S&P 500 companies are releasing earnings this week, according to data compiled by Bloomberg. Profit for the members of the index probably rose 4.8 percent in the third quarter and sales increased 4.2 percent, analysts projected.

     Concern about the spread of Ebola has also started to affect investor psychology, contributing to a 17 percent decline in U.S. airline stocks since a high in September and spurring intermittent plunges in broader averages. A second health-care worker in Texas tested positive after caring for an Ebola patient, opening new questions about oversight lapses.

     The benchmark 10-year yield fell 4 basis points to 2.16 percent and reached the lowest since May 2013. The rate retreated as much as 34 basis points. Treasury trading volume reached the highest on record as about $777 billion in U.S. government debt changed hands by 2 p.m., according to ICAP Plc, the world’s largest interdealer broker.

    Rates on federal fund futures show traders betting that the Fed will raise interest rates in December 2015, with chances of an increase in September fading to 37 percent from 46 percent yesterday and 67 percent two months ago, according to data compiled by Bloomberg.

    The MSCI All-Country World Index fell 1 percent, extending its lowest level since February and dropping for a fifth day. The Stoxx Europe 600 Index fell 3.2 percent, the most in almost three years, and closed at the lowest level since December. The gauge is down more than 10 percent from its high for the year on June 10, meeting the common definition of a correction.

     Shire Plc tumbled 22 percent. AbbVie Inc. is on the verge of abandoning its $51 billion takeover of Shire after recent talks with the U.S. Treasury Department and Internal Revenue Service left it convinced that tax-rule changes would undermine the deal’s rationale, people familiar with the matter said.

    Greece’s 10-year notes dropped a third day, pushing the yield up by the most in more than two years, on concern the government’s plan to end its bailout early will leave the nation unable to raise funding sustainably. The Athens Stock Exchange General Index plunged 6.3 percent, after yesterday’s 5.7 percent decline.

     The Bloomberg Commodity Index dropped 1.2 percent to the lowest level since 2009 as copper and zinc slumped amid concern that demand is slowing in China, the world’s biggest consumer.

     Brent crude fell 1.5 percent to a four-year low. West Texas Intermediate crude retreated 6 cents to $81.78 a barrel, the least in two years. Both grades have collapsed into a bear market as shale supplies boost U.S. output to the most in almost 30 years and global demand growth weakens. The largest OPEC producers are responding by cutting prices, sparking speculation that they will compete for market share rather than reduce supply.

Gold futures climbed for a third day, adding 0.9 percent, as the weaker retail sales spurred speculation that interest rates will remain low, boosting demand for the metal as a haven. More than $970 million has been added to the value of global exchange-traded products backed by bullion this month.

     The MSCI Emerging Markets Index slipped 1 percent to the lowest since March, with Russia’s Micex Index declining 1.2 percent. The MSCI Asia Pacific Index climbed 0.3 percent, rebounding from a six-month low. The Hang Seng China Enterprises Index of mainland companies traded in Hong Kong rose 0.3 percent, after yesterday capping a decline of more than 10 percent from its peak in September. The Shanghai Composite Index gained 0.6 percent.

Have a wonderful evening everyone.

“Problems are not stop signs, they are guidelines.” – Robert H. Schuller

 

Be magnificent!

“We must be willing to let go of the life we’ve planned, so as to have the life that is waiting for us.” E.M. Forster

Brianna

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Visitors view the autumn foliage of acer trees in the Old Arboretum at Westonbirt in south west England. The Japanese maples are some of the first species to turn red and orange at this famous tree collection, originally planted in the nineteenth century. Toby Melville/Reuters

Two crowned cranes stand face to face in their compound at the zoo in Berlin. These cranes are native to the Sahel and West Africa. Stephanie Pilick/dpa/AP

Market Closes for October 14^th, 2014    

Market Index	Close	Change
Dow Jones	16315.19	-5.88
		-0.04%
S&P 500	1877.78	+3.04   +0.16%
NASDAQ	4227.172	+13.516   +0.32%
TSX	14027.20	-200.16
		-1.41%

International Markets

Market Index	Close	Change
NIKKEI	14936.51	-364.04
		-2.38%
HANG SENG	23047.97	-95.41
		-0.41%
SENSEX	26349.33	-34.74
		-0.13%
FTSE 100	6392.68	+26.44
		+0.42%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.947	2.013
CND. 30 Year Bond	2.493	2.547
U.S.    10 Year Bond	2.1991	2.2892
U.S. 30 Year Bond	2.9562	3.0195

Currencies

BOC Close	Today	Previous
Canadian $	0.88488	0.89183
US $	1.13010	1.12129
Euro Rate 1 Euro=		Inverse
Canadian $	1.43070	0.69896
US $	1.26600	0.78989

Commodities

Gold	Close	Previous
London Gold Fix	1232.86	1223.26
Oil	Close	Previous
WTI Crude Future	81.84	85.82

Market Commentary:

Canada

By Eric Lam

     Oct. 14 (Bloomberg) — Canadian stocks fell, sending the Standard & Poor’s/TSX Composite Index to an eight-month low, as concern about energy demand pushed oil producers lower for the 10th straight day, the longest streak since 1997.

     Energy stocks in the index lost 2 percent as a group, the biggest loss among 10 industries. Precision Drilling Corp. and Canadian Natural Resources Ltd. slid at least 3.1 percent. Air Canada lost 4.3 percent, following a broad selloff in airlines on concern over the spread of Ebola.

     The S&P/TSX sank 0.8 percent to 14,113.55 at 12:32 p.m. in Toronto, the ninth decline in 11 days. Earlier, the index fell 1.8 percent, briefly reaching a 10 percent drop from its record on Sept. 3. The S&P/TSX is still up 4 percent for 2014.

     “Part of the selloff is energy related, but then you have the other challenge that the areas of the TSX not related to commodities were perhaps overvalued,” said Philip Petursson, director of institutional equities at Manulife Asset Management Ltd. in Toronto. His firm manages about $281 billion. “You’ve got a valuation adjustment going on at the same time as energy prices are dropping substantially.”

     Six of 10 industries in Canada’s benchmark index declined today. Trading volume was 64 percent higher than the 30-day average at this time of day, according to data compiled by Bloomberg.

     Producers of commodities from oil to copper and gold have slumped after leading gains in the benchmark equity gauge in the first half of the year amid concern economic growth is slowing in Europe and China. The S&P/TSX Energy Index, which accounts for about a quarter of the broader gauge, has plunged 18 percent from a June peak to erase its advance for the year.

     Canadian Natural Resources sank 3.1 percent to C$37.27. The oil and gas producer has fallen for 11 days, the longest streak since June 1988.

     Brent crude fell to the lowest level in almost four years after the International Energy Agency said oil demand will expand this year at the slowest pace since 2009. West Texas Intermediate slipped for the fifth time in six days.

     Oil futures have collapsed into bear markets as shale supplies boost U.S. output to the most in almost 30 years and global demand weakens. The biggest producers in the Organization of Petroleum Exporting Countries are responding by cutting prices, sparking speculation that they will compete for market share rather than trim output.

     The S&P/TSX trades at 18 times reported earnings, down from a peak of 21 in late July, according to data compiled by Bloomberg.

     Canadian Pacific Railway Ltd. rose 0.6 percent. The company made a merger proposal last week to CSX Corp. that was rebuffed, according to people familiar with the matter. CSX is the largest U.S. eastern railroad. Canadian National Railway Co. slid 0.7 percent to C$71.75.

     Pretium Resources Inc. jumped 18 percent to C$6.55 and AuRico Gold Inc. climbed 10 percent to C$4.16 to pace gains among raw-materials producers. Gold for December delivery added 0.2 percent to $1,232.70 an ounce in New York, the highest in almost four weeks, as concern that economic growth is slowing spurred demand for a haven asset.

US

By Joseph Ciolli and Callie Bost

     Oct. 14 (Bloomberg) — A rebound in U.S. stocks faded late in the session as energy shares slid with the price of oil, snuffing out most of an earlier rally in benchmark indexes led by industrial companies, airlines and banks.

     The Standard & Poor’s 500 Index ended the session up less than 0.2 percent at 1,877.70 at 4 p.m. in New York after earlier climbing as much as 1.3 percent. The measure is down 6.6 percent from its record on Sept. 18 and yesterday capped its worst three-day retreat since 2011. The Dow Jones Industrial Average lost 5.88 points, or less than 0.1 percent, to 16,315.19 today, wiping out a 143 point earlier gain.

     “The last hour has come down to ‘do you want to hold stocks overnight or not?’” Ryan Detrick, a Cincinnati-based strategist at investment research firm See It Market, said by phone. “There’s a lot of skittishness and concerns out there with headlines on a global slowdown, a recession in Europe, a slowdown in Asia and Ebola.”

     Energy shares in the S&P 500 lost 1.2 percent as a group and extended their retreat from a June record to 20 percent. West Texas Intermediate crude oil slid 4.6 percent to $81.84 a barrel, the lowest settlement price in more than two years, after the International Energy Agency said demand will expand this year at the slowest pace since 2009. Brent crude sank to the lowest since 2010.

     Small-cap stocks pared gains, leaving the Russell 2000 Index up 1.2 percent after a midday gain of as much as 2.5 percent. About 9.2 billion listed shares changed hands in the U.S., 51 percent higher than the three-month daily average.

     Some 53 S&P 500 companies are scheduled to release earnings this week, according to data compiled by Bloomberg. Profit for members of the index probably rose 4.8 percent in the third quarter and sales gained 4.2 percent, analysts projected.

     Data from Europe today showed consumer prices in Sweden and Spain fell, U.K. inflation slowed to a five-year low, and a measure of German investor confidence decreased for a 10th month. The German government cut its economic forecast for this year and for 2015.

     U.S. equities lost about $744 billion in value from Oct. 8 through yesterday amid concern that slower global growth could hurt America’s economic recovery just as the Federal Reserve gauges when to raise interest rates. Yesterday’s selloff accelerated as airlines sank on Ebola concerns and energy shares plunged.

     The S&P 500 closed below its 200-day average for the first time in two years yesterday and slid to the lowest level since May.

     The Chicago Board Options Exchange Volatility Index decreased 7.51 percent to 22.79 today. The gauge known as the VIX rose 16 percent yesterday to its highest level since June 2012, bringing the index’s three-day move to 63 percent.

