August 8, 2014 Newsletter

Dear Friends,

Tangents:

Sneak Some Zucchini Onto Your Neighbor’s Porch Night.

Celebrate this fun holiday on August 8!

Established by Pennsylvanian Tom Roy, this day encourages sharing. “Due to the overzealous planting of zucchini, citizens are asked to drop off baskets of the squash on neighbors’ doorsteps.” –Chase’s Calendar of Events.

I believe in pink.
I believe that laughing is the best calorie burner.
I believe in kissing, kissing a lot.
I believe in being strong when everything seems to be going wrong.
I believe that happy girls are the prettiest girls.
I believe that tomorrow is another day and I believe in miracles.

-Audrey Hepburn, 1929-1993

Photos of the Day

Hot air balloons lift off during a mass ascent at the 36th International Balloon Fiesta at Ashton Court Estate near Bristol, England. Ben Birchall/PA/AP

A couple wearing kimonos pose for wedding photos in Hamarikyu Gardens in Tokyo. Eugene Hoshiko/AP

Six sculptures of animated character Shaun the Sheep stand on display during a photocall near the Houses of Parliament in London. The ‘Shaun in the City’ sculptures, decorated by different artists and celebrities, will be auctioned to raise money for sick children. Matt Dunham/AP

Market Closes for August 8^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam and Callie Bost

Aug. 8 (Bloomberg) — Canadian stocks rose, trimming a second weekly decline, as signs that tensions are easing in Ukraine outweighed concern over crises in the Middle East and data showing national employers added fewer jobs than forecast.

Magna International Inc. rallied 6.5 percent, the most in more than two years, after boosting its sales outlook. SNC- Lavalin Group Inc. dropped 2.8 percent after second-quarter profit missed analysts’ estimates on declining revenue. Enerflex Ltd., an oilfield services company, jumped 10 percent as more bookings helped it report better-than-expected profit.

The Standard & Poor’s/TSX Composite Index rose 77.88 points, or 0.5 percent, to 15,196.31 at 4 p.m. in Toronto. The benchmark slipped 0.1 percent this week.

Stock gains accelerated in afternoon trading as Russia’s Defense Ministry said warplanes had ended drills in the region near Ukraine while RIA Novosti earlier reported that Russia offered to mediate between the government in Ukraine and the separatists that it’s battling.

U.S. President Barack Obama approved airstrikes in Iraq, and rocket attacks marked the end of a cease-fire between Israel and Hamas. Investors have been watching developments in geopolitical crises for signs of slowing global economic growth.

Canada added 200 jobs after a decline of 9,400 in May, while the country’s unemployment rate fell to 7.0 percent as people left the labor market, Statistics Canada said today in Ottawa. Economists had projected a 20,000 job increase according to median forecasts. The economy has alternated monthly jobs gains and losses for nine straight months.

Magna rose 6.5 percent to C$122.24 after reporting higher profit and sales than analysts had forecast. The auto parts maker also increased its 2014 sales guidance to $35.6 billion to $37.3 billion, from $34.9 billion to $36.6 billion.

Linamar Corp. rallied 5.2 percent to C$64.23 and Martinrea International Inc. added 5.6 percent to C$14.09 to pace gains among consumer discretionary stocks. Six of 10 industries in the S&P/TSX advanced.

Avigilon Corp., a security solutions provider, sank 11 percent to C$22.07, the worst decline in three months. The company reported earnings that fell short of estimates and expenses for sales, marketing and research and development expenses increased.

US
By Elena Popina

Aug. 8 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index climbing the most in five months to erase a weekly loss, as signs that tensions are easing in Ukraine outweighed concern over crises in the Middle East.

Gap Inc. advanced 5.9 percent as the retailer’s earnings and revenue topped estimates. Coach Inc. added 5.4 percent to lead a rally in apparel companies. Zynga Inc. tumbled 1.4 percent after cutting its full-year outlook. News Corp. slid 1.6 percent after fourth-quarter earnings missed estimates as the company struggled in its transition from print to digital.

The S&P 500 jumped 1.2 percent to 1,931.59 at 4 p.m. in New York, the most since March 4. The Dow Jones Industrial Average climbed 185.66 points, or 1.1 percent, to 16,553.93. About 5.6 billion shares changed hands on U.S. exchanges, 2.6 percent below the three-month average.

