August 11, 2014 Newsletter

Dear Friends,

Tangents:

Hope you caught a glimpse of the supermoon last night – it was beautiful – blazing white! The Perseid meteteor showers begins tonight, and we will be dazzled with shooting stars for the next few nights. There will be plenty of meteors to view tonight but the shower is set to peak tomorrow night, i.e., Tuesday night.

The American Meteor Society has a handy night sky guide to find the constellation Perseus, the area where Perseid meteoroids look like they are coming from, and tips on when to view the Perseids. “Anytime from midnight to dawn will be the best time to see the most activity. I would suggest facing away from the moon and concentrate your view at approximately one-half the way up in the sky. Most of the faint Perseids will be obscured by the bright moonlight,” said AMS’ Robert Lunsford.

Photos of the DayThe supermoon is pictured behind the Christ the Redeemer statue in Rio de Janeiro. Occurring when a full moon or new moon coincides with the closest approach the moon makes to the Earth, the supermoon results in a larger-than-usual appearance of the lunar disk. Pilar Olivares/Reuters

Chinese artist Zhou Jie takes a nap on a wire bed, one of her sculpture works, at Beijing Now Art Gallery, in Beijin. The bed is part of her installation ’36 days,’ in which she lives in the gallery space. Jason Lee/Reuters

Market Closes for August 11^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

Aug. 11 (Bloomberg) — Canadian stocks rose a second day as data showed housing starts beat economists’ estimates and tensions eased in the Middle East and Europe.

Tekmira Pharmaceuticals Corp., which is developing an experimental Ebola treatment, jumped 12 percent as the World Health Organization holds a panel today discussing the drugs for the ongoing outbreak in West Africa. Painted Pony Petroleum Ltd. and Pacific Rubiales Energy Corp. added at least 2.2 percent to pace gains among oil producers.

The Standard & Poor’s/TSX Composite Index rose 65.33 points, or 0.4 percent, to 15,261.64 at 4 p.m. in Toronto. The benchmark equity gauge has climbed 12 percent this year, the second-best performer among the world’s developed markets behind Denmark.

Toronto-Dominion Bank, the country’s largest lender by assets, increased 1.6 percent to C$56.48, the most since May, and Brookfield Asset Management Inc. added 3.4 percent to C$50.97. The S&P/TSX Financials Index rose 0.7 percent. Canada’s housing starts rose 0.7 percent in July to a seasonally-adjusted annual pace of 200,098 units, the fastest since October. Economists had forecast a decline to 193,000.

Tekmira, surged 12 percent to C$25.84, highest since March 26. The drug developer has rallied 76 percent in the past three days as U.S. regulators said the company could possibly give its experimental Ebola drug to people infected with the deadly disease.

Painted Pony added 2.7 percent to C$12.32 and Pacific Rubiales increased 2.2 percent to C$21.82.

Israeli and Palestinian negotiators are resuming talks for a long-term agreement on the Gaza Strip after the two sides agreed yesterday to a 72-hour truce brokered by Egypt. Using fighter jets and drones, the U.S. destroyed several armed trucks and a mortar position held by Iraqi militants, the U.S. Central Command in Tampa, Florida, said yesterday.

Imperial Metals Corp. rallied 1.5 percent to C$10.52 for a second day of gains after the company said it doesn’t see any signs that a burst dam at its Mount Polley copper-and-gold mine will delay the start-up of another mine it’s developing elsewhere in the province.

The dam at Mount Polley, which had been holding mine waste, unleashed about 10 million cubic meters (2.64 billion gallons) of water and 4.5 million cubic meters of ground-up rock when it spilled on Aug. 4. Imperial Metals plunged 39 percent on Aug. 5.

Avigilon Corp. tumbled 7.7 percent to C$20.38, the lowest since May 28, for a third day of declines. The surveillance equipment maker reported worse-than-forecast second-quarter earnings on Aug. 7.

US
By Elena Popina

Aug. 11 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its first back-to-back gains in two weeks, on optimism that tension between Russia and Ukraine will ease and American airstrikes will push back militants in Iraq.

MannKind Corp. advanced 4.9 percent after Sanofi agreed to pay the drugmaker as much as $925 million for rights to the world’s only available inhaled insulin. Kinder Morgan Inc. rallied 9 percent after announcing plans to consolidate its energy businesses. Priceline Group Inc. rose 2.2 percent after reporting better-than-forecast second-quarter bookings. Dean Foods Co. fell 3.9 percent after withdrawing its full-year profit forecast amid a volatile dairy market.

