August 15, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be sending the newsletter on her behalf.

Are you a fan of Indian Food? I was reading an Times Colonist and came across an article about Indian Food.  Chef Raghavan Iyer has released a cooking book titled “Indian Cooking Unfolded”, which shares the basics of Indian cooking.  It gives detailed instructions, with simple recipes that usually include fewer than 10 ingredients.  I thought I would share one with you:

Creamy Chicken Kebabs

1/2 cup half-and-half

6 medium-sized cloves of garlic

4 pieces fresh ginger (each about the size and thickness of a quarter; no need to peel the skin)

1 1/2 tsp. coarse kosher or sea salt

1 tsp garam masala spice mix

1/2 tsp cayenne pepper

1 1/2 lb skinless, boneless chicken breasts, cut at a diagonal into centimeter-wide strips

nonfat cooking spray

1 small red onion, cut in half lengthwise and thinly sliced

2 Tbsp finely chopped fresh cilantro, leaves and tender stems

1 large lime, cut into 8 wedges

To get the cooking instructions for this delicious recipe visit:

http://www.timescolonist.com/life/creamy-chicken-kebabs-take-taste-buds-to-india-1.586348

“Develop success from failures. Discouragement and failure are two of the surest stepping stones to success.” – Dale Carnegie

Photos of the Day –August 15^th, 2013

A station clock is pictured at a platform of the main train station in Mainz, Germany. German rail operator Deutsche Bahn cancelled most of its regional service in Mainz due to lack of personnel. Ralph Orlowski/Reuters

A taxi is driven past a trash bin in central London. Officials say that an advertising firm, Renew, must immediately pull the plug on a program using its network of high-tech trash cans like the one pictured, which measures the Wi-Fi signals emitted by smartphones to track people walking through London’s financial district. Lefteris Pitarakis/AP

Market Closes for August 15^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Aug. 15 (Bloomberg) — Canadian stocks rose to a three-week high, as commodities producers rallied after unrest in Egypt sent crude higher and gold surged amid concern the U.S. Federal Reserve will curb stimulus measures.

Eldorado Gold Corp. and Iamgold Corp. soared more than 7.7 percent as gold rose to an eight-week high. Bankers Petroleum Ltd. jumped 5.7 percent to pace gains among energy producers.

Brookfield Asset Management Inc. declined 3.4 percent after existing home sales in July recorded their smallest gain in five months. Valeant Pharmaceuticals International Inc. slid 1.1 percent, giving health-care stocks the biggest drop in the benchmark index.

The Standard & Poor’s/TSX Composite Index rose 65.22 points, or 0.5 percent, to 12,704.52 at 4 p.m. in Toronto, the highest since July 23. Trading volume was 31 percent higher than the 30-day average at this time of the day.

“The tapering view has been reinforced today,” said Andrew Pyle, a fund manager with ScotiaMcLeod Inc. in Peterborough, Ontario. He manages about C$210 million ($204 million). “Gold is picking up because of the volatility in bonds and stocks, and then you also have what’s going on in Egypt, which is a very significant development given the extent of what’s happening. Any type of volatility in that region tends to support crude prices due to supply disruptions.”

The S&P/TSX erased earlier losses of as much as 0.6 percent, initially following U.S. and global equities lower amid concern the Fed will withdraw stimulus this fall after data showed U.S. jobless claims dropped to the lowest level in almost six years.

The central bank has said it will consider reducing its monthly bond purchases as the economy shows signs of improvement. The tapering concerns drove U.S. Treasury yields to two-year highs and gave U.S. equities the worst drop since June.

Monetary support has bolstered equities around the world.

The tumble in global stocks — only four of 24 developed markets rose today — boosted demand for gold as an alternative investment. The metal traded above $1,350 for the first time since June 20, reversing an earlier decline of as much as 1.2 percent. Oil rose for a fifth day as unrest in Egypt bolstered concern supplies could be cut. Commodity stocks account for nearly 39 percent of S&P/TSX.

Materials producers rallied 3.8 percent and energy companies added 0.8 percent, as four out of 10 groups in the benchmark index advanced.

Eldorado Gold soared 7.7 percent to C$9.50 and Iamgold climbed 11 percent to C$6.66. Centerra Gold jumped 11 percent to C$6.20, extending its winning streak to seven days, the longest since May 2012.

Suncor Energy Inc. advanced 3.5 percent to C$34.97, the highest since January, after Warren Buffett’s Berkshire Hathaway Inc. reported a stake in the energy producer.

Buffett’s firm owned 17.8 million Suncor shares on June 30, valued at more than $500 million, Berkshire said today in a regulatory filing.

Five energy stocks rose for every one that fell, led by a 5.7 percent surge in Bankers Petroleum to C$3.32.

