November 13, 2014 Newsletter

Dear Friends,

Tangents:

Reading Poetry

It’s a forgotten pleasure in our rushed days, to leaf through a slim volume of verse, perhaps while sitting in the top deck of the bus, or when resting by a tree in the city park.  Everyone should keep a book of poetry about their person.  Even to read four lines of Keats while waiting for a friend will enrich your day.  Here is Keats, for example, on the pleasures of red wine:

O for a draught of vintage!  that hath been
Cooled a long age in the deep-delvéd earth,
Tasting of  Flora and the country-green,
Dance, and Provencal song, and sunburnt mirth!

What a phrasemaker he was!  Words well chosen can fill your heart with joy.  Reject the empty clatter of the penny dreadful and keep a book of poetry on your person at all times.
-Dan Kieran and Tom Hodgkinson, The Book of Idle Pleasures, Ebury Press, 1988.

PHOTOS OF THE DAY

US artist ‘Hen’ of San Francisco dances during the audiovisual performance ‘StratoFyzika’ at the 18th international festival for computer-based art ‘CYNETART 2014’ in the Festspielhaus Hellerau in Dresden, Germany. More than 60 international artists of 20 countries have been invited to present their work. Jens Meyer/AP

Jean de Loisy, Palais de Tokyo director, hides a needle in a haystack before an art performance based on the expression ‘looking for a needle in a haystack’ at the Palais de Tokyo modern and contemporary art museum in Paris. Italian artist Sven Sachsalber will spend two days trying to find the needle in a large pile of hay. Charles Platiau/Reuters

Market Closes for November 13^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Nov. 13 (Bloomberg) — Canadian stocks fell, ending a six- day advance, as energy shares declined with the price of oil after U.S. supplies increased to the highest since May.

     Painted Pony Petroleum Ltd. and Kelt Exploration Ltd. slumped more than 8.7 percent as the S&P/TSX Energy Index retreated the most among 10 industry groups. BlackBerry ltd. jumped 7.7 percent after entering a strategic software partnership with Samsung Electronics Co.

     The Standard & Poor’s/TSX Composite Index fell 75.96 points, or 0.5 percent, to 14,780.24 at 4 p.m. in Toronto. The index pared its increase for the year to 8.5 percent, the sixth- best performer among the world’s 24 developed markets.

     Painted Pony sank 9.6 percent to C$11.30 and Kelt Exploration tumbled 8.7 percent to C$9.66 as energy producers lost 2.4 percent as a group. Five of 10 industries in the S&P/TSX declined on trading volume 9.4 percent lower than the 30-day average.

     West Texas Intermediate crude for December delivery declined 3.9 percent to settle at $74.21 a barrel in New York, the lowest since September 2010. Oil supplies at the hub in Cushing, Oklahoma, climbed 1.7 million barrels to 22.5 million last week, the Energy Information Administration said. Brent crude extended losses below $80 a barrel to the lowest since September 2010.

     Aimia Inc., which provides loyalty programs for credit cards, plunged 9.1 percent to C$15.29, the biggest decline since March 2009. The company reported weaker-than-expected third- quarter earnings.

     BlackBerry climbed 7.7 percent to C$13.74, the highest level in more than a year. The smartphone maker will partner with Samsung to provide secure mobile software solutions for Android-based devices.

US

By Callie Bost

     Nov. 13 (Bloomberg) — U.S. stocks were little changed near record highs, as better-than-estimated results from Wal-Mart Stores Inc. and corporate deals overshadowed losses in small caps and energy shares.

     Wal-Mart surged 4.7 percent to an all-time high after earnings topped forecasts. Baker Hughes Inc. rallied 15 percent after a person with knowledge of the matter said Halliburton Co. was in talks to buy it. DreamWorks Animation SKG Inc. jumped 14 percent after reports Hasbro Inc. is in talks to buy the studio. Exxon Mobil Corp. paced losses in energy shares as crude sank. Microsoft Corp. passed the oil producer as the second-biggest company in the Standard & Poor’s 500 Index.

     The S&P 500 rose 0.1 percent to 2,039.33 at 4 p.m. in New York, closing less than one point from a record. The Dow Jones Industrial Average climbed 40.59 points, or 0.2 percent, to 17,652.79, an all-time high as Wal-Mart and Cisco Systems Inc. led gains. The Russell 2000 Index of smaller stocks sank 0.9 percent to halt a six-day rally.

     “We had a pretty big run-up within the month of November and late October and we’ve seen a slowing of the momentum recently,” Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc., said by phone. “From the context of a price standpoint, we’re due for a breather.”

