Author: Carolann

Dear Friends,

Tangents:

Yesterday was the anniversary when the first men, Neil Armstrong and Buzz Aldrin walked on the moon, on July 20^th, 1969.

Annette Dutenhoffer wrote this in a column this morning:

Another little boy watched that TV broadcast too, 9-year-old Chris Hadfield. Years later that Ontario farm boy fulfilled his dream and grew up to be commander of the International Space Station. During his five-month stay there, he became an online celebrity, posting videos that shared insights into his life and work in space. His most popular video, though no longer posted, had more than 22 million views on YouTube. It was a performance of David Bowie’s song, “Space Oddity,” showing Mr. Hadfield singing and floating with his guitar in space, while awe-inspiring views of the earth go by in the background.

Many things point to humanity’s yearning to know more of the infinite than our finite earth-bound perspective can give us: the 22 million views of Hadfield’s video; the surge of interest in private space travel, asteroid mining, and Mars in general; the jaw-dropping beauty of two decades of images from the Hubble Space Telescope; and, of course, the never-ending theories about the origin and makeup of Earth and the universe. I suspect the weightlessness we see the astronauts experiencing entices us to think that maybe even a glimpse of infinity might cut us loose from the burdens that weigh us down. ..

Although not all of us want to be space travelers, who hasn’t gazed up to the heavens on a dark, starry night and wondered about the magnificence of it all? We look to the broad expanse of the heavens for profound answers.

The splendor of the cosmos, the planets in their orbits, the grandeur of the celestial bodies, point to the beauty and harmony of spiritual reality. In the 1920s, astronomer Edwin Hubble discovered that the universe continues to expand….Just think, your vibrant potential is expanding and is boundless.

Before Hadfield departed for his mission on the space station in December 2012, he said, “To be able to command the space station, yes, it’s professional, and yes, I’ll take it seriously, and yes, it’s important for Canada, but for me, as just a Canadian kid, it makes me want to shout and laugh and do cartwheels.” I share his exuberance and desire to shout and laugh and do cartwheels when I think of the unlimited, eternal, and spiritual splendor of man and the universe.

Photos of the Day

A whirling dervish performs a traditional Sufi dance during the Muslim fasting month of Ramadan in the Ottoman-era Tekkiye Suleimaniye mosque complex in Damascus. Omar Sanadiki/Reuters

A young rider is sad at the end of a ride on the Seaside Heights NJ carousel. The historic 82-year-old carousel is being sold this fall after surviving superstorm Sandy and a devastating boardwalk fire intact. Its owners say it is too expensive to maintain and insure. It is one of only about 150 carousels left in the US. Wayne Parry/AP

Market Closes for July 21^st, 2014

Market   Index	Close	Change
Dow   Jones	17051.73	-48.45
		-0.28%
S&P 500	1973.63	-4.59    -0.23%
NASDAQ	4424.703	-7.443    -0.17%
TSX	15249.99	-16.58
		-0.11%

International Markets

Market   Index	Close	Change
NIKKEI	15215.71	-154.55
		-1.01%
HANG   SENG	23387.14	-67.65
		-0.29%
SENSEX	25715.17	+73.61
		+0.29%
FTSE 100	6728.44	-21.01
		-0.31%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.135	2.162
CND.   30 Year Bond	2.672	2.711
U.S.   10 Year Bond	2.4674	2.4818
U.S.   30 Year Bond	3.2571	3.2881

Currencies

BOC Close	Today	Previous
Canadian $	0.93131	0.93165
US   $	1.07376	1.07337
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45213	0.68864
US   $	1.35238	0.73944

Commodities

Gold	Close	Previous
London Gold   Fix	1312.55	1311.10
Oil	Close	Previous
WTI Crude Future	104.59	103.13

Market Commentary:

Canada
By Jacob Barach

July 21 (Bloomberg) — Canadian stocks fell from a record, led by losses in energy companies, amid a retreat in global equities as international pressure on President Vladimir Putin intensified.

Canyon Services Group Inc. dropped 3.2 percent after FirstEnergy Capital Corp. lowered its rating on the stock to market perform from outperform. Valeant Pharmaceuticals International Inc. climbed 2.9 percent after the company said it has contacted regulators concerning Allergan Inc.’s past statements about its Bausch & Lomb unit.

The S&P/TSX lost 16.58 points, or 0.1 percent, to 15,249.99 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 12 percent this year, the third-best performance among the world’s developed markets.

The S&P/TSX Energy Index dropped 0.2 percent. Eight of 10 industries in the benchmark equity gauge fell. Trading in S&P/TSX stocks was 17 percent below the 30-day average at the close.

Canyon Services lost 3.2 percent to C$16.94. FirstEnergy Capital also lowered its ratings on Precision Drilling Corp. and Western Energy Services Corp. Both stocks fell at least 1 percent.

Valeant advanced 2.9 percent to C$134.67. The company told the Autorite des marches financiers, Quebec’s regulators, and the U.S. Securities and Exchange Commission that Allergan has falsely asserted that Bausch & Lomb’s pharmaceutical sales were stagnating or declining, an “apparent attempt to mislead investors and manipulate the market.”

Separately, Allergan said it will cut 1,500 jobs and eliminate another 250 vacant positions as it tries to fend off a hostile takeover from Valeant.

European Union foreign ministers meeting in Brussels tomorrow will consider tougher sanctions on Russian individuals and companies as world leaders pressure Putin to do more to end the violence in eastern Ukraine.

Russian President Putin said the Malaysian airline disaster shouldn’t be used for political purposes. He again blamed the downing of the plane on the Ukraine conflict and said that international investigators, whose probe of the crash site has been hampered by armed, pro-Russian separatists, should have full access to the wreckage.

US
By Oliver Renick

July 21 (Bloomberg) — U.S. stocks fell, after the best Standard & Poor’s 500 Index rally since April, as concern tension in Ukraine could lead to deeper sanctions against Russia kept investors on the sidelines before major earnings reports.

Herbalife Inc. sank 11 percent as hedge-fund manager Bill Ackman vowed to reveal fraud at the company. Yum! Brands Inc. dropped 4.3 percent and McDonald’s Corp. lost 1.5 percent after the two halted buying meat products from a Shanghai supplier under investigation. Hasbro Inc. fell 2.7 percent after reporting revenue that missed analysts’ estimates. BB&T Corp. slid 4 percent as adjusted profit fell short of targets.

The S&P 500 lost 0.2 percent to 1,973.63 at 4 p.m. in New York, paring a loss of as much as 0.6 percent. The Dow Jones Industrial Average dropped 48.45 points, or 0.3 percent, to 17,051.73 after losing almost 126 points this morning. Trading in S&P 500 stocks was 6 percent below the 30-day average.

“The geopolitical situation is an overarching damper on the market and underneath that this week we’re right in the heart of second quarter earnings,” Matthew Kaufler, manager of Federated Investor Inc.’s Clover Value Fund, said in an interview. “While the market is net focused on earnings, we’re still trying to keep a pulse on what’s going on around the world.”

A total of 10 S&P 500 companies are reporting earnings today, including Chipotle Mexican Grill Inc., Netflix Inc. and Botox-maker Allergan Inc. Some 145 companies in the gauge report this week. Apple Inc., McDonald’s Corp. and Coca-Cola Co. are schedule to report results tomorrow.

The S&P 500 rallied 1 percent on July 18, rebounding from its biggest loss since April 10 that came after the downing of a Malaysian Airlines passenger jet in Ukraine and the Israeli ground invasion of the Gaza Strip.

The index pared losses today after President Barack Obama said he prefers a diplomatic solution to the hostilities in Ukraine and Malaysia’s prime minister said rebels in eastern Ukraine agreed to hand over bodies of crash victims and grant access to the crash site.

Obama added that Russian President Vladimir Putin has “direct responsibility” to compel separatists in Ukraine to let international investigators recover remains and collect evidence from the crash site.

“The burden is now on Russia,” Obama said. “Russia will only further isolate itself from the international community” and costs will “only increase” if it doesn’t get separatists to cooperate.

The administration is pushing European governments to expand sanctions against Russia, even at some peril to their own economies, in an effort to break Putin’s support for the pro- Russian rebels. Putin has defied rising international anger over the downing of the airliner, suggesting leaders in the U.S. and Europe were using the incident for “selfish political gains.”

“If Obama had said something concerning further sanctions then there would’ve been some fundamental bite, but there was nothing to it,” Matt Maley, equity strategist at Boston-based Miller Tabak & Co LLC, said in a phone interview. “The market is looking for something to have real impact, something concrete like a cut-off in oil supply or more sanctions.”

In the Middle East, diplomatic efforts to end two weeks of Gaza Strip fighting intensified after battles killed dozens of Palestinians and 13 Israeli soldiers in the conflict’s bloodiest single day.

The S&P 500 ended last week up 0.5 percent, rallying on the final day after better-than-estimated sales at Google Inc., the world’s third-largest company, spurred a rebound in shares.

The equities benchmark has advanced almost 7 percent this year amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter.

The gauge closed at a record 1,985.44 on July 3 and trades at 18.3 times reported earnings, near the highest level in four years. The index has not had a drop of more than 10 percent since 2011.

“People are naturally cautious against these geopolitical events and the market having had such a strong rally,” said Patrick Spencer, the London-based head of equity sales at Robert W. Baird & Co., which oversees more than $100 billion. “Markets are nervous given we haven’t had a correction yet so people are thinking we’re overdue. People are just looking for reasons for the market to sell off.”

The Chicago Board Options Exchange Volatility Index jumped 6.2 percent to 12.81. The gauge known as the VIX was little changed last week despite a 32 percent jump on July 17, the biggest one-day rally in 15 months.

About 76 percent of S&P 500 companies that have posted results this season have beaten analysts’ estimates for profit, while 69 percent exceeded sales projections, according to data compiled by Bloomberg.

Earnings at the index’s members probably rose 6.2 percent in the second quarter, while sales gained 3.3 percent, according to analyst estimates compiled by Bloomberg.

Nine of the 10 main groups in the gauge retreated today, with indexes of health-care and consumer stocks dropping at least 0.4 percent to pace declines. General Electric Co. sank 1.8 percent for the steepest slide in the Dow.

Herbalife shares fell the most in three months, losing 11 percent to $54.02, after billionaire Bill Ackman vowed to show Enron Corp.-like fraud at the seller of supplements and weight- loss shakes. Ackman, head of Pershing Square Capital Management LP, said his firm has devoted $50 million of investors’ money to prove that Herbalife is a pyramid scheme. The results of the investigation will be released in New York tomorrow, Ackman said in an interview on Bloomberg Television.

Herbalife responded to the statements today on Twitter, saying it was confident in the integrity of the company and that “the truth will prevail.”

“Ackman’s theatrics are increasingly desperate,” the company said through its HerbalifeTruth account. Herbalife “is proud of role that nutrition clubs play in helping people lose weight and stay healthy.”

Hasbro lost 2.7 percent to $51.78. The toys and game maker reported second-quarter revenue that fell short of estimates. Rival Mattel Inc. last week said earnings and sales fell short of forecasts.

BB&T Corp. sank 4 percent to $37.33. North Carolina’s second-largest bank reported profit that missed estimates and disclosed that the U.S. Department of Housing and Urban Development is auditing its originations of  government-backed loans.

Yum Brands fell 4.3 percent and McDonald’s dropped 1.5 percent. Shanghai Husi Food Co. is being investigated on allegations it sold chicken and beef past its expiration date.  Yum said that would result in shortages of some menu items.

Allergan Inc. jumped 2.2 percent to $171.14. The maker of the Botox wrinkle remover said it will cut 1,500 jobs as it tries to fend off a hostile takeover from Valeant Pharmaceuticals International Inc. The company also reported adjusted profit that topped analysts’ estimates.

EMC Corp. climbed 5 percent to $28.33. Elliott Management Corp. has amassed an active stake of more than $1 billion in EMC and is pushing the world’s biggest maker of storage computers to spin off its VMware Inc. unit, a person familiar with the matter said.

 

Have a wonderful evening everyone.

 

Be magnificent!

To make a decision is an illusion.

Behind the decision is the hidden belief

that everyone is the same.

Swami Prajnanpad, 1891-1974

 

As ever,

 

Carolann

 

Courage is grace under pressure.

-Ernest Hemingway, 1899-1961

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

 

Dear Friends,

Tangents:

Nelson Mandela was born on this day in 1918.

There is nothing like returning to a place that remains unchanged to find the ways in which you yourself have altered. –Nelson Mandela

If you don’t have plans for the weekend, the folk festival is on in Vancouver at Jericho Beach.  Joan Baez, among others, will be performing.  Should be great.

Photos of the Day

The pack with Italy’s Vincenzo Nibali, wearing the overall leader’s yellow jersey, passes a field with sunflowers during the thirteenth stage of the Tour de France cycling race over 197.5 kilometers (122.7 miles) with start in Saint-Etienne and finish in Chamrousse, France. Christophe Ena/AP

Russian President Vladimir Putin leaves after his meeting with Russian Orthodox Patriarch Kirill (l.) as he attends celebrations marking the 700th anniversary of St. Sergius of Radonezh in the Trinity St. Sergius monastery in Sergiyev Posad, Russia. Mikhail Klimentyev/RIA-Novosti/Presidential Press Service/AP

Market Closes for July 18^th, 2014

Market Index	Close	Change
Dow Jones	17100.18	+123.37
		+0.73%
S&P 500	1978.22	+20.10   +1.03%
NASDAQ	4432.145	+68.698   +1.57%
TSX	15266.57	+62.09
		+0.41%

International Markets

Market Index	Close	Change
NIKKEI	15215.71	-154.55
		-1.01%
HANG SENG	23454.79	-66.08
		-0.28%
SENSEX	25641.56	+80.40
		+0.31%
FTSE 100	6749.45	+11.13
		+0.17%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.162	2.135
CND. 30 Year Bond	2.711	2.691
U.S. 10 Year Bond	2.4818	2.4441
U.S. 30 Year Bond	3.2881	3.2653

Currencies

BOC Close	Today	Previous
Canadian $	0.93165	0.92932
US $	1.07337	1.07606
Euro Rate 1 Euro=		Inverse
Canadian $	1.45172	0.68884
US $	1.35250	0.73937

Commodities

Gold	Close	Previous
London Gold Fix	1311.10	1319.20
Oil	Close	Previous
WTI Crude Future	103.13	103.19

Market Commentary:

Canada
By Eric Lam

July 18 (Bloomberg) — Canadian stocks rose, driving the benchmark index to a record, with energy producers climbing as crude oil capped the first weekly gain in a month.

