August 13, 2014 Newsletter

Dear Friends,

Tangents:

On this day in 1961, the Brandenburg Gate was closed separating East and West Berlin and construction of the Berlin Wall began.

Exciting story reported today, this from the Guardian newspaper:

Archaeologists uncover vast ancient tomb in Greece

Site dates to end of Alexander the Great’s reign in 4th century BC and may be grave of a prominent Macedonian, say officials

Reuters,The Guardian, Wednesday 13 August 2014
Archaeologists have unearthed a vast ancient tomb in Greece, distinguished by two sphinxes and frescoed walls and dating to 300-325BC, the government announced on Tuesday.

The tomb, in the country’s north-eastern Macedonia region, which has been gradually unearthed over the past two years, marks a significant discovery from the early Hellenistic era. A culture ministry official said that there was no evidence yet to suggest a link to Alexander the Great – who died in 323BC after an unprecedented military campaign through the Middle East, Asia and northeast Africa – or his family.

The official said the Amphipolis site, about 65 miles north-east of Greece’s second-biggest city, Thessaloniki, appeared to be the largest ancient tomb to have been discovered in Greece.

Archaeologists began excavating the site in 2012 and expect to enter the tomb by the end of the month to determine who was buried there.

“It looks like the tomb of a prominent Macedonian of that era,” said a second culture ministry official. Alexander the Great died in Babylonia, in modern Iraq, and his actual burial place is not known.

Archaeologists have found two sphinxes, thought to have guarded the tomb’s entrance, and a 4.5-metre-wide road leading into it, with walls on both sides covered by frescoes. It is circled by a 497-metre marble outer wall.

Experts believe a five-metre-tall lion sculpture previously discovered nearby once stood atop the tomb.

“It is certain that we stand before an especially significant finding. The land of Macedonia continues to move and surprise us, revealing its unique treasures,” the prime minister, Antonis Samaras, said on Tuesday during a visit to the site.

Photos of the DayA meteor streaks over the sky during the Perseid meteor shower at the Maculje archaeological site near Novi Travnik. According to NASA, the annual Perseid meteor shower reaches its peak on August 12 and 13 in Europe. The fireballs from the meteorites are fast and plentiful, although a nearly full moon (Supermoon) makes it difficult to view them this year, the agency adds. Dado Ruvic/Reuters

A visitor tries Sony’s ‘Project Morpheus’ virtual reality headset at an exhibition stand during the Gamescom 2014 fair in Cologne. The Gamescom convention, Europe’s largest video games trade fair, runs from August 13 to August 17. Ina Fassbender/Reuters

Market Closes for August 13^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Jacob Barach

Aug. 13 (Bloomberg) — Canadian stocks ended a three-day rally as raw-material companies dropped after China’s industrial production trailed analyst estimates.

Badger Daylighting Ltd., an excavation company, fell 24 percent after it reported lower profit margins on slower activity in North America and wet weather in Saskatchewan. Black Diamond Group Ltd. slid 3.7 percent after its earnings fell short of analyst estimates. Secure Energy Services Inc. rose 13 percent on better-than-forecast profit.

The Standard & Poor’s/TSX Composite Index dropped 11.50 points, or 0.1 percent, to 15,262.73 at 4 p.m. in Toronto. The equity gauge is up 12 percent this year, and had advanced 1 percent over the previous three days.

Teck Resources Ltd., Canada’s largest diversified mine operator, slid 0.3 percent. Copper fell 1.3 percent amid concern about the outlook for demand in China, the biggest consumer of the metal. Zinc and aluminum slid in London.

China’s industrial output expanded 9 percent in July, less than the 9.2 percent estimate from economists in a Bloomberg survey, government statistics showed today. The country’s broadest measure of credit slumped to the lowest since the global financial crisis.

Badger Daylighting plunged 24 percent to C$27.25. Adjusted Ebitda margins were 25 percent for the second quarter, compared with 29 percent a year ago, the company said.

Black Diamond fell 3.7 percent to C$28.67. The provider of temporary work space reported earnings excluding some items of 23 cents a share, compared with the 31-cent average analyst estimate, data compiled by Bloomberg show. Yesterday, the stock was reduced to market perform, the equivalent of hold, from outperform at BMO Capital Markets.

Secure Energy Services gained 13 percent to C$27.18. The company, which sells services to the oil and gas industry, had earnings of 5 cents a share, compared with the average analyst estimate of 4 cents. It also agreed to buy Predator Midstream Ltd., according to a statement from the company yesterday.

USA

By Elena Popina

Aug. 13 (Bloomberg) — U.S. stocks rose, pushing the Standard & Poor’s 500 Index to a two-week high, as a slowdown in retail sales boosted speculation the Federal Reserve won’t be forced to raise rates sooner than anticipated.

Amazon.com Inc. climbed 2.2 percent after ChannelAdvisor Corp. said the retailer’s same-store sales rose 40 percent in July. Vertex Pharmaceuticals Inc. jumped 3.9 percent to lead gains among health-care stocks. King Digital Entertainment Plc plummeted 23 percent trading after posting worse-than-forecast sales and cutting its 2014 outlook. Macy’s Inc. lost 5.5 percent after profit fell short of estimates.