“For the most part the market has been pretty resilient over the last week or so,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in an interview. “It has been able to shrug off a lot of negatives and not go lower than it had.”

The S&P 500’s rally erased declines in the previous four sessions and left the index 0.3 percent higher for the week. The gauge yesterday came within 60 points of wiping out its gains for 2014 as it closed below its 100-day moving average for the first time since April. The Dow bounced back after touching its average price in the past 200 days.

Stocks jumped after RIA Novosti reported that Russia seeks a de-escalation of the conflict in Ukraine. Equities extended gains as Interfax, citing Russia’s Defense Ministry, said military exercises held since Aug. 4 near the Ukraine border are over and forces are returning to areas of permanent deployment.

The S&P 500 had dropped 3.9 percent from a record on July 24 through yesterday as Russia amassed troops along Ukraine’s border and as conflict escalated between Israel and Hamas. Equity futures retreated early today as President Barack Obama approved air strikes in Iraq, and rocket attacks marked the end of a cease-fire between Israel and Hamas.

“When you see the geopolitical news in Russia and the Middle East, it’s horrible from a humanitarian point of view for U.S. equities, but how bad is it for U.S. economic fundamentals?” Michael Purves, chief global strategist and head of equity derivatives research at Weeden & Co. in Greenwich, Connecticut, said in a phone interview. “It’s pretty distant. We’ve had a big selloff since the highs in July and in my estimations, this has been a pretty orderly retreat spurred by overstretched market conditions.”

U.S. stocks climbed amid speculation that recent declines had been excessive. Almost 80 percent of stocks in the S&P 500 closed yesterday below their average price of the past 50 days, the most since 2012, according to data compiled by Bloomberg. All but one of the 10 main industries in the index was oversold, a report from Bespoke Investment Group LLC showed.

The S&P 500 has gone without a 10 percent correction since 2011. It trades at 17.5 times the reported earnings of its companies, after reaching a four-year high of 18.3 in June.

Data today showed the productivity of U.S. workers rose more than projected in the second quarter, rebounding from the biggest drop in more than three decades and helping to restrain labor costs.

Reports last week showed 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 Chicago Board Options Exchange Volatility Index, known as the VIX, fell 5.3 percent to 15.77, extending a weekly decline to 7.4 percent.

All 10 major industries in the S&P 500 advanced. Utilities climbed 2 percent for the largest gain.

Consumer-discretionary shares added 1.6 percent, as Gap rallied 5.9 percent, the most since November. The biggest apparel-focused retailer in the U.S. reported preliminary second-quarter earnings and revenue that beat estimates.

Coach added 5.4 percent to lead a 1.9 percent jump in apparel makers.

Nvidia Corp. gained 8.8 percent after the maker of mobile- phone chips posted second-quarter adjusted earnings of 30 cents a share. Analysts on average had predicted 26 cents.

Monster Beverage Corp. advanced 6.7 percent after reporting quarterly earnings of 81 cents a share. That beat the 75-cent average estimate of analysts in a Bloomberg survey.

Zynga dropped 1.4 percent after the online game company posted second-quarter results at the low end of its forecast and cut its full-year outlook after deciding to delay new games.

News Corp., which split from billionaire Rupert Murdoch’s entertainment business last year, retreated 1.6 percent. Chief Executive Officer Robert Thomson is working to transform the company’s print properties into a digital business as well as expand around the globe. The news division, which publishes the Wall Street Journal and the New York Post, continued to face difficulty at a time when advertising is fleeing print in favor of digital destinations. Of the S&P 500 companies that have reported quarterly results so far this season, 75 percent beat analysts’ estimates for profit, while 64 percent exceeded sales projections.

Have a wonderful weekend everyone.

Be magnificent!

When you call yourself an Indian or a Muslim, or a Christian, or a European, or anything else,

you are being violent. Do you see why? Because you are separating yourself from the rest of mankind.

When you separate yourself by belief, by nationality, by tradition it breeds violence.

Krishnamurti, 1895-1986

As ever,

Carolann

…greatness comes when you are really tested, when you take some knocks, some disappointments,

when sadness comes, because only if you have been in the deepest valley can you ever know how

magnificent it is to be on the highest mountain.

-Richard Nixon, 1913-1994

from his resignation speech

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