November 21, 2014 Newsletter

Dear Friends,

Tangents:

On this day in 1877, a man in New Jersey sang the children’s song Mary Had a Little Lamb. What made this version different was that the man, Thomas Edison, sang the familiar words into a machine he had just built, part of his effort to perfect the telephone. Edison was completely surprised a moment later when the device played back the words he had just sang. He patented the machine – which he called the phonograph – the next year. It was his first great invention.

PHOTOS FROM AROUND THE WORLD TODAY

A Hindu priest rotates a traditional oil lamp as he performs morning prayers on the banks of the River Ganges in Allahabad, India. Allahabad, on the confluence of the rivers Ganges, Yamuna and the mythical Saraswati, is one of Hinduism’s important centers. Rajesh Kumar Singh/AP

Farmer Paul McAvoy moves his flock of Kelly Bronze turkeys into their enclosure on his farm near Lymm, northern England. Phil Noble/Reuters

A woman strolls through a park during dense fog in Hamburg, northern Germany. Daniel Bockwoldt/dap/AP

Market Closes for November 21^st, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Callie Bost

     Nov. 21 (Bloomberg) — Canadian stocks rose, with the benchmark index capping a sixth weekly gain, after central banks in China and Europe signaled additional stimulus measures, boosting investors’ confidence in the global economy.

     Raw-material and energy producers paced gains as Lightstream Resources Ltd. and Teck Resources Ltd. soared more than 9 percent. Gold miners dropped as the price of the precious metal pared gains. Metro Inc. slid for a second day after Credit Suisse cut its rating on the shares.

     The Standard & Poor’s/TSX Composite Index rose 36.28 points, or 0.2 percent, to 15,111.46 at 4 p.m. in Toronto, the highest level since Sept. 24. The Canadian benchmark has advanced in 12 of the last 13 trading sessions, for a 5 percent gain since Nov. 4. The gauge rallied 1.8 percent in the week.

     Global equities gained to the highest in two months after China cut its benchmark interest rates for the first time since July 2012. The People’s Bank of China lowered its one-year deposit rate and the one-year lending rate, with changes effective tomorrow, according to its website.

     European Central Bank President Mario Draghi said he will do what is necessary to raise inflation in the euro region as fast as possible. Should the current policy not be effective, the ECB will “broaden even more the channels” through which it intervenes, by adjusting the size, pace and composition of asset purchases, he said in Frankfurt.

     Canada’s inflation rate was faster than all economist forecasts in October, Statistics Canada said today. The consumer price index rose 2.4 percent compared with the same month a year earlier, following the September pace of 2.0 percent. The core rate that excludes eight volatile products accelerated to 2.3 percent, the fastest since February 2012.                      

     Four of 10 main industries in the S&P/TSX advanced. Trading in the gauge’s companies was in line with the 30-day average.

     Materials producers jumped 0.8 percent. Teck Resources gained 9.4 percent to C$19.94 and First Quantum Minerals Ltd. jumped 7.2 percent to C$19.12.

     Energy shares surged 1 percent as oil and gas explorers and producers soared 1.8 percent. Lightstream Resources rallied 15 percent to C$3.90, while Bellatrix Exploration Ltd. increased 7 percent to C$5.79.

     The S&P/TSX Gold Index sank 0.7 percent as gold pared a 1.4 percent advance. Torex Gold Resources Inc. dropped 2 percent to C$1.48 and Eldorado Gold Corp. slipped 1.8 percent to C$7.11.

     Metro slid 0.4 percent to C$87.85. Credit Suisse analyst David Hartley downgraded the food-and-drug store operator’s stock yesterday to underperform from neutral, with a target price of C$75 a share.

US

By Joseph Ciolli

     Nov. 21 (Bloomberg) — U.S. stock benchmarks climbed to records, giving the Standard & Poor’s 500 Index a fifth weekly gain, as optimism in the global economy grew after central banks in China and Europe signaled additional stimulus measures.

