Author: Carolann

Dear Friends,

Tangents:

Quiet day today in the financial markets, with the US markets closed for Martin Luther King Day….

Two months to the day before he was assassinated, the Rev. Martin Luther King Jr., whose life is marked by a national holiday in the United States today, gave a compelling sermon on what he termed the “Drum Major Instinct.” The sermon was based on a 1952 homily by a Methodist preacher but was adapted to Dr. King’s quest for justice – racial and otherwise.  The drum-major theme is ambition, which is necessary for progress and improvement but can be toxic to the spirit if not contained. Too much of the

instinct to lead the band, he said, can lead to feelings of superiority, which is the animating factor in racial prejudice. Nations, too, can succumb to it, he said, pointedly mentioning the US war in Vietnam.  These were the issues of his time. They go by different names and categories in our time. But the antidote is the same in either case. Greatness, King said, doesn’t mean physical or intellectual power. It is a willingness to serve others: “You don’t have to have a college degree to serve.  You don’t have to make your subject and your verb agree to serve…. You only need a heart full of grace, a soul generated by love.” –by John Yemma.

Photos of the day

President Barack Obama and his daughter Sasha make burritos at DC Central Kitchen as part of a service project in honor of Martin Luther King, Jr. Day, Monday, in Washington. Also helping were first lady Michelle Obama and daughter Malia Obama. Jacquelyn Martin/AP

Members of the Peoples Congregational United Church of Christ chorus sing during a wreath laying ceremony to celebrate the birthday of civil rights leader Martin Luther King, Jr. at the King Memorial in Washington, Monday. Joshua Roberts/Reuters

San Francisco 49ers’ Patrick Willis pauses after the NFL football NFC Championship game against the Seattle Seahawks Sunday, in Seattle. The Seahawks won 23-17 to advance to Super Bowl XLVIII. Marcio Jose Sanchez/AP

Market Closes for January 20^th, 2014

Market  Index	Close	Change
Dow  Jones	16458.56	Closed
S&P 500	1838.70	Closed
NASDAQ	4197.582	Closed
TSX	13990.29	+102.08
		+0.74%

International Markets

Market  Index	Close	Change
NIKKEI	15641.68	-92.78
		-0.59%
HANG  SENG	22928.95	-204.40
		-0.88%
SENSEX	21205.05	+141.43
		+0.67%
FTSE 100	6836.73	+7.43
		+0.11%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.491	2.505
CND.   30 Year Bond	3.056	3.066
U.S.   10 Year Bond	2.8194	2.8194
U.S.   30 Year Bond	3.7480	3.7480

Currencies

BOC Close	Today	Previous
Canadian $	0.91339	0.91220
US   $	1.09482	1.09625
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48419	0.67377
US  $	1.35573	0.73761

Commodities

Gold	Close	Previous
London Gold   Fix	1254.66	1254.05
Oil	Close	Previous
WTI Crude Future	94.37	94.37
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 20 (Bloomberg) — Canadian stocks rose a fifth day to a two-year high, as gold producers advanced in anticipation of rising demand in China and BlackBerry Ltd. led gains among technology stocks.

Barrick Gold Corp. and Detour Gold Corp. rallied at least 4 percent as the price of gold traded near a five-week high in London. Pan American Silver Corp. climbed 2.3 percent to C$14.51. BlackBerry jumped 11 percent for a fourth day of gains.

Osisko Mining Corp. slipped 0.3 percent after the company’s board recommended shareholders reject Goldcorp Inc.’s C$2.6 billion ($2.4 billion) unsolicited bid.

The Standard & Poor’s/TSX Composite Index rose 84.68.19 points, or 0.6 percent, to 13,973.06 at 12:11 p.m. in Toronto, heading for the highest since April 2011. The benchmark equity gauge has risen 2.6 percent this year. U.S. markets are closed today for the Martin Luther King Jr. Day holiday.

“When the U.S. market is closed, Canada can go either way, and today is an up day, continuing the firmness we had last week,” said Irwin Michael, fund manager at ABC Funds in Toronto. His firm manages about C$850 million. “There’s a dose of optimism out there. People who were queasy about gold took their losses in November and December and it’s a fresh year now.”

China, which probably overtook India as the largest user of gold last year, celebrates the Lunar New Year on Jan. 31, when consumers traditionally increase gold purchases.

Chinese gross domestic product expanded 7.7 percent in the fourth quarter, compared with 7.8 percent in the previous three months, the National Bureau of Statistics said today. Industrial production rose 9.7 percent in December, short of a 9.8 percent median forecast of analysts and a 10 percent gain in November, the data show.

Raw-materials stocks gained 1.2 percent as a group as all 10 industries in the S&P/TSX advanced. Trading volume was 11 percent lower compared with the 30-day average at this time of day.

Barrick Gold rose 4.6 percent to C$21.56 and Detour Gold rallied 8.1 percent to C$6.68 as the S&P/TSX Gold Index increased 1.6 percent, headed for a two-month high. The gauge has advanced for four days, the longest such streak since August.

Gold for immediate delivery reached as high as $1,260.07 in London, the highest since Dec. 11.

Cameco Corp., a uranium producer, rose 3.3 percent to C$24.89, headed for the highest close in almost two years.

Greg Barnes, an analyst at TD Securities Inc., raised his rating for Cameco to a buy from a hold and increased his price target to C$31 from C$22.

“After three years in the wilderness, we believe that it is time to think about a positive turn in fundamentals for uranium and for Cameco,” Barnes said in the report to clients yesterday.

The stock has 13 buys, six holds and one sell, with a 12- month average price target of C$25.39, according to data compiled by Bloomberg.

Pan American Silver rose 2.5 percent to C$14.53 for a seventh straight daily advance, the longest since September 2012.

BlackBerry soared 10 percent to C$11.01, headed for the highest close since September. The U.S. Department of Defense said it will hook up 80,000 BlackBerrys as well as 1,800 phones and tablets based on Apple Inc.’s iOS and Google Inc.’s Android software at the end of this month.

Bombardier Inc. rose 0.7 percent to C$4.14 after reporting delivery of 238 aircraft in 2013 compared with 233 a year earlier, including 180 business jets versus 179 in 2012.

Osisko Mining slipped 0.5 percent to C$6.44. The company rejected Goldcorp’s offer as too low, and said it’s reviewing other options. Osisko said the bid undervalues its Canadian Malartic mine in Quebec.

Goldcorp on Jan. 13 made a cash-and-stock offer for Osisko including 0.146 Goldcorp shares and C$2.26 in cash per share.

USA

Closed

Have a wonderful evening everyone.

 

Be magnificent!

True morality consists not in following

the well-beaten track,

but in finding out the true path for ourselves

and in fearlessly following it.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

In the end we will remember not the words of our enemies,

but the silence of our friends.

-Martin Luther King, Jr., 1929-1968.

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Ben Franklin was born on this day in 1706.  Around 1730, while he was in his mid-20s, he developed his own self-improvement program, listing 13 virtues that he felt were an important guide for living.  They are:  Temperance, Silence, Order, Resolution, Frugality, Industry, Sincerity, Justice, Moderation, Cleanliness, Tranquility, Chastity, Humility.  Mastering all these virtues at once was “a task of more difficulty than I had imagined,” so he decided to tackle them one at a time.  For most of his life he kept a small journal with a separate page for each virtue, evaluating himself regarding each one daily.  He also focused on one virtue per week, four times per year.  In one edition of Poor Richard’s Almanac, he advised “Be temperate in eating, wine, girls, and cloth, or the Gout will seize your and plague you both.”

So how virtuous was Ben?  Franklin was known to relish his food, womanize, and sometimes dress to impress people.  His food and wine-drinking habits led him to be plagued with the gout for much of his life.  To which he might say, “Search others for their virtues, thy self for thy vices.”  –from Cosmo Doogood’s Urban Almanac.

Photos of the day

A Tribal Tiwa woman participates in a community fishing event as part of Jonbeel festival near Jagiroad, east of Gauhati, India. Tribal communities like Tiwa, Karbi, Khasi, and Jaintia from nearby hills participate in large numbers in the festival that signifies harmony and brotherhood amongst various tribes and communities. Anupam Nath/AP

A couple stand at Lisbon, Portugal’s Portas do Sol ‘Sun Gates’ viewpoint as a ferry crosses the Tagus river during a rainy winter’s day. The area is a popular tourist spot where people can enjoy the view over the old Alfama neighborhood and the river. Francisco Seco/AP

Market Closes for January 17^th, 2014

Market  Index	Close	Change
Dow  Jones	16458.56	+41.55    +0.25%
S&P 500	1838.70	-7.19    -0.39%
NASDAQ	4197.582	-21.106    -0.50%
TSX	13888.21	+56.63
		+0.41%

International Markets

Market  Index	Close	Change
NIKKEI	15734.46	-12.74
		-0.08%
HANG  SENG	23133.35	+146.94
		+0.64%
SENSEX	21063.62	-201.56
		-0.95%
FTSE 100	6829.30	+13.88
		+0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.505	2.529
CND.   30 Year Bond	3.066	3.083
U.S.   10 Year Bond	2.8194	2.8414
U.S.   30 Year Bond	3.7480	3.7699

Currencies

BOC Close	Today	Previous
Canadian $	0.91220	0.91501
US   $	1.09625	1.09288
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48431	0.67371
US  $	1.35399	0.73856

Commodities

Gold	Close	Previous
London Gold   Fix	1254.05	1241.88
Oil	Close	Previous
WTI Crude Future	94.37	93.96
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 17 (Bloomberg) — Canadian stocks rose a fourth day, extending a two-year high, as raw-material producers rallied with higher commodity prices on better-than-projected U.S. housing data.

Torex Gold Resources Inc. and Kinross Gold Corp. gained at least 7.4 percent as gold erased a weekly loss. Pengrowth Energy Corp. rallied 6.4 percent as oil rose to a two-week high. Copper Mountain Mining Corp. added 4.8 percent as copper rose in New York.

The Standard & Poor’s/TSX Composite Index rose 56.63 points, or 0.4 percent, to 13,888.21 at 4 p.m. in Toronto. The benchmark equity gauge has gained 2 percent this year.

“The TSX is based on gold, and gold is popping today,” said Kevin Headland, a fund manager with Manulife Asset Management Ltd., on the phone from Toronto. The firm manages about C$265 billion ($241.6 billion). “I’m not expecting a crazy rally, but it seems we’re turning a corner.”

Raw-materials stocks rose 1.7 percent as a group, the most in the S&P/TSX, as seven of 10 industries advanced. Trading volume was 30 percent above the 30-day average. Of the top 10 advancers in the benchmark equity gauge today, eight were mining stocks including six gold producers.

U.S. industrial production rose for a fifth month in December, capping the strongest quarter since 2010 and indicating manufacturing is helping propel the economy. Output at factories, mines and utilities climbed 0.3 percent after a revised 1 percent increase in November, figures from the Federal Reserve showed today in Washington.

The pace of U.S. home construction dropped less than forecast in December. Housing starts fell 9.8 percent to a  999,000 annualized rate following November’s revised 1.11 million pace, which was the highest since November 2007, the Commerce Department reported today in Washington. The median estimate of 83 economists surveyed by Bloomberg called for 985,000.

Torex Gold jumped 10 percent to C$1.30 and B2Gold Corp. rallied 8.3 percent to C$2.74. Kinross Gold rose 7.4 percent to C$5.22 as the price of gold climbed 0.9 percent to settle at $1,251.90. The S&P/TSX Gold Index gained 4.1 percent, closing at the highest level in more than two months.

Gold gained 0.4 percent this week for a fourth straight advance, the longest weekly streak of gains since August.

Gold traders and analysts are bullish on speculation physical demand will increase. The U.S. Mint has sold 69,000 ounces of American Eagle gold coins in January, compared with 56,000 ounces for all of December and the most since 70,000 ounces sold in May, according to data from the Mint.

Silver Standard Resources Inc. advanced 5.5 percent to C$8.97 and Silver Wheaton Corp. rose 2.7 percent to C$24.49 as silver prices rallied 1.2 percent.

Pengrowth Energy added 6.4 percent to C$7.17, the highest close in 16 months, after Aaron Bilkoski, analyst at TD Securities, raised his rating for the stock to buy from hold.  Pengrowth has seven buys, nine holds and four sells, data collected by Bloomberg show.

Bankers Petroleum Ltd. climbed 2.7 percent to C$4.61 and Advantage Oil & Gas Ltd. rose 3.5 percent to C$4.76. Crude for February delivery rose 0.4 percent to $94.37 in New York, the most in two weeks.

Copper Mountain Mining rose 4.8 percent to C$1.75. Copper posted a 0.5 percent weekly increase, the first in three weeks, on speculation demand will increase as the U.S. economy recovers.

USA

By Nick Taborek

Jan. 17 (Bloomberg) — The Standard & Poor’s 500 Index fell for the 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.

Citigroup and CSX dropped at least 4.4 percent as quarterly results missed analysts’ estimates. Best Buy Co. sank 35 percent after price cuts failed to draw as many holiday shoppers as expected. American Express Co. rallied 2.7 percent as fourth- quarter profit doubled. Beam Inc. jumped 24 percent after Suntory Holdings Ltd. said it will acquire the spirits maker in a $16 billion deal.

The S&P 500 declined 0.2 percent to 1,838.70 for the five- day period. The Dow Jones Industrial Average gained 21.51 points, or 0.1 percent, to 16,458.56 for the week.

“A period of consolidation is in order,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said in a phone interview from Minneapolis. He helps oversee $112 billion. “We’re in a sideways trending market. Earnings are front and center and to that end I think it’s still too early to have a good read on fourth-quarter results.”