Pine Cliff Energy Ltd. jumped 25 percent to an all-time high after agreeing to buy natural gas assets for C$100 million in cash. Torex Gold Resources Inc. and Sherritt International Corp. fell at least 2.2 percent to pace declines among raw- materials producers. Canadian Pacific Railway Ltd. added 3.3 percent for a fourth day of gains.

The Standard & Poor’s/TSX Composite Index rose 62.09 points, or 0.4 percent, to 15,266.57 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 12 percent this year, the second-best performer among the world’s developed markets. The benchmark equity gauge previously closed at a record on July 16.

Canada’s inflation rate unexpectedly increased to 2.4 percent in June, the most in more than two years, on higher food and clothing costs. The increase exceeded economist forecasts and comes two days after the central bank said it will ignore quicker price gains.

Encana Corp. added 1.4 percent to C$23.23 and Canadian Oil Sands Ltd. rose 1.2 percent to C$23.78 as energy stocks gained 0.8 percent as a group. Nine of 10 industries in the S&P/TSX advanced on trading volume 18 percent lower compared with the 30-day average.

Encana is preparing to sell its Deep Panuke offshore project in Nova Scotia later this year, according to people familiar with the matter, as Canada’s largest natural gas producer shifts production toward more oil.

West Texas Intermediate posted the first weekly gain in a month amid rising international tensions in Europe and the Middle East. WTI has climbed 3.2 percent since dropping below $100 a barrel on July 15 for the first time in two months.

Torex Gold lost 2.4 percent to C$1.60 and Sherritt International dropped 2.2 percent to C$4.36.  Gold for August delivery fell 0.6 percent to $1,309.40 an ounce in New York, after rallying 1.3 percent yesterday when a Malaysia Airlines plane was shot down over Ukraine and Israel sent ground forces into the Gaza Strip.

First Quantum Minerals Ltd. decreased 1 percent to C$24.86 and Lundin Mining Corp. dropped 1.3 percent to C$6.09 as copper fell to the lowest in more than two weeks in New York. Nickel declined the most since May 15.

US
By Jacob Barach and Callie Bost

July 18 (Bloomberg) — U.S. stocks jumped, with the Standard & Poor’s 500 Index rebounding from its worst drop since April, as Google Inc. rose after sales beat analysts’ estimates and concerns eased over crises in the Ukraine and Middle East.

Google, the world’s third-largest company by market value, jumped 3.7 percent after second-quarter revenue exceeded analysts’ projections as the company sold more advertising alongside Web-search results. Johnson & Johnson, Boeing Co. and Nike Inc. jumped more than 1 percent to lead gains in the Dow Jones Industrial Average. Advanced Micro Devices Inc. tumbled 16 percent after it forecast sales below estimates.

The S&P 500 rose 1 percent to 1,978.22 at 4 p.m. in New York, marking its biggest gain in three months and capping a weekly advance of 0.5 percent. The Dow climbed 123.37 points, or 0.7 percent, to 17,100.18. The Russell 2000 Index of smaller companies rallied 1.6 percent, paring its weekly loss to 0.7 percent. Trading in S&P 500 companies was 6.1 percent above the 30-day average for this time of day.

“I think when all these things hit the headlines, there’s a knee-jerk reaction,” Jim Paulsen, who helps oversee $357 billion in assets as chief investment strategist at San Francisco-based Wells Capital Management Inc., said in a phone interview. “Traders reacted yesterday and it’s bringing in investors today. Maybe they’re thinking of buying and all of a sudden stocks got a lot cheaper.”

The gain in the S&P 500 erased almost all of yesterday’s 1.2 percent decline in the S&P 500 as the market resumed an advance that has added more than $1 trillion to share values in 2014. Stocks rose as Google’s results helped bolster Wall Street forecasts for annual S&P 500 earnings growth of about 8 percent this year amid an expansion in gross domestic product forecast by economists to exceed 3 percent in the next two quarters.

The S&P 500 yesterday ended a string of 62 straight days without a gain or decline of more than 1 percent.

A Malaysian Airlines jet went down yesterday over eastern Ukraine, killing all 298 people on board, just a day after the U.S. and the European Union imposed further sanctions on Russia over the conflict. Russia and Ukraine blamed each other for the downing of the jet as moves to investigate the crash got under way. President Barack Obama said the violence in Ukraine is facilitated by Russia’s support for separatists and called for an immediate cease-fire.

Stocks extended losses late yesterday after Israel began a ground operation in the Gaza Strip.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, rallied 32 percent yesterday, the most since April 2013, closing at 14.54, a three-month high. The VIX dropped 17 percent today to 12.06.

Equities have rallied this year amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter. The S&P 500 closed at a record on July 3 while the Dow reached an all-time high on July 16.

The index of U.S. leading indicators rose in June for the fifth straight month, showing the economy continues to gain momentum following a slowdown at the start of 2014. A gauge of consumer sentiment declined this month. The Thomson Reuters/University of Michigan preliminary July index of sentiment decreased to 81.3 from 82.5 the prior month.

More than 140 companies in the S&P 500 are scheduled to report earnings next week, including Netflix Inc., McDonald’s Corp., Boeing, Apple Inc. and Microsoft Corp.

About 77 percent of the 82 companies in the S&P 500 that have posted results this earnings season beat analysts’ profit projections, and 70 percent exceeded sales estimates, data compiled by Bloomberg show. Profit by the gauge’s members increased 6.2 percent in the second quarter, and revenue rose 3.3 percent, according to analysts’ estimates compiled by Bloomberg.

About 5.8 billion shares changed hands on U.S. exchanges today, in line with the three-month average.

“We had a bit of a low expectation going into the second quarter, given the first quarter,” Jim Russell, who helps oversee $120 billion as a senior equity strategist at U.S. Bank Wealth Management in Cincinnati, said by phone. “We do feel the second quarter finished much stronger than it began. We think the economic drumbeat is growing louder and more constructive for the markets moving forward.”

Google rose 4.2 percent to $605.11 today in its biggest gain since October. Chief Executive Officer Larry Page is adding new features in mobile, video and Web services to boost user traffic and attract marketers as he seeks to bolster Google’s main ad business. The number of clicks on ads on YouTube, search and other Google sites increased 33 percent in the latest quarter, making up for a decline in ad prices.

All 10 main industries in the S&P 500 advanced. Health-care and technology stocks climbed more than 1.3 percent for the best performances.

The Bloomberg U.S. Airlines Index rose 2 percent to rebound from yesterday’s 3.2 percent slide. American Airlines Group Inc., Spirit Airlines Inc. and United Continental Holdings Inc. rose more than 2 percent to lead all 11 stocks in the index higher.

General Electric Co. slipped 0.6 percent as it reported profits that matched estimates. The company said it will hold an initial public offering for the Synchrony Financial unit, its Capital’s North American consumer operations, this month.

AMD tumbled 16 percent, the biggest drop since 2012. The third-quarter sales projection may indicate the chipmaker isn’t benefiting from a rebound in corporate spending on computers that has buoyed other companies in the personal-computer industry.

 

Have  a wonderful weekend everyone.

 

Be magnificent!

We do not progress from error to truth, but from truth to truth.

Thus we must see that none can be blamed for what they are doing, because they are,

at this time, doing the best they can.  We learn only from experience.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

If you can’t feed a hundred people, then feed just one.

-Mother Teresa, 1910-1997

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

 

Dear Friends,

Tangents:

The World

-William Brighty Rands

Great, wide, beautiful, wonderful World,
With the wonderful water round you curled,
And the wonderful grass upon your breast-
World, you are beautifully drest.

The wonderful air is over me,
And the wonderful wind is shaking the tree,
It walks on the water, and whirls the mills,
And talks to itself on the tops of the hills.

You friendly Earth, how far do you go,
With the wheatfields that nod and the rivers that flow,
With the cities and gardens, and cliffs, and isles,
And people upon you for thousands of miles?

Ah, you are so great, and I am so small,
I tremble to think of you, World, at all;
And yet, when I said my prayers today,
A whisper inside me seemed to say,
“You are more than the Earth, though you are such a dot:
You can love and think, and the Earth cannot.”

Photos of the Day

Britain’s Queen Elizabeth meets construction workers as she attends the official opening of the refurbished Reading Station, west of London. Ben Gurr/Reuters

Peoples cool off in fountains, in Nice, southeastern France. Temperatures in the area rose to 32 degrees Celsius (90 Fahrenheit). Lionel Cironneau/AP

Market Closes for July 17^th, 2014

Market Index	Close	Change
Dow Jones	16976.81	-161.39
		-0.94%
S&P 500	1958.12	-23.45   -1.18%
NASDAQ	4363.445	-62.522   -1.41%
TSX	15204.48	-21.86
		-0.14%

International Markets

Market Index	Close	Change
NIKKEI	15370.26	-9.04
		-0.06%
HANG SENG	23520.87	-2.41
		-0.01%
SENSEX	25561.16	+11.44
		+0.04%
FTSE 100	6738.32	-46.35
		-0.68%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.135	2.197
CND. 30 Year Bond	2.691	2.749
U.S. 10 Year Bond	2.4441	2.5260
U.S. 30 Year Bond	3.2653	3.3374

Currencies

BOC Close	Today	Previous
Canadian $	0.92932	0.93069
US $	1.07606	1.07447
Euro Rate 1 Euro=		Inverse
Canadian $	1.45553	0.68703
US $	1.35265	0.73929

Commodities

Gold	Close	Previous
London Gold Fix	1319.20	1299.63
Oil	Close	Previous
WTI Crude Future	103.19	101.20

Market Commentary:

Canada
By Eric Lam

July 17 (Bloomberg) — Canadian stocks fell from a record after a Malaysian passenger jet went down over Ukraine and reports that Israel sent ground forces into the Gaza Strip and

Birchcliff Energy Ltd. and Painted Pony Petroleum Ltd. retreated at least 3.4 percent to pace declines among energy stocks. Canadian Pacific Railway Ltd., the country’s second- largest railroad, rose 2.3 percent as profit beat estimates, powered by a rise in grain and coal shipments. Eldorado Gold Corp. and Agnico Eagle Mines Ltd. increased more than 4 percent as gold posted the biggest gain in four weeks.

The Standard & Poor’s/TSX Composite Index fell 21.86 points, or 0.1 percent, to 15,204.48 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 12 percent this year, the third-best performer among the world’s developed markets.

The Malaysian plane crashed in the main battleground of Ukraine’s civil war, threatening to further raise tensions just days after the U.S. said the rebels are getting weapons from Russia and tightened sanctions against the country.

Israel sent troops and tanks into the Gaza Strip in an offensive intended to stop the barrage of missiles fired by Hamas and other Palestinian militants. This is Israel’s first significant ground operation in the area since 2009 as the 10- day-old conflict has escalated after an Egyptian peace plan was spurned.

The MSCI All-World Index dropped 0.9 percent while the Chicago Board Options Exchange Volatility Index jumped 32 percent, the most since April 2013.

Canadian Pacific climbed 2.3 percent to C$202.33, a record.  Leftovers from a record Canadian wheat crop helped Canadian Pacific post a 32 percent jump in grain revenue in that category. Earnings in the latest period also benefited from a 15 percent increase in coal sales.

Energy stocks declined 0.8 percent as a group, the most in the S&P/TSX, as eight of 10 industries retreated on trading volume about 1 percent above the 30-day average.

Eldorado Gold added 4.2 percent to C$8.15 and Agnico Eagle advanced 4 percent to C$44.84 as the S&P/TSX Gold Index jumped 2.7 percent. Gold for August delivery rose 1.3 percent to settle at $1,316.90 an ounce in New York, the biggest gain in four weeks, as investors sought a safe haven on concern conflicts in Ukraine and the Middle East will escalate.

US
By Joseph Ciolli and Callie Bost

July 17 (Bloomberg) — The Standard & Poor’s 500 Index fell the most in three months and the VIX had the biggest jump in more than a year amid intensifying tension in Ukraine and the Middle East.

The S&P 500 fell 1.2 percent to 1,958.12 at 4 p.m. in New York. The gauge hadn’t risen or fallen 1 percent on a closing basis for 62 days, the longest streak since 1995. The Dow Jones Industrial Average slipped 161.39 points, or 0.9 percent, to 16,976.81. The Chicago Board Options Exchange Volatility Index surged 32 percent, the most since April 2013, to 14.54. More than 6.6 billion shares changed hands on U.S. exchanges today, 15 percent above the three-month average.

“People are selling out of fear,” Todd Lowenstein, a fund manager who helps manage $16 billion at Highmark Capital Management Inc. in Los Angeles, said in a phone interview. “The market is really acute to geopolitical risk. Given where valuations are and the move lately amid all the M&A activity, when you have some geopolitical shocks, people will look for a reason to sell.”

Equities extended losses in the final hour of trading after Israel sent ground forces into the Gaza Strip. The military offensive was intended to stop the barrage of missiles fired by Hamas and other Palestinian militants, raising the stakes of the 10-day-old conflict after an Egyptian peace plan was spurned.

The crisis in Ukraine escalated after a Malaysian Airlines passenger jet crashed, killing all 295 people on board. The government in Kiev blamed pro-Russian rebels for shooting down the jet, while the separatists deny the accusation.

