September 6, 2013 Newsletter

Dear Friends,

Tangents:

Désirée Goyette wrote a piece today  in one of the daily newspapers I receive which I thought was very beautiful.  Here is an excerpt:

“When I was a little girl, I loved watching my parents drop all their workaday cares to dance across the kitchen floor to the sound of Glenn Miller’s classic “A String of Pearls,” composed by Jerry Gray. There was just something “perfect” about that recording, with a title that had to do with every note being in place and shining like a pearl in a necklace…. I’ve yearned for a way to distill the wisdom I’ve been exposed to into something as flawless as that pearl. One gem of wisdom is the idea of being present “in the moment” – accepting that our future prospects so often relate to paying attention to the present.  With my busy schedule as a wife, mother, and musician, it often seems as though my mind is much too busy living in “fast forward” even to catch a glimpse of the present.  One particularly stressful morning I realized…. Moment-by-moment communion….allows us to abandon will-based responsibility and enjoy every moment to the fullest, enriched by priceless pearls of insight and contentment.

Photos of the Day –September 6th, 2013

A girl plays in front of the skyline of New York’s Lower Manhattan and One World Trade Center in a park along the Hudson River in Hoboken, New Jersey, September 5th. New York will mark the 12th anniversary of the 9/11 attack on the World Trade center next week. Gary Hershorn/Reuters

A Komondor, a traditional Hungarian guard dog, shakes its long fur in Bodony, Hunagry, September 3rd. Komondors, have a fur coat that weighs 60 pounds. Photo released September 6th. Laszlo Balogh /Reuters

Market Closes for September 6^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Sept. 6 (Bloomberg) — Canadian stocks fell, after reaching a five-month high, as technology companies dropped and investors weighed reports on domestic and U.S. jobs growth amid growing tensions between America and Russia over Syria.

BlackBerry Ltd. dropped 2.7 percent, snapping three days of gains. Bombardier Inc. lost 1 percent after rallying the most in four months yesterday. Torex Gold Resources Inc. and B2Gold Corp. added at least 4.8 percent as the price of gold climbed.

Air Canada, the nation’s largest airline, jumped 3.1 percent after announcing it will refinance its long-term debt at a lower cost. Suncor Energy Inc. rose 1.2 percent as crude rallied to a two-year high.

The Standard & Poor’s/TSX Composite Index fell 24.14 points, or 0.2 percent, to 12,820.92 at 4 p.m. in Toronto, paring the weekly gain to 1.3 percent. The S&P/TSX closed at its highest level since March 12 yesterday.

“We’re seeing a bit of technical selling after the TSX reached a short-term high yesterday and has had a pretty good run the past few weeks,” said Youssef Zohny, a portfolio manager with Stenner Investment Partners of Richardson GMP Ltd. in Vancouver. Richardson GMP manages about C$15 billion ($14.4 billion).

Data showed Canadian employment increased by 59,200 last month and the jobless rate fell to 7.1 percent from 7.2 percent.

Economists surveyed by Bloomberg projected a 20,000 job increase and an unchanged jobless rate.

“Given the improved tone in the global economy, Canada is poised to enter a period of higher-than-potential growth resulting in more consistent gains in hiring and a gradual decline in the unemployment rate,” Dawn Desjardins, assistant chief economist at RBC Capital Markets, said in a note to clients today.

In the U.S., employers added 169,000 workers in August, following a revised 104,000 rise in July that was smaller than first reported. Economists surveyed by Bloomberg had called for a 180,000 gain. Unemployment fell to 7.3 percent from 7.4 percent. The data fueled speculation that any reduction in Federal Reserve stimulus will be limited.

“People were feeling pretty good about things going in with the jobs data, but with a print like this, maybe the U.S. economy isn’t ready for tapering,” said Michael O’Brien, fund manager with TD Asset Management Inc. in Toronto. The firm manages about C$216 billion ($207 billion).

Technology stocks declined 1.1 percent as eight of 10 groups in the S&P/TSX retreated. Trading volume was 14 percent below the 30-day average.

