August 13, 2013 Newsletter

Dear Friends,

As Carolann is out of the office this afternoon, I will be sending the newsletter on her behalf.

Today in History:

1889 – A patent for a coin-operated telephone was issued to William Gray.

1907 – The first taxicab started on the streets of New York City.

1932 – Adolf Hitler refused to take the post of vice-chancellor of Germany. He said he was going to hold out “for all or nothing.”

1935 – The first roller derby match was held at the Coliseum in Chicago, IL.

1942 – Walt Disney’s “Bambi” opened at Radio City Music Hall in New York City, NY.

1994 – It was reported that aspirin not only helps reduce the risk of heart disease, but also helps prevent colon cancer.

Tangents:

As back to school approaches, I thought I would share 4 tips to help your child succeed in school:

1. Set high (but not unrealistic) expectations for your child.

2. Talk to your child about school.  Ask specific questions – “What activities did you do today at school”, rather than general questions such as “How was school today?”.  This will avoid the answer “Good”, as I am sure all you parents out there have gotten many times.

3. Help your child develop good work habits and positive attitudes about learning.  Make your child excited about learning.  Find games to help them learn about the different subjects they are learning about in school.

4. Read with your child at home, in any language, even after your child can read alone.

Happy back to school shopping everyone!

“If you don’t build your dream, someone else will hire you to help them build theirs.” – Dhirubhai Ambani

Photos of the Day –August 13^th, 2013

The annual Perseid meteor shower lights the night sky behind Stonehenge in Salisbury Plain, southern England. The Perseid meteor shower is sparked every August when the Earth passes through a stream of space debris left by comet Swift-Tuttle. Kieran Doherty/Reuters

Greece’s Niki Panetta competes in the women’s triple jump qualification at the World Athletics Championships in Moscow’s Luzhniki stadium.David J. Phillip/AP

Market Closes for August 13^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam and Katie Brennan

Aug. 13 (Bloomberg) — Canadian stocks rose for a second day, climbing to a two-week high, after a rally in BlackBerry Ltd. shares and health-care stocks offset declines among some gold producers on a drop in the metal’s price.

BlackBerry rose 1.5 percent after announcing yesterday it had formed a special committee to consider strategic options.

Iamgold added 2.2 percent after lowering its cost forecast for the year. Alacer Gold Corp. surged 5.7 percent after appointing a new chief executive officer. New Gold Inc. and B2Gold Corp. dropped at least 3.4 percent as the metal declined.

The Standard & Poor’s/TSX Composite Index rose 47.92 points, or 0.4 percent, to 12,642.19 at 4 p.m. in Toronto. The index has gained 1.7 percent this year after rallying 6.8 percent since June 24.

“There’s some buying going on,” said Stephen Gauthier, chief investment officer with Fin-XO Securities in Montreal. His firm manages about C$550 million ($532 million). “We’re starting to see some good companies that are cheap on a relative basis.”

Health-care and technology stocks rose the most in the S&P/TSX, adding at least 1.4 percent as six of 10 industries advanced. Trading volume was 5.1 percent higher than the 30-day average.

BlackBerry gained 1.5 percent to C$11.27, the highest since June 27. The Waterloo, Ontario-based smartphone maker has surged 19 percent in the past three days.

BlackBerry’s decision to consider takeover offers, joint ventures or partnerships is fueling speculation that investors could band together to keep the company in Canadian hands.

Fairfax Financial Holdings Ltd. Chief Executive Officer Prem Watsa, BlackBerry’s largest shareholder through his company, resigned from the BlackBerry board, raising the possibility that he may play a role in rescuing the company.

Health-care stocks rallied 2 percent, the most in the benchmark index, as Valeant Pharmaceuticals International Inc. jumped 2.5 percent to a record C$107.58.

Iamgold added 2.2 percent to C$5.62. The gold mining company said its cost-cutting program is 55 percent done, and it expects total cash costs in 2013 of $790 to $840 an ounce, compared with a previous forecast of $850 to $925 an ounce.

Iamgold, based in Toronto, reported adjusted earnings of 8 cents a share, compared with analysts’ estimates of 9 cents, according to a Bloomberg survey.

Alacer Gold climbed 5.7 percent to C$2.58 after announcing Rodney P. Antal, formerly chief financial officer, has replaced David Quinlivan as chief executive officer effective immediately.

Alacer sold its stake in an Australian mine in February and is seeking to sell its two remaining assets there after taking charges of $902 million on the unit since the last quarter of 2012.

RMP Energy Inc., based in Calgary, gained 3.5 percent to C$4.76. The oil and gas producer raised its forecast for average production to about 6,800 barrels of oil equivalent a day from 6,000 to 6,500 barrels on strong drilling and production performance in its first half.

New Gold retreated 4.4 percent to C$7.13 and B2Gold lost 3.4 percent to C$3.12. Gold fell for the first time in a week, settling 1 percent lower at $1,320.50 an ounce in New York.

US

By Lu Wang and Nick Taborek

Aug. 13 (Bloomberg) — U.S. stocks and the dollar rose while Treasuries slid as retail sales data reinforced signals the economy is expanding moderately. European shares climbed to the highest level since May as German investor confidence topped estimates, while gold weakened.

The Standard & Poor’s 500 Index added 0.3 percent at 4 p.m. in New York, erasing an earlier loss, while the Stoxx Europe 600 Index advanced 0.6 percent. Apple Inc. rallied to the highest since Jan. 23 after billionaire investor Carl Icahn disclosed a “large position” in the stock. The yield on 10-year Treasuries rose 10 basis points to 2.72 percent. The Bloomberg U.S. Dollar Index added 0.5 percent and the yen fell versus all of its 16 major peers. Gold lost 1 percent, halting a four-session rally.