The Malaysian plane crashed in the main battleground of Ukraine’s civil war and is one of a number to have been downed in the region in the past month. Russian President Vladimir Putin has repeatedly denied his country has any involvement in the insurgency. The U.S. said this week that Russia is supplying the rebels with weapons.

Airlines began shifting planes away from the region, which sits astride some of the busiest air routes between Europe and Asia. Delta Air Lines Inc. said it was staying away from the entire country. Delta, American Airlines Group Inc. and United Continental Holdings Corp. retreated more than 3.4 percent.

Stocks fell earlier today after the U.S. and European Union imposed sanctions on Russian banks, energy companies and defense firms in the latest attempt to pressure the country to end support for Ukrainian rebels.

The VIX rose to the highest level since April 15. The gauge jumped 17 percent last week for its biggest rally in three months, after closing July 3 at the lowest since 2007.

The S&P 500 rallied 7.2 percent this year through yesterday amid better-than-estimated corporate earnings and central bank stimulus as the U.S. economy shows signs of recovering from a 2.9 percent contraction in the first quarter. The benchmark index increased 0.4 percent yesterday as companies from Time Warner Inc. to Intel Corp. rallied amid deals and better-than- forecast earnings.

A total of 24 companies on the S&P 500 report earnings today, including Google Inc. and Schlumberger Ltd. Profit by the gauge’s members increased 4.5 percent in the second quarter, and revenue rose 3.1 percent, according to analysts’ estimates compiled by Bloomberg.

SanDisk Corp. dropped the most since 2009 percent after posting profit margins and sales forecasts that fell short of some analysts’ estimates. UnitedHealth jumped to a record as earnings topped forecasts.

Economic data showed beginning home construction unexpectedly declined in June to a nine-month low as a record plunge in the South swamped gains in the rest of the U.S. The number of Americans filing applications for unemployment benefits dropped last week, showing further healing in the labor market, while the Federal Reserve Bank of Philadelphia’s factory index increased in July.

Fed Bank of St. Louis President James Bullard said gains in the U.S. labor market and accelerating inflation may prompt an earlier exit from unprecedented stimulus.

“If macroeconomic conditions continue to improve at the current pace, the normalization process may need to begin sooner rather than later,” Bullard said in remarks prepared for a speech today in Owensboro, Kentucky.

Fed Chair Janet Yellen said told lawmakers yesterday the central bank plans to press on with record easing to combat persistent weakness in the job market.

Yellen also said asset valuations in general aren’t out of line with historical norms, after a central bank report earlier in the week indicated prices for smaller social-media and biotechnology companies are substantially stretched.

With the Dow at a record and the S&P 500 close to an all- time high reached this month, financial professionals are growing more anxious. Forty-seven percent of investors, analysts and traders in a Bloomberg Global Poll said the equity market is close to unsustainable levels, while 14 percent already see a bubble. Most respondents said stock swings will increase within six months, the July 15-16 poll showed.

All 10 main industries in the S&P 500 fell today, with energy and industrial shares dropping at least 1.5 percent for the largest declines.

Airlines slumped, as Delta Air Lines Inc., American Airlines Group Inc. and United Continental Holdings Corp.retreated more than 3.4 percent.

SanDisk tumbled 14 percent, its biggest loss in five years. The company, which had rallied 53 percent this year, has held back on increasing production, seeking to avoid a repeat of supply gluts that have caused semiconductor prices to fall below the cost of manufacturing. The chipmaker expects it won’t have enough inventory to meet all orders this quarter, it said.

AutoNation Inc. dropped 8.2 percent, the most since 2009, after the largest U.S. new-vehicle retailer reported quarterly profit that missed forecasts as investment in an online sales system increased costs.

Yum! Brands Inc. retreated 6.9 percent. The owner of fast- food chains such as KFC and Taco Bell posted second-quarter profit that trailed some analysts’ estimates, dragged down by a slump at its Pizza Hut restaurants.

Mattel Inc. fell 6.6 percent, the most since January, as second-quarter earnings and sales missed analysts’ estimates.

UnitedHealth added 1.6 percent to a record $85.11. The largest U.S. health insurer by sales beat analyst earnings estimates as revenue grew from its technology and consulting unit that helped fix the Obamacare insurance website.

Microsoft Corp. increased 1 percent after saying it will eliminate as many as 18,000 jobs, the largest round of cuts in its history, as Chief Executive Officer Satya Nadella integrates Nokia Oyj’s handset unit and slims down the software maker. The restructuring amounts to about 14 percent of its workforce.

 

Have a wonderful evening everyone.

 

Be magnificent!

Do not destroy.  Iconoclastic reformers do no good to the world.

Help, if you can;  if you cannot, fold your hands, stand by, and see things go on.

Therefore say not a word against any man’s convictions, sp far as tjeu are somcere.

Secondly, take man where he stands, and from thence give him a lift.

Swami Vivekananda, 1863-1902

 

As ever,

 

Carolann

 

Things do not change; we change.

-Henry David Thoreau, 1817-1862

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

 

Dear Friends,

Tangents:

On this day in 1951, author J.D. Salinger published the novel The Catcher in the Rye.

A few memorable gems from Catcher in the Rye:

“Among other things, you’ll find that you’re not the first person who was ever confused and frightened and even sickened by human behavior. You’re by no means alone on that score, you’ll be excited and stimulated to know. Many, many men have been just as troubled morally and spiritually as you are right now. Happily, some of them kept records of their troubles. You’ll learn from them—if you want to. Just as someday, if you have something to offer, someone will learn something from you. It’s a beautiful reciprocal arrangement. And it isn’t education. It’s history. It’s poetry.”

“The mark of an immature man is that he wants to die nobly for a cause, while the mark of the mature man is that he wants to live humbly for one.”

“A lot of people, especially this one psychoanalyst guy they have here, keeps asking me if I’m going to apply myself when I go back to school next September. It’s such a stupid question, in my opinion. I mean how do you know what you’re going to do till you do it?”

“Don’t ever tell anybody anything. If you do, you start missing everybody.”

“Some game. If you get on the side where all the hot-shots are, then it’s a game, all right – I’ll admit that. But if you get on the other side, where there aren’t any hot-shots, then what’s a game about it? Nothing. No game.”

“I’m the most terrific liar you ever saw in your life. It’s awful. If I’m on my way to the store to buy a magazine, even, and somebody asks me where I’m going, I’m liable to say I’m going to the opera. It’s terrible.”

“What really knocks me out is a book that, when you’re all done reading it, you wish the author that wrote it was a terrific friend of yours and you could call him up on the phone whenever you felt like it. That doesn’t happen much, though.”

– Holden talking about authors like Ring Lardner, Isak Dinesen, and Thomas Hardy

“I am always saying “Glad to’ve met you” to somebody I’m not at all glad I met. If you want to stay alive, you have to say that stuff, though.”

Photos of the Day

A bolt of lightning strikes the Empire State Building during a summer rain storm in New York July 15. Lucas Jackson/Reuters

Honda’s latest version of the Asimo humanoid robot walks up stairs during a presentation in Zaventem near Brussels, Belgium. Honda introduced in Belgium an improved version of its Asimo humanoid robot that it says has enhanced intelligence and hand dexterity, and is able to run at a speed of some 9 kilometers per hour (5.6 miles per hour). Francois Lenoir/Reuters

Market Closes for July 16^th, 2014

Market Index	Close	Change
Dow Jones	17138.20	+77.52
		+0.45%
S&P 500	1981.57	+8.29   +0.42%
NASDAQ	4425.969	+9.582   +0.22%
TSX	15226.34	+145.02
		+0.96%

International Markets

Market Index	Close	Change
NIKKEI	15379.30	-15.86
		-0.10%
HANG SENG	23523.28	+63.32
		+0.27%
SENSEX	25549.72	+321.07
		+1.27%
FTSE 100	6784.67	+74.22
		+1.11%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.197	2.214
CND. 30 Year Bond	2.749	2.769
U.S. 10 Year Bond	2.5260	2.5522
U.S. 30 Year Bond	3.3374	3.3732

Currencies

BOC Close	Today	Previous
Canadian $	0.93069	0.92963
US $	1.07447	1.07570
Euro Rate 1 Euro=		Inverse
Canadian $	1.45322	0.68813
US $	1.35250	0.73937

Commodities

Gold	Close	Previous
London Gold Fix	1299.63	1294.23
Oil	Close	Previous
WTI Crude Future	101.20	99.96

Market Commentary:

Canada
By Eric Lam

July 16 (Bloomberg) — Canadian stocks rose to a record, after falling to a two-week low yesterday, as the central bank kept interest rates steady and commodities advanced the most in a month on faster-than-forecast growth in China.

Barrick Gold Corp. gained 2.9 percent after announcing executive changes less than three months after a breakdown in merger talks with its largest rival. Precision Drilling Corp. jumped 4.5 percent after agreeing to a strategic technology and service agreement with Schlumberger Ltd. BlackBerry Ltd. sank 12 percent after Apple Inc. and International Business Machines Corp. agreed to a partnership to reach more businesses.

The Standard & Poor’s/TSX Composite Index rose 145.02 points, or 1 percent, to 15,226.34 at 4 p.m. in Toronto, jumping the most since April to top a record set July 9. The benchmark Canadian equity gauge has gained 12 percent this year, the third-best performer among the world’s developed markets.

Bank of Canada policy makers kept their benchmark rate on overnight loans between commercial banks at 1 percent, where it’s been for almost four years, and said faster inflation has been caused by one-time gains in energy and import prices, not changes in economic fundamentals.

Canadian factory sales jumped 1.6 percent in May, to C$51.6 billion ($48 billion), after a revised 0.2 percent decline in April, Statistics Canada said today in Ottawa.

Nine of 10 industries advanced on trading volume in line with the 30-day average. Raw-materials stocks jumped 1.3 percent as a group and the S&P/TSX Energy Index rallied 1.4 percent to pace gains in the benchmark equity gauge.

The S&P GSCI Index, which tracks a basket of commodities prices, increased 0.4 percent, the most since June 19. Economic growth beat estimates in China. Gross domestic product rose 7.5 percent in the second quarter in China, the world’s biggest consumer of energy and raw materials, data showed.

Barrick Gold rose 2.9 percent to C$20.28. Chief Executive Officer Jamie Sokalsky said he will be stepping down two years into the job. Kelvin Dushnisky and Jim Gowans will be appointed co-presidents, the company said in a release.

BlackBerry plunged 12 percent to C$10.72, the most since November, after longtime rivals Apple and IBM agreed to a deal yesterday in which IBM will push iPhones and iPads in exchange for a chance to sell software and services to more companies. A key component of BlackBerry’s turnaround strategy has been to target that same business services market.

US
By Jacob Barach

July 16 (Bloomberg) — U.S. stocks advanced, sending the Dow Jones Industrial Average to an all-time high, as companies from Time Warner Inc. to Intel Corp. rallied amid deals and earnings reports.

Time Warner surged 17 percent as Rupert Murdoch’s 21st Century Fox Inc. made a takeover bid that was rebuffed. Intel jumped 9.3 percent as its third-quarter sales forecast fueled optimism the personal-computer market is emerging from a two- year slump. International Business Machines Corp. rose 2.1 percent after agreeing with Apple Inc. to develop applications for corporate users of wireless devices.

The Standard & Poor’s 500 Index added 0.4 percent to 1,981.57 at 4 p.m. in New York. The Dow increased 77.52 points, or 0.5 percent, to a record 17,138.20. The Russell 2000 Index of smaller companies fell 0.2 percent, after slumping 1 percent yesterday amid Federal Reserve concerns over valuations.

“I think Yellen might have derailed a few things yesterday, but today it’s back to earnings again and rightfully so,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a phone interview. “Earnings season is a big deal and you have a couple of big names that have looked good with many, many to come.”

Fed Chair Janet Yellen said today that asset valuations in general aren’t out of line with historical norms, after a central bank report yesterday indicated prices for smaller social-media and biotechnology companies are substantially stretched.

“I’m not seeing alarming warning signals,” Yellen said in response to questions from the House Financial Services Committee. While some asset values “may be on the high side and there may be some pockets where we see valuations becoming stretched,” in general “price equity ratios and other measures are not outside of historical norms,” she said.

The S&P 500 has rallied 7.2 percent this year amid better- than-estimated corporate earnings and central bank stimulus. The U.S. economy is showing signs of recovering from a 2.9 percent contraction in the first quarter.

Data today showed U.S. industrial production climbed 0.2 percent in June, capping the strongest quarter in almost four years. The Federal Reserve said in its Beige Book business survey released today that economic growth was modest to moderate in the latest period as all 12 of its districts reported stronger consumer spending and expanded manufacturing.

Equity futures climbed as a report showed China’s economic growth accelerated for the first time in three quarters. Gross domestic product rose 7.5 percent in the April-June period from a year earlier, beating the 7.4 percent median estimate in a Bloomberg News survey of economists.

“You’re starting to see the economy and leading indicators move in the direction that most people expected to start the year,” Chris Hyzy, chief investment officer of U.S. Trust in New York, said in a phone interview. That’s leading to better- than-forecast earnings for economically sensitive companies, he said, while increased merger activity is “emblematic of a corporate sector that has more comfort in the next couple of years.”

Fourteen companies in the S&P 500 including EBay Inc. and Yum! Brands Inc. are reported second-quarter results today. Profit by the gauge’s members increased 4.5 percent in the quarter, and revenue rose 3.1 percent, according to estimates compiled by Bloomberg.

Intel climbed 9.3 percent to $34.65, the highest level since 2002. The PC market has shown signs of improvement this year as corporate spending picked up and U.S. shipments returned to growth. Intel’s outlook indicates demand is starting to recover among consumers, who may be buying laptops and desktops again after years of opting for smartphones and tablets instead.

Intel also added $20 billion to its stock-repurchase program, including $4 billion planned for the third quarter.

Time Warner surged 17 percent, the most since 2000, to $83.13 for the largest gain in the S&P 500. Murdoch’s Twenty- First Century Fox is willing to pay more than $85 a share for Time Warner, according to people with knowledge of the matter, a sign the company is undeterred after being rebuffed in an initial offer. Fox shares fell 6.2 percent.

