Author: Carolann

Dear Friends,

Tangents:

I spent the weekend reading Donna Tartt’s The Goldfinch, which won the Pulitzer prize for fiction this year.  I am surprised really.  Have any of you read it?  I would really appreciate your comments, because I am not sure how I feel about it; I found it disturbing.  I look forward to hearing from you.

The Fiesta de San Fermin which Hemmingway made famous in The Sun Also Rises begins today in Pamplona, Spain.  It’s hard to believe, but July 2^nd marked the 50^th anniversary of Hemmingway’s death.  He remains one of my favorite writers ever and his books are indelibly printed in my memory.  I pick them up from time to time to read again.  The writing is so beautiful.

One of the most beautiful and frequently quoted examples of Hemingway’s style is the opening paragraph of A Farewell to Arms:

In the late summer of that year we lived in a house in a village that looked across the river and the plain to the mountains. In the bed of the river there were pebbles and boulders, dry and white in the sun, and the water was clear and swiftly moving and blue in the channels. Troops went by the house and down the road and the dust they raised powdered the leaves of the trees. The trunks of the trees too were dusty and the leaves fell early that year and we saw the troops marching along the road and the dust rising and leaves, stirred by the breeze, falling and the soldiers marching and afterward the road bare and white except for the leaves.

Photos of the Day Sunflowers are in full bloom in a field near Priestewitz, eastern Germany. Jan Woitas/dpa/AP

The pack climbs Cray pass during the first stage of the Tour de France cycling race over 190.5 kilometers (118.4 miles) with start in Leeds and finish in Harrogate, England, July 5. Laurent Cipriani/AP

Market Closes for July ^7th, 2014

Market  Index	Close	Change
Dow  Jones	17023.31	-44.95
		-0.26%
S&P 500	1976.52	-8.92    -0.45%
NASDAQ	4451.531	-34.394    -0.77%
TSX	15147.58	-67.38
		-0.44%

International Markets

Market  Index	Close	Change
NIKKEI	15379.44	-57.69
		-0.37%
HANG  SENG	23540.92	-5.44
		-0.02%
SENSEX	26100.08	+138.02
		+0.53%
FTSE 100	6823.51	-42.54
		-0.62%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.304	2.329
CND.  30 Year Bond	2.833	2.846
U.S.   10 Year Bond	2.6156	2.6383
U.S.  30 Year Bond	3.4405	3.4694

Currencies

BOC Close	Today	Previous
Canadian $	0.93665	0.93883
US  $	1.06763	1.06516
Euro Rate  1 Euro=		Inverse
Canadian  $	1.45258	0.68843
US  $	1.36057	0.73499

Commodities

Gold	Close	Previous
London Gold  Fix	1319.63	1319.94
Oil	Close	Previous
WTI Crude Future	103.40	104.06

Market Commentary:

Canada

By Gerrit De Vynck

July 7 (Bloomberg) — Canadian stocks fell the most in two weeks, pulled down by energy stocks, as the price of West Texas Intermediate crude extended its longest losing streak since 2009.

Canyon Services Group Inc. and RMP Energy Inc. fell at least 4.9 percent to pace losses among energy companies on the benchmark Canadian index. Telus Corp. and Rogers Communications Inc. dropped more than 1.5 percent as phone companies slid.
BlackBerry Ltd. jumped 5.7 percent.

The Standard & Poor’s/TSX Composite Index fell 42.03 points, or 0.3 percent, to 15,172.93 at 4 p.m. in Toronto. The gauge is up 11 percent this year.

Energy companies fell 0.8 percent as a group as West Texas Intermediate fell for a seventh day and Brent oil dropped ahead of a planned increase in exports from Libya.

Canyon Service Group fell 8.6 percent to C$18.17 and RMP Energy decreased 4.9 percent to C$9.42.

Telecommunications companies lost 1.1 percent, the most among the 10 industries in the benchmark index, as the Canadian government said it will auction additional wireless spectrum next year to smaller carriers in a bid to fuel competition for telephone services. Telus, BCE Inc. and Rogers Communications together control 90 percent of the nation’s wireless customers.

BlackBerry gained 5.7 percent to C$12.01, its biggest gain since June 20, the day after it reported better-than-forecast earnings. Chief Executive Officer John Chen has said he has stabilized the company to the point where he is working toward revenue growth next year.

Avino Silver & Gold Mines Ltd. gained 2.5 percent to C$2.35 after saying it would sell up to $25 million in new shares. The company said it plans to use the money to acquire and develop the Bralorne mine in British Columbia.

Crown Point Energy Inc. lost 4 percent to 37 Canadian cents after saying it sold its El Valle oil concession in Argentina for $525,000.

Alimentation Couche-Tard Inc. fell 1.9 percent to C$28.80 after the convenience store operator missed analyst estimates for its fourth-quarter earnings.

USA

By Joseph Ciolli

July 7 (Bloomberg) — U.S. stocks fell from records, led by a plunge among small companies, as investors weighed valuations and speculated the Federal Reserve may raise interest rates sooner than expected.

GT Advanced Technologies Inc. sank 16 percent after Canaccord Genuity Group Inc. downgraded the stock to hold from buy. Expedia Inc. slid 1.7 percent after agreeing to make a $658 million acquisition. Peabody Energy Corp. fell 3.7 percent to lead energy producers lower. PetSmart Inc. gained 2.5 percent after a second large shareholder prodded the company to consider selling itself.

The Standard & Poor’s 500 Index fell 0.4 percent to 1,977.65 at 4 p.m. in New York. The Dow Jones Industrial Average dropped 44.05 points, or 0.3 percent, to 17,024.21. The Russell 2000 Index of small companies slid 1.8 percent, the most since April. About 5.1 billion shares changed hands today on U.S. exchanges, 14 percent below the three-month average. U.S. equities markets were closed July 4 for the Independence Day holiday.

“Rates are going to go up before people expect,” Tom Stringfellow, president and chief investment officer of San Antonio-based Frost Investment Advisors LLC, which manages about $10 billion, said in a phone interview. “And when rates do go up, I expect some sort of a knee-jerk reaction. But I don’t believe for a moment that the Fed’s going to raise rates at a speed that derails this stable environment.”

Both the S&P 500 and the Dow average advanced 1.3 percent last week, with the 30-stock gauge closing above 17,000 for the first time, as monthly payroll addition exceeded 200,000 for a fifth month in June.

The Russell 2000 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.

Goldman Sachs Group Inc. brought forward its forecast for the Fed to raise interest rates, joining companies including JPMorgan Chase & Co. and Bank of Tokyo-Mitsubishi UFJ Ltd. in moving up estimates following the jobs data last week.

The central bank will increase its benchmark rate in the third quarter of 2015, rather than the first three months of 2016, Goldman Sachs Chief Economist Jan Hatzius wrote in a report yesterday.

Policy makers have kept their target for overnight lending between banks in a range of zero to 0.25 percent since December 2008. The central bank will publish the minutes of its June
17-18 meeting on July 9.

Fed Chair Janet Yellen said on July 2 that concerns about financial stability shouldn’t prompt a change in current policy.
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 its March 2009 bottom.

The equities benchmark is trading at 16.7 times the projected earnings of its members, higher than the five-year average multiple of 14.3. The Chicago Board Options Exchange Volatility Index, the measure known as VIX that tracks investors’ estimate of future volatility, slumped last week to the lowest level since February 2007. The gauge surged 9.8 percent to 11.33 today, the biggest gain since June 24.

“Valuations are pretty stretched, and we don’t see a lot of revenue growth, which might be negative for the market,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co., which oversees $110 billion, said in a phone interview. “There may be some concern about earnings, but this is basically a market being driven by an improving economy and guarantees by the Federal Reserve that they’re not going to raise interest rates.”

Alcoa Inc. will unofficially open the second-quarter earnings-reporting season tomorrow. Profit at companies in the S&P 500 increased 5 percent in the three months through June, estimates compiled by Bloomberg show.

Seven of the 10 main S&P 500 groups retreated today, with materials producers sliding 0.8 percent for the biggest loss.

Peabody Energy fell 3.7 percent, as energy stocks lost 0.6 percent as a group. Chesapeake Energy Corp. dropped 4.6 percent as the price of natural gas posted the biggest one-day drop in four months in New York.

Delta Air Lines Inc. sank 4.4 percent to the lowest since April and United Continental Holdings Inc. fell 3.2 percent as airlines retreated.

GT Advanced Technologies dropped 16 percent to $16.50.  Canaccord said the company is unlikely to get a boost in earnings in 2016 unless Apple Inc. uses its sapphire in all models of the iPhone.

Expedia fell 1.7 percent to $80.85. The online travel- booking service agreed yesterday to buy Australia’s Wotif.com Holdings Ltd. for about $658 million, seeking to expand its presence in the Asia-Pacific region.

Archer-Daniels-Midland Co. climbed 1.6 percent to $46.50.  Miller Tabak + Co. raised its rating on the stock to buy from hold after ADM said it will acquire Wild Flavors GmbH for $3 billion. The takeover will help the world’s top corn crusher diversify from grain processing and gain a bigger foothold in overseas markets for food and beverages made with more natural raw materials.

PetSmart gained 2.5 percent to $68.95. Shareholder Longview Asset Management LLC sent a letter to the board of the pet- supply retailer today saying the company should consider a sale.
PetSmart, under pressure from hedge fund Jana Partners LLC to pursue alternatives including a sale, said earlier it is reviewing changes to its capital structure to return more money to shareholders.

 

Have a wonderful evening everyone.

 

Be magnificent!

As long as individuality survives, that is,

as long as you continue to see others as separate from you,

a feeling of hostility towards them cannot fail to prevail.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

If wrinkles must be written upon our brows,

let them not be written upon the heart.

