November 12, 2014 Newsletter

Dear Friends,

Tangents:

NOVEMBER

It is my belief that every walk should have an objective as well as being a means of taking exercise.  The object of pre-Christmas walks can be to keep an eye open for suitable Christmas decorations, some for the house and some for the church.  We have a wonderful lane which has been walked and ridden for 2,000 years and so is haunted by ghosts of the past and full of good things in its hedges.  Luckily no monster hedging-machine has yet been that way to spoil the growth of blackberries, wild roses, old man’s beard and hazel nuts.  Traditionally the evergreens for Christmas are holly and ivy to provide red and black berries, and mistletoe with its white translucent berries.  These also bring good fortune and protection in the coming year.  Mistletoe, or Kiss-and-Go, grown on apple and poplar trees, is the best for good luck.  In Herefordshire a hundred years ago one third of all the apple trees had mistletoe growing on them.  Each New Year’s Eve a bough was picked and hung indoors as the clock struck twelve, the piece from the previous year being taken down and burnt.  In nearby Worcestershire the chosen mistletoe branch was decked with nuts and ripe apples, tied with a ribbon and hung in the middle of the room.  The just-marrieds would kiss under it and pick a berry, and then they would be blessed with a baby before next Christmas.  –Rosemary Verey, A Countrywoman’s Notes, foreward by H.R.H The Prince of Wales, 2009.

PHOTOS OF THE DAY

Crowds watch as volunteers in the castle moat remove ceramic poppies as work begins to dismantle the art installation ‘Blood Swept Lands and Seas of Red’ at the Tower of London in London. Toby Melville/Reuters

French National Centre for Space Studies (CNES) president Jean-Yves Le Gall, French President Francois Hollande, and former French minister and astronaut Claudie Haignere, wear 3D glasses as they visit the Cite des Sciences at La Villette during a broadcast of the Rosetta mission as it orbits around comet 67/P Churyumov-Gersimenko in Paris. Jacques Brinon/AP

Market Closes for November 12^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Nov. 12 (Bloomberg) — Canadian stocks rose a sixth day, the longest run since June, as gold mining and energy companies climbed and the nation’s largest banks rallied to a seven-week high.

     Detour Gold Corp. and Semafo Inc. climbed more than 3.1 percent as gold shares rose a second day. Legacy Oil & Gas Inc. and BlackPearl Resources Inc. gained at least 5.3 percent to pace an advance among energy companies. Loblaw Cos. surged to a nine-year high after posting better-than-expected earnings on growing sales.

     The Standard & Poor’s/TSX Composite Index rose 95.93 points, or 0.7 percent, to 14,856.20 at 4 p.m. in Toronto, the highest close since Sept. 30. The index has increased 3.2 percent in the past six days.

     Toronto-Dominion Bank increased 1 percent to C$57 and Royal Bank of Canada advanced 0.6 percent to C$82.25 as the S&P/TSX Banks Index posted a third straight gain, closing at the highest level since Sept. 24.

     Loblaw jumped 3.4 percent to C$60.10, the highest close since December 2005, to lead a 1.4 percent advance in the S&P/TSX Consumer Staples Index. The grocer posted increasing year-over-year sales and cost savings after the addition of pharmacy company Shoppers Drug Mart. The company also said it will open 84 Joe Fresh clothing retailers in Mexico and Central America.

     Detour Gold gained 3.1 percent to C$8.67 and Semafo soared 3.6 percent to C$3.17. The S&P/TSX Gold Index rose 0.3 percent for a second day of gains as 17 of 24 members advanced.

     Nine of 10 industries in the S&P/TSX rose on trading volume 3.8 percent lower than the 30-day average.

     Brent crude for December settlement lost 1.6 percent to $80.38 a barrel in London to decline for a third day. The price earlier fell below $80 a barrel for the first time in four years. OPEC said its production dropped by 226,400 barrels a day to 30.253 million in October, the biggest decrease since March.  West Texas Intermediate also fell.

US

By Oliver Renick

     Nov. 12 (Bloomberg) — The Standard & Poor’s 500 Index halted a five-day rally, while small-cap shares rose to the highest level since July, as gains among phone and consumer stocks offset losses in utilities and growing concern over slowing growth in Europe.

     Exelon Corp. led utility shares to the biggest drop since June as the U.S. and China agreed on new carbon cuts to fight climate change. Bank shares slumped 0.5 percent after regulators in Europe and the U.S. fined six lenders to settle a probe into the rigging of foreign-exchange benchmarks. Verizon Communications Inc. and AT&T Inc. climbed at least 0.9 percent. Macy’s Inc. added 5.1 percent after posting a gain in profit last quarter.