IBM gained 2.1 percent. The deal with Apple enables the iPhone maker to expand beyond individual customers and add more corporate clients through IBM’s sales force. IBM gets a boost in its effort to sell software and services to companies seeking to manage workers’ wireless devices. Apple shares fell 0.6 percent, reversing an earlier rally of 1.9 percent.

International Game Technology jumped 9.2 percent. Rome- based Gtech SpA agreed to buy the world’s biggest slot-machine maker for $4.7 billion.

General Electric Co. rallied 1.5 percent. The company is in talks with potential acquirers about selling its century-old household appliances business, said people familiar with the matter.

“This M&A just seems to have taken off, not that it was dead before, it just seems to be almost a daily event,” said Timothy Ghriskey, chief investment officer at New York-based Solaris Asset Management LLC, in a phone interview. “A bid for something like Time Warner, that’s big news. A takeover environment creates a lift to the markets. Everyone is looking for the next big name.”

The Russell 2000 fell, extending its loss to 1.2 percent over that period and erasing its gain for the year, after the Fed said valuations for smaller social-media and biotechnology companies are substantially stretched. Small-caps and Internet shares were the biggest victims of a market retreat earlier this year as investors dumped the best performers of the bull market amid concern valuations advanced too far.

The Dow Jones Internet Composite Index slid 0.5 percent today. Pandora Media Inc. retreated 1.8 percent, after a 1.2 percent loss yesterday. Groupon Inc. declined 1.6 percent.

Yahoo! Inc. fell 5.1 percent as the U.S. Web portal reported second-quarter earnings and sales that fell short of analysts’ estimates.

The Nasdaq Biotechnology Index declined 1.3 percent after tumbling 2.3 percent yesterday.       Seven of 10 main industries in the S&P 500 advanced today.  Energy companies increased 1.6 percent for the largest gain.  Technology shares jumped 1 percent.  The S&P Supercomposite Homebuilding Index rose 1.9 percent. Homebuilder confidence in July rose more than forecast to the highest level in six months as growing payrolls brightening the outlook. PulteGroup Inc. and D.R. Horton Inc. climbed more than 1.4 percent.

Financial shares dropped 0.1 percent and health-care companies lost 0.3 percent.

Bank of America Corp. dropped 1.9 percent. The second- biggest U.S. bank said profit declined 43 percent as it spent $4 billion to cover litigation costs, including a mortgage settlement with American International Group Inc.

The Chicago Board Options Exchange Volatility Index fell 8 percent to 11.00. The gauge known as the VIX jumped 17 percent last week for its biggest rally in three months, after closing July 3 at the lowest since 2007.

More than 6.3 billion shares changed hands on U.S. exchanges today, 9.2 percent above the three-month average.

 

Have a wonderful evening everyone.

 

Be magnificent!

We know that toleration is not sufficient toward another religion; we must accept it.

Thus it is not a question of subtraction, it is a question of addition.

The truth is the result of all these different sides added together.

Each religion represents one side, the fullness being the addition of all these.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

The test of good manners is to be patient

with the bad ones.

-Solomon Ibn Gabriol, 1021-1058

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

 

Dear Friends,

Tangents:

Carolann is out of the office today, I will be writing the newsletter on her behalf.

Photos of the Day

Lightning strikes One World Trade Center in Manhattan as it is seen from Weehawken during a summer storm over New York, July 14.Eduardo Munoz/Reuters

Bob Grutza rides on horseback through a field of sunflowers near Maysville, Ky. Terry Prather/The Ledger Independent/AP

Market Closes for July 15^th, 2014

Market  Index	Close	Change
Dow  Jones	17060.68	+5.26
		+0.03%
S&P 500	1973.28	-3.82    -0.19%
NASDAQ	4416.387	-24.033    -0.54%
TSX	15081.32	-89.91
		-0.59%

International Markets

Market  Index	Close	Change
NIKKEI	15395.16	+98.34
		+0.64%
HANG  SENG	23459.96	+113.29
		+0.49%
SENSEX	25228.65	+221.67
		+0.89%
FTSE 100	6710.45	-35.69
		-0.53%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.214	2.212
CND.  30 Year Bond	2.769	2.769
U.S.   10 Year Bond	2.5522	2.5431
U.S.  30 Year Bond	3.3732	3.3682

Currencies

BOC Close	Today	Previous
Canadian $	0.92963	0.93346
US  $	1.07570	1.07128
Euro Rate  1 Euro=		Inverse
Canadian  $	1.45956	0.06882
US  $	1.35685	0.73700

Commodities

Gold	Close	Previous
London Gold  Fix	1294.23	1307.20
Oil	Close	Previous
WTI Crude Future	99.96	100.91

Market Commentary:

Canada

By Oliver Renick

July 15 (Bloomberg) — Canadian stocks dropped to a two- week low as energy shares declined after oil prices fell below $100 for the first time since May.

Pacific Rubiales Energy Corp. and Lightstream Resources Ltd. sank more than 5.4 percent. Argonaut Gold Inc. lost 8.8 percent after saying gold production in the second quarter fell. Pretium Resources Inc. and Detour Gold Corp. retreated at least 4.2 percent as gold prices retreated to a three-week low.

The Standard & Poor’s/TSX Composite Index lost 89.91 points, or 0.6 percent, to 15,081.32 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 11 percent this year, the third-best performance among the world’s developed markets. The index closed at a record on July 9.

The S&P/TSX Energy Index dropped 1.2 percent as eight of 10 industries in the S&P/TSX fell. West Texas Intermediate crude fell 0.9 percent to $99.96 in New York, the lowest settlement since May 6. Brent tumbled to a three-month low as supply- disruption concerns eased with Libyan output gains and as Iraqi shipments were unaffected by an insurgency.

Lightstream Resources lost 6.2 percent to C$7.11. The company said production for the second quarter averaged 42,500 barrels of oil equivalent per day, a 3 percent reduction from first-quarter levels.

Pacific Rubiales Energy retreated 5.4 percent to C$19.25.

Argonaut Gold slid 8.8 percent to C$4.16, the biggest decline since January. The Reno, Nevada-based gold mining company said production in the second quarter was 30,310 gold equivalent ounces, compared with 34,572 ounces the year before.

Pretium Resources slumped 5.3 percent to C$8.70 and Detour Gold lost 4.2 percent to C$13.62 as gold futures fell 0.7 percent to settle at $1,297.10 an ounce in New York. Yesterday, the price dropped 2.3 percent.

US

By Jeremy Herron and Lu Wang

July 15 (Bloomberg) — U.S. stocks fell after Federal Reserve comments that some sectors have excessive valuations overshadowed better-than-estimated bank earnings. The dollar strengthened while Treasuries traded little changed as Chair Janet Yellen told lawmakers stimulus was still required.

The Standard & Poor’s 500 Index fell 0.2 percent, while the Russell 2000 Index of smaller companies sank 1 percent after the Fed said in a report that valuations of some biotechnology and social-media stocks may be “substantially stretched.” JPMorgan Chase & Co. and Goldman Sachs Group Inc. jumped. U.S. crude fell below $100 a barrel for the first time since May. Ten-year Treasury yields held at 2.55 percent, near a six-week low. The dollar gained against most major peers and gold fell.

The Fed must press on with economic stimulus as “significant slack” remains in labor markets and inflation is still below the central bank’s goal, Yellen said in testimony before the Senate Banking Committee. Retail sales data today showed a broad-based increase in June, which probably helped the U.S. economy’s rebound in the second quarter. JPMorgan Chase said second-quarter profit beat analysts’ estimates and Goldman Sachs reported a surprise increase in earnings.

“The Fed wants to pay attention to valuations given that they might have to change the interest rate backdrop that has been a strong catalyst for the market,” Eric Teal, who helps oversee about $3.6 billion as the chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina, said by phone. ‘The small cap area is going to be much more interest rate sensitive.’’

Yellen repeated comments from last month that the Fed will keep benchmark interest rates low for a considerable time after ending its asset-purchase program, even as it saw improvements in the economy and job market.

“A high degree of monetary policy accommodation remains appropriate,” Yellen said today. “Although the economy continues to improve, the recovery is not yet complete.”

Yellen cited labor-market weaknesses even after an unexpectedly fast decline in unemployment put pressure on Fed officials to consider accelerating their timetable for an interest-rate increase.

Minutes from the Fed’s June meeting, released last week, showed some policy makers were concerned investors may be growing too complacent about the economic outlook and the central bank should be on the lookout for excessive risk-taking.

The Fed said in a separate report released today that “valuation metrics in some sectors do appear substantially stretched, particularly those for smaller firms in the social media and biotechnology industries, despite a notable downturn in equity prices for such firms early in the year.”

The Dow Jones Internet Composite Index slipped 0.7 percent. The gauge had rallied 15 percent from a low reached May 8 to erase its losses for the year before falling 3.2 percent last week. The measure surged 54 percent in 2013.

Pandora Media Inc., which trades at more than 160 times projected earnings, fell 1.2 percent. Facebook Inc. and TripAdvisor Inc., which rallied more than 98 percent in 2013, lost at least 1.1 percent.

The Nasdaq Biotechnology Index slid 2.3 percent, after falling 3.2 percent last week, the most since April. The gauge had rallied as much as 23 percent from a low reached that month.

The Standard & Poor’s Smallcap 600 Index trades at 26 times reported profit and the Nasdaq biotechnology measure has a valuation of more than 500, according to data compiled by Bloomberg. The broader S&P 500 has a price-earnings ratio of 18, the most expensive level since 2010.

The comments in the Fed report spurred a “short-term reaction” in markets, Walter “Bucky” Hellwig, a Birmingham, Alabama-based senior vice president at BB&T Wealth Management, said by phone. “What it did is throw some cold water on some of the better earnings reports that were out earlier and had the markets on a roll.”

The valuations remarks also overshadowed data today showing U.S. retail sales rose 0.2 percent in June after a 0.5 percent advance in May that was larger than previously reported. The New York Fed’s Empire manufacturing report unexpectedly rose to 25.6 for this month from 19.28 last month.

The S&P 500 climbed 0.5 percent yesterday, the most since July 3, to rebound from its worst week since April. Profit at S&P 500 companies probably rose 4.5 percent in the three months through June while sales advanced 3.1 percent, analyst estimates compiled by Bloomberg show.

JPMorgan Chase climbed 3.5 percent and Goldman Sachs rose 1.3 percent to lead an index of banks to the biggest advance among 24 groups in the S&P 500. The two lenders posted the steepest gains in the Dow Jones Industrial Average, with the 30- stock index up less than 0.1 percent today.

Both firms reported fixed-income revenue that topped estimates. Banks have seen a tapering of profits in recent quarters as the Fed slowed its bond buying program and fixed- income clients made fewer bets amid low volatility.

Wells Fargo & Co., the most valuable U.S. bank, reported a 3.8 percent increase in second-quarter profit last week on lower credit costs, while Citigroup Inc. said yesterday that net income fell 96 percent as the company agreed to pay $7 billion to resolve a mortgage-related probe. Bank of America Corp., the second-biggest U.S. lender by assets, is scheduled to report results tomorrow.

Lorillard Inc. dropped more than 10 percent after Reynolds American Inc. reached an agreement to buy its rival for $27.4 billion including debt. Reynolds lost 6.9 percent.

Intel Corp., the world’s biggest maker of semiconductors, gained more than 4 percent in extended U.S. trading after forecasting third-quarter sales that exceeded some analysts’ predictions after markets closed.

Apple Inc. and International Business Machines Corp. rose in after-hours trading as the two companies said they will work together to create business-software applications for iPhone and iPad users. Apple added 1.6 percent in extended trading, while IBM gained 2.3 percent.

The Stoxx Europe 600 Index sank 0.4 percent after yesterday rallying the most in a week. Software AG declined 19 percent after the Darmstadt, Germany-based company lowered its operating-margin forecast, dragging technology companies down for the second-biggest decline among 19 industry groups. Draegerwerk AG slumped 16 percent after the maker of medical equipment cut its projection for sales growth.

Banco Espirito Santo SA tumbled 15 percent to the lowest price in data going back to 1993. The bank’s subordinated bonds also tumbled as 847 million euros ($1.15 billion) of short-term debt sold by a company linked to the Portuguese lender falls due today.

Rioforte Investments SA, a holding company of the Espirito Santo group, owes the money to Portugal Telecom SGPS SA, according to a June 30 regulatory filing by the nation’s biggest phone company.

The British pound advanced 0.4 percent to $1.7143 and added 0.7 percent to 79.15 pence per euro. The Office for National Statistics said annualized U.K. inflation quickened to 1.9 percent in June from 1.5 percent in May. That compared with a 1.6 percent forecast by analysts surveyed by Bloomberg.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major counterparts, rose to the highest level since June 24, adding 0.2 percent. The dollar climbed 0.1 percent to 101.68 yen after rallying the most yesterday against Japan’s currency since July 3. The euro added 0.4 percent to $1.3568, the strongest level since June.

Gold futures fell 0.7 percent to settle at $1,297.10 an ounce, the lowest close since June 18 after yesterday posting the steepest one-day drop since December, 2013.

Corn futures slid 1.7 percent after yesterday rebounding from a four-year low. Seventy-six percent of corn and 72 percent of soybeans were in good or excellent condition as of July 13, the best shape for that time of year since 1994, U.S. Department of Agriculture data released yesterday showed.

West Texas Intermediate oil fell 0.9 percent to $99.96 a barrel in New York, the lowest settlement price since May 6. WTI slid amid signs of a recovery in Libyan exports, stable output in Iraq and the highest U.S. crude production in almost three decades.

The MSCI Emerging Markets Index rose 0.3 percent to close at its highest level since February 2013. South Korea’s Kospi index jumped 0.9 percent, advancing for a second day as exporters gained. Stocks in Dubai rose 3.4 percent, sending the benchmark index back into a bull market three weeks after a selloff ended the longest rally since 2005.