Twenty-eight companies in the S&P 500 including Goldman Sachs Group Inc. and Bank of America Corp. reported quarterly earnings during the week. Out of the 52 companies in the gauge that have posted fourth-quarter results so far, 62 percent have exceeded analysts’ profit estimates, and 63 percent have topped revenue 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 percent, according to analysts surveyed by Bloomberg.

Equities also fell during the week amid concern over valuations. The S&P 500 trades at 15.6 times the estimated earnings of its members, near the highest level since 2009 and more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Three rounds of Federal Reserve monetary stimulus helped the S&P 500 rise 172 percent from a 12-year low in 2009. The benchmark index rallied 30 percent last year, the most since 1997.

“We’re asking our clients to rein in their expectations for stock market returns,” Michael Binger, who helps oversee $450 million as senior portfolio manager for Gradient Investments in Arden Hills, Minnesota, said in a phone interview. “This is going to be a more normalized year for stock returns, and by normalized we mean somewhere between five and 10 percent. This year we think that return is going to be driven by earnings growth, not multiple expansion.”

The S&P 500 touched a record on Jan. 15 as the World Bank said it sees improvement in the euro-zone helping the world economy expand 3.2 percent this year, compared with a June projection of 3 percent. Data during the week showed U.S. retail sales rose in December while New York-area manufacturing grew more than forecast.

The Federal Reserve in its Beige Book business survey said that “moderate” growth across most of the country last month was buoyed by gains in holiday spending by consumers, an improving labor market and strength in manufacturing.

“The markets are taking all of this in stride with only minimal declines because in reality the reasons for optimism for the overall economy continue,” Anastasia Amoroso, global market strategist at J.P. Morgan Funds, which oversees about $400 billion, said in a phone interview. “We’ve managed to make this shift from an economy that’s been on life support to an economy that is in a self-sustaining expansion.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, advanced 2.5 percent for the week to 12.44. The gauge has fallen 9.3 percent this year.

Six of 10 main S&P 500 groups retreated for the week, with consumer-discretionary and energy companies dropping at least 1.1 percent to lead declines. Nike Inc. lost 4.6 percent to $73.39 for the worst performance in the Dow.

Best Buy plunged 35 percent, the most since 2000, to $24.43 after U.S. same-store sales fell in the holiday shopping season.

Chief Executive Officer Hubert Joly, in a bid to stop customers from defecting to online rivals such as Amazon.com Inc., has piled on discounts and made permanent a policy of matching competitors’ prices to cut down on the practice known as “showrooming,” when shoppers use Best Buy stores to scout products they later buy online elsewhere.

J.C. Penney Co. fell 11 percent to $6.52 after saying it will close 33 stores and eliminate about 2,000 jobs to help save $65 million a year. The struggling department store-chain is unlikely to recover and may have to dilute shareholders by raising more capital this year, Craig-Hallum Capital Group Ltd. analyst Alex Fuhrman said in a note to clients.

CSX tumbled 5.7 percent to $27.23. The biggest railroad in the eastern U.S. posted profit that trailed analysts’ estimates for the first time in eight quarters as coal shipments declined amid a shift to natural gas.

Citigroup slid 4.5 percent to $52.27 as a slump in bond trading contributed to fourth-quarter results that missed Wall Street estimates. Earnings were marred by a 15 percent drop in fixed-income revenue excluding accounting charges, with adjusted profit down 8 percent in securities and banking, and 16 percent in global consumer banking, Citigroup said.

Financial companies in the S&P 500 lost 0.5 percent for the week, as Goldman Sachs declined 1.2 percent to $176.28 and JPMorgan Chase & Co. retreated 0.7 percent to $58.11.

PNC Financial Services Group Inc. rose 4.4 percent to $82.26. The second-biggest U.S. regional bank posted fourth- quarter profit that beat analysts’ estimates as the lender trimmed expenses and set aside less money for soured loans.

American Express, the biggest credit-card issuer by purchases, advanced 2.7 percent to a record $90.97. A pickup in household wealth and consumer confidence propelled card purchases, boosting fourth-quarter net income to $1.3 billion from $637 million a year earlier.  Visa Inc., the world’s biggest bank-card network, climbed 5 percent to $232.18 for the largest advance in the Dow.

Beam jumped 24 percent to $83.34. Suntory, the Japanese whiskey and beer maker, is seeking to boost overseas growth by gaining brands such as Maker’s Mark whiskey, Jim Beam and Canadian Club liquor. The deal, once completed, will create the world’s third-largest premium spirits company.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

My work will be finished if I succeed in carrying conviction to the human family,

that every man or woman, however weak in body,

is the guardian of his or her self-respect and liberty, and that this defence prevails,

though the world be against the against the individual resister.

Mahatma Gandhi, 1869-1948

 

As ever,

 

Carolann

 

Success isn’t permanent, and failure isn’t fatal.

-Mike Ditka, 1939-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

-from  A Countrywoman’s Notes:

JANUARY

I enjoy patterns, man-made and natural, and as I start looking around me, they are everywhere.  The countryside in winter has tree skeletons silhouetted against the sky – trees without leaves.  One day their background is dark grey, another it is clear blue, but there is always a natural pattern of trunk and branches, a lesson in symmetry with variations.  As the snow slowly melts, man-made patterns, filled with snow, scar the fields where the wheelmarks of tractors crossed the newly sown corn last autumn, sometimes straight, sometimes following the line of the walls or hedgerows.  Then, looking up. you see a thin white line of snow clinging, still frozen, to the telegraph wires and television aerials.  The snow on the tops of walls lasts much longer than on the soil all around.  Look across the countryside and you will find a pattern created by the wall-builders years ago, a random pattern you may think, but as they worked the wall was dictated by the lie of the land, the farmer’s whims and needful boundaries.  The sheep have made their mark too – regular paths that they have walked crossing the hills for generations.  We know man takes great pleasure in creating a sense of order by devising geometric shapes in architecture and gardens but when we see regularity in the world of nature we react with surprise.  Snowflakes through the microscope, or fairy rings – have they happened by accident any more than the concentric circles on the pond when we throw in a stone and disturb its calm?  Sounds have their pattern too.  The repeated rhythmic song of the blackbird, the soft lilt of the woodpigeon, the cuckoo calling – these are more noticeable to our ears than the disorganized twitter of the house sparrows.  Wherever you look or listen there is some pattern to discover, creating rhythm or calm satisfaction…-by Rosemary Verey.

Photos of the day

A car drives away from the Colby Fire in the hills above Glendora, Calif. The fire had scorched 125 acres. Mario Anzuoni/Reuters

An entertainer dressed as Darth Vader from ‘Star Wars’ walks down the corridor to pose for the media during the opening of Lucasfilm’s new animation production facility, the Sandcrawler, in Singapore. Edgar Su/Reuters

Market Closes for January 16^th, 2014

Market  Index	Close	Change
Dow  Jones	16417.01	-64.93    -0.39%
S&P 500	1845.89	-2.49    -0.13%
NASDAQ	4218.688	+3.804    +0.09%
TSX	13831.58	+59.00
		+0.43%

International Markets

Market  Index	Close	Change
NIKKEI	15747.20	-61.53
		-0.39%
HANG  SENG	22986.41	+84.41
		+0.37%
SENSEX	21265.18	-24.31
		-0.11%
FTSE 100	6815.42	-4.44
		-0.07%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.529	2.581
CND.   30 Year Bond	3.083	3.124
U.S.   10 Year Bond	2.8414	2.8912
U.S.   30 Year Bond	3.7699	3.8212

Currencies

BOC Close	Today	Previous
Canadian $	0.91501	0.91271
US   $	1.09288	1.09564
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48770	0.67218
US  $	1.36126	0.73461

Commodities

Gold	Close	Previous
London Gold   Fix	1241.88	1241.42
Oil	Close	Previous
WTI Crude Future	93.96	94.17
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 16 (Bloomberg) — Canadian stocks rose for the seventh time in eight days, extending a two-year high, as a gain in energy and raw-materials shares offset losses at Bombardier Inc. and railroad companies.

Torex Gold Resources Inc. and Eldorado Gold Corp. climbed more than 3.4 percent as the metal’s price advanced. Bombardier dropped 7.7 percent after postponing its CSeries jetliner’s entry into commercial service until 2015, the latest in a series of delays for the aircraft. Canadian National Railway Co. slipped 1.8 percent after CSX Corp., the largest eastern U.S. railroad, missed profit forecasts for the first time in two years.

The Standard & Poor’s/TSX Composite Index rose 59 points, or 0.4 percent, to 13,831.58 at 4 p.m. in Toronto, erasing earlier declines of as much as 0.2 percent. The benchmark equity gauge has rallied 1.7 percent in the past eight sessions.

Trading was 34 percent above the 30-day average.

“Some stocks are doing well in the mining space and that’s encouraging,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. The firm manages about C$1 billion ($916.6 million).

Raw-materials stocks added 1 percent, giving the S&P/TSX Materials Index its ninth advance in 11 trading days this year.  The gauge has rallied 8.2 percent in 2014 after plunging 31 percent last year.

Thompson Creek Metals Co. added 3.5 percent to C$3.27 for a third day of gains. The stock has rallied 38 percent since Jan. 14, after Bank of America Inc. upgraded its rating on the stock.

Torex Gold advanced 8.3 percent to C$1.18 and Eldorado Gold rallied 3.4 percent to C$6.96 as gold futures for February delivery added 0.2 percent to $1,240.20 an ounce.

Allied Nevada Gold Corp. rose 4 percent to C$5.25. The stock has increased for six days, the longest streak since August 2011. Allied Nevada surged as much as 28 percent on Jan. 14 after China Gold Stone Mining Development Ltd. retracted a $779.6 million offer for the company it said was published in error.

Birchcliff Energy Ltd. jumped 11 percent to C$8.43, the biggest gain since October 2011, after the company boosted its 2014 exit production forecast to 37,500 to 39,500 barrels of oil equivalent per day from 36,000 to 38,000 previously.

Raging River Exploration Inc. climbed 6.3 percent to C$7.10 and Baytex Energy Corp. rose 3.5 percent to C$41.45 to pace gains among energy stocks. The S&P/TSX Energy Index rallied 0.8 percent as all but 10 of its 63 members advanced.

Industrial stocks slumped 1.1 percent as a group, the only decline in the S&P/TSX. Bombardier tumbled 7.7 percent to C$4.17, an eight-month low. The Montreal-based company delayed its CSeries jetliner for a fourth time, saying the aircraft needs more time for flight tests.

Canadian National Railway declined 1.8 percent to C$58.64 and Canadian Pacific Railway Ltd. lost 0.4 percent to C$163.52.

CSX, the U.S. railroad, reported net income of 42 cents a share, short of the 43-cent average of 25 analyst estimates compiled by Bloomberg as coal shipments slumped.

Canadian Pacific is scheduled to report fourth-quarter results on Jan. 29, followed by Canadian National on Jan. 30.

U.S. competitors Union Pacific Corp., Norfolk Southern Corp. and Kansas City Southern report next week.

Alamos Gold Inc. plunged 17 percent to C$11.31, the biggest decrease since November 2008, after reporting 2014 gold production will be in the range of 150,000 to 170,000 ounces, short of the 190,000 ounces produced in 2013.

USA

By Lu Wang and Callie Bost

Jan. 16 (Bloomberg) — U.S. stocks fell, after the Standard & Poor’s 500 Index closed at a record yesterday, as Best Buy Co. tumbled and earnings at companies from Citigroup Inc. to CSX Corp. disappointed investors.

Best Buy slumped 29 percent after reporting a drop in U.S. same-store sales during the holiday shopping season. Citigroup and Goldman Sachs Group Inc. led declines among banks after releasing fourth-quarter results. CSX dropped 6.8 percent as profit missed analysts’ forecasts for the first time in two years. Intel Corp. slid 2.6 percent in extended trading after forecasting sales that may fall short of some estimates.

The S&P 500 lost 0.1 percent to 1,845.89 at 4 p.m. in New York, dragging the gauge lower for the year. The Dow Jones Industrial Average fell 64.93 points, or 0.4 percent, to 16,417.01. About 6.3 billion shares changed hands on U.S. exchanges, 4.4 percent above the 30-day average.

“It’s not going to be a straight road up like what we saw in 2013,” Robert Pavlik, chief market strategist at Banyan Partners LLC, which manages $4.5 billion, said in a phone interview. “A lot of what we saw in 2013 was predicated on money flowing into the market from the Fed. It’s going to be an upwards revision to earnings consensus this year that will push the market higher.”

The S&P 500 gained 0.5 percent yesterday, briefly erasing its losses for 2014, as the World Bank raised its global-growth forecast and better-than-estimated earnings from Bank of America Corp. fueled a rally in financial shares. The benchmark measure 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.

Citigroup, Goldman Sachs and 12 other S&P 500 companies report earnings today. Per-share profit for companies in the index probably climbed 4.9 percent on average in the fourth quarter, while sales increased 1.8 percent, according to analysts surveyed by Bloomberg.

“When you look at fundamentals, the market is not screamingly cheap, but it’s not screamingly expensive either,” Sandy Lincoln, the Chicago-based chief market strategist in the U.S. with BMO Global Asset Management, which oversees about $130 billion, said in a phone interview. “We like the market here. There is reason be skeptical about what companies are able to do. The top line hopefully will be supportive enough to overcome the skepticism.”