The S&P 500 gained 0.7 percent to 1,946.72 at 4 p.m. in New York, the highest since July 30. The Dow Jones Industrial Average climbed 91.26 points, or 0.6 percent, to 16,651.80, also the highest in two weeks. About 5.1 billion shares changed hands on U.S. exchanges, 11 percent below the three-month average.

“There is some feeling that events overseas are beginning to cool down a little bit but also the retail numbers might suggest that the Fed is not going to be so aggressive in raising rates any time soon,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co., which oversees $110 billion, said in a phone interview. “That has been the backbone of the market for the past five years.”

Retail sales were little changed in July, the worst performance in six months, as car demand slowed and tepid wage growth restrained U.S. consumers. The slowdown in purchases followed a 0.2 percent advance in June, the Commerce Department reported today in Washington.

Recent data have shown U.S. gross domestic product expanded at a 4 percent annual pace in the second quarter, confirming the Fed’s view that a first-quarter contraction was transitory. Employers in the U.S. added more than 200,000 jobs for a sixth straight month in July, the longest such period since 1997.

The economic strength had created concern that the Fed may be forced to act on rates sooner than anticipated, as the central bank remains on pace to wind down its monthly bond purchases in October. Fed Chair Janet Yellen has said officials will keep its benchmark low for a “considerable time” after the bond buying ends.

Three-rounds of bond purchases and record-low interest rates have helped push stocks higher by as much as 194 percent from a bear-market low in 2009.

The S&P 500 last closed at a record on July 24 before tumbling 3.9 percent on concerns that geopolitical crises from Ukraine to Israel and Iraq could derail the global economy. The gauge closed today 2.1 percent below its all-time high.

In Iraq, Kurdish forces fought to retake positions overrun last week by Islamic State fighters in the northern part of the country, while a political standoff between President Fouad Masoum and Prime Minister Nouri al-Maliki continued.

Ukrainian officials said today they’d refuse entry to a truck convoy that Russia says is loaded with humanitarian assistance for rebel-held eastern areas, while pledging to send their own aid to the embattled region.

“The many geopolitical issues are a little quieter or on the back burner at the moment,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a phone interview. “It’s given investors an opportunity to take a look and see if they want to add to positions, and it looks like that’s what they’re doing today.”

Four companies, including Macy’s and Cisco Systems Inc. report earnings today. About 75 percent of those that have posted results this season have beaten analyst estimates, while 64 percent have exceeded sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, which usually moves in the opposite direction to the S&P 500, slid 8.7 percent to 12.90 today.

All 10 main S&P 500 groups advanced today, with health-care and information technology stocks advancing at least 1.1 percent for the best performances. Vertex Pharmaceuticals Inc. added 3.9 percent for the biggest advance in the S&P 500 while Intel Corp. jumped 2.9 percent to lead gains in the Dow.

Health Care REIT Inc. added 2.3 percent to $64.95 as it agreed to buy HealthLease Properties Real Estate Investment Trust and formed a partnership for additional properties to expand in senior care.

InterMune Inc. jumped 14 percent to $52.06, the most since October 2000, after reports the company had received takeover bids from some of Europe’s biggest drugmakers, including Sanofi and Roche Holding AG.

Amazon.com climbed 2.2 percent to $326.28. ChannelAdvisor said the company’s rate of sales growth has increased each month this year.

EBay Inc. slipped 0.9 percent to $52.94. Its July sales grew by 9.7 percent, down from a 12 percent gain in June, according to ChannelAdvisor.

Macy’s sank 5.5 percent to $56.47 for its biggest slide in two years. The second-largest U.S. department-store company’s earnings missed estimates after discounts meant to lure shoppers eroded profit margins. The Cincinnati-based company, which operates about 840 stores, cut its full-year forecast for comparable-sales growth.

Macy’s led clothing and accessories retailers lower. Fossil Group Inc. tumbled 5.6 percent for the biggest drop in the S&P 500. Tiffany & Co., Kohl’s Corp. and TJX Cos. dropped at least

1.5 percent.

FleetCor Technologies Inc. added 9.8 percent to $142.10. The provider of fuel cards agreed to buy Comdata Inc. for $3.45 billion.

King Digital tumbled 23 percent to $13.99. The maker of the Candy Crush Saga video game said yesterday that gross bookings — the value of virtual merchandise sold — will fall in the third quarter. It also reported second-quarter adjusted revenue that missed analysts’ projections.

SeaWorld Entertainment Inc. dropped 33 percent to $18.90, the lowest since its debut in April 2013. Third-quarter earnings missed estimates as controversy over treatment of captive whales in its theme-park shows hurt attendance, the company said.

Have a wonderful evening everyone.

Be magnificent!

An eye for an eye only ends up making the whole world blind.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Beauty is power; a smile is its sword.

-Charles Reid, 1814-1884

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7