Author: Carolann

Dear Friends,

Tangents:

51 years ago today, on September 27^th, 1962, Rachel Carson’s book, Silent Spring, was published, spurring the environmental movement.

Today, The Wall Street Journal, featured this article:

U.N. Says Humans Are ‘Extremely Likely’ Behind Global Warming Report Says Long-Term Planetary Warming Trend Likely to Continue

By GAUTAM NAIK And JOHANNES LEDEL

A U.N. report on climate change said that while human activity is “extremely likely” to blame for global warming, temperatures aren’t expected to rise as quickly as previously thought. Gunnar Myhre, coordinating lead author for the IPCC, explains the details to WSJ’s Gautam Naik.

STOCKHOLM—A landmark United Nations report issued Friday reaffirmed the growing belief that human activity is the dominant cause behind a rise in global temperatures and reiterated that a long-term planetary warming trend is expected to continue.

The report could have a significant impact on policy-making because it underscores that human activity is pushing atmospheric carbon-dioxide concentrations toward levels whereby the surface temperatures may increase by 2 degrees Celsius. Many governments have pledged to try to keep the temperature rise below that level, which they believe is a threshold beyond which the consequences of climate change will be severe.

Between 1750 and 2011, human activity released 545 gigatons of carbon dioxide, the main greenhouse gas. If a total of 1,000 gigatons is emitted, there is a one-in-three chance that the 2-degree limit will be breached, said Corinne Le Quere, a geophysicist at the University of East Anglia in the U.K. and a lead author of a chapter in the U.N. report.

“We’re eating up our allocation very rapidly. At the current rate, we’ll hit the 1,000-gigaton-level sometime between 2040 and 2050,” she added.

Of all the carbon dioxide emitted so far, two-thirds comes from burning fossil fuels and one-third from land-use change and deforestation. However, in the last decade, 90% of the carbon dioxide released has come from burning fossil fuels, according to Dr. Le Quere.

A summary of the report, the work of more than 800 scientists working for the U.N.’s Intergovernmental Panel on Climate Change over several years, said there is a 95% likelihood that humans are behind global warming, up from the 90% level of certainty in a similar 2007 report.

Enlarge Image

An iceberg floats through the water on July 20, 2013, in Ilulissat, Greenland

Getty Images

The IPCC noted that air and oceans are getting warmer, ice and snow is less plentiful, and sea levels are rising.

“Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over the millennia,” the report says.

The IPCC said the past three decades have been successively warmer at the Earth’s surface that any preceding decade since 1850. That is “a robust signal of a changing planet,” said IPCC co-chair Thomas Stocker at a news conference in Stockholm.

At the same time, the IPCC has moderated projections of rising temperatures for the end of this century. The latest report outlines four scenarios, with the worst scenario predicting a possible increase of 4.8 degrees Celsius toward the end of the century. The prior report had outlined six scenarios, with the worst scenario peaking above 6 degrees Celsius.

Associated Press

Kali, an orphaned male polar bear cub from Point Lay, Alaska, explores the enclosure outside the infirmary at the Alaska Zoo, in a photo taken on March 22, 2013.

IPCC reports draw the attention of governments, environmentalists and key industries such as the oil, gas and coal sector because they provide the scientific backing for many policies on climate change. The narrower range of possible scenarios could help scientists and policy makers fine-tune their responses.

The summary previews a full report that will be issued next week as part of the group’s fifth assessment, which will come in several phases. It is considered a more definitive document than its predecessors because it incorporates more recent scientific findings, a larger set of satellite, oceanic and terrestrial measurements and more robust computer modeling.

“Observations of changes in the climate system are based on multiple lines of independent evidence,” said Qin Dahe, co-chair of the IPCC working group.

The IPCC’s credibility took a hit after some shoddy data made its way into the 2007 report, including a claim that Himalayan glaciers would melt by 2035.

More recently, climate change science has come under attack because of a flattening of temperatures over the past 15 years, even though greenhouse gas emissions have continued to rise.

Scientists at the IPCC played down the apparent slowdown, arguing that a 15-year period is too short to reflect long-term climate trends.

Among the factors that could be behind the apparent slowdown are a cooling of the Pacific Ocean, a natural change in the 11-year solar cycle and nearly a dozen volcanic eruptions since 2005, which can spew sunlight-blocking particles into the atmosphere.

“We couldn’t attribute exactly what was the contribution from each of these factors,” said Dr. Le Quere. “But the overall picture is that the earth is continuing to take up heat even when the surface is warming slowly.”

The newest measurements suggest that current carbon-dioxide concentration in the earth’s atmosphere is 40% above preindustrial levels. Such levels are “unprecedented in at least the last 800,000 years,” the report said. The 2007 report had calculated the same figure but only for the past 650,000 years.

Arctic sea-ice cover has been declining for several decades. The IPCC now says it is “very likely” that the ice cover will continue to shrink and thin, and there will be a reduction in glacier volumes and declines in spring snow cover in the Northern hemisphere. This past summer, Arctic sea ice levels registered an increase, but that partly reflected the record-low levels achieved a year earlier.

The U.N. report also concludes that the global mean sea level will “very likely exceed that observed during 1971 through 2010.”

Corrections & Amplifications
Thomas Stocker said the global surface temperature change for the end of the 21st century is projected to be likely to exceed 1.5 degrees Celsius, which is about 2.7 Fahrenheit. A previous version of this article gave an incorrect conversion of Celsius to Fahrenheit.

Those who dwell, as scientists or laymen, among the beauties and mysteries of the earth are never alone or weary of life. – Rachel Carson, 1907-1964

Market Closes for September 27^th, 2013

Market  Index	Close	Change
Dow  Jones	15258.24	-70.06    -0.46%
S&P 500	1691.72	-6.95    -0.41%
NASDAQ	3781.594	-5.833    -0.15%
TSX	12846.01	+4.39
		+0.03%

International Markets

Market  Index	Close	Change
NIKKEI	14760.07	-39.05
		-0.26%
HANG  SENG	23207.04	+82.01
		+0.35%
SENSEX	19727.27	-166.58
		-0.84%
FTSE 100	6512.66	-52.93
		+0.81%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.557	2.590
CND.   30 Year Bond	3.080	3.109
U.S.   10 Year Bond	2.6245	2.6498
U.S.   30 Year Bond	3.6847	3.6951

Currencies

BOC Close	Today	Previous
Canadian $	0.97056	0.96992
US   $	1.03033	1.03102
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39322	0.71776
US  $	1.35221	0.73953

Commodities

Gold	Close	Previous
London Gold   Fix	1336.42	1323.90
Oil	Close	Previous
WTI Crude Future	103.03	102.86
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Sept. 27 (Bloomberg) — Canadian stocks rose, with the benchmark gauge poised for the best quarterly performance in a year, as gains in consumer-staples companies and oil producers offset a decline in phone shares amid concern that a U.S. budget impasse may shut down the government.

Trilogy Energy Corp. soared 11 percent after providing an update on its operations in Alberta. Telus Corp. and Rogers Communications Inc. slipped at least 1 percent after an analyst with Canadian Imperial Bank of Commerce lowered his price targets for the nation’s largest wireless carriers due to regulatory risks. BlackBerry Ltd. increased 0.7 percent to snap three days of losses after reporting second-quarter earnings.

The Standard & Poor’s/TSX Composite Index rose 2.46 points, or less than 0.1 percent, to 12,844.08 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has jumped 5.9 percent this quarter, the biggest gain since September 2012, and is up 3.3 percent in 2013.

“There’s a lot of anxiety going into the weekend,” said Andrew Pyle, fund manager with ScotiaMcLeod Inc. in Peterborough, Ontario. He manages about C$210 million ($204 million). “Nobody should be naive out there, to think if we get a worst-case scenario with respect to the U.S. budget impasse that Canada comes out of this unscathed. You could see some very heavy losses in the TSX.”

The U.S. Senate voted to finance the government through Nov. 15, sending the bill to the House and setting up a weekend of negotiations and brinkmanship three days before federal spending authority runs out and a few weeks until the country reaches its borrowing limit.

President Barack Obama said in a televised statement that Congress’s failure to approve funding would have a destabilizing effect on the economy. Democrats and Republicans can’t agree on the inclusion of funds for Obama’s health-care law in the bill.

Energy stocks added 0.1 percent as a group, as six of 10 industries in the S&P/TSX rose. Trading volume was 20 percent below the 30-day average.

Trilogy Energy soared 11 percent to C$28.80 after reporting an operating update for its Montney and Duvernay oil projects.

The company said unexpected plant outages reduced third-quarter volumes to about 31,000 barrels of oil equivalent per day, and anticipates levels returning to normal in the fourth quarter.

Athabasca Oil Corp., which is seeking a joint-venture partner for its Duvernay holdings, jumped 9.3 percent to C$7.97, the most in seven weeks.

BlackBerry added 0.7 percent to C$8.28, the first increase in six days. The smartphone maker reported more complete second- quarter earnings, including a loss of 47 cents a share from continuing operations and a 45 percent plunge in sales to $1.57 billion, after disclosing preliminary results on Sept. 20.

“The slight upside likely reflects that there was nothing hidden in the results,” said Bill Kreher, an analyst with Edward Jones & Co., in a phone interview from St. Louis.

Jean Coutu Group Inc. rose 1.8 percent to C$18.29 to pace gains among consumer-staples companies.

Telus dropped 1.2 percent to C$34.52 and Rogers retreated 1 percent to C$44.64. Analyst Robert Bek with CIBC World Markets cut his price targets for the two wireless carriers by 11 percent and 17 percent, respectively, due to the Canadian government’s increasing attention to the space.

Canada’s largest carriers signaled on Sept. 23 their intent to bid in a wireless spectrum auction in January, with no sign of interest from major foreign companies after Verizon Communications Inc. said earlier this month it wouldn’t enter the Canadian market.

Teck Resources Ltd., Canada’s largest diversified miner, dropped 4.1 percent to C$28.10 following two days of gains.

Paretosh Misra, analyst with Morgan Stanley, said the company may move ahead with an oil sands project, as investing in energy assets is an “emerging trend” among miners.

Martinrea International Inc., a metal auto-parts maker, slumped 10 percent to C$10.96 after the company said it received a press release discussing a claim from Nat Rea, former vice chairman of the company. Martinrea has not received the claim or reviewed the allegations and will “respond appropriately in due course.”

Rea, who was fired in June 2012, said he filed a statement of claim alleging breaches of fiduciary duties related to several deals involving suppliers and customers and is calling for a new board of directors. The claims have not been proven in court.

US

By Lu Wang

Sept. 27 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its first weekly drop since August, as concern grew that the budget impasse will hurt economic growth in the world’s largest economy.

Accenture Plc slid 2.4 percent on a disappointing profit projection. United Continental Holdings Inc. dropped 9.3 as the world’s largest carrier cut its third-quarter forecast for a benchmark revenue gauge. J.C. Penney Co. sank 13 percent after the retailer began selling 84 million shares to raise as much as $932 million in cash. Nike Inc. surged 4.7 percent as fiscal first-quarter profit topped analysts’ estimates.

The S&P 500 fell 0.4 percent to 1,691.75 at 4 p.m. in New York. The Dow Jones Industrial Average lost 70.06 points, or 0.5 percent to 15,258.24. About 5.5 billion shares changed hands on U.S. exchanges, 5.7 percent below the three-month average.

“There is nothing in the economic data I can see that tells me I should worry about a recession,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm oversees about $217 billion. “A government shutdown would be a fiscal cliff that’s big enough in this case to drive the economy into a recession and I think that the market is increasingly worried about that risk because the risk seems to be rising.”

The S&P 500 dropped six of the past seven sessions, including a 1.1 percent slide this week, amid the Congressional impasse over the budget that threatens to shut down the government. The index rose 0.3 percent yesterday, snapping its longest losing streak this year, after an unexpected drop in jobless-benefit claims.

The U.S. Senate voted today to finance the government through Nov. 15 after removing language to choke off funding for the health care law. The bill now returns to the House, setting up a weekend of negotiating and brinkmanship that could continue until spending authority expires on Sept. 30.

Congress must also reach a deal to avoid hitting the limit on the government’s ability to borrow. Treasury Secretary Jacob J. Lew said the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt cap could lead to a downgrade of the government’s credit rating.

President Barack Obama said that Congress’s failure to approve funding to keep the government open and an increase in the debt ceiling would have a destabilizing effect on the economy.

A federal shutdown would cut fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, economists said. The Office of Management and Budget estimated 30 days of shutdowns in 1995 and 1996 cost more than $1.4 billion, or $2.09 billion in today’s dollars.

Today’s slide trimmed the S&P 500’s third-quarter rally to 5.3 percent. That compared with a 0.7 percent loss in U.S. Treasuries, according to data compiled by Bloomberg and Bank of America Corp. Investors should expect $23.5 billion in selling of equities and buying of bonds as pension fund managers rebalance their portfolios at the end of the third quarter, Ramon Verastegui, head of engineering and strategy at Societe Generale SA in New York, wrote in a Sept. 25 note.

“The momentum isn’t terrible, but has basically been progressively weakening,” Jim Welsh, a market strategist who helps oversee $5.7 billion at Forward Management LLC in San Francisco, said in a phone interview. “The market is vulnerable to the largest correction so far this year, and it just comes down to what kind of news shows up, whether it turns out to be because of Congress, or whatever.”

The S&P 500’s biggest retreat in 2013 was the 5.8 percent slide that started May 21, when Federal Reserve Chairman Ben S.

Bernanke first suggested the central bank could cut monetary stimulus this year. The gauge is down 2 percent since closing at a record Sept. 18, after the Fed unexpectedly refrained from slowing its monthly bond purchases. The stimulus has helped the S&P 500 rally as much as 155 percent from its 2009 low.

Investors have been weighing data to determine whether economic growth is strong enough to prompt the Fed to begin tapering at its next meeting in October. Fed Bank of New York President William C. Dudley said today he wants to see more momentum in the economy before making cuts.

The showdown in Washington “creates uncertainty about the fiscal outlook and may exert a restraining influence on household and business spending,” he said.

A report today indicated consumer spending rose in August for a fourth consecutive month, as a pickup in incomes bolstered the biggest part of the economy. Separate data showed confidence among consumers declined to a five-month low in September as Americans’ views on the economy dimmed.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, jumped 10 percent to 15.46. The measure has advanced 18 percent this week.

Eight out of 10 S&P 500 main industries fell today as materials and telephone shares sank at least 1 percent for the worst performance.