BlackRock Inc. Chief Executive Officer Laurence D. Fink said U.S. stocks may rise as much as 10 percent this year after the S&P 500 jumped 30 percent in 2013.

Fewer Americans filed applications for unemployment benefits last week, a sign the labor market continues to strengthen. Jobless claims decreased by 2,000 to 326,000, the least since the end of November, from a revised 328,000 in the prior period, a Labor Department report showed today. The median forecast of 51 economists surveyed by Bloomberg called for 328,000.

Another report showed the cost of living in the U.S. climbed in December by the most in six months, led by gains in fuel and rents. The 0.3 percent increase in the consumer-price index was the biggest since June and followed no change the prior month.

The Fed said in its Beige Book yesterday that it saw “moderate” growth across most of the U.S. The business survey is based on reports gathered on or before Jan. 6. The central bank, which next meets Jan. 28-29, decided at its December meeting to start reducing the pace of monthly bond purchases by $10 billion to $75 billion.

The Chicago Board Options Exchange Volatility Index gained 2 percent to 12.53. The gauge of S&P 500 options known as the VIX is down 8.7 percent this year.

Four of 10 S&P 500 groups retreated as financial and consumer-discretionary shares dropped more than 0.5 percent to lead declines.

Best Buy tumbled 29 percent, the most in the S&P 500, to $26.83. The consumer-electronics retailer said same-store sales fell 0.9 percent in the nine weeks ended Jan. 4, as price cuts and the first new video-game consoles in several years didn’t draw as many shoppers as expected.

Citigroup lost 4.4 percent, the most since November 2012, to $52.60. The third-biggest U.S. bank reported fourth-quarter profit that missed Wall Street estimates as bond trading slumped.

Goldman Sachs fell 2 percent to $175.17 even as results beat analysts’ estimates. Chief Executive Officer Lloyd C. Blankfein reported a fourth straight year of lower profitability than the firm achieved in the decade before the financial crisis. Goldman Sachs’s return on equity, a gauge of profitability, was 11 percent last year, and the company has struggled to reach 10 percent in the past three years, a level that Blankfein has called “hardly aspirational.”

The Dow Jones Transportation Average slipped 0.6 percent from a record. CSX sank 6.8 percent, the most since September 2011, to $27.24 after the biggest railroad in the eastern U.S. said fourth-quarter net income slid 5.1 percent to $426 million, or 42 cents a share. Analysts had projected an average of 43 cents.

Other rail stocks fell. Norfolk Southern Corp. slid 3.7 percent to $87.76 while Kansas City Southern lost 1.7 percent to $117.10. Both companies report results next week.

J.C. Penney Co. dropped 1.6 percent to $6.90 after saying it will close 33 stores and eliminate about 2,000 jobs, resulting in pretax charges of $26 million in the fourth quarter and $17 million in future periods. The department-store chain has gone nine straight quarters without posting a profit.

Kroger Co. fell 4.9 percent to $37.35. The largest U.S. grocery chain is “particularly vulnerable” in the supermarket industry, where competition is rising and volume growth is weakening, analysts at Credit Suisse Group AG wrote in a note.

They cut the stock’s rating to neutral from outperform.

Intel slipped 2.6 percent to $25.86 as of 4:24 p.m. in New York. After the market’s close, the world’s largest chipmaker forecast first-quarter sales that may fall short of some estimates as corporate spending on personal computers falters.

Hewlett-Packard Co. added 2.5 percent to $29.56 in regular trading. Bank of America raised its recommendation to buy from neutral, citing potential for increased earnings amid a restructuring. The maker of personal computers is committed to returning cash to shareholders through dividends and buybacks, the brokerage said.

BlackRock gained 1.6 percent to $317.78. The world’s biggest money manager said fourth-quarter net income increased 22 percent as investors put money into funds, boosting client assets and fees for managing them.

PNC Financial Services Group Inc. jumped 2.7 percent to $80.93, the highest level since September 2008. The second- biggest U.S. regional bank said fourth-quarter profit grew 53 percent, beating analyst estimates, as the lender trimmed expenses and set aside less money for soured loans.

Charles Schwab Corp. climbed 3 percent to $26.80, the highest close since February 2001. The financial-services provider reported fourth-quarter earnings of 23 cents a share, beating analysts’ estimates of 21 cents.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Fearlessness is the first requirement of spirituality.

Cowards can never be moral.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

You always pass failure on the way

to success.

-Mickey Rooney, 1920-

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: Full moon tonight!  Don’t forget to gaze at the stars J.

Birthday: January 15^th, 1929, Martin Luther King Jr.

Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree. – Martin Luther King, quoting Martin Luther.

Photo of the day

An angler fishes on opening day of salmon season on the River Tay in Kenmore, Scotland. Russell Cheyne/Reuters

Market Closes for January 15^th, 2014

Market  Index	Close	Change
Dow  Jones	16481.94	+108.08    +0.66%
S&P 500	1848.38	+9.50    +0.52%
NASDAQ	4214.883	+31.867    +0.76%
TSX	13772.58	+80.20
		+0.59%

International Markets

Market  Index	Close	Change
NIKKEI	15859.63	+50.90
		+0.32%
HANG  SENG	22902.00	+110.72
		+0.49%
SENSEX	21289.49	+256.61
		+1.22%
FTSE 100	6819.86	+53.00
		+0.78%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.581	2.579
CND.   30 Year Bond	3.124	3.122
U.S.   10 Year Bond	2.8912	2.8709
U.S.   30 Year Bond	3.8212	3.8035

Currencies

BOC Close	Today	Previous
Canadian $	0.91271	0.91305
US   $	1.09564	1.09524
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48887	0.67165
US  $	1.35890	0.73589

Commodities

Gold	Close	Previous
London Gold   Fix	1241.42	1245.14
Oil	Close	Previous
WTI Crude Future	94.17	92.59
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 15 (Bloomberg) — Canadian stocks rose a second day, reaching a more than two-year high, as base metals producers rallied after the World Bank raised its global growth forecast and insurance companies led financial shares higher.

Sun Life Financial Inc. and Manulife Financial Corp. advanced at least 1.5 percent to pace gains among financial stocks. Copper Mountain Mining Corp. added 6.3 percent after reporting improved production in the fourth quarter. NuVista Energy Ltd. climbed 3.5 percent as crude prices advanced for a second day. DragonWave Inc., a network equipment maker, soared 26 percent after announcing a deal to sell its services into the Chinese market.

The Standard & Poor’s/TSX Composite Index rose 80.20 points, or 0.6 percent, to 13,772.58 at 4 p.m. in Toronto for the highest close since May 2011. The benchmark equity gauge has advanced 1.1 percent this year.

“We’ve seen some positivity in the markets the last couple of days, we’re trading in line with the U.S. today,” said Brian Huen, fund manager at Red Sky Capital Management Ltd. in Toronto. His firm manages about C$225 million ($205.6 million).

“The banks are a barometer for the market, when the banks do well the rest of the market does well. We’re positive on financials.”

Eight of 10 industries in the S&P/TSX advanced on trading volume 25 percent higher than the 30-day average. Financial stocks account for nearly 35 percent of the S&P/TSX, the largest single industry group by weighting, followed by energy at almost 25 percent.

Sun Life Financial rose 1.5 percent to C$38.20 and Manulife Financial increased 1.8 percent to C$21.96 to pace a 0.5 percent advance among financial stocks.

Toronto-Dominion Bank, Canada’s largest lender by assets, added 0.3 percent to C$97.60 and Royal Bank of Canada, the second-largest, gained 0.2 percent to C$71.06.

Materials producers rallied 1.7 percent, the most in the S&P/TSX. The group has gained on all but two of the 11 sessions this year.

Copper prices advanced in London on speculation that an improving global economy will increase demand, as the World Bank raised this year’s growth forecast to 3.2 percent from 3 percent. Nickel also advanced.

Copper Mountain Mining jumped 6.3 percent to C$1.68. The company said output of copper, gold and silver last quarter was the most since the mine began operations.

Lundin Mining Corp. rose 4.3 percent to C$4.91 and First Quantum Minerals Ltd. increased 4.2 percent to C$19.40 as the price of copper erased earlier losses in London.

Thompson Creek Metals Co. climbed 12 percent to C$3.16. The stock has rallied 33 percent in the past two sessions, the biggest two-day advance since September 2006, after Bank of America raised its rating on the stock to buy from underperform.

NuVista Energy advanced 3.5 percent to C$7.47 and Bankers Petroleum Ltd. rose 1.4 percent to C$4.51. Crude for February delivery advanced 1.7 percent in New York to settle at $94.17 a barrel after the U.S. Energy Information Administration said stockpiles decreased more than five times as much as forecast.

DragonWave surged 26 percent to C$1.95, the biggest increase since April. The Ottawa-based company has signed a strategic sales agreement with China’s Xi’an Potevio Communications, focused on sales and distribution in China.

Potash Corp. of Saskatchewan Inc. climbed 2.5 percent to C$38.46 for the highest close since July, after a report from researcher Fertecon Ltd. said producer OAO Uralkali is seeking to raise prices for the potash fertilizer in Brazil and China to $350 a ton.

USA

By Lu Wang and Callie Bost

Jan. 15 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index erasing a loss for 2014 to close at a record, as the World Bank lifted its global growth forecast and Bank of America Corp.’s profit spurred a rally in financial shares.

Bank of America jumped 2.3 percent after the second-biggest U.S. lender reported fourth-quarter earnings and revenue that beat analysts’ estimates. Apple Inc. gained 2 percent after China Mobile Ltd. said pre-orders for iPhones had reached 1 million. Regeneron Pharmaceuticals Inc. declined 4.3 percent amid an analyst downgrade.

The S&P 500 added 0.5 percent to 1,848.38 at 4 p.m. in New York, surpassing its previous record of 1,848.36 from Dec. 31.

The Dow Jones Industrial Average gained 108.08 points, or 0.7 percent, to 16,481.94. About 6.8 billion shares changed hands on U.S. exchanges, 12 percent above the 30-day average.

“It’s a true, cyclical, macro upswing that’s broad- based,” Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, said in a phone interview. His firm manages $1.1 billion. “People who have reported have posted really solid numbers, specifically yesterday’s JPMorgan and today with BofA. Just tells us that when the banks are doing well, the economy is going well.”

The benchmark for U.S. equities is little changed in 2014 after declining as much as 1.6 percent. The gauge gained 1.1 percent yesterday, the most since Dec. 18, as better-than- forecast retail sales and corporate merger activity signaled confidence in the economy.

The index rallied 30 percent last year, sending the gauge to a record and its highest valuation since the end of 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.

Shares in shipping stocks and companies with smaller market capitalizations, considered most closely tied to economic swings, hit records today. The Russell 2000 Index of small stocks increased 0.7 percent to an all-time high while the Dow Jones Transportation Average added 0.6 percent to a record.

“When most of the averages are making new highs together, that shows that the overall market is in a pretty good shape,”  Jim Welsh, a market strategist who helps oversee $5.7 billion at Forward Management LLC in San Francisco, said in a phone interview. “The odds favor that there will be nother rally to one more new high by the end of the first quarter.”

The World Bank raised its global growth forecasts as a recovery in advanced economies tempers the effects of tighter monetary conditions on developing markets. The forecast for the richest nations was raised to 2.2 percent from 2 percent. Part of the increase reflects improvement in the 18-country euro area, with the U.S. ahead of developed peers, growing twice as fast as Japan.

International Monetary Fund Managing Director Christine Lagarde said today that momentum in the world economy seen in the second half of last year should continue in 2014. The Washington-based fund plans to raise its forecast for global growth when it releases a report later this month.

Data today indicated that manufacturing in New York, northern New Jersey and southern Connecticut grew at a faster pace this month. The Federal Reserve Bank of NewYork’s general economic index surged to 12.5, topping the 3.5 estimate in a Bloomberg survey. Positive readings mean that activity expanded.

A separate report showed wholesale prices in the U.S. climbed in December for the first time in three months to cap the smallest annual increase in five years.

Investors are watching economic data for signals on the pace of Federal Reserve stimulus cuts. Three rounds of monetary stimulus from the central bank have helped push the S&P 500 higher by 173 percent from a 12-year low in 2009.

The Fed said ‘‘moderate’’ growth across most of the country last month was buoyed by gains in holiday spending by consumers, an improving labor market and strength in manufacturing.

“The economic outlook is positive in most districts, with some reports citing expectations of ‘more of the same’ and some expecting a pickup in growth,” the Fed said today in its Beige Book business survey, based on reports gathered on or before Jan. 6.

The officials decided at their December meeting to reduce their monthly bond buying by $10 billion to $75 billion. They cited the improving labor market.

Bank of America and Fastenal Co. are among companies reporting financial results today. Fourteen members of the S&P 500, including Goldman Sachs Group Inc. and Citigroup Inc., release earnings tomorrow.

Profit per share for companies in the index probably climbed 4.9 percent on average in the fourth quarter, while sales increased 1.8 percent, according to analysts surveyed by Bloomberg.

“Expectations are not really high for earnings season,”  Richard Sichel, chief investment officer at Philadelphia Trust Co., said in a telephone interview. He helps oversee $1.9 billion. “The main thing that each quarter needs is top line growth. Companies can only go for so long squeezing earnings out of the bottom line. We need to some improvement in growth.”

The Chicago Board Options Exchange Volatility Index was unchanged today at 12.28. The gauge of S&P 500 options known as the VIX is down 11 percent this year.

Seven out of 10 industry groups in the S&P 500 advanced as telephone, technology and financial companies climbed more than 1.1 percent to lead the gains. Microsoft Corp. surged 2.7 percent to $36.76 and Verizon Communications Inc. gained 2.5 percent to $48.27 among the biggest advances in the Dow.

