August 28, 2013 Newsletter

Dear Friends,

Tangents:

We watched a terrific concert  from the White House on PBS last night, A Celebration of Music from the Civil Rights Movement.   It featured some great artists including Smokey Robinson, Joan Baez, Bob Dylan, among others.  To take a trip down memory lane with these tunes, you can watch it at the following link:

http://video.pbs.org/video/1410865290/

In the end, we will remember not the words of our enemies, but the silence of our friends.  – Martin Luther King Jr.

Photos of the Day –August 28th, 2013

Martin Luther King Jr. acknowledges the crowd at the Lincoln Memorial for his ‘I Have a Dream’ speech during the March on Washington on Aug. 28, 1963. AP/File

ROTC Lt. Col. Tangela Spencer rings the bell 50 times as elementary students recite verses from the ‘I Have a Dream’ speech given 50 years ago by Rev. Martin Luther King. About 500 students and others gathered for the event in Montgomery, Ala., on the campus of Alabama State University to honor the 50th anniversary of the March on Washington. Dave Martin/AP

Market Closes for August 28^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Alex Barinka

Aug. 28 (Bloomberg) — Canadian stocks rose, rebounding from the benchmark index’s biggest drop since June, as energy producers rallied on a surge in oil prices amid growing speculation of a U.S. military strike against Syria.

Niko Resources Ltd., an oil exploration company, gained 6.8 percent to lead advances among oil companies as crude touched a two-year high. Valeant Pharmaceuticals International Inc. rose 2.3 percent, reversing a 4.1 percent slide yesterday. BlackBerry Ltd. advanced 2.7 percent to propel technology stocks higher.

New Gold Inc. tumbled 7.5 percent to lead producers of raw materials lower as gold fell from a three-month high.

The Standard & Poor’s/TSX Index rose 16.01 points, or 0.1 percent, to 12,607.22 at 4 p.m. in Toronto, trimming an earlier gain of as much as 0.7 percent. Trading volume was 7.4 percent below the 30-day average.

“It’s all about Syria — that’s the risk,” John Stephenson, senior vice president and portfolio manager who helps oversee about C$2.8 billion ($2.7 billion) at First Asset Investment Management Inc. in Toronto, said by phone.

“Commodities are moving higher. It’s a scarcity argument that we are going to have another conflict in the Middle East. The market is up but very little and on very light volumes.”

The S&P/TSX dropped 1.3 percent yesterday, its steepest slide since June 24, amid concern the U.S. will take action against Syria. The U.S. and the U.K. today said they are prepared to make a military strike without authorization from the United Nations Security Council.

After Russia objected to a UN resolution offered by the U.K. authorizing steps to protect civilians, a State Department spokeswoman said the U.S. will take “appropriate” action without the international body’s approval. The U.S. and its NATO allies began presenting their justification for military action against Syria as they advanced plans for launching strikes and prepared evidence that the Syrian government used chemical weapons on its own people.

Crude surged as high as $112.24, the most since May 2011, as the tension over Syria escalated, increasing concern oil supplies will be disrupted. The rally helped commodities surge to the highest level since February. The Standard & Poor’s GSCI Spot Index rose as much as 1.9 percent before retreating to a gain of 0.9 percent.

Half of the 10 main industries in the benchmark Canadian equity index advanced, led by a 1.7 percent rally among health- care companies. Valeant Pharmaceuticals rose 2.3 percent to C$102.60.

Energy stocks contributed the most to the equity gauge’s climb, adding 1.2 percent on the spike in oil prices. Niko Resources jumped 6.8 percent to C$5.48 to lead the surge.

Athabasca Oil Corp. climbed 3.8 percent to C$7.66.

Technology stocks advanced 1.1 percent as BlackBerry, the struggling smartphone maker, rose 2.7 percent to C$10.82.

The S&P/TSX Materials Index plunged 1.6 percent, the biggest loss as a group in the benchmark index. The drop erased an earlier advance of as much as 1.7 percent as gold, silver and copper prices retreated.

New Gold slumped 7.5 percent to C$7.15. Torex Gold Resources Inc. fell 6.4 percent to C$1.77.

Financial stocks retreated 0.2 percent for a third day of declines. Sun Life Financial Inc. led the drop, falling 1.3 percent to C$31.82.

National Bank of Canada gained 2.4 percent to C$81.14, as profit from trading and wealth management boosted earnings at the country’s sixth-largest lender.

US

By Nick Taborek and Namitha Jagadeesh

Aug. 28 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from an eight-week low, as energy shares rallied and investors watched developments on Syria.

Chevron Corp. and Exxon Mobil Corp. jumped more than 2.3 percent. TiVo Inc. climbed 5.6 percent after the maker of digital-video recorders posted a profit. Joy Global Inc. lost 4.7 percent as the mining equipment maker said orders for new equipment are declining. PulteGroup Inc. and D.R. Horton Inc. declined at least 1.2 percent as pending sales of existing homes unexpectedly fell in July.

