June 11, 2014 Newsletter

Dear Friends,

Tangents:

BEE-AUTIFUL PORTRAITS

If you appreciate flowers in your garden or fresh vegetables every spring and summer, now you can get a close-up look at the bees that help to make them bloom.  Am Droege, head of the bee inventory and monitoring program at the US Geological survey, and a team of colleagues have figured out how to take detailed photographs of the more than 4,000 species of bees that live in North America.  Check out Droege’s photos on Flickr (http://bit.ly/BeeHeadshots) and read more about their work in National Geographic (http://bit.ly/NatGeobees).

Photos of the day

A monkey cools off in a water tub on the premises of a Hindu temple on a hot summer afternoon in Jammu, India. Severe heat conditions are prevailing across northern India with temperatures soaring past 45 degrees Celsius (113 Fahrenheit) at several places. Channi Anand/AP

A man fishes for striped bass on the mud shores of the Stewiacke River in Stewiacke, Nova Scotia, Canada. The striped bass is a coastal species found in rivers, estuaries, and inshore waters of eastern North America and can weigh over 50 kilograms. Andrew Vaughan/The Canadian Press/AP

Market Closes for June 11^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

June 11 (Bloomberg) — Canadian stocks fell for the first time in nine days as the nation’s largest lenders dropped after Moody’s Investors Service cut its credit outlook for the banks.

Bank of Montreal and Royal Bank of Canada both lost 0.5 percent as Moody’s cut the outlook for the nation’s seven largest banks to negative due to rules that would limit government support. Sherritt International Corp. slumped 3.9 percent as nickel fell in London to the lowest in almost four weeks. AuRico Gold Inc. and Argonaut Gold Inc. jumped more than 6.7 percent to pace gains among gold producers.

The Standard & Poor’s/TSX Composite Index fell 12.25 points, or 0.1 percent, to 14,892.13 at 4 p.m. in Toronto. The benchmark equity gauge is 1.2 percent away from its record closing high of 15,073.13 on June 18, 2008. The price-to- earnings ratio for the benchmark equity gauge is 19.9, the highest since 2011.

Bank of Montreal dropped 0.5 percent to C$76.81 and Royal Bank of Canada declined 0.5 percent to C$74.84 as financial companies slipped 0.4 percent as a group. Five of 10 industries in the S&P/TSX retreated on trading volume about 10 percent higher compared with the 30-day average.

Moody’s today changed its outlook for the nation’s largest lenders to negative from stable. In a statement, the credit ratings company said “balance of risk for the Canadian banks’ senior debt holders and uninsured depositors has shifted to the downside” as a result of pending government legislation that will probably shift the burden of bank bailouts to bondholders.

Oryx Petroleum Corp., which explores for oil in Africa and the Middle East, sank 3.5 percent to C$13.51 as Iraqi forces fought a breakaway al-Qaeda group across northern and central Iraq for control of a region that’s home to a key oil refinery.

USA

By Oliver Renick

June 11 (Bloomberg) — U.S. stocks fell the most in three weeks, with the Dow Jones Industrial Average halting a five-day rally, as the World Bank cut its forecast for global growth and Boeing Co. sank.

The world’s largest plane maker dropped the most in two months after U.S. House Majority Leader Eric Cantor’s defeat in a primary election threatened congressional reauthorization of low-cost lending that benefits the company. Bank of America Corp. dropped 2.1 percent after a report said the Justice Department may seek $17 billion to settle probes into mortgage lending. Anadarko Petroleum Corp. rose to a record amid speculation of a takeover. H&R Block Inc. added 4.6 percent after reporting sales that topped analysts’ forecasts.

The Standard & Poor’s 500 Index declined 0.4 percent to 1,943.89 at 4 p.m. in New York, the most since May 20. The Dow average retreated 102.04 points, or 0.6 percent, to 16,843.88, ending a streak that pushed it to an all-time high. About 5.2 billion shares changed hands on U.S. exchanges today, 17 percent below the three-month average at this time of day.

“That negative movement is the World Bank adding pressure with concerns about growth,” Robert Pavlik, chief market strategist at Banyan Partners LLC in New York, said in a phone interview. Pavlik helps oversee $4.5 billion. “People are tentative with a market that’s trading near all-time highs with low growth prospects.”

