March 6, 2014 Newsletter

Dear Friends,

Tangents:

March 6,1475, Michelangelo was born.
1806, poet Elizabeth Barrett Browning was born.
March 6, 1899, Bayer patents Aspirin.
Also on this day in 1912, Nabisco made the first Oreo cookie.
1928, writer Gabriel Garcia Marquez was born.

-from A Drama of Exile
Elizabeth Barrett Browning

Thy love
Shall chant itself its own beatitudes,
After its own life-working.  A child’s kiss,
Set on thy sighing lips, shall make thee glad:
A poor man, served by thee, shall make thee rich;
An old man, helped by thee, shall make thee strong;
Thou shalt be served thyself by every sense
Of service which thou renderest.

Photos of the day

A group of people pose for pictures with Wayne Garrett and Caitlind Brown of Canada’s light installation ‘CLOUD’ during a media preview of the i Light Marina Bay festival in Singapore. A total of twenty-eight groups of local and international artists took part in the biennial sustainable light art festival.Edgar Su/Reuters

Mars’s northern-most sand dunes are seen as they begin to emerge from their winter cover of seasonal carbon dioxide (dry) ice in this image acquired by the HiRISE camera aboard NASA’s Mars Reconnaissance Orbiter January 16, 2014. The steep lee sides of the dunes are also ice-free along the crest, allowing sand to slide down the dune. Dark splotches are places where ice cracked earlier in spring, releasing sand, according to a NASA news release. JPL-Caltech/Univ. of Arizona/NASA/Reuters

Market Closes for March 6^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

March 6 (Bloomberg) — Canadian stocks fell, after reaching a five-year high yesterday, as investors weighed developments in Ukraine and assessed U.S. economic data before a jobs report tomorrow.

SNC-Lavalin Group Inc. dropped 4.1 percent after quarterly profit fell. Valeant Pharmaceuticals International Inc. plunged 5.3 percent for its biggest slide in almost two years. Air Canada jumped 8 percent for a third day of gains. Pretium Resources Inc. added 3.2 percent as gold rallied. Royal Bank of Canada fell 0.7 percent to pace declines among the nation’s biggest lenders.

The Standard & Poor’s/TSX Composite Index fell 32.25 points, or 0.2 percent, to 14,271.92 at 4 p.m. in Toronto. The index has gained 4.8 percent this year. Trading was 9.7 percent below the 30-day average.

“We’re flipping around a bit here,” said Andrew Pyle, fund manager at ScotiaMcLeod Inc. in Peterborough, Ontario. He manages about C$220 million ($200 million). “This market is treading softly right now. No one is going to make an aggressive bet. You’re going to see a meandering market going into payrolls tomorrow, and then awaiting further developments in the Ukraine.”

U.S. and European leaders intensified diplomatic efforts to defuse the crisis in Ukraine, after Russia’s foreign minister evaded a U.S. attempt to get him to talk to his counterpart in Kiev. Crimean lawmakers called a March 16 referendum to return Ukraine’s Black Sea peninsula to Russia.

Data from the U.S. today showed that fewer Americans than projected filed applications for unemployment benefits last week, an indication companies are holding on to staff even as cold weather threatens to slow the world’s largest economy. The Labor Department will release its February jobs report tomorrow.

“The claims data provides some early evidence of a modest improvement in the employment picture heading into March,” said Josh Nye, economist at RBC Capital Markets, in a note to clients. “We expect more robust employment growth in the coming months as firms become more confident in hiring.”

Mario Draghi, European Central Bank president, said inflation in the euro region will accelerate over the next 2 1/2 years, as he maintained the bank’s commitment to keeping interest rates low for “an extended period of time.” Gold, seen by investors as a hedge against inflation, rallied 0.9 percent in New York.

Five of 10 main groups in the S&P/TSX fell today, led by a  4.5 percent drop among health-care companies. Valeant Pharmaceuticals International Inc. slumped 5.3 percent to C$151.53, the biggest decline since May 2012.

Royal Bank of Canada slipped 0.7 percent to C$71.87 and Bank of Montreal lost 0.4 percent to C$72.29 as the S&P/TSX Financials Index retreated 0.3 percent as a group.

SNC dropped 4.1 percent to C$46.39, the biggest decline since October. Canada’s largest engineering company reported a fall in fourth-quarter profit and said earnings would be less than analysts were estimating in 2014 due to a slump in commodity markets and unprofitable road projects.

An index of materials producers advanced 0.6 percent, a fourth straight gain that left the gauge with the highest close since April.

Novagold Resources Inc. climbed 6 percent to C$4.75 for a sixth day of gains. Pretium Resources added 3.2 percent to C$7.42.

Sherritt International Corp., which owns an interest in a nickel and cobalt metals business, jumped 7.6 percent to C$3.54 for a third day of gains. Nickel reached a nine-month high amid concern that the U.S. will impose trade sanctions on Russia, exacerbating supply constraints.

Air Canada, the nation’s largest airline, jumped 8 percent to C$6.48, the biggest increase in six weeks. The stock, the best performer in the S&P/TSX last year with a 323 percent advance, has rallied 12 percent in the past three days.

USA
By Callie Bost

March 6 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to an all-time high, as data showed jobless claims fell to the lowest level in three months and investors watched developments in Ukraine.

Yum! Brands Inc. gained 3.3 percent after Robert W. Baird & Co. raised the stock’s rating. Pluristem Therapeutics Inc. climbed 4.2 percent after getting regulatory approval for manufacturing stem-cell therapy products. Costco Wholesale Corp. slipped 2.8 percent after posting fiscal second-quarter profit that missed analysts’ estimates. Staples Inc. plunged 15 percent after saying it will close as many as 12 percent of its North American stores.