     “It has been a pretty fierce sell-off and investors reached an extreme risk aversion,” said Thomas Thygesen, head of cross-asset strategy at Skandinaviska Enskilda Banken AB in Copenhagen. “You can’t keep that selling momentum forever. Concerns that slower global growth would affect the U.S. have been overdone. We know the Fed will only adjust interest rates once the time is right, and they have reassured markets.”

     Chevron Corp., Schlumberger Ltd. and ConocoPhillips lost more than 2 percent to lead declines in 32 of 43 energy companies in the S&P 500 as the group erased a morning gain of as much as 1.5 percent.

     The Bloomberg U.S. Airlines Index increased 6.3 percent after plummeting 16 percent over the prior six trading sessions. United Continental Holdings Inc. increased 6.5 percent to $43.17, while American Airlines Group Inc. jumped 10 percent and Delta Air Lines Inc. climbed 6.1 percent.

     The Centers for Disease Control and Prevention is establishing an “Ebola response team” that can be on site in hours at any hospital if a case of the virus is reported, CDC Director Tom Frieden told reporters today. Experts at a Dallas hospital are making “immediate enhancements” to practices, including a site manager who will make sure protective gear is used correctly and limiting number of staff who will give care, he said.

     Financial stocks in the S&P 500 gained 0.5 percent as a group, paring an earlier 1.2 percent rally. Crown Castle International Corp. rose 3 percent to $80.80 after activist investor Corvex Management LP said the company should either increase its dividend payout ratio or boost its leverage ratio and buy back more stock. After recent meetings with company management, Corves said Crown Castle’s stock could top $100 by following its suggestions.

     Citigroup Inc. climbed 3.2 percent to $51.47. The third- biggest U.S. bank said profit rose 6.6 percent, topping estimates as bond-trading revenue climbed and lending improved. The firm also announced plans to exit consumer banking in 11 markets.

     JPMorgan Chase & Co. slipped 0.3 percent to $57.99, paring an earlier 3.6 percent tumble. The biggest U.S. bank swung to a third-quarter profit from a year earlier as a surprise gain in fixed-income trading helped boost revenue and legal costs narrowed. Net income was $1.36 a share, compared with a loss of $380 million, or 17 cents, a year earlier on legal and regulatory costs, according to a statement. Analysts on average had forecast EPS of $1.39.

     Wells Fargo & Co. slipped 2.7 percent to $48.83. The world’s most valuable bank posted a third-quarter profit that matched analysts’ estimates as mortgage banking revenue fell from the previous three-month period.
 

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,

 

Karen

“The most important thing is to enjoy your life – to be happy – it’s all that matters.” Audrey Hepburn

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Malala Yousafzai poses with a bouquet after speaking during a media conference at the Library of Birmingham, in Birmingham, England, after she was named as winner of The Nobel Peace Prize. Rui Vieira/AP

An elephant of the Swiss national circus ‘Knie’ takes a bath in the Lake Geneva, at the Bellerive beach near Lausanne, Switzerland.Valentin Flauraud/AP

Market Closes for October 10^th, 2014    

Market Index	Close	Change
Dow Jones	16544.10	-115.15
		-0.69%
S&P 500	1906.13	-22.08   -1.15%
NASDAQ	4276.238	-102.098   -2.33%
TSX	14227.36	-233.24
		-1.61%

International Markets

Market Index	Close	Change
NIKKEI	15300.55	-178.38
		-1.15%
HANG SENG	23088.54	-445.99
		-1.90%
SENSEX	26297.38	-339.90
		-1.28%
FTSE 100	6339.97	-91.88
		-1.43%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.013	2.034
CND. 30 Year Bond	2.547	2.570
U.S.    10 Year Bond	2.2892	2.3249
U.S. 30 Year Bond	3.0195	3.0639

Currencies

BOC Close	Today	Previous
Canadian $	0.89183	0.89382
US $	1.12129	1.11879
Euro Rate 1 Euro=		Inverse
Canadian $	1.41535	0.70654
US $	1.26225	0.79224

Commodities

Gold	Close	Previous
London Gold Fix	1223.26	1224.55
Oil	Close	Previous
WTI Crude Future	85.82	85.77

Market Commentary:

Canada

By Eric Lam

     Oct. 10 (Bloomberg) — Canadian stocks fell a second day amid a global market selloff, tumbling the most in more than a year, as declining oil and metal producers outweighed better- than-expected jobs data.

     Calfrac Well Services Ltd. slumped 8.4 percent and Trican Well Service Ltd. declined 6 percent, as a gauge of energy stocks tumbled a ninth day for its worst losing streak in three years. Air Canada fell 5 percent for a fourth day of declines.

     The Standard & Poor’s/TSX Composite Index fell 233.24 points, or 1.6 percent, to 14,227.36 at 4 p.m. in Toronto, the biggest decline since June 2013 and a six-month low. The equity gauge fell this week for the sixth straight time, the longest stretch since April 2012. The S&P/TSX has tumbled 9.1 percent from its Sept. 3 record.

     “A lot of financial players in oil are exiting the market,” said Monika Skiba, a senior managing director and fund manager at Manulife Asset Management Ltd. in Toronto. Her firm manages about $281 billion. “The reason they’re doing it is the expectations of global growth going weaker. Energy is still weak, gold stocks are continuing to be weak, and industrials.”

     The MSCI All-Country World Index, which tracks both developed and developing markets, fell 1.6 percent to the lowest since February as the Dow Jones Industrial Average erased its gains for the year. The Bloomberg Commodity Index dropped 0.5 percent.

     “A large part of the rise in commodities and energy prices in 2014 was unwarranted,” said Kash Pashootan, portfolio manager at First Avenue Advisory of Raymond James Ltd. in Ottawa. His firm manages C$220 million. “It’s been purely driven by geopolitical concerns and uncertainty with supply disruptions. The TSX will trade in the short and medium term based on how elevated those risks are.”

     The unemployment rate in Canada unexpectedly dropped to 6.8 percent last month, the lowest since December 2008, as the economy added 74,100 new jobs, including 69,300 full-time positions. Economists had forecast an increase of 20,000, and an unchanged employment rate.

     All 10 industries in Canada’s benchmark gauge declined, on trading volume 32 percent higher than the 30-day average.

     Calfrac Well Services plunged 8.4 percent to C$13.90, the most since 2011. Trican lost 6 percent to C$10.98, close to a two-year low. Energy stocks retreated 1.5 percent as a group to an eight-month low.

     The S&P/TSX Energy Index has fallen for nine days, the longest stretch since August 2011, and is down 17 percent from its June peak this year.

     Crude in New York posted the biggest weekly drop since January after falling into a bear market yesterday as it slid 20 percent from its June high. Brent crude traded near a four-year low.

     Canadian Pacific Railway Ltd. dropped 4.7 percent to C$212.20 and Canadian National Railway Co. retreated 3 percent to C$72.25 as industrial stocks slumped 2.8 percent, the most in three years.

     Novagold Resources Inc. slumped 11 percent to C$3.11 as gold futures fell from a two-week high. Raw-materials stocks sank 1.8 percent as a group to a December low.

US

By Callie Bost

     Oct. 10 (Bloomberg) — The Standard & Poor’s 500 Index posted the biggest weekly drop in two years as concern about chipmaker earnings fueled a rout across the technology industry.

     The Dow Jones Industrial Average erased gains for the year as Intel Corp., Microsoft Corp. and Cisco Systems Inc. fell more than 3.5 percent. Microchip Technology Inc. tumbled 12 percent said quarterly revenue was crimped by a decline in China sales and warned of an industry correction. Juniper Networks Inc. sank 9.1 percent after reporting preliminary results that missed its own forecast.

     The S&P 500 lost 1.1 percent to 1,906.13 as of 4 p.m. in New York. The index fell 3.1 percent for the week, the biggest drop since May 2012. The Nasdaq Composite Index sank 2.3 percent. The Dow average lost 115.15 points, or 0.7 percent, to 16,544.10.

     “It’s been an emotional roller coaster,” Mark Freeman, who oversees $20.1 billion as chief investment officer at Westwood Holdings Group Inc., said by phone. “It’s really about investors’ degree of confidence on growth outside of the U.S. and that’s what has been called into question.”

     The Chicago Board Options Exchange Volatility Index jumped above 20 for the first time since February, surging 46 percent for the week. The S&P 500 has moved more than 1 percent for the past four days.

     About 9.2 billion shares changed hands on U.S. exchanges, the most in three weeks, according to data compiled by Bloomberg. For the week, the average was 7.9 billion, the most since 2011.

     Global equities have lost $3.5 trillion in value since reaching a record last month. European Central Bank President Mario Draghi clashed with Germany’s finance minister yesterday over the steps needed to revive growth in the euro area, while Federal Reserve officials have said the U.S. economy may be at risk from a global slowdown.

     Stocks continued to slip after 4 p.m. after the close of equity exchanges, with S&P 500 December futures falling as low as 1,895. The contract closed at 1,897.4 on Aug. 7 and reached an intraday level of 1,892.9 that day, a key level for technical analysts.

     The S&P 500 has fallen for the past three weeks, the longest run since January. It’s down 5.2 percent from a record on Sept. 18, trimming its gain for the year to about 3 percent.

     Chipmakers had the worst losses today, with the Philadelphia Semiconductor Index falling almost 7 percent. Microchip Technology sank 12 percent to $39.96 after reporting preliminary quarterly sales that trailed forecasts. The company makes semiconductors used in products ranging from home appliances to computer network hardware to cars, making its earnings a broad indicator of demand across the industry.

     “We believe that another industry correction has begun, and that this correction will be seen more broadly across the industry in the near future,” Steve Sanghi, Microchip’s chief executive officer, said in a statement.

     Juniper Networks dropped 9.1 percent to $19.04. Revenue is projected to be $1.11 billion to $1.12 billion, less than Juniper’s own estimate of $1.15 billion to $1.2 billion, the company said.

     The International Monetary Fund cut its forecast for global growth this week and said the euro area faces the risk of a recession. European Central Bank President Mario Draghi pledged at the IMF’s annual meeting to loosen monetary policy more if needed. That contrasted with German Finance Minister Wolfgang Schaeuble, who warned against U.S.-style quantitative easing and urged continued budgetary discipline.

     Federal Reserve policy makers said in minutes of their last meeting that slowing global growth and the stronger greenback posed potential risks to the U.S. outlook.

     Investors are also watching earnings reports after Alcoa Inc. unofficially kicked off the results season this week. JPMorgan Chase & Co., Citigroup Inc., BlackRock Inc. and Google Inc. are among S&P 500 members posting results next week. Profit for companies in the index probably rose 4.8 percent and sales gained 4.2 percent in the third quarter, analysts projected.