     The S&P 500 lost 0.1 percent to 2,038.25 at 4 p.m. in New York, trimming an earlier drop of 0.4 percent. The Dow Jones Industrial Average declined 2.7 points, or less than 0.1 percent, to 17,612.20. Both gauges closed at all-time highs yesterday. About 5.9 billion shares traded hands today, 8.7 percent below the three-month average.

     The Nasdaq Composite Index gained 0.3 percent to the highest since March 2000, while the Russell 2000 Index of small companies added 0.6 percent to cap a six-day rally, its longest since June. The Chicago Board Options Exchange Volatility index, the gauge of options prices known as the VIX, added 0.8 percent to 13.02.

     “There was some nervousness at first out of Europe but as often is the case some of that’s fading as European markets close and we don’t see any real earnings blowups or economic data that’s hurt the market,” Steve Bombardiere, an equity trader at Conifer Securities LLC in New York, said by phone. “As it happens very often, we see a dip and people buy in, there’s still some fear in the market that if you don’t buy in, you’re left watching.”

     The S&P 500 had gained for five straight sessions, bringing its advance from a six-month low in October to 9.5 percent, as better-than-estimated corporate earnings and economic data boosted confidence the U.S. economy is weathering a global slowdown. The Dow’s decline today halted a six-day streak.

     The broader index fell as much as 9.8 percent from a September record on increasing signs that European growth was slowing at the same time the Federal Reserve was ending its monthly bond purchases.

     Concerns that European struggles may weigh on the U.S. economy were stoked today after Bank of England Governor Mark Carney unveiled lower U.K. growth and inflation forecasts as officials adjusted to account for “moribund” global expansion and stagnation in Europe.

     “Europe is doing everything it can to rev up their economies but the problem with Europe is it’s so fractured that you can’t get them to work together,” Joe Franklin, president of Franklin Wealth Management in Hixson, Tennessee. “The main issue is these countries need to work together.                        

     European Central Bank President Mario Draghi’s move to quantitative easing has met resistance from German Chancellor Angela Merkel, who has advocated fiscal discipline across the euro area. Last week, Draghi stoked investor speculation that he’ll intensify stimulus for the euro area after indicating he has the backing of policy makers to do so.

     Investors are also watching developments in Ukraine, where the country’s defense minister said the military should prepare for clashes, as growing tensions in the nation’s eastern combat zone threatened to boil over into open conflict.

     The Stoxx Europe 600 Index sank 1.1 percent today.

     Data in the U.S. today showed September wholesale inventories increased faster than estimated.

     Six of the 10 main S&P 500 groups advanced today, with phone shares rising 0.8 percent to pace gains.

     Utilities sank 2 percent to lead declines, with Exelon sliding 3.5 percent to $35.93. The group has rallied 19 percent this year, the second-most in the index.

     President Barack Obama pledged deeper U.S. cuts in greenhouse-gas emissions and China will for the first time set a target for capping carbon emissions. Electricity generation is responsible for about a third of U.S. greenhouse gas emissions by economic sector, according to the U.S. Environmental Protection Agency.

     Citigroup declined 0.7 percent to $53.42 and JPMorgan Chase & Co. slipped 1.3 percent to $60.56 after regulators fined them about $1 billion each. Bank of America dropped 0.2 percent to $17.29.

     Banks and individuals could still face further penalties and litigation following the 13-month probe into allegations dealers at the biggest banks colluded with counterparts at other firms to rig benchmarks used by fund managers to determine what they pay for foreign currency.

     JM Smucker dropped 3.5 percent to $100.38. The seller of peanut butter to coffee and pickles cut its forecast for adjusted earnings in its current fiscal year.

     Retailers of consumer durables and apparel gained 1.1 percent amid corporate earnings results. Macy’s jumped 5.1 percent to $61.57 after posting a 23 percent gain in net income last quarter.

     Fossil Group Inc. jumped 8.4 percent to $112.48 for the biggest gain in the S&P 500. The company announced a $1-billion share repurchase plan. The watchmaker posted third-quarter earnings of $1.96 a share, exceeding the average analyst projection of $1.82.

     Susquehanna Bancshares Inc. rallied 33 percent to $13.12. BB&T, North Carolina’s second-largest bank, agreed to buy the lender for a premium of about 39 percent over yesterday’s closing price. BB&T Corp. slipped 1.7 percent to $37.67.

     ADT Corp. jumped 3.1 percent to $36.77. The electronic security service company reported third-quarter earnings and revenue that beat analysts’ estimates.

Have a wonderful evening everyone.

Be magnificent!

The fact that there are so many men still alive in the world

shows that it is based not on the force of arms but on the force of truth or love.

Therefore, the greatest and most impeachable evidence of the success of this force

is to be found in the fact that, in spite of all the wars of the world,

it still lives on.

Mahatma Gandhi

As  ever,

Carolann

I am not an adventurer by choice but by fate.

                   -Vincent van Gogh, 1853-1890

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