Bank of America climbed 2.3 percent to $17.15, the highest since May 2010. The lender’s profit more than quadrupled as the company quelled claims tied to defective mortgages.

Wells Fargo & Co., the largest U.S. home lender that yesterday reported record quarterly profit, rose 1.8 percent to an all-time high of $46.40. JPMorgan Chase & Co., whose earnings beat analysts’ estimates this week, rallied 3 percent to $59.49, the highest level since April 2000.

Technology companies in the S&P 500 rallied 1.2 percent as a group and the Nasdaq-100 Index rose 0.8 percent to the highest level since September 2000.

Apple climbed 2 percent to $557.36. China Mobile, the world’s largest phone company by users, said pre-orders for the iPhone have reached about 1 million units ahead of sales in the carrier’s outlets that start at the end of this week.

Data-storage companies rallied after Datalink Corp.’s quarterly earnings and sales surpassed its expectations.

Datalink surged 38 percent to $14.96, the highest since August 2000. NetApp Inc. jumped 8.3 percent to $43.51 for the best performance in the S&P 500 and Teradata Corp. climbed 4 percent to $47.63.

Tesla Motors Inc. advanced 1.8 percent to $164.13, the highest since November. Elon Musk predicted that the company will deliver its first Model S vehicles to China in March. The electric-car maker surged 16 percent yesterday after saying it delivered 6,900 Model S cars in the fourth quarter, pushing its full-year sales beyond a company target.

Aeropostale Inc. added 0.7 percent to $7.78 after earlier rising as much as 6.2 percent. The teen-clothing retailer has contacted at least two private-equity firms as management explores strategic options, people with knowledge of the matter said.

General Motors Co. declined 1.6 percent to $39.38. The carmaker forecast 2014 profit to “modestly” improve as it introduces 15 new or refreshed vehicles in the U.S. The company yesterday announced a dividend of 30 cents a share, the first payout since 2008.

GM also named Chuck Stevens as its new chief financial officer. Mary Barra, who had been the company’s product chief, today becomes the first female chief executive officer of a global automaker, succeeding Dan Akerson, who is retiring.

Regeneron dropped 4.3 percent to $287.49. Jim Birchenough, an analyst with BMO Capital Markets Corp., cut the stock’s rating to market perform, an equivalent of neutral, from outperform, saying the market opportunity of the eye drug Eylea, the company’s top-selling product, is fairly valued.

Fastenal lost 4.5 percent to $46.06 for the biggest decline in the S&P 500. The seller of industrial and construction supplies reported profit and revenue that fell short of analysts’ forecasts.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Strength does not come from physical capacity.  It comes from an indomitable will.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

Experience teaches only the teachable.

-Aldous Huxley, 1894-1963.

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:

It’s serendipitous that I came across these words by Albert Schweitzer a few moments ago…

“You must give some time to your fellow men.  Even if it’s a little thing, do something for others – something for which you get no pay but the privilege of doing it.”

–Albert Schweitzer.

Today is the philosopher, Albert Schweitzer’s birthday.  He was born on January 14^th, in 1869.

I was thinking of my husband Gary, who is spending the evening tonight giving a talk to a couple of hundred folks and then doing a Q & A on the subject of sexual dysfunction after prostate cancer and what can be done about it.  Just because he can, for no compensation, after a very long day of seeing patients at the office and then at the cysto clinic.  I marvel at his incredible giving nature and caring disposition.

It made me think of something I read in the Wall Street Journal this past weekend by economist Donald Boudreaux:

“Suppose that Jones chooses a career as a poet. Jones treasures the time he spends walking in the woods and strolling city streets in leisurely reflection; his reflections lead him to write poetry critical of capitalist materialism. Working as a poet, Jones earns $20,000 annually.

Smith chooses a career as an emergency-room physician. She works an average of 60 hours weekly and seldom takes a vacation. Her annual salary is $400,000. Is this “distribution” of income unfair? Is Smith responsible for Jones’ relatively low salary? Does Smith owe Jones money? If so, how much? And what is the formula you use to determine Smith’s debt to Jones?

While Dr. Smith earns more money than does poet Jones, poet Jones earns more leisure than does Dr. Smith. Do you believe leisure has value to those who possess it? If so, are you disturbed by the inequality of leisure that separates leisure-rich Jones from leisure-poor Smith? Do you advocate policies to “redistribute” leisure from Jones to Smith—say, by forcing Jones to wash Smith’s dinner dishes or to chauffeur Smith to and from work? If not, why not?”

Photo of the day

A dog looks at a couple kissing on the beach in Nice, France. Temperatures on the French Riviera reached 54 degrees Fahrenheit. Lionel Cironneau/AP

Market Closes for January 14^th, 2014

Market  Index	Close	Change
Dow  Jones	16373.86	+115.92    +0.71%
S&P 500	1838.88	+19.68    +1.08%
NASDAQ	4183.016	+69.711   +1.69%
TSX	13692.38	+10.90
		+0.08%

International Markets

Market  Index	Close	Change
NIKKEI	15422.40	-489.66
		-3.08%
HANG  SENG	22791.28	-97.48
		-0.43%
SENSEX	21032.88	-101.33
		-0.48%
FTSE 100	6766.86	+9.71
		+0.14%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.579	2.544
CND.   30 Year Bond	3.122	3.094
U.S.   10 Year Bond	2.8709	2.8257
U.S.   30 Year Bond	3.8035	3.7726

Currencies

BOC Close	Today	Previous
Canadian $	0.91305	0.91875
US   $	1.09524	1.08843
Euro Rate  1 Euro=		Inverse
Canadian   $	1.49742	0.66781
US  $	1.36722	0.73141

Commodities

Gold	Close	Previous
London Gold   Fix	1245.14	1253.28
Oil	Close	Previous
WTI Crude Future	92.59	91.80
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 14 (Bloomberg) — Canadian stocks rose, rebounding from the worst drop in a month yesterday, as Corus Entertainment Inc. posted higher-than-estimated profit and Bank of America Corp. advised buying Thompson Creek Metals Co. shares.

Corus Entertainment, which operates television stations, climbed 3.3 percent. Thompson Creek surged 19 percent after Bank of America raised its rating on the stock to buy from underperform. Canexus Corp., a chemical maker, sank 12 percent after saying costs for a train expansion will be about 40 percent higher than previous forecasts. Pinecrest Energy Inc. plunged 41 percent after production in December fell short of previous guidance.

The Standard & Poor’s/TSX Composite Index rose 10.90 points, or 0.1 percent, to 13,692.38 at 4 p.m. in Toronto. The benchmark equity gauge has advanced 0.5 percent this year.

“We’re getting a little bit of a bounce back from yesterday’s pretty weak day and also retail sales in the U.S. were higher than estimated,” said Anish Chopra, fund manager at TD Asset Management Inc. in Toronto. He helps manage C$218.3 billion ($199.6 billion) with the firm. “Earnings that exceed expectations are a fantastic backdrop for stronger market performance.”

U.S. retail sales increased 0.2 percent in December, exceeding the median forecast for a 0.1 percent gain, according to a Bloomberg survey of analysts.

“Canadian equities have more elbow room, with current valuations not as stretched as those stateside,” said Avery Shenfeld, chief economist with CIBC World Markets, in a note to clients. “The TSX has outperformed the S&P in each of the last six years in which global growth has topped 4 percent, and 2014 should add to that streak.”

Raw-materials stocks rose 0.6 percent as a group. Six of 10 industries in the S&P/TSX advanced on trading volume 31 percent higher compared with the 30-day average.

Thompson Creek surged 19 percent to C$2.82. The company reported yesterday that molybdenum production climbed 34 percent to 30 million pounds in 2013. The stock has four buys, eight holds and four sell ratings from analysts, according to data compiled by Bloomberg. The stock’s 12-month share-price target is C$3.27, implying a 16 percent rally from current levels.

Allied Nevada Gold Corp. soared 7 percent to C$5.02 after China Gold Stone Mining Development Ltd. retracted a $779.6 million offer for the company that it said was published in error.

Allied Nevada said it received a letter from closely held China Gold Stone yesterday, which included the proposed offer.

The stock jumped as much as 52 percent to $6.55 in pre-market trading in New York before Allied Nevada halted trading. The company said it questioned the credibility of the bid.

Telephone stocks rallied after Wind Mobile yesterday withdrew from a spectrum auction. The company’s principal backer, VimpelCom Ltd., decided not to fund its bid, Wind Chief Executive Officer Anthony Lacavera said in an e-mail.

The mobile-phone company’s exit ruins the government’s plans to open the market to more competitors, said David Heger, a St. Louis-based analyst with Edward Jones & Co.

Rogers Communications Inc. increased 1.7 percent to C$47.86, Telus Corp. added 0.7 percent to C$37.03 and BCE Inc. rose 0.7 percent to C$46.72. Telephone stocks rallied 0.8 percent as a group in the S&P/TSX.

Corus Entertainment added 3.3 percent to C$25.40 after reporting first-quarter earnings of 65 Canadian cents a share, higher than the average estimate of 62 cents. The media company also raised its dividend 6.9 percent for Class A and Class B shares, to an annual payout of C$1.085 and C$1.09 respectively.

Canexus plunged 12 percent to C$6.57, the biggest decline since November 2008. The firm said its pipeline connected train expansion will now cost about C$315 million, more than the earlier estimate of C$225 million. The company plans to pay for the rising costs using its credit facilities and the project remains on track for completion in mid 2014.

Pinecrest Energy sank 41 percent to 22 Canadian cents, the lowest close in its history. The Calgary-based company said it averaged production of 2,308 barrels of oil equivalent per day in December, below previous guidance. Pinecrest cited bigger- than-expected declines at three of its drilled wells.

USA

By Lu Wang and Callie Bost

Jan. 14 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its biggest gain of the year, as better-than-forecast retail sales and corporate merger activity signaled confidence in the economy.

Intel Corp. and Jabil Circuit Inc. paced gains among technology companies, rising at least 4 percent amid analyst upgrades. Google Inc. added 2.4 percent after agreeing to buy digital-thermostat maker Nest Labs Inc. for $3.2 billion in cash. Time Warner Cable Inc. climbed 2.7 percent after rejecting an acquisition offer from Charter Communications Inc. JPMorgan Chase & Co. and Wells Fargo & Co. were little changed after reporting fourth-quarter results.

The S&P 500 added 1.1 percent to 1,838.88 at 4 p.m. in New York, posting the biggest jump since Dec. 18 and erasing most of yesterday’s loss. The Dow Jones Industrial Average gained 115.92 points, or 0.7 percent, to 16,373.86. About 6.5 billion shares changed hands on U.S. exchanges, 7.7 percent above the 30-day average.

“We’re probably at the stage in the stock market cycle where good news will continue to be seen as good news,” Martin Leclerc, founder of Barrack Yard Advisors LLC, which oversees $270 million, said in a telephone interview. “I would say that after this massive move we’ve had, it does feel like the animal spirits are still resurrected.”

The S&P 500 fell 1.3 percent yesterday, the most since November, as investors weighed valuations after a 30 percent rally last year that sent the gauge to a record. The benchmark index dropped 1.6 percent in January through yesterday for the worst start to a year since 2009.

The index trades at 15.6 times the estimated earnings of its members, more than the average multiple of 14.1 over the last five years, data compiled by Bloomberg show. The S&P 500 ended 2013 at its highest valuation since the end of 2009.

Wells Fargo and JPMorgan are among companies reporting financial results today. Bank of America Corp., Citigroup Inc. and Goldman Sachs Group Inc. report later this week. Earnings for companies in the index probably climbed 4.9 percent on average in the fourth quarter, while sales increased 1.8 percent, according to analyst estimates compiled by Bloomberg.

“Earnings are going to dominate for the next two or three weeks,” Patrick Kaser, a managing director and portfolio manager at Brandywine Global Investment Management in Philadelphia, said by phone. His firm oversees about $50 billion. “People are concerned about the rate of growth in the economy. How we finished the quarter going into January, that’s going to matter the most for where we are right now.”

U.S. retail sales increased 0.2 percent after a 0.4 percent advance in November that was smaller than previously reported, Commerce Department figures showed today in Washington. The median forecast of 86 economists surveyed by Bloomberg called for a 0.1 percent gain. Excluding cars, demand jumped by the most in almost a year.

Investors are watching economic data for signals on the pace of Federal Reserve stimulus cuts. Three rounds of monetary stimulus from the central bank have helped push the S&P 500 higher by 172 percent from a 12-year low in 2009. The Fed, which next meets Jan. 28-29, last month announced a reduction in its monthly bond-buying program, citing a recovery in the labor market.

A government report on Jan. 10 showed employment rose in December at the slowest pace in almost three years. The data ended months of improving job growth that had signaled the world’s largest economy was picking up.

Stocks extended losses yesterday after Fed Bank of Atlanta President Dennis Lockhart said weak payroll growth last month shouldn’t discourage policy makers from reducing monthly bond purchases as long as the economy continues to gain strength.

Philadelphia Fed President Charles Plosser said today that the central bank’s stimulus program should end later this year because the economy is on a “firmer footing” than it has been in the past several years.

Richard Fisher, Fed president in Dallas, likened quantitative easing to “beer goggles” that makes everything look good. There are signs that “we have made for an intoxicating brew as we have continued pouring liquidity down the economy’s throat,” he said in a speech today.

The Chicago Board Options Exchange Volatility Index, which measures expected swings on the S&P 500 using options prices, dropped 7.5 percent today to 12.28. The gauge is down 11 percent this year.