BlackBerry dropped 2.7 percent to C$11.29. The smartphone maker had risen 9 percent in the past three days amid speculation BlackBerry may sell itself as soon as November.

Niko Resources Ltd. slumped 10 percent to C$3.68 after Darren Engels, an analyst with FirstEnergy Capital, lowered his rating to underperform from market perform and cut his price target to C$3 from C$8.50 after accounting for the company’s financing needs and potential capital spending.

Suncor gained 1.2 percent to C$36.68 and Bankers Petroleum Ltd. advanced 3 percent to C$3.80 as crude gained 2 percent to $110.53 a barrel in New York, the highest since May 2011.

Bombardier lost 1.4 percent to C$4.91. The stock rallied 5.5 percent yesterday, the most since May 9, after announcing the sale of one of its units along with a jet order worth a minimum of $1.8 billion.

B2Gold added 4.8 percent to C$2.85 and Torex Gold jumped 8.1 percent to C$1.61. Gold rebounded from a two-week low, rising 1 percent to $1,386.50 an ounce in New York.

Air Canada increased 3.1 percent to C$3.03. The airliner plans to refinance about C$1.1 billion of its outstanding senior notes to extend the maturity of Air Canada’s long-term debt and lower costs of financing.

US

By Lu Wang and Nick Taborek

Sept. 6 (Bloomberg) — The Standard & Poor’s Index erased almost all its gains as an escalation in tension over Syria overshadowed slower-than-forecast jobs growth that eased concern about reductions in Federal Reserve stimulus.

Airlines slipped 0.9 percent as a group as crude oil rose to a two-year high. Mattress Firm Holding Corp. dropped 15 percent after cutting its forecast. American Tower Corp. climbed 4.6 percent after agreeing to acquire the parent company of rival Global Tower Partners for about $3.3 Billion. Lennar Corp. and D.R. Horton Inc. jumped at least 1.9 percent to pace gains among homebuilders as bond yields plunged.

The S&P 500 rose less than 1 point to 1,655.17 at 4 p.m. in New York. The gauge swung 1.5 percentage points during the session, the widest since June 24. The Dow Jones Industrial Average slipped 14.98 points, or 0.1 percent, to 14,922.50, snapping a three-day winning streak. About 5.9 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“It’s a very skittish stock market,” John Augustine, who helps manage $27 billion as chief market strategist at Cincinnati-based Fifth Third Bancorp, said in a phone interview.

“We’re in a period where markets will react quickly to external news from a variety of sources, whether it’s the bond market, the Middle East, or one single economic report.”

The S&P 500 erased gains of as much as 0.6 percent in the final hour of trading after a report from Al-Arabiya, citing unidentified activists, said forces for the regime of Bashar al- Assad shelled Damascus with gas.

The report stoked concern that the U.S. could take military action in Syria even as President Barack Obama acknowledged domestic and international resistance to his call for a strike.

One of the biggest hurdles to Obama’s efforts has been put up by Russian President Vladimir Putin.

Equities started the day higher before falling as much as 0.9 percent to the lowest level of the day after Putin said at the Group of 20 summit that his country will assist Syria if strikes are launched. Putin is Assad’s most powerful ally.

The S&P 500 recovered the losses by 11 a.m., turning higher as investors turned back to a Labor Department jobs report that eased concern about the size of potential Fed stimulus cuts.

Employers added 169,000 workers last month, missing the median forecast of 180,000 in a Bloomberg survey of 96 economists. The unemployment rate unexpectedly fell to 7.3 percent as more people left the labor force.

Central-bank stimulus has helped drive a global equity rally, with the S&P 500 rising as much as 153 percent from its bear-market low in 2009. The U.S. gauge fell as much as 4.6 percent from an Aug. 2 record as speculation grew that the Fed would begin winding down its monetary support after its next meeting on Sept. 17-18.

Today’s report on weaker jobs growth hasn’t derailed economists’ expectations that the Fed this month will taper its monthly bond buying by $10 billion, to $75 billion, according to the median of 34 responses today in a Bloomberg News survey of economists. That was unchanged from an Aug. 9-13 poll, as was a projection that the program will end in June.