China reports second-quarter gross-domestic product data tomorrow, with analysts expecting the economy expanded 7.4 percent from a year earlier, matching the rate of growth in the first three months of the year. June retail sales and industrial production are also due.

Have a wonderful evening everyone.

 

Be magnificent!

 

“Take up one idea. Make that one idea your life – think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone.  This is the way to success.” – Swami Vivekananda

As ever,

 

Karen

 

“Happiness is not something ready made. It comes from your own actions”. Dalai Lama

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Bastille Day today.  It was on this day in 1789 that  a mob stormed the state prison in  Paris that held political prisoners of the French royals, marking the beginning of the French Revolution.  The Bastille was originally built as a royal castle by Charles V between 1370 and 1383.

Photos of the Day

Youths release doves at the end of the traditional Bastille Day parade on the Champs Elysees in Paris. Benoit Tessier/Reuters

The Queen’s Swan Marker David Barber carries a swan back to the river during the annual Swan Upping ceremony on the River Thames in southern England. Young cygnets are counted and swans and cygnets are assessed for signs of injury or disease during the ceremony. The five-day census of the swan population dates back to the twelfth century. Luke MacGregor/Reuters

Market Closes for July 14^th, 2014

Market   Index	Close	Change
Dow   Jones	17055.42	+111.61
		+0.66%
S&P 500	1977.10	+9.53    +0.48%
NASDAQ	4440.418	+24.928    +0.56%
TSX	15171.23	+45.73
		+0.30%

International Markets

Market   Index	Close	Change
NIKKEI	15296.82	+132.78
		+0.88%
HANG   SENG	23346.67	+113.22
		+0.49%
SENSEX	25006.98	-17.37
		-0.07%
FTSE 100	6746.14	+55.97
		+0.84%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.212	2.213
CND.   30 Year Bond	2.769	2.769
U.S.   10 Year Bond	2.5431	2.5160
U.S.   30 Year Bond	3.3682	3.3366

Currencies

BOC Close	Today	Previous
Canadian $	0.93346	0.93145
US   $	1.07128	1.07360
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45911	0.68535
US   $	1.36202	0.73420

Commodities

Gold	Close	Previous
London Gold   Fix	1307.20	1338.62
Oil	Close	Previous
WTI Crude Future	100.91	100.83

Market Commentary:

Canada
By Eric Lam

July 14 (Bloomberg) — Canadian stocks rose a second day as energy shares advanced and the nation’s largest lenders climbed after data showed home prices increased.

Athabasca Oil Corp. jumped 3.8 percent after PetroChina Co. said it is committed to completing the purchase of a stake in an oil-sands project. Royal Bank of Canada added 0.3 percent to reach a record. Bombardier Inc. rose 1.6 percent after a U.K. lessor signed letters of intent to purchase as many as 24 CSeries jets. Argonaut Gold Inc. and Alacer Gold Corp. slumped more than 5.2 percent after gold prices posted the biggest loss this year as Portuguese banking concerns eased, lessening demand for safe haven assets.

The Standard & Poor’s/TSX Composite Index rose 45.73 points, or 0.3 percent, to 15,171.23 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 11 percent this year, the third-best performer among the world’s developed markets. The index closed at a record on July 9.

Athabasca Oil climbed 3.8 percent to C$7.13 to pace gains among energy stocks. The S&P/TSX Energy Index climbed 0.9 percent, the most in the benchmark Canadian equity gauge. Seven of 10 industries in the S&P/TSX rose.

Chen Shudong, the incoming director of China National Petroleum Corp.’s Canadian unit, said in an e-mail that PetroChina is committed to completing its C$1.32 billion ($1.23 billion) purchase of the stake it doesn’t own in the Dover oil- sands project in Canada from Athabasca.

Royal Bank, the nation’s second-largest lender by assets, added 0.3 percent to C$78.54, an all-time high. The S&P/TSX Banks Index rose 0.5 percent to a record. Home prices rose 0.9 percent in June for a third month of gains, according to the Teranet-National Bank Home Price Index.

Bombardier rallied 1.6 percent to C$3.83, the biggest increase in a month. The company said July 12 that Falko Regional Aircraft Ltd. has signed letters of intent for as many as 24 CS100 aircraft. The company’s CSeries jet was absent from the world’s biggest aviation expo after an engine caught fire during May testing.

Lundin Mining Corp. increased 1.8 percent to C$6.38, a three-year high. The base metals miner said it has been “actively pursuing” the acquisition of a mining project or operating mine.

US
By Stephen Kirkland and Jeremy Herron

July 14 (Bloomberg) — U.S. stocks rose with European equities on an increase in takeover activity and Citigroup Inc. earnings. Treasuries and gold retreated, while Portuguese bonds advanced.

The Standard & Poor’s 500 Index added 0.5 percent to  1,977.11 at 4 p.m. in New York, rebounding for the biggest weekly drop since April. Citigroup jumped 3 percent after reporting adjusted profit that topped estimates. Goldman Sachs Group Inc. boosted its year-end target for the U.S. equities benchmark to 2,050. The yield on 10-year Treasuries rose three basis points to 2.54 percent. Portugal’s 10-year securities had the steepest two-day gain in a month. Gold was poised for the biggest drop in almost seven months.

Citigroup rose after better-than-expected trading revenue and lower credit costs helped second-quarter profit beat analysts’ estimates and the company resolved a mortgage-related probe. Companies from Goldman Sachs Group Inc. to Intel Corp. and Johnson & Johnson report earnings this week. Shire agreed to recommend the latest bid from AbbVie Inc. to its shareholders, while Abbot Laboratories said it will sell its generic-drug business. European Central Bank President Mario Draghi testified to lawmakers in Strasbourg after announcing a package of measures last month to shore up the economy. Federal Reserve Chair Janet Yellen testifies before Congress tomorrow.

“The second-quarter earnings season in the U.S. is likely to be the next major driver of global markets,” Evan Lucas, a markets strategist in Melbourne at IG Ltd., wrote in an e-mail to clients today. “With all the major U.S. banks reporting this week, the market will get the best view of the ‘self-sustaining’ U.S. economy that the Fed now sees.”

The S&P 500 slid 0.9 percent last week amid signs of financial stress at a Portuguese bank and speculation that the recent rally is overdone. Profit at S&P 500 companies probably rose 4.5 percent in the three months through June, while sales gained 3.1 percent, analyst estimates compiled by Bloomberg show.

Citigroup led financial shares higher. Revenue from equity and fixed-income trading, while down 15 percent from a year earlier, fell less than the third-largest U.S. bank by assets predicted two months ago. Earlier today, Citigroup and the U.S. Justice Department announced a $7 billion agreement that resolves a probe into sales of mortgage securities leading up to the financial crisis.

Goldman Sachs raised its S&P 500 forecast for 2014 today to 2,050 from 1,900. Rising earnings and faster economic growth will push equities higher and stocks are still attractive relative to bonds, according to a research report from David Kostin, chief equity U.S. strategist at the bank.

“Earnings generally are coming in pretty positively here and revenues are as well,” said Timothy Ghriskey, chief investment officer at New York-based Solaris Asset Management LLC, in a phone interview. “It’s a very early stage in this earning’s season to declare victory, but the indications look good here. Citi’s numbers are very strong.”

Investors will also be watching statements from central banks and economic reports this week for clues to the strength of the global economy.

Yellen will deliver her semi-annual monetary policy testimony to the Senate Banking Committee tomorrow and to the House Committee on Financial Services the following day.

Minutes of the Fed’s June meeting released last week showed officials have agreed they’ll end their asset-purchase program in October if the economy holds up. At the same time, the policy makers said the central bank should continue to support favorable financial conditions needed to sustain growth, according to the minutes.

Draghi said today the ECB stands ready to take further action if needed after the central bank recently announced a targeted lending program for banks that aims to boost credit for the real economy. The so-called TLTRO program, part of a wider package of measures announced in June, offers as much as four years of low-cost funding tied to bank lending.

The Stoxx Europe 600 Index climbed 0.9 percent as all 19 industry groups rose. The gauge slid 3.2 percent last week, its biggest weekly drop since March.

Shire Plc advanced 0.7 percent after the U.K. drugmaker said it’s willing to back a 31.4 billion-pound ($53.7 billion) takeover by AbbVie Inc. Rolls-Royce Holdings Plc rose 1.3 percent after Airbus Group NV said it will use the U.K. company’s engines to upgrade its A330 plane. Airbus was little changed.

Meda AB, the Swedish producer of allergy medicine, fell 4.7 percent. Mylan Inc. is buying Abbott Laboratories’ generic-drug business and forming a new company that will be incorporated in the Netherlands. Mylan rose 2.1 percent.

“It looks like this is another merger Monday, which could be adding to optimism we’re seeing today,” Jeffrey Saut, chief investment strategist at Raymond James & Associates Inc., said by phone. Raymond James oversees $450 billion in assets. “You had all these mergers and takeover announcements over the weekend. It’s not just here in the U.S., it’s been a global phenomenon throughout the first half of this year.”

Banco Espirito Santo SA tumbled 7.5 percent and its subordinated bonds fell to a record. The bank’s parent sold a 4.99 percent stake to meet loan repayments and the firm named Vitor Bento chief executive officer today. Financial troubles at the group sparked concern last week that the region was vulnerable to financial shocks, triggering a selloff that helped erase $1 trillion from the value of global equities.

“Last week was a reminder that the European financial crisis is far from over,” said Christian Zogg, who manages the equivalent of about $11 billion as head of equity and fixed income at LLB Asset Management AG in Vaduz, Liechtenstein. “The Portuguese bank Espirito Santo was doing some harm to sentiment.  The situation seems to be under control so far.”

Portugal’s 10-year yield fell six basis points to 3.81 percent. The rate is down 18 basis points in the past two trading days, the biggest drop since the period through June 9.

The MSCI Emerging Markets Index added 0.5 percent, advancing after the first weekly decline in three. The Shanghai Composite Index added 1 percent, the most in a month, and the Hang Seng China Enterprises Index of mainland shares traded in Hong Kong added 0.8 percent. Thai shares extended the longest winning streak in almost four years.

China’s economy, the world’s second-largest, probably expanded 7.4 percent in the three months to June 30 from a year earlier, according to the median of 44 economists’ estimates compiled by Bloomberg before data scheduled for July 16.

The ruble retreated 0.4 percent per dollar and the Micex Index slipped 1.1 percent. Russia and Germany called for a resumption of Ukraine crisis talks after an artillery shell landed in Russian territory, killing one person.

The yen fell against all of its 16 major peers amid speculation central banks will maintain accommodative monetary policy that boosts demand for higher-yielding assets.

The Japanese currency declined 0.2 percent to 101.585 per dollar. It fell 0.3 percent to 138.34 per euro. The 18-nation shared currency was little changed at $1.36184.

Gold dropped 2.3 percent to settle at $1,306.70, the biggest drop since Dec. 19. The metal will be lower by the end of December as the economy improves, Jeffrey Currie, head of commodities research at Goldman Sachs, said in a July 11 interview. Currie expects prices will be $1,050 by the end of 2014, maintaining a forecast from the start of the year.

Corn futures extended a decline to a four-year low on signs of ample  supplies in the U.S., the world’s biggest producer. Soybeans and wheat rebounded.

 

Have a wonderful evening everyone.

 

Be magnificent!

Selfishness in man is a beginning.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Live as if you were to die tomorrow.  Learn as if

you were to live forever.

-Mahatma Gandhi, 1869-1948

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

 

Dear Friends,

Tangents:

On this day…

1960 “To Kill a Mockingbird,” Harper Lee’s Pulitzer Prize-winning novel, was published.

In 1914, Babe Ruth made his major-league debut in Fenway Park as a pitcher for the Red Sox. He pitched seven innings and led Boston to a 4-3 win over against Cleveland.

Something to note for the weekend:

On Sunday, Jane Goodall will introduce National Geographic’s Kingdom of the Apes, a fascinating look into the social structures of gorilla packs in the Rwandan mountains.  The clash between the oldest male, Titus, and his son, Rano, is a true story f the fight for leadership within the gorilla community.  The show highlights the remarkable similarities between gorilla conflicts and human power struggles.  It airs on Nat Geo Wild on July 13 at 9PM.

Photos of the Day

A group of riders cycles on its way during the 234.5 km seventh stage of the Tour de France cycling race from Epernay to Nancy, France. Jean-Paul Pelissier/Reuters

Native Brazilian with faces painted in the colors of the German national flag stand in front the news conference room of Germany’s national soccer team in the village of Santo Andre north of Porto Seguro, Brazil. Arnd Wiegmann/Reuters

Market Closes for July 11^th, 2014

Market Index	Close	Change
Dow Jones	16943.81	+28.74
		+0.17%
S&P 500	1967.57	+2.89   +0.15%
NASDAQ	4415.492	+19.289   +0.44%
TSX	15125.50	+11.02
		+0.07%

International Markets

Market Index	Close	Change
NIKKEI	15164.04	-52.43
		-0.34%
HANG SENG	23233.45	-5.54
		-0.02%
SENSEX	25024.35	-348.40
		-1.37%
FTSE 100	6690.17	+17.80
		+0.27%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.213	2.238
CND. 30 Year Bond	2.769	2.788
U.S. 10 Year Bond	2.5160	2.5359
U.S. 30 Year Bond	3.3366	3.3698

Currencies

BOC Close	Today	Previous
Canadian $	0.93145	0.93883
US $	1.07360	1.06516
Euro Rate 1 Euro=		Inverse
Canadian $	1.46090	0.68451
US $	1.36075	0.73489

Commodities

Gold	Close	Previous
London Gold Fix	1338.62	1335.85
Oil	Close	Previous
WTI Crude Future	100.83	102.93

Market Commentary:

Canada
By Oliver Renick

July 11 (Bloomberg) — Canadian stocks rose, with the benchmark gauge paring its worst weekly drop since May, as gains among gold miners offset a slump in energy stocks.