All 10 main industries in the S&P 500 advanced. The Morgan Stanley Cyclical Index climbed 1.4 percent, reversing a 1.4 percent drop yesterday. The Dow Jones Transportation Average added 1.3 percent, the most since Oct. 16. Microsoft Corp., Visa Inc., 3M Co. and Walt Disney Co. increased at least 1.6 percent to pace gains among the largest companies.

The Nasdaq-100 Index jumped 1.9 percent, the most since Oct. 10, as technology companies in the S&P 500 rallied 1.9 percent as a group.

Intel rose 4 percent to $26.51 for the biggest increase in the Dow. The maker of computer chips was raised to overweight from neutral by Christopher Danely, an analyst with JPMorgan Chase, on expectation the personal-computer market will remain stable this year and new Chief Executive Officer Brian Krzanich will focus on areas where Intel has an advantage.

Jabil Circuit advanced 7.8 percent to $17.89. The maker of electronics for Apple Inc. was boosted to buy from neutral by Goldman Sachs.

Google Inc. added 2.4 percent to $1,149.40, an all-time high, after saying it will buy Nest Labs. The deal is contributing to greater confidence among venture-capital firms, which often bet on companies before they have revenue or even a product.

Proposed deals by companies including Charter and Google brought the value of takeover offers worldwide this year to $130 billion, data compiled by Bloomberg show.

Time Warner Cable rose 2.7 percent to $136. The broadband- service provider’s chief executive officer, Rob Marcus, called Charter’s $132.50-a-share bid a “low-ball offer.” The proposal included about $83 cash per share and about $49.50 in stock.

Excluding debt, the deal would have been worth $37.3 billion.

Intuitive Surgical Inc. rallied 6.8 percent to $419.88. The maker of robot surgery systems said fourth-quarter revenue was $576 million, beating the average analyst estimate of $549.1 million in a Bloomberg survey.

Regeneron Pharmaceuticals Inc. jumped 12 percent to $300.32 for the biggest increase in the S&P 500. Sales of the eye drug Eylea, the company’s top-selling product, were about $400 million last quarter, Chief Executive Officer Len Schleifer said. That exceeded the $377.5 million average of eight analysts’ estimates compiled by Bloomberg.

Tesla Motors Inc. surged 16 percent to $161.27, the highest level in two months. The maker of high-end electric cars delivered 6,900 Model S sedans in the fourth quarter, lifting full year sales of the vehicle beyond the company’s target.

JPMorgan added less than 0.1 percent to $57.75. Quarterly profit fell 7.3 percent on $2.6 billion of settlements tied to Bernard Madoff’s Ponzi scheme as rising legal costs ended the firm’s three-year streak of record annual earnings.

Wells Fargo rose less than 0.1 percent to $45.59. The largest U.S. home lender posted record fourth-quarter and full- year profit as expense cuts and one-time gains bolstered results.

While Wells Fargo’s profit was enough to beat the consensus of Wall Street analysts, mortgage applications plunged and Oppenheimer & Co.’s Chris Kotowski said in a note to clients that results were helped by reserve releases and gains on securities.

GameStop Corp. plunged 20 percent, the most in the S&P 500, to $36.31. The largest specialty retailer of video games cut its full-year profit forecast amid lower-than-anticipated software sales and reduced gross margin from Sony Corp.’s PlayStation 4 and Microsoft Corp.’s Xbox One consoles during the holiday shopping period.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

You have to stand against the whole world although you may have to stand alone.

You have to stare the world in the face although the world may look at you with a bloodshot eye.

Do not fear.

Trust that little thing in you which resides in the heart and says:

forsake friends, wife, all, but testify to that for which you have lived and for which you have to die.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

It is not fair to ask of others what you are

unwilling to do yourself.

-Eleanor Roosevelt, 1884-1962.

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:

Blackout. Quiet.  The tick of clock

Shall bring you peace,

To your uncertain soul

Give slow increase.

The blackened windows shut

This inward room

Where you may be alone.

As in the tomb.

A tomb of life not death,

Life inward, true,

Where the world vanishes

And you are you…

 

It is not winter, not the cold we fear;

It is the dreadful echo of our void,

The malice all around us, manifest;

Loud-mouthed interpreter of constant whispers

Mostly ignored, or drowned within the song

Of cheerfulness and shallow disregard.

The athletic spirit, like a shouting boy,

Leaps to all reassurance, shuns the dour

Disquiet plucking mutely at his sleeve,

And seeks the climate native to his mind

Where day suffices day, but even he

When lowering Nature grips, must vacillate

Disconsolate before the frightful day

With a strange wonder and a strange alarm…

-by V. Sackwille-West, The Garden, Winter, 1946.

Photos of the day

People dance and sing Christmas carols, known locally as ‘Kolyadki,’ in the village of Noviny, Belarus. Many Orthodox Belarussians mark the New Year, according to the Julian calendar, on Jan. 13. Vasily Fedosenko/Reuters

Covered with branches and cow bells, ‘Silvesterchlaeuse,’ New Years Clauses, perform in front of a farm house in Urnaesch, Switzerland, to offer their best wishes for the New Year (according to the Julian calendar.) After their performance, they receive food, hot drinks or money. Ennio Leanza/Keystone/AP

Market Closes for January 13^th, 2014

Market  Index	Close	Change
Dow  Jones	16257.94	-179.77    -1.09%
S&P 500	1819.20	-23.17    -1.26%
NASDAQ	4113.305	-61.360    -1.47%
TSX	13681.48	-66.04
		-0.48%

International Markets

Market  Index	Close	Change
NIKKEI	15912.06	+31.73
		+0.20%
HANG  SENG	22888.76	+42.51
		+0.19%
SENSEX	21134.21	+375.72
		+1.81%
FTSE 100	6757.15	+17.21
		+0.26%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.544	2.557
CND.   30 Year Bond	3.094	3.110
U.S.   10 Year Bond	2.8257	2.8561
U.S.   30 Year Bond	3.7726	3.7991

Currencies

BOC Close	Today	Previous
Canadian $	0.91875	0.91784
US   $	1.08843	1.08952
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48737	0.67233
US  $	1.36652	0.73179

Commodities

Gold	Close	Previous
London Gold   Fix	1253.28	1246.33
Oil	Close	Previous
WTI Crude Future	91.80	92.72
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 13 (Bloomberg) — Canadian stocks fell the most in a month, ending a four-day streak of gains, as declining oil prices dragged down energy producers and Goldcorp Inc. dropped after making a bid for Osisko Mining Corp.

Goldcorp, the world’s second-largest producer of the metal, dropped 1 percent after offering to buy Osisko for about C$2.6 billion ($2.38 billion) in cash and shares. Osisko surged 21 percent. Savanna Energy Services Corp. lost 5.8 percent to lead declines among energy stocks. Fortuna Silver Mines Inc. added 11 percent after its silver production guidance was 30 percent higher than the previous year.

The Standard & Poor’s/TSX Composite Index fell 66.04 points, or 0.5 percent, to 13,681.48 at 4 p.m. in Toronto, the biggest decrease since Dec. 11. The gauge had rallied 1.9 percent in the previous four sessions.

“The oil stocks are looking weak today,” said David Cockfield, a fund manager with Northland Wealth Management in Toronto. The firm manages about C$250 million. “This is the way it’s going to be, not huge leaps forward. There’s some waiting for fourth-quarter earnings and a quiet edging upwards of the market to get us through 14,000.”

Energy stocks dropped 1.1 percent as a group, the most in a month, as eight of 10 industries in the S&P/TSX retreated.

Trading volume was 91 percent above the 30-day average.

Goldcorp slumped 1 percent to C$25.04 after it made an unsolicited offer to buy Osisko in a deal that would add 10 million ounces of gold reserves and make it the largest producer in Quebec. Osisko surged 21 percent to C$6.24.

As part of the proposed deal, Goldcorp would pay 0.146 Goldcorp shares plus C$2.26 cash for each Osisko share, valuing the company at C$5.95, a 15 percent premium based on Jan. 10 closing prices.

Lightstream Resources Ltd. fell 4.8 percent to C$5.81 and Savanna Energy Services dropped 5.8 percent to C$7.83, the biggest plunge in two years.

West Texas Intermediate crude declined as much as 1.2 percent. Iran agreed to curtail its nuclear program starting Jan. 20 under terms of a deal that will ease some sanctions on OPEC’s fifth-biggest oil producer, bringing additional supply to market.

Surge Energy Inc.lost 3.2 percent to C$6.34. The company agreed to acquire light oil producing assets in southeast Saskatchewan for C$109 million, paid for in part by issuing C$70 million worth of subscription receipts convertible to common stock.

BlackBerry Ltd. sank 4.7 percent to C$9.11 to snap five days of gains, the longest winning streak for the stock since August. BlackBerry had rallied 18 percent in that period.

John Chen, Chief Executive Officer at the Waterloo, Ontario-based smartphone maker, hired Eric Johnson for BlackBerry’s top sales job. Johnson was a colleague of Chen’s at SAP AG.

Finning International Inc., which sells, finances and services Caterpillar construction equipment, slumped 4.1 percent to C$26.22. Ben Cherniavsky, analyst with Raymond James Ltd., lowered his rating for the stock from “strong buy” to “outperform,” the equivalent of a buy. Cherniavsky lowered his rating as the stock has rallied more than the benchmark gauge since his last change.

Fortuna Silver Mines climbed 11 percent to C$3.64, the highest close since November, after reporting 2013 silver production of 4.6 million ounces from its two underground silver mines in Mexico and Peru and introduced 2014 guidance for 6 million ounces of silver, a 30 percent increase.

Centerra Gold Inc. added 4.5 percent to C$4.86 after reporting 2013 gold production of 690,720 ounces across its mines in the Kyrgyz Republic and in Mongolia.

“Both operations exceeded the company’s 2013 production guidance,” said Ian Atkinson, chief executive officer of Centerra, said in a release.

USA

By Callie Bost

Jan. 13 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index to its biggest loss in two months, amid concern over valuations after benchmark indexes rallied to all-time highs in 2013.

Companies from Microsoft Corp. to Nike Inc. and Walt Disney Co. dropped more than 2 percent, with all 10 main industries in the S&P 500 declining. Lululemon Athletica Inc. slumped 17 percent after the sportswear maker lowered its profit and sales forecast. Intercept Pharmaceuticals Inc. plunged 18 percent after the stock soared sixfold last week. Beam Inc. jumped 25 percent after Suntory Holdings Ltd. said it will acquire the spirits maker in a $16 billion deal.

The S&P 500 fell 1.3 percent to 1,819.20, the lowest level since Dec. 20, at 4 p.m. in New York. Some 464 companies in the S&P 500 declined today, the most since Aug. 27, data compiled by Bloomberg show. The Dow Jones Industrial Average lost 179.11 points, or 1.1 percent, to 16,257.94, for the biggest drop since September. About 7.2 billion shares changed hands on U.S. exchanges, the most since Dec. 20.

“Sentiment is extremely optimistic and that’s a negative for stocks,” Bruce Bittles, chief investment strategist at RW Baird & Co., said by phone from Sarasota, Florida. His firm oversees $105 billion. “That means for the short term they’re fully invested. Stocks have entered the new year overbought and over-believed and until we digest that, we’re likely to stay in this range.”

The S&P 500 has dropped 1.58 percent so far in 2014, the worst start to a year since 2009, according to data compiled by Bloomberg. The index ended last year at a record, having climbed 30 percent for its biggest annual rally since 1997.

Valuation for the S&P 500 is “lofty by almost any measure,” Goldman Sachs analysts wrote in a note Jan. 10. Further price-to-earnings expansion will be difficult to achieve, according to the note.

The benchmark index trades at 15.4 times the estimated earnings of its members, more than the average multiple of 14.1 over the last five years, data compiled by Bloomberg show. The gauge ended 2013 at its highest valuation since the end of 2009.

“The way to think about the market is the level of earnings and the multiple which should be applied to that earnings growth,” David Kostin, chief U.S. equity strategist at Goldman Sachs, said today on Bloomberg Television. “Those really are the fundamental drivers of the level of U.S. equity markets this year.”

JPMorgan Chase & Co., Bank of America Corp., Goldman Sachs, and Citigroup Inc. are among 29 members of the S&P 500 to report quarterly results this week. Earnings for companies in the index probably climbed 4.9 percent on average in the fourth quarter, while sales increased 1.8 percent, according to analyst estimates compiled by Bloomberg.

Stocks extended declines today after Federal Reserve Bank of Atlanta President Dennis Lockhart said the U.S. economy is on “solid footing” and he would support continued cuts to stimulus.

Three rounds of monetary stimulus from the Fed have helped push the S&P 500 higher by 169 percent from a 12-year low in 2009. The Fed, which next meets Jan. 28-29, last month announced a reduction in its monthly bond-buying program, citing a recovery in the labor market.

The S&P 500 increased on Jan. 10 after a report from the Labor Department showed employment rose in December at the slowest pace in almost three years. The data ended months of improving job growth that had signaled the world’s largest economy was picking up.

“It sounds as if the Fed is staying on its course of tapering,” John Carey, a fund manager at Boston-based Pioneer Investment Management Inc., said in a telephone interview. His firm manages about $220 billion worldwide. “Whatever mixed signals could have come from the jobs numbers, they’re looking at the overall picture.”

The Chicago Board Options Exchange Volatility Index, which measures expected swings on the S&P 500 using options prices, rose 9.4 percent, the most in a month, to 13.28. The gauge fell 12 percent last week to its lowest level since Aug. 5.

