Nov 1st, 2012 Newsletter

Dear Friends,

I was completing a 30^th page report during the past two evenings which I had to submit for the October 31^st deadline for a CSI designation I am completing, so I was unable to send my nightly newsletter, but it’s done yipee!

Tangents:

November, Latin novem, “nine”:  The ninth month in the ancient Roman calendar, when the year began in March, but now the eleventh.  The old Dutch name was Slaghtmaand, “slaughter month”, the time when the beasts were slain and salted down for winter use.  The Anglo-Saxon name was similar, as Blotmonath, literally “blood month”.  Another Saxon name was Windmonath, “wind month” , when fishermen beached their boats and stopped fishing until the next spring.  The equivalent in the French Revolutionary calendar was Brumaire, “mist month”, corresponding to the period from 23 October to 21 November. –from Brewer’s Dictionary of Phrase & Fable.

On this day in…

79 – The city of Pompeii is buried by eruption of Mt. Vesuvius.

1512 – Michelangelo’s painting on the Sistine Chapel ceiling is exhibited for the first time.

1869 – Louis Riel seizes Fort Garry, Winnipeg, during the Red River Rebellion.

1923 – Goodyear Tire and Rubber Company buys the rights to manufacture Zeppelin dirigibles.

1967 – The first issue of Rolling Stone hits the streets.
Most of the shadows of our life are caused by standing in our sunshine. – Ralph Waldo Emerson.

photos of the day

November 1, 2012

A woman walks in high water near the Rialto Bridge in Venice, Italy. High tides have flooded Venice, leading Venetians and tourists to don high boots and use wooden walkways to cross St. Mark’s Square and other areas underwater. Flooding is common this time of year. Today’s level, which reached a peak of 55 inches, was below the 63 inches recorded four years ago in the worst flooding in decades.

The remnants of a roller coaster sit in the surf three days after Hurricane Sandy came ashore in Seaside Heights, N.J. At least 82 people in North America died in the superstorm, which ravaged the northeastern United States on Monday night.

Steve Nesius/Reuters

Market Closes for November 1st, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Nov. 1 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level since April, as better- than-estimated results from Suncor Energy Inc. and Catamaran Corp. offset declines at Barrick Gold Corp.

Suncor, Canada’s largest energy company, jumped 3.5 percent after posting third-quarter profit that topped analysts’ forecasts. Barrick slumped 9.5 percent, its biggest loss in more than three years, after earnings and sales missed estimates.

The Standard & Poor’s/TSX Composite Index added 76.85 points, or 0.6 percent, to 12,499.76 in Toronto, advancing for a sixth straight session. The benchmark Canadian equity gauge is up 4.6 percent this year.

“Barrick’s report is symptomatic of a trend we see across the gold companies: Mines are getting more expensive to build,” Keith McLean, managing partner with GMP Investment Management LP, said from Toronto. His firm manages about C$650 million.

“Suncor is the other side of the same coin, sliding investment capital down to preserve and distribute cash flow. Do we see dividend bumps and share buybacks in the future? We do and it’s something Suncor’s board should consider.”

Energy companies and banks contributed most to gains on the Toronto Stock Exchange as eight of 10 industries advanced. The S&P/TSX Health Care Index soared 3.9 percent.

Investors also took cues from the latest U.S. manufacturing data, which grew at a faster pace than expected in October, McLean said.

The Institute for Supply Management’s factory index climbed to 51.7 last month, the highest since May, from 51.5 in September. Economists estimated 51 for October, according to the median estimate in a Bloomberg survey. A reading of 50 or higher indicates growth.

Suncor jumped 3.5 percent to C$34.68, its highest close since March. The company reported third-quarter profit of C$1.56 billion ($1.56 billion), up 21 percent compared with C$1.29 billion a year ago. Per-share profit of C$1.01 beat the 70-cent average of five analysts’ estimates compiled by Bloomberg.

