November 6, 2014 Newsletter

Dear Friends,

Tangents:

Full moon tonight!  Enjoy the beauty.

PHOTOS OF THE DAY

A full moon rises seen from a hilltop overlooking the Syrian city of Kobani, outside Suruc, on the Turkey-Syria border. Kobani, also known as Ayn Arab, and its surrounding areas, has been under assault by extremists of the Islamic State group since mid-September and is being defended by Kurdish fighters. Vadim Ghirda/AP

A murmuration of starlings put on a display near the town of Gretna, Scotland. Owen Humphreys/AP

Market Closes for November 6^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Nov. 6 (Bloomberg) — Canadian stocks rose a second day, after gaining the most in two weeks yesterday, as Air Canada and Kinross Gold Corp. rallied on better-than-forecast earnings.

     Air Canada soared 5.4 percent as earnings topped estimates on fuller planes and expanding routes. Kinross rallied the most in six years as sales advanced. Cott Corp. added 3.5 percent after agreeing to buy DSS Group Inc. for about $1.25 billion to expand into new markets. SNC-Lavalin Group Inc. plunged 8.4 percent after the engineering firm reduced its annual profit outlook and said it will cut 4,000 jobs.

     The Standard & Poor’s/TSX Composite Index rose 15.12 points, or 0.1 percent, to 14,563.38 at 4 p.m. in Toronto. The index has rebounded 5 percent from a low on Oct. 15.

     Investors weighed comments by Mario Draghi on the European Central Bank’s stimulus plans. Draghi, speaking at a press conference in Frankfurt, said policy makers were unanimous on the use of more stimulus if needed as the ECB held benchmark interest rates unchanged at record lows.

     Canada building permits rose in September, led by gains in Toronto, by 12.7 percent to C$7.5 billion ($6.58 billion) after a 27.3 percent drop in August, Statistics Canada said. Economists had forecast a 5 percent gain.

     Cott, a maker of private-label soft drinks and ice teas, rose 3.5 percent to C$7.15, paring an earlier gain of as much as 16 percent. The deal accelerates Cott’s strategy of diversifying beyond carbonated drinks and juices and extends the company’s distribution channel beyond large retail and supermarket stores.

     Seven of 10 industries in the benchmark Canadian equity gauge advanced today on trading volume in line with the 30-day average.

     SNC, the Montreal-based engineering services company, sank 8.4 percent to C$42.34, the biggest drop in more than two years. The job cuts, which will mostly be outside of Canada, will cost the company C$300 million over the next 18 months. The move comes as slowing economic growth in some emerging markets compounds a global mining slump.

     Pacific Rubiales Energy Corp. slumped 9.1 percent and Penn West Petroleum Ltd. lost 2.5 percent as crude futures slid for a fifth time in six days after OPEC cut forecasts for the amount of oil it needs to supply.

     Kinross surged 12 percent to C$2.54, the strongest rally since November 2008. Kinross posted earnings and sales ahead of analysts’ projections in the third quarter, and said 2014 production is expected to come in at the high end.

     Iamgold Corp. climbed 12 percent to C$1.96 and Barrick Gold Corp. increased 3.6 percent to C$12.97. The S&P/TSX Materials Index advanced 1.9 percent, the most in the broader gauge.

US

By Joseph Ciolli

     Nov. 6 (Bloomberg) — U.S. stocks rose, sending benchmark indexes to records, as the European Central Bank vowed to increase stimulus efforts if needed and a drop in American jobless claims bolstered optimism in the economy.

     Tesla Motors Inc. rose 4.4 percent as it predicted “several years” of 50 percent sales growth amid a surge in orders. Whole Foods Market Inc. rose 12 percent after posting better-than-forecast quarterly profit. Genworth Financial Inc. plunged 38 percent as the insurer predicted a tougher path ahead after a record loss. Qualcomm Inc. slid 8.6 percent after saying a Chinese government probe will curb profit.

     The Standard & Poor’s 500 Index rose 0.4 percent to 2,031.21 at 4 p.m. in New York. The Dow Jones Industrial Average added 69.94 points, or 0.4 percent, to 17,554.47. About 6.8 billion listed shares changed hands in the U.S., about 6 percent higher than the three-month daily average.