The S&P 500 gained 0.3 percent to 1,936.92 at 4 p.m. in New York. The Dow Jones Industrial Average climbed 16.05 points, or 0.1 percent, to 16,569.98, trimming earlier gains of 0.5 percent. The Russell 2000 Index of small stocks rallied 0.9 percent, while the Nasdaq Composite Index added 0.7 percent. About 5.1 billion shares changed hands on U.S. exchanges, 10 percent below the three-month average.

“There is some sense that geopolitical risk out there is waning, or at least the situation is better than the belligerent talk that was coming out in middle of last week,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “We’re at lower levels than we were two weeks ago, so there’s a better entry point if you look to add stocks to your portfolio.”

The S&P 500 advanced 1.2 percent on Aug. 8 to erase declines in the previous four sessions, after reports indicated Russia intended to de-escalate the conflict in Ukraine and had ended military exercises held since Aug. 4 near its border with the country.

Ukrainian President Petro Poroshenko said today there would be an international humanitarian mission to the city of Luhansk under the auspices of the Red Cross, involving the U.S., the European Union and Russia. Earlier today, Russian Foreign Minister Sergei Lavrov said agreement had been reached with the Ukrainian government on providing aid.

In the Middle East, U.S. jets and drone aircraft hit Islamic State fighters in multiple attacks in Iraq, while Israeli and Palestinian negotiators staked out positions for a long-term agreement on the Gaza Strip amid a new Egyptian- brokered truce.

The S&P 500 had fallen 3.9 percent from its record of 1,987.98 on July 24 on concern that conflicts from Iraq to Israel and Ukraine could slow global economic growth.

The equities benchmark has gone without a 10 percent correction since 2011. It trades at 17.5 times the reported earnings of its companies, after reaching a four-year high of 18.3 in June.

U.S. equities advanced today as technical analysts said stocks will likely extend last week’s rebound. A “tradeable bounce” may be in progress, wrote Jonathan Krinsky at MKM Partners LLC in a note, citing 1,965 as a key level for the S&P 500. About 50 percent of shares in the S&P 500 are oversold, according to Katie Stockton of BTIG LLC.

The index on Aug. 7 came within 60 points of wiping out its gains for 2014 and closed below its 100-day moving average for the first time since April before rallying the following day.

The Chicago Board Options Exchange Volatility Index, which usually moves in the opposite direction to the S&P 500, tumbled 9.8 percent to 14.23 today.

Seven out of 10 of the main S&P 500 groups advanced, with producers of consumer staples and information technology companies rallying at least 0.6 percent for the biggest gains.

Sysco Corp. added 3.2 percent to $37.44. The food- distribution company reported fiscal fourth-quarter revenue of $12.3 billion, topping the $12.2-billion average estimate of eight analysts compiled by Bloomberg.

Intel Corp. jumped 1.3 percent, the most in the Dow, while Micron Technology Inc. rose 2.3 percent to lead semiconductor shares higher.

MannKind advanced 4.9 percent to $8.53. Sanofi will take 65 percent of any profit or loss related to sales of the drug — Afrezza — while MannKind will get 35 percent, the two companies said in a statement today. Paris-based Sanofi will also advance MannKind as much as $175 million in expenses.

Kinder climbed 9 percent to $39.37, for the biggest gain in the S&P 500. The company will acquire all of Kinder Morgan Energy Partners LP, Kinder Morgan Management LLC and El Paso Pipeline Partners LP in a series of transactions valued at about $44 billion, according to a statement yesterday. Kinder Morgan Management jumped 24 percent to $95.42.

Priceline added 2.2 percent to $1,309.28 to lead a rally in discretionary shares. Bookings in the recent period rose 34 percent to $13.5 billion, the Norwalk, Connecticut-based company said today in a statement. That topped Priceline’s May projection for a 32 percent gain. Rival Expedia Inc. climbed 1.4 percent to $83.94. The shares earlier today reached $85.89, the highest on record.

Tesla Motors Inc. added 4.5 percent to $259.32 to close at a record high. Deutsche Bank AG lifted its rating on the Palo Alto, California-based electric carmaker to buy from hold.

Dean Foods lost 3.9 percent to $15.20. The largest U.S. dairy processor said it is operating in the most difficult environment in its history as it battles higher prices for raw milk.

Have a wonderful evening everyone.

Be magnificent!

He who seeks to understand violence belongs to no country, no religion, no political party, no particular system.

What matters to him is the complete understanding of humanity.

According to one school violence is found inside a man;

according to another, it is the result of his social and cultural heritage.

Neither of these viewpoints interests us:

they have no importance; what is important is the way that we are violent,

not the reason for it.

Krishnamurti, 1895-1986

As ever,

Carolann

Imagination is the highest kite one can fly.

-Lauren Bacall, 1924-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7