Barrick Gold Corp. jumped 3.8 percent and IamGold Corp. climbed 3.6 percent as miners rallied. Crew Energy Inc. and Legacy Oil + Gas Inc. dropped at least 3.7 percent as energy shares slid 1 percent as a group. Parex Resources Inc. surged 17 percent after saying its oil and gas reserves had increased.

The Standard & Poor’s/TSX Composite Index rose 0.1 percent to 15,125.50 at 4 p.m. in Toronto. The gauge has fallen 0.6 percent this week, the most since May 30, after closing at a record on July 9.

Canadian employment unexpectedly fell in June, with the second decline in three months led by the biggest drop in part- time work in almost two years. The country’s dollar fell with the last major data before Bank of Canada Governor Stephen Poloz’s July 16 interest-rate decision supporting his view there is plenty of slack in the world’s 11th largest economy.

Seven of the 10 main groups in the benchmark gauge rose today. Gold miners led raw-materials producers higher as the precious metal capped the longest run of weekly gains since 2011.

Barrick Gold jumped 4.8 percent to C$20.71 and IamGold rose 3.6 percent to C$4.36.

Parex Resources jumped 17 percent to a record C$14.87. The oil and gas explorer increased its proved plus provable reserves by 80 percent. At least two research firms, including Desjardins Securities, raised their rating on the stock.

Energy stocks lost the most, as West Texas Intermediate crude dropped to an eight-week low and capped a third weekly decline.

Crew Energy fell 3.7 percent to C$10.95 and Legacy Oil + Gas lost 3.8 percent to C$8.59. Painted Pony Petroleum Ltd. retreated 5.1 percent to C$12.17, the lowest in a month.

US
By Joseph Ciolli

July 11 (Bloomberg) — U.S. stocks rose, paring the biggest weekly loss since April, as a rally in Amazon.com Inc. and EBay Inc. led an afternoon rebound from declines spurred by concern over financial stress in Europe.

EBay and Amazon.com increased at least 2.3 percent amid optimism in the companies’ growth potential. Wells Fargo & Co. slipped after reporting per-share earnings that did not rise for the first time in 18 quarters. Fastenal Co. sank 4.2 percent after sales fell short of analysts’ estimates. Gap Inc. declined after same-store sales unexpectedly fell. Lorillard Inc. jumped 4.6 percent after Reynolds American Inc. said it’s in talks to buy the cigarette maker.

The Standard & Poor’s 500 Index rose 0.1 percent to 1,967.57 at 4 p.m. in New York after losing 0.3 percent earlier. It fell 0.9 percent this week. The Dow Jones Industrial Average added 28.74 points, or 0.2 percent, to 16,943.81. The Nasdaq 100 Index rose 0.6 percent. About 4.9 billion shares changed hands on U.S. exchanges today, 16 percent below the three-month average.

“People are going to keep one eye on earnings and one eye on peripheral debt,” Chad Morganlander, a money manager at St. Louis-based Stifel, Nicolaus & Co., which oversees about $160 billion, said in a phone interview. “Debt concerns may trump earnings in the short-term, but as long as we have solid numbers for this quarter, markets overall should be fine.”

The S&P 500 fell 0.4 percent yesterday as signs of financial stress among Portuguese banks fueled concern over the strength of the European recovery. Portugal’s second-largest lender sought to reassure investors today by revealing its exposure to related companies after a missed payment on short- term debt by a member of the group.

The S&P 500 trimmed losses of as much as 1 percent yesterday amid speculation the day’s initial selloff was overdone. The gauge slipped 1.1 percent in the first two days of the week on concern equities had risen too far, too fast.

The S&P 500 ended last week at an all-time high, and the index has not had a drop of 10 percent in more than two years. The gauge trades at a valuation of 18 times reported earnings, the highest since 2010.

More than 140 companies in the S&P 500, including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc. and Johnson & Johnson, will report quarterly results between now and July 23, according to data compiled by Bloomberg.

“With the start of earnings season, we’re expecting the U.S. to rebound,” Nick Skiming, who helps manage $10 billion at Ashburton Ltd., said by phone from Jersey, in the Channel Islands. “The U.S. is pretty clearly on the road to recovery. Their GDP, unemployment, and manufacturing figures are all fairly decent. From an economic view, it is the better place to put your money, a natural safe haven.”

The Chicago Board Options Exchange Volatility Index fell 4.1 percent today to 12.08. The gauge known as the VIX has surged 17 percent this week, its biggest rally since April. It finished last week at a seven-year low.

Profit at S&P 500 companies probably rose 4.5 percent in the three months through June, while sales gained 3.1 percent, analyst estimates compiled by Bloomberg show. The projections have decreased from the start of April, when analysts predicted a 7.3 percent jump in earnings and a 3.7 percent sales increase.

Earnings for banks are forecast to fall 3.9 percent in the second quarter, according to data compiled by Bloomberg. It’s the only sector expected to see declining profits, the data show.

Wells Fargo dropped 0.6 percent to $51.49. The bank reported quarterly profit of $1.01 per share, in line with estimates. The result ended a 17-quarter streak of rising per- share earnings at the bank.

All but two of the 10 main S&P 500 industries advanced today. Phone stocks climbed 0.8 percent to pace gains. Verizon Communications Inc. added 1.4 percent for the biggest jump in the Dow.

Whirpool Corp. increased 1.1 percent to $140.76. The Benton Harbor, Michigan-based company agreed to pay $1 billion for a controlling stake in Italian appliance maker Indesit Co., its largest acquisition since buying former rival Maytag Corp. eight years ago.

EBay rose 2.3 percent and Amazon.com jumped 5.6 percent to pace gains in the Dow Jones Internet Composite Index. The gauge capped its first weekly decline since May 9 as investors resumed selling earlier this week in some of the bull market’s biggest winners.

Sales at EBay grew more than 12 percent in June, data compiled by ChannelAdvisor show. Amazon.com’s sales have exceeded those for EBay by an average of 4 percent over the last four quarters, according to a Piper Jaffray Cos. report.

U.S. Steel Corp. climbed 3.2 percent to $27.64. The Obama administration imposed duties on steel pipe from South Korea and eight other countries in a victory for U.S. Steel Corp. and the United Steelworkers union, which said they were hurt by unfair competition from overseas, according to two people told of the decision.

Energy producers sank 0.8 percent, as crude oil declined for a third week. Chevron Corp. sank 1.4 percent to $128.47 for the biggest decline in the Dow.

Radian Group Inc. declined 5.4 percent to $13.77 and MGIC Investment Corp. plummeted 9.5 percent to $8.36. The two companies are among mortgage insurers that would need to fill a financial gap under new financial-strength rules proposed by the Federal Housing Finance Agency.

Genworth Financial Inc., which dropped 2.6 percent to $16.62, said yesterday that it may need as much as $550 million at its mortgage insurer to meet the standards by June 30, 2015.

Gap dropped 0.8 percent to $40.65. The biggest U.S. apparel-focused retailer said sales at stores open at least a year fell 2 percent in June, compared with a 7 percent gain in the year-earlier period. Retail Metrics Inc., a research firm that tracks the industry, had projected a 0.8 percent gain.

Rent-A-Center Inc. slid 11 percent to $25.88 after saying second-quarter adjusted earnings will be 36 cents to 38 cents a share, missing the average analyst prediction of 48 cents. The operator of rent-to-own electronics and furniture stores cited weaker-than-expected demand.

Fastenal retreated 4.2 percent to $46.15. The provider of industrial and construction supplies reported second-quarter revenue of $949.9 million, missing the average analyst estimate of $952.3 million.

Lorillard gained 4.6 percent to $66.01. The company confirmed the talks with Reynolds, the producer of Camel cigarettes. British American Tobacco Plc, the U.K. company which owns 42 percent of Reynolds, said it expects to support the transaction by subscribing for additional shares to maintain its stake. Reynolds lost 0.8 percent to $61.75.

 

Have a wonderful weekend everyone.

 

Be magnificent!

Though they may take various roads, all are on the way.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Even if you fall on your face, you’re still moving forward.

-Victor Kiam, 1926-2001

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

 

Dear Friends,

Tangents:

Marcel Proust was born on this day in 1871.  Happy 143^rd birthday. He died in 1922.

In 1971, The town of Illiers, where Proust spent some of his childhood and ate madeleines, changes its name, adding Proust’s fictional version of it, Combray. It remains Illiers-Combray to this day.

Also in 1971, celebrating Proust’s centenary, a ball is held in Paris with attendees, including a bejeweled Elizabeth Taylor, wearing gowns designed by Yves St. Laurent, Valentino and Christian Dior all inspired by Proust and his work.

In 1972, an unnamed editor of a New York publishing house jokes that Proust’s novel, Remembrance of Things Past, is “the story of a man who fell in love with a cookie.”

In 1982, writer Cameron Crowe originally conceived of “Fast Times at Ridgemont High” as Marcel Proust as a Ridgemont senior.

1983: In a review of a new collection of Proust’s letters: “Like Dante or Machiavelli, Proust’s reputation rests on a single work. Students and admirers read his letters and early writings … to search for precursors of the vivid characterizations and penetrating analyses, the profound themes and translucent style that make ‘Remembrance of Things Past’ a monument of literature.”

1988: The copyright of “Remembrance of Things Past” expires in France and becomes public domain, sparking a “Proust boom.” “Proust Belongs to You,” one French literary magazine declares. The novel is reissued in a luxury edition by his publisher Gaillimard, and four other publishers put out new versions, one including 312 pages of biographical notes. Videos about his life run in the Paris Metro. The novel is “one of the most celebrated works of the 20th century,” The Los Angeles Times writes, “a luxuriant unfolding of memory by a narrator of exquisite sensitivity.”

Happiness is beneficial for the body, but it is grief that develops the powers of the mind.  -Marcel Proust.

Photos of the Day

Visitors admire the Victory of Samothrace scultpture at the Louvre museum in Paris. The 2,200-year-old, 29-ton statue is back after almost a year of restoration. The statue is one of the five most popular works at the Louvre. Remy de la Mauviniere/AP

People look at a creation by French artist Elsa Tomkowiak in the Graslin Theater during the ‘A journey to Nantes’ art festival in Nantes, western France. Stephane Mahe/Reuters

Market Closes for July 10^th, 2014

Market   Index	Close	Change
Dow   Jones	16915.07	-70.54
		-0.42%
S&P 500	1964.68	-8.15    -0.41%
NASDAQ	4396.203	-22.831    -0.52%
TSX	15114.48	-100.71
		-0.66%

International Markets

Market   Index	Close	Change
NIKKEI	15216.47	-86.18
		-0.56%
HANG   SENG	23238.99	+62.92
		+0.27%
SENSEX	25372.75	-72.06
		-0.28%
FTSE 100	6672.37	-45.67
		-0.68%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.238	2.245
CND.   30 Year Bond	2.788	2.788
U.S.   10 Year Bond	2.5359	2.5503
U.S.   30 Year Bond	3.3698	3.3740

Currencies

BOC Close	Today	Previous
Canadian $	0.93883	0.93870
US   $	1.06516	1.06530
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44948	0.68990
US   $	1.36083	0.73485

Commodities

Gold	Close	Previous
London Gold   Fix	1335.85	1326.95
Oil	Close	Previous
WTI Crude Future	102.93	102.29

Market Commentary:

Canada
By Eric Lam

July 10 (Bloomberg) — Canadian stocks retreated from a record and joined a global selloff as signs of financial stress in Portugal increased concern that instability will return to Europe.

Crew Energy Inc. and TransGlobe Energy Corp. dropped at least 2 percent to pace declines among energy stocks. Banro Corp. plunged 29 percent after production was significantly hampered at one of its projects as the processing plant has problems handling the ore. Fortuna Silver Mines Inc. slumped 9.9 percent after analysts at Canaccord Genuity Corp. cut their rating for the stock.

The Standard & Poor’s/TSX Composite Index fell 100.71 points, or 0.7 percent, to 15,114.48 at 4 p.m. in Toronto, the most in two weeks after reaching a record close yesterday. The benchmark Canadian equity gauge has gained 11 percent this year.

A selloff in Europe spread to North America amid concern about the missed debt payments by the parent of Banco Espirito Santo SA. The MSCI All-Country World Index, which tracks both developed and emerging markets, sank as much as 1 percent.

Crew Energy fell 2 percent to C$11.37 and TransGlobe Energy lost 2.9 percent to C$7.38. The S&P/TSX Energy Index sank 0.9 percent, reaching a one-month low as 65 of 69 members retreated.

Crude for August delivery rallied 0.6 percent to snap a nine-day decline, the longest stretch since 2009, New York Mercantile Exchange data show. Prices have fallen about 2.4 percent this month.

Manulife Financial Corp. retreated 0.9 percent to C$21.47 as financial stocks decreased 0.2 percent as a group.

Royal Bank of Canada, the nation’s second-largest lender by assets, lost 0.2 percent to C$78.34 to snap a nine-day winning streak and retreat from a record.

Fortuna Silver Mines sank 9.9 percent to C$5.83 as the S&P/TSX Materials Index slumped 1.6 percent, the most in the benchmark Canadian equity gauge. Trading volume for S&P/TSX stocks was 26 percent higher compared with the 30-day average.

John Kratochwil, analyst at Canaccord Genuity, reduced Fortuna’s rating to a hold from a buy. The company said cash costs at its Caylloma mine in Peru were higher than earlier guidance in the second quarter.

Gold for August delivery rose 1.1 percent to settle at $1,339.20 an ounce on the Comex in New York, the highest since March. Gold is seen as an safe haven alternative investment in times of increasing volatility.

US
By Joseph Ciolli

July 10 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index resuming a selloff started earlier this week, as signs of financial stress in Portugal fueled demand for haven assets.

Home Depot Inc. and Lowe’s Cos. fell at least 1.4 percent after a Deutsche Bank AG analyst lowered his estimates for their profits based on weak results at rivals. Shares in high-dividend yielding companies such as Verizon Communications Inc. advanced as U.S. Treasuries gained.