The spirit should not grow old.

-James A. Garfield, 1831-1881

 

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:

Fourth of July may be the most American of holidays. Here are some of the numbers behind Independence Day in the U.S.

• 238 years

The number of years the U.S. has been independent from Britain, who now is America’s seventh leading trading partner, according to Foreign Trade Statistics by the U.S. Census Bureau.

• 2.5 million

The estimated number of people who were living in the 13 colonies in July 1776, according to Historical Statistics of the U.S.

• 318.4 million

The estimated population of the U.S.’s 50 states in July 2014, according to the U.S. Census Bureau.

• $203.6 million

The value of Chinese fireworks purchased in the U.S. in 2013. More than 90% of the fireworks imported to the U.S. come from China.

• 97%

The percentage of imported American flags that come from China.

• 34.8 million
• The number of Americans who will be traveling by automobile over the July 4 holiday, according to AAA. About 80% of travel will be by car.

We are tied to the ocean. And when we go back to the sea, whether it is to sail or to watch – we are going back from whence we came. –John F. Kennedy

July 4^th, 1785, Lord Byng, Viscount Torrington wrote in his Diary:

Our breakfast [at Oxford] was excellent; plenty of strawberries and cream.  I then tried, in vain, to get into the Ashmolean Museaum…to know if the woman were yet living who used to show (so well) the picture of the famous sailor, Sir Martin Frobisher: viz., “Sir Martin Furbisher, an antient navigator, sail’d all round the world and shot the Gulph… There’s the pistol in his hand he shot it with”…

We had been so long on horseback and tormented by flies, in a hot sun (even from ten till three o’clock) that we were as fatigued and peevish as any nervous wretches could be.  At one gateway, Colonel Bertie’s horse went on his knees to endeavour to drink, to the great alarm of his rider, who thought he had slipped into a deep hole; nor was it possible to refrain from laughter at this camel-like operation.

I visited the Mecedes museum when I was in Stuttgart last week; it is an amazing experience.  A real trip down memory lane.  When I read the above diary entry by Lord Byng today, I was reminded of one of the exhibits, wherein Kaiser Willhelm II, upon viewing Daimler’s and Maybach’s creations, remarked something to the effect that he thought the car would be a passing fad  and would never replace the horse!

Photos of the Day

Kevin Taylor of Savannah, Ga., heads out to surf the waves on the north beach of Tybee Island as Hurricane Arthur makes its way up the East Coast. The storm has bypassed the Georgia coast as predicted, but forecasters are warning beach goers to beware of dangerous rip currents in its wake.Stephen B. Morton/AP

Workers finish to prepare a gangway over the Trevi Fountain in Rome. Rome’s 18th-century Trevi Fountain, famed as a setting for the film ‘La Dolce Vita,’ is getting a $2.9 million restoration courtesy of the Fendi fashion house, and is closed to public. The gangway, that will be opened tomorrow, will allow tourists to view the fountain and even to flip a coin into the fountain: tradition says that doing so ensures a prompt return to the Eternal City.Alessandra Tarantino/AP

Market Closes for July 4^th, 2014

Market   Index	Close	Change
Dow   Jones	17068.26	Closed
S&P 500	1985.44	Closed
NASDAQ	4485.926	Closed
TSX	15220.69	+13.58
		+0.09%

International Markets

Market   Index	Close	Change
NIKKEI	15437.13	+88.84
		+0.58%
HANG   SENG	23546.36	+14.92
		+0.06%
SENSEX	25962.06	+138.31
		+0.54%
FTSE 100	6866.05	+0.84
		+0.01%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.329	2.322
CND.   30 Year Bond	2.846	2.842
U.S.   10 Year Bond	2.6383	2.6264
U.S.   30 Year Bond	3.4694	3.4617

Currencies

BOC Close	Today	Previous
Canadian $	0.93883	0.94005
US   $	1.06516	1.06377
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44808	0.69057
US   $	1.35949	0.73557

Commodities

Gold	Close	Previous
London Gold   Fix	1319.94	1319.40
Oil	Close	Previous
WTI Crude Future	104.06	104.06

Market Commentary:

Canada
By Gerrit De Vynck

July 4 (Bloomberg) — Canadian stocks rose for the sixth time in seven days as industrial and financial companies pushed the benchmark index to a record.

Canadian Pacific Railway Ltd. and Air Canada rose at least 1.5 percent to pace gains among industrial companies. Lassonde Industries Inc. rose to a record after agreeing to buy Apple & Eve LLC.

The Standard & Poor’s/TSX Composite Index gained 7.85 points, or 0.1 percent, to 15,214.96 at 4 p.m. in Toronto. Six of 10 industries on the index gained.

Volume was 64 percent lower than the average over the last 30 days as the U.S. celebrated the Independence Day holiday.

Industrial companies rose the most, increasing 0.6 percent. Canadian Pacific gained 1.5 percent to C$198.95 and Air Canada rose 2.6 percent to C$10.05.

Lassonde jumped 7.4 percent to C$118.03, closing at the highest price since September 1988, after the producer of food products from barbecue sauce to baked beans announced it was buying a 90 percent stake in juice-maker Apple & Eve.

Lundin Petroleum AB fell 0.8 percent to C$21.18 as the company said it would sell part of one of its Norway offshore oil properties.

ShawCor Ltd. fell 1.4 percent to C$57.66 after it announced a C$30 million contract to apply protective coating to a pipeline transporting gas from Russia to Bulgaria.

Fighting in eastern Ukraine between government troops and pro-Russian rebels continued after a 10-day cease-fire ended.

US

Markets closed today.

 

Have a wonderful weekend everyone.

 

Be magnificent!

It is not others who must change, but you.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

The best road to progress is freedom’s road.

-John F. Kennedy, 1917-1963

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:

Dog days of summer begin today ~ hottest days of the year, July 3^rd-August 11^th.

Tomorrow’s July 4^th spectacular: NBC will televise Macy’s 4^th of July Fireworks Spectacular live from New York City.  Before the pyrotechnics begin, Nick Cannon will host an all-star show, featuring Ariana Grande, Hunter Hayes, Miranda Lambert, and Lionel Richie.  The Brooklyn Bridge provides a stunning backdrop for the US’s largest Fourth of July fireworks show.  The show airs tomorrow at 8 PM and will be rebroadcast at 10 PM.

Also this week on the National Geographic channel, the miniseries The ‘90s: The last Great Decade?  Runs for three consecutive nights, beginning July 6^th at 9 PM.  The series explores the events of that decade, such as the Gulf War, the Rodney King riots, the Anita Hill hearings, the Bill Clinton presidency, and the rise of reality TV,  The miniseries will include interviews with people such as Gen. Colin Powell and “Friends” star Matthew Perry.

Good investment:  5.6 million= the price (in British pounds; $9.5 million US) brought at auction by a rare 1856 British Guiana One-Cent stamp.

Photos of the Day 07/03

Joseph Rojas and Abigail Zolotarsky embrace as lightning strikes One World Trade Center in Manhattan during sunset after a summer storm in New York. Lucas Jackson/Reuters

Sloan Hollis leads his class as kids march during First Baptist Church Weekday Education’s annual 4th of July parade, in Oxford, Miss. Bruce Newman/Oxford Eagle/AP

Market Closes for July 3^rd, 2014

Market   Index	Close	Change
Dow   Jones	17068.26	+92.02
		+0.54%
S&P 500	1985.44	+10.82    +0.55%
NASDAQ	4485.926	+28.192    +0.63%
TSX	15207.11	-2.68
		-0.02%

International Markets

Market   Index	Close	Change
NIKKEI	15348.29	-21.68
		-0.14%
HANG   SENG	23531.44	-18.18
		-0.08%
SENSEX	25823.75	-17.46
		-0.07%
FTSE 100	6865.21	+48.84
		+0.72%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.322	2.319
CND.   30 Year Bond	2.842	2.844
U.S.   10 Year Bond	2.6383	2.6264
U.S.   30 Year Bond	3.4694	3.4617

Currencies

BOC Close	Today	Previous
Canadian $	0.94005	0.93745
US   $	1.06377	1.06673
Euro Rate   1 Euro=		Inverse
Canadian   $	1.44769	0.69076
US   $	1.36090	0.73481

Commodities

Gold	Close	Previous
London Gold   Fix	1319.40	1326.59
Oil	Close	Previous
WTI Crude Future	104.06	104.48
BRENT	109.360	109.360

Market Commentary:

Canada
By Gerrit De Vynck

July 3 (Bloomberg) — Canadian stocks were little changed, paring earlier gains, as mining and energy stocks fell with the price of gold and oil.

ShawCor Ltd. and Arc Resources Ltd. fell at least 1.7 percent, pacing losses among energy companies in the benchmark index. Calfrac Well Services Ltd. jumped 5.3 percent after more than doubling its budget for new investments. Tekmira Pharmaceuticals Corp. lost 17 percent after U.S. regulators put one of its drug studies on hold.

The Standard & Poor’s/TSX Composite Index fell 2.44 points, or less than 0.1 percent, to 15,207.35 at 4 p.m. in Toronto, after climbing as much as 0.3 percent earlier in the day. The gauge is up 12 percent this year, and closed at a record yesterday.

West Texas Intermediate crude fell for a sixth day, it’s longest falling streak in more than two years. Gold futures fell the most in almost five weeks after the U.S. added more jobs in June than analysts had predicted, stemming demand for the haven asset.

Alacer Gold Corp. and OceanaGold Corp. fell at least 3 percent to lead losses among gold miners in the index.

Unemployment in the U.S. fell to 6.1 percent, the lowest since September 2008, as the economy added 288,000 jobs in June. Analysts surveyed by Bloomberg had predicted an average increase of 215,000 new jobs.

