Author: Carolann

Dear Friends,

Tangents:

Writer Gertrude Stein was born on this day in 1874.  I just finished reading a novel that was published by Paula McLean in 2012 entitled The Paris Wife. It is told through the eyes of Hadley Richardson, Ernest Hemingway’s first wife.  It is a portrait of a marriage, and of a writer’s early struggle to come into his own, but it is also a glimpse into the Paris of the early 1920’s when many American and English expatriots lived the Bohemian existence of struggling artists in the city of light.  It describes the importance of Gertude Stein’s Paris salon to the artists and intellectuals who gathered and her early friendship with Hemingway.  All in all, a good read.

Wasn’t that a game yesterday?

Photos of the day

Seattle Seahawks Malcom Smith makes an angel in the confetti after his team defeated the Denver Bronocs in the NFL Super Bowl XLVIII football game in East Rutherford, New Jersey. Shannon Stapleton/Reuters

Denver Broncos quarterback Peyton Manning runs off the field after being defeated by the Seattle Seahawks in the NFL Super Bowl XLVIII football game in East Rutherford, New Jersey. Shannon Stapleton/Reuters

Market Closes for February 3^rd, 2014

Market  Index	Close	Change
Dow  Jones	15372.80	-326.05    -2.08%
S&P 500	1741.89	-40.70    -2.28%
NASDAQ	3996.958	-106.919    -2.61%
TSX	13486.20	-208.74
		-1.52%

International Markets

Market  Index	Close	Change
NIKKEI	14619.13	-295.40
		-1.98%
HANG  SENG	22035.42	-106.19
		-0.48%
SENSEX	20209.26	-304.59
		-1.48%
FTSE 100	6465.66	-44.78
		-0.69%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.296	2.339
CND.   30 Year Bond	2.887	2.925
U.S.   10 Year Bond	2.5761	2.6440
U.S.   30 Year Bond	3.5307	3.5985

Currencies

BOC Close	Today	Previous
Canadian $	0.89968	0.89845
US   $	1.11150	1.11303
Euro Rate  1 Euro=		Inverse
Canadian   $	1.50348	0.66512
US  $	1.35266	0.73929

Commodities

Gold	Close	Previous
London Gold   Fix	1257.23	1244.55
Oil	Close	Previous
WTI Crude Future	96.43	97.49
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Feb. 3 (Bloomberg) — Canadian stocks declined, sending the benchmark index to the lowest level of the year, as energy and industrial shares slumped after manufacturing gauges in China and the U.S. weakened.

Energy producers retreated as Atlantic Power Corp. plunged 7.9 percent. BlackBerry Ltd. dropped 4.5 percent for a third straight day of losses. Cameco Corp. tumbled 5.3 percent after Canaccord Genuity Corp. analysts cut the stock’s rating. Semafo Inc. jumped 2.2 percent after Macquarie North America analysts said it may be a target for mergers and acquisitions.

The Standard & Poor’s/TSX Composite Index decreased 208.74 points, or 1.5 percent, to 13,486.20 at 4 p.m. in Toronto. The gauge erased its gain for the year, falling 1 percent for 2014.

Trading in S&P/TSX stocks was 2.8 percent higher than the 30-day average at the close.

“There’s some worry about what’s going on in emerging markets and if it’s now spreading to developed markets and what the ramifications of this will be,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.5 billion ($4.1 billion).

“There’s just a general risk aversion that has come into the market today.”

The Institute for Supply Management’s factory index, a measure of U.S. manufacturing activity, decreased to 51.3 in January from 56.5 the prior month, the Tempe, Arizona-based group’s report showed today. Readings above 50 indicate expansion.

China’s Purchasing Managers’ Index decreased in January as output and orders slowed. The gauge was at 50.5 last month, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Feb. 1 in Beijing. The reading in December was at 51. A number above 50 indicates expansion.

Gold for April delivery rallied 1.6 percent as declining global equity markets boosted demand for haven assets. The MSCI All-Country World Index dropped 1.6 percent, while emerging- markets shares slid 1.1 percent.

All 10 main industries in the S&P/TSX retreated at least 1 percent. Technology shares tumbled 2.9 percent, while industrials lost 2 percent. Consumer-discretionary shares and financials declined at least 1.3 percent.

Utilities slid 1.4 percent as Atlantic Power plunged 7.9 percent to C$2.69, an all-time low. Just Energy Group Inc. fell 4.6 percent to C$7.45 and ATCO Ltd. slipped 2.6 percent to C$48.55.

BlackBerry declined 4.5 percent to C$10.08, extending a three-day losing streak to 9.4 percent. Last week, a person familiar with the matter said Lenovo Group Ltd. considered the Motorola Mobility handset unit a better fit for the company than BlackBerry. Lenovo agreed to buy Motorola’s handset unit from Google Inc. for $2.91 billion. Lenovo’s chief financial officer said last year the company was considering a possible deal with BlackBerry.

Cameco tumbled 5.3 percent, the biggest drop since March 2012, to C$22.41. Canaccord analyst Gary Lampard downgraded the uranium explorer’s rating to sell from hold.

Semafo Inc. jumped 2.2 percent to C$3.67. Macquarie analysts led by Michael Gray wrote that the gold mining company could potentially be bought by producers of the precious metal such as Agnico Eagle Mines Ltd., Argonaut Gold Corp. and B2Gold Corp.  B2Gold climbed 2.7 percent to C$2.70. Argonaut increased 1.8 percent to C$5.

US

By Lu Wang

Feb. 3 (Bloomberg) — U.S. stocks fell, sending benchmark indexes to their biggest declines since June, as manufacturing in the world’s largest economy slowed more than estimated.

All but nine stocks in the Standard & Poor’s 500 Index slipped, the broadest decline since April. Telephone shares plunged after AT&T Inc. introduced new service plans, the latest in an escalating price war among wireless carriers. Ford Motor Co. and General Motors Co. fell at least 2.3 percent after reporting declines in January auto sales. Jos. A. Bank Clothiers Inc. slid 5 percent after telling Men’s Wearhouse Inc. it will not enter takeover talks.

The S&P 500 fell 2.3 percent to 1,741.89 at 4 p.m. in New York, the lowest close since Oct. 17. The Dow Jones Industrial Average lost 326.05 points, or 2.1 percent, to 15,372.80. The gauge has fallen 7.3 percent this year to a three-month low.

About 9.5 billion shares changed hands on U.S. exchanges today, the busiest trading since Dec. 20.

“Everyone walked in this year expecting a continuation of at least growing economic activity and the latest data we’ve been seeing throw a bit of cold water on that theory,” Bill Schultz, chief investment officer who oversees about $1.1 billion at McQueen Ball & Associates in Bethlehem, Pennsylvania, said by phone. “Economic activity was not as strong as people expected. People are taking a pause, reassessing where they stand.”

The S&P 500 reached a record 1,848.38 on Jan. 15 and has since fallen 5.8 percent. The market last produced a loss of at least 5 percent in June, when the index dropped 5.8 percent from a May high. The seven months between declines of at least 5 percent was the longest stretch since late 2006, according to Bespoke Investment Group LLC.

The benchmark for American equities sank 3.6 percent in January, its worst opening month since 2010, as the gauge dropped in each of the month’s final three weeks, the longest streak since 2012. Stocks fell as the Federal Reserve trimmed its bond-buying program for the second time in as many months and emerging-market currencies tumbled amid signs growth was slowing in China. The country’s official Purchasing Managers’ Index decreased to a six-month low in January as output and orders slowed.

Data today showed factory activity in the U.S. expanded in January at the weakest pace in eight months as orders slumped, a sign manufacturing cooled at the start of the year along with the weather.

The Institute for Supply Management’s factory index decreased to 51.3 from 56.5 the prior month, the Tempe, Arizona- based group’s report showed. The median forecast of 85 economists surveyed by Bloomberg called for a decrease to 56.  Readings above 50 indicate expansion.

Fed policy makers said on Jan. 29 that the central bank will trim its monthly bond purchases by $10 billion to $65 billion, cutting the pace of stimulus for a second straight meeting because of an improving economy.

Three rounds of Fed bond buying has helped drive the S&P 500 up 157 percent from a 12-year low in 2009 while pushing capital into emerging markets in search of higher returns.

“The market is adjusting to the Fed taking the punch bowl away,” Douglas Cote, chief market strategist at ING U.S. Investment Management in New York, in a telephone interview. His firm oversees about $200 billion. “The fundamentals remain solid. Even though we’re in the correction phase, ultimately the path for the market is up.”

Treasury Secretary Jacob J. Lew today said the U.S. risks breaching the federal debt limit by the end of this month and called on Congress to raise it immediately to sustain economic momentum. The debt ceiling was suspended through Feb. 7 under an agreement between President Barack Obama and congressional Republicans in October. The Treasury Department uses so-called extraordinary measures, or accounting maneuvers, stay under the ceiling.

Anadarko Petroleum Corp. and Yum! Brands Inc. are among 11 S&P 500 companies reporting earnings today. Profit at companies in the benchmark gauge probably increased by 8.3 percent in the fourth quarter of 2013 and their revenue by 2.5 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index jumped 16 percent today to 21.44, the highest level since December 2012. The gauge of S&P 500 options known as the VIX is up 56 percent this year.

The Nasdaq Composite Index plunged 2.6 percent for its biggest decline since June 2012. The Russell 2000 Index slumped 3.2 percent for its steepest slide since April and the Dow Jones Transportation Average lost 3.2 percent to its lowest since November.

All 10 main S&P 500 groups retreated at least 0.8 percent.

Financial, industrial and consumer-discretionary stocks fell more than 2.5 percent.

Phone stocks plunged 3.7 percent, the most since August 2011, to lead declines. AT&T dropped 4.1 percent to $31.95 for the biggest loss in the Dow, while Verizon Communications Inc. fell 3.4 percent to $46.41.

AT&T’s new offer cuts $40 a month from premium users’ bills. The move is an escalation of competition in the mobile market where AT&T and T-Mobile US Inc. have run back-and-forth attack ads and offered $450 in credit to entice customers to switch service providers.

Ford fell 2.7 percent to $14.55, the seventh drop in eight days that left the stock at its lowest level since May. GM slipped 2.3 percent to $35.25. The largest U.S. automakers reported wider declines in deliveries than analysts estimated as the coldest January in two decades kept some shoppers from dealerships. Sales of cars and light trucks fell 12 percent for GM and 7.5 percent for Ford, according to company statements.

Jos. A. Bank dropped 5 percent to $53.39. The retailer, which told Men’s Wearhouse Inc. it won’t enter buyout talks, has been looking at other acquisitions including retailer Eddie Bauer, people familiar with the matter said.

Pfizer Inc. added 0.7 percent to $30.60 for the only gain in the 30-stock Dow index. The world’s largest drugmaker said a phase 2 trial of palbociclib plus letrozole achieved its primary endpoint in treating post-menopausal women with advanced breast cancer.

ArthroCare Corp. rallied 8.2 percent to $49.12. Smith & Nephew Plc agreed to buy the company for $48.25 a share, or $1.7 billion in cash, to add products for minimally invasive surgery used in sports medicine.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

What is the world?  It is the earth below and the sky above and the air in space that connects them.

What is light?  It is fire below and the sun above – and the lightning that connects them.

What is education?  It is the teacher above and the disciple below – and the wisdom that connects them.

Taittiriya Upanishad

As ever,

 

Carolann

 

A rose is a rose is a rose.

-Gertrude Stein, 1894-1946

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:

On this day in 1958:

56 years ago

Wernher von Braun, in conjunction with the U.S. Army, launches the first U.S. satellite, Explorer I.

I plan to finally get to see Gravity this weekend.  People have told me that it’s one movie that you should see in a movie theatre and it feels like you are in outer space.    Speaking of movies, we went to see American Hustler a few weeks ago and I thought it was terrific; I recommend it if you haven’t seen it yet.

Enjoy the Super Bowl on Sunday!

Photos of the day

A Seattle Seahawks fan wears a “12th Man” flag on “Super Bowl Boulevard” at Times Square, as part of the Super Bowl lead up, in New York. Andrew Kelly/Reuters

Year decorations with a golden horse are displayed outside a building in Hong Kong. Chinese communities around the world were welcoming the arrival of the year of the horse on Friday, Jan. 31 with equine-themed decorations and celebrations. Vincent Yu/AP

Market Closes for January 31^st, 2014

Market  Index	Close	Change
Dow  Jones	15698.85	-149.76    -0.94%
S&P 500	1782.59	-11.60    -0.65%
NASDAQ	4103.879	-19.246    -0.47%
TSX	13694.94	-40.34
		-0.29%

International Markets

Market  Index	Close	Change
NIKKEI	14914.53	-92.53
		-0.62%
HANG  SENG	22035.42	-106.19
		-0.48%
SENSEX	20513.85	+15.60
		+0.08%
FTSE 100	6510.44	-28.01
		-0.43%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.339	2.374
CND.   30 Year Bond	2.925	2.950
U.S.   10 Year Bond	2.6440	2.6949
U.S.   30 Year Bond	3.5985	3.6341

Currencies

BOC Close	Today	Previous
Canadian $	0.89845	0.89563
US   $	1.11303	1.11654
Euro Rate  1 Euro=		Inverse
Canadian   $	1.50120	0.66613
US  $	1.34875	0.74143

Commodities

Gold	Close	Previous
London Gold   Fix	1244.55	1243.50
Oil	Close	Previous
WTI Crude Future	97.49	98.23
BRENT	109.360	109.360

Market Commentary:

Canada

By Whitney Kisling

Jan. 31 (Bloomberg) — Canadian stocks fell, sending the benchmark equities gauge to a second weekly loss, as financial shares and materials producers sank after emerging-market currencies weakened.

Cameco Corp., Canada’s largest uranium miner, dropped 3.7 percent after selling its stake in Bruce Power. Atlantic Power Corp. plunged 17 percent after TD Securities Inc. cut its rating on the stock. Toronto-Dominion Bank slumped 0.9 percent to a six-week low, as an index of bank stocks dropped to the lowest since October. BlackPearl Resources Inc. climbed 1.2 percent after Canaccord Genuity Corp. recommended buying the shares.

The Standard & Poor’s/TSX Composite Index declined 40.34 points, or 0.3 percent, to 13,694.94 at 4 p.m. in Toronto. The gauge lost 0.2 percent in the past five days after dropping 1.3 percent last week. Trading volume was about 4.7 percent higher than the 30-day average.

“Everything relates to psychology, and the psychology of a fear of deflation, fear of China doing less well, the Fed and tapering,” Irwin Michael, fund manager at ABC Funds in Toronto, said in a phone interview. His firm manages about C$850 million.

“There’s still a real tug-of-war between the positive and negative forces out there.”

Copper fell for an eighth day in London, capping the longest losing streak since December 1998, on concern demand is set to weaken as the economy slows in China. West Texas Intermediate crude fell from the highest level of 2014 on concern that developing economies may shrink.

Canada’s gross domestic product expanded for a fifth straight month in November as the nation’s oil and gas production rebounded, Statistics Canada said today in Ottawa.

Consumer spending in the US. climbed more than forecast in December, even as incomes stagnated. Household purchases, which account for about 70 percent of the economy, rose 0.4 percent, after a 0.6 percent gain the previous month, Commerce Department figures showed today. The U.S. is Canada’s largest trading partner.

Seven of 10 industries in the S&P/TSX declined. Materials producers fell 0.3 percent as a group.

Financial stocks, which account for 34 percent of the index’s weighting, plunged 0.8 percent, extending a decline this year to 3.6 percent.