The S&P 500 fell 0.4 percent to 1,964.68 at 4 p.m. in New York, trimming an earlier decline of 1 percent that was the most since May 15. The Dow Jones Industrial Average lost 70.54 points, or 0.4 percent, to 16,915.07. The Russell 2000 Index fell 1 percent, paring a drop of 1.9 percent.

“People will shoot first and ask questions later when news like this hits,” said Lawrence Creatura, a fund manager at Federated Investors Inc. in Rochester, New York. His firm manages about $363.8 billion. “The concern of an event like this is always determining whether it’s occurring in isolation or whether it’s the first domino. It’s a classic flight to safety across the equity, commodities and bond markets.”

European stocks and Portuguese bonds tumbled with investor concern deepening over missed debt payments by a company linked to the Iberian nation’s second-largest lender. Portugal’s central bank said Banco Espirito Santo SA is protected after its parent missed the payments. U.S. Treasuries and gold rallied.

Today’s decline came after speculation that U.S. stocks have risen too far, too fast fueled losses earlier in the week as Raymond James & Associates Inc. said equities are vulnerable and Citigroup Inc.’s chief U.S. equity strategist cited concerns for a “severe” pullback. The S&P 500 ended last week at an all-time high and the Dow Jones Industrial Average topped 17,000 for the first time.

The Chicago Board Options Exchange Volatility Index rose 8.5 percent today to 12.64. The gauge known as the VIX finished last week at a seven-year low before rallying 16 percent during the first two days of the week, the biggest surge since April.

The S&P 500 has not had a drop of 10 percent in more than two years, and has not fallen by more than 1 percent on a closing basis since April. The gauge trades at a valuation of 18 times reported earnings, the highest since 2011 when it was in the middle of a 19 percent slide, its biggest during the current five-year bull market.

Equities trimmed steeper losses amid speculation the day’s initial selloff was overdone.

“Everyone expected the worst, and the contagion fears were brought back to fruition, but as the day has gone on those fears have abated a bit,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “Right now the market is saying that their concerns are not going to be as widespread as they were when they walked in this morning.”

U.S. equities yesterday halted a two-day selloff as optimism about corporate earnings and jobs growth outweighed concern that Federal Reserve concern that investors may be growing complacent about risk.

A report today showed fewer Americans than forecast filed applications for unemployment benefits last week, adding to signs the job market continues to strengthen. The latest government payrolls report showed job growth blew past expectations in June and the unemployment rate fell to the lowest level since before the financial crisis peaked six years ago.

More than 140 companies in the S&P 500, including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs Group Inc. and Johnson & Johnson, will report quarterly results between now and July 23, according to data compiled by Bloomberg.

Profit at S&P 500 companies probably rose 5 percent in the three months through June, while sales gained 3 percent, estimates show. The forecasts have decreased from the start of April, when analysts predicted a 7.3 percent jump in earnings and 3.7 percent sales increase.

Earnings for banks are forecast to fall 3.3 percent in the second quarter, according to data compiled by Bloomberg. It’s the only sector expected to see declining profits, the data show.

Goldman Sachs dropped 0.8 percent and JPMorgan Chase lost 0.8 percent as banks had the fourth-worst performance among 24 S&P 500 groups.

Eight of the 10 main groups in the S&P 500 retreated today. Shares in energy producers and makers of consumer-discretionary products tumbled at least 0.9 percent to pace losses as investors shifted out of stocks whose performance is linked to economic growth.

Exxon Mobil Corp. retreated 1 percent to $102.57 as crude prices climbed after a nine-day losing streak. Chevron Corp. fell 0.9 percent to $130.25.

Home Depot sank 1.7 percent to $79.40 for the biggest decline in the Dow, while Lowe’s lost 1.4 percent to $47.20. Deutsche Bank’s Michael Baker lowered his earnings estimates for the two biggest U.S. home-improvement retailers by 1 cent a share each after Lumber Liquidators Holdings Inc. reported weaker-than-estimated results. Lumber Liquidators sank 22 percent to $55.25 for its biggest drop in three years.

Tractor Supply Co. lost 2.4 percent to $59.92. The farm- supplies retailer forecast second-quarter earnings below analysts estimates.

L Brands Inc. decreased 2.7 percent to $60.21. The owners of the Victoria’s Secret and Bath & Body Works chains reported that June sales rose 2 percent, falling short of the consensus analyst forecast of 2.7 percent.

Utility and phone shares rose at least 0.6 percent to lead advances today, as investors shifted into sectors with high dividend-yielding stocks often favored in a risk-averse environment.

Verizon added 1.5 percent to $49.64 for the biggest rise in the Dow. The stock extended gains after Chief Executive Officer Lowell McAdam said on CNBC that Verizon was not interested in buying a satellite company.

Utilities yield 3.7 percent and phone stocks pay at 4.9 percent, the highest the S&P 500. The yield on benchmark 10-year Treasury notes fell one basis point, or 0.01 percentage point, to 2.54 percent today.

 

Have a wonderful evening everyone.

 

Be magnificent!

Our contribution

to the progress of the world must, therefore,

consist in setting our own house in order.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

College is something you complete.  Life is something you experience.  So don’t worry about

your grade, or the results or success.  Success is defined in myriad ways, and you will find it,

and people will no longer be grading you, but it will come from your own

internal sense of decency.

-Jon Stewart, 1962-

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

 

Dear Friends,

Tangents:

The Wall Street Journal published its first edition 125 years ago yesterday.  It consisted of four pages priced at 2 cents.  The Journal published an anniversary issue as a commemoration which is very interesting, especially some of the items from the front page of the July 8, 1889 issue:

The column entitled “The Average Movement of Price”  contained statistics on price movements on 12 active stocks.  Today’s Dow Jones Industrial Average began in 1896 with those same 12 stocks.  The only original stock in the present-day 30-stock index is General Electric.

There is an ad on the front page from Rand McNally & Company that begins in bold letters “WE FURNISH MAPS…”   Rand McNally is now owned by Patriarch Partners, but is still known as a publisher of maps.  It started in 1856 to print timetables and tickets for the railroads.

Readers of the first edition are informed that “The first bale of cotton from the South was sold at auction in front of the Cotton Exchange today and was bought by Henry Clews & Co. at 16 1/8.”

The bale of cotton from Georgia bought by Clews who was a  financier and served as an economic consultant to President Ulysses S. Grant.  The bale was said to be headed to Liverpool.

Readers are also informed on the front page of the first edition of the WSJ that “Mr. Duncan A. McTavish of the British Bank of North America died this morning aged 72.”

Duncan McTavish, born in Scotland, was a representative of the Bank of British North America in New York.  A detailed obituary in the Banker’s Magazine said “his business life was marked by success without sensation.”

Central Railroad Co. of New Jersey announced on the front page that “A dividend of one and a half per cent has this day been declared payable August 1^st prox. for the quarter ending June 30^th ulto.  The transfer books will close on Monday, the 15^th inst., and open on Friday, August 2d.  By order of the board.  J. W. Watson, Treasurer.”  This railroad started in 1831 as “Elizabethtown & Somerville Railroad” and adopted the “Central Railroad of New Jersey” name in 1849.  After the railroad boom years ended, CNJ went through numerous forms until in 1988, as part of a complicated transaction related to taxes, its shell acquired packaging company Triangle Industries and took its name.

Photos of the Day

Waves brought about by Typhoon Neoguri hits a lighthouse in Seogwipo on Jeju Island. Typhoon Neoguri weakened from its original status as a super typhoon but remained intense, with gusts of more than 250 km per hour (155 mph). It was powering through the Okinawa island chain where emergency rain and high-seas warnings were in effect. Ko Sung-sik/Yonhap/Reuters

People watch Estafeta Street from balconies as police control the street a few minutes before the start of the running of the bulls at the San Fermin festival, in Pamplona, Spain. Revelers from around the world arrive to Pamplona every year to take part in some of the eight days of the running of the bulls glorified by Ernest Hemingway’s 1926 novel ‘The Sun Also Rises.’ Alvaro Barrientos/AP

Market Closes for July 9^th, 2014

Market   Index	Close	Change
Dow   Jones	16985.61	+78.99
		+0.47%
S&P 500	1972.83	+9.12    +0.46%
NASDAQ	4419.035	+27.572    +0.63%
TSX	15215.19	+78.01
		+0.52%

International Markets

Market   Index	Close	Change
NIKKEI	15302.65	-11.76
		-0.08%
HANG   SENG	23176.07	-365.31
		-1.55%
SENSEX	25444.81	-137.30
		-0.54%
FTSE 100	6718.04	-20.41
		-0.30%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.245	2.249
CND.   30 Year Bond	2.788	2.785
U.S.   10 Year Bond	2.5503	2.5557
U.S.   30 Year Bond	3.3740	3.3723

Currencies

BOC Close	Today	Previous
Canadian $	0.93870	0.93654
US   $	1.06530	1.06369
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45327	0.68810
US   $	1.36419	0.73304

Commodities

Gold	Close	Previous
London Gold   Fix	1326.95	1319.42
Oil	Close	Previous
WTI Crude Future	102.29	103.40

Market Commentary:

Canada
By Eric Lam

July 9 (Bloomberg) — Canadian stocks rose to a record, following a two-day slide, as materials companies advanced with gold and Royal Bank of Canada rallied amid data showing housing starts unexpectedly advanced last month.

Royal Bank, the nation’s second-largest lender by assets, rose 0.9 percent to extend its longest winning streak in four years. Alacer Gold Corp. added 6.7 percent as gold prices increased for the first time in four days. Copper Mountain Mining Corp. jumped 4.1 percent after reporting record second- quarter production results for its mine in British Columbia. Bankers Petroleum Ltd. sank as crude prices slid a ninth day.

The Standard & Poor’s/TSX Composite Index rose 78.01 points, or 0.5 percent, to 15,215.19 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has gained 12 percent this year, topping its previous record in June, for the third-best performance among the world’s developed markets.

Canadian housing starts unexpectedly rose for a third month in June led by single-family dwellings, adding to signs the nation’s real estate market is defying predictions of a slowdown.

Consumer confidence approached its 2014 high last week on optimism about real estate prices, according to the Bloomberg Nanos Canadian Confidence Index.

Nine of the 10 industries in the S&P/TSX rose on trading volume 9.1 percent higher than the 30-day average.

Royal Bank rose 0.9 percent to a record C$78.50. The stock has climbed for nine days, the longest streak since February 2010. The S&P/TSX Banks Index rallied 0.6 percent, for its eighth advance in the past nine days.

Copper Mountain Mining jumped 4.1 percent to C$3.05, the highest since March 2013. Production from the Copper Mountain mine in British Columbia rose 4 percent from the prior quarter to 19.9 million pounds in the second quarter.

Bankers Petroleum retreated 1.4 percent to C$7.01 to pace declines among energy stocks. West Texas Intermediate crude dropped for a ninth day, the worst losing streak since 2009, after a report showed U.S. supplies increased.

USA
By Joseph Ciolli and Callie Bost

July 9 (Bloomberg) — U.S. stocks rebounded from a two-day selloff as optimism over corporate earnings and jobs growth overshadowed central-bank concern that investors may be growing complacent about the economic outlook.

Alcoa Inc. jumped 5.7 percent to the highest in almost two years after kicking off earnings season with better-than- forecast results. American Airlines Group Inc. rallied 4.3 percent after raising its margin forecast. Facebook Inc. advanced 3.5 percent to pace gains among a gauge of technology shares. Bob Evans Farms Inc. slid 4.4 percent as quarterly revenue missed estimates.

The Standard & Poor’s 500 Index rose 0.5 percent to 1,972.83 at 4 p.m. in New York after a 1.1 percent slide the two previous days. The Dow Jones Industrial Average added 78.99 points, or 0.5 percent, to 16,985.61. About 5.4 billion shares changed hands on U.S. exchanges today, 8.3 percent below the three-month average.

“The market can go down, but it won’t stay down,” John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York, said in a phone interview. “The fact that the market is still questioning all these things that are going on is a very healthy sign. I still think the Fed is going to be more concerned about making absolutely sure that the U.S. economic recovery is under way and staying under way.”

Equities initially turned lower after Federal Reserve meeting minutes showed some policy makers were concerned investors may be growing too complacent about the economic outlook and the central bank should be on the lookout for excessive risk-taking. Officials are also debating the timing for the first increase in the main interest rate since 2006.

Fed officials expressed concern about low volatility in equity, currency and fixed-income markets, according to minutes of their June meeting, when policy makers trimmed monthly bond purchases to $35 billion. At the same time, “it was noted that monetary policy needed to continue to promote the favorable financial conditions required to support the economic expansion,” according to the minutes.

The Chicago Board Options Exchange Volatility Index finished last week at a seven-year low before rallying 16 percent the previous two days, the most since April. The gauge known as the VIX slipped 2.8 percent to 11.65 today.

The Fed meeting took place before a June payrolls report that showed job growth blew past expectations and the unemployment rate fell to the lowest level since before the financial crisis peaked six years ago, creating a firm foundation for a stronger U.S. economic expansion.

“We saw a knee-jerk reaction down, but we usually get some short-term volatility after events like these,” Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said by phone. “I think people are continuing to see improvement in labor market conditions, especially on the heels of the most recent jobs report. A lot of people are viewing the fact that the Fed is going to continue to be accommodative to the economy.”

Fed Chair Janet Yellen said last month that accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth. She emphasized the need to put more Americans back to work and downplayed concerns about asset-price bubbles and incipient inflation.

U.S. equities retreated a second day yesterday amid growing investor concern that stocks have rallied too fast after benchmark indexes ended last week at all-time highs. Raymond James & Associates Inc. said stocks are vulnerable to losses and Citigroup Inc.’s chief U.S. equity strategist cited concerns for a “severe” pullback.

