December 3, 2014 Newsletter

Dear Friends,

Tangents:

THE COUNTRY OF THE TREES

There is no king in their country
and there is no queen
and there are no princes vying for power,
    inventing corruption.
Just as with us many children are born
and some will live and some will die and the country
will continue.

The weather will always be important.

And there will always be room for the weak, the violets
     and the bloodroot.
When it is cold they will be given blankets of leaves.
When it is hot they will be given shade.
And not out of guilt, neither for a year-end deduction
     but maybe for the cheer of their colors, their
     small flower faces.

They are not like us.

Some will perish to become houses or barns,
     fences and bridges.

Others will endure past the counting of years.
And none will ever speak a single word of complaint,
     as though language, after all,
     did not work well enough, was only an early stage.
Neither do they ever have any questions to the gods-
     which one is the real one, and what is the plan.
As though they have been told everything already,
     and are content.
                                 -Mary Oliver

Writer Joseph Conrad’s birthday today, b. December 3^rd, 1857.

All a man can betray is his conscience.  –Joseph Conrad.

PHOTOS OF THE DAY

A woman walks a dog through the ice and snow-covered landscape near Winterberg, western Germany. Joerg Taron/dpa/AP

More than 200 booths offer traditional Thuringian handicrafts and sweets and a Ferris wheel at the Christmas Market in front of the Mariendom (Cathedral of Mary) and St. Severi’s Church in Erfurt, central Germany. Jens Meyer/AP

Market Closes for December 3^rd, 2014     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Dec. 3 (Bloomberg) — Canadian stocks rose the most in a month, ending a five-day loss, as commodities producers jumped with gold and crude prices while the nation’s central bank kept interest rates unchanged.

     Iamgold Corp. and Semafo Inc. increased at least 4.2 percent as gold prices climbed. Surge Energy Inc. and Meg Energy Corp. rallied more than 5.7 percent as crude climbed. Royal Bank of Canada, the nation’s second-largest lender by assets, added 0.2 percent after profit rose.

     The Standard & Poor’s/TSX Composite Index rose 133.99 points, or 0.9 percent, to 14,754.06 at 4 p.m. in Toronto, the biggest increase since Nov. 5. The equities benchmark had fallen 3 percent over five straight days previously.

     Surge Energy increased 6.8 percent to C$4.55 and MEG Energy rallied 5.8 percent to C$18.59 as energy stocks jumped 1.9 percent as a group. The industry has rebounded 2.7 percent in the past two days after a six-day slide.

     West Texas Intermediate added 0.8 percent to settle at $67.38 a barrel in New York. A U.S. government report said the country’s crude inventories dropped last week.

     The recent plunge in oil prices poses an important risk to the outlook for Canadian inflation, the Bank of Canada said today. Oil prices have fallen due to both supply and demand factors, the central bank said as it kept its policy interest rate unchanged at 1 percent, an outcome anticipated by all 26 economists surveyed by Bloomberg News.

     Seven of 10 industries in the benchmark Canadian equity gauge advanced on trading volume 19 percent higher than the 30- day average today, led by gains among energy and raw-materials producers.

     Iamgold soared 8.3 percent to C$2.73 and Semafo increased 4.2 percent to C$3.49 as gold for February delivery advanced 0.8 percent to $1,208.70 an ounce in New York. 

US

By Callie Bost

     Dec. 3 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to an all-time high, as industrial and commodity shares rallied while data boosted confidence in the economy before Friday’s jobs report.

     Energy companies in the S&P 500 climbed 1.2 percent for a third straight advance as Cimarex Energy Co. and Diamond Offshore Drilling Inc. surged more than 3.5 percent. Consumer- staples stocks slipped the most in the U.S. benchmark gauge as Brown-Forman Corp. and Molson Coors Brewing Co. slumped at least 3.7 percent.

     The S&P 500 rose 0.4 percent to 2,074.33 at 4 p.m. in New York. The Dow Jones Industrial Average extended a record, climbing 33.07 points, or 0.2 percent, to 17,912.62. The Russell 2000 Index jumped 0.9 percent. About 6.3 billion shares changed hands on U.S. exchanges, 6.3 percent below the three-month average.