The S&P/TSX Banks Index lost 1.1 percent to a three-month low. TD Bank fell 0.9 percent to C$96.32 and Royal Bank of Canada slid 1.1 percent to C$68.93.

Cameco slipped 3.7 percent to C$23.67 in the biggest drop since July. The company is selling its stake in Bruce Power to Borealis Infrastructure, an investment arm of the Ontario Municipal Employees Retirement System, for C$450 million to focus on its uranium business. Bruce Power operates eight reactors at the world’s largest nuclear generating facility.

Atlantic Power plunged 17 percent to a record C$2.92 for the biggest drop in the index. The shares were cut to reduce from hold at TD Securities.

BlackPearl Resources, an oil and gas exploration and development company in Western Canada, climbed 1.2 percent to C$2.50. Canaccord Genuity Corp. recommended buying the shares, which have risen 10 percent in 2014.

TransCanada Corp., the Calgary-based company, rallied 1.2 percent to C$48.42, the biggest gain of the year. A proposed Keystone XL pipeline cleared a key hurdle today, with the U.S. State Department finding the Canada-U.S. oil pipeline would not greatly increase carbon emissions.

The S&P/TSX is up 0.5 percent in 2014, the seventh best performance among 24 developed markets. Canadian stocks fell short of American peers last year, gaining 9.6 percent compared to the 30 percent rally on the U.S. benchmark, as gold posted its worst annual decline since 1981.

Daily average moves in Canadian stocks are up in 2014. The S&P/TSX rose or fell an average of 0.51 percent per day this month, compared with 0.41 percent in December, according to data compiled by Bloomberg.

US

By Lu Wang

Feb. 1 (Bloomberg) — U.S. stocks fell for a third week, the longest slump since 2012 for the Standard & Poor’s 500 Index, after the Federal Reserve cut stimulus even as a rout in emerging markets spurred concern about the global economy.

Apple Inc. sank 8.3 percent after its sales projection missed expectations. Amazon.com Inc. tumbled 7.5 percent as its earnings report showed revenue growth slowed outside the U.S. and holiday shipping costs surged. Boeing Co. dropped 8.3 percent after its profit forecast trailed predictions amid a slowing pace of jet orders. Caterpillar Inc. jumped 9 percent after announcing a stock buyback and forecasting better-than- expected earnings amid demand for construction equipment.

The S&P 500 slipped 0.4 percent to 1,782.59 in the week and reached the lowest level since November on Jan. 29. The Dow Jones Industrial Average lost 180.26 points, or 1.1 percent, to 15,698.85. Both gauges capped the worst month in almost two years, with the S&P 500 finishing January down 3.6 percent while the Dow dropping 5.3 percent.

“It’s a volatile cocktail,” David Lafferty, chief market strategist for Natixis Global Asset Management in Boston, said in a phone interview from Boston. His firm oversees $838 billion. “The Fed provides an interesting backdrop for capital leaving emerging markets. Earnings have been solid, but the outlook has generally been fairly weak.”

Equities fell as currencies from Turkey to Argentina tumbled, spurring concern that the turmoil in emerging markets may threaten a global economic recovery. While surprise rate increases by central banks in Turkey and South Africa failed to boost their currencies, the U.S. Fed opted to press on with reductions to its monetary stimulus.

Fed policy makers said on Jan. 29 that the central bank will trim its monthly bond purchases by $10 billion to $65 billion, cutting the pace of stimulus for a second straight meeting because of an improving economy.

U.S. gross domestic product expanded 3.2 percent in the fourth quarter, matching economists’ estimates, according to Commerce Department figures. Other reports over the week showed that consumer spending climbed more than forecast even as incomes stagnated while orders for durable goods unexpectedly slumped in December by the most in five months.

Three rounds of Fed bond buying has helped drive the S&P 500 up 163 percent from a 12-year low in 2009 while pushing capital into emerging markets in search of higher returns. The benchmark gauge for U.S. equities reached a record 1,848.38 on Jan. 15 and has fallen 3.6 percent since then.

The S&P 500’s loss for the month marked its first January decline since 2010. A lower January resulted in a full-year decline for the index 58 percent of the time since 1950, according to data compiled by MKM Partners LLC.

“Momentum has weakened,” Jim Welsh, a portfolio manager at Forward Management LLC in San Francisco, said in a phone interview on Jan. 30. His firm oversees $5.5 billion. “Going into this year, a lot of people were talking about a synchronized growth story. I can see later this year where people are disappointed relative to their expectations.”

Walt Disney Co. and Merck & Co. are among 92 companies in the S&P 500 scheduled to announce financial results next week.

Of the 251 companies that have reported, 79 percent beat analysts’ profit estimates while 66 percent exceeded on sales, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index added 1.5 percent over the week to 18.41, the highest level since October. The gauge of S&P 500 options known as the VIX has jumped 34 percent this year.

Consumer, energy and technology companies fell the most among 10 S&P 500 groups, sinking at least 0.9 percent.

Apple slumped 8.3 percent to $500.60. The company’s iPhone sales for the holiday season missed analysts’ estimates, adding pressure for Chief Executive Officer Tim Cook to release new hit products to revive growth.

Even after releasing the iPhone through the world’s largest carrier, China Mobile Ltd., Apple said revenue will be $42 billion to $44 billion in the current quarter, compared with analysts’ estimates of $46.1 billion. Anything short of $43.6 billion would mark the company’s first sales decline since 2003.

Amazon sank 7.5 percent to $358.69 in the week, its worst drop since 2011. Net income was 51 cents a share in the fourth quarter, missing the average analyst estimate of 69 cents as the company’s global growth weakened. Amazon’s international sales growth slowed to 13 percent in the quarter from 21 percent a year earlier.

Boeing dropped 8.3 percent to $125.26. The world’s largest planemaker faces U.S. defense cuts and higher financing costs that analysts say may impede commercial aircraft sales that had risen for four years. Earnings excluding some pension expenses will be $7 to $7.20 a share for 2014, the company said. That compares with an average estimate of $7.46 in a Bloomberg survey of 23 analysts.

Yahoo! Inc. fell 5 percent to $36.01. The company forecast first-quarter sales that fell short of some analysts’ estimates as Chief Executive Officer Marissa Mayer struggles to turn user growth at the Web portal into advertising dollars.

ADT Corp., the provider of security services for residences and small businesses, plunged 23 percent to $30.04 for the biggest loss in the S&P 500 after profit and sales trailed analysts’ estimates.

Caterpillar advanced 9 percent to $93.91. The largest maker of mining and construction equipment said profit will be $5.85 a share this year excluding $400 million to $500 million in restructuring costs. That’s more than the $5.77 average estimate. Caterpillar approved a $10 billion share buyback plan through 2018.

Facebook Inc. jumped 15 percent to a record $62.57. The world’s largest social network said more than half its advertising revenue came from mobile devices in the fourth quarter, helping sales rise 63 percent to $2.59 billion.

Alexion Pharmaceuticals Inc. surged 19 percent to $158.73, the biggest gain in the S&P 500 and the most for the stock since 2008. The maker of the rare-disease drug Soliris reported fourth-quarter earnings that exceeded analysts’ estimates, helped by a lower-than-projected tax rate.

 

Have a fabulous weekend everyone.

 

Be magnificent!

 

But unless the development of the mind and body goes hand in hand

with a corresponding awakening of the soul,

the former alone would prove to be a poor lopsided affair.

By spiritual training I mean education of the heart.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

If winning isn’t everything, why do they keep score?

-Vince Lombardi, 1913-1970

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:

On this day in 1948, Mahatma Gandhi was assassinated by a Hindu extremist in New Delhi.

1969, the Beatles played an unannounced concert on a London rooftop in what would be their last concert together as a band.

1971, Carole King released her album Tapestry, which would eventually sell 25 million copies.

1972, Northern Ireland’s Bloody Sunday.

January

“Some people are far more sensitive to light than others and are at their happiest when there is plenty of sunlight and they can throw open the windows and walk outside.  None of us is immune to seasonal changes, though we may think we are, but we are certainly less so than plants and animals.  Fading and increasing light tells them to hibernate or drop their leaves, mate or be active.  I welcome winter as a time when I can slightly change my way of life, stay indoors more, read, and give way to a lethargy I do not have in summer.  I am aware that the light as it meets our eyes produces a set of nerve impulses that travel to the gland between the hemispheres of our brain, and that the hormones in this gland have a powerful effect on our sleep as well as our mood, so perhaps my lethargy is quite natural.  ‘ A sad tale’s best for winter’, wrote Shakespeare.  I believe he meant this to fit the winter mood of the reader.  I have just talked to a friend who is moving back to London after two winters and a summer in the country.  She says she feels depressed in the country and wants the companionship and activity of town life.  I am wondering if it is really the lack of sunlight through the naturally short days that she is missing rather than the glitter of town lights.  Soon spring will be with us than days much longer, so our spirits should be lightened too…”  -Rosemary Verey, from A Countrywoman’s Notes, 1989, Frances Lincoln Ltd, Publishers.

Photos of the day

The moon moves between NASA’s Solar Dynamics Observatory (SDO) and the sun, giving the observatory a view of a partial solar eclipse from space beginning at 8:31 am ET. Such a lunar transit happens two to three times each year. This one lasted two and one half hours, which is the longest ever recorded. NASA/SDO/Reuters

Ice crystals glisten in the sunlight on a bridge over Falls Lake in Wake Forest, NC. Temperatures reached the single digits. A storm that dropped just inches of snow Tuesday wreaked havoc across much of the South. AP

Market Closes for January 30^th, 2014

Market  Index	Close	Change
Dow  Jones	15848.61	+109.82    +0.70%
S&P 500	1794.19	+19.99    +1.13%
NASDAQ	4123.125	+71.691    +1.77%
TSX	13735.28	+92.06
		+0.67%

International Markets

Market  Index	Close	Change
NIKKEI	15007.06	-376.85
		-2.45%
HANG  SENG	22035.42	-106.19
		-0.48%
SENSEX	20498.25	-149.05
		-0.72%
FTSE 100	6538.45	-5.83
		-0.09%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.374	2.365
CND.   30 Year Bond	2.950	2.945
U.S.   10 Year Bond	2.6949	2.6767
U.S.   30 Year Bond	3.6341	3.6163

Currencies

BOC Close	Today	Previous
Canadian $	0.89563	0.89519
US   $	1.11654	1.11709
Euro Rate  1 Euro=		Inverse
Canadian   $	1.51376	0.66061
US  $	1.35576	0.73759

Commodities

Gold	Close	Previous
London Gold   Fix	1243.50	1267.54
Oil	Close	Previous
WTI Crude Future	98.23	97.36
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 30 (Bloomberg) — Canadian stocks rose, erasing a loss for the week, as an increase in U.S. consumer spending offset a decline in gold shares amid a report showing manufacturing in China contracted.

NuVista Energy Ltd. soared 9.2 percent after CIBC World Markets analysts upgraded the stock. Methanex Corp. surged 7.8 percent after reporting fourth-quarter earnings that exceeded estimates. Gold producers in the index retreated 2.2 percent as China Gold International Resources Corp. and Osisko Mining Corp. paced losses. Potash Corp. of Saskatchewan Inc. tumbled 1.9 percent after forecasting 2014 earnings that trailed estimates.

The Standard & Poor’s/TSX Composite Index increased 92.06 points, or 0.7 percent, to 13,735.28 4 p.m. in Toronto. The gauge has gained 0.1 percent this week. Trading in S&P/TSX stocks was 5.3 percent below the 30-day average.

“Today is a risk-on market,” Bob Decker, a fund manager with Aurion Capital Management Inc. who helps manage about C$6 billion ($5.37 billion), said by phone from Toronto. “Investors seem to think that emerging markets turmoil will calm down and fairly good earnings in U.S. market could drive gains. People who bought gold yesterday are now selling.”

Americans’ spending climbed the most in three years as the U.S. economy expanded at a 3.2 percent pace in the fourth quarter, data today showed. The annualized gain in gross domestic product matched the median forecast in a Bloomberg survey.

A Chinese manufacturing gauge signaled the first contraction since July. The Purchasing Managers’ Index fell to 49.5 this month from 50.5 in December, HSBC Holdings Plc and Markit Economics said in a statement. The reading compared with the median 49.6 estimate in a Bloomberg News survey of 14 economists. A number below 50 indicates contraction.

Today’s reports come after U.S. Federal Reserve policy makers said yesterday the central bank will cut monthly bond purchases by $10 billion to $65 billion, sticking to a plan for a gradual withdrawal from its unprecedented monetary easing.

Gold for April delivery fell the most in six weeks. The metal had rallied 5 percent this month through yesterday, with a rout in emerging-market currencies this week spurring demand.

Nine of 10 main industries in the S&P/TSX advanced at least 0.6 percent. Industrial shares gained 1.9 percent, as Canadian Pacific Railway Ltd. jumped 3.6 percent to a record, and Canadian National Railway Co. climbed 2.1 percent.

NuVista Energy soared 9.2 percent to C$8.28, the highest level since June. CIBC analyst Adam Gill raised the stock to sector outperform from sector perform with a 12-month target price of C$10.50 a share.

Methanex surged 7.8 percent to C$68.88, an all-time high, after the methanol producer said it earned C$1.72 per share in the fourth quarter.

BlackPearl Resources Inc. increased 2.9 percent to C$2.47.

Macquarie analysts wrote that BlackPearl and other energy producers may attract foreign buyers amid a depreciation in the Canadian dollar.

Air Canada jumped 6.4 percent to C$7.63, stopping a five- day slide of 26 percent. The stock was the best performer on the S&P/TSX in 2013, soaring 323 percent.

An index of raw-materials producers dropped 1.2 percent for the only decline in the benchmark gauge today, as as gold and silver prices tumbled.

The S&P/TSX Gold Index dropped 2.2 percent after two days of gains. China Gold slumped 6.2 percent to C$3.32, halting a two-day rally that added 15 percent to the stock. Osisko Mining slid 4.2 percent to C$6.60, and Iamgold Corp. dropped 3.3 percent to C$4.06.

Potash Corp. tumbled 1.9 percent to C$34.89. The world’s largest fertilizer producer by market value said today that profit for the year will be $1.40 to $1.80 a share, below analysts’ estimates of $2 a share.

Potash Corp. also cut its estimate for 2014 global shipments. Buyers of potash deferred purchases in the second half of 2013 after OAO Uralkali, the world’s largest producer, quit a sales accord in July with its Belarusian competitor and announced plans to boost output.

US

By Stephen Kirkland and Nick Taborek

Jan. 30 (Bloomberg) — U.S. stocks rose, pushing benchmark indexes up from two-month lows, while Treasuries and gold fell as consumer spending climbed and corporate earnings beat estimates. The iShares MSCI emerging-markets exchange-traded fund rose and the dollar gained a fifth day versus the euro.

The Standard & Poor’s 500 Index jumped 1.1 percent to 1,794.19 by 4:32 p.m. in New York, the biggest gain in a month.

The emerging-markets ETF climbed 0.9 percent and European stocks rallied. Ten-year Treasury yields rose two basis points to 2.69 percent. The dollar strengthened 0.8 percent against the euro, while Hungary’s forint retreated. Gold and natural gas slumped more than 1.4 percent while aluminum dropped to a four-year low and West Texas Intermediate oil advanced.

The rally in American equities erased losses for the week after data showed the U.S. economy expanded 3.2 percent in the fourth quarter and spending climbed the most in three years.

Investors are pulling money from exchange-traded funds that track developing-nation assets at the fastest rate on record, as concerns over a slowdown in China and reductions in central-bank stimulus sink currencies from Turkey to Malaysia.