The Morgan Stanley Cyclical Index and the Dow Jones Transportation Average each fell 1.4 percent. Microsoft decreased 2.9 percent to $34.98, while Disney tumbled 2.8 percent to $73.27 for the largest declines in the Dow industrial average. Nike fell 2.3 percent to $75.18 and Exxon Mobil Corp. slid 2 percent to $98.55.

The KBW Bank Index slumped 1.3 percent as Bank of America dropped 2 percent, the most since October, to $16.43 and Citigroup slipped 1.8 percent to $53.72. Homebuilders in the S&P erased 2.5 percent as PulteGroup Inc. lost 3.8 percent to $19.40 and D.R. Horton Inc. decreased 2.7 percent to $21.55.

All 10 main industries in the S&P 500 retreated. Consumer- discretionary companies and energy producers fell more than 1.9 percent. Kohl’s Corp. plunged 6.2 percent to $53.46 and Michael Kors Holdings Ltd. slipped 3.9 percent to $76.67. Gap Inc. dropped 4 percent to $38.25.

Lululemon slumped 17 percent to $49.70, the lowest level in two years. The yogawear retailer cut its revenue and earnings forecast for its fourth quarter ending Feb. 2. Lululemon joins retailers from L Brands Inc. to Family Dollar Stores Inc. that have cut forecasts this month in the wake of a margin-eating price war this holiday season.

Vancouver-based Lululemon has been trying to win back customers after being forced to recall pants last year for being too sheer and has struggled to overcome supply-chain delays as it expands overseas and fends off growing competition.

Intercept plunged 18 percent to $364.36. Chief Executive Officer Mark Pruzanski said he may need the help of a larger drugmaker to bring the company’s experimental liver-disease treatment to market. The stock soared 545 percent last week after a trial of the drug worked well enough for the testing to be stopped.

Symantec Corp. fell 5.4 percent to $22.20 after Morgan Stanley lowered its rating on the stock to underweight from equal weight. The brokerage predicted that revenue would rebound more slowly as Symantec reorganizes its sales force, potentially limiting its profitability.

Beam jumped 25 percent to $83.42, an all-time high. Osaka- based Suntory, the maker of Yamazaki whiskey and the Premium Malt’s beer, is seeking to boost overseas growth by gaining brands such as Maker’s Mark whiskey, Jim Beam and Canadian Club liquor.

Suntory will pay $83.50 per share in cash and take over all of Beam’s outstanding debt, according to a joint statement. The companies said they expect to complete the deal by the end of June. The deal, once completed, will create the world’s third- largest premium spirits company.

Juniper Networks Inc. climbed 7.6 percent to $25.32, the highest level since July 2011. The maker of computer-networking equipment has been targeted by activist hedge fund Elliott Management Corp., run by billionaire Paul Singer, which will seek cost cuts, stock buybacks and other changes, two people familiar with the matter said.

Elliott is seeking talks with management and the company’s board, the people said.

Merck & Co. was the only company in the Dow to rise today, surging 6.5 percent to $53.12, the highest level in six years.

The second-largest U.S. pharmaceuticals said it will seek early approval of a new cancer treatment and decide the future of the company’s animal health and consumer businesses this year.

Twitter Inc. rose 1.4 percent to $57.82. Goldman Sachs analyst Heath Terry raised the stock’s price target to $65 a share from $46, citing Twitter’s “significant acceleration” in innovation during the fourth quarter.     Twitter has seen five trading sessions of declines, falling 17 percent last week as the microblogging service was hit with analyst downgrades and Cowen & Co. initiating coverage of the stock with the equivalent of a sell rating.

 

Have  a wonderful evening everyone.

 

Be magnificent!

 

Very few people in this world can reason normally.

There is a terrible tendency to accept all that is said, all that is read, and to accept it without question.

Only he who is ready to  question, to think for himself, will find the truth!

To understand the currents of a river,

he who wishes to know the truth must enter the water.

-Nisargadatta, 1897-1981

As ever,

 

Carolann

Don’t cry because it’s over.

Smile because it happened.

-Dr. Seuss, 1904-1991

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.

Reader’s Digest just released the 2014 version of Manners and Etiquette: The Best Rules to Follow.  Below you will find the top 12 rules everyone should follow!

1)   Wait for everyone to be seated before eating

2)   Keep things off the table, including keys, bags, sunglasses, etc

3)   Don’t text at the table

4)   If you prefer not to have wine while dining out, don’t turn your glass upside down

5)   Practice good speakerphone manners

6)   Whoever arrives at a door first holds it for the next person

7)   Don’t microwave stinky foods in the shared lunchroom

8)   At the airport, don’t crowd the boarding area

9)   Let people off the elevator and hold the doors for others before you board

10)  If all you have to say in your e-mail reply is “Thanks!” refrain from sending it.

11)  Keep your cell phone out of the conversation

12)  Be polite in e-mail

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

Photos of the Day:

A flower blooms in the ash from Mt Sinabung near Sibintun village in Karo district, Indonesia’s North Sumatra province. Beawiharta/Reuters

A man shields himself from the rain as he walks along Holman Street in Houston. Cody Duty/Houston Chronicle/AP

Market Closes for January 9^th, 2014

Market  Index	Close	Change
Dow  Jones	16445.91	-16.83    -0.10%
S&P 500	1838.14	+0.65    +0.04%
NASDAQ	4156.195	-9.416    -0.23%
TSX	13638.52	+23.89
		+0.18%

International Markets

Market  Index	Close	Change
NIKKEI	15880.33	-241.12
		-1.50%
HANG  SENG	22787.33	-209.26
		-0.91%
SENSEX	20713.37	-16.01
		-0.08%
FTSE 100	6691.34	-30.44
		-0.45%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.684	2.718
CND.   30 Year Bond	3.191	3.210
U.S.   10 Year Bond	2.9578	2.9894
U.S.   30 Year Bond	3.8678	3.8921

Currencies

BOC Close	Today	Previous
Canadian $	0.92211	0.92394
US   $	1.08448	1.08232
Euro Rate  1 Euro=		Inverse
Canadian   $	1.47577	0.67761
US  $	1.36082	0.73485

Commodities

Gold	Close	Previous
London Gold   Fix	1228.43	1225.15
Oil	Close	Previous
WTI Crude Future	91.66	92.33
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 9 (Bloomberg) — Canadian stocks rose for a third day, erasing a loss for the year, as gains in health-care and industrial shares offset declines in raw-material companies amid a slump in copper prices.

Air Canada soared 8.6 percent to lead industrial shares higher. Valeant Pharmaceuticals International Inc. added 3.5 percent. HudBay Minerals Inc. dropped 2.7 percent after announcing it would sell more than 18 million shares. First Quantum Minerals Ltd. lost 2.5 percent as copper prices slid 1.3 percent. Teck Resources Ltd. retreated 2.1 percent after Cowen & Co. analysts downgraded the stock.

The Standard & Poor’s/TSX Composite Index rose 14.78 points, or 0.1 percent, to 13,629.41 at 4 p.m. in Toronto. The gauge is up 0.1 percent for the year, erasing an earlier loss.

The Canadian dollar weakened to the lowest level since 2009 amid speculation slowing employment growth will push the Bank of Canada closer to considering lowering interest rates. The loonie, as the Canadian dollar is nicknamed for the waterfowl on its C$1 coin, fell 0.3 percent to C$1.0851 per U.S. dollar.

Copper fell the most in two months after a gauge of Chinese producer prices fell for a 22nd straight month, fanning concern about an economic slowdown in the biggest global user of the metal.

The producer-price index fell 1.4 percent from a year before and consumer-price gains trailed estimates at 2.5 percent, government reports showed in Beijing. Today’s releases followed declines in gauges of manufacturing and services based on surveys of purchasing managers.

Domestic building permits fell for the first time in three months. The value of municipal permits in Canada fell 6.7 percent to C$6.75 billion, Statistics Canada said today in Ottawa. Economists forecast a 2.7 percent reduction, according to the median of six responses to a Bloomberg survey.

Projects such as apartments and condominiums dropped 8.7 percent to C$1.88 billion in November, curbing the increase over the prior 12 months to 25 percent.

Five of the S&P TSX’s 10 main industries rose. Valeant Pharmaceuticals led health-care companies higher, jumping 3.5 percent to C$143.51.

Air Canada jumped 8.6 percent to C$7.95, reversing three days of losses. The carrier soared 323 percent last year, making it the best performer in the S&P/TSX.

Producers of raw materials and phone companies lost at least 0.6 percent for the largest declines.

First Quantum Minerals decreased 2.5 percent to C$18.31.

Copper futures for delivery in March lost 1.3 percent to $3.299 a pound, the biggest decline since Nov. 13.

HudBay Minerals plunged 2.7 percent to C$8.57. The mining company is planning to raise C$150 million in an offering of 18.2 million shares at C$8.25, implying a 6.4 percent discount to its closing price yesterday.

Teck Resources dropped 2.1 percent to C$25.72. Cowen analyst Daniel Scott downgraded the stock to market perform from outperform, citing concerns such as ample global supply and muted demand.

Advantage Oil & Gas Ltd. fell 5.1 percent to C$4.63 as natural gas futures declined 5 percent.

US

By Nick Taborek

Jan. 9 (Bloomberg) — U.S. stocks were little changed as retailers slumped and investors awaited tomorrow’s jobs report for clues to whether the Federal Reserve will accelerate the pace of stimulus cuts.

Bed Bath & Beyond Inc. sank 12 percent and L Brands Inc. slid 4.1 percent, leading losses among retailers, as earnings forecasts disappointed analysts. Macy’s Inc. and J.C. Penney Co. rallied more than 3.6 percent. Intercept Pharmaceuticals Inc. soared 281 percent after a trial of its liver disease drug worked well enough for the testing to be stopped. Alcoa Inc., the largest U.S. aluminum maker, slid 4.2 percent in extended trading after its quarterly results missed analysts’ estimates.

The S&P 500 rose less than 1 point to 1,838.13 at 4 p.m. in New York. The Dow Jones Industrial Average dropped 17.98 points, or 0.1 percent, to 16,444.76. About 6.7 billion shares changed hands on U.S. exchanges, 11 percent above the 30-day average.

“You could be seeing some anticipation that the jobs number tomorrow could be really high,” Walter Todd, who oversees about $950 million as chief investment officer of Greenwood Capital Associates LLC in Greenwood, South Carolina, said by phone. “That could change the timetable for the Fed’s ultimate exit from quantitative easing.”

The S&P 500 has fallen 0.6 percent in 2014, after climbing 30 percent last year, the most since 1997. Three rounds of Federal Reserve stimulus have helped propel the S&P 500 higher by as much as 173 percent from a 12-year low in 2009.

Equities slipped yesterday as minutes from the Fed’s latest meeting fueled concern that stimulus cuts may be accelerated.

Officials saw diminishing economic benefits from the central bank’s bond-buying program, according to the minutes, which didn’t describe a set schedule for the pace of reductions, although “a few” officials mentioned the need for a “more deterministic path.”

The Fed announced after the December meeting that it would begin trimming monthly bond buying by $10 billion to $75 billion this month as the U.S. economy continues to improve.

Data today showed applications for U.S. unemployment benefits declined by 15,000 to 330,000 in the period ended Jan. 4. The median forecast of 47 economists surveyed by Bloomberg projected 335,000. The data can be volatile after the holidays as temporary workers are dismissed, a Labor Department spokesman said as the report was released.

A report from the ADP Research Institute yesterday showed companies added 238,000 workers in December, the biggest increase since November 2012. A Labor Department report tomorrow may show total payrolls rose by 197,000 last month, according to a Bloomberg survey median. That would bring the total for the year to 2.27 million, the most since 2005.

Alcoa, the largest U.S. aluminum maker, marked the unofficial start of earnings season after the close of trading today by reporting fourth-quarter profit that missed analysts’ estimates amid a glut of product for the aerospace industry. The shares slid 4.2 percent to $10.24 in extended trading, after losing 1.3 percent in the regular session.

The company also agreed to pay $384 million to settle U.S. allegations that one of its units bribed members of Bahrain’s royal family and officials at a state-owned company to win business.

Analysts predict that companies in the S&P 500 will increase their earnings by 9.7 percent on average this year and their sales by 3.8 percent, according to estimates compiled by Bloomberg.

JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. will all post their results next week.

“We are at a tipping point — if not a turning point — where markets will start to be driven by earnings per share and not price-to-earnings ratios,” said Romain Boscher at Amundi Asset Management in Paris, which oversees about $1 trillion.

Five out of 10 main industries in the S&P 500 slumped, with phone companies falling 1.9 percent for the biggest decline.

AT&T Inc. fell 2 percent to $33.54 and Verizon Communications Inc. slid 2.1 percent to $47.50 for the steepest losses in the Dow.

Retailers retreated 0.2 percent as a group. Companies from L Brands, which owns the Victoria’s Secret and Bath & Body Works brands, to discount chain Family Dollar cut profit forecasts, showing the price war that marked the holiday season is taking a toll.

Family Dollar slid 2.1 percent to $64.97 and L Brands lost 4.1 percent to $57.75. The companies cut profit forecasts after reporting disappointing December sales as promotions that failed to lure shoppers hurt margins.

Bed Bath & Beyond slumped 12 percent to $69.75. The retailer projected fourth-quarter earnings of $1.60 to $1.67 a share, less than the $1.79 that analysts had estimated. Home- goods merchant Pier 1 Imports Inc. tumbled 12 percent to $20.44 as it also lowered its quarterly forecast.