International Paper Co. dropped 3.9 percent to $45.44, its eighth retreat in the past nine session to lead declines among raw-materials producers. The world’s largest maker of office paper could be forced to shut down some capacity as the industry faces an increasing supply amid sluggish demand, Mark Wilde, an analyst with Deutsche Bank AG, said in a note. He cut the stock’s rating to hold from buy.

Accenture slipped 2.4 percent to $74.09. The world’s second-largest technology-consulting company forecast earnings that may fall short of analysts’ estimates amid increasing competition from Indian providers.

International Business Machines Corp., the largest technology-services provider, lost 1.7 percent to $186.92.

United Continental slid 9.3 percent to $30.91. Revenue for each seat flown a mile will increase 2.5 to 3.5 percentage points, according to a filing yesterday, a range that the carrier said was about 1 percentage point less than previous projections. It cited lower fares on some overseas flights operated in conjunction with other airlines and rivals adding seats on China routes.

J.C. Penney lost 13 percent to $9.05, extending its weekly loss to 30 percent. The stock has plunged the past five days to its lowest since 2000 after a Goldman Sachs Inc. debt analyst said cash will be strained this quarter. J.C. Penney said today it will end the fiscal year with about $1.3 billion in liquidity, excluding the offer proceeds.

International Game Technology dropped 7 percent to $19.23.

The world’s largest maker of slot machines was cut to hold from buy at Deutsche Bank. The stock’s price has reflected expectations for increasing returns to shareholders while the gaming industry is likely to become “more challenged,” analyst Carlo Santarelli wrote in a note to clients.

Nektar Therapeutics tumbled 24 percent, its biggest slide in five years, to $10.54. The company said a study of the slow- release painkiller NKTR-181 showed it failed to meet the primary endpoint of a Phase 2 study, citing an “unusual lack” of a gain in pain scores for patients taking a placebo.

Nike gained 4.7 percent, the most in the Dow, to $73.64.

The world’s largest sporting-goods company posted fiscal first- quarter profit that topped analysts’ estimates after demand for running and basketball shoes helped North American sales.

Microsoft Corp. climbed 1.5 percent to $33.27 for the second-biggest gain in the Dow.

Cerner Corp. rallied 8 percent, the most in the S&P 500, to a record $52.61. The provider of electronic medical records said it reached a multiyear agreement to provide services to Intermountain Healthcare.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

Sleep is temporary death.  Death is longer sleep.

If the man dies while yet alive, he need not grieve over others’ death.

One’s experience is evident with or without the body, as in waking, dream, and sleep.

Then why should one desire continuance of the bodily shackles?

Let man find out his undying Self and die and be immortal and happy.

Sri Ramana Maharshi, 1879-1950

As ever,

 

Carolann

 

And that’s the way it is.

-Walter Cronkite, 1916-2009

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1969, The Beatles released their last recorded album, Abbey Road.

And on September 26^th, 1960, the first presidential debate was broadcast – Richard Nixon and John F. Kennedy.  Polls indicated that those who listened to the debate on radio, thought Nixon won the debate and those who watched the debate on television thought Kennedy won.

Life imitates art far more than art imitates life.  –Oscar Wilde.

Spend time outdoors:  “Why?  We spend most of our time indoors.  Now researchers have found chemicals from indoor air someplace  we might not want it: our blood.  The research is in the journal Environmental Science and Technology.  A variety of the chemicals used to make everything from carpets to couches resist stains showed up in the serum of 31 Boston office workers.  The researchers found the highest levels of these chemicals in the air inside new buildings and, subsequently, in the blood of those who worked there.”  –from Scientific American.

Photos of the day

Bees fly between sunflowers at the Agricenter in Memphis, Tenn., Sept. 25. Jim Weber/The Commercial Appeal/AP

A man leaves ‘Flower Power,’ a vintage camping caravan that was converted into a hotel room at the Base Camp Bonn Young Hostel, the world’s first camping trailer and Pullman coach hostel, in Bonn, Germany, Sept. 20, 2013. Wolfgang Rattay/Reuters

Market Closes for September 26^th, 2013

Market  Index	Close	Change
Dow  Jones	15328.30	+55.04    +0.36%
S&P 500	1698.67	+5.90    +0.35%
NASDAQ	3787.427	+26.329    +0.70%
TSX	12841.62	+4.91
		+0.04%

International Markets

Market  Index	Close	Change
NIKKEI	14799.12	+178.59
		+1.22%
HANG  SENG	23125.03	-84.60
		-0.36%
SENSEX	19893.85	+37.61
		+0.19%
FTSE 100	6565.59	+14.06
		+0.21%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.590	2.574
CND.   30 Year Bond	3.109	3.101
U.S.   10 Year Bond	2.6498	2.6189
U.S.   30 Year Bond	3.6951	3.6585

Currencies

BOC Close	Today	Previous
Canadian $	0.96992	0.96929
US   $	1.03102	1.03168
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39074	0.71904
US  $	1.34890	0.74134

Commodities

Gold	Close	Previous
London Gold   Fix	1323.90	1333.50
Oil	Close	Previous
WTI Crude Future	103.03	102.76
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam and Aubrey Pringle

Sept. 26 (Bloomberg) — Canadian stocks rose for the third time in four days as data showing growth in the U.S. economy offset concern that a budget impasse in Washington could hurt the recovery.

Teck Resources Ltd., Canada’s largest diversified miner, gained 2.5 percent as copper rose the most in a week. Husky Energy Inc. climbed 4.1 percent after reporting “significant discoveries” in the Atlantic. Valeant Pharmaceuticals International Inc. added 0.7 percent after an analyst with Guggenheim Securities LLC initiated coverage of the stock with a buy rating. Alacer Gold Corp. dropped 6.1 percent as Credit Suisse reduced its rating on the shares and gold prices sank.

The Standard & Poor’s/TSX Composite Index rose 4.91 points, or less than 0.1 percent, to 12,841.62 at 4 p.m. in Toronto, trimming an earlier advance of as much as 0.5 percent. The benchmark Canadian equity gauge has surged 5.9 percent this quarter and is up 3.3 percent in 2013.

“The U.S. GDP and jobless claims data, those are the two reasons” for the market’s gains, said Ian Nakamoto, director of research with MacDougall MacDougall and MacTier Inc. in Toronto.

The firm manages about $4 billion. “The guys in Washington will find a compromise, the question is the impact on consumer confidence. My sense is the consumer will stay on.”

The U.S. economy grew at a 2.5 percent annualized pace in the second quarter, after expanding 1.1 percent in the first, a sign the country was weathering federal budget cutbacks and higher taxes. Fewer Americans applied for unemployment benefits last week, with claims dropping by 5,000 to 305,000.

Stocks pared an earlier rally as U.S. House Speaker John Boehner said President Barack Obama can’t avoid negotiations on raising the government’s debt limit, and he doesn’t expect his chamber to pass the stopgap spending bill anticipated from the Senate. The Senate likely will not vote on the bill until this weekend, leaving the House one full workday to act before spending authority for the federal government expires on Oct. 1.

Energy shares rose 0.4 percent as a group, as six out of 10 industries in the S&P/TSX advanced. Trading volume was 18 percent lower than the 30-day average.

Husky Energy climbed 4.1 percent to C$30.26 after the Calgary-based company said it discovered oil in the Flemish Pass Basin off the Atlantic coast of Canada.

Legacy Oil & Gas Inc. rose 1.8 percent to C$6.71 and Imperial Oil Ltd. gained 1.5 percent to C$45.54 as crude prices advanced for the first time in six days.

Teck Resources rose 2.5 percent to C$29.29 as copper jumped 1.1 percent, the most in a week.

Valeant, the biggest drugmaker in Canada, increased 0.7 percent to C$106.41. Louise Chen, analyst with Guggenheim, initiated coverage of Valeant with a buy rating.

Raw-materials companies had the biggest decline among the 10 main industries in the S&P TSX, dropping 1 percent as gold for December delivery sank 0.9 percent. Of 24 companies in the S&P/TSX Gold Index, 23 fell.

Semafo Inc. tumbled 6.9 percent to C$2.42. Alacer Gold sank 6.1 percent to C$3.21 after Credit Suisse cut the stock’s rating to underperform from outperform.

BlackBerry Ltd. lost 0.6 percent to C$8.22, the lowest close since November, for a third day of declines since agreeing to sell itself on Sept. 23 to a group led by Fairfax Financial Holdings Ltd. in a tentative deal worth $9 a share or $4.7 billion. The agreement is subject to securing financing and due diligence.

The smartphone maker has slumped 24 percent in the past five days and is scheduled to officially report second-quarter earnings tomorrow. The company on Sept. 20 disclosed worse-than- estimated earnings and smartphone sales and plans to fire 4,500 workers.

US

By Lu Wang and Sofia Horta e Costa

Sept. 26 (Bloomberg) — U.S. stocks rose, halting the longest slump this year for the Standard & Poor’s 500 Index, as an unexpected drop in jobless claims overshadowed concern that a budget impasse could hurt economic growth.

EBay Inc. jumped 4.5 percent after agreeing to buy Braintree for $800 million to expand its mobile-transactions business. Bed Bath & Beyond Inc. added 4.5 percent after raising the low end of its earnings forecast. Eli Lilly & Co. fell 3 percent as its experimental drug ramucirumab failed to meet its goals for treating breast cancer in a late-stage trial. Hertz Global Holdings Inc. sank 16 percent after cutting its forecasts.

The S&P 500 rose 0.3 percent to 1,698.67 at 4 p.m. in New York, extending its third-quarter rally to 5.8 percent. The Dow Jones Industrial Average climbed 55.04 points, or 0.4 percent, to 15,328.30. About 5.3 billion shares changed hands on U.S. exchanges, 8.6 percent below the three-month average.

“Economic news have been reasonably good,” Mark Foster, chief investment officer who oversees $620 million at Kirr Marbach & Co. in Columbus, Indiana, said in a telephone interview. “On the negative side, we have the short-term budget issues and debt ceiling. I don’t think that’ll end up being a major issue. People just get somewhat immune to all of that.”

The benchmark index declined 1.9 percent during a five-day losing streak through yesterday, retreating from an all-time high on Sept. 18, when the Federal Reserve refrained from reducing the pace of stimulus. Investors have been watching economic reports to help determine whether growth is sufficient for the central bank to begin cutting bond purchases at its next meeting in October.

A Labor Department report today showed the number of Americans filing applications for unemployment benefits unexpectedly fell last week, indicating further progress in the labor market. The economy expanded at faster pace in the second quarter from the previous three months, with gross domestic product rising at a 2.5 percent annualized rate, the Commerce Department said.

A separate report added to signs that rising mortgage rates may have slowed housing market momentum. Fewer Americans signed contracts in August to buy previously owned homes, figures from the National Association of Realtors showed. Data yesterday indicated purchases of new homes rose in August, capping the weakest two months this year.

Investors are also weighing whether lawmakers can avoid a looming government shutdown, with the S&P 500 paring an earlier gain of as much as 0.7 percent after House Speaker John Boehner, an Ohio Republican, said he doesn’t expect his chamber to pass a stopgap spending bill expected from the Senate. He also said he does not expect a government shutdown to happen.

The Senate likely will not vote on its version of the bill until this weekend, leaving the House just one full workday to act before spending authority for the federal government expires on Oct. 1. The House and Senate are at odds over language that withdraws funding for the 2010 health-care law.

The Office of Management and Budget estimated 30 days of shutdowns in 1995 and 1996 cost more than $1.4 billion, or $2.09 billion in today’s dollars.

On another fiscal front, Treasury Secretary Jacob J. Lew told Congress yesterday that the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt limit could lead to a downgrade of the U.S. government’s credit rating.

The S&P 500’s losing streak through yesterday was the longest since Dec. 28, when lawmakers wrangled over impending automatic spending cuts and tax increases known as the fiscal cliff. The index dropped as much as 3.4 percent over the last two weeks of 2012 and then jumped 5 percent in January for the best start to a year since 1997 after a last-minute budget deal was struck.

“Washington has been dragging their feet as of late but eventually they’ll be forced into action,” said Patrick Spencer, head of U.S. equity sales for Robert W. Baird & Co. in London. “We’ve been down this road before. It’s quite natural and healthy to have pull-backs in a bull market. We’ll shift into a stronger gear with a settlement on the budget and what I think will be a very positive earnings season.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, rose 0.4 percent to 14.06 today. The measure has fallen 17 percent this quarter.

Nine of 10 main groups in the S&P 500 advanced, with phone stocks and producers of consumer-discretionary products rising 0.9 percent. Nike Inc., which reported better-than-estimated quarterly earnings after the market’s close today, rose the most in the Dow, climbing 2.1 percent to $70.34. The stock added 5.6 percent to $74.30 at 4:34 p.m. in New York.

EBay climbed 4.5 percent to $56.64, its biggest rally since January. The owner of electronic-payments service PayPal said it will bolster that business by buying Braintree, a global payments platform that works with online and mobile-only startups such as room-rental service Airbnb and online restaurant-reservation company OpenTable Inc.

Bed Bath & Beyond gained 4.5 percent to $77.54. The retailer predicted full-year adjusted earnings per share of $4.88 to $5.01, up from a previous range of $4.84 to $5.01.

Air Products & Chemicals Inc. added 2.3 percent to $109.78.

The industrial gas producer said Chairman and Chief Executive Officer John E. McGlade will leave and it will add three independent directors, less than two months after investor William Ackman’s Pershing Square Capital Management LP became the company’s largest shareholder.

J.C. Penney Co. climbed 3 percent to $10.42, halting a six- day slide that peaked with a 15 percent plunge yesterday. The department-store chain repeated that it expects positive sales trends in the second half of the year, with some key items and sizes helping sales at stores and online. The shares have plunged 47 percent this year amid concern that it is running out of cash.

Eli Lilly fell 3 percent to $51.04. Lilly is counting on experimental drugs for Alzheimer’s, cancer and diabetes to revive growth as the company loses patent protection on some of its top products, including the antidepressant Cymbalta.

Hertz sank 16 percent, the most since May 2009, to $21.63.

The rental-car company trimmed its forecast for full-year revenue and profit, citing weaker than anticipated car rentals at U.S. airports.