“The fact we can print a quarter in which GDP growth was more than 3 percent even though government spending contracted as much as it did, is unquestionably a positive,” Dan Greenhaus, chief global strategist at BTIG LLC in New York, said by phone. “The concerns over emerging markets are the dominant topic. To the extent this remains contained, the selloff is likely to be limited.”

More than $7 billion flowed from ETFs investing in developing-nation assets in January, the most since the securities were created, data compiled by Bloomberg show.

Emerging economies have benefited from cheap money as three rounds of Fed bond buying pushed capital into their borders in search of higher returns. The central bank began paring the purchases by $10 billion to $75 billion this month and announced yesterday plans to reduce the amount by another $10 billion.

Facebook Inc. jumped 14 percent after the world’s largest social network reported that more than 50 percent of its advertising revenue came from mobile devices in the last quarter of 2013. Blackstone Group LP and Under Armour Inc. also rallied after reporting better-than-estimated earnings.

The Dow Jones Industrial Average gained 0.7 percent, rising from yesterday’s lowest close since Nov. 7.

Companies in the S&P 500 probably increased their earnings per share by 6.6 percent in the fourth quarter of 2013 and their revenue by 2.6 percent, analysts’ estimates compiled by Bloomberg show.

The annualized gain in U.S. gross domestic product matched the median forecast in a survey of economists and followed a 4.1 percent advance in the prior three months, Commerce Department figures showed today. Growth in the second half of the year was the strongest since the six months ended in March 2012. Consumer spending, which accounts for almost 70 percent of the economy, climbed 3.3 percent, less than estimated.

Separate data showed contracts to purchase previously owned homes in the U.S. plunged in December by the most since May 2010 as higher borrowing costs and bad weather held back sales.

Asian stocks and industrial metals tumbled after a private report showed that China’s manufacturing industry contracted this month. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong lost 0.8 percent, taking this year’s decline to 9.2 percent. Aluminum dropped as much as 1.1 percent to $1,723 a metric ton, the lowest level since July 2009, and zinc fell for a seventh day.

A Chinese Purchasing Managers’ Index fell to 49.5 from 50.5 in December, HSBC Holdings Plc and Markit Economics said in a statement. The reading compared with the median 49.6 estimate in a Bloomberg News survey of 14 economists. A number below 50 indicates contraction.

European stocks advanced, with the Stoxx Europe 600 Index climbing 0.3 percent to pare its monthly decline to 1.5 percent.

Givaudan SA, the world’s largest maker of flavors and fragrances, jumped 6.3 percent after posting full-year net income that beat analyst estimates. Diageo Plc, the biggest distiller, lost 4.7 percent after reporting sales growth that missed forecasts.

Hungary’s forint dropped versus the greenback as emerging- market currencies extended a week-long rout. The forint depreciated 0.8 percent to 228.15 per dollar after earlier dropping as much as 1.6 percent. The currency has declined “too fast, too big” and the central bank is monitoring its move and the market environment, Gyula Pleschinger, a member of the central bank’s Monetary Council, said yesterday.

The dollar’s strength against the euro was driven partly by speculation that emerging-market central banks may take steps to prevent their exchange rates from falling further, according to Geoffrey Yu, senior currency strategist at UBS AG in London.

“If these central banks are getting ready for intervention, they would need to over-fund in dollars,” said Yu. “That may involve selling euro reserves into the U.S. currency.”

The yen has advanced 4.5 percent this year, the biggest gain in Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies.

Gold futures tumbled 1.6 percent, the most since Dec. 19, as U.S. economic growth boosted speculation that the Fed will continue to scale back monetary stimulus.

Treasuries declined, with 10-year yields climbing from a two-month low as the U.S. sold $64 billion of notes, the first time it conducted two fixed-coupon debt auctions in a single day since October 2008.

U.S. debt losses were limited as the week-long slide in emerging-market assets boosted demand for the safest fixed- income securities. Today’s five- and seven-year auctions completed four note sales this week totaling $111 billion.

WTI oil rose 0.9 percent to $98.23 a barrel, the highest level in four weeks. Natural gas dropped 8.3 percent as a government report showed a U.S. stockpile decline that matched analyst estimates. Prices are up about 19 percent this month, heading for the biggest gain since September 2009.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

If this individuality is wiped away, the creative joy that crystallized it disappears,

even if no material was lost, even if no atom was destroyed.

And if it is lost, it is also a loss for the entire world.  It is particularly precious because it is not universal.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Fall seven times, stand up eight.

-Japanese Proverb

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:

On this day in 1963, the poet Robert Frost died in Boston.    In honor of him:

The Secret Sits

Robert Frost

We dance round in a ring and suppose,

But the Secret sits in the middle and knows.

Devotion

Robert Frost

The heart can think of no devotion

Greater than being shore to the ocean-

Holding the curve of one position,

Counting an endless repetition.

Photos of the day

Fireworks explode over the Singapore skyline during Chinese New Year celebrations. The Lunar New Year, which falls on January 31, marks the year of the horse. Edgar Su/Reuters

Two hikers walk past snow-covered trees in the Thuringian Forest near Masserberg, central Germany. Martin Schutt/dap/AP

Market Closes for January 29^th, 2014

Market  Index	Close	Change
Dow  Jones	15738.79	-189.77    -1.19%
S&P 500	1774.20	-18.30    -1.02%
NASDAQ	4051.434	-46.529    -1.14%
TSX	13643.22	-44.44
		-0.32%

International Markets

Market  Index	Close	Change
NIKKEI	15383.91	+403.75
		+2.70%
HANG  SENG	22141.61	+180.97
		+0.82%
SENSEX	20647.30	-36.21
		-0.18%
FTSE 100	6544.28	-28.05
		-0.43%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.365	2.417
CND.   30 Year Bond	2.945	2.987
U.S.   10 Year Bond	2.6767	2.7479
U.S.   30 Year Bond	3.6163	3.6717

Currencies

BOC Close	Today	Previous
Canadian $	0.89519	0.89681
US   $	1.11709	1.11507
Euro Rate  1 Euro=		Inverse
Canadian   $	1.52593	0.65534
US  $	1.36599	0.73207

Commodities

Gold	Close	Previous
London Gold   Fix	1267.54	1254.46
Oil	Close	Previous
WTI Crude Future	97.36	97.41
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 29 (Bloomberg) — Canadian stocks declined following disappointing corporate earnings, as investors weighed the U.S. Federal Reserve’s decision to reduce stimulus amid turmoil in emerging markets.

CGI Group Inc. plunged 5 percent after first-quarter earnings missed estimates. AGF Management Ltd. slumped 6.3 percent as quarterly profit trailed forecasts. Air Canada dropped 6 percent, extending its slide to a fifth day. Detour Gold Corp. paced gains among miners as gold and silver prices gained amid a rout in emerging-market currencies that spurred demand for the precious metals.

The Standard & Poor’s/TSX Composite Index decreased 44.56 points, or 0.3 percent, to 13,643.10 at 4 p.m. in Toronto. The slump trimmed the gauge’s advance this year to 0.2 percent.

Trading in S&P/TSX stocks was 12 percent higher than the 30-day average.

“There seems to be mixed signals in how investors should react to emerging markets and violent currency movements,” Barry Schwartz, a fund manager with Baskin Financial Services Inc., said in a phone interview from Toronto. His firm manages C$600 million ($538.1 million). “There’s a debate to whether the Fed will taper or not taper. None of the economic data is concerning, so our feeling is once again, stocks should react to earnings.”

The Fed today announced plans to press on with another $10 billion reduction in monthly bond purchases intended to speed a recovery from the worst recession since the Great Depression.

A Bloomberg gauge tracking 20 emerging-market currencies fell to the lowest since April 2009 today even as central banks from South Africa to Turkey tightened monetary policy to bolster their currencies.

Gold for April delivery rose the most in a week, while silver futures advanced 0.3 percent.

Six of 10 main industries in the index retreated. Energy and financial stocks fell at least 0.7 percent, contributing the most to the index’s slide.

CGI plunged 5 percent to C$33.47, the lowest since September. The information-technology company that worked on the Obamacare health exchange software reported first-quarter adjusted earnings of 65 Canadian cents per share, less than analysts’ profit estimates of 70 Canadian cents per share.

AGF slid 6.3 percent to C$11.63 for a sixth day of losses that left the stock at its lowest since July. The investment- management firm reported fourth-quarter earnings of 11 Canadian cents per share, less than the 12 Canadian cents per share analysts forecast.

Air Canada tumbled 6 percent to C$7.17. The carrier’s shares have lost 28 percent in five days of declines. The stock was the best performer on the S&P/TSX in 2013, soaring 323 percent.

Raw-materials producers gained 1.7 percent and an index of gold miners added 3.8 percent to the highest level since September. Detour soared 14 percent to C$7.25 and Barrick Gold Corp. jumped 4.2 percent to C$21.83, the highest since June.

Silvercorp Metals Inc. increased 6.2 percent to C$3.07 to pace gains among producers of the metal.

USA

By Nick Taborek

Jan. 29 (Bloomberg) — U.S. stocks sank, dragging benchmark indexes to the lowest levels since November, amid disappointing earnings forecasts and the Federal Reserve’s plan to reduce stimulus even amid turmoil in emerging markets.

Yahoo! Inc. slumped 8.7 percent, the most since July 2009, as its sales forecast signaled slowing growth. Boeing Co. retreated 5.3 percent for its worst drop in more than two years after its 2014 profit forecast trailed analysts’ estimates amid a slowing pace of jet orders. Dow Chemical Co. jumped 3.9 percent after stepping up its dividend and share-buyback plan.

The Standard & Poor’s 500 Index lost 1 percent to 1,774.20 at 4 p.m. in New York, wiping out yesterday’s advance and sending the benchmark gauge lower for the fourth time in five days. The Dow Jones Industrial Average dropped 189.77 points, or 1.2 percent, to 15,738.79 today. About 7.8 billion shares changed hands in the U.S., 26 percent above the three-month average.

“The emerging markets have been weak now for quite some time, but the drama has heightened really in the past few days,” Erik Davidson, the San Francisco-based deputy chief investment officer for Wells Fargo Private Bank, which oversees $170 billion, said by phone. “It would be out of sorts for the Fed to react on such a short-term news development.”

Stocks extended early losses as Fed policy makers pressed on with another $10 billion reduction in the monthly bond purchases intended to speed a recovery from the worst recession since the Great Depression. Some officials have expressed concern that the Fed’s record $4.1 trillion balance sheet could help create asset-price bubbles.

“Labor market indicators were mixed but on balance showed further improvement,” the Federal Open Market Committee said today in a statement following a two-day meeting in Washington that was the last for Chairman Ben Bernanke, who will be succeeded by Vice Chairman Janet Yellen on Feb. 1. “The unemployment rate declined but remains elevated.”

The Fed this month began paring the purchases by $10 billion a month to $75 billion. The reductions announced today will reduce the pace to $65 billion.

Three rounds of Fed monetary stimulus helped the S&P 500 rise as much as 173 percent from a 12-year low in 2009. The U.S. stock benchmark rallied 30 percent last year, the most since 1997. While the index reached an all-time high of 1,848.38 on Jan. 15, it has slumped 4 percent since then.

Speculation about Fed policy has caused turmoil in emerging market currencies. The Turkish lira depreciated as much as 2.4 percent today, even after the country more than doubled its key interest rate to stem capital outflows. South Africa’s rand also weakened as an unexpected increase in its benchmark interest rate failed to reassure investors.

Facebook Inc., Boeing and Dow Chemical are among the 25 S&P 500 companies reporting earnings today.

About 77 percent of the S&P 500 companies that have posted earnings this season beat analysts’ projections. Profit at S&P 500 companies probably rose 6.6 percent in the fourth quarter of 2013, and sales increased 2.6 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index rose 9.8 percent today to 17.35. The gauge of S&P 500 options known as the VIX has gained 26 percent this year.

Nine of the 10 main groups in the S&P 500 retreated today as consumer staples companies fell 1.8 percent to pace losses.

Raw-materials suppliers advanced 0.5 percent for the only gain as DuPont Co. rallied 1.9 percent, the most in the Dow.

Yahoo slumped 8.7 percent to $34.89. The company forecast first-quarter sales that signaled slowing growth amid competition from Google Inc. and Facebook. Yahoo’s fourth- quarter net income rose 28 percent to $348.2 million, while net sales slipped to $1.2 billion from $1.22 billion a year ago, the company said.

Boeing slumped 5.3 percent, the most since August 2011, to $129.78. The world’s largest planemaker forecast a profit for 2014 that fell short of analysts’ estimates as the pace of its jet orders slows after the second-highest year in 2013.

AT&T Inc. retreated 1.2 percent to $33.31. The second- largest U.S. wireless carrier forecast 2014 earnings-per-share will grow at a “mid-single-digit” rate, compared with analysts’ estimates for an increase of 7 percent.

McCormick & Co. slid 6.2 percent to $65.30. The manufacturer of spices and flavorings forecast profit below analysts’ estimates, citing a higher tax rate and slower growth in its U.S. business.

Dow Chemical jumped 3.9 percent to $44.73. The largest U.S. chemical maker expanded its 2014 buyback plan to $4.5 billion from $1.5 billion, while raising the first-quarter dividend 16 percent to 37 cents. Fourth-quarter profit excluding one-time items was 65 cents, topping the 43-cent average of 20 estimates compiled by Bloomberg.

DuPont climbed 1.9 percent to $60.71 after a 1.1 percent decline in the previous session. The biggest U.S. chemical maker by market value said yesterday it will repurchase $5 billion of its shares after posting fourth-quarter earnings that exceeded analysts’ estimates.

Medivation Inc. gained 11 percent to $84.29 after saying its prostate-cancer drug Xtandi slowed the disease in a study.

The treatment slowed or stopped cancer growth in 59 percent of patients not on chemotherapy compared with 5 percent of those taking a placebo.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

By education I mean an all-round drawing out of the best in a child and man – body, min, and spirit.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

I am not my body.  My body is nothing without me.

-Tom Stoppard, 1937-

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:

Amanda commented in the Newsletter last night about flight delays lately because of the fog at Victoria airport.  We experienced it firsthand trying to get home Sunday night; arrived at the Seattle airport only to learn the Victoria airport was shut down….everything was tied up so we had to go back to the city, try for Monday morning; no luck, finally in the afternoon.  Gary’s office had to cancel all his patients booked yesterday – we both felt out of sorts – the feeling you get when you’re supposed to be somewhere else.  The opera was superb, but it’s the most expensive Rigoletto we’ve ever seen, with the back and forth and extra night.

We also had to abandon the float plane on Saturday morning because of fog, so we got to see Spinnaker’s new digs at the Victoria airport. Looks great, feels great – we had very good cappuccinos J.   You have to go through security first and you’ll see it on the other side.  The airport is sure expanding.

Seattle is at a fever pitch right now in anticipation of  the Super Bowl next Sunday.  People are dressed in their number 12 Seahawk jerseys; everywhere you go, people are talking about their team and the game.  Signs posted everywhere.  The route to the airport was lined on both sides with fans cheering the bus that carried the team to the airport for their flight to New York on Sunday.   Sunday’s game  should be exciting – the best offence in the league pitted against the best defense in the league.  Not to mention the B’s star quarterback.