     “It’s healthy to have corrections along the way because it does reduce valuations, it does shake out people that don’t have fundamental convictions,” Jim McDonald, chief investment strategist at Chicago-based Northern Trust Corp., said by phone. His firm manages about $924 billion. “A long overdue correction can help the bull market have a longer duration.”

 

Have a wonderful Thanksgiving Everyone!!

Be magnificent!

 

“Cultivate the habit of being grateful for every good thing that comes to you, and to give thanks continuously. And because all things have contributed to your advancement, you should include all things in your gratitude.” ― Ralph Waldo Emerson

As ever,

 

Karen

“The roots of all goodness lie in the soil of appreciation for goodness.” – Dalai Lama 

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

The sun rises over the north sea as ‘The Couple,’ by artist Sean Henery, sits just off the coast at Newbiggin-by-the-Sea, England.

A radio-controlled flying witch makes a test flight past the moon along the pacific ocean in Carlsbad, Calif. The life-sized device was invented by Otto Dieffenbach lll. Mike Blake/Reuters

 Market Closes for October 9^th, 2014    

Market Index	Close	Change
Dow Jones	16659.25	-334.97
		-1.97%
S&P 500	1928.21	-40.68   -2.07%
NASDAQ	4378.336	-90.258   -2.02%
TSX	14460.60	-205.87
		-1.40%

International Markets

Market Index	Close	Change
NIKKEI	15478.93	-117.05
		-0.75%
HANG SENG	23534.53	+271.20
		+1.17%
SENSEX	26637.28	+390.49
		+1.49%
FTSE 100	6431.85	-50.39
		-0.78%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.034	2.017
CND. 30 Year Bond	2.570	2.555
U.S.    10 Year Bond	2.3249	2.3213
U.S. 30 Year Bond	3.0639	3.0599

Currencies

BOC Close	Today	Previous
Canadian $	0.89382	0.90033
US $	1.11879	1.11070
Euro Rate 1 Euro=		Inverse
Canadian $	1.41973	0.70436
US $	1.26898	0.78803

Commodities

Gold	Close	Previous
London Gold Fix	1224.55	1221.22
Oil	Close	Previous
WTI Crude Future	85.77	87.31

Market Commentary:

Canada

By Eric Lam

     Oct. 9 (Bloomberg) — Canadian stocks fell to the lowest level since April as commodity producers sank with the price of oil on concerns about a slowdown in global economic growth.

     Athabasca Oil Corp. and Ithaca Energy Inc. tumbled at least 8.2 percent as oil producers fell for an eighth straight day. Iamgold Corp. and Kinross Gold Corp. dropped more than 5 percent as gold producers resumed declines after jumping the most in a year yesterday.

     The Standard & Poor’s/TSX Composite Index fell 205.87 points, or 1.4 percent, to 14,460.60 at 4 p.m. in Toronto, the lowest level since April 16. The equity gauge has fallen 2.2 percent this week, on track for a sixth straight weekly decline, the longest stretch since April 2012. The S&P/TSX has tumbled 7.7 percent from its Sept. 3 record.

     “Clearly market momentum has turned to the downside with added volatility,” said Greg Eckel, a fund manager at Morgan Meighen & Associates Ltd. in Toronto. The firm manages about C$1.4 billion.

     Nine of the 10 industries in the benchmark gauge declined on trading volume 35 percent higher than the 30-day average.

     Athabasca Oil tumbled 8.3 percent to C$4.56, a record low, and Ithaca Energy retreated 9.9 percent to C$1.73 as energy stocks slumped 2.7 percent as a group, to an eight-month low.

   The S&P/TSX Energy Index has fallen for eight days, the longest stretch since August 2011, and is down 15 percent from its June peak this year.

     Crude in New York slumped 1.8 percent to settle at $85.77 a barrel, closing 20 percent below its June high as oil supplies increased and economic growth faltered.

     Brent crude for November delivery dropped below $90 a barrel for the first time since June 2012. Brent ended yesterday more than 20 percent below this year’s June peak, meeting a common definition of a bear market.

     Teck Resources Ltd., Canada’s largest diversified miner, fell 6.2 percent to C$18.09, the lowest since July 2009. Iron ore prices continued to plunge in September on new supply and tepid demand from China, the biggest importer and consumer, Bloomberg Intelligence analysts Zhuo Zhang and Kenneth Hoffman said in a report.

     Iamgold plunged 5.3 percent to C$2.70 and Kinross Gold retreated 5 percent to C$3.42. The S&P/TSX Materials Index tumbled 2.9 percent, the most since March after a 4 percent rally yesterday.

     Canadian Tire Corp. increased 3.1 percent to C$120.67, a record, after unveiling a three-year growth strategy that includes additional share buybacks of C$400 million ($360 million) through 2015.

US

By Oliver Renick

     Oct. 9 (Bloomberg) — The Standard & Poor’s 500 Index plunged the most since April, erasing its biggest rally this year, on concern that slowing growth in Europe will hurt the American economy as the Federal Reserve ends its bond purchases.

     All 10 of the main S&P 500 groups dropped at least 0.9 percent. Energy stocks plunged 3.7 percent to pace losses as U.S. crude slipped into a bear market. Materials producers sank 2.5 percent even as precious metals rallied. Alcoa Inc. lost 4.2 percent after unofficially starting the earnings season. The Chicago Board Options Exchange Volatility Index jumped 24 percent to the highest since February.

     The S&P 500 dropped 2.1 percent to 1,928.21 at 4 p.m. in New York, after rallying 1.7 percent yesterday. The Russell 2000 Index sank 2.7 percent. Both gauges had their worst day since April. The Dow Jones Industrial Average lost the most since February, sinking 334.97 points, or 2 percent, to 16,659.25. That cut its gain this year to 0.5 percent.

     “The fear is that global interest rates are so low that there’s risk of deflation, and the economic recovery, which has shown some steady progress, is now deteriorating,” Timothy Ghriskey, who helps oversee $1.5 billion as chief investment officer for Bedford Hills, New York-based Solaris Asset Management LLC, said in a phone interview. “The news out of Europe is nothing new, but it’s come to front and center now with Draghi’s new comments.”

     Equities extended losses today after European Central Bank President Mario Draghi said there are signs the euro-area’s economic growth is slowing and policy makers must lift inflation from an “excessively low” level. Separately, a report by four economic institutes said Germany’s economy is on the verge of recession.

     The S&P 500 advanced 1.8 percent yesterday, the biggest jump since October 2013, following the Federal Reserve’s hint that interest rates will stay near zero amid concerns that a slowdown in global growth and stronger dollar will hurt the U.S.economy.

     After plunging 1.5 percent on Oct. 7, the S&P 500’s rally yesterday was the biggest turnaround in almost three years. The measure ended 2.1 percent away from its all-time closing high of 2,011.36 reached Sept. 18. The gauge is up 4.3 percent this year.

     Volatility is returning to stocks after the market experienced the longest stretch of calm in two decades. Seven trading days into October, the S&P 500 has posted five days of moves of more than 1 percent. The index went without a 1 percent move for 62 days through July 16, the longest stretch since 1995.

     The VIX jumped 24 percent 18.76 today, the highest since Feb. 5.

     Over the last 15 days, the S&P 500 has posted an average daily change of about 0.9 percent, compared with 0.48 percent in 2014 before that. Volume has risen correspondingly, with an average of about 7 billion shares changing hands each day on U.S. markets through yesterday, compared with 6.2 billion the rest of this year. About 8.3 billion traded today on U.S. exchanges.

     “We’ve seen the reintroduction of the risk-on risk-off propensity of the market and that high level of volatility is here to stay for awhile,” Drew Wilson, an investment analyst with Fenimore Asset Management in Cobleskill, New York, said by phone.

     Some Fed officials said Europe’s cooling economy and low inflation could lead to a further appreciation of the dollar. That, in turn, might curb U.S. exports and limit price gains that have lagged behind the Fed’s goal. The release of minutes came a day after the International Monetary Fund cut economic- growth forecasts and warned of “frothy” equities.

     European stocks dropped a third day today, extending losses from earlier in the week spurred by the IMF lowering its forecasts and data showing German industrial production contracted the most in more than five years.

     Draghi said in speech in Washington that boosting growth in the euro area will have to come through improvements in productivity.

     “We are accountable to the European people for delivering price stability, which today means lifting inflation from its excessively low level,” he said. “And we will do exactly that.”

     Investors are also keeping an eye on developments in Hong Kong, where the government today suspended plans to hold formal talks with pro-democracy protesters tomorrow after leaders of the movement called for more demonstrations.

     U.S. data today showed the number of Americans filing applications for unemployment benefits unexpectedly fell last week, pushing the average over the past month to the lowest level in eight years and signaling that employers are hanging on to workers as the economy improves.

     “We are in a phase of uncertainty until the big companies release their third-quarter figures,” said Christian Zogg, who manages about the equivalent of about $10 billion as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “The question in the U.S. is whether companies can keep their good margins.”

     Profit at companies in the S&P 500 rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey. PepsiCo and Family Dollar Stores Inc. reports earnings today.|

     Energy stocks declined 3.7 percent today, led by losses of more than 6.3 percent in both Newfield Exploration Co. and QEP Resources Inc. The group has plunged 16 percent since reaching a high in June as the price of oil has tumbled.

     West Texas Intermediate oil joined Brent in falling more than 20 percent from this year’s June peak, meeting a common definition of a bear market, on concern rising global supplies will be more than enough to meet slowing demand.

     Materials stocks lost 2.5 percent, dropping to the lowest level since April. Newmont Mining Corp. and Dow Chemical Co. fell at least 3.5 percent to lead losses.

     Among stocks moving on corporate news, Gap Inc. plunged 12 percent after saying its chief executive officer will step down. Advanced Micro Devices Inc. sank 10 percent to a 17-month low after naming a new CEO a week before reporting earnings. Alcoa fell 4.2 percent after unofficially starting the earnings season. Apple Inc. climbed 0.2 percent after investor Carl Icahn urged the company to accelerate share repurchases.
 

Have a wonderful evening everyone.

Be magnificent!