Jabil Circuit Inc. lost 9.9 percent to $21.62 for the biggest retreat in the S&P 500. The electronics company that counts BlackBerry Ltd. as its second-largest customer said yesterday it will probably disengage from the struggling Canadian device maker in coming months. Jabil also forecast first-quarter profit below analyst estimates.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

All of our selfish impulses, all of our personal desires, obscure our true vision of the soul,

as they only point out our shabby ego.  When we are aware of our soul,

we perceive the inner life that surpasses our ego

and that has profound affinities with the Whole.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

The long arm of coincidence.

-Haddon Chambers, 1860-1921

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

I just read the Dow News Wire that Oracle Team US won the America’s cup: this has to rank as one of the biggest comebacks in sports history.  Wow, when we were in San Francisco watching the races a couple of weekends ago, the Kiwis had only to win one more race for the cup, the Americans were down 10.  Just goes to show – never give up.

Getty Images

Oracle Team USA in action

I laughed at Yachtsman Jimmy Spithill’s endearing comment, “You’re a rooster one day; a feather duster the next.”

Every exit is an entry somewhere. – Tom Stoppard

Photos of the day

Britain’s Bradley Wiggins rides past the Basilica of Santa Maria del Fiore, on his way to clinching the silver medal in the men’s individual time trial event, at the road cycling world championships, in Florence, Italy. Fabrizio Giovannozzi/AP

Pittsburgh Pirates left fielder Starling Marte (l.), center fielder Andrew McCutchen (c.) and right fielder Marlon Byrd (r.) celebrate after beating the Chicago Cubs 8-2 during their MLB National League baseball game in Chicago. Jeff Haynes/Reuters

Baseball breaks your heart.  It is designed to break your heart.  The game begins in the spring, when everything else begins again, and it blossoms in the summer, filling the afternoons and evenings, and then as soon as the chill rains come, it stops and leaves you to face the fall alone. – A. Bartlett Giamatti, Major League Baseball Commissioner, 1938-1989.

Market Closes for September 25^th, 2013

Market  Index	Close	Change
Dow  Jones	15273.26	-61.33    -0.40%
S&P 500	1692.77	-4.65    -0.27%
NASDAQ	3761.099	-7.155    -0.19%
TSX	12836.71	-12.18
		-0.09%

International Markets

Market  Index	Close	Change
NIKKEI	14620.53	-112.08
		-0.76%
HANG  SENG	23209.63	+30.59
		+0.13%
SENSEX	19856.24	-63.97
		-0.32%
FTSE 100	6551.53	-19.93
		-0.30%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.574	2.599
CND.   30 Year Bond	3.101	3.124
U.S.   10 Year Bond	2.6189	2.6552
U.S.   30 Year Bond	3.6585	3.6698

Currencies

BOC Close	Today	Previous
Canadian $	0.96929	0.97056
US   $	1.03168	1.03033
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39524	0.71672
US  $	1.35239	0.73943

Commodities

Gold	Close	Previous
London Gold   Fix	1333.50	1323.30
Oil	Close	Previous
WTI Crude Future	102.76	103.17
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Sept. 25 (Bloomberg) — Canadian stocks fell, after a two- day advance, as declines among telephone and consumer-staples companies offset a rally among raw-material shares amid the first gain in commodities prices in five days.

Torex Gold Resources Inc. and Yamana Gold Inc. gained at least 3 percent as the price of the metal snapped three days of losses. Teck Resources Ltd., Canada’s largest diversified miner, rose 1.4 percent as base metals prices advanced. Telus Corp. and BCE Inc. fell more than 1 percent as phone stocks retreated for the first time in nine days. BlackBerry Ltd. slumped 5.8 percent as investors continued to digest a potential $4.7 billion takeover by Fairfax Financial Holdings Ltd.

The Standard & Poor’s/TSX Composite Index fell 12.18 points, or 0.1 percent, to 12,836.71 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.8 percent this quarter and is up 3.2 percent in 2013.

“Today, the market has gold going for it,” said Keith Richards, fund manager with ValueTrend Wealth Management in Barrie, Ontario. His firm manages about C$110 million ($107 million). “The banks have supported the TSX, but they’re maybe a bit overbought, so it’s time to take a pause. I don’t see what else could really drive the TSX. It needs a catalyst and there isn’t one right now.”

Raw-materials stocks gained 1.4 percent as a group, the only increase among 10 industries in the S&P/TSX. Trading volume was 2.8 percent lower than the 30-day average.

“From time to time you see rebounds there in commodities, but the prices are stuck in a range,” said Stephen Gauthier, chief investment officer with Fin-XO Securities Inc. in Montreal. His firm manages about C$550 million. “What you need to see that change is stronger growth worldwide. That’s what people are waiting for.”

Alongside improvements in Europe and China, economic data in the U.S. will need to show signs beyond growth in real estate, Gauthier said. A report today showed U.S. new home sales in August climbed 7.9 percent compared with a revised 14 percent plunge in July.

Alacer Gold Corp. surged 9.6 percent to C$3.42. The gold producer, which is selling mines in Australia, said yesterday it expects to decide on an expansion at its Copler operation in Turkey by the end of 2014.

Torex Gold added 4.3 percent to C$1.46 and Yamana Gold rose 3 percent to C$11.01. Gold for December delivery increased 1.5 percent to $1,336.20 an ounce in New York. The price had declined 3.9 percent in the past three sessions.

Endeavour Silver Corp. climbed 6.6 percent to C$4.71 as silver futures rose 1.4 percent, snapping a three-day, 7.3 percent slide.

Teck Resources rose 1.4 percent to C$28.58 and First Quantum Minerals Ltd. rallied 1 percent to C$19.27 as base metals including copper, aluminum, zinc, tin and lead advanced.

Stockpiles of copper monitored by the London Metal Exchange fell for a 15th session.

Telus lost 2.2 percent to C$34.78 and BCE Inc. fell 1 percent to C$44.13 as telephone stocks slumped 1.1 percent, the first decline since Sept. 12. Telus, BCE and Rogers Communications Inc. have signaled their intent to bid in a wireless spectrum auction that didn’t include any submissions from major foreign companies.

CGI Group Inc. rose 0.3 percent to C$36.85, a record high, after the technology services company said it has signed an eight-year deal worth 75 million British pounds ($121 million) with Smart DCC Ltd. to develop and operate a system to link gas and electricity meters for utility companies.

BlackBerry, the smartphone maker, slumped 5.8 percent to C$8.27, the lowest close since November 2012.

On Sept. 23, BlackBerry said it had agreed to a tentative deal to sell itself to a group led by Fairfax, the largest company shareholder. The sale, for $9 a share in cash, is still subject to several conditions including securing financing and due diligence.

BlackBerry has plunged 24 percent in the past four days, since announcing on Sept. 20 worse-than-estimated earnings and smartphone sales for its second quarter and plans to fire 4,500 employees.

Consumer-staples shares slid 0.7 percent. Maple Leaf Foods Inc., the Canadian food processor, retreated 2.3 percent to C$13 for its fifth straight loss. Alimentation Couche-Tard Inc., the largest public convenience-store operator in North America, tumbled 2.4 percent to C$63.77.

US

By Lu Wang

Sept. 25 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its longest slump this year, as Wal- Mart Stores Inc. retreated and concern grew that a political showdown over government spending poses a threat to growth.

Wal-Mart lost 1.5 percent after the retailer told suppliers it’s cutting orders this quarter and next to address rising inventories. J.C. Penney Co. slumped 15 percent as Goldman Sachs Group Inc. said the department-store chain’s liquidity will be strained. Stryker Corp. slipped 2.9 percent on an agreement to buy Mako Surgical Corp. for $1.65 billion. Noble Corp. added 1.8 percent after the offshore rig contractor said it plans to spin off about half its fleet.

The S&P 500 fell 0.3 percent to 1,692.77 at 4 p.m. in New York, its fifth straight losing session. The Dow Jones Industrial Average, which includes Wal-Mart, slid 61.33 points, or 0.4 percent, to 15,273.26. About 5.9 billion shares changed hands on U.S. exchanges, in-line with the three-month average.

“There is a lot of noise that’s disruptive to people doing anything with a great deal of confidence,” Don Hodges, founder of Dallas-based Hodges Funds, said in a phone interview,referring to budget negotiations. His firm manages about $1.3 billion. “Anytime the market is as strong as it’s been in the last few weeks, you just know that it’s capable of having a pullback that shakes off people a little bit.”

The S&P 500 has dropped 1.9 percent in the past five days as investors weighed whether a looming government shutdown will hamper economic growth. The current losing streak is the index’s longest since Dec. 28, when lawmakers wrangled over impending automatic spending cuts and tax increases known as the fiscal cliff.

The Senate likely will not vote on a stopgap spending bill until this weekend, leaving the House just one full workday to act before spending authority for the federal government expires on Oct. 1. The House and Senate are at odds over language that withdraws funding for the 2010 health-care law.

On another fiscal front, Treasury Secretary Jacob J. Lew told Congress that the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt limit could lead to a downgrade of the U.S. government’s credit rating.

The wrangling comes as Americans are losing faith in the nation’s economic recovery, according to a Sept. 20-23 Bloomberg National Poll. Forty-four percent of poll respondents say they expect the economy, which has expanded for nine consecutive quarters, to remain about the same over the next year, while 28 percent see it weakening.

Investors have also been scrutinizing data to determine whether economic growth is robust enough for the Federal Reserve to begin paring back its $85 billion in monthly bond purchases.

A report from the Commerce Department today indicated purchases of new homes rose in August, capping the weakest two months this year, showing the fallout from mortgage rates at a two-year high is cooling the real-estate rebound. Demand slumped 14 percent in July. Separate government data showed orders for equipment such as computers and machinery climbed less than forecast in August.

The central bank’s decision Sept. 18 to refrain from slowing stimulus sent the S&P 500 to a record close of 1,725.52.

The gauge has retreated every session since the decision, as policy makers send mixed signals on the timing of the central bank’s next move. Fed Bank of St. Louis President James Bullard said Sept. 20 that tapering could start in October. William Dudley, head of the New York Fed, said yesterday any cut would depend on the economy’s performance.

“There has been some push and pull on whether this is just a temporary waiting for the taper to actually start, or whether lower for longer is the new reality,” Diane Jaffee, the New York-based group managing director for U.S. equities who oversees about $6.4 billion in assets at TCW Group Inc., said in a phone interview.

The S&P 500 has rallied 5.7 percent in the third quarter while Treasuries retreated 0.1 percent through yesterday, according to data compiled by Bloomberg and Bank of America Corp. The divergence will cause some funds to sell stocks and buy bonds to rebalance asset allocations. UBS AG strategist Boris Rjavinski projects “significant” outflows from U.S. equities into Treasuries, with as much as $41 billion in stocks being sold and up to $22 billion of fixed-income investments purchased.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, lost 0.5 percent to 14.01. The measure has fallen 22 percent this year.

Eight of 10 S&P 500 main industries fell as consumer- staples and health-care stocks dropped at least 0.7 percent.

Wal-Mart lost 1.5 percent to $74.65, the steepest drop in the Dow. Last week, an ordering manager at the company’s Bentonville, Arkansas, headquarters described the pullback in orders in an e-mail to a supplier, who said others got similar messages.

Merchandise has been piling up because consumers have been spending less freely than Wal-Mart projected, and the company has forfeited some sales because it doesn’t have enough workers in stores to keep shelves adequately stocked.

“We’ve seen a little bit of weakening in the strength of the consumer recently and Wal-Mart could be a good example of that, where people are starting to pull back on marginal purchases,” James W. Gaul, a fund manager at Boston Advisors LLC, which oversees about $2.3 billion from Boston, said by phone.

J.C. Penney sank 15 percent to $10.12, the lowest since December 2000. The stock has tumbled 49 percent in 2013.

“Weak fundamentals, inventory rebuilding, and an underperforming home department will likely challenge J.C. Penney’s liquidity levels in the third quarter,” Kristen McDuffy, at New York-based analyst for Goldman, wrote yesterday in a note to clients.

Stryker fell 2.9 percent to $68.79. The second-largest seller of orthopedic devices agreed to buy Mako for $30 a share to add technology for robot-assisted surgeries. Mako surged 82 percent to $29.46.

Carnival Corp. lost 5.3 percent to $32.70, extending a 7.7 percent drop yesterday to put the stock at its lowest since June. The world’s largest cruise-ship operator forecast an unexpected loss for the fourth quarter, and Morgan Stanley cut its recommendation to underweight, similar to a sell rating, from equal weight. Bank of America Corp. lowered its rating to neutral from buy.

JPMorgan Chase & Co. rallied 2.7 percent, the most in the Dow, to $51.70, snapping a two-day losing streak that pushed the stock down 4.7 percent.

The lender resumed settlement talks with the U.S. after authorities prepared to sue the bank yesterday in California federal court alleging it misrepresented the quality of mortgage-backed securities it sold from 2005 to 2007, a person familiar with the matter said.

A settlement may include $7 billion in cash and $4 billion for consumer relief, the Associated Press reported, citing an official familiar with ongoing negotiations among federal and state officials.

Noble advanced 1.8 percent to $38.60. The contractor said the planned spinoff will let it focus on higher-priced rigs working in deeper waters. An initial public offering of as much as 20 percent of the new company’s shares may precede a tax-free distribution of the new stock to existing Noble investors.

Facebook Inc. rallied 2.1 percent to $49.46, the stock’s sixth gain in the past seven sessions, with each advance setting a fresh record. Canaccord Financial Inc. initiated coverage of the social media company with a buy rating. Facebook is “very early in generating revenue from its enormous user base,” Michael Graham wrote in a note, giving the stock a price target of $60.

U.S. stocks are delivering the best risk-adjusted returns among the world’s biggest developed markets as a third straight year of earnings growth produces steadier gains. The S&P 500 has risen 1.9 percent in 2013 when adjusted for price swings, the top advance among 24 of the largest developed nations, according to the data compiled by Bloomberg. The performance exceeds Japan, where prices have surged almost twice as much this year, as a measure of U.S. volatility reached a six-year low.

U.S. equities have provided more stable returns as China’s economy expands at the slowest pace in at least two decades and Europe faces record joblessness, prompting investors to seek safety in American companies. The Fed’s unprecedented bond purchases and five years of S&P 500 profit growth have helped rebuild investor confidence after the financial crisis and reduce price swings.

“The U.S. continues to be the most resilient economy across the world and its markets have reflected that with the least amount of volatility,” Joseph Tanious, global market strategist for J.P. Morgan Asset Management, said in a phone interview from New York. His firm oversees about $1.5 trillion.

“Earnings growth has continued to hit record highs. There is less skepticism about the long-term potential in U.S. markets.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Death is extraordinarily like life,

when we know how to live.