Photos of the day

A visitor checks little lemon trees from Portugal at one of the world’s leading horticultural trade fairs, IPM in Essen, Germany. Martin Meissner/AP

A bird sits on a frozen branch in Waterford, Mich. Temperatures dropped to dangerous lows in Michigan, leading to the closure of hundreds of schools. The morning low of 9 degrees below zero at Detroit Metropolitan Airport in Romulus broke the previous record low. With the winds, it felt like 25 to 30 degrees below zero. Eric Seals/Detroit Free Press/AP

Market Closes for January 28^th, 2014

Market  Index	Close	Change
Dow  Jones	15928.56	+90.68    +0.57%
S&P 500	1792.50	+10.94    +0.61%
NASDAQ	4097.961	+14.352    +0.35%
TSX	13687.66	+105.37
		+0.78%

International Markets

Market  Index	Close	Change
NIKKEI	14980.16	-25.57
		-0.17%
HANG  SENG	21960.64	-15.46
		-0.07%
SENSEX	20683.51	-23.94
		-0.12%
FTSE 100	6572.33	+21.67
		+0.33%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.417	2.426
CND.   30 Year Bond	2.987	2.993
U.S.   10 Year Bond	2.7479	2.7479
U.S.   30 Year Bond	3.6717	3.6649

Currencies

BOC Close	Today	Previous
Canadian $	0.89681	0.89992
US   $	1.11507	1.11121
Euro Rate  1 Euro=		Inverse
Canadian   $	1.52431	0.65603
US  $	1.36696	0.73155

Commodities

Gold	Close	Previous
London Gold   Fix	1254.46	1256.82
Oil	Close	Previous
WTI Crude Future	97.41	95.72
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 28 (Bloomberg) — Canadian stocks rose the most in two weeks, following the biggest three-day slide since June, as commodities producers rallied and global equities rebounded.

Thompson Creek Metals Co. and China Gold International Resources Corp. added at least 4.9 percent to pace gains among miners.  BlackBerry Ltd. jumped 3.1 percent after releasing an updated version the operating system for its handsets. First Quantum Minerals Ltd. climbed 2.6 percent after boosting the production target for its Cobre Panama copper mine. Air Canada plunged 12 percent after Bank of America Corp. lowered its rating on the stock.

The Standard & Poor’s/TSX Composite Index increased 105.37 points, or 0.8 percent, to 13,687.66 at 4 p.m. in Toronto. The gauge closed at a three-week low yesterday after falling 2.9 percent since Jan. 22. Trading in S&P/TSX stocks was in line with than the 30-day average at the close.

“This is a little bit of a relief rally on the back of what has been a pretty ugly three days for North America,”  Brian Huen, a fund manager with Red Sky Capital Management Ltd., which oversees C$225 million ($202 million), said by phone from Toronto. “I think all eyes will be on the Fed tomorrow to make sure that nothing strange is going to happen.”

U.S. stocks advanced on corporate earnings from Ford Motor Co. to Pfizer Inc. and data showing consumer confidence rose more than forecast this month. European equities climbed after three days of losses and the MSCI Emerging Markets Index advanced 0.3 percent, after closing yesterday at the lowest level since August.

The U.S. Federal Reserve began a two-day policy meeting to discuss further cuts to its monthly bond buying that has helped propel global equities higher.

All 10 main industries in the S&P/TSX advanced at least 0.1 percent today, with raw-materials producers adding 1.9 percent.  Thompson Creek jumped 6.3 percent to C$3.03 and China Gold rose 4.9 percent to C$3.22.

Energy stocks added 0.7 percent as crude advanced for the first time in three days. Canadian Natural Resources Ltd. jumped 2.6 percent to C$36.30, the highest level since March 2012.

BlackBerry climbed 3.1 percent to C$11.18, halting a three- day slide that had reduced the share price by 9.4 percent. The smartphone maker announced a new software update for its BlackBerry 10 devices.

First Quantum rose 2.6 percent to C$20.36. The mining company raised its estimate of the cost of building the copper mine to $6.43 billion while boosting the production target.

The company forecast annual production of 320,000 metric tons of copper at the mine starting in the first quarter of 2018. The mine’s previous owner had planned to spend about $6.2 billion to produce 266,000 tons annually from 2016.

Air Canada slumped 12 percent, the most since April, to C$7.63. The stock has plunged 21 percent during a four-day losing streak. It was the best performer on the S&P/TSX in 2013, soaring 323 percent.

Bank of America analyst Glenn Engel lowered his rating to underperform, citing a “sharp” depreciation in the Canadian dollar. The loonie fell against the dollar to its lowest level since July 2009.

Engel also cut his recommendation on WestJet Airlines Ltd. The regional carrier’s stock sank 4.1 percent to C$24.83, the lowest level since October.

USA

By Lu Wang and Whitney Kisling

Jan. 28 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from its worst slump since June, as earnings at companies from Pfizer Inc. to D.R. Horton Inc. topped estimates and consumer confidence increased ahead of a Federal Reserve policy meeting.

Pfizer, the world’s biggest drugmaker, advanced 2.6 percent after earnings beat estimates as it cut costs and saw its tax rate fall. An index of homebuilders surged 5.3 percent as D.R. Horton jumped 9.8 percent and a report showed home prices climbed. American International Group Inc. rose 2.5 percent after Bank of America Corp. said it expects the insurer to buy back $10 billion of stock during the next two years. Apple Inc. tumbled 8 percent as iPhone sales trailed estimates.

The S&P 500 rose 0.6 percent to 1,792.50 at 4 p.m. in New York. The Dow Jones Industrial Average climbed 90.68 points, or 0.6 percent, to 15,928.56. About 6.6 billion shares changed hands on U.S. exchanges, 6.8 percent more than the three-month average.

“Earnings looked pretty good,” Dan Veru, the chief investment officer who helps oversee $4.5 billion at Palisade Capital Management LLC, said by phone from Fort Lee, New Jersey.

“The economy is in the process of being self-reinforcing and it can handle the modest amount of tapering we’re planning to do.”

U.S. equities joined a global rebound as European shares recovered from their biggest three-day decline in seven months while the MSCI Emerging Markets Index rose from its lowest level since August.

The S&P 500 lost 3.4 percent in the past three days, the most since June, with emerging-market currencies sinking amid signs China’s economy is slowing. The benchmark gauge rallied 30 percent last year and is up 165 percent from a bear-market low in 2009.

Some 83 S&P 500 stocks had their 14-day relative-strength index below 30 yesterday, the most since November 2012, data compiled by Bloomberg show. RSI measures the degree to which gains and losses outpace each other, and some analysts who watch charts to predict market moves consider a reading lower than 30 as indicating the stock has fallen too far too fast.

“The ride probably will not be as smooth as we have seen in the last couple years,” Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC, which oversees $63 billion, said in phone interview from Philadelphia. “We’ve had a pretty decent pullback here in equity prices.”

The Federal Open Market Committee started its last meeting under Chairman Ben S. Bernanke today. Policy makers said in December that the central bank would begin to pare the pace of its monthly bond buying by $10 billion to $75 billion this month. The Fed will cut purchases by $10 billion at each of the next six FOMC meetings, with the program ending no later than December, according to economists in a Bloomberg News survey conducted Jan. 10.

The Conference Board’s index of consumer confidence rose to 80.7 in January from a revised 77.5 in the prior month, the New York-based private research group said today. The median forecast in a Bloomberg survey of economists called for a reading of 78.

Stock futures briefly erased early gains as a report showed orders for durable goods unexpectedly slumped in December by the most in five months, reflecting a broad-based retreat that raises the risk business investment will cool in early 2014.

AT&T Inc. and Yahoo! Inc. are among S&P 500 companies reporting quarterly results today. Almost 74 percent of the 152 companies that have posted earnings this season beat analysts’ projections. Profit at S&P 500 companies probably rose 6.6 percent in the fourth quarter of 2013, and sales increased 2.3 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index retreated for a second day, sliding 9.3 percent to 15.80. The gauge of S&P 500 options known as the VIX surged 46 percent last week, its biggest gain since May 2010.

Nine out of 10 main industries in the S&P 500 advanced, with financial and health-care stocks rising more than 1.2 percent for the biggest gains.

Pfizer advanced 2.6 percent to $30.42 after posting quarterly profit of 56 cents a share excluding some items. The average analyst estimate was for 52 cents.

An S&P index of homebuilders rallied 5.3 percent, the most since September. Home prices in 20 U.S. cities rose 13.7 percent in November from a year ago, the S&P/Case-Shiller index showed, the biggest 12-month gain since February 2006.

D.R. Horton climbed 9.8 percent, the most in the S&P 500, to $23. The largest U.S. homebuilder by revenue posted earnings that beat analyst estimates as the Fort Worth, Texas-based company raised prices and delivered more homes.

AIG and T. Rowe Price Group Inc. led gains among financial shares. AIG rose 2.5 percent to $48.46 after Bank of America named the stock the top pick among property and casualty insurers for 2014. T. Rowe Price climbed 5.5 percent to $80.70 after the money manager reported fourth-quarter profit that exceeded analysts’ estimates.

Comcast Corp. increased 1.6 percent to $53.35 after people familiar with the matter said the cable company is near a deal to buy assets from Charter Communications Inc. Comcast also reported a 26 percent increase in fourth-quarter profit after adding TV subscribers for the first time in more than six years.

Cliffs Natural Resources Inc., the biggest U.S. iron ore producer, advanced 2.1 percent to $19.81. Casablanca Capital LP, which owns 5.2 percent of Cliffs, said the company’s valuation would rise to $53 if Cliffs spun off foreign assets, doubled its dividend and converted U.S. assets to a master limited partnership to “significantly cut costs.”

Oshkosh Corp., which designs and manufactures specialty trucks and other vehicles, rallied 8 percent to $55.50. The company said replacement demand and earlier orders may indicate a stronger recovery. The company boosted its 2014 earnings forecast to at least $3.40 a share, higher than the average analyst estimate of $3.35, according to data compiled by Bloomberg.

Technology shares sank 0.7 percent for the only loss among 10 S&P 500 groups. Apple slid 8 percent to $506.50, the lowest since October, after reporting that it sold 51 million iPhones in the quarter ended Dec. 28, missing analysts’ estimates for 54.7 million handsets. Apple also projected revenue in the current period may shrink from a year earlier, in what would be the first quarterly sales decline since 2003.

Stagnating growth is adding pressure for the company to release new hit products, be it a television, wearable computer or a way to pay for things with an iPhone. Billionaire activist investor Carl Icahn is betting Apple will deliver, disclosing on Twitter today that he bought another $500 million of Apple shares on top of the $3.6 billion he had as of last week.

Yahoo! Inc. dropped 2.9 percent to $37.10 as of 4:39 p.m. in New York. The company forecast after the close of regular trading first-quarter sales that fell short of some analysts’ estimates as Chief Executive Officer Marissa Mayer struggles to turn user growth at the Web portal into advertising dollars.

Seagate Technology Plc dropped 11 percent to $51.52 in regular trading. It reported second-quarter earnings of $1.32 a share excluding some items, missing the average analyst estimate of $1.39. The maker of disk drives posted sales of $3.53 billion, falling short of the projected $3.56 billion.

Corning Inc. tumbled 6.2  percent to $17.10 after projecting price declines for LCD, the display technology used in televisions and computer monitors.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Man lives in confusion and fear until he discovers the uniformity of the law in nature;

until then the world is a stranger to him.

And yet, the law discovered is only the perception of the harmony between reason,

which is the soul of man, and the play of nature.

It is the bond that unites man to the world he lives in.

When he discovers it, man feels an intense joy, because he realizes himself in his environment.

To understand this is to find something to which we belong,

and it is the discovery of ourselves outside ourselves that gives us joy.

Rabindranath Tagore, 1861-1901

 

Carolann

 

Be yourself.  The world worships the original.

–Ingrid Bergman, 1915-1982

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:

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

Do you have a trip planned and are leaving in the next couple of days?  Airports are urging passengers to check victoriaairport.com for real-time arrivals and departures and follow-up with their respective airlines in the event of delays or cancellations due to the fog we have been getting over the past few days.  Heavy fog blanketing the Capital Region this morning is causing havoc at Victoria International Airport, causing several delays and cancellations. Early morning flights beginning at 6 a.m. were cancelled to Seattle, San Francisco, Vancouver, and Calgary. Flights to Kelowna and Toronto have been delayed several hours, according to the airport’s website.  Make sure to touch base with your airline prior to heading to the airport!

Photos of the day

Visitors walk through the medals plaza while the Olympic torch is tested before the start of the 2014 Winter Olympics in Olympic Park in Sochi, Russia. David J. Phillip/AP

People take a walk during a snowfall in Berlin. Tobias Schwarz/Reuters

Market Closes for January 27th, 2014

Market  Index	Close	Change
Dow  Jones	15837.88	-41.23    -0.26%
S&P 500	1781.56	-8.73    -0.49%
NASDAQ	4083.609	-44.564    -1.08%
TSX	13582.29	-135.47
		-0.99%

International Markets

Market  Index	Close	Change
NIKKEI	15005.73	-385.83
		-2.51%
HANG  SENG	21976.10	-473.96
		-2.11%
SENSEX	20707.45	-426.11
		-2.02%
FTSE 100	6550.66	-113.08
		-1.70%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.426	2.399
CND.   30 Year Bond	2.993	2.970
U.S.   10 Year Bond	2.7479	2.7169
U.S.   30 Year Bond	3.6649	3.6350

Currencies

BOC Close	Today	Previous
Canadian $	0.89992	0.90214
US   $	1.11121	1.10848
Euro Rate  1 Euro=		Inverse
Canadian   $	1.51927	0.65821
US  $	1.36722	0.73141

Commodities

Gold	Close	Previous
London Gold   Fix	1256.82	1270.07
Oil	Close	Previous
WTI Crude Future	95.72	96.68
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 27 (Bloomberg) — Canadian stocks declined a third day, with the benchmark index erasing a gain for the year, as financial shares retreated and commodities producers slumped with oil and metals prices.

Bank of Montreal sank 2.1 percent after F&C Asset Management Plc said it’s in talks to be bought by the Canadian lender. Horizon North Logistics Inc. plunged 12 percent after the oil services provider reported a drop in preliminary fourth- quarter earnings. Pacific Rubiales Energy Corp. lost 4.2 percent as the price of crude fell a second day.

The Standard & Poor’s/TSX Composite Index decreased 135.47 points, or 1 percent, to 13,582.29 at 4 p.m. in Toronto. The gauge closed at a three-week low after plunging 2.9 percent since Jan. 22, the biggest three-day slide since June. The index has fallen 0.3 percent this year after rising as much as 2.7 percent earlier in January.

“We’ve had strong markets for a while so we’re due for a checkback,” Jeff Young, chief investment officer at NexGen Financial Corp., said in a phone interview. The Toronto-based firm manages about C$900 million ($815 million). “Financials seem to be the big culprit here. The global markets certainly don’t help. The S&P/TSX is certainly impacted by global growth and more so by emerging markets growth than the U.S.”

Emerging-market stocks have had the worst start to a year since 2009 and currencies from Turkey to South Korea tumbled amid signs growth is slowing in China as the Federal Reserve prepared to review further stimulus cuts this week.

The MSCI Emerging Markets Index slid 1.8 percent, extending this year’s decline to 7 percent.

The Bloomberg Nanos Canadian Confidence Index fell for the second straight reading as optimism about the economy waned during a week where the nation’s currency depreciated to the lowest in more than four years. Consumers grew more pessimistic about their personal finances, the national economy and job security, survey data show.

The Canadian dollar depreciated to the lowest in 4 1/2 years against its U.S. counterpart on Jan. 22 after the Bank of Canada kept its benchmark interest rate unchanged and said the strength of the currency is hurting exporters.

Nine of 10 main industries in the index retreated at least 0.3 percent, on trading volume that was 4 percent above the 30- day average.

Financial stocks, which account for 34 percent of the benchmark index for Canadian equities, dropped 1.5 percent today for a third day of declines. The group of banks and insurers has fallen 3.3 percent this year after rallying 19 percent in 2013.