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

As ever,

 

Karen

“Imagination is everything. It is the preview of life’s coming attractions.” – Albert Einstein

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Early in the morning, a lunar eclipse, known as a blood moon, appears behind a gargoyle atop the Dallas County Courthouse. The moon appears orange or red, the result of sunlight scattering off Earth’s atmosphere. Tom Fox/The Dallas Morning News/AP

Turtles make their way into the ocean upon their release in Bali, Indonesia. More than a thousand baby turtles were released during a campaign to save sea turtles. Firdia Lisnawati/AP

Market Closes for October 8^th, 2014    

Market Index	Close	Change
Dow Jones	16994.22	+274.83
		+1.64%
S&P 500	1968.89	+33.79   +1.75%
NASDAQ	4468.594	+83.391   +1.90%
TSX	14666.47	+90.02
		+0.62%

International Markets

Market Index	Close	Change
NIKKEI	15595.98	-187.85
		-1.19%
HANG SENG	23263.33	-159.19
		-0.68%
SENSEX	26246.79	-25.18
		-0.10%
FTSE 100	6482.24	-13.34
		-0.21%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.017	2.032
CND. 30 Year Bond	2.555	2.555
U.S.    10 Year Bond	2.3213	2.3427
U.S. 30 Year Bond	3.0599	3.0488

Currencies

BOC Close	Today	Previous
Canadian $	0.90033	0.89510
US $	1.11070	1.11720
Euro Rate 1 Euro=		Inverse
Canadian $	1.41423	0.70710
US $	1.27238	0.78537

Commodities

Gold	Close	Previous
London Gold Fix	1221.22	1210.43
Oil	Close	Previous
WTI Crude Future	87.31	89.15

Market Commentary:

Canada

By Eric Lam

     Oct. 8 (Bloomberg) — Canadian stocks rose, rallying from the lowest intraday levels since April, as gold producers and banks surged on speculation the U.S. Federal Reserve will keep interest rates lower for a longer period.

     Torex Gold Resources Inc. and B2Gold Corp. soared at least 13 percent as gold stocks rallied the most in a year. Royal Bank of Canada, the second-largest lender by assets, jumped 1.7 percent to pace gains among financial stocks. Penn West Petroleum Ltd. and Bellatrix Exploration Ltd. tumbled more than 2.4 percent as energy producers dropped to the lowest since March.

     The Standard & Poor’s/TSX Composite Index climbed 90.02 points, or 0.6 percent, to 14,666.47 at 4 p.m. in Toronto. The equity gauge had fallen 1.4 percent in the past two days and has declined for five straight weeks, the longest stretch since April 2012.

     Fed policy makers at their last meeting said a global slowdown and a stronger dollar posed potential risks to the outlook for the U.S. economy. The minutes were released a day after the International Monetary Fund cut its global growth forecast. Gold for immediate delivery increased 0.8 percent in New York and has rallied 2.3 percent in the three days, the most since June.

     Torex Gold soared 16 percent to C$1.70 and B2Gold increased 13 percent to C$2.47 as the S&P/TSX Gold Index surged 7.7 percent, the most since September 2013.

     Seven of 10 industries in the benchmark gauge rose on trading volume 50 percent higher than the 30-day average=.

     Canadian housing starts rose 0.5 percent in September to a seasonally adjusted 197,343 units, close to the 198,000 median forecast of economists surveyed by Bloomberg.

     Penn West Petroleum fell 2.4 percent to C$6.21 and Bellatrix Exploration lost 5.1 percent to C$6.17. Energy producers dropped 1 percent as a group for a seventh straight day of declines, the longest since August 2011.

US

By Oliver Renick

     Oct. 8 (Bloomberg) — The Federal Reserve’s hint that interest rates will stay near zero sent investors rushing back to the stock market, igniting the biggest rally this year for the Standard & Poor’s 500 Index.

     The S&P 500 surged 1.7 percent to 1,968.89 at 4 p.m. in New York. From trough to peak, the index moved 45 points today, the most since February, data compiled by Bloomberg show. The rally recouped yesterday’s slump, when the benchmark gauge sank 1.5 percent amid concern over global growth and weaker economic data from Germany. The Dow Jones Industrial Average climbed 274.83 points, or 1.6 percent, to 16,994.22 today, the most since Dec. 18.

     Minutes from the Federal Open Market Committee’s last meeting showed a number of policy makers said U.S. growth “might be slower than they expected if foreign economic growth came in weaker than anticipated.” In a statement following the September gathering, policy makers renewed their pledge to keep interest rates near zero for a “considerable time” after ending bond purchases this month. They also projected a steeper increase in borrowing costs next year.

     “The market was definitely set for more hawkish Fed minutes than what this was,” said Paul Zemsky, the New York- based head of multi-asset strategies at Voya Investment Management LLC, which oversees $213 billion. “There was this concern that the Fed was on this locked-in tightening path. The minutes today show they are focusing on what’s going on overseas and how the dollar was affected by it.”

     U.S. stocks have lurched back and forth for the past week, driving a measure of 10-day volatility to the highest level since April, according to data compiled by Bloomberg. The last time the S&P 500 had back-to-back moves of at least 1.5 percent in opposite directions was in December 2011.

     The Chicago Board Options Exchange Volatility Index sank 12 percent to 15.11 today, the biggest drop since July. The gauge known as the VIX jumped 11 percent yesterday to the highest since March.

     The U.S. equities benchmark began its rebound today after S&P 500 futures approached 1,918, a two-month low and a level seen as support by some technical analysts.

     “The overall reaction was they aren’t going to raise rates a lot sooner and didn’t seem hawkish,” Joe Bell, a senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said by phone. “This is really a reflection of the fact the market has been extremely volatile right now and this is extending that idea.”

     Among stocks moving, Costco Wholesale Corp. gained 2.8 percent after saying profit topped forecasts. Merck & Co. and UnitedHealth Group Inc. each jumped 2.9 percent to pace gains in the Dow. Apple Inc. rallied 2.1 percent to send the Nasdaq 100 Index higher by 2.1 percent, its best advance in a year. Alcoa Inc. rose 1.6 percent at 4:27 p.m. in New York after reporting profit that topped analysts’ estimates.

     The S&P 500 sank 1.5 percent yesterday to the lowest since Aug. 12 after the International Monetary Fund cut economic- growth forecasts and warned of “frothy” equities. European stocks today tumbled to a two-month low on concern that equity valuations have overshot the potential for economic growth and earnings.

     The U.S. gauge has been resilient this year, with no losing streak longer than three days. The index has not fallen more than 10 percent in three years and is up 6.5 percent in 2014.

     The Russell 2000 index jumped 1.9 percent, its best gain since June. The small-cap gauge had fallen more than 10 percent from its March record through yesterday as investors sold speculative shares.

     Alcoa Inc. unofficially started the earnings season after the markets closed today. The largest U.S. aluminum producer’s results beat estimates after metal prices rose amid higher aerospace and auto demand.

     Profit at companies in the S&P 500 rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.

     The benchmark index fell 3.3 percent in the past month through yesterday, the worst pre-earnings performance since 2009. The gauge has averaged a 2.2 percent gain in that period since the bull market began.

     Costco rose 2.8 percent to $128.73. The largest U.S. warehouse-club chain posted fiscal fourth-quarter profit that topped analysts’ estimates as sales at its established stores increased.

     Yum! Brands Inc.  gained 1.5 percent to $70.74. The owner of the KFC and Taco Bell fast-food chains reduced its forecast for profit this year as another food-supplier probe hurts sales in its China division. Adjusted profit in the last quarter topped estimates.

     Symantec gained 3.5 percent to $24.01 after people familiar with the matter said the software company is in advanced talks to break up its business into two entities — one offering security programs and another focusing on data storage.

     Energy producers in the gauge advanced 1 percent, reversing a drop of 1.7 percent after U.S. crude plunged to a 17-month low and Brent oil slid into a bear market.

     Monsanto Co. climbed 1.8 percent to $109.73. The world’s largest seed company forecast fiscal 2015 earnings that trailed analysts’ expectations as tumbling grain prices leave farmers with less to spend.

     Sears Holdings Corp. dropped 4.5 percent to $28.85. Three of the biggest insurance firms for the retailer’s suppliers are seeking to reduce coverage, prompting at least one medium-sized vendor to halt shipments to the department-store chain, people with knowledge of the matter said.

     The Bloomberg U.S. Airlines Index slid 2 percent. The gauge has fallen 6.7 percent during a three-day losing streak as concern about the spread of the Ebola virus weighed on travel- related stocks. Delta Air Lines lost 1.3 percent.

     The U.S. will begin Ebola screenings at five U.S. airports for some passengers from three West African nations most stricken by the disease, according to the White House.

 

Have a wonderful evening everyone.

Be magnificent!

“In oneself lies the whole world and if you know how to look and learn, the door is there and the key is in your hand. Nobody on earth can give you either the key or the door to open, exept yourself.” Jiddu Krishnamurti 

 

As ever,

 

Karen

“Each day provides its own gifts.” Marcus Aurelius

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

A Lilac-breasted roller sits on a branch in the Naboisho Conservancy in Kenya. Goran Tomasevic/Reuters

A patron looks at Heinrich Campendonk’s ‘Harlequin and Columbine’ at the ‘From Van Gogh to Kandinsky: Impressionism to Expressionism’ exhibit at the Museum of Fine Arts in Montreal, Canada. The exhibit runs from Oct. 11 to Jan. 25. Ryan Remiorz/The Canadian 

Market Closes for October 7^th, 2014    

Market Index	Close	Change
Dow Jones	16719.33	-272.58
		-1.60%
S&P 500	1940.17	-24.65   -1.25%
NASDAQ	4385.203	-69.599   -1.56%
TSX	14584.08	-159.04
		-1.08%

International Markets

Market Index	Close	Change
NIKKEI	15783.83	-107.12
		-0.67%
HANG SENG	23422.52	+107.48
		+0.46%
SENSEX	26271.97	-296.02
		-1.11%
FTSE 100	6495.58	-68.07
		-1.04%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.032	2.089
CND. 30 Year Bond	2.555	2.597
U.S.    10 Year Bond	2.3427	2.4160
U.S. 30 Year Bond	3.0488	3.1200

Currencies

BOC Close	Today	Previous
Canadian $	0.89510	0.89811
US $	1.11720	1.11346
Euro Rate 1 Euro=		Inverse
Canadian $	1.41568	0.70637
US $	1.26711	0.78920

Commodities

Gold	Close	Previous
London Gold Fix	1210.43	1207.28
Oil	Close	Previous
WTI Crude Future	89.15	90.34

Market Commentary:

Canada

By Eric Lam

     Oct. 7 (Bloomberg) — Canadian stocks fell to a four month low as the International Monetary Fund cut its outlook for global growth and lower oil prices dragged down energy shares.