Intercept Pharmaceuticals surged 281 percent to $275.87.

The company uses obeticholic acid, or OCA, to treat nonalcoholic steatohepatitis, or NASH, a liver disease in which people who don’t drink or drink very little alcohol get liver damage that resembles that of heavy drinkers. About 2 percent to 5 percent of Americans have the disease, according to the National Institutes of Health.

Copper fell the most in eight weeks, with futures for March delivery sliding 1.4 percent to $3.2975 a pound in New York as data showed China’s inflation eased in December while factory- gate prices extended the longest streak of declines since the Asian financial crisis.

Cliffs Natural Resources Inc. fell 6.5 percent to $22.96 and U.S. Steel Corp. lost 4.4 percent to $28.30.

Twitter Inc. dropped 3.8 percent to $57.05, extending its losses to a fourth straight day. The owner of the microblogging website has lost 17 percent since Jan. 3.

Macy’s jumped 7.6 percent, the most in the S&P 500, to $55.80. The second-largest U.S. department-store company forecast profit for its next fiscal year ahead of analysts’ estimates and disclosed a program to cut costs that includes eliminating about 2,500 jobs.

J.C. Penney climbed 3.7 percent to $7.64 after Piper Jaffray Cos. recommended buying the shares. J.C. Penney sank 10 percent yesterday after it published a two-paragraph statement on holiday results that didn’t include sales data, raising doubts about its turnaround. The brokerage said investors had overreacted and upgraded the retailer to overweight from neutral, citing the company’s decision to reiterate its guidance.

McKesson Corp. advanced 3.3 percent to $175.33 after raising its bid for German drug distributor Celesio AG, winning support from U.S. hedge fund Elliott Management Corp., which opposed the original offer as too low. The sweetened bid ends a stalemate that threatened to derail McKesson’s plan to expand in Europe. The acquisition may allow the U.S. company to buy as much as $10 billion a year in generic drugs for distribution, compared with $6 billion to $7 billion on its own.

Ford Motor Co. climbed 1.9 percent to $15.84. The auto company boosted its quarterly dividend for common shares and the stock held by its founding family to 12.5 cents, up from 10 cents and topping the 12-cent estimate by Bloomberg analysts.

Confidence in the U.S. economy is sending bets on stock correlation to the lowest levels since before the 2008 financial crisis, signaling an improved environment for stock pickers as the earnings season starts.

The Chicago Board Options Exchange S&P 500 Implied Correlation Index has fallen 16 percent from its November high to 50.22, according to data compiled by Bloomberg. The gauge, which uses options to measure expectations about whether S&P 500 shares will move in lockstep, reached 49.24 on Dec. 27, its lowest level since September 2008.

“It’s good news,” said Romain Boscher, head of equities at at Amundi Asset Management in Paris, which oversees about $1 trillion. “There is room for stock pickers and country pickers to create value. We are back to much more normal levels of market risk. It’s a much more comfortable market.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“Lots of people want to ride with you in the limo, but what you want is someone who will take the bus with you when the limo breaks down.”
Oprah Winfrey

 

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:

It is truly amazing to contemplate how much scientific progress has been made in such a short period of time.  I was reading a story this morning about images released yesterday by NASA from the Hubble Space Telescope that reveal a “cosmic dawn.”  The telescope has peered back to a chaotic time 13.2 billion years ago when never-before-seen galaxies were tiny, bright blue and full of stars bursting to life all over the place; we’re starting to see the universe at its infancy in living colour and detail.  Astronomer Jennifer Lotz said at the American Astronomical Society convention in Washington, “I like to call it cosmic dawn; it’s when the lights are coming on….Things look clumpy and kind of weird.”  Because light travels nearly 9.6 trillion kilometers in a year, as telescopes look farther from Earth they see earlier into the past.  While Hubble and other telescopes using different light wavelengths have seen this far back, this is the first complete set of photos in the visible light spectrum that the human eye sees.  To do this, Hubble is using one of Albert Einstein’s concepts that massive clusters of galaxies have such super gravity that they magnify and stretch light, Lotz said.  By focusing on clusters, astronomers use them as natural binoculars to see what’s behind the.  –from an article by Seth Borenstein, The Associated Press.

So, contrast that story with the fact that on this day, January 8^th, in 1851, the Earth’s rotation was proved.

Today is also famous physicist Stephen Hawking’s birthday.  He turns 72 today.

My goal is simple. It is a complete understanding of the universe, why it is as it is and why it exists at all. – Stephen Hawking

On a related topic, also in the news today:

LEONARDO DICAPRIO’S CARBON FOOTPRINTS
The actor/environmentalist is planning a space voyage on Richard Branson’s Virgin Galactic. But FAA data show the trip will burn more than five times Mr. Branson’s estimated amount of fuel, amounting to twice the average American’s annual energy consumption. –Wall Street Journal, 1/8/2014.

We are just an advanced breed of monkeys on a minor planet of a very average star.  But we can understand the Universe.  That makes us something very special. –Stephen Hawking.

Photos of the day

Show attendee Limore Shur waits inside a Nikon-powered XXArray during the 2014 International Consumer Electronics Show (CES) in Las Vegas. The booth uses 68 cameras that fire at the same time. The images are processed to create a 3D model of the subject that can be placed inside a computer video game. Steve Marcus/Reuters

Participants arrange sushi to create the largest sushi mosaic in an attempt to break a Guinness World Record during the 10th anniversary of a sushi chain store in Hong Kong. A total of 20,647 sushi pieces were used for a 37-square-meter space to break the record. Bobby Yip/Reuters

Market Closes for January 8^th, 2014

Market  Index	Close	Change
Dow  Jones	16462.74	-68.20    -0.41%
S&P 500	1837.49	-0.39    -0.02%
NASDAQ	4165.613	+12.432    +0.30%
TSX	13614.63	+17.70
		+0.13%

International Markets

Market  Index	Close	Change
NIKKEI	16121.45	+307.08
		+1.94%
HANG  SENG	22996.59	+283.81
		+1.25%
SENSEX	20729.38	+36.14
		+0.17%
FTSE 100	6721.78	-33.67
		-0.50%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.718	2.681
CND.   30 Year Bond	3.210	3.168
U.S.   10 Year Bond	2.9894	2.9391
U.S.   30 Year Bond	3.8921	3.8849

Currencies

BOC Close	Today	Previous
Canadian $	0.92394	0.92881
US   $	1.08232	1.07664
Euro Rate  1 Euro=		Inverse
Canadian   $	1.46947	0.68052
US  $	1.35775	0.73651

Commodities

Gold	Close	Previous
London Gold   Fix	1225.15	1232.20
Oil	Close	Previous
WTI Crude Future	92.33	93.67
BRENT	109.360	109.360

Market Commentary:

Canada

By Lu Wang and Callie Bost

Jan. 8 (Bloomberg) — Canadian stocks rose a second day, following the biggest rally in three weeks, as a private report showed U.S. companies hired more workers than forecast.

Valeant Pharmaceuticals International Inc. advanced 2.6 percent after Morgan Stanley boosted the stock’s rating. Potash Corp. of Saskatchewan Inc. and Agrium Inc. climbed at least 2.2 percent, pacing gains among fertilizer stocks, as Monsanto Co.’s profit beat analysts’ estimates. Canadian National Railway Co. slipped 1.6 percent as a train carrying crude oil and propane derailed in the eastern province of New Brunswick.

The Standard & Poor’s/TSX Composite Index added 17.70 points, or 0.1 percent, to 13,614.63 at 4 p.m. in Toronto. The gauge rallied 0.8 percent yesterday. Trading was 18 percent above the 30-day average.

“Because we didn’t have a consumer debt crash or real- estate crash here, there is no dramatic recovery here either,”  Bill Harris, partner and portfolio manager with Avenue Investment Management in Toronto, said in a phone interview. His firm manages about C$250 million ($231 million). The question is, “The U.S. is recovering, but is Canada participating in it?” he said.

Companies in the U.S. boosted payrolls by 238,000 in December, compared with a 200,000 advance predicted in a Bloomberg survey, ADP Research Institute data showed. Federal Reserve officials saw diminishing economic benefits from the central bank’s bond-buying program and expressed concern about risks to financial stability when they took the first step to cut the pace of purchases, according to minutes of their last meeting released today.

Statistics Canada and the U.S. Labor Department will provide unemployment rates and new hiring figures for last month on Jan. 10.

Canadian stocks rose yesterday for the first time in four days, as the price of crude halted the longest slide since September. Oil retreated to the lowest level in six weeks today in New York.

Six out of 10 industries in the S&P/TSX advanced today as health-care companies rallied 2.4 percent to lead the gains.

Industrial stocks fell 0.8, the most of any group.

Valeant climbed 2.6 percent to an all-time high of C$138.54. The drug distributor was raised to overweight, an equivalent of buy, from equal-weight by Morgan Stanley.

Potash Corp., the world’s largest fertilizer company by market value, jumped 2.9 percent to C$36.19. Agrium gained 2.2 percent to C$97.90. Monsanto, the world’s largest seed company, reported fiscal first-quarter earnings that topped analysts’ estimates on rising sales of engineered soybean seeds and Roundup herbicide.

Questerre Energy Corp. climbed 6 percent to C$1.41. The independent energy company said Kim Anderson will become chief financial officer, replacing Brent Heagy, who plans to leave the company to join Inter Pipeline Ltd.

Canadian National Railway slipped 1.6 percent to C$58.63.

The 122-car train jumped the tracks about 7 p.m. local time yesterday near the town of Plaster Rock, sparking a blaze that was still burning more than 12 hours after the accident. A helicopter is being brought in today to help identify the source of fire, said Jim Feeny, a railroad spokesman.

The accident and a Dec. 30 crude-train derailment in North Dakota added to the attention on the risks of moving oil by rail.

Colabor Group Inc. dropped 5.6 percent to C$5.19. The wholesaler was cut to sector perform from outperform by Leon Aghazarian, an analyst with National Bank Financial.

USA

By Nick Taborek and Callie Bost

Jan. 8 (Bloomberg) — U.S. stocks fell, after yesterday’s rebound in benchmark indexes, as Federal Reserve minutes and better-than-estimated payrolls data fueled concern stimulus cuts may be accelerated.

Twitter Inc. dropped 3.5 percent, falling for a third day, amid an analyst downgrade. Ford Motor Co. gained 1 percent after Chief Executive Officer Alan Mulally ruled himself out from a race for the top job at Microsoft Corp. Micron Technology Inc. jumped 9.9 percent after reporting quarterly revenue that topped estimates. Forest Laboratories Inc. climbed 18 percent as it agreed to buy Aptalis Pharma for $2.9 billion.

The Standard & Poor’s 500 Index lost less than 0.1 percent to 1,837.49 at 4 p.m. in New York. The equities benchmark rose 0.6 percent yesterday after a three-day retreat. It climbed 30 percent last year, the most since 1997. The Dow Jones Industrial Average slipped 68.20 points, or 0.4 percent, to 16,462.74 today. Almost 7 billion shares changed hands on U.S. exchanges, 15 percent above the three-month average.

“I suspect from the minutes that there might be a bias toward pulling back stimulus sooner rather than later,” Brad McMillan, chief investment officer for Waltham, Massachusetts- based Commonwealth Financial Network, said in a phone interview.

“There seems to be a fairly wide consensus that stimulus should be gradually taken out.”

Fed officials saw diminishing economic benefits from the central bank’s bond buying program, according to the minutes of the meeting, when they took the first step to cut the pace of purchases. The minutes didn’t describe a set schedule for the pace of asset-purchase reductions, although “a few” officials mentioned the need for a “more deterministic path.”

“A majority of participants judged that the marginal efficacy of purchases was likely declining as purchases continue,” the record of the Federal Open Market Committee’s Dec. 17-18 meeting showed. Participants also were “concerned about the marginal cost of additional asset purchases arising from risks to financial stability” citing the potential for “excessive risk-taking in the financial sector.”

The central bank is trimming monthly bond buying by $10 billion to $75 billion this month. Three rounds of stimulus have helped propel the S&P 500 higher by as much as 173 percent from a 12-year low in 2009.

Companies in the U.S. boosted payrolls by 238,000 in December, figures from ADP Research Institute in Roseland, New Jersey, showed today. The median forecast of 36 economists surveyed by Bloomberg called for a 200,000 advance.

The Labor Department will announce on Dec. 10 figures for new hiring and the unemployment rate last month.

“We’re looking at a situation where equities are still likely to outperform most other markets,” Cam Albright, director of asset allocation at Wilmington Trust Investment Advisors, said in a phone interview from Wilmington. His firm oversees about $79 billion. “The question is whether if we see a jump in growth in jobs, is that going to accelerate the tapering process?”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, slid 0.4 percent to 12.87.

Global equity values are close to reaching a record for the first time since 2007. The total market capitalization of stocks around the world has risen to $61.5 trillion, near the all-time high of $62.6 trillion from October 2007, according to data compiled by Bloomberg.

The International Monetary Fund plans to raise its forecast for global economic growth this year, three months after lowering its prediction, underscoring confidence in the global recovery as the outlook for the U.S. improves. IMF Managing Director Christine Lagarde said yesterday that the revision will take place in three weeks. The multilateral institution now forecasts global expansion of 3.6 percent this year.

HSBC Holdings Plc cut U.S. stocks to underweight from neutral, citing high valuations compared with the rest of the world, earnings near record highs and the possible removal of monetary stimulus at a faster rate than in other developed markets. Companies in the S&P 500 are trading at 17.3 percent reported earnings, up from 14.5 at the start of 2013.

