January 15, 2015 Newsletter

Dear Friends,

Tangents:

The Ides of January!

POEM by Mary Oliver:

RUMI (for Coleman Barks)

When Rumi went into the tavern
I followed.
I heard a lot of crazy talk
and a lot of wise talk.

But the roses wouldn’t grow in my hair.

When Rumi left the tavern
I followed.
I don’t mean just to peek at
such a famous fellow.
Indeed he was rather ridiculous with his
long beard and his dusty feet.
But I heard less of  the crazy talk and
a lot more of the wise talk and I was
hopeful enough to keep listening

until the day I found myself
transformed into an entire garden
of roses.

PHOTOS OF THE DAY

A hot air balloon floats upwards during the International Balloon trophy in the village of Filzmoos, Austria on Wednesday. Over 35 hot air balloons from all over Europe participated in the week long event in the middle of the Austrian Alps. Leonhard Foeger/Reuters

People look at the sea as a helicopter, part of a rescue team, continues its search for five missing fishermen at Macas beach, near Sintra on Wednesday. Rescuers continued their search for the missing fishermen after their boat was shipwrecked on the beach last night, according to authorities. Rafael Marchante/Reuters

Market Closes for January 15^th, 2015   

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Michelle F. Davis

     (Bloomberg) — Canadian stocks retreated a fifth day, extending their longest slide in six weeks, as plunges of more than 20 percent in BlackBerry Ltd. and Bombardier Inc. and declines among energy companies overshadowed a rally in raw- materials shares.

     BlackBerry tumbled 20 percent after the smartphone maker and Samsung Electronics So. said they’re not in talks about a deal. Bombardier tumbled the most ever after moving to cut about 1,000 jobs and book $1.4 billion in pretax fourth-quarter costs. Goldcorp Inc., Barrick Gold Corp. and Franco-Nevada Corp. surged at least 6.1 percent as the metal rallied to a four-month high.

     The Standard & Poor’s/TSX Composite Index slipped 42.61 points, or 0.3 percent, to 14,041.82 at the close in Toronto. The gauge has fallen 2.9 percent during its slide and is now down by 4 percent this year.

     West Texas Intermediate oil fell for the fourth time in five days, pushing energy shares in the S&P/TSX down 1.1 percent, as OPEC said it expects weaker demand for its crude and U.S. output climbed to the highest in records dating to January 1983.

     BlackBerry lost 20 percent, the most since June 2013, after it denied a report that it is in talks to be acquired by Samsung. Shares of the mobile-device maker surged 31 percent yesterday after Reuters reported Samsung recently proposed acquiring the company for as much as $7.5 billion.

     Bombardier dropped 26 percent after saying it will cut jobs as it halts work on the Learjet 85 business aircraft. Bombardier’s pullback on the jet, which was described as a “pause” in the face of weak demand, underscored the company’s struggle in developing new planes.                         

     Seven of 10 industries in the S&P/TSX slumped on trading volume 35 percent higher than the 30-day average.

     Data today showed Canadian existing home sales declined 5.8 percent from the previous month in December.

     Goldcorp and Barrick jumped at least 9.5 percent, the most in six years, and Franco-Nevada rose 6.1 percent as gold futures climbed to the highest since September. The precious metal rallied 2 percent as the dollar weakened after Switzerland decoupled its currency to the euro and lowered the deposit rate.

     Gold demand will rebound in 2015 as bullion consumption in Asia increases and investors return to exchange-traded products backed by the metal, according to HSBC Securities (USA) Inc.

     Canada retailers increased after Target Corp. said it plans to stop operations in Canada amid plunging profits. The second- largest U.S. retailer increased 1.8 percent in the U.S. while competitors Dollarama Inc. and Loblaw Cos. jumped at least 2.3 percent in Toronto.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks fell for a fifth straight day as banks and Best Buy Co. slid after corporate earnings disappointed, while Apple Inc. paced a decline in technology shares.