Telus Corp. rallied 4.8 percent to C$32.21 and Rogers Communications Inc. gained 5 percent to C$42.45 to pace gains among phone stocks. The Globe and Mail reported that Verizon Communications Inc. has delayed possible takeover bids for smaller wireless carriers Wind Mobile and Mobilicity, without naming sources.

Financial stocks lost 0.6 percent, as data showed existing home sales in Canada rose 0.2 percent last month, down from a 3.3 percent pace in June and 3.6 percent in May. Toronto- Dominion Bank, Canada’s second-largest lender, slid 0.6 percent to C$86.75

Brookfield Asset Management dropped 3.4 percent to C$37.01 and Canadian Apartment Properties Real Estate Investment Trust retreated 0.6 percent to C$20.68 to pace declines among real- estate stocks.

Valeant Pharmaceuticals slid 1.1 percent to C$106.12, extending a two-day decline after closing at a record Aug. 13.

The drop helped drag health-care stocks 1.4 percent lower as a group.

US

By Alex Barinka and Katie Brennan

Aug. 15 (Bloomberg) — U.S. stocks fell the most since June as forecasts from Cisco Systems Inc. and Wal-Mart Stores Inc. disappointed while improving economic data pushed bond yields higher amid concern the Federal Reserve will reduce stimulus.

All 10 major industries in the S&P 500 retreated, with technology and consumer-discretionary shares dropping more than 1.7 percent. Cisco and Wal-Mart lost at least 2.6 percent after reporting earnings. Gannett Co. tumbled 5.1 percent after Warren Buffett’s Berkshire Hathaway Inc. exited its stake in the newspaper publisher. Homebuilders rallied as confidence in the industry rose to the highest level since 2005 despite rising mortgage rates.

The Standard & Poor’s 500 Index slipped 1.4 percent, the most since June 20, to 1,661.32 at 4 p.m. in New York. The Dow Jones Industrial Average dropped 225.47 points, or 1.5 percent, to 15,112.19, the lowest level since July 3. About 6.6 billion shares exchanged hands on U.S. exchanges today, 4.5 percent above the three-month average. Treasury yields rose to the highest levels in two years.

“With weaker earnings, higher interest rates and geopolitical concerns, risk assets like stocks don’t do well in that type of environment,” Jim Russell, the senior equity strategist for U.S. Bank Wealth Management, said in an interview from Cincinnati. His firm oversees $110 billion. “The jobless claims numbers were sufficiently strong that taper fears are probably front and center in terms of display today.”

Reports today showed claims for jobless benefits unexpectedly dropped last week to the lowest level in almost six years, signaling the U.S. job market continues to mend. The cost of living rose in July for a third month, supporting the Fed’s forecast that inflation will move closer to its target.

Industrial production in the U.S. was unchanged in July.

Separate Fed reports showed manufacturing in the Philadelphia and New York regions expanded in August at a slower-than- anticipated pace.

“We could still be in an environment where the market is having difficulty digesting some positive data points because of the possible end result of tapering happening sooner or more forcefully than we would like,” Kristina Hooper, U.S. head of investment and client strategies at Allianz Global Investors, said in an interview from Frankfurt. Her firm oversees more $409 billion.

The Fed, led by Chairman Ben S. Bernanke, will probably reduce its $85 billion in monthly bond purchases at its meeting on Sept. 17-18, according to 65 percent of economists surveyed by Bloomberg from Aug. 9 to Aug. 13. In a survey last month, half of economists predicted a reduction at next month’s meeting. The first step may be small, with monthly purchases tapered by $10 billion to a $75 billion pace, the survey showed.

Central-bank stimulus helped propel the S&P 500 up more than 150 percent from its low in 2009. The rally that sent the index up 20 percent in 2013 to a record 1,709.67 on Aug. 2 was the broadest in at least 23 years, with 445 companies higher for the year on that date.

Since peaking, the benchmark gauge for U.S. equities has retreated 2.8 percent, while the Russell 2000 measure of small- cap stocks has dropped 3 percent, the S&P 500 Financials Index has fallen 3.7 percent and the Dow Jones Transportation Average has slid 4.7 percent, data compiled by Bloomberg show.

Turmoil in Egypt is also weighing on markets. Hundreds of supporters of ousted President Mohamed Mursi torched government headquarters in Giza, as the death toll rose above 500 after a crackdown on Islamists calling for his reinstatement.

Today’s decline broke a month-long fluctuation for the S&P 500 and ended the calmest trading period in six months. The benchmark index was confined to a 35-point range from July 11 through yesterday, with intraday price changes averaging 0.68 percent over the past 30 days, the smallest swing over a comparable period since Feb. 19, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, climbed 13 percent today to 14.73, the highest level since July 8. The equity volatility gauge has jumped 24 percent since Aug. 5.