You cannot live without dying.

You cannot live if you do not die

psychologically every minute.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Reason only discovers the shortest way: it does not

discover the destination.

-George Bernard Shaw, 1856-1950

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

“September is an optimistic month,” writes Lindsey Taylor in the Wall Street Journal.  “all one has to do is look up.  The clouds in the vast, clear, corn-flower-blue skies are transfixing – whiter, fresher and puffier than seems possible….a restless September sky.”

Pompeii up Close: If you happen to have London on your itinerary, you can take in the exhibit “Life and Death in Pompeii and Herculaneum” at the British Museum.  The rest of us can head to the nearest movie theater that shows Fathom Events on Sept. 25 to catch an in-depth tour of the museum’s blockbuster exhibit (open through September).  Pompeii From the British Museum is a behind-the-scenes look at this collection of artifacts from the ancient Roman civilization destroyed by the eruption of Mount Vesuvius.  Check for local showings at www.fathomevents.com. –CSM, September, 2013.

Jim Henson, the muppet creator was born on this day in 1936.

Photos of the day

Bert and Ernie, as well as Elmo are among a donation of additional Jim Henson objects to the Smithsonian’s National Museum of American History in Washington, D.C. Henson’s daughter, Cheryl Henson, is donating 20 more puppets and props to the National Museum of American History. Jacquelyn Martin/AP

Left to right, Florence Mayor Matteo Renzi, New York Mayor Michael Bloomberg, London Mayor Boris Johnson, and Warsaw Mayor Hanna Gronkiewicz-Waltz, during the Mayors Challenge competition, at City Hall in London. Mayor Bloomberg is offering European cities millions of dollars to be government groundbreakers, tapping his personal fortune to extend his cities-as-civic-laboratories campaign. Matt Dunham/AP

Market Closes for September 24^th, 2013

Market  Index	Close	Change
Dow  Jones	15334.59	-66.79    -0.43%
S&P 500	1697.42	-4.42    -0.26%
NASDAQ	3768.254	+2.966    +0.08%
TSX	12848.89	+37.71
		+0.29%

International Markets

Market  Index	Close	Change
NIKKEI	14732.61	-9.81
		-0.07%
HANG  SENG	23179.04	-192.50
		-0.82%
SENSEX	19920.21	+19.25
		+0.10%
FTSE 100	6571.46	+14.09
		+0.21%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.599	2.648
CND.   30 Year Bond	3.124	3.165
U.S.   10 Year Bond	2.6552	2.6999
U.S.   30 Year Bond	3.6698	3.7250

Currencies

BOC Close	Today	Previous
Canadian $	0.97056	0.97237
US   $	1.03033	1.02841
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38803	0.72045
US  $	1.34717	0.74230

Commodities

Gold	Close	Previous
London Gold   Fix	1323.30	1322.86
Oil	Close	Previous
WTI Crude Future	103.17	103.69
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle and Eric Lam

Sept. 24 (Bloomberg) — Canadian stocks rose for a second day as consumer shares rallied after better-than-expected retail sales boosted prospects for economic growth.

Alimentation Couche-Tard Inc. advanced 2.5 percent to lead consumer-staples producers higher. Canadian Utilities Ltd. added 2.5 percent to pace gains among utilities companies. Air Canada, the nation’s largest airline, rallied to a two-year high.

BlackBerry Ltd. dropped 3.3 percent as investors weighed a $4.7 billion deal to take the smartphone maker private.

The Standard & Poor’s/TSX Composite Index rose 37.71 points, or 0.3 percent, to 12,848.89 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.9 percent this quarter and is up 3.3 percent in 2013. Trading volume was 2.9 percent below the 30-day average.

“The retail numbers are showing that GDP numbers are going to look a little bit better because of that,” said Paul Harris, partner and portfolio manager at Avenue Investment Management, which manages C$300 million ($290 million), said in a phone interview from Toronto. “They show that the market is a little bit better.”

Statistics Canada said today that retail sales rose more than forecast in July, reversing a drop a month earlier and adding to evidence that growth in the world’s 11th largest economy is gaining momentum.

All 10 main industries in the benchmark equities gauge advanced. Producers of consumer staples rallied the most, adding 1.1 percent with 10 of 11 members rising.

Alimentation Couche-Tard, which operates 24-hour convenience stores, jumped 2.5 percent to C$65.33. North West Co., a general purpose retailer, gained 2.8 percent to C$24.

Canadian Utilities gained 2.5 percent to C$35.68 as utilities stocks increased 0.8 percent as a group.

Air Canada gained 5.7 percent to C$3.52, the highest close since January 2011. The stock has rallied 7.3 percent in the past three days. The company yesterday said it was looking for bids for several U.S. cross-border routes, beginning in mid-2014.

Phone stocks gained for an eighth day, with the S&P/TSX Telecom Services Index closing at its highest level since June 18. Manitoba Telecom Services Ltd. gained 0.9 percent to C$33.20 and Telus Corp. rose 0.3 percent to C$35.56, a three-month high.

Energy shares added 0.1 percent, erasing earlier losses after U.S. President Barack Obama said recent overtures from Iran may offer a basis for a “meaningful agreement” to resolve the confrontation over the Persian Gulf nation’s nuclear program, one of the primary sources of instability in the Middle East. Oil fell to an eight-week low but remained 6.8 percent higher this quarter, the most in a year, and up 12 percent in 2013.

Commodities stocks “are quite attractive,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto.

The firm manages about C$1 billion. “The oil stocks, some of them now have performed quite nicely so they’re catching up” to the price of oil, he said.

Commodity shares, which have lost 29 percent this year, fluctuated between gains and losses as investors watched a looming political clash over the U.S. budget that could shut down the federal government as early as next week and damp growth in the world’s biggest economy. America is Canada’s largest trading partner and the second-biggest user of industrial metals such as copper.

BlackBerry dropped 3.3 percent to C$8.78, below the $9 a share that its biggest shareholder, Fairfax Financial Holdings Ltd., agreed to pay in a tentative buyout deal.

The $4.7 billion offer forges a path to go private after years of losing ground to Apple Inc.’s iPhone and Google Inc.’s Android.

US

By Lu Wang

Sept. 24 (Bloomberg) — U.S. stocks fell for a fourth day amid concerns over budget talks and economic growth as investors weighed prospects for easing tensions in the Middle East.

Red Hat Inc. slumped 12 percent after billings at the largest seller of the Linux operating system trailed estimates.

Homebuilders gained 2.3 percent as a group after a report showed home prices increased by the most in more than seven years and Lennar Corp.’s profit beat analyst estimates. Applied Materials Inc. advanced 9.1 percent after agreeing to buy Tokyo Electron Ltd. for about $9.39 billion in stock.

The Standard & Poor’s 500 Index fell 0.3 percent to 1,697.42 at 4 p.m. in New York. The Dow Jones Industrial Average lost 66.79 points, or 0.4 percent, to 15,334.59. About 6 billion shares changed hands on U.S. exchanges, in line with the three- month average.

The market is “riding waves of news, both good and bad,” Malcolm Polley, the chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said in a telephone interview. His firm manages $1.1 billion. “The market is very dependent on macro news.”

The S&P 500 initially fell as much as 0.4 percent after the Conference Board’s index of U.S. consumer confidence slumped in September to a four-month low. A separate report showed a gauge of manufacturing in the region covered by the Federal Reserve Bank of Richmond shrank in September.

The equity benchmark index erased earlier losses as President Barack Obama said recent overtures from Iran may offer a basis for a “meaningful agreement” to resolve the confrontation over the Persian Gulf nation’s nuclear program, one of the primary sources of instability in the Middle East.

Iranian officials told the U.S. that the time isn’t right for direct contact between the two countries’ leaders.

Stocks turned lower in the last 30 minutes of trading as investors watched the debate in Washington over spending cuts.

U.S. Senate Democrats offered a new proposal that funds the government through Nov. 15, complicating efforts to avoid a government shutdown in a week as Republican Senator Ted Cruz began an extended speech in opposition to funding for the health-care law.

“We may have a couple few weeks where there is still lingering concern over the Fed along with very much headline risk around the budget ceiling debate,” David Chalupnik, head of equities at Nuveen Asset Management in Minneapolis, said in a phone interview. His firm manages more than $115 billion. “Over the short term, we would see the market continue to either muddle through or consolidate before we hit earnings season.”

The S&P 500 has declined 1.6 percent over four days after reaching an all-time high of 1,725.52 as the Federal Reserve refrained from cutting stimulus. The Federal Open Market Committee said after its Sept. 17-18 meeting that it wants more evidence of an economic recovery before paring its $85 billion of monthly asset purchases, surprising economists who had forecast a reduction. The S&P 500 has gained 5.7 percent this quarter and is up about 19 percent for the year.

Fed Bank of New York President William C. Dudley said today the central bank may reduce the pace of its quantitative easing program in 2013 depending on the economy’s performance.

“If the economy were behaving in a way aligned with the Fed’s June forecast, then it’s certainly likely that the Fed would begin to taper later this year,” Dudley said in an interview with CNBC. “I certainly wouldn’t want to rule it out. But it depends on the data.”

Stocks fell on Sept. 20 as Fed Bank of St. Louis President James Bullard said policy makers may decide to reduce their monthly bond purchases at the meeting in October.

“There are so many different views from the Fed itself and there is no one voice that seems to be articulating a common message,” Mark Freeman, who oversees about $15.8 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said by phone. “What they ultimately created is uncertainty and that’s never a positive for the market.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, slipped 1.6 percent to 14.08, extending its drop for the year to 22 percent.

Seven out of 10 S&P 500 groups fell as telephone and consumer-staples companies declined more than 0.7 percent for the worst performance.

Red Hat tumbled 12 percent, the most in the S&P 500, to $46.73. Billings, a predictor of future revenue, rose 8 percent in the second quarter from a year earlier to $376 million.

Analysts at CLSA had projected an increase of 17 percent, and Stifel Nicolaus & Co. predicted 14 percent growth.

JPMorgan Chase & Co. fell 2.2 percent to $50.32 for the biggest retreat in the Dow. The lender resumed settlement talks with the U.S. as the government was preparing to sue the bank in California federal court alleging it misrepresented the quality of mortgage-backed securities it sold from 2005 to 2007, according to a person familiar with the matter.

The bank offered to pay about $3 billion to settle an array of probes, the Wall Street Journal reported today, citing a person familiar with the matter. The Justice Department pressed the bank to pay more, the report said, citing the person.

Carnival Corp. slipped 7.7 percent to $34.54. The world’s largest cruise-ship operator forecast fourth-quarter results that trailed analysts’ estimates, citing a decline in advance bookings and higher fuel prices.

The S&P Supercomposite Homebuilding Index rose 2.3 percent, with all its 11 members gaining, as an industry report showed home prices in 20 U.S. cities increased in the 12 months through July by the most in more than seven years.

Lennar, the third-largest U.S. homebuilder by revenue, rose 4.3 percent to $36.01 after fiscal third-quarter earnings topped analysts’ estimates, driven by higher sales and home prices.

Applied Materials advanced 9.1 percent to $17.45 as the largest supplier of chipmaking equipment agreed to buy Tokyo Electron. Gary Dickerson, chief executive officer of Applied Materials, will become CEO of the combined company, which will be 68 percent owned by Applied Materials shareholders.

Facebook Inc. climbed 2.7 percent to $48.45. Citigroup Inc.’s Mark May raised his recommendation on the social-network operator to buy from neutral, saying feedback from advertisers and agencies suggest that the growth seen in the second quarter is sustainable. May also boosted his price estimate by 72 percent to $55 a share.

CarMax Inc. gained 3.6 percent to $51.79. The car dealer’s second-quarter profit beat analyst estimates as used car sales climbed 20 percent from a year ago.

Have a wonderful evening everyone.

 

Be magnificent!

 

We would rather cling to the known than face the unknown –

the known being our house, our furniture, our family,

our character, our work, our knowledge, our fame, our loneliness, our gods –

that little thing that moves around incessantly within itself,

with its own limited embittered existence.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

At 18 our convictions are hills from which we look; at 45

they are caves in which we hide.

-F. Scott Fitzgerald, 1896-1940

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1930, Ray Charles was born.  It was wonderful to read about the new stamp (see photo below) being issued to commemorate him.  During his lifetime, he gave the world more than 50 years of jazz, blues, R & B, country and gospel.  He worked as a professional musician in Florida, but at age 17, he took his savings of $600 and moved to Seattle.  There he met Quincy Jones, who was 14 years old at the time, and a friendship began that would last a lifetime.

Must be an auspicious day for musicians –  Bruce Springsteen turns 64 today.  John Coltrane was born on September 23^rd, 1926.

Singer Hank Williams had his last studio session on September 23, 1952, recording Your Cheatin’ Heart and other songs.

The planet Neptune has a birthday of sorts today – it was discovered on this date in 1846 by German astronomer Johann Gottfried Galle.

You better live every day like your last because one day you’re going to be right. –Ray Charles, 1930-2004.

Photos of the Day –September 23rd, 2013

A stamp featuring musician Ray Charles is unveiled as singer Ashanti performs at the event at Morehouse College in Atlanta. The US Postal Service is planning to add soul singer Ray Charles to its ‘Music Icons Forever’ stamp series. David Goldman/AP

A member of the media tries out a Surface 2 tablet during the launch of the Microsoft Surface 2 tablets in New York. Shannon Stapleton/Reuters

Market Closes for September 23^rd, 2013

Market  Index	Close	Change
Dow  Jones	15401.38	-49.71    -0.32%
S&P 500	1701.84	-8.07    -0.47%
NASDAQ	3765.288	-9.440    -0.25%
TSX	12811.18	+4.71
		+0.04%

International Markets

Market  Index	Close	Change
NIKKEI	14742.42	-23.76
		-0.16%
HANG  SENG	23371.54	-130.97
		-0.56%
SENSEX	19900.96	-362.75
		-1.79%
FTSE 100	6557.37	-39.06
		-0.59%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.648	2.687
CND.   30 Year Bond	3.165	3.206
U.S.   10 Year Bond	2.6999	2.7374
U.S.   30 Year Bond	3.7250	3.7649

Currencies

BOC Close	Today	Previous
Canadian $	0.97237	0.97078
US   $	1.02841	1.03010
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38758	0.72068
US  $	1.34924	0.74116

Commodities

Gold	Close	Previous
London Gold   Fix	1322.86	1325.60
Oil	Close	Previous
WTI Crude Future	103.69	105.51
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Sept. 23 (Bloomberg) — Canadian stocks rose, halting a two-day slide, as phone stocks gained after foreign competitors signaled no intention to join a wireless-spectrum auction and BlackBerry Ltd. pared declines after agreeing to a buyout.