“The numbers were good across the board, and surprisingly so,” Lawrence Creatura, a portfolio manager at Federated Investors Inc. in Rochester, New York, said by phone. He helps manage $366 billion. “So this is a clear positive surprise.”

Calfrac Well Services gained 5.3 percent to C$21.29 after saying it would increase its capital spending to C$360 million from C$150 million because of growing demand in the U.S.

Tekmira fell 17 percent to C$12.18 after the U.S. Food and Drug Administration told the Burnaby, British Columbia-based company its study into the safety of a prospective anti-Ebola drug was being put on hold.

Cathedral Energy Services Ltd. gained 1.4 percent to C$4.99 as National Bank Financial raised its rating on the stock to outperform from the equivalent of a hold.

Terrace Energy Corp. fell 2.4 percent to C$2.05 after saying it would sell 10.8 million new shares for C$1.85 million to fund new exploration and development.

USA
By Stephen Kirkland and Jeremy Herron

July 3 (Bloomberg) — Declining unemployment and a pledge that European interest rates will stay low jolted the Dow Jones Industrial Average above 17,000 for the first time, lifted the dollar and sent bonds lower.

The Standard & Poor’s 500 Index added 0.6 percent to extend an all-time high, while the Dow average climbed 0.5 percent to 17,068.26. The Stoxx Europe 600 Index added 0.9 percent, capping the biggest three-day rally in 10 weeks. The Bloomberg Dollar Spot Index rose 0.2 percent and the yield on 10-year Treasuries increased one basis point to 2.64 percent at 2:10 p.m. in New York. Gold fell the most since May and corn entered a bear market.

The U.S. unemployment rate fell to an almost six-year low of 6.1 percent, underscoring a brighter U.S. labor market that will help spur the economy. ECB President Mario Draghi said the central bank sees rates at current levels for an extended period after policy makers left borrowing costs unchanged at record lows. Sweden’s currency tumbled the most since 2011 after the central bank cut borrowing costs by more than analysts estimated. U.S. equities markets closed at 1 p.m. ahead of the Independence Day holiday.

“This is a pretty strong report,” said Jim Paulsen, chief investment strategist at San Francisco-based Wells Capital Management, in a phone interview. “This is stuff that is going to lead to upward revisions of second quarter growth rates and it starts off the third quarter in a real positive momentum place.”

The U.S. added 288,000 jobs following a 224,000 gain the prior month that was bigger than previously estimated, Labor Department figures showed. The median forecast in a Bloomberg survey of economists called for a 215,000 advance. The jobless rate is the lowest since September 2008.

Another report from the Institute for Supply Management showed services industries, which make up almost 90 percent of the world’s largest economy, expanded last month at slower pace than economists in a Bloomberg survey estimated.

Benchmark 10-year yields reached 2.69 percent, the highest since May 2, based on Bloomberg Bond Trader prices. Traders pushed the odds up to almost even that Federal Reserve Chair Janet Yellen and policy makers will lift borrowing costs by next June, while Wall Street economists moved up their estimated dates for the Federal Reserve’s first interest-rate increase since 2006.

“The stellar jobs report hits the Fed right between the eyes on how good labor market conditions out there truly are,” said Chris Rupkey, chief financial economist for Bank of Tokyo- Mitsubishi UFJ in New York. “It shows how far behind the curve they are,” he said, adding that he now expects the first rate increase in March next year instead of June.

Yellen said on June 18 that policy makers planned to hold interest rates near zero for a “considerable time” as slack in the jobs market kept inflation below its 2 percent target. The central bank has kept its benchmark rate near zero since December 2008.

U.S. benchmark indexes have extended a rebound from a selloff earlier this year that started with biotechnology and small-cap stocks. The S&P 500 has rallied 9.3 percent since reaching a two-month low in April as central bank stimulus spread from Europe to Japan and the U.S.

Among stocks that moved today, financial firms jumped 0.8 percent, led by online brokers and insurers. Life insurers such as Lincoln National Corp. and No. 1 MetLife Inc. benefit from higher bond yields, which allow them to invest clients’ premiums at higher rates.

Paccar Inc. added 5.4 percent amid speculation that the maker of Kenworth and Peterbilt trucks may receive takeover interest from Volkswagen AG, which denied it. PetSmart Inc. jumped 13 percent after Jana Partners LLC disclosed a new activist stake and urged the retailer to explore strategic options including a sale.

The ECB left its benchmark interest rate at 0.15 percent as predicted by all economists surveyed by Bloomberg News. Stocks rallied on June 5 after Draghi announced new measures to stimulate lending and said the central bank would begin preparations related for an asset-purchase plan.

Draghi reiterated that he’ll keep interest rates low as officials try to revive the region’s economy with a new round of emergency measures.

The Stoxx 600’s gain today pushed its three-day advance to 2.1 percent, the most since April. Five shares rose for every one that declined.

Gold futures retreated 0.8 percent to settle at $1,320.60 an ounce while silver slid 0.8 percent as demand for haven assets declined.

West Texas Intermediate crude fell 0.7 percent, a sixth day of losses that would be its longest losing streak since 2012.

Corn for December delivery fell 0.7 percent to $4.1525 a bushel in Chicago, on expectations farmers will produce a record crop in the U.S., the world’s largest grower and exporter. That leaves prices down 20 percent from this year’s settlement high of $5.215 in April, meeting the common definition of a bear market.

 

Have a wonderful evening everyone.

 

Be magnificent!

“If I change, will the world have any value?”

That is a wrong question, if one may point out.  It is wrong because you are the rest of humanity.

Krishnamurti, 1895-1986

As ever,

 

 

Carolann

 

We all have the ability.  The difference is how we use it.

-Stevie Wonder, 1950-

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:

Halfway Day today: 182^nd day of the year.

Just returned from a driving holiday in Europe –finally got to drive the autobahn in Germany – it’s pretty exciting to be able to drive over 150 km/hour!  The people in most places we visited are consumed by soccer right now – as you would expect.

July:  The seventh month, named by Mark Anthony in honour of Julius Caesar.  It was formerly called Quintilis, as it was the fifth month of the Roman year.  The old Dutch name for it was Hooy-maand – hay month, while the Anglo-Saxons knew it as Maedmonath – meadow month, because the cattle were turned into meadows to feed then.

Love is an act of endless forgiveness, a tender look which becomes a habit.  –Peter Ustinov.

Photos of the Day 07/02

Fabien Cousteau is pictured inside the marine laboratory Aquarius. Cousteau, grandson of famed French oceanographer Jacques Cousteau, emerged from the turquoise waters off the Florida Keys marking the end of a record-breaking, 31-day stay in an underwater habitat with a team of scientists and documentary filmmakers. Kip Evans/Mission Blue/Reuters

Chicago Mercantile Exchange (CME) group’s Chairman Emeritus Leo Melamed speaks during an interview with Reuters in Tokyo. Melamed, 82, was back in Japan to honor Chiune Sugihara, who over a period of roughly a month issued visas that allowed 6,000 Jews to escape war-torn Lithuania and the advancing Nazis – saving several times as many people as Oskar Schindler, made famous in the film ‘Schindler’s List.’ In 1940, Melamed, a small Jewish boy fleeing the Nazis, was put in to a remote Japanese port and saved by Sugihara, the Japanese consul who issued exit visas from Lithuania against his government’s orders. Yuya Shino/Reuters

Market Closes for July 2^nd, 2014

Market   Index	Close	Change
Dow   Jones	16976.24	+20.17
		+0.12%
S&P 500	1974.62	+1.30    +0.07%
NASDAQ	4457.734	-0.917    -0.02%
TSX	15209.79	+63.78
		+0.42%

International Markets

Market   Index	Close	Change
NIKKEI	15369.97	+43.77
		+0.29%
HANG   SENG	23549.62	+358.90
		+1.55%
SENSEX	25841.21	+324.86
		+1.27%
FTSE 100	6816.37	+13.45
		+0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.319	2.237
CND.   30 Year Bond	2.844	2.825
U.S.   10 Year Bond	2.6264	2.5205
U.S.   30 Year Bond	3.4617	3.3499

Currencies

BOC Close	Today	Previous
Canadian $	0.93745	0.93737
US   $	1.06673	1.06682
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45686	0.68641
US   $	1.36573	0.73221

Commodities

Gold	Close	Previous
London Gold   Fix	1326.59	1327.75
Oil	Close	Previous
WTI Crude Future	104.48	105.33
BRENT	109.360	109.360

Market Commentary:

Canada
By Eric Lam

July 2 (Bloomberg) — Canadian stocks rose a fifth day, with the benchmark index extending a record, as banks and metals miners advanced amid data that boosted confidence in the world’s largest economies.

Teck Resources Ltd. and First Quantum Minerals Ltd.increased at least 2.9 percent as copper jumped to a 19-week high. Royal Bank of Canada, the nation’s second-largest lender, paced gains as banks climbed a fourth day to extend a record. CAE Inc. rose 1.2 percent after winning a series of defense contracts for global customers worth about C$110 million ($103 million). BlackBerry Ltd. jumped 4.1 percent, extending a four- month high.

The Standard & Poor’s/TSX Composite Index rose 63.78 points, or 0.4 percent, to a record 15,209.79 at 4 p.m. in Toronto. Canadian markets were closed yesterday for a national holiday.

“It’s partly a bit of a catch-up from yesterday as the U.S. market was up,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.7 billion. “The Canadian banks still look pretty good here, in terms of safety and consistent growth.”

A gauge of global equities closed at an all-time high yesterday after data showed manufacturing activity expanding in countries from China to the U.K. and the U.S. The S&P 500 and Dow Jones Industrial Average both reached records.

Data from employment to housing is fueling confidence that the U.S. economy is rebounding after the worst contraction in gross domestic product since 2009. Data today indicated staffing at companies climbed in June by the most since November 2012, boosting bets growth is heating up in the world’s biggest economy.