Bank of Nova Scotia sank 2.2 percent to C$61.69, a three- month low. Royal Bank of Canada lost 1.3 percent to C$69.38, the lowest since Dec. 18.

Bank of Montreal fell 2.1 percent to C$70.46, the lowest this year. Canada’s fourth-largest lender by assets offered about 697 million pounds ($1.2 billion) for F&C Asset Management, the London-based money manager said in a statement today.

Energy stocks declined 0.9 percent as a group as oil dropped for a second day. Pacific Rubiales plunged 4.2 percent to C$16.50, the lowest level since February 2010. TransGlobe Energy Corp. retreated 4.8 percent to C$8.82.

Horizon North plunged 12 percent to C$7.24, the lowest since September. The company reported that preliminary fourth- quarter earnings excluding some items dropped as much as 65 percent from the prior quarter. Revenue for the Calgary-based oil-and-gas service provider decreased as much as 40 percent in the same period.

Raw-materials producers in the benchmark index slid 1.3 percent as copper capped its longest slump in five months.

Turquoise Hill Resources Ltd. fell 2.3 percent to C$3.89.

The S&P/TSX Gold Index lost 2.5 percent, the biggest drop this year. China Gold International Resources Corp. tumbled 6.7 percent to C$3.07 and NovaGold Resources Inc. slipped 6.1 percent to C$3.21. B2Gold Corp. dropped 4.9 percent to C$2.54.

Hudson’s Bay Co. rose 1.2 percent to C$16.34, erasing an earlier drop of 3.9 percent. The retailer announced it will sell its Toronto location for C$650 million in a sale and leaseback transaction. Proceeds of the transaction will be used to reduce debt and invest in growth initiatives, Hudson’s Bay said.

USA

By Whitney Kisling and Lu Wang

Jan. 27 (Bloomberg) — U.S. stocks fell, following the worst week since 2012 for benchmark indexes, as concern over Federal Reserve plans to cut stimulus and an economic slowdown in China tempered gains in industrial shares.

Visa Inc., Microsoft Corp. and Goldman Sachs Group Inc. slumped more than 1.7 percent, leading declines among large companies. Google Inc. and Facebook Inc. paced losses in technology stocks. Caterpillar Inc. jumped 5.9 percent after announcing a stock buyback and forecasting earnings above analysts’ estimates amid demand for construction equipment.

The Standard & Poor’s 500 Index slipped 0.5 percent to 1,781.56 at 4 p.m. in New York after tumbling 2.6 percent last week. The Dow Jones Industrial Average lost 41.23 points, or 0.3 percent, to 15,837.88. Both gauges closed at the lowest levels since mid-December. About 8 billion shares changed hands on U.S. exchanges, 30 percent more than the three-month average.

“I don’t think the emerging market story has played out yet,” Wayne Lin, a portfolio manager at Baltimore-based Legg Mason Inc., which oversees $680 billion, said in a phone interview. “The big question is, is it the beginning of another macro event, or is it just people worried about losing their profits and selling off? People are evaluating whether or not markets are as safe and steady as they have been.”

The S&P 500 sank the most since June 2012 last week as a sell-off in developing-nation currencies spurred concern global markets will become more volatile. The decline pushed the index below its average price in the past 50 days for the first time since October. The threshold is currently about 1,813. The S&P 500 today extended its 2014 retreat to 3.6 percent. The Dow is down 4.5 percent for the year.

Emerging-market stocks are off to the worst start to a year since 2009 and currencies from Turkey to South Korea have tumbled amid signs growth is slowing in China and as the Fed prepares to review further stimulus cuts this week.

The central bank, which starts a two-day meeting tomorrow, decided at its December gathering to begin cutting its monthly bond purchases by $10 billion to $75 billion.

The meeting is the last for Chairman Ben S. Bernanke, as Janet Yellen takes over starting Feb. 1. The Fed stimulus has helped fuel a five-year bull market that has pushed the S&P 500 higher by 165 percent.

Fed officials have been scrutinizing economic data to determine the timing and pace of any reductions to their stimulus. A Commerce Department report today showed that sales of new homes in the U.S. fell more than forecast in December, ending the industry’s best year since 2008 on a sour note.

Eight companies in the S&P 500 were scheduled to report their financial results today. Of the 125 companies in the benchmark that posted earnings so far this season, 74 percent have beaten analysts’ estimates for profit and 68 percent have exceeded projections for sales, according to data compiled by Bloomberg.

Companies in the S&P 500 probably increased their earnings per share by 6.6 percent in the fourth quarter of 2013 and their revenue by 2.6 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index slid 4 percent to 17.42 today, retreating from the highest level since October. The gauge of S&P 500 options known as the VIX surged 46 percent last week, its biggest gain since May 2010.

“The market is volatile and it just feels like a lot of scared buyers are out there,” Sandy Villere III, a New Orleans- based fund manager at Villere & Co., said in a phone interview.

His firm oversees $3.2 billion. “We don’t see a major pullback. Earnings are largely pretty good and the U.S. is generally healthy.”

Villere said his firm is considering buying some technology, industry and retailer shares after raising cash to a maximum 15 percent at some of the funds at the end of last year.

Seven out of 10 S&P 500 industry groups declined today as technology and health-care companies fell the most, sliding at least 0.8 percent as a group. A gauge of industrial shares added 0.2 percent for the best performance.

Visa, the world’s biggest bank-card network, declined 2.3 percent to $216.22. Microsoft, the largest software developer, slipped 2.1 percent to $36.03. Goldman Sachs lost 1.8 percent to $164.69.

Liberty Global Plc slipped 2.2 percent to $81.42 after the company controlled by billionaire John Malone agreed to take over Dutch broadband provider Ziggo NV for 4.9 billion euros ($6.7 billion). Liberty will combine Ziggo’s 2.7 million customers with its UPC cable unit as it competes with Dutch carrier Royal KPN NV.

The Nasdaq-100 Index declined 0.9 percent, trimming a loss of 1.7 percent earlier. Google slipped 2 percent to $1,101.23 while Facebook, the world’s largest social network, dropped 1.7 percent to $53.55. Both companies are scheduled to report results later this week.

Xerox Corp. dropped 5.6 percent to $10.61. The photocopier pioneer was cut to market perform from outperform at BMO Capital Markets by equity analyst Keith Bachman, who said the stock’s valuation already reflected the company’s improved services and technology mix.

Apple Inc., the most-valuable company in the world, climbed 0.8 percent to $550.50 in regular trading before the company reported fiscal first-quarter results. The shares sank 6.3 percent in extended trading at 4:35 p.m. in New York after the company’s second-quarter revenue forecast of $42 billion to $44 billion trailed the average analyst estimate of $46.10 billion.

Caterpillar rallied 5.9 percent to $91.29 after saying it will spend $10 billion buying back shares. The company also reported earnings of $1.54 a share, exceeding the average analyst estimate of $1.27, data compiled by Bloomberg show.

Construction equipment demand is helping Caterpillar to limit the damage from the slump in orders from mining companies that followed a decline in commodity prices.

Merck & Co. advanced 1.1 percent to $52.53. The second- largest U.S. pharmaceuticals company was raised to overweight, an equivalent of buy, from underweight by Morgan Stanley on expectations that cancer drugs will help Merck boost sales.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“The main purpose of life is to live rightly, think rightly, act rightly. The soul must languish when we give all our thought to the body.”
Mahatma Gandhi

 

As ever,

 

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

 

Dear Friends,

Tangents:

I was happy to receive so much feedback from you on Armagnac after my comments in my newsletter last night.  I guess I’m in the minority – I didn’t realize how popular it is!  One of my clients who lives in Ottawa sent me an email, well, in her words, she’s “an Armagnac fan and during the winter months, I usually have one every evening!  I buy ‘Armagnac de Montal’ (more recent than 1961!) which we can get in Ottawa for about $58.00 a bottle.  Lovely!”

We’re off to see Seattle opera’s performance of Rigoletto this weekend….glad I converted those C$ to U$ when we were at par – not so long ago.  I’m also happy speaking with all my clients these days, telling them what their US$ RRSPs and RRIFs are worth in $C.

It’s hard to believe that today is the 30^th anniversary of the unveiling of apple’s first McIntosh.   One of my clients told me today that he remembers its unveiling during a commercial during the Superbowl that year.  You can still watch it on Youtube.  Just go to Youtube.com and search Mac 1984 superbowl ad.

Photos of the day

Revelers wear costumes as they stretch whilst welcoming others to Morning Glory, at a venue in Hackney, London, January 22nd. Morning Glory is a nightclub which operates once a month from 6:30 to 10:30 am, at which revelers drink fruit smoothies, coffee and dance to high energy music, sometimes in their sleepwear. Andrew Winning/Reuters

Irving Finkel, curator in charge of cuneiform clay tablets at the British Museum, poses with the 4,000-year-old clay tablet containing the story of the Ark and the flood during the launch of his book ‘The Ark Before Noah’ at the British Museum in London. The book tells how he decoded the story of the Flood and offers a new understanding of the Old Testament’s central narratives and how the flood story entered into it. Sang Tan/AP

Market Closes for January 24^th, 2014

Market  Index	Close	Change
Dow  Jones	15879.11	-318.24    -1.96%
S&P 500	1790.29	-38.17    -2.09%
NASDAQ	4128.172	-90.703    -2.15%
TSX	13717.76	-215.21
		-1.54%

International Markets

Market  Index	Close	Change
NIKKEI	15391.56	-304.33
		-1.94%
HANG  SENG	22450.06	-283.84
		-1.25%
SENSEX	21133.56	-240.10
		-1.12%
FTSE 100	6663.74	-109.54
		-1.62%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.399	2.409
CND.   30 Year Bond	2.970	2.986
U.S.   10 Year Bond	2.7169	2.7772
U.S.   30 Year Bond	3.6350	3.6821

Currencies

BOC Close	Today	Previous
Canadian $	0.90214	0.90060
US   $	1.10848	1.11037
Euro Rate  1 Euro=		Inverse
Canadian   $	1.51610	0.65959
US  $	1.36773	0.73114

Commodities

Gold	Close	Previous
London Gold   Fix	1270.07	1263.97
Oil	Close	Previous
WTI Crude Future	96.68	97.37
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 24 (Bloomberg) — Canadian stocks fell a second day, with the benchmark index dropping the most in seven months, as concern that a slowdown in China will hurt economic growth triggered a rout in global equities.

Thompson Creek Metals Co. and HudBay Minerals Inc. sank at least 4 percent to lead a gauge of mining stocks lower. Air Canada dropped 3.3 percent as industrial shares declined. Open Text Corp. soared 11 percent to an all-time high after saying it plans to spend another $3 billion on deals.

The Standard & Poor’s/TSX Composite Index decreased 215.18 points, or 1.5 percent, to 13,717.79 at 4 p.m. in Toronto. The gauge lost 1.2 percent this week after closing Jan. 20 at the highest since April 2011. Trading in S&P/TSX stocks was 16 percent higher than the 30-day average at the close.

“People are concerned that if China starts to weaken they should worry about commodity prices,” Irwin Michael, a fund manager at ABC Funds in Toronto, said in a phone interview. His firm manages about C$850 million ($768 million). “The market was looking for an excuse to check back and they found it with PMI. The China number is just a smokescreen and we believe that the economic numbers will start to improve again.”

Emerging-market shares extended the worst start to a year since 2009, while a measure of European stocks tumbled the most since June and U.S. equities retreated a to a one-month low. The MSCI All-Country World Index declined 1.9 percent, the biggest drop since June.

Data yesterday from China indicated factory output may contract this month, based on a preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics. Prices for industrial metals sank as the data fell below economists’ forecasts. China is the world’s biggest consumer of the metals such as copper and Canada’s second-largest trading partner.

Copper tumbled to a one-month low in New York, while zinc reached a two-week low in London.

Investors also assessed a report from Canada today that showed the nation’s inflation rate last month accelerated less than forecast, reinforcing policy-maker warnings that gains will be sluggish.

Eight of the 10 main industries in the index retreated.  Producers of raw materials plunged 1.9 percent, while energy companies dropped 1.3 percent.

The S&P/TSX Diversified Metals & Mining Index dropped 2 percent for a fourth straight decline, as nine of 10 members in the gauge retreated. Thompson Creek Metals Co. fell 6.7 percent to C$2.80.  HudBay Minerals declined 4 percent to C$8.93 and Capstone Mining Corp. slipped 3.2 percent to C$3.01.

Industrial companies in the S&P/TSX dropped 2.6 percent as Air Canada’s Class B shares decreased 3.3 percent to C$9.23, extending losses for the carrier to almost 5 percent in two trading sessions.

The stock rallied 8 percent on Jan. 22 after the company said its Canadian pension plans are estimated to be in a small surplus position as of Jan. 1.

Open Text soared 11 percent to a record C$110.82. Chief Executive Officer Mark Barrenechea said the business software company is ready to spend $3 billion on acquisitions over the next five years.

Open Text bought GXS Group Inc., a seller of cloud-based software integration services, for $1.17 billion on Jan. 16.  Yesterday, Waterloo, Ontario-based Open Text reported profit and sales that beat analysts’ average estimates and announced a 2-for-1 stock split.

USA

By Nick Taborek

Jan. 24 (Bloomberg) — U.S. stocks sank the most since June, capping the worst week for benchmark indexes since 2012, as a selloff in developing-nation currencies spurred concern global markets will become more volatile.

Caterpillar Inc., General Electric Co. and Boeing Co. slid at least 2.6 percent to pace losses in the Dow Jones Industrial Average. Kansas City Southern plunged 15 percent, the biggest retreat since 2008, after reporting lower-than-estimated earnings. International Game Technology tumbled 15 percent as the maker of slot machines posted first-quarter profit that missed analysts’ projections.

The Standard & Poor’s 500 Index retreated 2.1 percent to 1,790.29 at 4 p.m. in New York to close at the lowest level since Dec. 17. The benchmark index declined 2.6 percent this week. The Dow slid 318.24 points, or 2 percent, to 15,879.11 today. The 30-stock gauge lost 3.5 percent this week. About 8.8 billion shares changed hands on U.S. exchanges, the busiest trading day of the year.

“The volatility of the emerging markets and the currency impacts are affecting U.S. markets,” Eric Teal, who helps oversee $3.5 billion as the chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina, said by phone. “Following the strong gains of last year, I think it’s to be expected that you might have an overreaction here of selling.”

Emerging-market currencies had their worst selloff in five years yesterday as Argentine policy makers devalued the peso by reducing support in the foreign-exchange market. The Turkish lira plunged, Ukraine’s hryvnia sank to a four-year low and South Africa’s rand weakened beyond 11 per dollar for the first time since 2008. China’s banking regulator ordered its regional offices to increase scrutiny of credit risks in the coal-mining industry, said two people with knowledge of the matter, signaling government concern about possible defaults.

Investors are losing confidence in some of the biggest developing nations, extending the rout in currencies that began last year when the Federal Reserve signaled it would slow the pace of its monthly purchases of Treasuries and mortgage bonds.

The S&P 500 fell 0.9 percent yesterday and the Dow dropped to a one-month low after a gauge of manufacturing activity in China unexpectedly contracted.

The MSCI Emerging Markets Index lost 1.5 percent today, extending its decline for the year to more than 5 percent, while Europe’s equity benchmark slid the most since June.

Three rounds of Fed monetary stimulus have helped the S&P 500 rise about 165 percent from a 12-year low in 2009. The U.S. equity benchmark rallied 30 percent to a record last year, the most since 1997. Equities have since pared those gains, with the index down more than 3 percent for 2014.