BlackBerry was unchanged, erasing earlier losses of as much as 8.2 percent, after saying it has a deal to sell itself for $4.7 billion to a group led by Fairfax Financial Holdings Ltd.

Rogers Communications Inc. rose 1.2 percent as Canada’s three largest phone carriers placed deposits to bid in a spectrum auction that is not expected to attract a foreign competitor.

National Bank of Canada climbed 0.9 percent to pace gains among the nation’s lenders. Catamaran Corp. dropped 3.5 percent after Morgan Stanley cut its rating on the stock.

The Standard & Poor’s/TSX Composite Index rose 4.71 points, or less than 0.1 percent, to 12,811.18 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.6 percent this quarter and is up 3 percent in 2013. Trading volume was 3.3 percent above the 30-day average.

“The big news event today was BlackBerry,” said John O’Connell, chief executive officer with Davis Rea Ltd. in Toronto. The firm manages about C$600 million. The gains among phone stocks show “the markets were overreacting to the threat of an entrance from foreign telecoms,” he said.

The S&P/TSX traded little changed for most of the morning session before the BlackBerry announcement sent the index up by as much as 0.2 percent. The company’s shares erased an earlier drop to turn as high as 4.1 percent before finishing the day unchanged at C$9.08.

That’s roughly in line with the $9 a share offered by a group led by Fairfax, its largest shareholder, in a tentative deal. The deal values BlackBerry at a 3.1 percent premium over its closing price last week.

The stock plunged 16 percent Sept. 20 after the company released second-quarter earnings on that fell short of analysts’ estimates. The Waterloo, Ontario-based company also said it’s cutting 4,500 jobs and taking a writedown of as much as $960 million for unsold inventory of its Z10 phone — a touch-screen device unveiled in January as its answer to the iPhone.

The acquirers will have six weeks to scrutinize BlackBerry’s books, a span in which the smartphone maker can seek other takeover offers. Fairfax, a financial services holding company, added 1.1 percent to C$420.45.

Wireless carriers rallied after the industry’s largest domestic players applied to bid in a wireless spectrum auction on Jan. 14, according to a list on Industry Canada’s website.

Rogers Communications, Canada’s largest wireless carrier, increased 1.2 percent to C$45.36 and BCE Inc. added 1.3 percent to C$44.51. Telus Corp. jumped 2.5 percent to C$35.44.

The roster of applicants doesn’t appear to include major foreign players. Verizon Communications Inc. said Sept. 3 it wouldn’t enter the Canadian market after saying earlier in the summer it was exploring the idea.

It’s “good for incumbents,” Greg MacDonald, an analyst in Toronto at Macquarie Capital Markets, said in an e-mail, referring to the three largest companies.

Financial firms advanced. National Bank rose 0.9 percent to C$85.78 and Canadian Imperial Bank of Commerce gained 0.8 percent to C$83.47. Royal Bank of Canada, the nation’s largest lender, added 0.5 percent to C$66.26.

Materials producers declined as prices for metals from gold to copper slumped amid speculation the U.S. Federal Reserve will reduce fiscal stimulus, outweighing data from China showing a preliminary manufacturing index gauge climbed more than expected in September.

Iamgold Corp. retreated 4.2 percent to C$4.99 and Osisko Mining Corp. tumbled 5.6 percent to C$5.11. Silver Standard Resources Inc. dropped 7.5 percent to C$6.57.

Catamaran, a pharmacy benefits management company, slumped 3.5 percent to C$49.29, the lowest close since May. The stock has lost 14 percent since customer Walgreen Co. said on Sept. 17 it is moving staff into a private health exchange. Analysts with Morgan Stanley today lowered Catamaran’s rating to equal weight, the equivalent of a hold.

Agrium Inc., North America’s third-largest fertilizer producer, lost 3.1 percent to C$89.49, the biggest drop since July 30. The company said earnings will fall in its wholesale unit this quarter because of declines in sales volumes of as much as 30 percent compared with a year earlier.

Prices for potash, a major fertilizer used to strengthen crops, have declined since OAO Uralkali, the world’s biggest producer, pulled out of a trading venture with Belarus in July and said it would sell its product at a lower price.

US

By Lu Wang

Sept. 23 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index having the longest retreat in a month, as financial shares slumped and investors watched speeches from Federal Reserve officials for clues on monetary policies.

Goldman Sachs Group Inc. and Citigroup Inc. declined more than 2.7 percent as Atlantic Equities LLP forecast a drop in fixed-income trading revenue for the biggest U.S. banks.

Homebuilders slipped 1.6 percent as a group before Lennar Corp. and KB Home report earnings tomorrow. Apple Inc. surged 5 percent after saying first-weekend sales of its new iPhones topped 9 million units.

The S&P 500 retreated 0.5 percent to 1,701.84 at 4 p.m. in New York. The benchmark gauge has lost 1.4 percent over three days, giving back all its gains from the Fed’s unexpected move last week to maintain stimulus levels. The Dow Jones Industrial Average slipped 49.71 points, or 0.3 percent, to 15,401.38.

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

“At some point, investors are going to say, ‘What’s underpinning this strong rally? We need some solid numbers,’” Scott Armiger, chief investment officer at Christiana Trust in Wilmington, Delaware, said in a phone interview. The firm has $6 billion under administration. Fed policy makers “are trying to neutralize the market. This time Bernanke said no tapering and they’re all running out and saying ‘wait a minute, folks, don’t get carried away.’”

The S&P 500 rose 1.3 percent last week, touching a record high, as the Federal Open Market Committee said at its Sept. 17-18 meeting that it will continue to buy $85 billion of assets a month, surprising economists who had forecast a reduction. The S&P 500 has gained 6 percent for the quarter and is up 19 percent for the year.

The central bank has left its main interest rate near zero since December 2008 and has expanded its balance sheet to a record $3.66 trillion through three rounds of stimulus. The quantitative easing program has helped the S&P 500 surge more than 150 percent since March 2009.

The rally has pushed equities to their highest valuations in more than three years. At a record close on Sept. 18, the S&P 500 traded at 16.5 times reported earnings, a multiple not seen since May 2010, data compiled by Bloomberg show.

Three regional bank presidents spoke today. Fed Bank of New York President William C. Dudley said policy makers must “forcefully” push against economic headwinds as the U.S. has yet to show “any meaningful pickup” in momentum. Fed Bank of Atlanta President Dennis Lockhart said monetary policy should focus on creating a more dynamic economy. Fed Bank of Dallas President Richard Fisher said the central bank harmed its credibility with the decision last week.

The S&P 500 fell 0.7 percent on Sept. 20 as Fed Bank of St. Louis President James Bullard said policy makers may decide to reduce their monthly bond purchases at the meeting in October.

“The more people who speak from the Fed in one day, the less clarity there is,” Richard Sichel, who oversees about $1.9 billion as chief investment officer at Philadelphia Trust Co., said by phone. “People will be hanging at every word that’s said for more clues about our monetary policy.”

Even as investors focus on the Fed’s policies, a risk is rising from another corner of Washington. Hardening positions on the federal budget and borrowing limit, and recent political setbacks suffered by both President Barack Obama and Republican congressional leaders as they go into the fight, are raising the odds of a government shutdown, debt default or near-miss that could roil equities markets.

Forty percent of global investors surveyed in a Sept. 10 Bloomberg poll said they would pull back on U.S. markets in the event of a government shutdown, which many economists say would be less damaging than a debt default.

“We are in for another ugly confrontation,” said Howard Ward, the chief investment officer for growth equity at Rye, New York-based Gamco Investors Inc., which oversees about $40 billion. “Even though everyone knows the impasse will be short- lived, it is a sad reminder of how dysfunctional Washington has become. It will be a catalyst for taking profits after the recent run-up.”

Outside the U.S., German Chancellor Angela Merkel was re- elected yesterday, winning the biggest tally since Helmut Kohl’s post-reunification victory of 1990. In Asia, the preliminary reading of a purchasing managers’ index for Chinese manufacturing compiled by HSBC Holdings Plc and Markit Economics climbed to 51.2 in September from 50.1 in August. That beat the 50.9 median estimate of economists surveyed by Bloomberg News.

U.S. equities will likely extend their declines this week, if history is any guide, after the Sept. 20 expiration in futures and options contracts, according to MacNeil Curry, a New York-based technical strategist at Bank of America Corp.

When the quarterly expiration process known as triple witching occurs in September, the following week has resulted in losses 68 percent of the time for the S&P 500 since equity index futures were created in 1982, according to a study by Curry. In the past 10 years, the S&P 500 has fallen 80 percent of the time in the week after September triple witching, averaging a decline of 1.9 percent, the data show.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, jumped 9.1 percent, the most since Aug. 27, to 14.31. The measure is still down 21 percent this year.

Seven of 10 S&P 500 industry groups declined, with financial shares falling 1.5 percent as a group for the largest drop. Utility and technology shares had the best performance, rising 1.2 percent and 0.3 percent, respectively.

The largest U.S. banks’ fixed-income trading revenue will probably fall 20 percent in the third quarter from a year ago on lower volumes, Richard Staite, an analyst at Atlantic Equities wrote in a note. Staite cut his estimate for Goldman Sachs’s per-share earnings 18 percent to $2.47 and Citigroup’s by 14 percent to $1.05.

Goldman Sachs slid 2.7 percent to $165.25 for the biggest retreat in the Dow. Citigroup sank 3.2 percent to $49.57.

JPMorgan Chase & Co. retreated 2.5 percent to $51.46 and Bank of America Corp. erased 2.1 percent to $14.14.

The S&P Supercomposite Homebuilding Index declined 1.6 percent, with all 11 members falling. Lennar slid 1.7 percent to $34.54 while KB Home lost 3.4 percent to $17.03.

Lennar’s profit growth during the three months ended August probably slowed to 13 percent from 105 percent in the previous quarter while KB Home’s earnings may have increased 32 percent, less than half its pace in the previous quarter, analyst estimates compiled by Bloomberg show.

Apple jumped 5 percent, the most in the S&P 500 and its biggest gain since July 24, to $490.64. The company sold 9 million iPhone 5s and 5c models. That topped the 5 million in opening-weekend sales for last year’s model and surpassed analyst estimates that ranged from 6 million to 7.75 million, according to a Bloomberg poll.

Pandora Media Inc., the biggest web radio service, tumbled 10 percent to $24.26 after Apple said more than 11 million listeners have used iTunes Radio since its launch this year.

BlackBerry Ltd. added 1.1 percent to $8.82. The company entered a tentative agreement for a $4.7 billion buyout from a group led by its biggest shareholder, Fairfax Financial Holdings Ltd., forging a path to go private after a new line of smartphones failed to catch on.

Shares of BlackBerry fell as much as 6.1 percent earlier as Jefferies Group LLC lowered its rating on the shares to hold from buy, saying the handset business has a negative value. The stock tumbled 17 percent on Sept. 20 after the company posted quarterly sales that trailed analysts’ estimates by half and announced 4,500 job cuts.

General Electric Co. advanced 1.1 percent to $24.28 after winning contracts worth $2.7 billion from a unit of Sonelgaz, Algeria’s state-owned electricity and gas company. GE will supply heavy-duty gas turbines, steam turbines and generators for nine power plants, according to a statement.

Walgreen Co. added 1.3 percent to a record $56.23. Morgan Stanley boosted its rating on the drugstore chain to overweight from equal weight.

Have a wonderful evening everyone.

 

Be magnificent!

 

A mind that is burdened with the past is a sorrowful mind.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

From even the greatest of horrors

irony is seldom absent.

-H.P. Lovecraft, 1890-1937

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

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

Last Thursday, here in Victoria we had a lightning storm that lit up the sky.  Did any of you have the chance to watch it?  I found some amazing pictures of the storm last Thursday that I wanted to share with you, as well as some fun facts on lighting!

• There are bolts of lightning striking somewhere on Earth every second.
• Lightning strikes usually last around 1 or 2 microseconds.
• Lightning contains millions of volts of electricity.
• Thunder is the sound caused by lightning.
• The average temperature of lightning is around 20000 °C (36000 °F).
• The study of lightning is known as fulminology.
• Astraphobia is the fear of thunder and lightning.

“Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship.” – Buddha

Photos of the Day –September 20^th, 2013

The moon shines near the top of Tokyo SkyTree in Tokyo on the mid-autumn festival day. Kazunori Kasahara/Tokyo Shimbun/AP

Steam from the Verso paper mill is backlit by the light of the setting moon in this time-exposure in Bucksport, Maine. Verso makes coated papers used by publications such as catalogs and magazines. Robert F. Bukaty/AP

Market Closes for September 20^th, 2013

Market  Index	Close	Change
Dow  Jones	15451.01	-185.54    -1.19%
S&P 500	1710.52	-11.82    -0.69%
NASDAQ	3774.728	-14.656    -0.39%
TSX	12829.62	-97.16
		-0.75%

International Markets

Market  Index	Close	Change
NIKKEI	14742.42	-23.76
		-0.16%
HANG  SENG	23502.51	+385.06
		+1.67%
SENSEX	20263.71	-382.93
		-1.85%
FTSE 100	6596.43	-28.96
		-0.44%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.687	2.705
CND.   30 Year Bond	3.206	3.221
U.S.   10 Year Bond	2.7374	2.7446
U.S.   30 Year Bond	3.7649	3.7962

Currencies

BOC Close	Today	Previous
Canadian $	0.97078	0.97416
US   $	1.03010	1.02652
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39332	0.71771
US  $	1.35260	0.73932

Commodities

Gold	Close	Previous
London Gold   Fix	1325.60	1366.29
Oil	Close	Previous
WTI Crude Future	105.51	106.39
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle and Eric Lam

Sept. 20 (Bloomberg) — Canadian stocks fell for a second day as BlackBerry Ltd. plunged the most in three months and gold producers slumped after a Federal Reserve policy maker said a small tapering of bond buying is possible next month.

BlackBerry tumbled 16 percent after saying it will cut 4,500 jobs and record an inventory writedown of as much as $960 million after a new set of devices failed to catch on with consumers. Iamgold Corp. and Eldorado Gold Corp. retreated at least 7.7 percent as gold fell the most in 11 weeks. Goldcorp Inc. slid 3.8 percent after Chairman Ian Telfer agreed to pay a C$200,000 ($194,000) fine in a settlement over allegations that he violated securities laws.