A report yesterday showed China’s Purchasing Managers’ Index climbed to 51.0 in June, suggesting the government’s efforts to arrest a slowdown are helping to stabilize the world’s second-largest economy. China and the U.S. are Canada’s biggest trading partners.

The S&P/TSX has rallied 1.7 percent in the past five days.  The gauge rallied 6.1 percent in the past three months, capping a fourth straight quarterly advance.

Seven of the 10 main industries climbed today, with technology and consumer stocks pacing gains. BlackBerry climbed 4.1 percent to C$11.39, the highest since March 4.

Shares of the smartphone maker have surged 41 percent in the past month after the company reported a narrower loss in the fiscal first quarter than analysts had estimated.

Teck Resources, Canada’s largest diversified miner, added 4.3 percent to C$25.40, the biggest gain since January, and First Quantum Minerals rose 2.9 percent to C$23.49, highest since November 2012. The price of copper in New York rose to a 19-week high. Nickel, aluminum, zinc, tin and lead rose in London.

Royal Bank advanced 1 percent to C$77.01 and Bank of Nova Scotia rose 0.3 percent to C$71.34 to pace gains as the S&P/TSX Banks Index climbed 0.4 percent to a record.

US
By Lu Wang

July 2 (Bloomberg) — U.S. stocks were little changed, after benchmark gauges closed at record levels yesterday, as private data showed companies added more workers than estimated in June before the government’s jobs report tomorrow.

Constellation Brands Inc. rallied 2.3 percent after boosting its earnings forecast. Rackspace Hosting Inc. jumped6.3 percent after TechCrunch reported the company may go private. Bank of America Corp. advanced 1.6 percent as Deutsche Bank AG advised investors to buy the stock. Airlines posted the biggest loss among S&P 500 industries after Delta Air Lines Inc. said excess capacity in some international markets forced fares down more than expected.

The Standard & Poor’s 500 Index rose less than 0.1 percent to 1,974.62 at 4 p.m. in New York. The Dow Jones Industrial Average added 20.17 points, or 0.1 percent, to 16,976.24. Both gauges extended closing records. The Russell 2000 Index of smaller companies lost 0.5 percent today after rallying 0.8 percent yesterday. U.S. equity markets close at 1 p.m. tomorrow ahead of the Independence Day holiday.

“The ADP data is very strong,” Jim McDonald, chief investment strategist at Chicago-based Northern Trust Corp., said by phone. His firm manages about $915 billion of assets.  “It’s another sign that we’re regaining some momentum in the latter part of the year. People are probably not going to want to have big bets on ahead of the payroll number.”

The S&P 500 moved in a range of 0.21 percentage point today from its highest and lowest points, the second-smallest fluctuation since 1993 after a 0.20 point reading in December, data compiled by Bloomberg show. About 5.2 billion shares changed hands on U.S. exchanges, 13 percent below the three- month average.

Benchmark indexes reached records yesterday, with the 30- member Dow rising within two points of 17,000. The Dow Jones Transportation Average also jumped to an all-time high, while the Russell 2000 briefly touched a record. Simultaneous gains in different industries are sometimes cited by chart analysts as evidence economic growth is pervasive enough to fuel additional gains.

Stocks are extending a rebound from the selloff earlier this year that started with biotechnology and small-cap stocks.  Equities have rallied since the S&P 500 reached a two-month low in April as central bank stimulus spread from Europe to Japan and the U.S.

Companies in the U.S. added 281,000 workers to their payrolls in June, figures from the ADP Research Institute showed today. The median projection of 47 economists surveyed by Bloomberg called for an advance of 205,000.

The private report precedes the Labor Department’s payrolls data tomorrow that may show nonfarm payrolls rose by 215,000 in June, according to the median of 89 economists’ estimates. A separate release showed today that U.S. factory orders fell 0.5 percent in May.

Data from employment to housing is fueling confidence that the world’s largest economy is rebounding after the worst contraction in gross domestic product since 2009.

“Everything that we’re seeing in the second quarter has generally been improving and in most cases accelerated improvement,” Chris Bouffard, chief investment officer at the Mutual Fund Store in Overland Park, Kansas, said by phone. His firm oversees $9 billion. “The market’s looking to say the outlook for the next few quarters is more positive than we saw certainly in the first quarter.”

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.

Yellen said in a speech today that interest rates shouldn’t be the main tool to promote financial stability.

“Monetary policy faces significant limitations,” she said in prepared remarks at the International Monetary Fund in Washington. “Its effects on financial vulnerabilities, such as excessive leverage and maturity transformation, are not well understood and are less direct than a regulatory or supervisory approach.”

The comments are significant because economists worry that central banks may now be causing a worldwide reach for yield as interest rates are suppressed by monetary policy. The Fed itself has kept the benchmark lending rate near zero since December 2008.

The European Central Bank will probably keep interest rates unchanged at its meeting tomorrow after cutting its benchmark rate to a record low last month, according to the median forecast of economists in a Bloomberg survey.

The Chicago Board Options Exchange Volatility Index declined 3 percent to 10.82. The gauge, known as the VIX, is near its lowest level since February 2007.

Six out of the 10 S&P 500 main industries gained as health- care, phone and consumer-staples companies rose the most, adding at least 0.2 percent. Utilities fell 2 percent for the worst performance.

Constellation rose 2.3 percent to $90.45. The producer and marketer of wines, beers and spirits increased its earnings estimates for the fiscal year after posting better-than- estimated profit in its first quarter.

Rackspace rallied 6.3 percent to $35.88. The provider of cloud-computing services has been negotiating with a private- equity firm to borrow capital for a deal to go private, TechCrunch reported, citing an unidentified source. The deal could be announced as soon a this week, according to the news website. Rackspace hired Morgan Stanley last month to seek strategic options.

Bank of America advanced 1.6 percent to $15.85. Deutsche Bank upgraded its recommendation for the second-biggest U.S. lender to buy from hold.

Airlines slumped 3.6 percent, the most among 156 groups in the S&P 500. Delta lost 5.1 percent to $38.24 as its passenger unit revenue increased 4.5 percent last month from a year earlier, slowing from a growth rate of 7 percent in May. Strong domestic travel “offset lower-than-expected international yields driven by industry-wide capacity increases,” Delta said.

GoPro Inc. lost 14 percent to $42.04, the first drop since its initial public offering last week. The maker of wearable cameras surged 20 percent to $48.80 yesterday, doubling its IPO price in a week. The company’s market value climbed to $6 billion, compared with $2.96 billion in its IPO.

Harley-Davidson Inc. retreated 3.6 percent to $67.80 after Raymond James Financial Inc. lowered its recommendation on the Milwaukee-based motorcycle maker to market perform, the equivalent of hold, from strong buy.

Have a wonderful evening everyone.

 

Be magnificent!

Society cannot be changed unless man changes.

Man, you and others, have created these societies

for generations upon generations.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Optimism for me isn’t a passive expectation that things will get better; it’s a conviction that we can make things better – that whatever suffering we see, no matter how bad it is, we can help people if we don’t lose hope and we don’t look away.

-Bill Gates, Stanford University Commencement speech, 2014.

 

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:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the Day

Morning fog covers the valleys near Bernbeuren, southern Germany, at sunrise.

An Iraqi Christian girl whose family fled from Mosul, Iraq, arrives at a social club in Ainkawa, a suburb of Irbil with a majority Christian population. Hundreds of Iraqi villagers are fleeing advances by Sunni militants.

Market Closes for June 30^th, 2014

Market Index	Close	Change
Dow Jones	16824.68	-27.16
		-0.16%
S&P 500	1958.99	-1.97   -0.10%
NASDAQ	4408.180	+10.250   -+0.23%
TSX	15136.35	+42.10
		+0.28%

International Markets

Market Index	Close	Change
NIKKEI	15162.10	+67.10
		+0.44%
HANG SENG	23190.72	-30.80
		-0.13%
SENSEX	25413.78	+313.86
		+1.25%
FTSE 100	6743.94	-13.86
		-0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.237	2.262
CND. 30 Year Bond	2.780	2.825
U.S. 10 Year Bond	2.5205	2.6206
U.S. 30 Year Bond	3.3499	3.4660

Currencies

BOC Close	Today	Previous
Canadian $	0.93737	0.92228
US $	1.06682	1.08426
Euro Rate 1 Euro=		Inverse
Canadian $	1.46093	0.68450
US $	1.36942	0.73023

Commodities

Gold	Close	Previous
London Gold Fix	1327.75	1272.67
Oil	Close	Previous
WTI Crude Future	105.33	106.90
BRENT	109.360	109.360

Market Commentary:

Canada

By Andrew Mayeda

June 30 (Bloomberg) — Canadian consumer confidence rose for the first time in a month as optimism about real-estate prices surged to the highest in almost five years.

The Bloomberg Nanos Canadian Confidence Index climbed to 59.2 for the week ended June 27, from 58.5 in the prior period. The percentage of respondents who believe home values in their neighborhood will increase in the next six months rose to 44.1, the highest since the fourth quarter of 2009.

Optimism about personal finances and the economy also increased, while job-security sentiment dimmed, according to the survey-based index.

“Looking at the key drivers of consumer sentiment over the past six years, it is clear that positive views of real estate is a key factor in Canadian consumer confidence,” said Nik Nanos, chairman of Ottawa-based polling firm Nanos Research Group. Sentiment about real estate is “noticeably” above its six-year average, while personal-finance views are “marginally” below the average for the period, he said.

Canada’s housing market has been surging even as the world’s 11th largest economy struggles to shift into high gear. Canadian realtors recorded their biggest sales gain in almost four years last month, as the industry rebounded from the impact of a difficult winter, the Canadian Real Estate Association said June 16.