The S&P 500 has not had a drop of 10 percent in more than two years. The gauge trades at a valuation of 18 times reported earnings, the highest since 2011 when it was in the middle of a 19 percent slide, its biggest during the current five-year bull market.

Equity losses in the previous two days were concentrated in technology shares and small-caps with high valuations. Twitter Inc. and Pandora Media Inc., which trade at more than 150 times estimated earnings, plunged about more than 9 percent. Facebook Inc. and TripAdvisor Inc. sank at least 5.3 percent.

Facebook rose 3.5 percent to $64.97 today. The stock paced gains in the Nasdaq 100 Index of large technology shares, which had fallen for two straight days.

More than 130 companies in the S&P 500 are scheduled to report quarterly results in the next two weeks, including Citigroup Inc., JPMorgan Chase & Co., Goldman Sachs and Johnson & Johnson.

Profit at S&P 500 companies probably rose 5 percent in the three months through June, while sales gained 3 percent, estimates compiled by Bloomberg show. The forecasts are lower than they were at the start of April, when analysts predicted a 7.3 percent rise in earnings and 3.7 percent sales increase.

“We’re looking for continued economic growth, which will drive corporate earnings,” John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said in a phone interview. “There’s still money on the sideline. As long as earnings keep going up and stocks are fairly valued, the market can keep going.”

All but one of the 10 main S&P 500 groups advanced today, with shares in makers of consumer-discretionary products adding 1.2 percent to pace gains. Utility stocks fell 0.2 percent.

Alcoa advanced 5.7 percent to $15.69 for its best day since March and the biggest gain in the S&P 500. The struggling U.S. aluminum producer, which is shifting its focus to manufacturing auto and aerospace components, reported better-than-forecast profit on the strength of its traditional aluminum smelting business.

American Airlines gained 4.3 percent to $41.99. The carrier said second-quarter pretax margins would exceed the company’s previous forecast. The company also said it sees strong global travel demand and no “material pockets of weakness.”

Reynolds American Inc. rose 2.2 percent to $62.67. The U.K.’s Daily Mail speculated British American Tobacco Plc may purchase the rest of the cigarette producer. BAT holds about 42 percent of Reynolds, according to data compiled by Bloomberg.

Bob Evans Farms slid 4.4 percent to $47.57. The Columbus, Ohio-based operator of family restaurants reported quarterly revenue that failed to meet analyst estimates.

The Container Store Group plunged 8.4 percent to $24.80. The retailer of storage and organization products reported quarterly earnings that missed analysts’ estimates and said it’s “experiencing retail ‘funk.’”

Gigamon Inc. tumbled 32 percent to $12.29. The designer of networking products reported preliminary second-quarter revenue of as much as $35 million. That was lower than its earlier forecast of as much as $42 million, and missed analyst estimates of $40.3 million.

 

Have a wonderful evening everyone.

 

Be magnificent!

Every day we see or read of appalling things happening in the world as the result of violence in man.

You may say, “I can’t do anything about it,” or “How can I influence the world?”

I think you can tremendously influence the world if you yourself are not violent,

if you lead actually every day a peaceful life – a life which is not competitive, ambitious, envious –

a life which does not create enmity.

Small fires can become ablaze.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Draw strength from the knowledge that education will break the backs of poverty,

disenfranchisement, and violence; that war is never inevitable but only a terrible

failure of the imagination; and that love is stronger than hatred.

-Wally Lamb, 1950-

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

 

Dear Friends,

Tangents:

From Fanny Burney’s Diary, at Weymouth, July 8^th, 1789:

The King [George III] bathes, and with great success;  a [bathing] machine follows the royal one into the sea, filled with fiddlers, who play “god Save the King”, as His Majesty takes his plunge! –from The Book of Days.

Photos of the Day

A woman faces the Mediterranean Sea as she sits on the Promenade des Anglais in Nice, southeastern France. Lionel Cironneau/AP

The pack of riders cycles on its way during the fourth stage of the Tour de France cycling race from Le Touquet-Paris-Plage to Lille, France.Jean-Paul Pelissier/Reuters

Market Closes for July 8^th , 2014

Market   Index	Close	Change
Dow   Jones	16906.62	-177.59
		-0.69%
S&P 500	1963.71	-13.94    -0.70%
NASDAQ	4391.465	-60.065    -1.35%
TSX	15137.18	-35.75
		-0.24%

International Markets

Market   Index	Close	Change
NIKKEI	15314.41	-65.03
		-0.42%
HANG   SENG	23541.38	+0.46
		——
SENSEX	25582.11	-517.97
		+1.98%
FTSE 100	6738.45	-85.06
		-1.25%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.249	2.304
CND.   30 Year Bond	2.785	2.833
U.S.   10 Year Bond	2.5557	2.6156
U.S.   30 Year Bond	3.3723	3.4405

Currencies

BOC Close	Today	Previous
Canadian $	0.93654	0.93665
US   $	1.06369	1.06763
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45353	0.68803
US   $	1.36120	0.73465

Commodities

Gold	Close	Previous
London Gold   Fix	1319.42	1319.63
Oil	Close	Previous
WTI Crude Future	103.40	104.06

Market Commentary:

Canada

By Eric Lam

July 8 (Bloomberg) — Canadian stocks fell a second day, paring earlier losses, as Valeant Pharmaceuticals International Inc. extended a slide while phone and technology shares slumped.

TransGlobe Energy Corp. lost 1 percent after second-quarter production at one of its facilities was affected by pump failures. Air Canada sank 3.1 percent, extending a loss after WestJet Airlines Ltd. said yesterday it’ll start flying twin- aisle jets as early as next year. Valeant dropped 1.1 percent for a sixth day of losses. Telus Corp. lost 2.1 percent after the government moved to boost competition.

The Standard & Poor’s/TSX Composite Index fell 35.75 points, or 0.2 percent, to 15,137.18 at 4 p.m. in Toronto, paring earlier losses of as much as 1 percent. The benchmark Canadian equity gauge has fallen 0.5 percent in the past two days to trim its gain this year to 11 percent.

Eight of the 10 industries in the S&P/TSX fell on trading volume 29 percent higher than the 30-day average.

Phone stocks slid 1 percent as a group, dropping to the lowest level since March, after the government yesterday set aside additional airwaves for smaller wireless carriers in an attempt to create more competition in the country.

Telus retreated 2.1 percent to C$38.47 and BCE Inc. slipped 0.6 percent to C$47.92.

Energy shares slid 0.3 percent as a group, as Advantage Oil & Gas Ltd. retreated 3 percent to C$6.72 and Raging River Exploration Inc. slipped 1.1 percent to C$10.35.

Brent crude fell below $110 a barrel for the biggest drop in more than two months, reversing a rally that started when Islamist militants seized the northern Iraqi city of Mosul almost a month ago.

TransGlobe fell 1 percent to C$7.80 after reporting average production in the second quarter at its West Gharib facility in Egypt was 9,980 barrels a day due to faulty pumps.

Air Canada tumbled 3.1 percent to C$9.55, the biggest decline in two weeks. WestJet said yesterday it plans to fly wide-body jets on routes between Alberta and Hawaii beginning in late 2015, stepping up a challenge to Air Canada, the nation’s largest air carrier.

Valeant Pharmaceuticals lost 1.1 percent to C$130.43. The stock has slid 5.6 percent in the past six sessions. Valeant is trying to acquire Allergan Inc.

Datawind Inc. sank 7.8 percent to C$4.38, the worst- performing initial offering in Canada so far this year, according to data compiled by Bloomberg. Datawind is a Mississauga, Ontario-based company that sells budget-priced tablet devices in emerging markets. The company raised about C$30 million in its IPO.

US

By Joseph Ciolli

July 8 (Bloomberg) — U.S. shares extended a selloff today, with the Nasdaq Composite Index sliding the most in two months, as Raymond James & Associates said equities are vulnerable to losses and Citigroup Inc. cited investor concerns for a “severe” pullback.

Twitter Inc. and Pandora Media Inc., which trade at more than 150 times earnings, plunged at least 7 percent to pace a Dow Jones gauge of Internet shares to the biggest drop since May. The Nasdaq Biotechnology Index headed for its steepest two- day slide since April. Goldman Sachs Group Inc. and JPMorgan Chase & Co. sank more than 1.6 percent to lead bank shares lower. Alcoa Inc., the largest American aluminum producer, rose 1.3 percent in late trading after reporting earnings that topped estimates.

The Standard & Poor’s 500 Index lost 0.7 percent to 1,963.71 at 4 p.m. in New York. The Dow Jones Industrial Average fell 117.59 points, or 0.7 percent, to 16,906.62. The Russell 2000 Index sank 1.2 percent, while the Nasdaq Composite slid 1.4 percent, the most since May 6. About 6.4 billion shares changed hands on U.S. exchanges today, 7.3 percent above the three-month average.

“Many investors wonder if the ride is over,” Tobias Levkovich, chief U.S. equity strategist at Citigroup Inc., said in a report today. “As stock indices hit new highs, there are those that fear further gains, given defensive positioning, but more worry about buying in now just in time for a severe pullback.”

The Chicago Board Options Exchange Volatility Index, the measure known as VIX that tracks investors’ volatility expectations for the S&P 500, jumped 9.8 percent yesterday from a seven-year low. The index added 5.7 percent to 11.98 today, giving it the biggest two-day rally since April 11.

U.S. benchmark indexes ended last week at all-time highs, with the Dow topping 17,000 for the first time. The S&P 500 has not had a drop of 10 percent in more than two years. The gauge trades at a valuation of 18 times reported earnings, the highest since 2011 when it was in the middle of a 19 percent slide, its biggest during the current five-year bull market.

“I do think we are vulnerable to a 10 percent to 12 percent decline in the weeks ahead, albeit within the construct of a secular bull market that has years left to run,” Jeffrey Saut, chief investment strategist at Raymond James wrote in a post on the firm’s website.

The Russell 2000 tumbled 1.8 percent yesterday, the most since April 25. The index last week recovered nearly all its losses from a two-month selloff of Internet and small-cap shares, coming within a point of an all-time high. Gauges of Internet and biotechnology companies also had climbed back from their lows for the year, retracing more than half of their earlier losses.

Small-caps and Internet shares were the biggest victims of the market retreat earlier this year as investors dumped the biggest winners of the bull market amid concern valuations advanced too far. Investors resumed selling those industries this week after a rally drove valuations on the Nasdaq Composite to 35 times reported earnings, about double that of the S&P 500.

The Dow Jones Internet Composite Index sank 3 percent today, the most since May 6. The gauge had rallied 15 percent from a low on May 8 to erase its losses for the year before falling 4.3 percent in the past two days. The barometer surged 54 percent in 2013.

Twitter sank 7 percent to $37.41, while Pandora dropped 7.3 percent to $25.79. Both stocks had the biggest declines since May 6. Facebook Inc. and TripAdvisor Inc., which rallied more than 98 percent in 2013, lost at least 3.9 percent.

The Nasdaq Biotechnology index has fallen 4.6 percent in the past two days, the most since April 11. It had surged 23 percent since a low that month.

“There’s clearly some profit-taking in names that have done extremely well,” Peter Tuz, who helps manage more than $450 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, said in a phone interview. “Some of the stocks have pretty lofty P/E ratios, so if anything does go awry with earnings or guidance, they could have bigger declines. It’s just a little bit of rebalancing, which isn’t atypical for the start of a new quarter.”

While data from employment to housing is indicating the world’s largest economy is recovering after the worst contraction in gross domestic product since 2009, International Monetary Fund Managing Director Christine Lagarde this week signaled a cut in the institution’s global expansion forecasts, saying investment is still weak and risks remain in the U.S.

The Federal Reserve will release minutes from its June meeting tomorrow. Policy makers trimmed bond purchases last month by $10 billion for the fifth consecutive time, saying economic growth is rebounding and the job market is improving.

Officials are debating the timing for the first increase in the main interest rate since 2006. Policy makers have kept their target for overnight lending between banks in a range of zero to 0.25 percent since December 2008.

Goldman Sachs yesterday joined banks including JPMorgan Chase & Co. and Bank of Tokyo-Mitsubishi UFJ Ltd. in bringing forward it estimates for Fed rate increases after data last week showed the economy added more workers than estimated in June.

In Europe, signs the economic recovery is losing momentum sent stocks lower for a third day. U.K. manufacturing unexpectedly slumped the most in 16 months in May and German exports contracted more than estimated, data showed today.

Alcoa rose 1.3 percent to $15.05 in late trading after unofficially kicking off earnings season. The company reported second-quarter earnings and sales that beat analysts’ expectations after an increase in the price of aluminum including regional delivery premiums.The stock finished the regular session 0.8 percent higher at $14.85.

Citigroup Inc., JPMorgan Chase, Goldman Sachs, Yahoo! Inc. and Johnson & Johnson are among companies reporting financial results in the next week.

Bank shares dropped 1.2 percent for the fourth-worst performance among 24 S&P 500 groups. Goldman Sachs retreated 1.7 percent to $164.91 and JPMorgan Chase lost 1.6 percent to $55.76. Both fell to one-month lows.

Profit for S&P 500 members probably climbed 5 percent in the three months through June, while sales rose 3 percent, according to analyst estimates compiled by Bloomberg. The forecasts are lower than they were at the beginning of April, when analysts projected earnings to rise 7.3 percent and sales to increase 3.7 percent.

Three rounds of monetary stimulus from the Fed and better- than-forecast corporate earnings have driven the S&P 500 up more than 190 percent from a low reached in March 2009.

“Equities are near all-time highs and the air will only get thinner,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn, Germany. “We need a strong results season now to support equities because investors will keep wondering when the Fed will hike rates and this can bring some nervousness to the market.”

 

Have  a wonderful evening everyone.

 

Be magnificent!

When there is space between you and the object you are observing

you well know there is no love, and without love, however hard you try to reform the world

or bring about a new social order or however much you talk about improvements,

you will only create agony.

So it is up to you.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

There are times when fear is good. It must keep its watchful place

at the heart’s controls.

–Aeschylus, 525 BC-456 BC.

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