     Canadian National Railway Co. and Canadian Pacific Railway Ltd. sank more than 3 percent after a train carrying petroleum derailed in Saskatchewan. Pacific Rubiales Energy Corp. and Athabasca Oil Corp. retreated at least 4.8 percent as crude in New York traded at a 17-month low. Lundin Mining Corp. lost 2.1 percent after agreeing to buy a controlling stake in the Candelaria copper mining complex in Chile from Freeport-McMoRan Inc. for at least $1.8 billion.

     The Standard & Poor’s/TSX Composite Index fell 166.67 points, or 1.1 percent, to 14,576.45 at 4 p.m. in Toronto, the lowest close since May 20. While the equity gauge is still up 7 percent this year, it has posted losses for the past five weeks. Trading volume was 17 percent higher than the 30-day average.

     The world economy will grow 3.8 percent next year, compared with a July forecast for 4 percent, the IMF said. Financial markets in advanced economies may be overheating after a sustained period of near-zero interest rates, raising the risk of a correction in 2014.

     Canadian building permits plunged 27 percent in August from a record, led by lower intentions for medical buildings in Quebec and multiple-unit housing in Ontario.

     Canadian National sank 3.2 percent to C$75.26, the biggest decline since December, and Canadian Pacific slumped 3.1 percent to C$231.56. A Canadian National train carrying petroleum products and toxic material derailed near the village of Clair in Saskatchewan. Six of the 26 cars in the train were carrying dangerous goods, including petroleum distillate, which caught fire, Jim Feeny, a company spokesman, said by phone.

     Industrial stocks plunged 2.3 percent as a group, the most in the S&P/TSX.

     Pacific Rubiales tumbled 5.1 percent to C$17 and Athabasca Oil slumped 4.8 percent to C$4.98 as oil producers retreated 1.5 percent as a group. Nine of 10 industries in the S&P/TSX retreated.

     West Texas Intermediate for November delivery fell 1.7 percent to $88.85 a barrel on the New York Mercantile Exchange.

 US

 By Oliver Renick and Lu Wang

     Oct. 7 (Bloomberg) — Stocks tumbled and bonds rallied, sending yields to the lowest since May 2013, as the International Monetary Fund cut its global outlook and German industrial production plunged. Oil slid to a 17-month low.

     The Standard & Poor’s 500 Index fell 1.5 percent to 1,935.10 at 4 p.m. in New York, the lowest level since Aug. 12. The Dow Jones Industrial Average lost 1.6 percent, the most since July. The yield on 30-year Treasuries retreated 8 basis points to 3.05 percent as investors sought safety. Oil tumbled 1.7 percent to the lowest since April 2013, while gold futures climbed 0.4 percent. Volatility rose, with the VIX jumping to the highest since March.

     The IMF cut its outlook for global growth in 2015 and warned about the risks of rising geopolitical tensions and a financial-market correction as stocks reach “frothy” levels. German industrial production dropped 4 percent in August in the biggest decline since 2009. The Federal Reserve releases minutes of its last meeting tomorrow, when Alcoa Inc. unofficially starts the U.S. earnings season.

     “People get worried when they hear the IMF talk about growth prospects around the world falling,” Karyn Cavanaugh, the New York-based senior market strategist at Voya Investment Management LLC, said in a phone interview. “The economic data from Europe is not good, some of the steam is getting let out of the economy. We don’t have earnings data to drive us yet this week and let’s face it, that’s the meat and potatoes of the market.”

     The S&P 500 fell through its average price for the past 100 days in morning trading. Losses accelerated in the afternoon as futures contracts expiring in December slipped below 1,940, a level where two previous declines had ended earlier today.

     The world economy will grow 3.8 percent next year, compared with a July forecast for 4 percent, after a 3.3 percent expansion this year, the Washington-based IMF said. U.S. growth is helping lead a worldwide acceleration that’s weaker than the fund predicted 2 1/2 months ago as the outlooks for the euro area, Brazil, Russia and Japan deteriorate.

     The IMF predicted the U.S. economy will grow 2.2 percent this year, compared with a 1.7 percent projection in July.

     According to the IMF’s report, a sustained period of policy interest rates near zero in advanced economies has raised the risk that some financial markets may be overheating.

     “Downside risks related to an equity price correction in 2014 have also risen, consistent with the notion that some valuations could be frothy,” the IMF said without naming specific markets.

     The report comes three months after the Fed said prices were stretched in some small-cap and biotechnology stocks. Since then, the Nasdaq Biotechnology Index has rallied almost 6 percent while the Russell 2000 Index last week entered a correction, falling more than 10 percent from a record in March. The Russell 2000 lost 1.6 percent today, the most since July 31.

     “We don’t share the view of a frothy market,” Frederic Dickson, who helps oversee $45 billion as the chief investment strategist of D.A. Davidson & Co., said by phone from Baltimore. “Where there has been froth in the market, it’s been with some high-flying, small-cap, illiquid stocks that have taken a beating in the last three months.”

     With a valuation of almost 18 times earnings, the S&P 500 is at the same multiple as in October 2007, the beginning of the last bear market. Compared with the dot-com bubble, the S&P 500’s valuation is about 60 percent below the level from 1999.

     Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., said today at the Fortune’s Most Powerful Women Summit that stocks are now “in a zone of reasonableness.”

     The S&P 500 rose to a record on Sept. 18. The gauge has not fallen four straight days this year, and has not slid more than 10 percent in three years. The index has retreated 3.8 percent since its all-time high as the Fed remains on track to end bond purchases this month, trimming its gain for the year to 4.7 percent. The Dow is up 0.9 percent for the year.

     The Federal Open Market Committee will release minutes from its Sept. 16-17 meeting tomorrow. Investors have been concerned the central bank may increase interest rates sooner than anticipated as the U.S. economy gains strength.

     Forecasts for the Fed to raise rates in mid-2015 are “reasonable” as policy makers wait for unemployment to fall further and inflation to rise, New York Fed President William C. Dudley said today in a speech in Troy, New York.

     Investors will also turn to corporate profits for clues on the strength of the U.S. economy. Profit at companies in the S&P 500 rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.

     AGCO Corp. sank 11 percent to lead industrial shares lower today. The world’s third-largest maker of agricultural equipment cut its forecast because of lower sales in all regions and the stronger dollar. The Dow Jones Transportation Average retreated 2.5 percent to an almost two-month low.

     The Chicago Board Options Exchange Volatility Index rose 11 percent to 17.20 today, the highest level since March 14. The gauge known as the VIX jumped 36 percent in September, the most since July.

     “It’s definitely a risk-off day with ugly European data and growth concerns and I think we’re seeing some of that negative sentiment just getting ahead of itself here,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone.

     The Stoxx Europe 600 Index dropped 1.5 percent to the lowest level since Aug. 15, after advancing in the past two days. Travel and leisure companies declined the most, after a Madrid nursing assistant became the first person outside Africa to be diagnosed with Ebola.

     Rio Tinto Plc added 0.8 percent, paring an earlier rally of 6.2 percent, as Glencore Plc abandoned a bid for the company after a July offer to create the world’s largest miner was rebuffed. Rio Tinto said today it has had no further contact over a potential deal. Glencore fell 2.5 percent and Anglo American Plc gained 2 percent.

     “A combination of not-perfect economic data and some geopolitical risk has put doubt in some investors’ minds and that brings some volatility,” Dan Curtin, the Boston-based global investment specialist at JP Morgan Private Bank, said in a phone interview. “The dollar surge, Hong Kong protests, Ebola scare and weakening oil prices, somewhere circled together in those things is the root of this recent pullback.

     Treasuries rose as the U.S. sale of $27 billion of three- year notes drew the strongest demand since February amid concern global economic growth may be slowing. The notes yielded 0.994 percent at the auction, compared with a forecast of 1.004 percent in a Bloomberg News survey of six of the Federal Reserve’s 22 primary dealers.

     The U.S. will sell $21 billion in 10-year notes tomorrow and $13 billion in 30-year debt the next day.

     The benchmark 10-year yield dropped 8 basis points to 2.34 percent, the lowest level since August.

     West Texas Intermediate oil fell to $88.85 a barrel before a government report that may show U.S. inventories increased last week. Brent crude lost 0.7 percent to $92.11, the lowest since June 2012.

     U.S. crude inventories expanded by 2 million barrels in the week ended Oct. 3, a Bloomberg News survey showed before Energy Information Administration data tomorrow. The EIA cut its 2014 and 2015 crude price forecasts today because of rising output and reduced demand.

     Gold rose for a second day as the dollar’s decline boosted the metal’s appeal as an alternative investment. Futures added 0.4 percent to $1,212.4 an ounce, after rallying 1.2 percent yesterday.

     The Bloomberg Dollar Spot Index fell 0.2 percent, after dropping 0.9 percent yesterday. The gauge has rallied for seven weeks and closed at a four-year high on Oct. 3 as investors speculated on the timing of an interest-rate increase by the Fed.

     The yen strengthened against most of its 16 major peers on speculation officials are growing uncomfortable with the pace of its depreciation. Bank of Japan Governor Haruhiko Kuroda said the central bank will closely monitor the exchange rate and Prime Minister Shinzo Abe said its weakness is hurting small companies and households.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“Health is the greatest gift,

contentment the greatest wealth,

faithfulness the best relationship”

Buddha

As ever,

 

Karen

“Put your heart, mind, and soul into even your smallest acts. This is the secret of success.” Swami Sivananda 

 

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

A member of the Samaritan sect decorates a traditional hut known as a sukkah with fruits and vegetables on Mount Gerizim, on the outskirts of the West Bank City of Nablus. A sukkah is a ritual hut used during the week-long Jewish holiday of Sukkot which begins Monday at sundown. The Samaritans, who trace their roots to the northern Kingdom of Israel in what is now the northern West Bank, observe religious practices similar to those of Judaism. Abed Omar Qusini/Reuters

Exhibition curator Stephanie Stepanek talks about two paintings in the new exhibit ‘Goya: Order and Disorder’ during a press preview of works by the Spanish painter Francisco Goya at the Museum of Fine Arts in Boston, Massachusetts. The two paintings are portraits of the Duchess and Duke of Alba. Brian Snyder/Reuters

Market Closes for October 6^th, 2014    

Market Index	Close	Change
Dow Jones	16991.91	-17.78
		-0.10%
S&P 500	1964.82	-3.08   -0.16%
NASDAQ	4454.801	-20.823   -0.47%
TSX	14743.12	-46.66
		-0.32%

International Markets

Market Index	Close	Change
NIKKEI	15890.95	+182.30
		+1.16%
HANG SENG	23315.04	+250.48
		+1.09%
SENSEX	26567.99	-62.52
		-0.23%
FTSE 100	6563.65	+35.74
		+0.55%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.089	2.096
CND. 30 Year Bond	2.597	2.614
U.S.    10 Year Bond	2.4160	2.4358
U.S. 30 Year Bond	3.1200	3.1273

Currencies

BOC Close	Today	Previous
Canadian $	0.89811	0.88937
US $	1.11346	1.12440
Euro Rate 1 Euro=		Inverse
Canadian $	1.40928	0.70958
US $	1.26568	0.79009

Commodities

Gold	Close	Previous
London Gold Fix	1207.28	1190.95
Oil	Close	Previous
WTI Crude Future	90.34	89.74

Market Commentary:

Canada

By Eric Lam

     Oct. 6 (Bloomberg) — Canadian stocks fell to a four-month low as declines among industrial shares and energy producers offset an advance in gold miners.