Housing starts rose to their strongest level in seven months in May, following a slump in construction in the first three months of the year, Canada Mortgage & Housing Corp. reported June 9.

Bank of Canada Governor Stephen Poloz said June 12 that the biggest domestic risk to the country’s financial system remains households with stretched consumer finances after a period of rapid homebuilding. Poloz also predicted a soft landing in the housing market and progress in Europe’s effort to ease its debt crisis.

Canada’s economic growth slowed in the first quarter as the harsh winter slowed housing construction, business spending and exports, and expanded less than economists forecast in April. Poloz said June 4 it remained appropriate for the central bank to keep its benchmark interest rate at 1 percent, in view of the economy’s “modest” pace of growth.

The survey-based Nanos index has two sub-indexes. The Expectations Index, based on responses about the national economy and real estate, rose to 58.7 last week from 58.2.

The share of respondents who think the Canadian economy will improve over the next six months rose to 21.8 percent from 21.1 percent the week before.

The Pocketbook Index, based on responses to questions about personal finances and job security, climbed to 59.7 from 58.9.

Those who say their finances have improved over the past year rose to 17.6 percent from 17.0 percent, according to the Nanos report.

The proportion who say they feel at least somewhat secure about their jobs dropped to 68.8 percent, the lowest since May 30, from 69.2 percent.

“A modest pickup in overall economic activity appears to have bolstered consumer sentiment,” said Joseph Brusuelas, senior economist at Bloomberg LP, “However, Canadians remain concerned about their own personal financial condition, which is reflective of the household imbalances that remain a pressing policy challenge.”

Canada’s gross domestic product grew less than economists forecast in April as goods production fell while service industries such as wholesaling expanded, Statistics Canada said today in Ottawa. Output rose 0.1 percent to an annualized C$1.62 trillion ($1.51 trillion), the same pace as in March. The median forecast in a Bloomberg economist survey was for the world’s 11th largest economy to expand 0.2 percent.

The Nanos data are based on phone interviews with 1,000 people, using a four-week rolling average of 250 respondents.

The results are accurate to within 3.1 percentage points.

USA

By Jeanna Smialek

June 30 (Bloomberg) — The number of contracts to purchase previously owned U.S. homes jumped in May by the most in more than four years, a sign the residential-real estate market is rebounding after a slow start to the year.

The pending home sales index climbed 6.1 percent, the biggest advance since April 2010, after a revised 0.5 percent increase in April, the National Association of Realtors said today in Washington. The gain exceeded the most optimistic estimate in a Bloomberg survey of economists, whose median forecast called for a 1.5 percent gain.

Housing demand is benefiting from cheaper borrowing costs, a stronger employment outlook and easier access to credit for some households. At the same time, higher prices and limited income gains are keeping the improvement in the residential real estate from becoming more broad-based.

“Housing is beginning to bounce back,” Paul Ashworth, chief U.S. economist at Capital Economics Ltd. in Toronto, whose forecast for a 4 percent gain was the highest in the Bloomberg survey. “Mortgage rates have backed down a bit recently. Home prices are still rising, which means fewer people have mortgages that are under water. The longer the housing recovery goes on, the more people will gain confidence to join in.”

The gain in May was the biggest since first-time buyers rushed to sign contracts before the expiration of a tax credit four years ago. Estimates in the Bloomberg survey of 37 economists ranged from a decline of 0.5 percent to an advance of 4 percent after a previously reported 0.4 percent April gain.

Another report showed manufacturing cooled in June from a month earlier. The Chicago Institute for Supply Management Inc.’s business barometer fell to 62.6 from 65.5 in May. The median forecast called for the gauge to fall to 63. Readings above 50 signal expansion.

Stocks rose after the data, with the Standard & Poor’s 500 Index advancing 0.1 percent to 1,962.77 at 10:35 a.m. in New York. The S&P Supercomposite Homebuilding Index increased 1.5 percent.

Purchases fell 6.9 percent from the year prior, on an unadjusted basis, after a 9.3 percent decrease in the 12 months that ended in April, the association reported.

The pending sales index was 103.9 on a seasonally-adjusted basis, the highest since September. A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic, according to the NAR.

Pending home sales climbed in all four regions, led by an 8.8 percent gain in the Northeast. Contract signings increased 7.6 percent in West, 6.3 percent in the Midwest and 4.4 percent in the South.

Economists consider pending sales a leading indicator because they track new purchase contracts. Existing-home sales are tabulated when a contract closes, usually a month or two later.

“Solid income growth and a slight easing in underwriting standards are needed to encourage first-time buyer participation, especially as renting becomes less affordable,” NAR chief economist Lawrence Yun said as the report was released.

Home sales have been slowly emerging from a slump early this year. Purchases of new homes rose in May by the most in 22 years, increasing 18.6 percent, the biggest one-month gain since January 1992, to a 504,000 annualized pace, figures from the Commerce Department showed.

Gains in home prices have started to cool, which will help bring more properties within reach of those prospective buyers with access to credit.  The S&P/Case-Shiller index of property values increased 10.8 percent from April 2013, the smallest 12-month gain in more than a year, after rising 12.4 percent in March, the group reported last week.

Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, is optimistic that demand will continue to rise though sales have been uneven in recent months.

“While the housing market has improved dramatically overall compared to where it was a couple of years ago, the recent recovery has been a little more choppy,” Chief Executive Officer Ara Hovnanian said during an earnings conference call on June 4.

Household formation will be the primary driver of long-term housing demand, he said, and “the creation of well-paying jobs will go a long way” toward it. “Given the low levels of total U.S. housing starts, we remain convinced that we are still in the early stages of the housing industry recovery.”

Home-improvement retailers including Lowe’s Cos. also remain upbeat about the housing recovery.

“We’ve seen a bit of a downturn in housing turnover, but home prices continue to appreciate,” Chief Financial Officer Robert Hull said at a June 24 consumer conference. “As we think about the drivers of our business, both housing and income is constructive.”

 

Have a wonderful evening everyone.

Be magnificent!

As ever,

 

Brianna

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:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the Day

Fans watch the match between the US and Germany June 26 from an alley in Seattle’s historic Pioneer Square neighborhood. ‘Nord Alley’ has been the site of large-screen viewing parties for World Cup games every match day.

A France supporter blows a kiss prior to the Group E match between Ecuador and France at the Maracana stadium in Rio de Janeiro, June 25.

Market Closes for June 27^th, 2014

Market   Index	Close	Change
Dow   Jones	16851.84	+5.71
		+0.09%
S&P 500	1959.48	+2.50    +0.03%
NASDAQ	4397.930	+18.84    -+0.43%
TSX	15094.25	+63.51
		+0.42%

International Markets

Market   Index	Close	Change
NIKKEI	15095.00	-213.49
		-1.39%
HANG   SENG	23167.73	-13.99
		-0.06%
SENSEX	23221.52	+23.69
		-0.10%
FTSE 100	6757.77	+22.65
		+0.34%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.250	2.262
CND.   30 Year Bond	2.801	2.825
U.S.   10 Year Bond	2.5340	2.6206
U.S.   30 Year Bond	3.3665	3.4660

Currencies

BOC Close	Today	Previous
Canadian $	0.99765	0.92228
US   $	1.06650	1.08426
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45566	0.68697
US   $	1.36490	0.73266

Commodities

Gold	Close	Previous
London Gold   Fix	1316.18	1272.67
Oil	Close	Previous
WTI Crude Future	105.74	106.90
BRENT	109.360	109.360

Market Commentary:

Canada

By Gerrit De Vynk – June 27 (Bloomberg)

Canadian Stocks rallied the most in two weeks as Valeant Pharmaceuticals international Inc. settled a lawsuit and financial shares advanced.  Valeant gained 2.1 percent. Mag silver corp. fell 11 percent after saying it would sell C$75million in shares. Empire Cp., which operates grocery stores, gained 4.6 percent after Canadian Imperial Bank of Commerce raised its rating to sector outperform, the equivalent of buy, from sector perform.

The Standard & Poor’s/TSX Composite Index rose 63.51 points, or 0.4 percent, to 15,094.25 at 4pm. In Toronto, paring a weekly decline to 0.1 percent.  It is up 11 percent this year and trading near an all-time high.

Royal Bank of Canada and CIBC gained at least 0.9 percent to pace gains among financial firms, which gained 0.6 percent as a group.

Empire gained 4.6 percent to C$70.82. Yesterday the company raised its dividend and reported fourth-quarter earnings that beat analyst estimates. Empire recently bought the Safeway brand in Canada.

USA

By Nina Glinski – June 27 (Bloomberg)

Consumer sentiment improved in June as higher stock prices and an improving labor market helped bolster Americans’ views of the economy. The Thomson Reuters/University of Michigan’s final sentiment index climbed to 82.5 from 81.9 in may.  Economists surveyed by Bloomberg projected an increase to 82 after a preliminary June reading of 81.2

More employment opportunities, record stock prices and improved property values are giving consumers cause for enthusiastic attitudes, reducing the odds that consumers ill retrench.  At the same time, Americans are paying more at gas pumps and grocery-store checkout lines, underscoring the need for bigger wage gains.

 

Have a wonderful evening everyone.

Be magnificent!

As ever,

 

Brianna

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:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the Day

A man takes advantage of the heavy rain to give his Siberian husky a bath outside their house in Paranaque city, metro Manila

A vendor sells dates at a market ahead of the holy fasting month of Ramadan near Riyadh, Saudi Arabia.