Barrick, the world’s biggest producer of the precious metal, plunged 9.5 percent to C$36.56 for the biggest percentage decline since February 2009.

Adjusted earnings per share were 85 cents, trailing the 99- cent average of 23 estimates according to a Bloomberg survey.

Barrick earnings have disappointed for four consecutive quarters as it struggles to contain costs.

Catamaran, which processes drug prescriptions in the U.S., soared 8.7 percent to C$51, its largest advance since April. The company reported adjusted earnings per share of 25 cents, ahead of analysts’ estimates.

The company has also won a deal to manage pharmacy benefits for 180,000 Target Corp. workers, the largest deal since Catamaran’s $5 billion merger with Catalyst Health Solutions Inc. in July.

Research In Motion Ltd. surged 10 percent to C$8.68, its biggest gain since Sept. 27. The company said more than 50 wireless carriers, including BCE Inc., have begun testing BlackBerry 10 devices.

Cott Corp., the third-best performing stock on the S&P/TSX Consumer Staples Index this year, jumped 6.4 percent to C$8.12 after the non-alcoholic drinks maker announced a new quarterly dividend of six Canadian cents a share.

Stantec Inc., an engineering and architectural services company, climbed 8.4 percent to C$37.29 after reporting third- quarter earnings of 74 Canadian cents a share, ahead of 66 cents estimated by analysts.

Cameco Corp., the world’s third-largest uranium miner, slumped 5 percent to C$18.40 after cutting its 2018 production target by 10 percent. A close at that price would be its biggest decline since March 2011.

US

By Lu Wang and Inyoung Hwang

Nov. 1 (Bloomberg) — U.S. stocks rose, giving benchmark indexes their biggest advance in seven weeks, as reports on employment and manufacturing topped estimates while consumer confidence climbed in October to a more than four-year high.

Eight of 10 groups in the Standard & Poor’s 500 Index advanced. Caterpillar Inc., Microsoft Corp. and Bank of America Corp. climbed more than 3.4 percent to lead gains in the Dow Jones Industrial Average. Visa Inc. rose 3.7 percent after reporting fourth-quarter profit that beat analysts’ estimates.

Macy’s Inc. climbed 6.4 percent after raising its sales forecast. Pfizer Inc. lost 1.3 percent after the world’s largest drugmaker narrowed its forecast for 2012.

The S&P 500 gained 1.1 percent to 1,427.59 in New York. The Dow advanced 136.16 points, or 1 percent, to 13,232.62. Both gauges posted their biggest advance since Sept. 13. Volume for exchange-listed stocks in the U.S. was about 6.8 billion shares, or 14 percent above the three-month average.

“One of the major concerns of the market is a deceleration of growth,” Mark Freeman, who oversees about $14 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said in a phone interview. “The data is actually saying that deceleration has basically stopped and the growth rate has stabilized. When we look at fundamentals, the economy still supports earnings growth going into next year.”

Companies expanded payrolls in October by the most in eight months, the Institute for Supply Management’s U.S. factory index rose to 51.7 in October from 51.5 a month earlier, and the Conference Board’s consumer sentiment index increased to 72.2, the highest since February 2008, reports showed today. A Chinese purchasing manager’s index climbed to 50.2 in October, a sign economic growth is picking up after a seven-quarter slowdown.

Tomorrow’s monthly employment report from the Labor Department may provide more clues for investors to gauge the strength of the economy before the presidential election.

Payrolls increased by 125,000 workers in October and the jobless rate rose to 7.9 percent, according to the median forecasts of economists surveyed by Bloomberg.

The jobs report is the last before the Nov. 6 presidential election, and may help sway voters trying to decide between giving President Barack Obama another four years in office or to change course with Republican challenger Mitt Romney.

The S&P 500 fell 2 percent in October, ending four months of gains, as concern grew that slowing economic growth will curb earnings. The benchmark index rallied 15 percent from a June low to a four-year high on Sept. 14 as central banks around the world stepped up stimulus to boost the economy. The S&P 500 reversed a loss in the final hour of trading yesterday as equity markets reopened following a two-day shutdown because of Hurricane Sandy.