     Finning International Inc. tumbled 3.1 percent after analysts at Canaccord Genuity Corp. cut their rating for the stock to a hold from a buy. Air Canada jumped 3.9 percent after reporting gains in capacity and traffic in September. Torex Gold Resources Inc. rose 3.8 percent as gold increased from the lowest price this year.

     The Standard & Poor’s/TSX Composite Index fell 46.66 points, or 0.3 percent, to 14,743.12 at 4 p.m. in Toronto, the lowest close since June 3. The equity gauge has risen 8.2 percent this year.

     Eight of 10 industries in the benchmark gauge declined on trading volume 3.6 percent below the 30-day average today.

     Energy stocks fell 0.4 percent as a group, erasing earlier gains for a fifth straight decline. Oil rebounded from declines after gasoline futures climbed on reports that units at Irving Oil Corp.’s Saint John, New Brunswick, refinery will be shut for unplanned repairs through Nov. 20.

     The Canadian plant has the capacity to process 298,800 barrels a day of oil and exports over half of its refined products to the U.S. Northeast. The refinery will keep its largest fluid catalyst cracker closed, according to two people familiar with the repairs.

     Brent crude earlier fell to a 27-month low after Saudi Arabia cut its oil prices to all destinations, prompting speculation the world’s biggest exporter won’t lead supply cuts by the Organization of Petroleum Exporting Countries.

     Air Canada soared 3.9 percent to C$8.18 after reporting a system load factor of 84.7 percent in September, compared with 83.2 percent a year ago, on higher system capacity. Load factor is a measure of airline efficiency relative to capacity.

     Postmedia Network Canada Corp., operator of the National Post, jumped 11 percent to C$2.50 after agreeing to buy 175 newspapers and trade publications for C$316 million ($282 million) from Quebecor Inc.

     The sale includes English-language publications Toronto Sun and Calgary Sun, as well as the Canoe.com website and real- estate properties.

US

By Oliver Renick

     Oct. 6 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index halting a two-day advance, as small-cap shares resumed a selloff and investors awaited the start of corporate earnings season to assess the strength of the economy.

     Micron Technology Inc. fell 4 percent after Samsung Electronics Co. said it will spend $15 billion building a chip plant in South Korea. GT Advanced Technologies Inc. sank 93 percent after the company filed for bankruptcy. Hewlett-Packard Co. jumped 4.7 percent after saying it will split into two companies. CareFusion Corp. surged 23 percent as Becton, Dickinson & Co. agreed to buy the company for $12.2 billion.

     The S&P 500 fell 0.2 percent to 1,964.84 at 4 p.m. in New York, erasing an earlier 0.5 percent gain. The Dow Jones Industrial Average retreated 17.72 points, or 0.1 percent, to 16,991.97. The Russell 2000 Index of small companies dropped 0.9 percent after the gauge capped its fifth straight weekly decline.

     “We see stocks trading a little nervously today and this week before third-quarter earnings,” Jim Russell, a senior equity strategist at U.S. Bank Wealth Management in Cincinnati, said in a phone interview. “We’re anxious to see how company managements comment on the strong U.S. dollar and overseas revenue.”

     Alcoa Inc. unofficially starts the U.S. earnings season on Oct. 8. Eight other S&P 500 companies will post results this week, including  Yum! Brands Inc. and PepsiCo Inc. Profit at companies in the gauge rose 4.9 percent in the July-September period, according to the average estimate of analysts in a Bloomberg survey.

     The S&P 500 climbed 1.1 percent on Oct. 3, paring a weekly decline, after data showed the U.S. jobless rate declined to a six-year low and employers hired more workers than economists had estimated. The dollar strengthened last week to a four-year high before weakening today.

     Stocks tumbled last week amid signs of economic weakness in Europe and geopolitical turmoil as the Federal Reserve is on course to end its bond-buying program this month. Investors have been concerned the central bank may raise interest rates sooner than anticipated as the U.S. economy gains strength.

     The Federal Open Market Committee releases minutes from its Sept. 16-17 meeting on Oct. 8.

     Selling last week was heaviest among small-cap stocks, with the Russell 2000 sliding 1.3 percent. The fifth weekly drop was its longest streak since 2008. The gauge closed Oct. 1 more than 10 percent below its record from March, meeting the common definition of a correction, before rallying in the final two days of the week.

     Losses today came as GT Advanced Technologies plunged 93 percent to less than $1. The maker of lab-grown sapphire used in mobile-device screens and parts supplier for Apple Inc. said it would continue operations during reorganization.

     “That came as a big sucker punch out of the blue,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “It underscores how fragile any rally in the small caps is at this juncture. The small caps are behaving like frightened bunnies.”

     About 6.3 billion shares changed hands on U.S. exchanges today, 9.4 percent below the three-month average. Last week saw the busiest trading in six months for U.S. equities, with an average 7.2 billion shares moving each day.

     The Chicago Board Options Exchange Volatility Index rose 5.2 percent to 15.31 today. The gauge known as the VIX slid 2 percent last week.

     Seven of the 10 main industries in the S&P 500 retreated today, with consumer-discretionary stocks sliding 0.6 percent for the biggest loss. Phone stocks jumped 0.4 percent to pace gains.

     H&R Block Inc. fell 5.6 percent for the biggest decline in the S&P 500. The tax preparer said the sale of its banking unit to BofI Federal Bank is being slowed by a regulatory approval process. The firm had predicted the deal would close before tax season begins.

     Micron Technology fell 4 percent and SanDisk Corp. dropped 2.7 percent after Samsung announced plans for the new chip factory.

     Hewlett-Packard jumped 4.7 percent after announcing a split separating its corporate hardware and services operations, which will be led by current chief Meg Whitman, from the personal- computer and printer business. The latter will be led by Dion Weisler, currently vice president in charge of those operations.

     CareFusion soared 23 percent. Becton, Dickinson agreed to pay $58 a share for the San Diego-based company that provides drug management and patient safety services to hospitals. That’s a 26 percent premium to its Oct. 3 closing price. Becton, Dickinson climbed 7.9 percent.

     Durata Therapeutics Inc. rallied 75 percent as Actavis Plc announced a deal to acquire the maker of a skin-infection treatment.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“In oneself lies the whole world and if you know how to look and learn, the door is there and the key is in your hand. Nobody on earth can give you either the key or the door to open, except yourself.”  Jiddu Krishnamurti

 

As ever,

 

Karen

 

“The purpose of our lives is to be happy.” Dalai Lama

 

 Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

October:

Birthdays: September 23 – October 22^nd, Libra

                October 23 –November 21, Scorpio.

October Flower: Cornflower

October Birthstone: Opal

Green becomes gold.  Orange pumpkins appear on the porches.  Tasseled, colored corn hangs mysteriously on the doorframe.  The world is on fire – it is becoming the sun!  The maples redden.  The poplars become flaming torches.  Leaves drift weightlessly across the lawn and city parks.  Twilight echoes with crows cawing.  It is time to turn over a new leaf.  Within us, summer’s gift of sun becomes a yearning to find ourselves.   No longer immersed in nature’s greenness, we find ourselves detached from her.  We want to think again, to find meaning in experience.  Thought-life seems to strengthen.  We want to understand.  Perhaps the dead can help us.  The month ends with Celtic Samhain, Christian All Souls and All Saints – Hallowe’en – when the veil between the worlds is thinnest and the spirits of the ancestors come with their gifts.  –by Christopher Bamford.

On this day in 1950, the comic strip Peanuts, written and illustrated by Charles M. Schulz, was first published. It predominately ran on Sundays up until Feb. 2000, and continued in reruns years later.

Birthdays today:

Singer Sting was born on this day in 1951.

Mahatma Gandhi was born October 2, 1869.

Groucho Marx on this day in 1890.

Writer Graham Green was born on this day in 1904.

Whatever you do will be insignificant, but it is very important that you do it. –Mahatma Gandhi.

PHOTOS OF THE DAY

Rescuers walk in line after their search operation near the peak of Mount Ontake in central Japan. Saturday’s eruption of the volcano was the worst fatal eruption in postwar history in Japan. Kimi Takeuchi/Mainichi Shimbun/AP

A Philadelphia Fire Department boat makes a water display as pedestrians and cyclists move along the newly-christened 2,000-foot concrete Schuylkill Banks Boardwalk in Philadelphia. Matt Rourke/AP

Butchers from the Chatsworth Estate wait for the funeral procession of Deborah, the Dowager Duchess of Devonshire at Chatsworth House in Derbyshire, central England. Deborah, the last of the Mitford sisters, who transformed Chatsworth into a popular tourist attraction, died aged 94 last week. Darren Staples/Reuters

Market Closes for October 2^nd, 2014    

Market Index	Close	Change
Dow Jones	16801.05	-3.66
		-0.02%
S&P 500	1946.17	+0.01   —
NASDAQ	4430.195	+8.110   +0.18%
TSX	14760.64	-44.80
		-0.30%

International Markets

Market Index	Close	Change
NIKKEI	15661.99	-420.26
		-2.61%
HANG SENG	22932.98	-296.23
		-1.28%
SENSEX	26567.99	-62.52
		-0.23%
FTSE 100	6446.39	-111.13
		-1.69%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.093	2.079
CND. 30 Year Bond	2.624	2.671
U.S.    10 Year Bond	2.4339	2.3891
U.S. 30 Year Bond	3.1443	3.0999

Currencies

BOC Close	Today	Previous
Canadian $	0.89600	0.89560
US $	1.11608	1.11657
Euro Rate 1 Euro=		Inverse
Canadian $	1.41339	0.70752
US $	1.26639	0.78695

Commodities

Gold	Close	Previous
London Gold Fix	1214.33	1214.86
Oil	Close	Previous
WTI Crude Future	91.01	90.73

Market Commentary:

Canada

By Eric Lam

     Oct. 2 (Bloomberg) — Canadian stocks fell a fourth day, extending a four-month low, as energy producers dropped after Brent crude tumbled to the cheapest since 2012. Valeant Pharmaceuticals International Inc. sank the most in two months.