The Morgan Stanley Cyclical Index fell 1.5 percent, the most since June 24. Consumer-discretionary stocks had the biggest retreat among S&P 500 groups, tumbling 1.8 percent. Home Depot Inc. dropped 3 percent to $75.14, extending a two-day decline to 5.4 percent.

The KBW Bank Index slumped 1.2 percent as all 24 members decreased. Citigroup Inc. lost 1.4 percent to $50.86 and JPMorgan Chase & Co. dropped 1.6 percent to $53.29.

Wal-Mart, the world’s largest retailer, fell 2.6 percent to $74.41. The world’s largest retailer cut its annual profit forecast after shoppers’ reluctance to buy more than the bare necessities hurt second-quarter sales.

Cisco sank 7.2 percent to $24.49 as the biggest maker of networking equipment said revenue for the current quarter through October will be $12.2 billion to $12.5 billion. Analysts on average had projected sales of $12.5 billion.

The company is eliminating 4,000 jobs amid weaker sales in Japan, China and Europe, Chief Executive Officer John Chambers said on a conference call yesterday.

Semiconductor companies tumbled 2.3 percent as a group.

Micron Technology Inc. dropped 4.7 percent to $14.13. Advanced Micro Devices Inc. slid 3.4 percent to $3.69.

“The second half of the year is supposed to be so great, but then Wal-Mart’s earnings are lackluster and so limp, and Cisco is saying things are not as great as they were last quarter,” Chad Morganlander, a Florham Park, New Jersey-based money manager who helps oversee about $130 billion at Stifel Nicolaus & Co., said in a telephone interview. “This is a reminder that although economic deceleration has abated, earnings for corporations across the globe are hard to come by.”

Of the 463 companies in the benchmark index that have reported quarterly results this period, 72 percent have exceeded analysts’ profit estimates, data compiled by Bloomberg show.

Some 55 percent have topped forecasts for revenue.

Gannett, which has proposed buying Belo Corp., slid 5.1 percent to $24.29. A filing showed that Buffett’s Berkshire Hathaway exited its stake in Gannett during the second quarter.

Automotive stocks fell the most among 24 industries in the S&P 500. Ford Motor Co. retreated 2.7 percent to $16.43. Delphi Automotive Plc slid 2.4 percent to $54.20 after filings showed a selloff of shares as of June 30 by holders including David Einhorn’s Greenlight Capital Inc., Dan Loeb’s Third Point LLC, John Paulson’s Paulson & Co. and Paul Singer’s Elliott Management Corp.

Onyx Pharmaceuticals Inc. declined 7.2 percent to $115.34.

Talks over Amgen Inc.’s proposed takeover of the maker of blood- cancer medication have stalled over a dispute about access to data from an ongoing drug trial even as the two sides have a general agreement on price, said three people familiar with the matter.

“Amgen does not comment on market rumors,” said Christine Regan, a spokeswoman for the Thousand Oaks, California-based company. Lori Melancon, a spokeswoman for Onyx, declined to comment on the report of the talks.

Hewlett-Packard Co. retreated 4.5 percent to $25.95. Rival Lenovo Group Ltd. reported first-quarter profit that beat analyst estimates after increasing its global market share for tablet computers, smartphones and personal computers.

An S&P index of homebuilders rallied 4.4 percent, reversing an earlier decline of as much as 3.3 percent. Confidence in the industry rose in August to the highest level since 2005, a report showed today, as demand for new homes supports the market amid rising mortgage rates. The homebuilders index slumped 10 percent this year through yesterday, when it closed at the lowest level since November.

D.R. Horton Inc. climbed 5.7 percent to $19.12, halting an eight-day decline. PulteGroup Inc. surged 5.3 percent to $15.91.

KB Home rose 5.3 percent to $17.21. Lennar Corp. increased 5.1 percent to $33.28.

Newmont Mining Corp. gained 4 percent to $33.22 after gold futures jumped to an eight-week high as demand for the metal as an alternative investment increased. Gold’s rally followed a 20 percent plunge for the year through yesterday amid the U.S. equity rally and low inflation.

Kohl’s Corp. surged 5.3 percent to $53.51. The third- largest U.S. retailer forecast sales for this quarter that beat some analysts’ estimates. Chief Financial Officer Wes McDonald told investors on a conference call that Kohl’s was “very pleased” with initial back-to- school sales.

Estee Lauder Cos. climbed 3.4 percent to $67.36 after the makeup manufacturer’s fourth-quarter earnings beat estimates.

Have  a wonderful evening everyone!

Be magnificent!

“Watch your thoughts; they become words.
Watch your words; they become actions.
Watch your actions; they become habits.
Watch your habits; they become character.
Watch your character; it becomes your destiny.”

—Lao-Tze

As ever,

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.