Forty-one companies in the S&P 500 post results today, according to data compiled by Bloomberg. Earnings have exceeded projections at 72 percent of companies that have released third- quarter results, while sales have trailed estimates at 59 percent of firms, Bloomberg data show.

Companies whose earnings are most tied to economic swings rose the most among 10 S&P 500 industry groups as commodity, technology and industrial shares climbed more than 1.8 percent.

Intel Corp. added 2.9 percent to $22.26, while Microsoft jumped 3.4 percent to $29.52. Caterpillar Inc., the largest builder of construction and mining machinery, rose 3.4 percent to $87.65.

The Morgan Stanley Cyclical Index climbed 2.6 percent, the most since Sept. 6. Bank of America rallied 4.5 percent to $9.74, while JPMorgan Chase & Co. increased 2.8 percent to $42.84. D.R. Horton Inc. gained 4.2 percent to $21.84, helping drive an S&P measure of homebuilders up 2.6 percent.

Visa advanced 3.7 percent to $143.88. The world’s biggest payments network reported an 89 percent increase in quarterly net income to $1.66 billion. Adjusted profit per share was $1.54, beating the $1.50 average analyst estimate.

Macy’s climbed 6.4 percent to $40.52. The second-biggest U.S. department-store chain boosted its forecast for same-store sales in the second half of the year, to a 4 percent gain compared with the year-ago period. The company had previously estimated an increase of 3.7 percent.

Ross Stores Inc. and Target Corp. posted October same-store sales that trailed analysts’ estimates as consumers held back on discretionary spending ahead of the U.S. presidential election and Hurricane Sandy diverted some traffic.

Ross Stores dropped 6.3 percent to $57.13. The operator of apparel and home accessories stores said sales rose 4 percent, falling short of the average projection for a 4.3 percent gain from analysts surveyed by researcher Retail Metrics Inc.

Target slipped 1.3 percent to $62.94. The second-biggest U.S. discount retailer posted a 2.4 percent increase in same- store sales, missing the 2.9 percent estimate.

Abercrombie & Fitch Co. climbed 8.7 percent to $33.23. The teen-clothing retailer didn’t update its sales figures. The absence of pre-announcement “may mean more limited downside risk, and could provide relief” to the stock, Roxanne Meyer, an analyst with UBS AG, wrote in a note to clients.

JDA Software Group Inc. rallied 17 percent to $44.76, the highest level since it went public in 1996. RedPrairie Corp., backed by private-equity firm New Mountain Capital LLC, will pay $45 a share for the Scottsdale, Arizona-based company in a $1.9 billion deal that merges two providers of software for managing corporate supply chains.

VeriSign Inc. jumped 11 percent to $41.15. The operator of Web domain name registries said it expects to continue to run registry for .com names, as regulators review its contract for that business. The Department of Justice has “substantially concluded” its own review process while the Commerce Department may extend its evaluation beyond Nov. 30, the company said.

Pfizer slipped 1.3 percent to $24.55 after the drugmaker narrowed its full-year adjusted earnings guidance to $2.14 a share to $2.17 a share, from $2.12 to $2.22 a share. The company said it was buying as much as $10 billion in shares.

Exelon Corp. dropped 6.2 percent to $33.58. The largest U.S. power company by 2011 sales said it may cut its dividend for the first time to maintain an investment grade credit rating as power prices decline.

Have a wonderful evening everyone.

Be magnificent!

Variety is the first principle  of life.

What makes us formed beings?

Differentiation.

Perfect balance will be destruction.

Swami Vivekananda, 1863-1902

As ever,

Carolann

Emergencies have always been necessary to progress.

It was darkness which produced the lamp.  It was fog

that produced the compass.  It was hunger that drove

us to exploration.  And it took a depression to show

us the value of a job.

-Victor Hugo, 1802-1885

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7