     Bankers Petroleum Ltd. and BlackPearl Resources Inc. tumbled at least 2.9 percent to pace declines among energy stocks. Valeant sank 3.7 percent to lead health-care shares lower. Sears Canada Inc. lost 1.1 percent after parent company Sears Holdings Corp. said it will offer shares of the unit to generate as much as $380 million. Canadian Pacific Railway Ltd. jumped 5.4 percent to a record as the company started talks on developing surplus lands.

     The Standard & Poor’s/TSX Composite Index fell 44.80 points, or 0.3 percent, to 14,760.64 at 4 p.m. in Toronto, retreating for a fourth straight day. The index lost 4.3 percent in September, the most since May 2012, and fell 1.2 percent in the third quarter.

     Canadian shares plunged as much as 1.8 percent, following a rout in European equities on speculation new stimulus measures won’t be enough to revive growth in the euro area. The S&P/TSX pared declines in late trading as U.S. crude reversed.     Six of 10 industries in the S&P/TSX retreated on trading volume 40 percent higher than the 30-day average.

     Crude in New York dipped below $90 a barrel for the first time in 17 months before rebounding, while Brent crude dropped to the lowest level since June 2012 amid signs that global supplies are outstripping demand.

     Bankers Petroleum fell 4.8 percent to C$5.01 and BlackPearl lost 2.9 percent as energy producers slid 0.7 percent as a group.

US

By Callie Bost and Jeremy Herron

     Oct. 2 (Bloomberg) — Most U.S. stocks rose, as small cap shares rebounded on speculation selling was overdone and as concern over Europe’s stimulus plan faded. Brent tumbled to the lowest since June 2012.

     The Standard & Poor’s 500 Index was little changed at 4 p.m. in New York, erasing an earlier slide of 1 percent. The Russell 2000 Index jumped 1 percent as small caps rebounded from a selloff yesterday. The Stoxx Europe 600 Index sank 2.4 percent, the most since June 2013. The euro rose as much as 0.6 percent, advancing for the first time in three days versus the dollar. Treasuries weakened after gaining the most in more than eight months yesterday.

     The European Central Bank left its main refinancing rate at 0.05 percent at its meeting today in Naples, Italy. Draghi said the central bank will buy assets for at least two years to boost inflation and economic growth in the euro area. U.S. jobless claims unexpectedly dropped last week. Pro-democracy leaders in Hong Kong said they will escalate protests if their demands aren’t addressed.

     “People will come back to the market once they realize Europe is not falling a cliff and the U.S. economy is still pretty strong, but not so strong as to get the Fed to raise interest rates early,” Gary Black, global co-chief investment officer for Calamos Investments in Naperville, Illinois, said by phone. The firm oversees $25.6 billion. “We’re using this weakness to buy into names that got beaten up over the last week or so.”

       The S&P 500 fell yesterday to its lowest level since Aug. 12, while the Russell 2000 Index of smaller shares sank 1.5 percent to close more than 10 percent below its record in March amid signs of economic weakness in Europe and geopolitical turmoil. The  S&P 500 has fallen 3.2 percent since a Sept. 18 record.

     While Europe is stepping up its stimulus efforts, the U.S. is on course to halt its monthly bond-buying program this month. Investors have been analyzing economic reports for clues on whether growth will withstand the end of quantitative easing and higher interest rates.

     The U.S. jobless claims data come before the government’s labor report on Oct. 3, which may show that payrolls added 215,000 workers in September after a 142,000 increase the month prior that was the smallest this year, according to the median estimate in a Bloomberg survey. The jobless rate probably held at 6.1 percent.

     The ECB’s asset-buying plan is part of a range of stimulus measures it has announced since June to fight the threat of falling prices in the 18-nation currency bloc. Inflation slowed to 0.3 percent last month, the least in almost five years, and the central bank’s preferred measure of medium-term inflation expectations has extended its decline.

     Today’s decline left the Stoxx 600 down 4.8 percent from an almost six-year high on Sept. 4. All 19 of the index’s main groups sank at least 1.5 percent. Oil and gas producers plunged 4 percent, the most in three years, while banks tumbled 3.2 percent.

     “Draghi did not bring out the big bazooka that the market had hoped for,” Peter Garnry, head of equity strategy at Saxo Bank A/S in Hellerup, Denmark, said by telephone. “Sentiment was already tilted to the downside on economic data and we are seeing an increasing likelihood of deflationary pressures. It seems that the market is interpreting Draghi’s words negatively and as not providing the salvation that was hoped for.”                          

     The euro rose as investors curbed bets the central bank’s purchases would expand the ECB’s balance sheet enough to weaken the currency.

     The euro added 0.3 percent to $1.2665 after touching $1.2571 on Sept. 30, the lowest level since September 2012. The yen appreciated 0.4 percent to 108.44 per dollar, having reached 110.09 yesterday, the weakest since Aug. 25, 2008.

     “The view is that what they’re doing is simply not enough with buying bond assets for the next couple of years,” Dan Veru, chief investment officer at Fort Lee, New Jersey-based Palisade Capital Management, said by phone. The firm oversees $5 billion in assets. “I wouldn’t want to underestimate them. I believe in Draghi and that he will do whatever it takes and I believe that will include some new tools.”

     The global economy needs bold policies to avoid a “new mediocre” period of sluggish growth as the world struggles with a disappointing recovery six years after the financial crisis, the head of the International Monetary Fund said.

     “We see continued weakness in the global economy,” IMF Managing Director Christine Lagarde said in a speech today at Georgetown University in Washington. She cited “some serious clouds on the horizon,” including high unemployment and low inflation in the euro area, financial excesses building in advanced economies, and market and liquidity risks that are migrating to less-regulated parts of the financial system.

     Treasuries gave back some of the biggest gain in eight months on speculation the performance of the U.S. labor market is strengthening. The benchmark 10-year yield rose five basis points, or 0.05 percentage point, to 2.43 percent.

     Developing-nation stocks fell 0.4 percent to the lowest since April. The MSCI Emerging Markets Index is now down 9.8 percent since a Sept. 3 high. The measure has fallen 0.9 percent in 2014 and trades at 10.6 times projected 12-month earnings, data compiled by Bloomberg show.

     Argentine bond and stock markets deepened their losses after the resignation of Central Bank President Juan Carlos Fabrega dimmed the prospect of a second peso devaluation this year.

     The Merval stock index sank 7.1 percent, bringing losses to 15 percent since President Cristina Fernandez de Kirchner on Sept. 30 publicly criticized the bank for allegedly leaking inside information.

     The Micex Index tumbled 1.7 percent for a second day of losses. Russia’s central bank intervened for the first time since May to stem the world’s worst currency slide since June, ending the ruble’s five-day losing streak. The ruble gained 0.1 percent to 44.3072 against the central bank’s basket of dollars and euros.

     The Jakarta Composite Index declined the most since April and the rupiah depreciated 0.2 percent after Indonesia’s parliament chose a house speaker that may challenge President- elect Joko Widodo’s plans to boost economic growth.

     Equities in the Czech Republic, Poland and Hungary lost at least 1.1 percent. Hungary central bank Deputy Governor Adam Balog is set to speak at a conference on the nation’s economic outlook and banking sector.

     Markets in China and India are shut for holidays.

     West Texas Intermediate oil dropped below $90 for the first time in 17 months, before erasing losses, amid signs that global supplies are outstripping demand. WTI fell as much as 2.8 percent to $88.18 a barrel in New York, before settling 0.3 percent higher at $91.01.

     Brent for November settlement slipped 0.8 percent, to end the session at $93.42 a barrel in London. It’s the lowest close since June 28, 2012.
 

Have a wonderful evening everyone.

 

Be magnificent!
 

Water, you are the one that brings us life.  You are the source of nourishment that gives us strength.

We rejoice at your existence.

We drink you with joy, as babies drink their mothers’ milk.

And when we swallow you, we receive love.

Water, carry away all my sins and my failures, all that has been bad in my life.

I seek you today; I shall plunge into your wetness.

Drown me in splendor.

 

The Vedas

As ever,

 

Carolann

 

The best way to predict the future is to create it.

                           -Peter Drucker, 1909-2005

 

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

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:

October:  the eight month of the ancient Roman calendar – Latin, octo = eight – when the year began in March, but now the tenth month.  The Old English name was Winmonath,  wine month, or the time of vintage.  Another Old English name was Winterfylleth, perhaps meaning winter full moon, but possibly from fyllan, to fell, as time of tree-felling.  In the French Revolutionary calendar, the equivalent month wasVendémaire, time of vintage, corresponding to the period from 23 September to 22 October.

October Club: In the reign of Queen Anne, a group of High Tory MPs who met at a tavern near the Houses of Parliament to drink October ale and to abuse the Whigs.  It became politically prominent about 1710 although it had probably existed form the end of William III’s reign.

October 1, 1890, Yosemite National Park was established.

On this date in 1908, the first Model T rolled off the production line at a Ford factory in Detroit. Priced at $825 apiece, it was the first car designed to be affordable for the masses.

Also on this day, in 1924, Jimmy Carter, 39^th President of the US, was born.