     “The policy and macro news were both positive, and that’s giving the market something of a positive bias as we go through the day,” Alan Gayle, who helps oversee about $50 billion as a senior strategist at RidgeWorth Capital Management, said in a phone interview from Atlanta. “Outside of the U.S., other major players are taking aggressive policy steps to stabilize and re- accelerate growth, and that’s putting a floor under the equity markets.”

     Draghi faces pressure to do more to support a slowing euro- area economy after the Bank of Japan last week unexpectedly boosted its stimulus plan. Draghi said policy makers will be ready to implement further stimulus measures if needed as he signaled officials may cut growth forecasts next month. ECB officials were unanimous on more stimulus if needed, Draghi told reporters today after keeping interest rates unchanged.

     In stressing unanimity, Draghi is seeking to smooth over divisions in his own ranks about the precise way the ECB can aid the economy more, as pessimism about the outlook builds. While the central bank is already expanding its range of asset purchases, it has yet to commit to broad-based bond buying, or quantitative easing.

     The S&P 500 and Dow climbed to records yesterday after election results shifted control of the Senate from Democrats to Republicans while a report showed improvement in the labor market.

     The benchmark index has rebounded 9.1 percent from a six- month low on Oct. 15. S&P 500 companies are beating analysts’ earnings estimates at the fastest pace in four years, while recent economic data have pointed to improvements in the U.S. labor market and consumer sentiment.                        

     First-time jobless claims dropped 10,000 to a three-week low of 278,000 in the week ended Nov. 1, the Labor Department reported today. The median forecast of 50 economists surveyed by Bloomberg called for 285,000. The four-week moving average, a less-volatile measure of job cuts, reached the lowest level in more than 14 years.

     Labor Department figures tomorrow may show nonfarm payrolls rose 235,000 last month and that the jobless rate probably held at a six-year low.

     Of the S&P 500 members that have reported their latest quarterly results, 80 percent topped profit projections, while 60 percent beat sales estimates, according to data compiled by Bloomberg.                         

     The Chicago Board Options Exchange Volatility Index, the gauge known as the VIX, fell 3.5 percent to 13.67. The measure surged to 26.25 on Oct. 15 before declining 47 percent through the end of the month.

     The S&P 500 Industrials Index rose for a third day, adding 1.1 percent. Deere & Co. and Agco Corp. climbed more than 2.4 percent amid speculation that the companies will benefit from tax credits following yesterday’s midterm election. The likelihood that two expired tax credits may be retroactively renewed in late 2014 could soften a sales decline for machinery companies like Deere and Agco, according to Bloomberg Industries analysts Caitlin Webber and Karen Ubelhart.

     Tesla rose 4.4 percent after projecting to sell 50,000 Model S cars in 2015. Chief Executive Officer Elon Musk said Tesla is accelerating production and sees 50 percent growth next year lasting “probably for several years.”

     Whole Foods rallied 12 percent. Fiscal fourth-quarter profit topped analysts’ estimates as the grocery-store chain slashed prices to win over bargain-hunting shoppers.

     Gauges of utilities and telecommunications shares declined more than 0.8 percent for the biggest losses among the 10 main industries in the S&P 500. Energy shares rose even as West Texas Intermediate crude slid 1 percent to $77.91. Oil touched the lowest price in three years earlier this week.

     Genworth plunged 38 percent, the most since the financial crisis in 2008. The company yesterday posted a quarterly loss of $844 million, driven by costs tied to its long-term care insurance operation.

     “The turnaround in this business will be more difficult and prolonged,” Chief Executive Officer Tom McInerney said in a statement. “Despite this setback, we remain steadfast in our commitment to transform this business.”

     Qualcomm slid 8.6 percent. A previously disclosed investigation by China’s antitrust regulator into its business practices will hurt sales and profit next year. The chipmaker also said U.S. and European regulators are conducting inquiries related to its licensing and phone-chip businesses.

     The S&P 500 Utilities Index lost 1.8 percent. AES Corp. was the biggest decliner in the group, falling 6.4 percent. The electrical power generator and distributor reported third- quarter sales that fell short of consensus analyst estimates.
 

Have  a wonderful evening everyone.

Be magnificent!

The whole universe is to us a writing of the Infinite in the language of the finite.

Swami Vivekananda

As ever,

Carolann

It’s not hard to make decisions when you know what your values are.

                                                             -Roy Disney, 1930-2009

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7