“You’ve had a massive selloff in these emerging-market currencies,” Nick Xanders, a London-based equity strategist at BTIG Ltd., said by telephone. “Ruble, rupee, real, rand: they’ve all fallen and the main cause has been tapering. A lot of companies that have benefited from emerging-markets growth are now seeing it go the other way.”

The S&P 500 trades at about 15.2 times the estimated earnings of its members, more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Ten companies in the S&P 500, including Procter & Gamble Co. and Bristol-Myers Squibb Co., reported results today. Of the 122 index members that have released earnings so far this season, 74 percent have beaten estimates for profit and 67 percent have exceeded sales projections, according to data compiled by Bloomberg.

Per-share profit for companies in the benchmark probably climbed 6.6 percent in the fourth quarter, while sales increased 2.6 percent, according to analysts surveyed by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, surged the most since April, adding 32 percent to 18.14 today. The gauge rallied 46 percent this week, for the biggest weekly increase since May 2010.

All 10 main S&P 500 groups retreated today. Industrial and materials stocks lost at least 2.7 percent to pace declines.

Boeing sank 3.3 percent to $136.65 and Caterpillar lost 2.6 percent to $86.17, among the biggest declines in the Dow.

Companies whose earnings are most tied to economic swings dropped. The Morgan Stanley Cyclical Index lost 3 percent, the most since April, as Whirlpool Corp. slid 5 percent to $145.68.

An S&P gauge of homebuilders fell 3.4 percent for the steepest decline since August. D.R. Horton Inc. slipped 4.9 percent to $20.88 and PulteGroup Inc. fell 4.1 percent to $18.84.

The Dow Jones Transportation Average, which reached a record yesterday, slid 4.1 percent for the biggest one-day decline since 2011. Delta Air Lines Inc. fell 4.3 percent to $31.11.

Kansas City Southern lost 15 percent to $99.49. The railroad operator reported fourth-quarter profit that missed analysts’ estimates as energy revenue fell 17 percent due to a decline in coal shipments.

International Game Technology tumbled 15 percent to $15.04.  The Las Vegas-based company posted earnings of 25 cents a share, missing the average analyst estimate by 6 cents.

Intuitive Surgical Inc. lost 6.4 percent to $410.76. The maker of a robotic-surgery device said fourth-quarter systems revenue decreased by 23 percent from a year earlier.

Phone, utility and consumer-staples stocks, which have the highest dividend yields among 10 S&P 500 groups, fell less than 1.2 percent, as yields on 10-year Treasuries fell to an eight- week low, boosting the allure of equity income.

Procter & Gamble climbed 1.2 percent to $79.18. The world’s largest consumer-goods maker posted second-quarter profit that topped analysts’ estimates as sales of products such as Pampers diapers rose in emerging markets.

Microsoft Corp. added 2.1 percent, the most in the Dow, to $36.81. Customers flocked to the company’s game consoles and cloud software last quarter, helping sales beat analysts’ projections.

Juniper Networks Inc. rallied 6.6 percent to $27.72 for the biggest gain in the S&P 500. The networking-equipment maker reported sales that exceeded analysts’ estimates. Revenue in the fourth quarter increased 12 percent to $1.27 billion from $1.14 billion a year earlier, the Sunnyvale, California-based company said yesterday in a statement. Analysts had predicted sales of $1.22 billion.

Discover Financial Services climbed 2.8 percent to $53.88. Discover rose the most in three months after reporting profit that beat analysts’ estimates as credit-card spending and loan demand increased.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

Chitragupta, who is supposed to be writing out our deeds in an account book

is no other than the conscious and unconscious parts of our mind.

The Lord of Law, to whom we have to render the account,

is the Soul within us.

Gopla Singh, 1911-1963

As ever,

 

Carolann

 

Life shrinks or expands according

to one’s courage.

-Anaïs Nin, 1903-1977.

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:

We spent an entertaining evening last Thursday night at an “Armagnac Tasting”.  A couple of friends invited us to join them – one of whom loves Armagnac, however she says it is difficult to find  easily in Victoria, so this was going to be a treat.  To be honest, I didn’t even know what Armagnac is, so Karen did a little sleuthing for me before the event. For those who, like me, aren’t well versed on Armagnac, I learned that it is a distinctive kind of brandy produced in the Armagnac region in Gascony, southwest France.  According to Wikipedia, it is distilled from wine usually made from a blend of grapes including Baco 22A, Colombard, Folle blanche and Ugni blanc; the resulting spirit is then aged in oak barrels.  It is the oldest brandy distilled in France, but the overall volume of production is far smaller than Cognac production and therefore is less known outside Europe.  Also, they are for the most part made and sold by small producers, whereas in Cognac production is dominated by big-name brands.

One generous member at the Union Club offered up a sampling of nine different vintages that he had acquired – it turned out to be so much fun.   No prior research was necessary though because the sommelier from Lure Restaurant, Jacques Lacoste, had such a scope of knowledge on the subject  – he is truly amazing.  The tasting included a 1961 Amagnac de Montal that fetches $408/bottle, a 1973 Marie Duffau, a 1973 Domaine D’Ognoas, a 1974 Damblat, a 1975 Marcel Treput, A 1978 Armagnac de Montal, a 1985 Domaine de Baraillon, A 1986 Armagnac du Miquer and a 1993 Armagnac de Montal that can be had for a more reasonable $115/bottle.  All tasted very different – all were good.  Mr. Treput gave a wonderful introduction about the history, the region and even anecdotal comments about t the families who produced the vintages we tasted.

I am now a fan.

Photos of the day

Russian women enjoy a skating rink along a boulevard in Moscow’s Sokolniki Park. Pavel Golovkin/AP

A female leopard runs inside a snow-covered enclosure at Dachigam Wildlife Sanctuary on the outskirts of Srinagar, Indian-Administered Kashmir. Wildlife authorities are making special efforts to provide food to the endangered leopards as they face difficulty in finding vegetation following heavy snowfall. Dar Yasin/AP

Market Closes for January 23^rd, 2014

Market  Index	Close	Change
Dow  Jones	16197.35	-175.99    -1.07%
S&P 500	1828.46	-16.40    -0.89%
NASDAQ	4218.875	-24.125    -0.57%
TSX	13932.97	-55.23
		-0.39%

International Markets

Market  Index	Close	Change
NIKKEI	15695.89	-125.07
		-0.79%
HANG  SENG	22733.90	-348.35
		-1.51%
SENSEX	21373.66	+35.99
		+0.17%
FTSE 100	6773.28	-53.05
		-0.78%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.409	2.487
CND.   30 Year Bond	2.986	3.050
U.S.   10 Year Bond	2.7772	2.8619
U.S.   30 Year Bond	3.6821	3.7577

Currencies

BOC Close	Today	Previous
Canadian $	0.90060	0.90151
US   $	1.11037	1.10926
Euro Rate  1 Euro=		Inverse
Canadian   $	1.52033	0.65775
US  $	1.36924	0.73033

Commodities

Gold	Close	Previous
London Gold   Fix	1263.97	1236.83
Oil	Close	Previous
WTI Crude Future	97.37	96.78
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 23 (Bloomberg) — Canadian stocks declined, led by technology, financial and health-care shares, after a measure of China’s manufacturing contracted. Mining companies gained after gold reached a two-month high.

BlackBerry Ltd. dropped 3.1 percent after yesterday reaching the highest price since September. Penn West Petroleum Ltd. retreated 4 percent, bringing its loss this week to 14 percent. Gold mining stocks soared 3.1 percent as a group with OceanaGold Corp. and China Gold International Resources Corp. jumping more than 5 percent.

The Standard & Poor’s/TSX Composite Index decreased 55.23 points, or 0.4 percent, to 13,932.97 at 4 p.m. in Toronto after earlier rising above 14,000 for the first time since May 2011.

The gauge is about 2.4 percent lower than a three-year high of 14,270.53 in April 2011. Trading in S&P/TSX stocks was 8 percent higher than the 30-day average at the close.

“Investors are letting the market take a pause,” Bob Decker, a fund manager with Aurion Capital Management Inc. who helps manage about C$6 billion ($5.7 billion), said by phone from Toronto. “There’s a general wait-and-see attitude. Other than gold stocks mitigating the decline, we’re seeing a negative tone in the equity markets.”

Chinese factory output may shrink this month, a preliminary survey from HSBC Holdings Plc and Markit Economics indicated today as the People’s Bank of China injected more funds to the financial system to ease a cash shortage. In the U.S., applications for unemployment benefits rose in the latest week.

The S&P/TSX has advanced 2.3 percent this year for the 10th best performance among 24 developed markets tracked by Bloomberg. The gauge trades for about 18.4 times its companies’ reported earnings, the highest valuation in almost three years.

The Canadian index is starting the year off stronger than the S&P 500 Index, the U.S. benchmark gauge, for the first time since 2009. The S&P 500 is down 1.1 percent this year, more than the MSCI All-Country World Index’s 1 percent decline.

The Canadian dollar, the worst performer among the Group of 10 countries in the past six months, slid 0.8 percent to C$1.1174 per U.S. dollar, the weakest level since July 2009.

Global stocks fell today as a survey from HSBC Holdings Plc and Markit Economics signaled that Chinese factory output may contract this month. The preliminary reading of 49.6 for the Purchasing Managers’ Index compared with a final figure of 50.5 in December and a 50.3 median estimate of 19 analysts in a Bloomberg survey.

Canadian retail sales in November increased 0.6 percent to C$41.0 billion ($36.8 billion), Statistics Canada said today in Ottawa, three times faster than the 0.2 percent median of a Bloomberg survey with 18 responses. Motor vehicle and parts sales rose 1.2 percent to C$9.63 billion in November as an early onset of winter boosted demand for seasonal items, Statistics Canada said.

Nine of the 10 main industries in the index retreated.

Health-care companies dropped 1.2 percent, while technology, financial and consumer-staples stocks lost at least 0.5 percent.

Producers of raw materials advanced 1 percent.

Manulife Financial Corp. rose 1.9 percent to C$21.80 and Alaris Royalty Corp. slipped 1.8 percent to C$26.51. Home Capital Group Inc. decreased 1.6 percent to C$78.75.

BlackBerry dropped 3.1 percent to C$11.59. Yesterday, the smartphone maker jumped to the highest level since September after it disclosed plans to sell most of its Canadian real estate for cash.

Penn West lost 4 percent to C$7.89. Yesterday, the oil and gas explorer fell to the lowest level since 1999 after AltaCorp Capital Inc. analyst Jeremy McCrea said Penn West may have a higher risk of missing expected production rates.

RBC Capital Markets analyst Greg Pardy said yesterday the company should divest assets with “modest” output to improve its balance sheet.

The S&P/TSX Gold Index increased 3.1 percent as OceanaGold jumped 9.7 percent to C$2.14 and China Gold International Resources Corp. surged 5.7 percent to C$3.36, leading gains among mining stocks in the gauge. Pretium Resources Inc. climbed 2.1 percent to C$6.97 and NovaGold Resources Inc. rose 4.5 percent to C$3.46.

Gold futures for February delivery rose 1.9 percent to $1,262.30 an ounce in New York. Earlier, the price of gold touched $1,267.10 an ounce, the highest level since Nov. 20.

Agnico Eagle Mines Ltd. increased 7.2 percent to C$33.91, the highest level since August. Sterne, Agee and Leach Inc. analyst Michael Dudas raised the gold producer’s rating to buy from neutral with a 12-month price target of $38 a share.

USA

By Nick Taborek and Nikolaj Gammeltoft

Jan. 23 (Bloomberg) — U.S. stocks fell, with the Dow Jones Industrial Average tumbling to a one-month low, after a gauge of China’s manufacturing contracted and investors analyzed corporate earnings.

Cliffs Natural Resources Inc. slipped 4.3 percent, following European commodity producers lower. JPMorgan Chase & Co. and American Express Co. slid at least 1.9 percent to pace losses among financial firms. American Eagle Outfitters Inc. lost 7.8 percent after saying its chief executive officer is leaving. Netflix Inc. surged 16 percent as it projected customer growth that topped analysts’ estimates.

The Standard & Poor’s 500 Index declined 0.9 percent to 1,828.46 at 4 p.m. in New York. The Dow lost 175.99 points, or 1.1 percent, to 16,197.35. About 7.4 billion shares changed hands on U.S. exchanges, 22 percent above the three-month average.

“U.S. equities were at the intersection of full valuations and increasingly positive sentiment and that combination has made them vulnerable to less than perfect news,” Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC, which oversees $63 billion, said in a phone interview. “We set the stage this morning with the data from China for the market to be a little bit nervous and the data points from the U.S. didn’t help to stem that anxiety.”

The S&P 500 has fallen 1.1 percent for the year while the Dow has tumbled 2.3 percent, after the broader gauge jumped 30 percent to a record last year, the most since 1997. Three rounds of Federal Reserve monetary stimulus have helped the S&P 500 rise 170 percent from a 12-year low in 2009.

The rally has boosted equity valuations to near the highest level since 2009. The S&P 500 trades at 15.5 times the estimated earnings of its members, more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Data today showed applications for U.S. unemployment benefits held near a six-week low, showing firings remain muted following the holidays. U.S. house prices advanced 0.1 percent in November from October, slowing growth that indicates the real estate recovery may be losing strength, the Federal Housing Finance Agency said in another report.

Separate releases indicated purchases of previously owned homes climbed in December for the first time in four months, while the index of U.S. leading indicators rose.

Fed officials have been scrutinizing economic data to determine the timing and  pace of any reductions to their stimulus. The central bank, which next meets Jan. 28-29, decided at its December meeting to start cutting its monthly bond purchases by $10 billion to $75 billion.

In China, a report today indicated factory output may contract this month, based on a preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics.

“China has been the growth story for the better part of 10 or 15 years, and all of a sudden we’re starting to see contraction,” Chris Bouffard, chief investment officer of the Mutual Fund Store in Overland Park, Kansas, which oversees $8.5 billion, said in a phone interview. “That’s going to take a while for market participants to get comfortable with.”

The U.S. equities benchmark had gained 0.3 percent in the previous two sessions as investors assessed corporate earnings.

Some 20 members of the index report results today, including Microsoft Corp. and McDonald’s Corp. Of the 109 index members that have released earnings so far this season, 74 percent have beaten estimates for profit and 67 percent have exceeded sales projections, according to data compiled by Bloomberg.

Per-share profit for companies in the index probably climbed 6 percent in the fourth quarter, while sales increased 2.2 percent, according to analysts surveyed by Bloomberg.

The Chicago Board Options Exchange Volatility Index rose 7.2 percent today to 13.77, the highest in three weeks. The gauge of S&P 500 options known as the VIX has gained 0.4 percent this year.

Nine of the 10 main groups in the S&P 500 retreated at least 0.3 percent today. Financial stocks dropped 1.7 percent, as JPMorgan Chase fell 1.9 percent to $56.47 and Citigroup Inc. slid 2.3 percent to $50.72. American Express lost 2.2 percent to $89.17 for the biggest loss in the Dow.

Berkshire Hathaway Inc. Class B shares fell 1.5 percent to $113.50. Regulators are starting to scrutinize Warren Buffett’s conglomerate to determine whether it is important enough to the financial system to require Fed supervision, according to two people with knowledge of the matter.

KeyCorp slid 3.3 percent to $13.68. The Cleveland-based bank today said noninterest expenses in the fourth quarter were $712 million, surpassing its guidance of $680 million to $700 million, including one-time charges. Profit rose 21 percent.

Materials producers declined 1.5 percent as a group after commodity stocks retreated in Europe. Prices for industrial metals sank as the manufacturing data from China, the world’s biggest consumer, fell below economists’ forecasts.