The Standard & Poor’s/TSX Index fell 120.31 points, or 0.9 percent, to 12,806.47 at 4 p.m. in Toronto, paring a weekly gain of 0.7 percent. Trading volume was 117 percent higher than the 30-day average.

Once a quarter, futures and options for indexes and single stocks expire on the same day, leading to a phenomenon called quadruple witching, with increased volume as investors close out their positions.

A comment by Federal Reserve Bank of St. Louis President James Bullard “saying tapering could happen in October got people all nervous, and corresponding with that gold went lower,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. His firm manages about C$220 million ($213.7 million). “The message is not clear, so there’s some nervousness out there.”

“There’s an index rebalancing happening as well as quadruple witching for options, so you’ll see some volatility at the close,” he said.

Bullard, a voter on policy this year who has backed the Fed’s bond buying, said today the decision not to taper stimulus was a close call and “small” cuts are possible next month.

Policy makers meet Oct. 29-30.

The benchmark Canadian equity gauge soared to a two-year high on Sept. 18 after the U.S. Fed said it will “await more evidence” for sustained economic recovery before reducing its $85 billion in monthly bond buying.

Iamgold plunged 11 percent to C$5.25 and Eldorado Gold sank 7.7 percent to C$7.15 as gold for December delivery tumbled 2.7 percent to $1,332.50 an ounce in New York, the biggest drop since July 5.

Gold stocks slumped 5.6 percent as a group, the worst decline in six weeks, as all 24 members of the S&P/TSX Gold Index retreated. Nine of 10 industries in the S&P/TSX fell.

BlackBerry, based in Waterloo, Ontario, plunged 16 percent to C$9.08, the most since June 28. The smartphone maker, which is evaluating a sale, expects to report a net operating loss of as much as $995 million for the fiscal second quarter, according to a statement today.

Sales in the quarter were about $1.6 billion, just more than half the $3.03 billion average estimate of analysts surveyed by Bloomberg. The company sold about 5.9 million smartphones in the quarter.

Goldcorp lost 3.8 percent to C$26.96. Telfer, the company’s chairman, was included in an Ontario Securities Commission statement of allegations in February 2012 regarding an alleged insider-trading scheme.

Telfer admitted his conduct fell below standards expected, Cullen Price, representing OSC staff, said at a hearing today in Toronto. In addition to paying a fine to the regulator, Telfer will be banned from arranging the right for people to buy shares in private placements for one year.

S&P Dow Jones Canadian Index Services said on Sept. 13 that it will make changes to the benchmark S&P/TSX at the close today. Additions include Air Canada, the nation’s largest air carrier, and NuVista Energy Ltd. Niko Resources Ltd. will be removed from the index.

Air Canada slid 2.4 percent to C$3.20 and NuVista slipped 4.9 percent to C$7.01. Niko lost 1.2 percent to C$4.07.

US

By Lu Wang and Jeff Sutherland

Sept. 20 (Bloomberg) — U.S. stocks fell the most since August and Treasuries rose as concerns grew that political debate over government spending and potential Federal Reserve stimulus cuts may pose a threat to economic growth. Emerging- markets shares dropped and gold retreated the most in 11 weeks.

The Standard & Poor’s 500 Index dropped 0.7 percent at 4 p.m. in New York for its biggest drop since Aug. 27. The Stoxx Europe 600 Index declined 0.3 percent. Yields on 10-year Treasuries slipped two basis point to 2.73 percent. The MSCI Emerging Markets Index fell after rallying 2.2 percent yesterday, as India’s banks drove a slump in financial shares.

The S&P GSCI Index slid 0.7 percent after gold declined 2.7 percent and silver had the biggest retreat in three months. Oil fell to a one-month low.

Fed Bank of St. Louis President James Bullard said a small tapering of bond buying is possible next month after the central bank made a close call this week in deciding not to slow purchases. The Federal Open Market Committee said it wants more evidence of an economic recovery before paring its $85 billion- a-month bond-buying program. The U.S. House voted to finance the federal government through mid-December and choke off funding for President Barack Obama’s health-care law, setting up a showdown with the Senate and the White House.

“It’s probably a little confusing to the market what’s coming out of the Fed,” John Kvantas, a San Antonio, Texas- based executive director who helps manage more than $16 billion at USAA Investments, said in a phone interview. “Maybe the Fed is trying to send a message that ‘yeah we didn’t taper, but it doesn’t mean we will never taper and maybe actually will taper still quite soon.’”

About 8.9 billion shares changed hands on U.S. exchanges, the most since June 28, as futures and options contracts expire in a process known as quadruple witching. Announced index changes, including the addition of Visa Inc., Goldman Sachs Group Inc. and Nike Inc. to the Dow Jones Industrial Average, take effect after the markets’ close. The operator of the S&P 500 also did its quarterly rebalancing of the index to adjust member weightings. The Dow tumbled 1.2 percent, the most since Aug. 15.

The S&P 500 rallied 1.3 percent this week and is up 4.7 percent for September, rebounding from its worst month since May 2012, after the central bank unexpectedly refrained from reducing monetary stimulus. The stimulus helped boost the equity index as much as 155 percent higher since March 2009. The S&P 500 and the Dow Jones Industrial Average reached record highs on Sept. 18 after the Fed’s announcement.

Bullard said today at the New York Association for Business Economics luncheon that he wants to see higher inflation before backing less accommodation from the central bank. Kansas City Fed President Esther George, who dissented at the last FOMC meeting, said at the Manhattan Institute for Policy Research that the Fed needs credibility for markets to trust its guidance. Policy makers meet Oct. 29-30.

“Weaker data came in,” Bullard said earlier in the day on Bloomberg Television’s “Bloomberg Surveillance” with Tom Keene and Michael McKee. “That was a borderline decision,” and “the committee came down on the side of, ‘Let’s wait.’” With inflation low, Bullard said, “we can afford to be patient.”

Twenty-four of 41 economists surveyed Sept. 18-19 said the Fed will now wait until December before taking the first step in slowing its $85 billion in monthly bond purchases, according to a Bloomberg survey. The median estimate in an Aug. 9-13 poll projected the Fed would begin paring at this week’s meeting.

Reports next week on data from second-quarter gross domestic product to consumer confidence and new home sales may help investors gauge the prospect of economic growth.

Investors are also watching the political wrangling over the approaching limit on federal spending. Government funding expires Oct. 1 and the Treasury is expected to exhaust its ability to borrow funds in mid-October, when it will hit the statutory debt limit. The White House said President Obama would veto the House bill. The Senate will consider its version of the funding measure next week.

“When you look at political uncertainty and a fight going forward and the government really faces a shutdown, I don’t know how that can be construed as a positive in markets’ mind,” Bill Schultz, chief investment officer who oversees about $1.1 billion at McQueen Ball & Associates in Bethlehem, Pennsylvania, said by phone. “If anything, it just means potentially less economic activities.”

Microsoft Corp. and General Electric Co. slipped at least 1.8 percent to pace declines among large companies. Caterpillar Inc. slumped 3.4 percent after its global retail machine sales dropped for a ninth consecutive month. BlackBerry Ltd. plunged 17 percent after announcing 4,500 job cuts. AK Steel Holding Corp. sank 8 percent, leading declines among steelmakers, after predicting a third-quarter loss.

Utilities and phone companies, which offer the highest dividend payouts among 10 S&P 500 groups, had the largest drops.

Apple Inc. fell 1 percent as its iPhone 5s and 5c handsets went on sale.

Among Dow additions, Visa climbed 2.1 percent, Goldman Sachs added 1.2 percent and Nike lost 0.2 percent. They will replace Hewlett-Packard Co., which slipped 0.4 percent, and Alcoa Inc. and Bank of America Corp, which fell 1.8 percent and 1.2 percent, respectively.

The yield on 10-year Treasuries dropped 15 basis points this week, the most since the five days ended July 12. The rate, the benchmark for loans ranging from mortgages to corporate bonds, climbed to a two-year high of 3.01 percent on Sept. 6, from 1.93 percent on May 21, the day before Fed Chairman Ben S.

Bernanke said the central bank could slow the pace of asset purchases in the next few policy meetings.

Global equity funds attracted the largest inflows since at least 2005 in the week ended Sept. 18 as investors piled into stocks.

The funds lured a net $25.9 billion in the period, Wei Liang Chang, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd., said by phone from Singapore today, citing data from EPFR Global. Developed markets posted $24.3 billion of inflows, while emerging-nation funds drew $1.6 billion, according to Chang.

The dollar rose versus most of its 16 biggest peers. The euro fell 0.1 percent to $1.3523, ending a four-day run of gains. It dropped 0.2 percent to 134.35 yen.

Germany holds elections on Sunday to decide whether Chancellor Angela Merkel wins a third term. An INSA opinion poll in Germany published yesterday showed the opposition Social Democrats climbing one percentage point to 28 percent, 10 points behind Merkel’s Christian Democratic-led group.

The Stoxx Europe 600 Index pared its gain for the week to 0.9 percent. Adidas AG fell 3 percent as the world’s second- largest maker of sporting goods cut its profit forecast. Direct Line Insurance Group Plc retreated 3.7 percent as Royal Bank of Scotland Group Plc sold a 630 million-pound ($1 billion) stake in the U.K. insurer. Foxtons Group Plc surged 16 percent in London on the real estate broker’s first day of trading after its initial public offering.

The MSCI Emerging Markets Index fell from a four-month high, dropping 0.9 percent to 1,013.18, led by Indian shares.

The gauge rose 2.7 percent this week. The measure’s 14-day relative strength index was at 69.6, falling below 70 for the first time in five days. The level of 70 indicates to some analysts a security has climbed too far too fast.

India’s benchmark Sensex Index tumbled 1.9 percent, the steepest drop in more than two weeks, after central bank Governor Raghuram Rajan surprised analysts by raising the benchmark interest rate in his first policy review. Lenders led the decline, with ICICI Bank Ltd. tumbling 4.7 percent. The rupee slid 0.8 percent against the dollar.

Rajan, who took office two weeks ago, boosted the repurchase rate by a quarter point to 7.5 percent. All 36 analysts in a Bloomberg News survey predicted no change.

Markets in China, Hong Kong, South Korea and Taiwan were shut for holidays.

Turkey’s lira weakened 1.1 percent to 1.9815 against the dollar, trimming this week’s rally to 2.3 percent, the biggest gain since January 2012.

Gold declined the most since July 5, losing 2.7 percent to $1,332.50 an ounce. The metal climbed 1.8 percent this week.

Silver slumped 5.9 percent, the biggest drop since June 20, to $21.93 an ounce to lead declines among 24 raw materials in the S&P GSCI Index.

West Texas Intermediate oil dropped 1.6 percent to $104.67 a barrel after decreasing the same amount yesterday as Libya’s oil production expanded and President Bashar al-Assad said Syria will make information about its chemical weapons available.

Crude lost 3.3 percent for the week, the biggest five-day drop since June.

 

Have a wonderful weekend everyone!!!

 

Be magnificent!

 

“Being busy does not always mean real work. The object of all work is production or accomplishment and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing.”
Thomas A. Edison

As ever,

 

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

 

Dear Friends,

Tangents:

On this day in 1960, Chubby Checker’s record The Twist hit #1 on the music charts and launched a worldwide dance craze.

If you hear a voice within you say  ‘you cannot paint’ then by all means paint,  and that voice will be silenced. –Vincent Van Gogh.

And the day came when the risk it took to remain tight inside the bud was more painful than the risk it took to blossom. –Anaïs Nin.

Photos of the day

Artists with their painted bodies and wearing tiger masks perform during the annual ‘Pulikali’ or Tiger Dance in Thrissur, in the southern Indian state of Kerala. Pulikali is a colorful recreational folk art revolving around the theme of tiger hunting, performed to entertain people during Onam, an annual harvest festival. Arun Sankar K./AP

Tourists look at a traditional yacht sailing on the Mediterranean Sea during the Regatta of Nice in southeastern France. The regatta, which has been held annually since 2008, aims to highlight the strong historical ties to yachting, which was introduced at the end of the 19th century, in the region./Lionel Cironneau/AP

Market Closes for September 19^th, 2013

Market  Index	Close	Change
Dow  Jones	15636.55	-40.39    -0.26%
S&P 500	1721.64	-3.88    -0.22%
NASDAQ	3789.384	+5.743    +0.15%
TSX	12924.83	-6.57
		-0.05%

International Markets

Market  Index	Close	Change
NIKKEI	14766.18	+260.82
		+1.80%
HANG  SENG	23502.51	+385.06
		+1.67%
SENSEX	20646.64	+684.48
		+3.43%
FTSE 100	6625.39	+66.57
		+1.01%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.705	2.684
CND.   30 Year Bond	3.221	3.192
U.S.   10 Year Bond	2.7446	2.6878
U.S.   30 Year Bond	3.7962	3.7471

Currencies

BOC Close	Today	Previous
Canadian $	0.97416	0.97113
US   $	1.02652	1.02973
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38890	0.71999
US  $	1.35302	0.73909

Commodities

Gold	Close	Previous
London Gold   Fix	1366.29	1363.22
Oil	Close	Previous
WTI Crude Future	106.39	108.07
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle

Sept. 19 (Bloomberg) — Canadian stocks fell from a two- year high, as gold producers and financial stocks slid following the U.S. Federal Reserve’s decision yesterday to unexpectedly maintain the pace of its bond buying program.

Barrick Gold Corp. dropped 2.7 percent even as precious metals prices rallied. Manulife Financial Corp. and Sun Life Financial Inc. lost more than 1.2 percent as the threat of depressed yields weighed on the insurers’ investment portfolios.

Catamaran Corp. advanced 2.9 percent after Cantor Fitzgerald LP said the stock’s 9 percent slide yesterday represents a buying opportunity.

The Standard & Poor’s/TSX Index fell 4.62 points, or less than 0.1 percent, to 12,926.78 at 4 p.m. in Toronto, trimming an earlier decline of as much as 0.3 percent. The drop halted a four-day rally that left the gauge at its highest level since July 2011. Trading volume was 7 percent above the 30-day average.

“People had their fun yesterday, but at some point that tapering is going to start,” Gareth Watson, vice president of investment management and research at Richardson GMP Ltd., said in a phone interview from Toronto. His firm oversees C$15 billion ($14.6 billion). “Tapering was just postponed, it wasn’t canceled.”