Market Closes for June 26^th , 2014

Market Index	Close	Change
Dow Jones	16846.13	-21.38
		+0.13%
S&P 500	1957.22	-2.31   +0.12%
NASDAQ	4379.046	-0.710   -0.02%
TSX	15030.74	+56.09
		+0.37%

International Markets

Market Index	Close	Change
NIKKEI	15308.49	+41.88
		+0.27%
HANG SENG	23197.83	+331.13
		+1.45%
SENSEX	250622.67	-251.07
		-0.99%
FTSE 100	6735.12	+1.50
		+.02%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.242	2.271
CND. 30 Year Bond	2.799	2.822
U.S. 10 Year Bond	2.5286	2.5592
U.S. 30 Year Bond	3.3557	3.3815

Currencies

BOC Close	Today	Previous
Canadian $	0.93519	0.93268
US $	1.06930	1.07218
Euro Rate 1 Euro=		Inverse
Canadian $	1.45555	0.68703
US $	1.36121	0.73464

Commodities

Gold	Close	Previous
London Gold Fix	1317.32	1319.30
Oil	Close	Previous
WTI Crude Future	105.84	107.25
BRENT	109.360	109.360

Market Commentary:

Canada

June 26 ( Bloomberg)

Canadian stocks rose, erasing an early decline, as energy an dindutrial stocks pushed the benchmarke index higher for a second straight day.  Enerflex Ltd. And Enerplus Corp. added at least 2.6 percent to pace gains among energy companies.  Perpetual Energy Inc. jumped 20 percent after it got a rating upgrade and announced a new joint venture.  AutoCanda Inc. dropped 4.5 percent a day after announcing it would sell C$350 million in new shares.

The Standard & Poor’s/TSX Composite Index rose 56.09 points, or 0.4 percent, to 15,030.74 at 4pm in Toronto.  The gauge is up 10 percent for the year, and closed at a record June 19.

Industrial companies gained the most among 10 groups in the benchmark index, rising 0.7 percent.  Air Canada and WestJet Airlines Ltd. Rose at least 2.6 percent to pace gains in the groups.

Perpetual Energy jumped 20 percent to C$1.96 as Canadian Imperial Bank of Commerce raised its rating to the equivalent of buy from the equivalent of hold. Perpetual also announced a $120 million joint venture to pump natural gas in Alberta.

AutoCanada fell 4.5 percent to C$79.38.  The car dealership owner announced a stock offering yesterday, saying it would sell new shares for C$78.  AutoCanada is up 73 percent this year.

QLT Inc. jumped 14 percent to C$6.59 after Auxilium Pharmaceuticals Inc. said it would buy the company in a $345 million stock transaction.  The deal allows Auxilium, a specialty drug company based in Chersterbook, Pennsylvania, to re-domicile in Canada and take advantage of the country’s tax rate.

Concordia Healthcare Corp. gained 3.2 percent to C$32.75 after its chief executive officer said it had already had one company approach the drug maker with a merger deal and was still a target.

Lumenpulse Inc. rose 2.6 percent to C$21.20 after saying it would buy assets from U.K.-based Projection Lighting Ltd. For GBP 16.6 million.

USA

By Jeff Kearns and Steve Matthews

June 26 ( Bloomberg)

James Bullard, president of the Federal Reserve Bank of St. Louis, said the U.S. economy is improving enough to withstand an increase in short-term interest rates next year as growth picks up. “I’m starting to think the economy could tolerate at least  little bit of the central bank getting back to a more normal stance,” Bullard, who favors raising the benchmark rate in the first quarter of 2015, said at an event today in New York.

The Federal Open Market Committee is closer to its goals fur full employment and low stable inflation than many investors realize, Bullard said.  He predicted the pace of economic growth will accelerate to 3 percent this year after an unexpectedly deep first quarter contraction.

“Inflation is picking up now.  It is still below target but it has been moving up in recent months,” he said in response to a question at a forum organized by the Council on Foreign Relations.  “I don’t think financial markets have internalized how close we are to our ultimate goals, and I don’t think the FOMC has internalized how close we are.”

The FOMC is debating how long to keep the benchmark federal funds rate near zero after completing a bond-purchase program that’s set to end late this year.  The committee repeated on June 18 that it expects the rate to remain near zero for a “considerable time” after the purchases end.

 

Have a wonderful evening everyone.

Be magnificent!

As ever,

 

Brianna

 

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:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the Day

A member of the Amazonian Tatuyo tribe looks on in her village in the Rio Negro near Manaus, a World Cup host city, in Brazil. The Tatuyo have enjoyed three weeks of brisk business thanks to the World Cup.

Panda Xin Xin hangs out in his cage during the opening ceremony of the Panda Complex at the National Zoo in Kuala Lumpur, Malaysia. Two pandas are on loan to Malaysia for 10 years

Market Closes for June 25^th , 2014

Market   Index	Close	Change
Dow   Jones	16867.51	+49.38
		+0.29%
S&P 500	1959.53	+9.55    +0.49%
NASDAQ	4379.757	+29.401    +0.68%
TSX	14974.65	+12.28
		+.08%

International Markets

Market   Index	Close	Change
NIKKEI	15266.61	-109.63
		-0.71%
HANG   SENG	22866.70	-13.94
		-.06%
SENSEX	25313.74	-55.16
		-0.22%
FTSE 100	6733.62	-53.45
		-0.79%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.271	2.294
CND.   30 Year Bond	2.822	2.835
U.S.   10 Year Bond	2.5592	2.6052
U.S.   30 Year Bond	3.3815	3.4337

Currencies

BOC Close	Today	Previous
Canadian $	0.93268	0.92961
US   $	1.07218	1.07572
Euro Rate   1 Euro=		Inverse
Canadian   $	1.46132	0.68431
US   $	1.36294	0.73371

Commodities

Gold	Close	Previous
London Gold   Fix	1319.30	1314.85
Oil	Close	Previous
WTI Crude Future	107.25	107.26
BRENT	109.360	109.360

Market Commentary:

Canada

June 25 (Bloomberg) — Canadian stocks rose, after plunging the most since February yesterday, as a jump in Valeant Pharmaceuticals International Inc. offset losses among consumer- staples companies.

Valeant gained 4.3 percent on a report that Paulson & Co. supported the drugmaker’s attempt to buy Allergan Inc. Metro Inc. and Jean Coutu Group Inc. fell at least 1 percent, pacing losses among consumer-staples companies. Ithaca Energy Inc. and Veresen Inc. rose more than 2.3 percent as energy stocks advanced.

The Standard & Poor’s/TSX Composite Index rose 12.28 points, or 0.1 percent, to 14,974.65 at 4 p.m. in Toronto, climbing for the first time in four days. The price-to-earnings ratio for the benchmark Canadian equity gauge is 20.2, the highest since 2011. The measure has advanced 2.5 percent in June, closing at a record on June 19, and is up 4.5 percent for the quarter.

Five of 10 industries advanced in the S&P/TSX on trading volume 4.8 percent lower than the 30-day average. Consumer- staples companies had the biggest drop, falling 0.4 percent.

The S&P/TSX Gold Index advanced 0.6 percent, after a 2.9 percent loss yesterday, the worst since May 27. Gold for August delivery added 0.1 percent to $1,322.60 an ounce in New York, after an earlier loss of as much as 1.2 percent. The gold price reached $1,326.60 yesterday, a two-month high.

The U.S. economy fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previous reported 1 percent drop, the Commerce Department said today in Washington. The U.S. is Canada’s largest trading partner. Linamar Corp. lost 1 percent to C$61.66 and Martinrea International Inc. retreated 0.6 percent to C$12.64 to pace declines among automotive-related companies. Metro fell 1.1 percent to C$65.08 and Jean Coutu dropped 1 percent to C$22.49.

Valeant gained 4.3 percent, the most since April, to C$134.93 after a Reuters report said Paulson has six million shares in Allergan and supports the Valeant deal. That would make it the Botox maker’s 11th biggest shareholder, according to data compiled by Bloomberg.

Atlantic Power Corp. sank 1.5 percent to C$3.86 after Rupert Merer, analyst at National Bank Financial, cut his rating for the electric power generator company to underperform, the equivalent of a sell, from sector perform.

“With a likely dividend cut, high debt and many moving parts, we remain cautious,” Merer said in a note to clients today.

USA

June 25 (Bloomberg) — U.S. stocks rose for the first time in three days as investors speculated the economy is recovering from a first-quarter contraction and Monsanto Co. announced a $10 billion stock buyback plan.

Monsanto, the largest seed company, rallied 5.1 percent. CBS Corp. jumped 6.2 percent after the U.S. Supreme Court ruled that Aereo Inc. is violating broadcaster rights. Oil refiners such as Valero Energy Corp. and Marathon Petroleum Corp fell after the U.S. Commerce Department opened the door to more crude exports.

The Standard & Poor’s 500 Index added 0.5 percent to

1,959.53 at 4 p.m. in New York, rebounding after a 0.6 percent drop yesterday. The U.S. equity benchmark is up 1.9 percent in June, poised for a fifth month of gains. The Dow Jones Industrial Average climbed 49.38 points, or 0.3 percent, to 16,867.51 today. The Russell 2000 Index was up 0.8 percent.

“The market is partying on,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm manages about $247 billion. “If you think about it over a slightly longer-term basis, Fed tightening is not on the horizon, corporate outlook is fine, and if you look at dividend yields, stocks are attractive from a valuation point of view.”

Profits as a percentage of the S&P 500’s price, known as earnings yield, total 5.6 percent, exceeding the 2.6 percent yield on the 10-year Treasury note, according to data compiled by Bloomberg. The U.S. equity benchmark pays 1.9 percent in dividends.

U.S. stocks are poised for the third-slowest month in six years. About 5.6 billion shares have changed hands each day in June, trailing every month since 2008 except for the previous two Augusts, data compiled by Bloomberg show.