     The S&P 500 retreated yesterday for the first time in six days, after rallying 9.5 percent from a six-month low in October to an all-time high as better-than-estimated corporate earnings and economic data boosted confidence the U.S. economy is weathering a global slowdown. The index trades at 17 times forward earnings, its highest valuation since December 2009.                        

     Investors sold the recent rally’s biggest winners today. The Russell 2000 had surged 13 percent over the past month through yesterday, the biggest 30-day increase since August 2009.

     The Chicago Board Options Exchange Volatility Index climbed 5.9 percent to 13.79. The gauge of S&P 500 options prices has increased 5.1 percent this week.

     Data today showed applications for U.S. unemployment benefits rose more than forecast last week, representing a pause from a recent run of readings close to a 14-year low.

     “The market is just churning right now, looking for an indication of which direction the future is going to take,” Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors Inc., said by phone. His firm oversees $1.8 billion. “There is no catalyst to get investors excited or to instill additional fear.”

     Four of the 10 main industries in the S&P 500 advanced today. Phone stocks climbed 0.7 percent, while shares in consumer-discretionary producers added 0.6 percent for the biggest gains.

     Wal-Mart rose 4.7 percent to $82.94 for its best day since 2008 and the biggest gain in the Dow. The world’s largest retailer also said U.S. same-store sales grew for the first time in seven quarters. The sales increase signals that Chief Executive Officer Doug McMillon is making progress in his turnaround plan.

     “One of the positives for the market are positive reactions from retail names to earnings,” Schaeffer’s Bell said. “A lot of the consumer discretionary sector had low expectations coming into this season, but we saw positive results from Macy’s yesterday and Wal-Mart today.”

     Nordstrom Inc. advanced 2.2 percent to $74.88 in late trading after reporting revenue that topped estimates. The company finished the regular session 0.6 percent higher.

     Kohl’s Corp. slipped 3.2 percent to $56.07. The retailer reported third-quarter revenue and earnings that missed estimates and said fourth-quarter margins may be pressured.                        

     J.C. Penney plunged 8.5 percent to $7.10. The company posted an unexpected third-quarter sales decline as consumers restrained spending amid the choppy economic recovery and warmer weather hurt sales of seasonal merchandise.

     Viacom Inc. led media shares higher, rallying 2.8 percent to $71.20. The owner of Comedy Central and Spike posted revenue and earnings that beat expectations, as the latest “Transformers” film and higher fees for networks like MTV countered lower advertising sales in the U.S.

     Technology shares in the S&P 500 jumped 0.6 percent, while the Nasdaq 100 Index advanced 0.4 percent.

     Cisco rose 2.3 percent to $25.68 even after forecasting sales that fell short of analysts’ estimates. Level 3 Communications Inc. jumped 3 percent, while Apple Inc. climbed 1.4 percent for a third day of gains.

     Energy companies slid 1.3 percent as oil prices extended a selloff. The sector has plunged 15 percent since reaching a record on June 23.

     Exxon dropped 0.8 percent to $94.66. Helmerich & Payne Inc., a contract driller, slipped 6.7 percent to $79.79 for the biggest drop in the S&P 500.

     The energy sector trimmed losses after the Wall Street Journal reported the talks between Halliburton and Baker Hughes, in what would be one of the largest takeovers of a U.S. energy company in years.

     Baker Hughes surged 15 percent to $58.75. The third-largest oilfield services provider has a market capitalization of more than $25 billion. Halliburton rose 1.1 percent to $53.79.

     DreamWorks Animation surged 14 percent to $25.52. The film studio, led by Jeffrey Katzenberg, is asking for more than $30 a share from Hasbro, said one of the people. The discussions are preliminary the people said. Hasbro sank 4.3 percent to $54.98.

     Procter & Gamble Co. fell 1 percent to $88.60. Berkshire Hathaway Inc. agreed to pay $4.7 billion in P&G shares held by Warren Buffett’s company to acquire the Duracell battery business. Berkshire Class B shares rose 0.5 percent to $146.29.

     “These M&A deals that are happening lend a lot of support to the general investment psyche,” Tom Sudyka, president of Lawson Kroeker Investment Management in Omaha, Nebraska, said in a phone interview. His firm oversees about $500 million. “Grinding higher is the best course at this point.”

Have  a wonderful evening everyone.

Be magnificent!

The characteristic of my nation is this transcendentalism,

this struggle to go beyond, this daring to tear the veil off the face of nature

and have at any risk, at any price,

a glimpse of the beyond.

Swami Vivekananda

As ever,

Carolann

The moral sense, or conscience, is as much a part of man as his leg or arm.  It is given to all human beings

in a stronger or weaker degree, as force of members is given them in a greater or less degree.  It may be

strengthened by exercise, as may any particular limb of the body.

                                                                                                       -Thomas Jefferson, 1743-1826

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