     Bank of America Corp. and Citigroup Inc. fell at least 3.7 percent as both banks reported a drop in fourth-quarter profit as revenue from fixed-income trading declined. Best Buy tumbled 14 percent as the largest electronics retailer warned that price pressure and sluggish demand may hamper results in the coming year. A gauge of homebuilders plunged the most since June 2013.

     Equity futures fluctuated earlier in the day after Switzerland’s central bank unexpectedly gave up its minimum exchange rate.

     “There’s a lot of uncertainty today,” Thomas Garcia, the head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc., said by phone. “There’s uncertainty about what to do with your Swiss holdings and their competitors, and commodities are all over the place. The other thing is we’ve had mixed economic data and you’ve got earnings this week, which are going to have a big effect on the markets as people keep an eye on the consumer.”

     The S&P 500 fell 0.9 percent to 1,992.73 as of 4 p.m. in New York, the lowest close since Dec. 16. The Dow Jones Industrial Average lost 102.37 points, or 0.6 percent, to 17,324.72. The Nasdaq 100 Index retreated 1.4 percent as Apple declined 2.7 percent. Trading in S&P 500 companies was 32 percent above the 30-day average for this time of the day.

     A decline in American retail sales combined with a slump in copper prices weighed on stock markets yesterday, causing the S&P 500 to have its worst start to the year since 2009. The benchmark gauge is down 3.4 percent over the past five days.

     After going through all of 2014 without a losing streak of more than three days, the S&P 500 yesterday completed its second slide of at least four straight days. The Chicago Board Options Exchange Volatility Index, known as the VIX, rose for a fifth straight day, climbing 6.5 percent to 22.88.

     Among today’s data, a Fed gauge of manufacturing in the New York region topped economists estimates, while a Philadelphia- area survey missed forecasts. Separate data showed more Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays.

     Wholesale prices in the U.S. declined 0.3 percent in December, the most in three years, showing little sign that inflation’s bubbling up amid plunging energy costs.

     A sustained plunge in energy prices is keeping a lid on inflation throughout the pipeline, from bills for businesses to the consumer’s cost of living. Weak price growth has convinced Federal Reserve officials to remain “patient” in their timing of the first interest rate increase since 2006 after ending monthly asset purchases three months ago.                       

     Concern about the impact of falling oil on investment and earnings growth are testing the resilience of U.S. stocks that have tripled since 2009, as investors speculate that demand for raw materials won’t be enough to eliminate a supply gut.

     Copper advanced after losing 5.2 percent yesterday, while gold capped the longest rally in more than six months. Oil lost 4.6 percent for the fourth decline in five sessions. The S&P 500 has moved in the same direction of the commodity 10 out of the past 11 trading sessions.

     “Put copper together with oil, the strength of the dollar, and the Swiss National Bank move and what you’ve got is a broader concern about the global growth story similar to what we saw in October,” said Paul Christopher, the St. Louis-based head of international strategy for Wells Fargo Investment Institute, which oversees $1.6 trillion.

     Equities futures were whipsawed earlier in the day as the Swiss National Bank unexpectedly gave up its minimum exchange rate of 1.20 per euro today, ending a three-year-old policy designed to shield the economy from the euro area’s sovereign debt crisis.

     The latest move marks an attempt by the SNB to reinforce defenses before government bond purchases by the European Central Bank. The change comes just one week before ECB policy makers meet to discuss introducing new stimulus, including quantitative easing, a move that may add to pressure on the franc against the euro.

     “The Swiss Bank move was a huge surprise, which was unsettling,” Ron Sanchez, chief investment officer at Fiduciary Trust Company International in New York, said via phone. “The predictability of the market has been a little compromised and markets are moving pretty clearly to risk-off.”
 

Have a wonderful evening everyone.

Be magnificent!

Brahman is like the clay of substance

out of which an infinite variety of articles are fashioned.

As clay, they are all one; but form or manifestation differentiates them.  Before every one of them was made,

they all existed potentially in clay, and of course, they are identical substantially; but when formed,

and so long as the form remains, they are separate and different.

Swami Vivekananda

As ever,

Carolann

The difference between life and the movies is that a script has to make sense,

and life doesn’t.

                                           -Joseph L. Mankiewicz, 1909-1993

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