PHOTOS OF THE DAY
An Aurora Borealis (Northern Lights) is seen over a mountain camp north of the Arctic Circle, near the village of Mestervik. Yannis Behrakis/Reuters

A squirrel uses its tail to shield it from the weather as rain falls in south London. Official figures showed that last month was the driest September in the UK since records began over one hundred years ago. Dylan Martinez/Reuters

Market Closes for October 1^st, 2014    

Market Index	Close	Change
Dow Jones	16804.51	-238.39
		-1.40%
S&P 500	1949.47	-22.82   -1.16%
NASDAQ	4422.086	-71.304   -1.59%
TSX	14816.36	-144.15
		-0.96%

International Markets

Market Index	Close	Change
NIKKEI	16082.25	-91.27
		-0.56%
HANG SENG	22932.98	-296.23
		-1.28%
SENSEX	26567.99	-62.52
		-0.23%
FTSE 100	6557.52	-65.20
		-0.98%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.079	2.149
CND. 30 Year Bond	2.604	2.671
U.S.    10 Year Bond	2.3891	2.4915
U.S. 30 Year Bond	3.0999	3.1975

Currencies

BOC Close	Today	Previous
Canadian $	0.89560	0.89309
US $	1.11657	1.11971
Euro Rate 1 Euro=		Inverse
Canadian $	1.40913	0.70966
US $	1.26202	0.79238

Commodities

Gold	Close	Previous
London Gold Fix	1214.86	1208.35
Oil	Close	Previous
WTI Crude Future	90.73	91.16

Market Commentary:

Canada

By Eric Lam

     Oct. 1 (Bloomberg) — Canadian stocks fell, sending the benchmark index to the lowest level since June, as energy and industrial shares tumbled amid a selloff in U.S. equity markets.

     Westport Innovations Inc., a maker of natural gas engines and components, plunged 25 percent after cutting its revenue guidance for the year. Penn West Petroleum Ltd. and Enerplus Corp. slumped more than 4.4 percent as Brent crude dropped to the lowest level in more than two years.

     The Standard & Poor’s/TSX Composite Index fell 155.07 points, or 1 percent, to 14,805.44 at 4 p.m. in Toronto, retreating for a third straight day. The index lost 4.3 percent in September, the most since May 2012, and fell 1.2 percent in the third quarter.

     U.S. stocks tumbled today amid concern over economic growth in Europe and geopolitical turmoil as the Federal Reserve prepares to end its bond-buying program. The Russell 2000 Index dropped more than 10 percent from a record reached in March, meeting the common definition of a correction.

     Equities fell as Italy cut its growth forecast, German manufacturing shrank and euro-area factories lowered prices in September by the most in more than a year. The weakness underlined the mounting challenge facing policy makers before the European Central Bank meets tomorrow.

     Westport Innovations sank 25 percent to C$8.84, the most since 1996, as industrial stocks dropped 2.2 percent as a group, the most in the S&P/TSX. Trading volume was 18 percent higher than the 30-day average today.

     Energy shares slumped 1.8 percent as a group, erasing an early gain, as Brent oil tumbled 0.5 percent after Saudi Arabia cut its November official selling prices to all areas.

     AGF Management Ltd. declined 4.1 percent to C$11.20 and Element Financial Corp. fell 3.9 percent to C$13.05 as the S&P/TSX Financials Index lost 0.8 percent.

US

By Jeremy Herron and Callie Bost

     Oct. 1 (Bloomberg) — U.S. stocks tumbled, with the Russell 2000 Index extending losses from a record to 10 percent, while Treasuries rallied the most in six weeks as the Federal Reserve remains on pace to end bond-buying this month amid growing signs of economic weakness in Europe.

     The Standard & Poor’s 500 Index declined 1.3 percent at 4 p.m. in New York to the lowest since Aug. 12. The Russell 2000 dropped 1.5 percent and is 10 percent below its March record. The Dow Jones Transportation Average sank the most since February as airlines retreated after the first reported U.S. case of the Ebola virus. The Stoxx Europe 600 Index lost 0.8 percent. The rate on 10-year Treasury notes sank 10 basis points to 2.39 percent. Brent crude fell to its lowest level in more than two years.

     Euro-area factories reduced prices by the most in more than a year and German manufacturing shrank, underlining the mounting challenge facing policy makers before the central bank meets tomorrow. U.S. manufacturing cooled in September following the strongest rate of growth in three years, while companies accelerated hiring for the first time in three months. A person familiar with German government policy said Russia risks an escalation of sanctions. Hong Kong’s pro-democracy protests swelled for a sixth day.

     “The headwinds have come to the forefront and investors are starting to recognize that,” Randy Bateman, chief investment officer of Huntington Asset Advisors, which manages about $2.8 billion, said by phone. “You’ve got a whole bunch of geopolitical situations and you have concerns about economic weakness. We’ve always relied on the Fed priming the pump. This is the month the pump dries up so now people are focused on these other issues.”                        

     The Fed is set to end later this month asset purchases that have helped nearly triple the S&P 500 during the bull market at a time when conflict between Ukraine and Russia threatens to tip Europe back into a recession and economists forecast growth from Japan to China will slow every year through 2016.

     More than $200 billion in assets was erased from U.S. equity markets during the past three months, as stronger economic data fueled concern the Fed may also raise interest rates sooner than anticipated. The U.S. economy expanded in the second quarter at the fastest rate since 2011.

     The S&P 500 has fallen three straight days and is down 3.2 percent since closing at a record on Sept. 18. The index added 0.6 percent last quarter, its seventh gain and longest streak since 1998. The gauge has not fallen four straight days this year, and has not slid more than 10 percent in three years.

     Among stocks moving today, Sarepta Therapeutics Inc. led makers of experimental Ebola treatments higher following the first reported U.S. case of the deadly disease. That also sent carriers from American Airlines Group Inc. to Delta Air Lines Inc. lower.

     Shares held by Relational Investors LLC tumbled an average of 2.5 percent amid news that the firm will dissolve current funds by the end of next year, according to people familiar with the plans. Hewlett-Packard Co., the firm’s top holding in August according to a regulatory filing, slid 2.6 percent.

     The Russell 2000 tumbled 7.7 percent in the third quarter, its worst performance in three years, as investors sold speculative stocks.

     The Russell has seen some of the heaviest selling after the index beat the S&P 500 by more than 70 percentage points and traded at more than 60 times annual earnings after the first 5 1/2 years of the bull market. Thee small-cap gauge is down 6.7 percent this year, while the S&P 500 has advanced 5.3 percent.

     “The market is showing nervousness just over the last couple weeks as we’ve been having this choppiness, especially in smaller companies,” Tim Courtney, who helps oversee about $1.3 billion as chief investment officer of Exencial Wealth Advisors, said in a phone interview from Oklahoma City. “Small caps have historically led the way down. This could be the beginning of a normal 10 percent correction.”

     While the Institute for Supply Management’s index dropped to 56.6 from 59 in August, the gauge’s average over the past three months was the highest since early 2011, figures from the Tempe, Arizona-based group showed today.

     The Fed has been analyzing U.S. economic reports for clues on whether growth will withstand the end of quantitative easing and higher interest rates.

     Concern that the central bank will be forced to move forward the timing of any rate increase bolstered the greenback last quarter. The Bloomberg Dollar Spot Index, which measures the currency against a basket of 10 peers, rallied 6.7 percent in the July-September period, the most since 2008. The index was little changed today.

      The dollar rose 0.1 percent to $1.26183 per euro.  It touched $1.2571 yesterday, the strongest level since September 2012. The greenback dropped 0.6 percent to 108.95 yen after rising earlier to 110.09 yen, the highest since Aug. 25, 2008.

     Treasuries rallied the most in six weeks as yields higher relative to most Group of Seven nations increased demand from investors worldwide concerned global growth is stalling.

     Benchmark 10-year notes yielded almost the most versus their German counterparts since 1999 after the dollar touched a two-year high versus the euro yesterday.

     “We have this quest for growth and central banks are unable to produce it,” said Richard Gilhooly, an interest-rate strategist in New York at TD Securities Inc., one of 22 primary dealers that trade with the Federal Reserve. “We have a global deflationary situation developing.”                      

     The yields have gained versus bunds for a record nine quarters as the European Central Bank unveiled a series of stimulus measures to boost credit lending and combat the threat of deflation. The ECB is forecast to announce tomorrow details of its plan to buy asset-backed securities.

     The ECB is on a mission to avert deflation as the euro region’s economic landscape deteriorates. Purchasing Managers’ Indexes from Markit Economic showed manufacturing also contracted in France, Austria and Greece, with a gauge for the 18-nation region pointing to near-stagnation. A separate report showed spillover to the U.K., with factory growth there at a 17- month low.

     The Stoxx 600 fell today after climbing 0.4 percent last quarter, a fifth increase and the longest stretch since 2006. J Sainsbury Plc slumped to the lowest price in more than 11 years after saying it won’t see a return to growth in same-store sales this year. Orange SA fell 7 percent as Bpifrance sold a stake in the company for 580 million euros ($730 million).

     Developing-nation stocks dropped for a fifth day and currencies slid amid prospects for higher U.S. interest rates. The MSCI Emerging Markets Index fell 0.9 percent to the lowest level since May.                      

     The ruble weakened 0.2 percent versus a target basket of dollars and euros, a day after briefly crossing the level at which the central bank intervenes to halt declines.

     Two officials with direct knowledge of the discussions said yesterday that Russia’s central bank is weighing temporary capital controls if outflows intensify. The central bank denied it’s considering such measures.

     If separatists took the Donetsk airport or the city of Mariupol in an effort to create a land corridor in eastern Ukraine, the EU might impose additional sanctions, according to the official, who asked not to be named because he isn’t authorized to discuss the matter publicly. Russia has denied any involvement.

     Russia’s economy will expand 0.5 percent next year, the International Monetary Fund said today, cutting its previous growth forecast in half.

     The Brazilian real depreciated 1.3 percent and South Korea’s won dropped to a six-month low. Pro-democracy protests continued in Hong Kong with markets in the city and China shut for holidays.

     Brazil’s Ibovespa sank 2.3 percent as a voter poll showing President Dilma Rousseff’s victory in this month’s election curbed bets that a new administration would reduce intervention in the economy and act to bolster growth.

     Brent crude dropped to the lowest level in more than two years after Saudi Arabia cut its November official selling prices to all areas. West Texas Intermediate crude slipped to a 17-month low.

     Brent for November settlement fell 51 cents, or 0.5 percent, to end the session at $94.16 a barrel on the London- based ICE Futures Europe exchange. It closed at the lowest level since June 28, 2012.

     Nickel prices fell to a six-month low as inventories monitored by the London Metal Exchange extended an increase to a record. Aluminum tumbled the most in 14 months.
 

Have a wonderful evening everyone.

 

Be magnificent!
 

How can you regard yourself as subject and other beings as objects,

when you know that all are one?

Brihadaranyaka Upanishad

As ever,

 

Carolann

 

Sublimity is the echo of a noble mind.

                -Longinus, 213-273 AD

 

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

Senior Vice-President &

Senior Investment Advisor

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7