The S&P 500 rose 0.3 percent to 1,634.96 at 4 p.m. in New York. The index closed just short of its average level for the past 100 days of 1,638.27, after slipping below it yesterday for the first time since June. The Dow Jones Industrial Average advanced 48.38 points, or 0.3 percent, to 14,824.51.

“We’re simply just seeing a little bit of bounce back from what was very bad action yesterday,” Walter Todd, who oversees about $950 million as chief investment officer of Greenwood Capital Associates LLC in Greenwood, South Carolina, said by phone. “There are probably starting to be opportunities that are being created in certain segments of the market as a result of this sell-off, and investors are wisely looking to see if they can take advantage of some of those.”

The S&P 500 slid 1.6 percent yesterday to the lowest level since July 3 amid concern the U.S. will take action against Syria. The U.S. and the U.K. today said they are prepared to take military action against Syria without authorization from the United Nations Security Council.

After Russia objected to a UN resolution offered by the U.K. authorizing action to protect civilians, a State Department spokeswoman said the U.S. will take “appropriate” steps without the international body’s approval. The U.S. and its NATO allies began presenting their justification for military action as they advanced plans for launching strikes and prepared evidence that the Syrian government used chemical weapons on its own people.

“This is an environment where people are really focused on one variable which is going to dominate all others, and that, today, is Syria,” Lawrence Creatura, a Rochester, New York- based fund manager at Federated Investors Inc., which oversees about $380 billion, said in a phone interview. “The reflex is to sell during times of sudden unexpected conflict. Weakness derived from temporary events can often times be a great buying opportunity.”

The S&P 500 has lost 4.4 percent from a record high on Aug. 2 amid growing speculation the Federal Reserve will reduce its monthly bond buying. Minutes of the central bank’s July meeting released Aug. 21 showed policy makers supported stimulus cuts this year if the economy improves. Fed stimulus helped push the S&P 500 up as much as 153 percent from its March 2009 low, as better-than-estimated corporate earnings also fueled gains.

Data today showed fewer Americans signed contracts in July to buy previously owned homes. The index of pending home sales dropped 1.3 percent, the most this year, after a 0.4 percent decrease in June, according to figures from the National Association of Realtors. Economists forecast no change in the gauge from the month before, according to a median estimate in a Bloomberg survey.

About 5.2 billion shares changed hands on U.S. exchanges.

Trading volume is heading for the second-slowest month in at least five years, according to data compiled by Bloomberg. An average of about 5.5 billion shares changed hands each day this month. That’s about 80 million shares more than last August.

The Chicago Board Options Exchange Volatility Index, or VIX, fell 1.7 percent to 16.49. The equity volatility gauge has surged 39 percent since a five-month low on Aug. 5.

Seven out of 10 main industry groups in the S&P 500 rose, with energy companies jumping 1.8 percent to pace advances.

Chevron advanced 2.5 percent to $121.81. Exxon Mobil rallied 2.3 percent to $88.84. Marathon Oil Corp. increased 3.7 percent to $34.60. Oil futures climbed 1 percent to the highest in two years.

TiVo advanced 5.6 percent to $11.58 after reporting second- quarter net income of $268.9 million, including legal settlements, compared with a $27 million loss a year earlier.

Chief Executive Officer Tom Rogers said in an interview the company will be profitable for the remainder of the fiscal year ending January and through the following year.

Avago Technologies Ltd. surged 4.7 percent to $38.28. The supplier of components for wireless communications reported third-quarter revenue of $664 million, exceeding the $617.25 million average forecast of analysts surveyed by Bloomberg.

Zale Corp. rose 30 percent to $11.63, the highest level since 2008. The jewelery retailer reported fourth-quarter revenue that beat analyst estimates as same-store sales jumped 5.6 percent.

Express Inc. gained 6.6 percent to $21.10. The specialty retailer said same-store sales rose 6 percent in the second quarter, beating analysts’ estimates, and raised its profit forecast.

Tiffany & Co. retreated 4.4 percent to $77.25, extending its loss for the week so far to 5.8 percent. The world’s second- largest luxury jewelry retailer yesterday reported second- quarter sales that were short of analyst estimates.

Joy Global lost 4.7 percent to $48.89. The mining equipment producer’s CEO, Mike Sutherlin, said the market “has become even more challenging,” as customers’ declining cash flows are resulting in “significantly” reduced capital expenditures.

Caterpillar Inc. slid 0.3 percent to $82.45.

An S&P index of homebuilders fell 1.2 percent. PulteGroup lost 1.4 percent to $15.38 while D.R. Horton declined 1.2 percent to $17.77.

Taser International Inc. fell 5.9 percent to $11.15, after rising 38 percent in the past 11 trading days. The maker of stun guns declined after JPMorgan analysts downgraded the shares to neutral from overweight.

Have a wonderful evening everyone.

Be magnificent!

Live your own life.

That is to say, where you are, as you are, with what you are, and with who you are…

Accept the situation in which you find yourself and try, at the same time, to adapt to it.

You cannot escape from it.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

I have decided to stick with love.  Hate is too great a burden

to bear.

-Martin Luther King Jr., 1929-1968

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7