September 18, 2014 Newsletter

Dear Friends,

Tangents:

On this day in 1970, Jimi Hendrix passed away from a drug overdose. The rock musician was 27 years old at the time of this death.

1851- New York Times first published.

PHOTOS OF THE DAY

A man looks at a Twizy, the Renault electric city car, during a presentation of the Wattmobile, a new self-drive Autolib-style electric car service at Gare de l’Est train station in Paris. Charles Platiau/Reuters

Piper Anton Doherty plays to passers-by in front of the Houses of Parliament on Westminster Bridge in London as Scotland votes on independence. Luke MacGregor/Reuters

Market Closes for September 18^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Sept. 18 (Bloomberg) — Canadian stocks were little changed after erasing declines in the final hour of trading, as banks rallied to offset a slump in gold producers.

     Royal Bank of Canada and Bank of Montreal each advanced 0.7 percent to all-time highs, as financial shares rose the most in the benchmark index. TransCanada Corp. jumped 3.3 percent after Reuters reported U.S. hedge funds are reviewing the company for a possible breakup. Penn West Petroleum Ltd. jumped 7.6 percent after completing an internal review of its accounting practices. Detour Gold Corp. retreated 6.5 percent as the metal sank to an eight-month low.

     The Standard & Poor’s/TSX Composite Index rose 6.66 points, or less than 0.1 percent, to 15,465.54 at 4 p.m. in Toronto. The gauge fell as much as 0.2 percent earlier in the day, touching a one-month low. It has advanced 14 percent this year, the second- best performer among the world’s developed markets behind Denmark.

     Six of 10 industries in the benchmark Canadian equity index advanced on trading volume 17 percent higher than the 30-day average at this time of day.

     An index of financial stocks rose 0.5 percent for a third day of gains and record close.

     Penn West jumped 7.6 percent to C$8.32. The company restated its annual financial statements as a result of the internal review while maintaining its output goals and dividend.

     Air Canada climbed 4.5 percent to C$9.01. The company added baggage fees and said it may consider a share buyback or increased dividend.

     Detour Gold retreated 6.5 percent to C$9.26 as raw- materials stocks dropped 1.5 percent as a group to the lowest since June. Gold declined 0.7 percent to $1,226.90 an ounce in New York.

USA

By Oliver Renick

     Sept. 18 (Bloomberg) — U.S. stocks rose for a third day, sending benchmark indexes to records, as data showed fewer Americans filed for jobless claims and investors speculated interest rates will remain low.

     ConAgra Foods Inc., owner of the Chef Boyardee and Healthy Choice food brands, gained 4.6 percent after reporting earnings that topped estimates. Kohl’s Corp. added 1.6 percent after analysts at Citigroup Inc. told clients to buy the shares. Rite Aid Corp. tumbled 19 percent after saying lower reimbursement rates and higher costs for drugs hurt profit. AOL Inc. rallied on takeover speculation.

     The Standard & Poor’s 500 Index advanced 0.5 percent to 2,011.36 at 4 p.m. in New York. The Dow Jones Industrial Average added 109.14 points, or 0.6 percent, to an all-time high of 17,265.99. The Nasdaq Composite Index and Russell 2000 Index gained at least 0.5 percent.

     “The market’s still in Fed mode,” Joe Bell, a senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said in a phone interview. “A majority of people are thinking July 2015 may be the rate increase and the market’s responding positively to the idea that rates aren’t coming any sooner.”

     Stocks advanced yesterday, sending the S&P 500 up as much as 0.6 percent, after the Fed renewed its pledge to keep interest rates near zero for a “considerable time” after its bond-buying program ends, probably next month. Policy makers also projected a steeper increase in borrowing costs next year, raising the median forecast for the benchmark rate at the end of 2015 to 1.375 percent from June’s estimate of 1.125 percent.

     “Anytime the Fed speaks it can move markets and it’s more true today than ever because we’re at an inflection point where non-traditional monetary policy that’s almost been on auto pilot is coming to a close and we’re shifting our focus to traditional policy,” Ron Sanchez, executive vice president and chief investment officer at New York-based Fiduciary Trust Co. International, said by phone.

     Alibaba Group Holding Ltd., the Chinese e-commerce giant, intends to pick a price for its nearly $22 billion initial public offering tonight. The company is asking investors to value it as high as $167.6 billion, or 29 times estimated earnings in the year through March. That’s still below Tencent, Baidu Inc. and Amazon.com Inc.

     Jobless claims decreased by 36,000 to 280,000 in the period ended Sept. 13, the Labor Department said today. The median forecast of 52 economists surveyed by Bloomberg called for a decline to 305,000. Those already collecting unemployment benefits fell to a more than seven-year low.

     Financial shares led gains among the 10 primary industries in the S&P 500, as bank stocks climbed 1.5 percent as a group and insurers advanced 1.1 percent.

     CME Group Inc. gained 2.8 percent to $82.96, extending gains to a seventh session. Citigroup Inc. and Prudential Financial inc. jumped at least 2.4 percent.

     ConAgra increased 4.6 percent to $33.48. The maker of packaged meals and condiments reported earnings of 39 cents a share, excluding some items, exceeding the average 35-cent estimate from analysts surveyed by Bloomberg.

     AOL Inc. jumped 3.3 percent after a strategist at BGC Financial LP said investors should position themselves for gains in the stock. AOL may have a “seasonally stronger” December quarter and could be target of a takeover by Yahoo Inc! after that company’s windfall of cash following the Alibaba IPO, according to derivatives strategist Richard Anthony.

     Kohl’s added 1.6 percent to $62.50. The stock was raised to buy from neutral at Citigroup.

     MSCI Inc. climbed 5.8 percent to $48.98, the biggest advance in the Russell 1000 Index, after increasing its share buyback plans.

     Rite Aid dropped 19 percent to $5.41. The company said net income for 2015 is expected to be 22 cents to 33 cents a share. The drugstore company previously forecast 30 cents to 40 cents.

     Pier 1 Imports Inc. slumped 19 percent to $12.66. Analysts from Barclays Plc to Wells Fargo & Co. cut their rating on the stock after the company reduced its annual-profit forecast, citing weak customer traffic and slimmer margins.
 

Have a wonderful evening everyone.

Be magnificent!

It is quite proper to resist and attack a system but,

to resist and attack its author is tantamount to resisting and attacking oneself.

For we are all tarred with the same brush.

Mahatma Gandhi

As ever,

Carolann

If you’re going through hell, keep going.

            Winston Churchill, 1874-1965

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