The benchmark Canadian equity gauge soared yesterday after the U.S. Federal Reserve said it will “await more evidence” for sustained economic recovery before reducing its $85 billion in monthly bond buying. The central bank stimulus has helped fuel a global rally in equities.

Yields on government bonds in the U.S. and Canada plunged yesterday after the Fed suggested short-term borrowing rates could remain near zero even if U.S. unemployment falls below 6.5 percent. The threat of cuts to the bond purchases had pushed the yield on 10-year U.S. Treasury notes to a two-year high.

Financial firms dropped 0.2 percent for a second day of declines, led lower by insurers. Manulife fell 2.4 percent to C$17.16 and Sun Life Financial lost 1.2 percent to C$32.88.

Insurers invest in bonds to back future obligations to policyholders and low yields can pressure profits.

Materials producers sank 1.6 percent, following the biggest rally in six weeks yesterday after gold surged the most in two years. While the metal continued its advance today, an index of gold producers slumped 2.7 percent.

Investors are “likely hesitant because they don’t have a lot of conviction in the longer-term sustainability of higher gold prices,” Watson said.

Nineteen of 24 members in the S&P/TSX Gold Index retreated after each advanced at least 1.3 percent yesterday. Barrick Gold, the world’s largest producer, dropped 2.7 percent to C$19.94. Novagold Resources Inc. plunged 7 percent to C$2.67.

Catamaran, a provider of pharmacy benefits management, gained 2.9 percent to C$53.44. Cantor Fitzgerald LP analyst Justin Kew called the worst slide since May “overly punitive.”

Walgreen Co., one of the company’s main customers, said late Sept. 17 it would switch employees into a private insurance exchange in 2014.

Health-care companies rallied 3.4 percent as a group for the biggest gain in the S&P/TSX. Valeant Pharmaceuticals International Inc. jumped 3.7 percent to a record C$108.92.

Niko Resources Ltd. jumped 8.7 percent to C$4.12, snapping a three-day slide as energy companies climbed. The Calgary-based oil and gas explorer lost 9.1 percent during the losing streak.

“The material sector moved very strongly yesterday, and I think energy is catching up to that,” Youssef Zohny, portfolio manager at Richardson GMP in Vancouver, said in a phone interview.

US

By Nick Taborek and Aubrey Pringle

Sept. 19 (Bloomberg) — U.S. stocks fell after the Standard & Poor’s 500 Index rallied to a record yesterday on the Federal Reserve’s decision to refrain from cutting stimulus as investors weighed the latest batch of economic reports.

ConAgra Foods Inc. lost 4 percent after first-quarter sales missed estimates. Walt Disney Co. dropped 2.1 percent as Morgan Stanley downgraded the shares. Apple Inc. gained 1.6 percent as the iPhone maker rose for the third straight day. Priceline.com Inc., the largest U.S. online travel agency by market value, closed above $1,000 for the first time. Rite Aid Corp. surged 23 percent as the drugstore chain raised its profit forecast.

The S&P 500 fell 0.2 percent to 1,722.34 at 4 p.m. in New York. The Dow Jones Industrial Average lost 40.39 points, or 0.3 percent, to 15,636.55. About 6.8 billion shares changed hands on U.S. exchanges, 13 percent above the three-month average.

“It’s been essentially a bleeding off of some of the party atmosphere from yesterday,” Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which oversees about $150 billion, said by phone. “At some point the market’s got to take a breather and I think today’s that day. There’s no real catalyst today in the data.”

The benchmark index climbed 1.2 percent to a record yesterday as the Fed unexpectedly refrained from reducing bond buying. Treasury yields have jumped since May, when Fed Chairman Ben S. Bernanke first outlined a possible timetable for a reduction in asset purchases.

The Federal Open Market Committee said it wants more evidence of an economic recovery before paring its $85 billion- a-month bond-buying program, surprising economists who predicted a reduction in the plan. The Fed has held the main interest rate near zero since December 2008 and pushed its balance sheet to a record $3.66 trillion through three rounds of stimulus, helping send the S&P 500 155 percent higher since March 2009.

“To be fair to Bernanke, he set the conditions necessary for tapering and the conditions are not there,” Ross Yarrow, who sells U.S. equities to European investors for Robert W.

Baird & Co. in London, said in a phone interview today. That’s “not because of any particular deterioration but because, by talking about tapering, he already achieved an adjustment in yields,” Yarrow said.

Ten-year U.S. Treasury yields climbed as high as 3.01 percent on Sept. 6 from 1.61 percent on May 1. They plunged 16 basis points yesterday to 2.69 percent.

Equity gauges whose performance some chart analysts consider predictive of stock market gains closed at records yesterday, including the Dow Jones Transportation Average, the Russell 2000 Index and the Morgan Stanley Cyclical Index.

About 83 percent of the stocks in the S&P 500 rose above their average price over the past 50 days yesterday, and a quarter of them reached their highest levels in 52 weeks or more, data compiled by Bloomberg show. Both measures hit their highest since Aug. 1, a day before the benchmark index peaked and started a 4.6 percent retreat.

Some 136 S&P 500 stocks had their 14-day relative-strength index above 70 yesterday, the most since May 20, Bloomberg data show. RSI measures the degree to which gains and losses outpace each other and some analysts who watch charts to predict market moves consider a reading higher than 70 as indicating the stock has gained too far too fast.

Economic data today showed sales of previously owned U.S. homes unexpectedly rose in August to the highest level in more than six years as buyers rushed to lock in interest rates before they rise further. Manufacturing in the Philadelphia region expanded in September at the fastest pace since March 2011, a sign factories are picking up momentum.

Among other reports, the Conference Board’s index of leading economic indicators increased 0.7 percent in August.

Jobless claims in the U.S. rose less than forecast last week as two states began working through a backlog of applications that were caused by computer-system changeovers.

The U.S. economy will expand 1.6 percent this year, at the slowest pace since the recession ended in 2009, and grow by 3 percent in 2015, according to economists surveyed by Bloomberg.

The Bloomberg Economic Surprise Index, which measures the degree to which economic data exceeded or missed projections, is at minus 0.01. It has fluctuated above and below zero since April, after reaching an 11-month high in February.

“People had their fun yesterday, but at some point that tapering is going to start,” Gareth Watson, vice president of investment management and research at Richardson GMP Ltd., said in a phone interview from Toronto. His firm oversees C$15 billion ($14.6 billion). “Tapering was just postponed, it wasn’t canceled.”

Investors are also watching the political wrangling over the approaching limit on federal spending. Government funding expires Oct. 1 and the Treasury is expected to exhaust its ability to borrow funds in mid-October, when it will hit the statutory debt limit.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, dropped 3.2 percent to 13.16, the lowest level since Aug. 14. The equity volatility gauge has tumbled 23 percent in September after rallying 26 percent in August, the biggest monthly gain since May 2012.

Financial and consumer-staples shares had the biggest drops among 10 main groups in the S&P 500, losing more than 0.4 percent.

ConAgra fell 4 percent to $30.80. Revenue in the first quarter missed analysts’ predictions as consumer foods volume was lower than planned. General Mills Inc. slipped 2.6 percent to $48.83 after Wells Fargo Securities downgraded the shares to market perform from outperform.

Walt Disney dropped 2.1 percent to $65.72. Morgan Stanley cut Disney to equalweight from overweight, its first downgrade of the shares in more than four years, saying the company’s growth now depends more on its creative success. Disney delayed the Pixar film “The Good Dinosaur” by 18 months, leaving the animation studio that produced “Toy Story” without an annual release for the first time since 2005.

Banks had the largest decline among 24 groups in the S&P 500, falling 1 percent. Zions Bancorporation fell 2.8 percent to $27.96 and KeyCorp retreated 3.9 percent to $11.60. Regional lenders had been rooting for the Fed to let interest rates rise, which would help bring relief to bankers who’ve seen lending margins squeezed and expenses pushed up by new technology and regulations.

Life insurer Lincoln National Corp. tumbled 3.7 percent to $42.21 and MetLife Inc. lost 3.2 percent to $47.08. Insurers invest in bonds to back future obligations to policyholders and low yields can pressure profits.

Mining companies declined even as gold continued to rally.

Newmont Mining Corp. retreated 3.5 percent to $29.78, after an 8.2 percent surge yesterday. Barrick Gold Corp. slid 3.3 percent to $19.44. Gold for immediate delivery rose 0.2 percent.

Yesterday’s 4.1 percent jump in the metal’s price was the biggest since June 2012.

Pier 1 Imports Inc. plunged 14 percent to $20.33. The home furnishings retailer cut its earnings forecast for the year after second-quarter profit fell short of analysts’ predictions.

Same-store sales increased 3.5 percent in the quarter, compared with the average analyst estimate of 6.5 percent.

Technology and industrial shares had the best performance among S&P 500 industries. Apple jumped 1.6 percent to $472.30.

The stock has rallied 4.9 percent over three days, after an 11 percent slide since the Sept. 10 introduction of the newest iPhones.

Priceline, the largest U.S. online travel agency by market value, added 0.6 percent to $1,000.62. It climbed to as much $1,001 in intraday trading yesterday, the first time a stock in the S&P 500 changed hands at a four-digit price, according to S&P Dow Jones Indices, which compiles the indicator.

Agilent Technologies Inc. increased 3.4 percent to $50.98 after announcing it will split into two public companies. One company will focus on life sciences, diagnostics and applied markets, retaining the Agilent name. The other will be comprised of Agilent’s current portfolio of electronic measurement products, according to a statement.

Rite Aid surged 23 percent to $4.58. The drugstore chain raised its annual profit and revenue forecasts after second- quarter results exceeded analyst estimates, helped by an increase in same-store pharmacy sales.

Take-Two Interactive Software Inc. advanced 1.3 percent to $17.43. The video game maker said first-day sales of “Grand Theft Auto V” topped $800 million worldwide, surpassing the record set by “Call of Duty: Black Ops II” last November.

Groupon Inc. gained 9 percent to $12.59. The daily deals provider was raised to buy from hold at Stifel Nicolaus & Co.

Tesla Motors Inc. climbed 7 percent to $177.92. Deutsche Bank analyst Rod Lache said in a note the electric car maker is on track to “modestly” outperform margin expectations for the third quarter and raised his price target to $200 from $160.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Life is like a garden,  Quite naturally, leaves wither and flowers fade.

Only if we clear the decay of the past

then and there can we really enjoy the beauty of the new leaves and flowers.

Likewise, we must clear the murkiness of past bad experiences from our minds.

Life is remembrance in forgetfulness.

Forgive what ought to be forgiven; forget what ought to be forgotten.

Let us embrace life with renewed vigor…

We should be able to face every moment of life with renewed expectation, like a freshly blossomed flower.

Mata Amritanandamayi, 1953-

As ever,

 

Carolann

 

Answer me in one word.

-Shakespeare, 1564-1616

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1917:

Alduous Huxley, who would one day write the novel Brave New World, is hired at Eton College. One of his students, Eric Blair, will later use the pen name George Orwell.

Also, on this day in…

1851, the New York Times was published for the first time.

1905, Greta Garbo was born.

1947, the US Air Force was established.

1970, Jimi Hendrix passed away from a drug overdose. The rock musician was 27 years old at the time of this death.

1971, Lance Armstrong was born.

1975, Patty Hearst was captured by the FBI after 19 months with the Symbionese Liberation Army.

Read more at History.com

Being deeply loved by someone gives you strength, while loving someone deeply gives you courage.  –Lao Tzu.

Photos of the day

A yacht sails along the Biryusa Gulf of the Yenisei River in the Siberian taiga area, south of Krasnoyarsk, September 17, 2013. Ilya Naymushin/Reuters

A worker mounts the logo on a rim at the serial production BMW i3 electric car in the BMW factory in Leipzig, Gerrmany. Fabrizio Bensch/Reuters

Market Closes for September 18^th, 2013

Market  Index	Close	Change
Dow  Jones	15676.94	+147.21    +0.95%
S&P 500	1725.52	+20.76    +1.22%
NASDAQ	3783.641	+37.942    +1.01%
TSX	12931.40	+97.29
		+0.76

International Markets

Market  Index	Close	Change
NIKKEI	14505.36	+193.69
		+1.35%
HANG  SENG	23117.45	-63.07
		-0.27%
SENSEX	19962.16	+158.13
		+0.80%
FTSE 100	6558.82	-11.35
		-0.17%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.684	2.771
CND.   30 Year Bond	3.192	3.253
U.S.   10 Year Bond	2.6878	2.8468
U.S.   30 Year Bond	3.7471	3.8322

Currencies

BOC Close	Today	Previous
Canadian $	0.97793	0.97113
US   $	1.02256	1.02973
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38216	0.72351
US  $	1.35166	0.73983

Commodities

Gold	Close	Previous
London Gold   Fix	1363.22	1309.60
Oil	Close	Previous
WTI Crude Future	108.07	105.42
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle

Sept. 18 (Bloomberg) — Canadian stocks rose to the highest in two years, as mining companies rallied after the U.S. Federal Reserve unexpectedly refrained from reducing the pace of its monthly bond buying.

Barrick Gold Corp. surged 8.6 percent as the metal jumped the most since 2009. Athabasca Oil Corp. soared 4.7 percent after oil extended a rally following the Fed decision. Catamaran Corp. plummeted 9 percent to lead health-care companies lower.

BlackBerry Ltd. sank 2.2 percent after a report said the smartphone maker may cut staff.

The Standard & Poor’s/TSX Index jumped 97.29 points, or 0.8 percent, to 12,931.40 at 4 p.m. in Toronto, erasing an earlier decline of as much as 0.3 percent. The gauge has advanced 2.2 percent so far in September to close today at the highest level since July 2011.

“There is a wash of money on the sidelines, so people will be pushed into stocks as it goes higher and higher,” Paul Harris, partner and portfolio manager at Avenue Investment Management in Toronto, said in a phone interview. He helps oversee C$300 million ($294 million). “Gold and oil and the metals going up will certainly help Canada. You’re seeing a great rally.”

Fed Chairman Ben S. Bernanke and his policy making colleagues held back from paring record accommodation as rising borrowing costs show signs of slowing the four-year U.S. economic expansion. The stimulus has helped fuel a rally in global stocks.

Among 64 economists surveyed by Bloomberg News, 33 predicted officials would will reduce monthly buying of Treasuries by $5 billion or less, with 31 forecasting a cut of $10 billion or more.

Five of 10 main groups in the benchmark Canadian equity gauge advanced, led by a 5.1 percent rally among raw-materials producers.