“What the jobs report told us is that it’s a slow recovery, but it’s a recovery, so that while the Fed is likely to taper in September, it won’t be surprising to see a tiny taper as the Fed tries to wean the market off quantitative easing,” Kristina Hooper, a U.S. investment strategist at Allianz Global Investors in New York, said in a phone interview.

Her firm oversees $409 billion. “It could be an almost Goldilocks scenario where you have just enough tapering to satisfy the hawkish sentiment but too little to impact stock.”

Fed Bank of Chicago President Charles Evans, a voter on policy this year, said today the central bank shouldn’t taper until inflation and economic growth pick up. Esther George, the Fed Bank of Kansas City president who has consistently dissented against additional stimulus, called for tapering at this month’s meeting while cautioning that such reductions may prompt market volatility.

The S&P 500 capped a 1.4 percent advance over the holiday- shortened week for the biggest weekly increase since July 12.

The Chicago Board Options Exchange Volatility Index, or VIX, gained 0.5 percent to 15.85, snapping a three-day advance.

The equity volatility gauge is down 12 percent this year.

Half of 10 main S&P 500 groups fell as consumer- discretionary and raw-materials companies each slipped 0.2 percent. Utility shares rose 0.6 percent for the best performance.

The Bloomberg U.S. Airlines Index dropped 0.9 percent amid concern rising oil prices will boost fuel costs. Delta Air Lines Inc. lost 1.8 percent to $19.89 while US Airways Group Inc. declined 1.1 percent to $16.80.

Mattress Firm tumbled 15 percent to $35.59. The mattress retailer cut its profit forecast as same-store sales fell in the second quarter.

Smith & Wesson Holding Corp. fell 10 percent to $10.31. The handgun manufacturer forecast earnings to be no more than 22 cents a share in the fiscal second quarter. That trailed the average analyst estimate of 29 cents in a Bloomberg survey.

Real-estate shares jumped 2.1 percent for the best performance among 24 industries in the S&P 500. American Tower rallied 4.6 percent to $71.91. The biggest operator of cellular towers in the U.S. agreed to acquire MIP Tower Holdings LLC, giving it thousands of additional wireless sites as appetite for next-generation services grows.

An S&P index of homebuilders rebounded from a 12-month low, rising 2 percent, as a drop in bond yields eased concern that surging borrowing costs will hurt a housing recovery. Yields on 10-year Treasury notes fell the most in 10 months.

Lennar advanced 2.3 percent to $32.25. D.R. Horton climbed 1.9 percent to $18.10.

Facebook Inc. climbed 3 percent to a record $43.95. The owner of the world’s largest social-networking service had its share-price estimate boosted to $55 from $40 at SunTrust Robinson Humphrey Inc. E*Trade Financial Corp. climbed 4.6 percent to $16.26.

Goldman Sachs Group Inc. raised its recommendation on the online brokerage to buy from neutral.

Timken Co. rose 2.1 percent to an all-time high of $61.52.

The maker of ball bearings agreed to spin off its steel unit, dropping opposition to a plan pushed by Ralph Whitworth’s Relational Investors LLC after a shareholder vote and a Goldman Sachs Group Inc.-led review favored the split.

VeriFone Systems Inc. jumped 10 percent to $22.81, the highest since June 4. The maker of credit-card terminals forecast fourth-quarter sales of at least $418 million, topping the average analyst estimate of $412.9 million.

Have a wonderful weekend everyone.

Be magnificent!

It is only when we give complete attention to a problem,

and solve it immediately – never carrying it over to the next day,

the next minute – that there is solitude.

To have inward solitude and space is very important

because it implies freedom to be, to go, to function, to fly.

Krishnamurti, 1895-1986

As ever,

Carolann

True heroism is remarkably sober, very undramatic.  It is not the urge

to surpass others at all cost, but the urge to serve others at

whatever cost.

-Arthur Ashe, 1943-1993

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