The S&P 500 gained 0.2 percent to a record 1,877.03 at 4 p.m. in New York. The Dow Jones Industrial Average added 61.71 points, or 0.4 percent, to 16,421.89. About 6.5 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“We need to get away from the latest noise and headlines and look at the fundamental trends in place,” Rob Stein, chief executive officer at Chicago-based Astor Investment Management, which manages $700 million, said by phone. “We’ve been adding jobs, GDP growth is positive, earnings are showing a positive trend, inflation is relatively low and while a lot of the stuff could be much, much better, the trend is still productive.”

The S&P 500 fell less than one point yesterday as investors assessed weaker-than-estimated data on payrolls and services. The gauge rallied the most this year to close at a record on March 4 as concern eased that Russia’s intervention in the Crimean peninsula would lead to a broader conflict and disrupt markets.

Fewer Americans than projected filed applications for unemployment benefits last week, an indication companies are holding on to staff even as cold weather threatens to slow the world’s largest economy. The Labor Department will release its February jobs report tomorrow.

Separate data indicated factory goods orders in January fell 0.7 percent compared with a forecast for a decline of 0.5 percent.

The Federal Reserve said yesterday in its Beige Book business survey that the economy in most regions grew last month even as harsh winter weather impeded hiring. Investors have been speculating that recent weakness in data from housing to jobs was caused by inclement weather.

Three rounds of Fed stimulus have helped push the S&P 500 up 177 percent from a 12-year low, as U.S. equities are set to enter the sixth year of a bull market that started March 9, 2009.

The European Central Bank kept interest rates unchanged at a record low of 0.25 percent today, as stronger inflation and economic output reduced the need for officials to take action. The decision was forecast by 40 out of 54 economists in a Bloomberg News survey.

President Barack Obama said the U.S. and its allies will keep raising pressure on Russia to back down in Ukraine and held open the possibility of further sanctions if Vladimir Putin’s government doesn’t respond. His administration earlier banned visas for Ukrainian officials and others, including Russians, who it says are threatening Ukraine’s sovereignty. Obama also authorized the imposition of financial sanctions.

Crimean lawmakers called a March 16 referendum to return Ukraine’s Black Sea peninsula to Russia. European Union governments halted trade and visa negotiations with Russia and prepared sanctions against selected Russian officials.

“It’s one of those things that could come back and become the most important event at any time,” James Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees about $360 billion in assets. “The concern is still there but it’s rapidly losing its focus. At least it’s gotten itself to a situation where it won’t have an affect economically until it flares up again.”

The tensions sent the Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility, surging 14 percent on March 3. The VIX tumbled 12 percent the next day. The index rose 2.3 percent to 14.21 today.

Investors have added $9 billion to U.S. equity exchange- traded funds in the past five days and withdrawn $7.3 billion from bond ETFs, data compiled by Bloomberg show. Real-estate stocks absorbed the most money among industry ETFs, taking in nearly $900 million during the past week.

Seven of 10 main S&P 500 groups advanced. Financial shares rallied 0.7 percent to lead the gains and close at the highest level since September 2008. JPMorgan Chase & Co. jumped 1.3 percent to $58.90 for a third day of gains.

Yum climbed 3.3 percent to $77.29. Robert Baird analyst David Tarantino upgraded the stock’s rating to outperform, the equivalent of buy, from neutral, with a 12-month target price of $87 a share.

Sangamo Biosciences Inc. jumped 17 percent to $22.96 after the company said its experimental treatment lowered the amount of HIV in some AIDS patients.

Pluristem rose 4.2 percent to $4.23. The Food and Drug Administration gave its approval for the company to manufacture placenta-based cell therapies at its new production unit.

Pixelworks Inc. soared 88 percent to $9.00, the highest since October 2006. The semiconductor company’s sales to Apple Inc. represented more than 10 percent of its annual revenue, according to a March 5 regulatory filing. The previous year’s filing did not list the iPhone maker under customers that contribute at least 10 percent to total sales.

An index of pharmaceutical and biotechnology stocks fell 1 percent for the biggest drop among 24 S&P 500 groups. Actavis Plc slid 4.7 percent and Celgene Corp. dropped 4.1 percent for the steepest slides. The gauge is up 8.2 percent this year.

Costco Wholesale slipped 2.8 percent to $113.26. The largest U.S. warehouse-club chain said net income in the quarter ended Feb. 16 fell 15 percent to $1.05 a share from $1.24 a year earlier. Analysts projected profit of $1.17, the average of estimates compiled by Bloomberg.

Staples plunged 15 percent to $11.35 for the biggest drop in the S&P 500. The largest office-supplies chain will close as many as 225 stores in North America and reduce costs by as much as $500 million by the end of 2015, as it forecast sales to drop for a fifth consecutive quarter.

Have a wonderful evening everyone.

Be magnificent!

Meditation is one of the greatest arts in life, perhaps the greatest,

and one cannot possibly learn it from anybody else,

that is the beauty of it.

It has no technique and therefore no authority.

When you learn about yourself, watch yourself, watch the way you walk,

how you eat, what you say, the gossip, the hate, the jealousy –

if you are aware of all that in yourself, without any choice,

that is part of meditation.

Krishnamurti, 1895-1986

As ever,

Carolann

The inevitable has always found me

ready and hopeful.

-Amelia Barr, 1831-1919

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7