     “I think a lot of people are waiting for Friday and the payrolls number,” Jim Paulsen, who helps oversee $345 billion as chief investment strategist at Wells Capital Management, said by phone from San Francisco. “We’re going to have another 200,000-plus payroll number if ADP is any indication, and unit labor costs should stay low. Put those two together and you have real growth without inflation. That’s a recipe for a melt-up in the stock market.”

     The S&P 500 topped its record of 2,072.83 reached on Nov. 26. The gauge has rebounded 11 percent from a low in October amid optimism the economy is strong enough to withstand a slowdown overseas and tighter monetary policy after the Federal Reserve wound up its asset-purchase program.                         

     Companies in the U.S. added 208,000 workers in November, indicating steady progress in the labor market, a private payrolls report showed. The increase in employment followed a revised 233,000 gain the prior month, figures from the Roseland, New Jersey-based ADP Research Institute showed today. Payrolls have climbed by at least 200,000 in seven of the last eight months.

     The Labor Department releases its jobs data on Friday. The government’s report may show companies added 230,000 nonfarm payrolls in November while the unemployment rate held at 5.8 percent, according to the consensus forecast by economists.

     The Fed said “employment gains were widespread across districts” as the economy continued to expand amid advances in consumer spending and lower gasoline prices. Some districts noted that “contacts remained optimistic” about the economic outlook, the Fed said in its Beige Book business survey based on reports gathered on or before Nov. 24.                          

     Fed Bank of Philadelphia President Charles Plosser said a drop in the U.S. unemployment rate and moderate growth call for returning monetary policy to normal from an emergency stance with near-zero interest rates.

     “Labor markets continue to heal, and their stronger-than- expected recovery should serve to underpin continued economic expansion,” Plosser said in a speech in Charlotte, North Carolina. “Individuals have regained significant fractions of the wealth they lost during the crisis. That gives me additional confidence that the economy is now operating fairly normally and that policy should reflect that normalization.”

     A separate report today showed service industries in the U.S. expanded in November at the second-fastest pace in more than nine years, a sign the world’s largest economy is powering past a global slowdown.

     Investors are also awaiting signals from the European Central Bank. Mario Draghi and his central bank colleagues may move a step closer to full-scale quantitative easing when they meet tomorrow in Frankfurt. The majority of economists surveyed by Bloomberg News predict the ECB will eventually buy government bonds to help spur growth in the region.

     The Chicago Board Options Exchange Volatility Index slid 3 percent to 12.47. The gauge of S&P 500 options prices plunged 13 percent in a two-day slide, the most since October.

     Seven of 10 main industries in the S&P 500 gained. Raw- materials and industrials shares advanced more than 1.2 percent.

     Energy companies climbed 1.2 percent, extending the group’s gains this week to 3.2 percent. West Texas Intermediate crude rose 0.8 percent today, resuming a rebound from a five-year low last week.

     Prices climbed after a government report showed that U.S. crude inventories dropped as refineries bolstered operating rates. Crude has collapsed into a bear market amid the highest U.S. output in more than three decades and signs of slowing global demand growth.

     Cimarex surged 5.1 percent, while Diamond Offshore increased 3.6 percent. Exxon Mobil Corp. rose 0.8 percent, while Chevron Corp. dropped 0.3 percent. Both energy producers climbed at least 1.9 percent yesterday.

     Consumer-staples shares slipped 0.8 percent. Brown-Forman dropped 3.9 percent, while Molson Coors slumped 3.7 percent. Monster Beverage Corp. slid 2.4 percent.
 

Have a wonderful evening everyone.

Be magnificent!

Meditation is to be aware of every thought and of every feeling,

never to say it is right or wrong, but just to watch it and move with it.

In that watching you begin to understand the whole movement of thought and feeling.

And out of this awareness comes silence.

Krishnamurti

As ever,

Carolann

The ultimate inspiration is the deadline.

                    -Nolan Bushnell, 1943-

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