Trading is likely to get a boost on June 27, when Russell Investments concludes the annual revisions to its equity benchmark gauges. Russell’s U.S. stock indexes, including the Russell 1000 Index and the Russell 2000, are used as benchmarks for $5.2 trillion in assets, according to the company’s website. In the previous two years, the reconstitution day ranked in the top two busiest trading sessions, data compiled by Bloomberg show.

With the end of the quarter approaching, investors should expect about $20 billion in selling of equities and some buying of bonds as pension fund managers rebalance their portfolios, Boris Rjavinski, a strategist at UBS AG, estimated in a June 23 report. Economic data today showed that the U.S. gross domestic product shrank 2.9 percent in the first quarter, the worst reading since 2009. Orders for business equipment climbed in May, a sign that corporate investment is helping revive the economy after a slump at the start of the year. Monsanto also raised its full-year earnings forecast and posted better-than- expected fiscal third-quarter profit.

Americans returned to stores and car dealerships, companies placed more orders for equipment and manufacturing picked up as temperatures warmed, indicating the early-year setback was temporary. Combined with more job gains, such data underscore the view of Federal Reserve policy makers that the economy is improving and in less need of monetary stimulus.

Bookings for non-military capital goods excluding aircraft rose 0.7 percent after a 1.1 percent drop in April, data from the Commerce Department showed. Demand for all durable goods — items meant to last at least three years — decreased 1 percent, reflecting declines in the volatile transportation and defense categories.

“What’s important in goods is the non-defense capital orders, which are essentially a proxy for business spending,” Darrell Cronk, New York-based deputy chief investment officer at Wells Fargo Private Bank, said in a phone interview. Cronk helps oversee $170 billion. “When you factor in the numbers, that’s a good story that suggests in May there was bump in business spending.”

The CBOE OEX Volatility Index, also known as the old VIX, fell 6 percent to 9.76. Two days ago, the index fell to 8.9, its first close below 9 since calculations started in 1986.

Pacific Investment Management Co.’s theory of the “new neutral” led traders to speculate that the money manager sold S&P 500 options in April and May to benefit from stable prices, according to four people who heard about the trading and asked not to be named. Pimco’s chief investment officer, Bill Gross, declined to discuss specific trades in an interview last week. Monsanto climbed 5.1 percent to $126.73. The company raised its fiscal full-year forecast for ongoing earnings to $5.10 to $5.20 a share from $5 to $5.20 previous. Net income was $1.62 a share, beating the $1.55 average of analysts’ estimates compiled by Bloomberg.

CBS advanced 6.2 percent to $62.48. The Supreme Court’s 6-3 ruling is a triumph for broadcast companies. They said Aereo was threatening the underpinnings of the industry by selling programming online without paying licensing fees.

Bristol-Myers Squibb Co. gained 3 percent to $49.73 after stopping a late-stage study of a top experimental drug after skin cancer patients showed “superior overall survival.” The company said it’s testing nivolumab in more than 35 studies against multiple tumor types.

Schlumberger Ltd. jumped 6.4 percent to $113.85, for the biggest gain since November 2011. Chief Executive Officer Paal Kibsgaard said in a company webcast that earnings for the largest energy service company by market capitalization may reach $10 a share in 2017. Oil refiners fell as the Commerce Department widened its definition of what’s traditionally been considered a refined product eligible for shipping to customers abroad. That means more of the oil being pumped from U.S. shale formations may be eligible for export after being run through small-scale processing units.

Valero, which owns and operates refineries in the U.S., Canada and Aruba, fell 8.3 percent to $51.35, the biggest decline since November 2011. Marathon Petroleum lost 6.3 percent to $80.97.

General Mills Inc. retreated 3.6 percent to $51.76 for a fourth day of losses. The company reported quarterly earnings that trailed analysts’ estimates and said it began a review of its North American manufacturing and distribution network as part of a wider effort to reduce costs.

ImmunoGen Inc. fell 8.2 percent to $12.04. Morgan Stanley rated shares of the biotechnology company at underweight, similar to a sell recommendation, with a price estimate of $10.

 

Have a wonderful evening everyone.

 

Be magnificent!

“Wonder rather than doubt is the root of all knowledge.” – Abraham Joshua Heschel

 

As ever,

 

Brianna

“If you actions inspire others to dream more, learn more, do more, you are a leader.” – John Quincy Adams

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:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the Day

Buyan, a male Siberian brown bear, is given a shower by a zoo employee on a hot day at the Royev Ruchey zoo in Russia’s Siberian city of Krasnoyarsk

Youth play soccer on the Arabian Sea shore in Mumbai, India. In a country where cricket dwarfs every other sport, the ongoing World Cup soccer tournament in Brazil has evoked a lot of interest in the game.

Market Closes for June 24^th, 2014

Market   Index	Close	Change
Dow   Jones	16818.13	-119.13
		-0.70%
S&P 500	1949.98	-12.63    -0.64%
NASDAQ	4350.355	-18.321    -0.42%
TSX	14962.37	-143.26
		-0.95%

International Markets

Market   Index	Close	Change
NIKKEI	15376.24	+6.96
		+0.05%
HANG   SENG	22880.64	+75.83
		+0.33%
SENSEX	25368.90	+337.58
		+1.35%
FTSE 100	6787.07	-13.49
		-0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.284	2.334
CND.   30 Year Bond	2.826	2.865
U.S.   10 Year Bond	2.5781	2.6261
U.S.   30 Year Bond	3.3991	3.4549

Currencies

BOC Close	Today	Previous
Canadian $	0.93075	0.93137
US   $	1.07440	1.07300
Euro Rate   1 Euro=		Inverse
Canadian   $	1.46164	0.68416
US   $	1.36037	0.73510

Commodities

Gold	Close	Previous
London Gold   Fix	1318.29	1317.99
Oil	Close	Previous
WTI Crude Future	106.63	106.82
BRENT	109.360	109.360

Market Commentary:

Canada

June 24 (Bloomberg) — Canada’s biggest pension fund is investing in Indian infrastructure assets after Prime Minister Narendra Modi vowed to build 100 new cities and revive growth in the $1.8 trillion economy.

Canada Pension Plan Investment Board said yesterday that it will pay $166 million for a stake in a unit of Larsen & Toubro Ltd., India’s largest engineering company. Investing in infrastructure will be core to the fund’s growth in the South Asian country, Andre Bourbonnais, senior vice president of private investments, said in an interview.

“Investors are confident of the long-term economic growth potential in India,” Ambareesh Baliga, managing partner of global wealth management at Mumbai-based Edelweiss Financial Services Ltd., said by phone. “Companies with proven track record and good balance sheets will get the maximum advantage. L&T is right there at the top.”

Modi has promised high-speed trains, low-cost airports that connect smaller towns and simple rules for industrial projects to help spur economic growth from near the slowest pace in a decade. Larsen & Toubro has surged 57 percent this year, the best performance on the S&P BSE Sensex index.

Canada Pension is committed to investing an equal amount for an additional stake in L&T Infrastructure Development Project Ltd. in 12 months after the initial purchase, according to a statement issued yesterday. L&T Infrastructure operates 19 toll roads, a power transmission line and a metro in Hyderabad. The L&T stake is Canada Pension’s first direct investment in India’s infrastructure and the latest push in its efforts to grow in the South Asian country. In February, the Toronto-based fund announced it had set up a $500 million fund with Piramal Enterprises Ltd., one of India’s top diversified companies, to finance home projects in the country.

In November, the pension fund contributed $200 million to an alliance with the Shapoorji Group to buy office buildings in major Indian cities. Bourbonnais said finding the right partners is key to Canada Pension’s expansion in India, which poses its unique challenges, including being “fairly bureaucratic.”

“In emerging markets, the selection of the partner is absolutely key,” he said.

Bourbonnais said the strongest electoral mandate for a government in 30 years will provide the political stability needed for additional investment. The partnership with L&T will allow Canada Pension to leverage this investment into new ones.

“We can use the joint venture to buy other toll road assets,” he said.

USA

June 24 (Bloomberg) — The Treasury sold $30 billion of two-year notes at the highest yield in more than three years as investors bet the economy will be strong enough for the Federal Reserve to remain on pace to raise interest rates next year.

The securities were sold at a yield of 0.511 percent, the most since the May 2011 monthly auction drew 0.56 percent. The auction’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount of debt offered, was 3.23, the lowest since March versus an average of 3.39 at the past 10 sales.

There is a 60 percent probability the Fed will raise rates to at least 0.5 percent by July of next year, based on fed funds futures, versus a 43.2 percent chance at the end of May. Following their June 17-18 policy meeting, Fed officials released forecasts, represented as dots on charts, showing that starting next year interest-rates would rise from zero faster than previously expected.

“We’ve had a decent concession of the last few days and yields at 50 basis points helped bring in some interest,” said Thomas Simons, a government-debt economist in New York at Jefferies Group LLC, one of 22 primary dealers that bid at Treasury auctions. “As we get closer to the Fed raising rates, we will drift higher.”

The yield on the current two-year note was little changed at 0.47 percent at 2:14 p.m. in New York, according to Bloomberg Bond Trader Prices. The yield on the benchmark 10-year note fell three basis points to 2.59 percent. Indirect bidders, an investor class that includes foreign central banks, purchased 23.1 percent of the notes, compared with an average of 26.2 percent for the past 10 sales.

Direct bidders, non-primary-dealer investors that place their bids directly with the Treasury, purchased 23.3 percent of the notes at the sale, compared with an average of 24.4 percent for the past 10 auctions.

Two-year notes have returned 0.3 percent this year, compared with a gain of 2.6 percent by the broad Treasuries market, according to Bank of America Merrill Lynch indexes. The two-year securities advanced 0.3 percent in 2013, while Treasuries fell 3.4 percent.