U.S. retail sales rose for a fourth consecutive month in July, showing American households are regaining momentum as employment climbs. The ZEW Center for European Economic Research’s index of investor and analyst expectations rose to 42 in August, more than the 39.9 median forecast of economists in a Bloomberg survey. Japanese Prime Minister Shinzo Abe is mulling a tax cut for companies, the Nikkei newspaper reported, citing unidentified government officials.

“The general tenor of economic news has been somewhat positive and so perhaps there are some bargain hunters who are coming into the market after some days of correction,” John Carey, a fund manager at Boston-based Pioneer Investment Management Inc., said by phone. His firm oversees $211.5 billion. “I don’t know that we’re going to have a roaring recovery anytime soon, but the economy does seem to be advancing, slowly but certainly advancing, and that I think has sunk in finally.”

The S&P 500 erased earlier losses of as much as 0.4 percent, extending to a ninth day a trend where it reached its lowest point before noon, data compiled by Bloomberg show. The gauge rallied an average of 0.45 percent from its morning low to the close during the eight days through yesterday.

Hewlett-Packard Co. rose 2.1 percent after being added to Citigroup Inc.’s focus list. Bank of America Corp. and Citigroup jumped more than 0.7 percent after analyst Dick Bove said the stocks would double. D.R. Horton Inc. and PulteGroup Inc. dropped more than 1.5 percent as homebuilders slid amid rising interest rates. U.S. Airways Group Inc. sank 13 percent after the Justice Department recommended blocking a planned merger with American Airlines.

Apple rallied 4.8 percent, giving technology shares the biggest gain among 10 groups in the S&P 500. Icahn said in a Twitter post that Apple shares are extremely undervalued and the company should conduct a large buyback. The company will unveil a new iPhone at a Sept. 10 event, according to a person familiar with its plans.

The S&P 500 fell 0.1 yesterday, its fifth drop in the past six days after closing at a record on Aug. 2, amid growing speculation the Federal Reserve will pare bond purchases this year as the economy strengthens. Fed officials have been scrutinizing data to determine whether growth is strong enough to curtail stimulus.

Charles Evans, Sandra Pianalto and Richard Fisher, regional Fed presidents in Chicago, Cleveland and Dallas, said last week that policy makers may be closer to tapering debt buying.

Fed Bank of Atlanta President Dennis Lockhart, who has backed the Fed’s $85 billion in monthly bond purchases, said today that policy makers may start to slow buying at any of their next few meetings amid “uneven performance” by the economy.

The 0.2 percent increase in U.S. retail sales last month followed a 0.6 percent gain in June that was larger than previously reported, according to Commerce Department figures issued today in Washington. The median forecast of 81 economists surveyed by Bloomberg called for a 0.3 percent advance.

Treasuries dropped the most in more than a week as the retail sales report added to speculation the economy is strengthening enough for the Fed to reduce its bond-buying program.

The S&P 500 will climb 8 percent to 1,825 in the next 12 months as economic growth gains momentum, according to Goldman Sachs Group Inc. David Kostin, the bank’s chief U.S. equity strategist, recommends buying shares of companies that generate most of their revenue domestically.

“The real issue to focus on is that rising interest rates are a reflection of a better economy,” Kostin said in a Bloomberg Television interview from New York. “The best strategy right now would be here, in the U.S., from now until the end of the year.”

The Stoxx 600 climbed for a fourth day, as two shares advanced for every one that declined. EON SE jumped 3 percent after Germany’s biggest utility beat analyst earnings estimates.

GAM Holding AG, the Swiss asset manager that split from Julius Baer Group Ltd. almost four years ago, rallied 9.7 percent as profit more than tripled.

The yen depreciated 1.3 percent to 98.16 per dollar and 1 percent per euro, the most in eight weeks. Europe’s shared currency slipped 0.3 percent to $1.3264.

Gold futures for December delivery fell 1 percent to $1,320.50 an ounce on the Comex in New York, after advancing 4 percent in the previous four sessions. The commodity has slumped 21 percent this year.

Crude advanced for a third day, with West Texas Intermediate rising 0.7 percent to $106.83 a barrel, as German investor confidence and U.S. retail sales bolstered optimism that economic growth and energy demand will accelerate.

Germany’s benchmark 10-year bund yield gained 11 basis points to 1.81 percent. Spain’s yield spread over Germany fell nine basis points to 269 basis points after reaching 265, the tightest since August 2011.

The cost of insuring against losses on corporate bonds declined, with the Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies decreasing 1 basis point to 94.7 basis points. High-yield corporate bonds rose for a 12th day in Europe, the longest stretch of gains since April, pushing borrowing costs down to the lowest in more than two months.

The MSCI Emerging Markets Index climbed 0.8 percent, advancing for a fourth day in the longest rally in almost four weeks. The Hang Seng China Enterprises Index jumped 2.6 percent to a two-month high. Russia’s Micex Index climbed 1.4 percent and India’s Sensex gained 1.5 percent. Benchmark gauges in South Korea, Taiwan, Indonesia, Thailand and the Philippines increased at least 1 percent.

Have  a wonderful evening everyone.

Be magnificent!

“Whenever you find yourself on the side of the majority, it is time to pause and reflect.” – Mark Twain

As ever,

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.