Alcoa Inc. will kick off the start of earnings season with the release of its results after the market close on Jan. 9.

Earnings for companies in the S&P 500 will climb 9.7 percent on average this year, almost twice the rate of 2013. Sales will probably increase 3.8 percent, compared with 2.2 percent last year, according to analyst estimates compiled by Bloomberg.

Twitter dropped 3.5 percent to $59.29, increasing its slide for the week to 14 percent. An analyst at Cantor Fitzgerald LP downgraded the shares to sell from hold and said the company’s valuation is excessive. Twitter shares debuted in November and rallied 145 percent through the end of 2013.

J.C. Penney Co. lost 10 percent to $7.37, bringing its five-day slump to 19 percent. The retailer reiterated its fourth-quarter forecast and said it was “pleased” with the holiday performance as the retailer works to rebound from two years of losses. The shares fell as the company didn’t provide December sales after releasing figures the previous three months.

Tenet Healthcare Corp. slid 1.6 percent to $45.36 after Raymond James Financial Inc. cut the shares to market perform, a rating similar to hold, from outperform.

Ford added 1 percent to $15.54. Mulally said he has no other plans except to serve the automaker. He made the comments in an Associated Press interview to end speculation that he may leave for Microsoft. Microsoft slipped 1.8 percent to $35.76.

Micron Technology jumped 9.9 percent to $23.87. The largest U.S. maker of memory chips reported quarterly revenue that topped analysts’ estimates. Revenue in the period through Nov. 28 more than doubled to $4.04 billion, the company said.

Analysts on average estimated sales of $3.72 billion, according to a Bloomberg survey.

Forest Laboratories climbed 18 percent to $69.30 after it agreed to buy Aptalis, a closely held company whose shareholders include investment firm TPG Capital, to expand in gastrointestinal and cystic fibrosis treatments.

Constellation Brands Inc. gained 9.6 percent to $76.61. The alcoholic beverage company reported third-quarter profit that beat analysts’ estimates and raised its profit forecast on a stronger outlook for its beer business.

Macy’s Inc. rallied 4.8 percent to $54.32 in extended trading as of 4:50 p.m. New York time. The department-store chain issued a profit forecast after the market close that exceeded analysts’ estimates and said it would cut 2,500 jobs to reduce costs.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

With the clouds hanging in the air above the trees,

and the birds falling silent before the storm,

this morning brings forth serious reflection,

bringing into question the entirety of existence,

the gods themselves, and all human activity.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

In the right light, at the right time,

everything is extraordinary.

-Aaron Rose, 1969-

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:

The Chinese New Year, Nóngli Xinnián, begins on January 31^st this year, the first day of the first month of the Chinese calendar for 2014.  The Chinese months are determined by both solar and lunar changes, with the new year coming in approximately one and a half months after the winter solstice and symbolizing the beginning of spring.  For this reason, the fifteen days of celebration that begin on January 31^st are also known as the spring festival.  The Chinese year consists of 354 days compared to our 365 day year.

The animal designations of the Chinese zodiac follow a 12-year cycle and are always used in the same sequence.  This year will be the year of the horse.  Persons born in the year of the horse are physically attractive and popular; like the company of others and are thought to be most compatible with persons born in tiger or dog years.  Their opposite is the rat.

Horse Years: 1906, 1918, 1930, 1942, 1954, 1966, 1978, 1990, 2002, 2014.

Photos of the day

A worker walks among newly-made red lanterns as she and other workers prepare for the sales boom ahead of the Spring Festival at a family workshop in Wenxian county, Henan province, China. China Daily/Reuters

A miniature sculpture made by Chinese artist Li Qici is displayed on his finger in Yuyao, Zhejiang province, China. Li worked several months to craft the miniature sculpture on an ivory plate. The sculpture imitates Chinese painter Xu Beihong’s painting of eight running horses and celebrates Chinese New Year, which welcomes the year of the horse. Reuters

Market Closes for January 7^th, 2014

Market  Index	Close	Change
Dow  Jones	16530.94	+105.84    +105.84%
S&P 500	1837.88	+11.11    0.61%
NASDAQ	4153.184	+39.503    +0.96%
TSX	13596.93	+101.39
		+0.75%

International Markets

Market  Index	Close	Change
NIKKEI	15814.37	-94.51
		-0.59%
HANG  SENG	22712.78	+28.63
		+0.13%
SENSEX	20693.24	-94.06
		-0.45%
FTSE 100	6755.45	+24.72
		+0.37%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.681	2.719
CND.   30 Year Bond	3.168	3.194
U.S.   10 Year Bond	2.9391	2.9595
U.S.   30 Year Bond	3.8849	3.9012

Currencies

BOC Close	Today	Previous
Canadian $	0.92881	0.93803
US   $	1.07664	1.06607
Euro Rate  1 Euro=		Inverse
Canadian   $	1.46588	0.68218
US  $	1.36153	0.73447

Commodities

Gold	Close	Previous
London Gold   Fix	1232.20	1238.82
Oil	Close	Previous
WTI Crude Future	93.67	93.43
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 7 (Bloomberg) — Canadian stocks rose for the first time this year, after tumbling to a two-week low, as the price of crude halted the longest slide since September and Valeant Pharmaceuticals International Inc. surged to a record.

Athabasca Oil Corp. and Encana Corp. rose at least 0.6 percent to pace advances among energy stocks. Valeant jumped 13 percent after providing a 2014 forecast. BlackBerry Ltd. increased 7.4 percent for a second day of gains. Semafo Inc. and Detour Gold Corp. lost more than 0.7 percent as gold slipped a second day.

The Standard & Poor’s/TSX Composite Index rose 101.39 points, or 0.8 percent, to 13,596.93 at 4 p.m. in Toronto. The benchmark equity gauge lost 0.9 percent over the previous three sessions.

“Today is a continuation of the run we had in December,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.7 billion ($4.37 billion). “The past couple of days were an aberration during the holidays. People are coming back to work and there’s an air of optimism as the big jobs number comes on Friday.”

Statistics Canada and the U.S. Labor Department will provide unemployment rates and new hiring figures for last month on Jan. 10.

Brent crude halted its longest run of declines since September on concern clashes between Iraq’s government and al- Qaeda-linked militants may disrupt oil output. Brent for February settlement rose 0.6 percent in London. West Texas Intermediate crude increased 0.3 percent in New York.

The S&P/TSX Energy Index rallied 1 percent as 50 of 63 stocks advanced. Athabasca Oil climbed 3.7 percent to C$6.98, for the highest close in two months, and Encana added 0.6 percent to C$18.79.

Bellatrix Exploration Ltd. advanced 5.1 percent to C$8.08 after reporting record production levels at the end of 2013 of 38,000 barrels of oil equivalent per day.

Valeant jumped 13 percent to C$135.03 as health-care stocks soared 10 percent as a group, the most in the S&P/TSX. Nine of 10 industries advanced on trading volume 7.5 percent higher compared with the 30-day average.

Valeant said in a conference call that all of its business units are expected to expand in 2014, including double-digit growth across its Asia, Central and Eastern Europe, Latin America and Middle East markets. The company will pursue further acquisitions, including at least “one significant deal.”

BlackBerry surged 7.4 percent to C$9.14, the highest level since September. Chief Executive Officer John Chen said the smartphone maker will return its focus to keyboard-equipped phones after struggling to entice customers with touch-screen models last year.

“I personally love the keyboards,” Chen said in an interview yesterday with Bloomberg Television’s Jon Erlichman at the International Consumer Electronics Show in Las Vegas.

The stock has rallied 13 percent in the past two days.  BlackBerry yesterday hired former HTC Corp. and Sony Ericsson executive Ron Louks to run its devices business.

Semafo dropped 0.7 percent to C$3.04 and Detour Gold retreated 2.5 percent to C$5.04, ending a four-day advance, as gold futures for February delivery fell 0.7 percent to $1,229.60 an ounce in New York.

USA

By Nick Taborek and Sofia Horta e Costa

Jan. 7 (Bloomberg) — U.S. stocks rose, snapping a three- day retreat, as hospital and health-insurance stocks rallied ahead of Friday’s employment report and the start of fourth- quarter earnings season this week.

UnitedHealth Group Inc. and Johnson & Johnson rose more than 2.1 percent, leading gains in the Dow Jones Industrial Average, after brokerages raised their stock ratings.

Pharmacyclics Inc. jumped 20 percent after its leukemia medicine met a trial’s goals. Netflix Inc. slid 5.6 percent as Morgan Stanley said the company faces more competition.

The Standard & Poor’s 500 Index advanced 0.6 percent to 1,837.88 at 4 p.m. in New York. The gauge lost 1.2 percent from Jan. 2 through yesterday, the longest stretch of declines to start a year since 2005. The index climbed 30 percent last year, the most since 1997. The Dow average added 105.84 points today, or 0.6 percent, to 16,530.94.

“Equities are the place to be,” John Lynch, the Charlotte-based regional chief investment officer for Wells Fargo Private Bank, said by telephone. His firm manages $170 billion.    Everyone’s waiting on the Fed minutes tomorrow and the jobs report on Friday could be a driver of further confidence.”

Alcoa Inc. will mark the unofficial start of the fourth quarter earnings season when it reports results after the market close on Jan. 9. Earnings for companies in the S&P 500 will climb 9.7 percent on average this year, almost twice the rate of 2013, while sales will probably increase 3.8 percent, according to analyst estimates compiled by Bloomberg.

The ADP Research Institute reports the change in companies’ payrolls tomorrow and minutes from the Federal Reserve’s December meeting will be released the same day. The Labor Department will provide the unemployment rate and new hiring figures for last month on Friday. The Fed, which has made job creation a condition for reducing asset purchases, said on Dec. 18 that it would slow the pace of bond buying.

Three rounds of stimulus have helped propel the S&P 500 higher by as much as 173 percent from a 12-year low in 2009.

Janet Yellen won Senate confirmation with a 56-26 vote to become the 15th chairman of the Fed. She will replace Ben S. Bernanke, whose second term as chairman expires Jan. 31.

Data today showed the trade deficit in the U.S. shrank more than forecast in November as oil imports dropped to the lowest level in three years and exports climbed to a record. The gap narrowed 12.9 percent to $34.3 billion, smaller than projected by any economist surveyed by Bloomberg and the least since October 2009, figures from the Commerce Department showed today in Washington.

“Sentiment is still very high,” said Francois Savary, who oversees about $9.4 billion as chief investment officer at Reyl & Cie. in Geneva. “The key question now will be to see if earnings growth really does come through. When you have less liquidity in the system and good economic numbers to support the recovery, it’s time for companies to deliver.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, fell 4.7 percent to 12.92.

Nine out of 10 main industries in the S&P 500 rose as health-care stocks added 1 percent to pace gains. Almost four stocks rose for each that declined in the U.S. equity benchmark.

About 6.7 billion shares changed hands on U.S. exchanges, 11 percent above the three-month average.

UnitedHealth climbed 3.1 percent to $76.51. The largest publicly traded U.S. insurer was raised to buy from hold by analysts at Deutsche Bank AG. J&J, the world’s biggest maker of health-care products, increased 2.1 percent to $94.29 as RBC Capital Markets boosted the stock to outperform from sector perform.

Tenet Healthcare Corp. rallied 4.9 percent to $46.10 and HCA Holdings Inc. advanced 2.7 percent to $49.85. Credit Suisse, which rates both companies outperform, advised buying hospital stocks on any weakness.

Pharmacyclics, the cancer-drug developer partnered with J&J, rallied 20 percent to $125.90. Its leukemia drug Imbruvica helped patients live longer without their cancer progressing compared with GlaxoSmithKline Plc’s Arzerra, also known as ofatumumab, Pharmacyclics and J&J said in statements today.

Imbruvica also showed improvement in overall survival and had an acceptable safety profile, the companies said.

The Nasdaq Biotechnology Index added 1.4 percent, the biggest advance in two weeks. Health-care shares in the S&P 500 have risen 0.3 percent in 2014, the most among the 10 main industries.

Convergys Corp. jumped 7.3 percent to $22.39. The information management firm said it will buy Stream Global Services Inc. for $820 million, adding 35 cents to its adjusted earnings-per-share in the first 12 months after the deal’s projected completion in the first quarter of this year.

MGM Resorts International, Wynn Resorts Ltd. and Las Vegas Sands Corp. advanced after Nomura analyst Harry Curtis increased his estimates for the companies’ Macau earnings and raised his price targets for all three stocks.

MGM rose 4.4 percent to $24.51 and Wynn Resorts gained 2.9 percent to $201.51. Las Vegas Sands added 2.2 percent to $78.98.

Netflix dropped 5.6 percent to $339.50. Morgan Stanley cut its rating on the stock to underweight, similar to a sell recommendation, from equal weight, citing increased competition in U.S. digital-video streaming. The stock almost quadrupled last year.

PBF Energy Inc. declined 4.7 percent to $28.50. The oil refiner said funds affiliated with First Reserve Management LP and Blackstone Group LP will sell 15 million shares in PBF, according to a statement.

Accelerating earnings growth will pave the way for stocks to extend their bull market this year, according to Thomas J.

Lee, JPMorgan Chase & Co.’s chief U.S. equity strategist. After climbing 6 percent this quarter, S&P 500 profit will rise 10 percent in the second quarter, 11 percent in the third and 14 percent in the fourth, according to the New York-based strategist’s estimates.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The outward freedom that we shall attain will only be in exact proportion

to the inward freedom to which we may have grown at any given moment.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Life is a long lesson in humility.

-James M. Barrie, 1860-1937.

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