Cantor lost to a Tea Party-backed candidate in last night’s Virginia primary, fueling concern about further gridlock in Washington. The defeat could also have long-range market repercussions, as the seven-term House veteran was an ally for Wall Street on issues ranging from the 2008 Troubled Asset Relief Program to defending the Export-Import Bank.

“There were very few folks who expected this,” Michael Block, chief strategist at New York-based Rhino Trading Partners LLC, said in an interview. “I’m not concerned about the debt ceiling but some are and I will say Cantor was good at finding compromises relative to the rest of the party.”

Since Republicans took control of the House in 2011, debates over the debt limit — the total amount of money the U.S. government can borrow to finance existing obligations such as Social Security and Medicare — led to eleventh-hour showdowns that raised concerns that the government could default on its obligations, roiling financial markets. Congress voted in February to suspend the limit until March 15, 2015.

Cantor’s defeat raises concerns about the future of political compromise, Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said.

“I hope it doesn’t mean that it will be impossible from this point forward to compromise on issues like the budget, immigration policy,” Blankfein said in a television interview with CNBC today. “This is not necessarily a good signal but we’ll have to see how this plays out.”

The S&P 500 slipped less than one point yesterday, halting a four-day rally, as investors considered equity valuations. The gauge trades at 16.4 times the projected earnings of its members, up from a multiple of 14.8 at the beginning of February. The index has advanced 7.1 percent through yesterday since a low on April 11.

The World Bank forecast in a report that the global economy will expand 2.8 percent this year, down from a January projection of 3.2 percent. The lender predicted slower growth for the U.S., China, Russia, India and Brazil. It left the estimate for world growth in 2015 unchanged at 3.4 percent.

The Chicago Board Options Exchange Volatility Index rose 5.7 percent to 11.62. The gauge, known as the VIX, dropped 5.9 percent last week to 10.73, the lowest level since February 2007.

Nine of the 10 main S&P 500 groups retreated, with industrial and utility stocks losing at least 0.8 percent to pace declines.

Boeing slid 2.3 percent to $134.10 for the biggest drop in the Dow. The planemaker is the “biggest loser” other than Cantor in last night’s primary, Chris Krueger, a senior policy analyst for Guggenheim Securities LLC, said, as the defeat imperils financing for the Export-Import Bank. Boeing said last month the lender would support $10 billion in sales this year.

Bank of America sank 2.1 percent to $15.59. The U.S. Justice Department is seeking about $17 billion from Bank of America Corp. to settle probes into its handling of mortgages ahead of the financial crisis, the New York Times reported.

Hilton Worldwide Holdings Inc. slid 2.7 percent to $22.81 after registering to sell 90 million shares held by Blackstone Group LP. The world’s largest lodging company by market value has climbed 17 percent since raising $2.35 billion in its Dec. 11 initial public offering.

Orexigen Therapeutics Inc. dropped 15 percent to $5.81. The biopharmaceutical company said the Food and Drug Administration will take an additional three months to review its new weight- loss drug.

Anadarko Petroleum jumped 4.2 percent to $108.32, an all- time high. Theflyonthewall.com reported “renewed takeover chatter” today on the company.

CBS Corp. added 1.1 percent to $61.80. The owner of the most-watched television network said it will fully divest its 81 percent stake in CBS Outdoor Americas Inc. The company will offer shareholders the option to exchange CBS Class B stock for shares of CBS Outdoor stock at a 7 percent discount.

H&R Block rose 4.6 percent to $32.15, the highest since February. The biggest U.S. tax preparer said fiscal fourth- quarter profit climbed 35 percent as higher prices for its services and more online business boosted revenue.

Synaptics Inc. jumped 29 to a record $85.78 after agreeing to buy Renesas SP Drivers Inc., a maker of chips for smartphones and tablets. The provider of touch-screen technology said it will acquire Renesas within three to four months.

Have  a wonderful evening everyone.

Be magnificent!

Why is this division between man and man, between race and race, culture against culture,

one series of ideologies set one against another?   Why?

Why is there this separation?

Krishnamurti, 1895-1986

As ever,

Carolann

I’ve learned that people will forget what you said, people will forget

what you did, but people will never forget how you made them feel.

-Maya Angelou, 1928-2014

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