December 22, 2014 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

Harry Winston, a Persian, is groomed by his owner before competing in a cat show in Dover, N.H. The show, put on by New Hampshire Feline Fanciers, had 118 entries of which 106 were pedigree and 12 were household pets. Melanie Stetson Freeman

Women over age 58 compete in the 36th and final Ms. Senior Sweetheart Pageant of America in Fall River, Mass. Ida White, 79, from Florida, sits on her throne surrounded by the runners-up after being crowned the 2014 winner. ‘One of my favorite assignments of the year. The ladies were full of energy and spunk.’ Melanie Stetson Freeman

Market Closes for December 22^nd, 2014     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Callie Bost

     (Bloomberg) — Canadian stocks declined, after posting the best week in five years, as commodity producers tumbled with the price of crude and metals.

     Legacy Oil + Gas Inc. and Crew Energy Inc. plunged at least 10 percent to pace losses in energy companies. Primero Mining Corp. slumped 14 percent to lead a 3.1 percent tumble among raw- materials producers. BlackBerry Ltd. jumped 7.6 percent after TD Securities analysts upgraded the stock.

     The Standard & Poor’s/TSX Composite Index fell 35.88 points, or 0.3 percent, to 14,432.38 at 4 p.m. in Toronto. Trading in the benchmark gauge’s stocks was 16 percent below the 30-day average. The index has lost 2.1 percent in December, paring its gains for the year to 6 percent.

     The S&P/TSX surged 5.4 percent last week, the most since July 2009, as equities worldwide climbed as oil prices stabilized and Fed Chair Janet Yellen said the U.S. central bank will probably hold rates near zero at least through the first quarter.

     Crude prices resumed a selloff today, extending a four-week slide on concern OPEC’s refusal to cut production will worsen a global glut. Gold fell the most in more than two weeks, while silver sank 2.6 percent and copper retreated.

     Four of the 10 main industries in the S&P/TSX declined today. Materials shares sank more than 3 percent as gold miners plunged 5.4 percent. Health-care companies jumped 1.3 percent as Valeant Pharmaceuticals International Inc. climbed 1.4 percent to a record C$167.77.

     Energy stocks in the benchmark index dropped 1 percent, halting a four-day rally. The group recorded its best gain in five years last week as oil advanced three out of the five days.

     Legacy Oil plunged 13 percent to C$2.18 and Crew Energy slid 10 percent to C$6.10.

     BlackBerry jumped 7.6 percent to C$12.43. TD Securities analyst Scott Penner increased his rating on the shares to a buy rating from a hold rating, with a price target of C$13.

     BlackBerry’s uptake of new software services is likely to drive earnings power, Penner wrote in a note today. The company’s third-quarter revenue miss was largely in device business, which is less relevant to earnings going forward, he wrote.

US

By Jeremy Herron and Joseph Ciolli

     (Bloomberg) — U.S. stocks extended their climb, with benchmark indexes rising to records as gains in technology shares offset losses among drugmakers. Energy producers resumed a selloff as crude sank with gold, while the ruble strengthened.

     The Standard & Poor’s 500 Index added 0.4 percent to an all-time high of 2,078.54 by 4 p.m. in New York, while gains in Intel Corp. and International Business Machines Corp. led the Dow Jones Industrial Average up 0.9 percent, also to a record. Oil traded in the U.S. and London slipped at least 2 percent, halting a four-day rally in S&P 500 energy stocks. Natural gas futures fell to a two-year low. Gold futures declined the most in more than two weeks. The ruble climbed on speculation exporters are selling foreign currency amid government pressure.

     Equities globally have been climbing since the Federal Reserve indicated last week that it will probably hold interest rates near zero at least through the first quarter, even as the U.S. economy shows signs of strength. An update on third-quarter gross domestic product is due tomorrow. Chinese ministers offered support for Russia, expanding a currency swap between the two nations as President Vladimir Putin seeks to shore up the ruble without depleting foreign-exchange reserves.

     “Once the trend got turned last week, given the time of the year, it became a perfect storm to the upside,” Walter Todd, who oversees about $1 billion as chief investment officer for Greenwood, South Carolina-based Greenwood Capital Associates LLC, said by phone. “Absent something from left field overseas or anything else unforeseen, stocks will continue to move higher and maybe approach that 2,100 level on the S&P by the end of the year.”

     The S&P 500 completed its fifth recovery this year from a decline of 4 percent or more, just 17 days after it started, data compiled by Bloomberg show. In comparable drops beginning in January, April, July and September, the S&P 500 needed about a month to erase losses, the data show.