     Materials companies in the S&P 500 rose the most this month to a two-month high, and industrial shares increased to a record amid speculation the increased accommodation will spur global economic growth. Caterpillar Inc. jumped 4.3 percent. The Bloomberg U.S. Airlines Index dropped for a third day.

     The S&P 500 rose 0.5 percent to 2,063.50 at 4 p.m. in New York, paring an earlier rally of 0.9 percent. The index advanced 1.2 percent this week, pushing its gains in 2014 to 12 percent. The Dow Jones Industrial Average increased 91.06 points, or 0.5 percent, to 17,810.06, also an all-time high. About 7.1 billion listed shares changed hands in the U.S., 7.7 percent higher than the three-month daily average.

     “Asia is strong on the interest rates, and Europe is strong on the Draghi comments,” Michael James, a Los Angeles- based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “There’s a positive flow coming through to U.S. businesses. A rising tide lifts all boats.”

     European Central Bank President Mario Draghi said he will do what is necessary to raise inflation in the region as fast as possible. Should the current policy not be effective, the ECB will “broaden even more the channels” through which it intervenes, by adjusting the size, pace and composition of asset purchases, he said in Frankfurt.

     Global equities extended gains after China cut its benchmark interest rates for the first time since July 2012. The People’s Bank of China lowered its one-year deposit rate and the one-year lending rate, with changes effective tomorrow, according to its website.

     Concern that economic recoveries from the U.S. to Europe and Japan are failing to spur inflation has been cited by central bankers worldwide as justification for prolonged stimulus efforts.

     The S&P 500 has rebounded 11 percent since falling to a more than six-month low in October as better-than-estimated earnings and economic data have shored up confidence that the U.S. economy is able to weather a global slowdown even as the Federal Reserve winds down its bond-buying program.

     Of the S&P 500 companies that have reported this earnings season, 79 percent beat profit estimates and 60 percent surpassed revenue projections, according to data compiled by Bloomberg.

     The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, fell 5 percent to 12.9. The benchmark gauge of price swings climbed to a more than two-year high on Oct. 15.

     All 10 of the major groups in the S&P 500 increased today. Raw-material, energy and industrial stocks rallied more than 0.9 percent.

     The S&P 500 Industrials Index climbed to a record, rising 1 percent as Caterpillar jumped 4.3 percent and Joy Global Inc. added 2.5 percent. The gauge of companies has increased 15 percent since falling to an eight-month low on Oct. 13.

     Industrial companies exposed to North America, which accounts for one-third of machinery industry sales, may fare better than peers in 2015 as economic growth accelerates and construction markets recover, according to Bloomberg Industry analyst Karen Ubelhart.

     The Bloomberg U.S. Airlines Index declined for a third day, losing 1.7 percent, after reaching a more than 13-year high on Nov. 18. Southwest Airlines Co. slid 2.2 percent.

     Materials companies in the S&P 500 gained 1.3 percent as gold, copper and zinc prices rose. Allegheny Technologies Inc. surged 5.8 percent, while Freeport-McMoRan Inc., the largest publicly traded copper producer, increased 3.6 percent.

     Hess Corp. and Nabors Industries Ltd. paced gains in S&P 500 energy shares, increasing more than 1.9 percent.

     Ross Stores advanced 7.3 percent after the retail chain forecast full-year earnings of as much as $4.32 a share, up from a maximum of $4.26 a share earlier. That topped the average analyst projection of $4.25.

     GameStop lost 13 percent. The largest video-game specialty retailer lowered its forecast for earnings in 2015 to no more than $3.55 a share, after previously estimating as much as $3.70. That compares with analyst projections of $3.69.

     Gap Inc. retreated 4.2 percent as the biggest U.S. apparel- focused retailer cut its annual profit forecast.

Have a wonderful weekend everyone.

Be magnificent!

Truth is that which one wishes in its totality.  Have you reached it?

Krishnamurti

As ever,

Carolann

Music is a higher revelation than all wisdom and philosophy.

                              -Ludwig van Beethoven, 1770-1827

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