Fed policy makers said on June 18 that they expect their year-end rate will reach 1.13 percent in 2015 and 2.5 percent in 2016. Trading in the futures and swaps markets indicate the benchmark rate will remain below 2 percent through March 2017.

Today’s offering is the first of four auctions of coupon- bearing debt this week. The Treasury will sell $35 billion of five-year securities tomorrow and $29 billion of seven-year notes the next day. It will also auction $13 billion of two-year floating-rate notes tomorrow.

The sales, plus a $7 billion offering of 30-year Treasury Inflation Protected Securities on June 19, will raise $40.6 billion of new cash, as maturing securities held by the public total $73.4 billion, according to the U.S. Treasury.

 

Have a wonderful evening everyone.

Be magnificent!

As ever,

 

Brianna
“Along with Success comes a reputation for Wisdom” – Euripedes

 

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:

I will be writing the newsletter on Carolann’s behalf, as she is out of town.

Photos of the day

Dancers wait to perform for actor Forest Whitaker (not seen) inside the UN House at an Internally Displaced People’s camp in Juba, South Sudan.

Portraits of the last veterans of WWI and artifacts from the Museum of the Great War of the Pays de Meaux, are displayed at Gare de L’Est railway station in Paris during an exhibition to celebrate the centenary of the WWI.

Market Closes for June 23^rd, 2014

Market   Index	Close	Change
Dow   Jones	16937.26	-9.82
		-0.06%
S&P 500	1962.61	-.026    -0.06%
NASDAQ	4368.676	+0.640    +0.01%
TSX	15105.63	-3.34
		-0.02%

International Markets

Market   Index	Close	Change
NIKKEI	15369.28	+19.86
		+0.13%
HANG   SENG	22804.81	-389.25
		-1.68%
SENSEX	25031.32	-74.19
		-0.30%
FTSE 100	6800.56	-24.64
		-0.36%

Bonds

Bonds	% Yield	Previous % Yield
CND.   10 Year Bond	2.334	2.294
CND.   30 Year Bond	2.865	2.835
U.S.   10 Year Bond	2.6261	2.6052
U.S.   30 Year Bond	3.4549	3.4337

Currencies

BOC Close	Today	Previous
Canadian $	0.93137	0.92961
US   $	1.07300	1.07572
Euro Rate   1 Euro=		Inverse
Canadian   $	1.45975	0.68505
US   $	1.36044	0.73506

Commodities

Gold	Close	Previous
London Gold   Fix	1317.99	1314.85
Oil	Close	Previous
WTI Crude Future	106.82	107.26
BRENT	109.360	109.360

Market Commentary:

Canada

June 23 (Bloomberg) — Canada’s dollar is poised to test a technical level that marks the boundary between bullish and bearish outlooks for the currency versus its U.S. peer, according to Royal Bank of Canada, citing technical analysis.

The Canadian currency broke out of a six-week range June 20 after a report showed the nation’s consumer prices rose beyond the central bank’s target for the first time in more than two years, George Davis, chief technical analyst at the bank’s RBC Capital Markets unit, wrote in a client note. If it closes today stronger than C$1.0734, that will clear the way to advance to a trendline at C$1.0635, Davis wrote.

“This level is very, very important technically, as the trendline is drawn off of the lows dating back to September 2012,” Davis wrote. “A daily close below C$1.0635 would nullify our bullish view” on the U.S. dollar versus the loonie over the intermediate to long term.

The Canadian currency, nicknamed the loonie for the image of the aquatic bird on the C$1 coin, appreciated 0.2 percent to C$1.0732 per greenback at 1:44 p.m. Toronto time. It closed at C$1.0758 on June 20, a the strongest since Jan. 6, after trading between C$1.0810 and C$1.0961 since May 8.

The nation’s consumer-price index increased 2.3 percent in May from a year earlier, a report showed June 20. The last time it exceeded the Bank of Canada’s 2 percent target was February 2012.

In technical analysis, investors and analysts study charts of trading patterns to forecast changes in a security, commodity, currency or index.

USA

June 23 (Bloomberg) — Americans snapped up previously owned homes in May in the biggest monthly sales gain in almost three years, a sign the residential real estate market is regaining its footing after a stumble early in the year.

Purchases climbed 4.9 percent, the biggest increase since August 2011, to a 4.89 million annualized rate, figures from the National Association of Realtors showed today in Washington. The level was the strongest since October. The report also showed price appreciation is slowing as more homes become available.

A more balanced market, including a wider selection of properties, smaller price gains and still-low borrowing costs, may encourage more Americans to buy as employment strengthens. Improving demand will probably spur a pickup in construction, and builders such as Hovnanian Enterprises Inc. are optimistic.

“The housing recovery is going to continue,” said Tom Simons, an economist at Jefferies LLC in New York, who projected sales would rise to a 4.8 million pace. “Income levels are going up, rates are at least not going up anymore, and prices are stabilizing, so all that blends into a good picture for affordability.”

Stocks fell, after the Standard & Poor’s 500 Index closed at a record, as industrial shares sank. The S&P 500 declined less than 0.1 percent to 1,961.68 at 12:33 p.m. in New York.

Another report today showed manufacturing was also strengthening. The Markit Economics preliminary June U.S. factory index increased to 57.5, the highest since May 2010, from 56.4 a month earlier, the London-based group said. Readings exceeding 50 in the purchasing managers’ gauge indicate expansion. The news abroad was less upbeat. Euro-area manufacturing and services activity weakened in June amid a further slowdown in France’s economy, underscoring the fragility of the recovery in the 18-nation region, other reports showed.

The median forecast of 70 economists surveyed by Bloomberg projected U.S. sales of existing houses would climb to a 4.74 million rate. Estimates ranged from 4.63 million to 4.9 million. The prior month’s pace was revised to 4.66 million from a previously reported 4.65 million.

The median home price rose 5.1 percent from May 2013 to reach $213,400, today’s report showed, matching the April increase as the smallest 12-month gain since the year ended March 2012.

Compared with a year earlier, purchases decreased 8.2 percent before seasonal adjustment. The number of previously owned homes on the market increased 6 percent from a year earlier to 2.28 million, the most since August 2012. At the current sales pace, it would take 5.6 months to sell those houses compared with 5.7 months at the end of the prior month. The month’s supply is consistent with a balanced market, Lawrence Yun, NAR chief economist, said at a news conference today as the figures were released. First-time buyers accounted for 27 percent of all purchases and are still having trouble getting into the market, Yun said.

Distressed sales, comprising foreclosures and short sales, in which the lender agrees to a transaction for less than the balance of the mortgage, accounted for 11 percent of the total, the fewest since records began in October 2008.

The slump in sales that began about a year ago when mortgage rates shot up “is pretty effectively over,” Yun said at the news conference. Given gains in employment, it is “hard to foresee how sales could slide back now.” He projected sales will soon top the 5 million pace and stay around those levels for the rest of the year. For all of 2014, sales will total 4.93 million, down from 5.09 million last year, Yun said. The drop reflects the slump at the beginning of the year as unusually frigid temperatures kept prospective buyers indoors, he said.

Sales of existing single-family homes increased 5.7 percent to an annual rate of 4.3 million. Purchases of multifamily properties — including condominiums and townhouses — held at a 590,000 pace.

Purchases improved in all four regions, led by an 8.7 percent increase in the Midwest. Yun said some of the advance represented transactions that had been delayed by the poor weather earlier in the year.

Existing home sales, tabulated when a purchase contract closes, account for more than 90 percent of the residential market. New-home purchases, which make up about 7 percent and are tabulated when contracts are signed, are considered a timelier barometer.

The housing recovery still has a ways to go. Existing-home sales had plunged to a 13-year low of 4.11 million in 2008, three years after a record 7.08 million houses were sold in 2005.

Borrowing costs, which climbed in the second half of 2013, have retreated recently. The average 30-year, fixed-rate mortgage was 4.17 percent in the week ended June 19, down from 4.41 percent at the beginning of April, according to data from Freddie Mac in McLean, Virginia. Overall, mortgage costs are still near historically low levels.

Residential construction is picking up this quarter after a weather-induced slump at the start of the year. Builders broke ground on homes at a 1 million annualized pace in May following 1.07 million in April, the best two-month reading since late 2013, a Commerce Department report showed this month.

Sentiment is also rebounding. The National Association of Home Builders/Wells Fargo confidence index climbed to 49 in June from 45 the prior month, the biggest gain since July 2013. The gauges for current sales, the outlook for future purchases and prospective buyer traffic all improved to the highest level since January.

Increasing property prices hurt affordability for prospective buyers trying to get into the market, at the same time they also help homeowners feel wealthier and may keep boosting profits for developers.

Hovnanian Enterprises, New Jersey’s largest homebuilder, is optimistic that demand will continue to rise though sales have been uneven in recent months.  “While the housing market has improved dramatically overall compared to where it was a couple of years ago, the recent recovery has been a little more choppy,” Chief Executive Officer Ara Hovnanian said during an earnings conference call on June 4.

Household formation will be the primary driver of long-term housing demand, he said, and “the creation of well-paying jobs will go a long way” toward boosting the market. “Given the low levels of total U.S. housing starts, we remain convinced that we are still in the early stages of the housing industry recovery,” Hovnanian said.

Some industry groups are growing concerned about the rebound. The Mortgage Bankers Association last week lowered its forecast for combined new and existing home sales in 2014 to 5.28 million — a decline of 4.1 percent that would be the first annual drop in four years. The group also cut its prediction on mortgage lending volume for purchases.

 

Have a wonderful evening everyone.

“Don’t walk behind me; I may not lead. Don’t walk in front of me; I may not follow. Just walk beside me and be my friend.” – Albert Camus

Be magnificent!

As ever,

 

Brianna

“To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment.” – Ralph Waldo Emerson

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