DuPont Co. fell 2 percent to $61.75. Alcoa Inc., the largest U.S. aluminum producer, dropped 1.2 percent to $12.07.

Cliffs Natural Resources, the biggest U.S. iron-ore producer, dropped 4.3 percent to $20.29, the lowest since October.

Noble Corp. fell 8.6 percent to $33.13 for the steepest decline in the S&P 500. The oil driller said the offshore industry may be due for a cyclical pause. Diamond Offshore Drilling Inc. fell 5.2 percent to $51.88 and Rowan Cos. lost 2.6 percent to $32.78.

American Eagle Outfitters lost 7.8 percent to $13.19 after the teen-apparel retailer said Chief Executive Officer Robert Hanson is leaving the company and Executive Chairman Jay Schottenstein will replace him on an interim basis.

Herbalife Ltd. tumbled 10 percent to $65.92, a two-month low. The nutrition company that hedge fund manager Bill Ackman has accused of being a pyramid scheme fell the most in a year after a U.S. senator called for a probe into the company’s operations.

Zhone Technologies Inc. tumbled 26 percent to $4.62 after the provider of network products for voice, data and video services reported fourth-quarter revenue of $32.3 million, missing an estimate for $32.5 million.

Netflix surged 16 percent to $388.72. The world’s largest subscription streaming service forecast customer growth ahead of analysts’ estimates and saying it may charge new users more to share accounts.

Netflix predicted 2.25 million new domestic subscribers this quarter. The Los Gatos, California-based company also estimated first-quarter profit of $48 million, or 78 cents a share, compared with analysts’ projections of 75 cents.

AT&T Inc. gained 1.4 percent to $33.80 and Verizon Communications Inc. added 1.1 percent to $47.86, as phone stocks were the only group to advance in the S&P 500.

Union Pacific Corp. climbed 3.3 percent to $174.12. The biggest U.S. railroad reported fourth-quarter profit that beat analysts’ estimates after a record corn crop increased shipments of agricultural products. Shipments of automobiles and industrial products also rose.

McDonald’s rose 0.5 percent to $95.32. The world’s largest restaurant chain posted fourth-quarter profit that was little changed from a year earlier even as U.S. same-store sales fell amid shaky consumer confidence and increased competition.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The human voice can never reach the distance

that is covered by the still small voice of conscience.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

The least I can do is speak out for those who cannot

speak for themselves.

-Jane Goodall, 1934-

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:

Thought I’d share with you this interesting article  that I read this morning:

Why do birds fly in a V?

ENERGY SAVINGS, AERODYNAMIC BENEFITS ARE FACTORS, STUDY SHOWS

-by SUDESHNA CHOWDHURY

The reason why some birds fly in a big V is more than just aesthetics, say scientists.  A team led by University of London biologists Steven Portugal and James Usherwood equipped a flock of 14 bald ibises with various measurement devices and monitored the endangered birds as they migrated from Austria to Italy.  The precision of these measurements allowed the scientists to track the relative positioning of the birds in a V, according to the university’s Royal Veterinary College. As the birds flew, the scientists observed them for just over 43 minutes, recording each bird’s position, speed, and direction, according to a press release from the science journal Nature.

Their findings, published in the Jan. 16 issue of Nature, revealed that birds changed their position of flight or flapped their wings in a manner that gave them “the best aerodynamic advantage.”  The ones flying in V formation flapped their wings in phase so that the trailing bird could get an extra lift from the one that was ahead of it, stated the study. Those flying directly behind another bird flapped their wings out of phase to reduce the effects of “detrimental downwash” from the bird ahead of it. It is basically a balancing act, says Dr. Usherwood, who was involved in the study.  “The intricate mechanisms involved in Vformation flight indicate remarkable awareness and ability of birds to respond to the wing path of nearby flock-mates,” said Dr. Portugal.  “Birds in V formation seem to have developed complex phasing strategies to cope with the dynamic wakes produced by flapping wings.”  This behavior also helps conserve energy while flying, says Usherwood, Not all birds fly in V patterns. Only certain species of birds, such as cranes, pelicans, and geese, do. “Birds which fly in V-formation are fairly big,” Usherwood says. “They fly at the same speed and fly large distances. They usually have long wings.”  This study opens the door to further research about how birds can sense the flow of air, says Usherwood. “This can also help us look into how aircraft fly together,” he says.  These findings also show that birds can sense and predict the patterns of air turbulence caused by the other birds in the flock.

Birthday today: poet Lord Byron was born on this day in 1788.

She walks in beauty, like the night

Of cloudless, climes and starry skies;

And all that’s best of dark and bright

Meet in her aspect and her eyes.

–Lord Byron, from She Walks in Beauty, 1815.

Photos of the day

The sun illuminates windblown snow as a man walks under elevated train tracks in Philadelphia. A winter storm stretched from Kentucky to New England and hit hardest along the heavily populated Interstate 95 corridor between Philadelphia and Boston. Matt Rourke/AP

Members of movement Oxford Committee for Famine Relief (Oxfam) put white roses on symbolic gravestones, on the opening day of the Geneva II peace talks on Syria, in Montreux, Switzerland. Representatives of Syrian President Bashar Assad, a divided opposition, world powers and regional bodies started the peace conference. Salvatore Di Nolfi/Keystone/AP

Market Closes for January 22^nd, 2014

Market  Index	Close	Change
Dow  Jones	16373.34	-41.10    -0.25%
S&P 500	1844.86	+1.06    +0.06%
NASDAQ	4243.000	+17.240    +0.41%
TSX	13988.20	+36.43
		+0.26%

International Markets

Market  Index	Close	Change
NIKKEI	15820.96	+25.00
		+0.16%
HANG  SENG	23082.25	+49.13
		+0.21%
SENSEX	21337.67	+86.55
		+0.41%
FTSE 100	6826.33	-7.93
		-0.12%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.487	2.507
CND.   30 Year Bond	3.050	3.057
U.S.   10 Year Bond	2.8619	2.8286
U.S.   30 Year Bond	3.7577	3.7445

Currencies

BOC Close	Today	Previous
Canadian $	0.90151	0.91152
US   $	1.10926	1.09707
Euro Rate  1 Euro=		Inverse
Canadian   $	1.50269	0.66547
US  $	1.35470	0.73817

Commodities

Gold	Close	Previous
London Gold   Fix	1236.83	1241.43
Oil	Close	Previous
WTI Crude Future	96.78	94.99
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 22 (Bloomberg) — Canadian stocks rose for the sixth time in seven days after Bank of Canada governor Stephen Poloz maintained the benchmark interest rate and said the direction of the next move will depend on the economy.

BlackBerry Ltd. climbed 9.9 percent on plans to sell most of its Canadian real estate for cash. Gran Tierra Energy Inc. rallied 10 percent after FirstEnergy raised its rating on the stock. Torex Gold Resources Inc. plunged 5 for a second day of losses after announcing it is seeking to raise C$125 million in a share offering.

The Standard & Poor’s/TSX Composite Index increased 36.43 points, or 0.3 percent, to 13,988.20 at 4 p.m. in Toronto after losing 0.1 percent earlier. The gauge has advanced 2.7 percent this year.

“The market’s just awaiting the earnings picture that begins next week,” John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto, said by phone. The firm manages about C$1 billion ($916.6 million). “The market will probably go quiet until we see some of these numbers. It’s had a good run the last little while and we’re hopeful that with the large commodity content that it has, the world economies are going to do a little better in 2014 than in 2013, and that will be beneficial for our markets.”

Policy makers kept the benchmark rate on overnight loans between commercial banks at 1 percent, where it’s been since September 2010, as expected by all 21 economists in a Bloomberg News survey. The bank’s updated forecast lifted the outlook for 2014 economic growth to 2.5 percent from 2.3 percent and said inflation will be further below target throughout 2014.

The Canadian dollar, or the loonie, lost 1 percent to a four-year low of C$1.1087 per U.S. dollar. The loonie has fallen against all of its 16 major peers this year after Poloz said he’s concerned that inflation is too low.

BlackBerry rallied 9.9 percent to C$11.96. The struggling smartphone maker is working with CBRE Group Inc. to sell vacant properties as well as occupied space it would then lease back from buyers, according to a statement today. The assets cover more than 3 million square feet (280,000 square meters), the amount of office space in the 104-story One World Trade Center skyscraper in lower Manhattan.

Gran Tierra rallied 10 percent to C$8.58. The stock was raised to top pick from market perform by FirstEnergy analyst Darren Engels after the company reported “significant” reserves at its Bretana field in Peru.

Torex Gold plunged 5 percent to C$1.14, extending yesterday’s 9.8 percent decline, after the mining company said it will sell shares at C$1.20 each to finance the development of its El Limon and Guajes projects and for general corporate purposes.

Bombardier Inc. slipped 1 percent to C$3.91. Chief Executive Officer Pierre Beaudoin said the company will not have to raise additional funds this year after delaying delivery of its CSeries narrow-body plane for a fourth time.

The manufacturer delayed its CSeries jetliner again on Jan. 16, saying the aircraft won’t enter commercial service until late next year instead of 2014 because it needs more time for tests.

Penn West Petroleum Ltd. dropped 9 percent to C$8.22. The company may have a higher risk of missing expected production rates, AltaCorp Capital Inc. analyst Jeremy McCrea wrote in note. RBC analyst Greg Pardy said the oil and gas explorer should divest assets with “modest” output to improve its balance sheet.

USA

By Lu Wang

Jan. 22 (Bloomberg) — Most U.S. stocks rose as investors assessed earnings from companies including Norfolk Southern Corp., Coach Inc., International Business Machines Corp.

Norfolk Southern, the second-largest U.S. eastern railroad, climbed 4.8 percent after posting a fourth-quarter profit that exceeded analysts’ estimates. BlackBerry Ltd. rose 8.6 percent as the smartphone maker said it plans to sell most of its Canadian real estate to raise cash for its turnaround plan.

Coach, the largest U.S. luxury handbag maker, slumped 6 percent after sales missed analysts’ estimates. IBM slid 3.3 percent as revenue declined for a seventh consecutive quarter amid weaker demand for servers.

Three stocks rose for every two that declined in the Standard & Poor’s 500 Index. The U.S. equity benchmark added less than 0.1 percent to 1,844.86 at 4 p.m. in New York. The Dow Jones Industrial Average lost 41.10 points, or 0.3 percent, to 16,373.34 for a second day of declines. About 6.3 billion shares changed hands on U.S. exchanges, 3 percent above the three-month average, according to data compiled by Bloomberg.

“Earnings are all that matters,” Dan Morris, who helps oversee about $564 billion as global investment strategist at TIAA-CREF Asset Management in New York, said in a phone interview. “To see the justification for meaningful higher prices, we just need to wait for earnings to catch up and accelerate a bit and that may take a quarter or two.”

Twenty-five companies in the S&P 500 including Northern Trust Corp., Netflix Inc. and EBay Inc. report earnings today.

Of the 86 index members that have posted results so far this season, 70 percent have beaten estimates for profit and 65 percent have exceeded sales projections, according to data compiled by Bloomberg.

Per-share profit for companies in the benchmark probably climbed 6 percent in the fourth quarter, while sales increased 2.2 percent, according to analysts surveyed by Bloomberg.

A five-year rally that lifted the S&P 500 up more than 170 percent from a bear-market low has boosted equity valuations to near the highest level since 2009. The index trades at 15.6 times the estimated earnings of its members, more than the five- year average multiple of 14.1, data compiled by Bloomberg show.

The Dow is diverging from the S&P 500 by the most in more than two years amid weaker results from companies such as Johnson & Johnson and IBM. The average difference between their performance in the past three days has been 0.5 percentage point, the most since October 2011.

“Earnings have been mixed,” David Chalupnik, head of equities at Nuveen Asset Management in Minneapolis, said in a phone interview. His firm manages about $120 billion. “If we as a country, we as a world, stay in the muted economic growth we’ve experienced in the past two years, the market probably can’t support the valuations here. We need better economic numbers and we need earnings to follow that.”

Traders are buying record amounts of options that pay off if the calm that is blanketing markets proves temporary.

Outstanding call options on the Chicago Board Options Exchange Volatility Index has reached a record 8.4 million, exceeding the previous high of 7.7 million in March, according to data compiled by Bloomberg.

The contracts, which expire today, are used by investors as insurance against losses because the VIX usually climbs when equities fall. Investors are positioning for stock swings with more than 180 companies in the S&P 500 getting ready to release quarterly results by the end of next week. The VIX slid 0.2 percent today to 12.84, bringing its decline for 2014 to 6.4 percent.

Energy, consumer-discretionary and industrial stocks rose the most among 10 main industries in the S&P 500, climbing more than 0.2 percent. Telephone and raw-materials companies dropped at least 0.7 percent for the worst performance.

Norfolk Southern jumped 4.8 percent to $92.94. The company’s profit exceeded analysts’ forecast amid higher shipments of chemicals, automotive and agricultural products.

BlackBerry rose 8.6 percent to $10.78. The company said in a statement that it will work with CBRE Group Inc. to sell vacant properties as well as occupied space it will then lease back from the new owners.

Textron Inc. advanced 5.3 percent to $38. The manufacturer of Cessna aircraft said it earned 60 cents a share in the fourth quarter. That beat the average analyst estimate by 1 cent.

Brinker International Inc., which owns Chili’s Grill & Bar restaurants, climbed 6.5 percent to $49.72. The restaurant chain reported second-quarter profit and sales above analysts’ estimates.

Nuance Communications Inc. jumped 7.8 percent to $16.05.

The provider of voice applications to corporate customers said first-quarter preliminary adjusted earnings per share probably amounted to 23 cents to 24 cents, more than the 20-cent average estimate of analysts. The company predicted profit of 18 cents to 21 cents a share in November.

Coach slid 6 percent to $49.38. Revenue for the quarter through Dec. 28 amounted to $1.42 billion, missing the average analyst estimate of $1.48 billion. The maker of luxury accessories posted earnings per share of $1.06, falling short of the $1.11 that analysts had projected.

IBM dropped 3.3 percent to $182.25 for the biggest retreat in the Dow. The world’s biggest computer-services provider said revenue declined to $27.7 billion in the three months through December. Profit dropped at the company’s hardware unit partly because of its x86 server business, according to Chief Financial Officer Martin Schroeter.

Advanced Micro Devices Inc. slumped 12 percent to $3.67 for the biggest drop since October. The maker of processors for personal computers predicted that revenue will be from $1.29 billion to $1.38 billion in the first quarter. The average analyst projection had called for sales of $1.37 billion, according to a Bloomberg survey.

Motorola Solutions Inc. fell 3.9 percent to $64.51. The mobile communications company forecast first-quarter profit below analyst estimates and said it expects sales to decline between 4 percent and 6 percent. Analysts were predicting a 2 percent revenue gain.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

In Sanskrit, one calls the bird twice born.

And this name is also given to the man who submits for at least twelve years

to the discipline of mastering his self and the noble thought, who emerges from it with simple needs,

with a pure heart, and ready to take upon himself all the responsibilities of life

in a broad and disinterested spirit.  One estimates that this man is born again from the blind envelopment

of the ego to the freedom of the life of the soul,

that he has entered into lively connection with his environment,

that he has become one with the Whole.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Now hatred is by far the longest pleasure.  Men love in haste,

but they detest at leisure.

–Lord Byron, 1788-1824.

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:

One of my favorite writers (a frequent contributor to The New Yorker magazine) is Adam Gopnik.  This past weekend I read a recent article he wrote about the new year.