     A slide in oil prices and the worsening financial crisis in Russia rippled through markets earlier this month, wiping more than $1 trillion off U.S. equity values in less than two weeks. The S&P 500 lost 5 percent in seven trading days through Dec. 16.

     After rising Dec. 19, oil resumed its retreat today, with West Texas Intermediate crude for February delivery dropped 3.3 percent to $55.26 a barrel in New York, extending its slide this year to 44 percent. Brent crude for February settlement slipped 2.1 percent to $60.11 per barrel in London, after jumping 3.6 percent Dec. 19, its steepest one-day gain in two years.

     Saudi Arabia reaffirmed its resolve to maintain output at current levels at a conference at the weekend, fueling concern over a global supply glut in oil. Energy shares in the S&P 500 fell 1 percent, after rallying 9.7 percent last week.

     Eight of the S&P 500’s 10 main industry groups advanced today, with technology shares rising 1.1 percent and telephone stocks up 1 percent. Intel and IBM gained at least 1.8 percent, while Apple Inc. added 1 percent. The Nasdaq 100 Index rose 0.3 percent, while the Russell 200 Index of small-cap stocks added 0.5 percent to close at its highest level since July 3.

     Gilead Sciences Inc. sank 14 percent after its hepatitis C drug was blocked by a drug-benefit manager. Health-care shares sank 1.2 percent as a group on the S&P 500, contributing the biggest decline. Trading in S&P 500 stocks was 7.4 percent below the 30-day average, according to data compiled by Bloomberg.

     “It’s going to be pretty tough to divine anything meaningful from the market this week with Christmas coming up on Thursday and with trading desks half-staffed,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said by phone. “If anything, you’re likely to see more impetus to show more equity positions and less cash going into year end.”

     After the close of European trading, S&P revised its outlook for the ratings of oil companies Total SA, BP Plc and Royal Dutch Shell Plc to negative, citing the deterioration in the forecast for crude prices. The Stoxx Europe 600 Index gained 0.5 percent today.

     The ratings service earlier raised its forecast for U.S. gross domestic product in 2015, saying lower oil prices may spur consumer spending. S&P now forecasts the U.S. economy to grow next year by 3.1 percent, up from 3.0 percent. The report boosted the S&P 500 index briefly above its Dec. 5 closing record, capping a five-day gain of 5.8 percent, the most in two months.

     Economists surveyed by Bloomberg predict annualized growth in U.S. gross domestic product will be revised up to 4.3 percent for the three-month period, from a previous estimate of 3.9 percent.

     The ruble strengthened 4.7 percent to 55.80 a dollar in Moscow, bringing its two-day appreciation to about 9.3 percent. The Micex Index rose 0.8 percent today.

     China will provide Russia with help if needed and is confident the country can overcome its economic difficulties, Foreign Minister Wang Yi was cited as saying in Bangkok in a Dec. 20 report by Hong Kong-based Phoenix TV.

     OAO Rosneft rallied 2.5 percent after it repaid $7 billion in debt and said it’s generating enough dollars to meet the obligations taken on to buy TNK-BP last year and become the world’s largest traded oil producer.

     The yen fell for a fourth day against the greenback, losing 0.5 percent to 120.08 per dollar, the longest losing streak in a month, as stabilizing oil prices reduced demand for haven currencies. The euro was little changed at $1.2226 after earlier sliding to $1.2220, matching its weakest level since August 2012. The 18-member currency advanced 0.5 percent to 146.82 yen.

     Yields on German 10-year bonds were little changed at 0.60 percent, and rates on similar-maturity U.S. Treasuries were also steady, at 2.16 percent. Yields on Spanish and Portuguese 10- year bonds fell to record lows today.

     Stocks in developing nations climbed for a fourth day, with the MSCI Emerging Markets Index rising 1.3 percent as investors bet on a stabilization in oil prices and that China will step up measures to support economic growth.

     Equity gauges in the Czech Republic, Hungary, Poland and Turkey climbed, while Dubai’s DFM General Index added 2.3 percent, trimming its plunge this quarter to 24 percent.

     The Bloomberg Commodity Index fell 1.5 percent as natural gas, oil and metals retreated. Natural gas futures slumped 9 percent to the lowest settlement since Jan. 9, 2013. Gold futures for February delivery fell 1.4 percent to $1,179.80 on the Comex, while contracts on silver retreated 2.1 percent.

Have a wonderful evening everyone.

Be magnificent!

”How far you go in life depends on your being tender with the young, compassionate with the aged, sympathetic with the striving and tolerant of the weak and strong. Because someday in your life you will have been all of these.” George Washington Carver

As ever,

Karen

“Life’s most persistent and urgent question is, ‘What are you doing for others?’” Martin Luther King, Jr.  

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