TWO SHIPS

We make the turn toward the new year this January with trepidation.  Well, we make the turn toward every new year with trepidation, but added to the anticipatory jumps this year are what might be called the retrospective willies.  You don’t have to  have a very enlarged sense of history to remember what happened last time Western Civilization sped around the corner from ’13 to ’14.  Not so good.  The year 1913 had been full of rumbling energy and matchless artistic accomplishment – Proust kicking off, the Cubists kicking back, Stravinsky kicking out – and then, within a few months, the Archduke was assassinated in Sarajevo and the troop trains were running and, pretty soon, the whole positive and optimistic and  progressive culture was on its way to committing suicide.  The Great War left more than ten million Europeans dead and a civilization in ruins (and presaged a still worse war to come).  Naturally, a lot of people, staring at this year’s tea leaves – at rising new powers and frightened old ones – are searching for parallels between that ’14 and this one, and finding them.  In the Times recently, the historian Margaret MacMillan pointed out a few, clustering around the folly of “toxic nationalisms” that draw big powers into smaller local disputes, with the Russians trying to play a better hand today in Syria than they played in Serbia a century ago.

Lodged somewhere in our collective memory of that catastrophe is an image, a  metaphor of hubris, from just  a year or so before:  a great four-funnelled ocean liner, the biggest and most luxurious ever built, whose passengers, rich and poor, crowd on board, the whole watched over by a bearded man named Edward John Smith, with the chief designer, Thomas Andrews, along for the maiden voyage, too.  Then the ship sets off from Southampton, sure of itself, unsinkable, until it comes to the ice fields of the North Atlantic, off the coast of Newfoundland – and speeds right on through them to its anchorage, here in New York.  Because this ship isn’t the Titanic but its nearly identical twin sister, the Olympic, made at the same time, by the same people, to do the same job in the same way.  (A single memorable image exists of the two ships in dock together.)  The Olympic not only successfully completed its maiden voyage but became known as Old Reliable, serving as a troop carrier in the First World War, and sailing on for twenty years more. (A third, , late-released liner in the same class, the Britannic, hit a mine in the Aegean, in 1916, while serving as a hospital ship, and sank, a true casualty of war.)

The story of the two ships is one to keep in mind as we peer ahead into the new year.  It reminds us that our imagination of disaster is dangerously more fertile than our imagination of the ordinary.  You have certainly heard of the Titanic; you probably never heard of the Olympic.  We have a fatal attraction to fatality….If our history leads us to the First World War, then we imagine that we were always bound on that collision course, and we cannot imagine that, with a bit of luck and another set of contingencies, we might have been on the Olympic, not the Titanic.  We search for parallels of disaster, and miss parallels of hope.  False positives are the great curs of diagnostic, in historical parallels and prostate screenings alike.

Is it all chance and contingency though?   Do we not know what boat we’re on until the iceberg informs us?  Leafing through recent books on the last encounter with ’14, you find one thing that does seem to have the chill of ice about it.  Even open societies, so to speak, on the open seas of history, are not immune to the appeal to honor and the fear of humiliation.  The relentless emphasis on shame and face, on position and credibility, on the dread of being perceived as weak sounds an icy note through the rhetoric of 1914 – from the moment Franz Ferdinand is shot to the moment the troops are sent to the Western Front.  The prospect of being discredited, “reduced to a second-rate power,” was what drove the war forward.  The German Kaiser kept saying that he would never again allow himself to be embarrassed by the British.  Lloyd George, in London, felt that Britain had to go to war or it would never “be taken seriously” in the councils of Europe.  Needless wars are rushed alone, it seems, by an overcharge of the language of honor and credibility, when the language of common sense and compromise would be a lot more helpful.   When someone says, “Ram the iceberg!  We can’t afford to let it make us look weak,”  it’s time to run for the deck.  Sanity lurks in sailing around the ice.

But then, sanity doesn’t necessarily guarantee safe passage.  Two boats set sail in those prewar years a century ago: the boat that sailed on the boat that sank.  Olympic or Titanic?  Which is ours?  It is, perhaps, essential to life to think that we know where we’re going when we set out –our politics and plans alike depend on the illusion that someone knows where we’re going.  The cold-water truth that the past provides, though, may be that we can’t.  To be a passenger in history is to be unsure until we get to port – or the life boats – and, looking back at the prow of our ship, discover the name, invisible to our deck-bound eyes, that it possessed all alone.  –Adam Gopnik.

Photos of the day

People make use of good weather conditions as they kite surf at Scarborough, on the outskirts of Cape Town, South Africa. Thousands of kite surfers visit the Western Cape each year to practice their sport on pristine beaches. Schalk van Zuydam/AP

People walk and ride on ‘La Promenade des Anglais’, in Nice, southeastern France. Temperatures on the French Riviera reached 14 degrees Celsius (57 Fahrenheit). Lionel Cironneau/AP

Market Closes for January 21^st, 2014

Market  Index	Close	Change
Dow  Jones	16414.44	-44.12    -0.27%
S&P 500	1843.80	+5.10    +0.28
NASDAQ	4225.762	+28.180    +0.67
TSX	13951.77	-38.52
		-0.28%

International Markets

Market  Index	Close	Change
NIKKEI	15795.96	+154.28
		+0.99%
HANG  SENG	23033.12	+104.17
		+0.45%
SENSEX	21251.12	+46.07
		+0.22%
FTSE 100	6834.26	-2.47
		-0.04%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.507	2.491
CND.   30 Year Bond	3.057	3.056
U.S.   10 Year Bond	2.8286	2.8194
U.S.   30 Year Bond	3.7445	3.7480

Currencies

BOC Close	Today	Previous
Canadian $	0.91152	0.91339
US   $	1.09707	1.09482
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48752	0.67226
US  $	1.35591	0.73751

Commodities

Gold	Close	Previous
London Gold   Fix	1241.43	1254.66
Oil	Close	Previous
WTI Crude Future	94.99	94.37
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 21 (Bloomberg) — Canadian stocks fell, after closing yesterday at a more than two-year high, as a drop in gold prices dragged mining companies lower while energy and consumer discretionary shares advanced.

Gold miners slid 0.8 percent as a group with Detour Gold Corp. and NovaGold Resources Inc. decreasing at least 2.6 percent as the metal fell the most in three weeks. Talisman Energy Inc. declined 1.1 percent on reports GDF Suez SA hadn’t placed a bid for the company. Raging River Exploration Inc. rose 3.7 percent after it raised its outlook for fourth-quarter oil production.

The Standard & Poor’s/TSX Composite Index decreased 38.52 points, or 0.3 percent, to 13,951.77 at 4 p.m. in Toronto. The gauge is 2 percent lower than in April 2011, when it climbed to the highest level since 2008. Trading in S&P/TSX stocks was 29 percent higher than the 30-day average at the close.

“There was some good news out of recent earnings reports, especially financials, and that’s given the index a relief rally,” Paul Gardner, portfolio manager at Avenue Investment Management, said by phone from Toronto. He helps manage C$300 million ($290 million). ’’That being said, Canada is under pressure because gold as an underlying commodity is selling out on speculation the Fed may taper sooner rather than later, which will affect gold rates.’’

Gold for immediate delivery fell 1 percent to $1,241.90 an ounce, the biggest loss for the precious metal in three weeks.  Bullion slid 28 percent last year, the most since 1981, as some investors lost faith in the metal as a store of value.

The Canadian dollar weakened to C$1.10 for the first time in more than four years amid speculation the U.S. Federal Reserve will slow its monetary stimulus as the Bank of Canada signals more may be on its way. The Canadian central bank will release a policy statement on rates tomorrow, while the Federal Open Market Committee is scheduled to meet Jan. 28-29.

Canadian factory sales rose to a two-year high in November, while domestic wholesale sales held steady at a record high in the same period, Statistics Canada said today in Ottawa.

Eight of the 10 main industries in the S&P/TSX declined as producers of raw materials slid 0.9 percent. Energy and consumer discretionary companies in the index gained less than 0.1 percent.

The S&P/TSX Gold Index retreated 0.8 percent. Detour dropped 4.7 percent to C$6.30 and NovaGold slipped 2.6 percent to C$3.43.

Argonaut plunged 8.9 percent, the biggest drop since June, to C$5.31. Macquarie Capital Markets analyst Michael Siperco cut the gold producer to neutral from outperform, citing a weaker- than-expected outlook for 2014 and concerns regarding ongoing development projects.

Talisman decreased 1.1 percent to C$12.69. GDF Chief Executive Officer Gerard Mestrallet said at a press conference in Paris that GDF hadn’t bid to buy the Canadian oil and gas producer.

GDF has “no plans” for large acquisitions and development plans outside Europe will be achieved mostly through organic growth, Mestrallet said.

Raging River increased 3.7 percent to C$7.39, an all-time high. The oil explorer reported a 148 percent increase in year- end reserves for 2013 and said fourth-quarter production will be higher than previously forecast.

Capital Power Corp. jumped 3.3 percent to C$22.41, the highest level since May. Scotia Capital Inc. analyst Matthew Akman raised the company to sector outperform from outperform yesterday with a target price of $26 a share.

USA

By Lu Wang and Nick Taborek

Jan. 21 (Bloomberg) — Most U.S. stocks rose as optimism about global economic growth was overshadowed by disappointing results from Johnson & Johnson and Verizon Communications Inc.

J&J declined 1.1 percent, the most in a month, after its earnings forecast trailed analysts’ estimates. Verizon slipped 1.3 percent as subscriber growth slowed from a record. Dow Chemical Co. rallied 6.6 percent after Daniel Loeb’s hedge fund Third Point LLC took a stake. Alcoa Inc. jumped 6.8 percent after JPMorgan Chase & Co. recommended buying the stock.

The S&P 500 gained 0.3 percent to 1,843.80 at 4 p.m. in New York. Three stocks rose for every two that fell in the gauge.

The Dow Jones Industrial Average lost 44.12 points, or 0.3 percent, to 16,414.44. The Russell 2000 Index of small-cap stocks increased 0.6 percent to a record 1,175.72. About 6.8 billion shares changed hands on U.S. exchanges, 12 percent above the three-month average.

“In the short term, continued earnings growth is particularly important,” James W. Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.5 billion from Boston, said by phone. “We are no longer cheap, perhaps not even fairly valued at this point. Investor sentiment is quite optimistic. We need some positive news to get us going.”

Stocks pared early gains today after the S&P 500 approached 1,850, a level that has halted the index’s advance three times in the past month. The benchmark gauge reached an intraday record of 1,850.84 on Jan. 15.

The International Monetary Fund raised its forecast for global growth this year as expansions in the U.S. and U.K. accelerate. The global economy will grow 3.7 percent this year, compared with an October estimate of 3.6 percent, according to the report.

European stocks rose to a six-year high today and Chinese shares led gains in Asia after the country’s money-market rates fell the most in four weeks. The U.S. equities benchmark fell 0.2 percent last week, after touching an all-time high, as weaker-than-estimated earnings at companies from Citigroup Inc. to CSX Corp. offset an improving outlook for the global economy.

For every U.S. company predicting in January that earnings will beat analyst estimates, 2.5 are projecting results that fall short, matching the worst ratio since the rally began in March 2009, according to data compiled by Bloomberg. While analysts say S&P 500 profits will rise 8.8 percent in 2014, that’s almost the same estimate they generated a year ago for 2013, when earnings ended up increasing at about half that rate, the data show.

A five-year rally that lifted the S&P 500 up more than 170 percent from a bear-market low has boosted equity valuations to near the highest level since 2009. The S&P 500 trades at 15.6 times the estimated earnings of its members, more than the five- year average multiple of 14.1, data compiled by Bloomberg show.

Fourteen companies in the S&P 500 including Texas Instruments Inc. and Travelers Cos. report financial results today. Per-share profit for companies in the benchmark probably climbed 6 percent in the fourth quarter, while sales increased 2.2 percent, according to analysts surveyed by Bloomberg.

Of the 62 S&P 500 members that have reported results so far this season, 68 percent have beaten estimates for profit and 66 percent have exceeded sales projections, according to data compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index rose 3.5 percent today to 12.87. The gauge of S&P 500 options known as the VIX is down 6.2 percent this year.

Eight of 10 industries in the S&P 500 gained as utility companies climbed 1.2 percent for the biggest gain. Telephone shares dropped 0.7 percent for the worst performance.

J&J slipped 1.1 percent to $94.03. The world’s biggest maker of health-care products forecast 2014 profit of $5.75 to $5.85 a share, excluding one-time items. The outlook was below the $5.86 average of analysts’ estimates compiled by Bloomberg.

Verizon lost 1.3 percent to $47.70. The second-largest U.S. phone company added 1.6 million monthly subscribers during the fourth quarter, fewer than the record 2.1 million gained a year earlier. The average estimate was for 1.3 million new subscribers, based on a Bloomberg survey of nine analysts.

Travelers Cos. lost 1.7 percent to $85 after the insurer said rates charged to customers renewing their policies increased at a slower pace.

“The larger focus for investors today may be the clear headline pricing deceleration,” Randy Binner, an analyst at FBR Capital Markets, said in a research note. “The declining pricing trend has been a tough one for investors.”

Halliburton Co. slid 1.7 percent to $49.78. The energy services company said North American revenue will rise at a “mid-single digit” growth rate this year. The company in November predicted the expansion at a “high-single digit” pace.

Dow Chemical rallied 6.6 percent to $45.93. Third Point, the hedge fund led by billionaire Loeb, took a stake in the firm, calling for a share buyback and a spinoff of its petrochemicals business to improve profitability.

Third Point’s stake in Dow is the hedge fund’s largest current investment, Third Point said in a letter to investors, a copy of which was obtained by Bloomberg News. Dow should hire external advisers to review its strategy and the potential benefits of a spinoff, Third Point said.

Alcoa advanced 6.8 percent to $12.13. JPMorgan raised its rating on the largest U.S. aluminum producer to overweight, a recommendation similar to buy, from neutral. The brokerage boosted its 12-month price estimate for the stock to $15 from $9 and said increasing premiums and tightening supply will support the company’s earnings growth.

Delta Air Lines Inc. climbed 3.3 percent to a record $32.08 as earnings beat analysts’ estimates, helped by increased holiday travel, higher fares and lower fuel costs.

Chesapeake Energy Corp. advanced 3.9 percent to $26.45. The oil and gas company was raised to buy from neutral at SunTrust Robinson Humphrey Inc., which said Chesapeake has leading positions in three of the best U.S. gas fields and may sell lower-return assets such as its oilfield services unit.

Investors are the most upbeat about the global economy in almost five years, encouraged by the U.S.-led revival of industrialized nations, according to a Bloomberg Global Poll.  Seventy-two percent in the survey of Bloomberg subscribers said the U.S. economy is improving, up from 53 percent a year ago.

Jeff Altman and John Paulson, two of last year’s best- performing hedge-fund managers, are predicting that stocks will continue their rally in 2014 even as the bull market approaches its sixth year. They’re among a number of top money managers betting markets are robust enough to weather a gradual reduction in the pace of the Federal Reserve’s asset purchases as the central bank signaled it will keep interest rates at their current low for the foreseeable future, according to interviews with more than half a dozen investors.

“The wind will continue to be at the markets’ backs with the Fed,” said Altman, head of the $3.2 billion Owl Creek Asset Management LP. He’s betting on telecommunications and aerospace companies, the same industries that helped him gain 49 percent last year, putting him in the top 10 of Bloomberg’s annual hedge fund ranking.

 

Have a wonderful evening everyone.

 

Be magnificent!

The purity of life is the highest and most authentic art to follow.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

A bird doesn’t sing because it has an answer,

it sings because it has a song.

-Maya Angelou, 1928-

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