The S&P/TSX Materials Index erased an earlier decline of as much as 1 percent as metals surged on the Fed decision. All ten of the Canadian benchmark index’s top performers were miners of precious metals.

Gold for immediate delivery rallied 4.1 percent for the biggest gain since January 2009. Copper futures rose the most in two weeks and silver surged 5.9 percent at 4:35 p.m.

Barrick Gold, the world’s largest gold producer, soared 8.6 percent to C$20.50, its biggest jump since 2008. Aurico Gold Inc. rose 15 percent to C$4.54. Endeavor Silver Corp. jumped 15 percent to C$5.14.

Goldcorp Inc. rose 7.5 percent to $29.11, erasing an earlier loss after Chairman Ian Telfer reached a deal with Canada’s main financial regulator to settle allegations that he violated securities laws. The Ontario Securities Commission will hold a hearing on Sept. 20 on whether to approve the settlement, the OSC said yesterday in a statement.

Energy producers gained 0.5 percent as crude advanced the 2.5 percent, the most in three weeks. Athabasca Oil rose 4.7 percent to C$7.85, the stock’s highest price in over a month.

Catamaran, a provider of pharmacy benefits management, fell 9 percent to C$51.94, the lowest since July 17. Walgreen Co., one of the company’s main customers, said yesterday it would switch its employees into a private insurance exchange in 2014.

Goldman Sachs & Co. analyst Robert Jones said the impact to PBMs from the Walgreen move is “unclear.”

BlackBerry plunged 2.2 percent to C$10.64, erasing an earlier gain of as much as 2 percent. The stock reversed after Dow Jones reported the smartphone maker was preparing for “deep” staff cuts by the end of the year, citing people familiar with the situation. The shares rallied earlier on news the company would start selling a new version of its phone next week.

US

By Nick Taborek and Lu Wang

Sept. 18 (Bloomberg) — The Standard & Poor’s 500 Index climbed to a record after the Federal Reserve unexpectedly refrained from reducing bond buying, emboldening bulls who have enjoyed a 155 percent rally since stimulus began five years ago.

Utilities rallied the most out of 10 groups in the S&P 500 as investors snapped up high dividend-yielding equities. Newmont Mining Corp. and Barrick Gold Corp., the world’s largest gold miner, jumped at least 8.2 percent to pace gains among commodity companies. An index of homebuilders soared 6 percent to the highest level since July. FedEx Corp. rose 5 percent after earnings topped estimates.

The S&P 500 jumped 1.2 percent to 1,725.52 at 4 p.m. in New York, erasing an earlier decline of as much as 0.3 percent. The benchmark index climbed above its all-time high of 1,709.67 reached Aug. 2. The Dow Jones Industrial Average rose 147.21 points, or 1 percent, to 15,676.94, also a record. Treasuries and gold rallied while the dollar slid. About 7.4 billion shares changed hands on U.S. exchanges, the most since June 28.

“Everyone was a little stupefied,” Erik Davidson, deputy chief investment officer for Wells Fargo Private Bank,  which oversees $170 billion, said by phone. “It’s great to own stocks when we’re at these great levels. When money’s going to continue to be free for a while, it all plays into the valuations.”

Chairman Ben S. Bernanke and his policy making colleagues refrained from paring record accommodation as rising borrowing costs show signs of slowing the four-year expansion. Treasury yields have jumped since May, when Bernanke first outlined a possible timetable for a reduction in the asset purchases.

“The Committee decided to await more evidence that progress will be sustained before adjusting the pace of its purchases,” the Federal Open Market Committee said today at the conclusion of its two-day meeting in Washington. While “downside risks” to the outlook have diminished, “the tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement.”

The FOMC has been debating how to scale back its $85 billion in monthly purchases of Treasury and mortgage debt aimed at stoking economic growth and reducing unemployment that was 7.3 percent in August. The Fed has held the main interest rate near zero since December 2008 and pushed its balance sheet to a record $3.66 trillion through three rounds of bond buying.

“What they’re basically saying is ‘Look, we’re not tapering yet, but we’re planning to taper pretty soon,’” said Michael Strauss, who helps oversee about $25 billion of assets as chief investment strategist and chief economist at Commonfund Group in Wilton, Connecticut.

Among 64 economists surveyed by Bloomberg News, 33 predicted the Fed would reduce its buying of Treasuries by $5 billion or less, with 31 forecasting a cut of $10 billion or more.

The central bank’s stimulus program has helped the S&P 500 rally 155 percent from its March 2009 low. Speculation over the future of quantitative easing has whipsawed global asset prices since May. The S&P 500 tumbled 5.8 percent from a record on May 21 through June 24. It rebounded 8.7 percent to close at its latest record last month, then slumped as much as 4.6 percent before climbing again.

U.S. stocks volume surged after the Fed’s announcement.

About 552 million shares traded on all exchanges in the 10 minutes after 2 p.m., compared with 113 million in the preceding 10 minutes, according to data compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, dropped 6.5 percent to 13.59, the lowest level since Aug. 14. The equity volatility gauge has tumbled 20 percent in September after rallying 26 percent in August, the biggest monthly gain since May 2012.

The Dow Jones Transportation Index jumped 1.5 percent to an all-time high. The Morgan Stanley Cyclical Index, which tracks shares in companies whose earnings are closely tied to economic growth, advanced 1.4 percent to a record. The Nasdaq 100 Index jumped 1.3 percent to its highest level since November 2000.

All 10 main S&P 500 groups advanced at least 0.4 percent.

Utilities rallied 3 percent as Treasury yields sank and investors increased purchases of high dividend-yielding shares.

Utility stocks pay 4 percent in dividends for the second-biggest payout among S&P 500 groups.

An S&P index of 11 homebuilding stocks rallied 6 percent after declining as much as 1.4 percent before the Fed statement.

Housing starts rose 0.9 percent to a 891,000 annual rate, following the prior month’s 883,000 pace that was weaker than previously estimated, the data showed. The median estimate of 83 economists surveyed by Bloomberg called for 917,000. Permits dropped 3.8 percent.

D.R. Horton Inc. jumped 6.9 percent to $21.33. Lennar Corp. climbed 6.5 percent to $37.33. PulteGroup Inc. added 5.5 percent to $17.93.

Raw-materials stocks surged 2.3 percent. Newmont Mining, the largest U.S. gold producer, surged 8.2 percent to $30.87 and Barrick Gold jumped 9.7 percent to $20.11. Gold rallied the most since 2009, erasing an earlier decline after the Fed decision as the metal’s attractiveness as a store of value increased.

Cliffs Natural Resources Inc., the largest U.S. iron-ore producer, added 4.7 percent to $23.49.

FedEx rallied 5 percent to $116.25, the highest level since 2007. The company, regarded as an economic bellwether because of the variety of goods it ships globally, began taking steps last year to reduce costs by $1.7 billion as customers opt for cheaper shipping. FedEx is parking older planes sooner, trimming capacity to Asia and eliminating 3,600 jobs through buyouts.

Adobe Systems Inc. rallied 9.2 percent to $52.58. The largest maker of graphic-design tools said the number of Web subscribers jumped 47 percent in the fiscal third quarter, even as sales and profit declined.

The results are validating the strategy of Chief Executive Officer Shantanu Narayen to push the maker of Photoshop and Illustrator software deeper into Internet services. While that’s crimping near-term revenue and profit, the transition to a suite of online tools called Creative Cloud positions Adobe for more predictable growth in the future, according to Josh Olson, an analyst at Edward Jones & Co.

WellPoint Inc. lost 4.4 percent to $84.39 and Health Net Inc. fell 0.9 percent to $33.34. JPMorgan Chase & Co. analyst Justin Lake said the two companies would be most affected by any delay in the start of open enrollment in new health-care exchanges mandated by the Affordable Care Act.

UnitedHealth Group Inc. lost 1.7 percent to $73.04 for the only decline in the Dow.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

You are never alone because you are full of all the memories, all the conditioning,

all the mutterings of yesterday; your mind is never clear of all the rubbish it has accumulated.

To be alone, you must die to the past.

When you are alone, totally alone, not belonging to any family, any nation, any culture,

any particular continent, there is that sense of being an outsider.

The man who is completely alone in this way is innocent and it is this innocence that frees the mind from sorrow.

-Krishnamurti, 1895-1986

As ever,

 

Carolann

 

We live, not as we wish to, but as we can.

-Menander, c. 341-c. 290 BC

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day in 2001, the U.S. stock market reopened for the first time following the 9/11 attacks, ending the longest shutdown on Wall Street since the Great Depression. The Dow fell 684 points, which at the time was the worst one-day point drop in history.  -Steven Russolillo, WSJ.

This week also marks the 5^th anniversary of the collapse of Lehman Brothers on  September 15th, 2008, which triggered the global financial crises.

As soon as questions of will or decision or reason or choice of action arise, human science is at a loss. –Noam Chomsky.

Photos of the day

Ben McCann, 11, and John Schunk, (r.) fish for rainbow trout on a dock at the east end of Sand Lake as the sun sets on Monday, Sept. 16th, in Anchorage, Alaska. Dan Joling/AP

An Indian devotee takes a picture of an idol of elephant-headed Hindu god Ganesha as it is lifted to be immersed in the Hussain Sagar Lake during Ganesh Chaturthi festival celebrations in Hyderabad, India. The festival is celebrated to mark the birth of Ganesha, the Hindu God of wisdom, prosperity and good fortune. Mahesh Kumar A./AP

Market Closes for September 17^th, 2013

Market  Index	Close	Change
Dow  Jones	15529.73	+34.95    +0.23%
S&P 500	1704.76	+7.16    +0.42%
NASDAQ	3745.699	+27.853    +0.75%
TSX	12834.11	+17.23
		+0.13

International Markets

Market  Index	Close	Change
NIKKEI	14311.67	-93.00
		-0.65%
HANG  SENG	23180.52	-71.89
		-0.31%
SENSEX	19804.03	+61.56
		+0.31%
FTSE 100	6570.17	-52.69
		-0.80%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.771	2.779
CND.   30 Year Bond	3.253	3.273
U.S.   10 Year Bond	2.8468	2.8624
U.S.   30 Year Bond	3.8322	3.8658

Currencies

BOC Close	Today	Previous
Canadian $	0.97113	0.96885
US   $	1.02973	1.03216
Euro Rate  1 Euro=		Inverse
Canadian   $	1.37546	0.72703
US  $	1.33575	0.74864

Commodities

Gold	Close	Previous
London Gold   Fix	1309.60	1311.79
Oil	Close	Previous
WTI Crude Future	105.42	106.59
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam and Aubrey Pringle

Sept. 17 (Bloomberg) — Canadian stocks rose a third day, after gaining the most in two weeks yesterday, as rising technology shares offset a slump in oil producers before a U.S. Federal Reserve policy statement tomorrow.

Wi-Lan Inc. rose 3.6 percent to lead technology stocks higher. Rockwell Diamonds Inc. soared the most in four years after the company found four rough diamonds of at least 100 carats. Potash Corp. of Saskatchewan Inc. and Agrium Inc. fell more than 1.5 percent after a rival producer cut its quarterly forecast for fertilizer sales and prices.

The Standard & Poor’s/TSX Composite Index rose 17.23 points, or 0.1 percent, to 12,834.11 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has added 1.4 percent in September. Trading volume was in line with the 30-day average.

“There’s a lot of wait-and-see attitude in front of the Fed meetings tomorrow, there’s not a ton of conviction,” said Bob Decker, a fund manager with Aurion Capital Management, in an interview from Toronto. His firm manages about C$6 billion ($5.8 billion). “There’s a large amount of cash on the sidelines that could be convinced to move once the uncertainty surrounding tapering is removed.”

The Fed began a two-day meeting to weigh potential reductions in the rate of its monthly bond buying. The stimulus has helped fuel a global rally in equities.

Factory sales rose 1.7 percent to C$49.5 billion in July, the fastest in five months, on gains for commodities producers from crude to lumber and fabricated metals. The increase exceeded all 18 economist forecasts in a Bloomberg survey.

In China, foreign-direct investment grew 0.6 percent last month, compared with the Bloomberg estimate of 12.5 percent growth.

Eight of 10 main groups in the benchmark gauge advanced today, led by a 1.5 percent gain among technology stocks. Energy stocks fell the most, sliding 0.3 percent.

Element Financial Corp., the top-performing company in the S&P/TSX Financials Index this year with a 91 percent gain, added 1 percent to a record C$13.55.

Royal Bank of Canada, the nation’s largest lender, rose 0.6 percent to C$66.32 and Toronto-Dominion Bank added 0.5 percent to C$91.43. Financial stocks added 0.3 percent as a group.

Wi-Lan increased 3.6 percent to C$3.75, extending a three- day rally to 12 percent. BlackBerry Ltd., the Waterloo, Ontario- based smartphone maker, rose 2 percent to C$10.88.

Valeant Pharmaceuticals International Inc. climbed 1.3 percent to C$105.83, the highest close in a month, after Gary Nachman with Goldman Sachs Group Inc. initiated coverage of the drugmaker with a buy rating.

Energy producers slid, halting a three-day winning streak.

Crude fell to the lowest level in almost four weeks as a U.S. agreement with Russia to eliminate Syria’s chemical weapons reduced supply risk and on speculation that the Federal Reserve will start tapering stimulus measures.

Niko Resources Ltd., an oil and gas exploration company, dropped 5.3 percent to C$3.91. Bankers Petroleum Ltd. lost 2.4 percent to C$3.74.

Potash Corp. of Saskatchewan fell 2 percent to C$33.39 and Agrium retreated 1.5 percent to C$93.46. Mosaic Co., North America’s second-largest fertilizer producer, cut its quarterly forecast for potash and phosphate sales and prices because crop- nutrient markets have “softened.”

Global fertilizer markets have weakened, in part, because of fertilizer distributors’ cautiousness related to the breakup of Belarusian Potash Co., Mosaic said in a statement. On July 30, OAO Uralkali, the world’s largest potash producer, quit Belarusian Potash, the largest trader of the crop nutrient, because of a dispute with its partner Belaruskali.

“Dealers are cautious and are deferring purchases,” Jim Prokopanko, Mosaic’s chief executive officer, said in the statement.

Rockwell Diamonds jumped 45 percent to 42 Canadian cents, the most since June 2009, after announcing it has recovered four rough diamonds, one as large as 169 carats, from its operations in the Middle Orange River region in South Africa. The stones will be sold into a joint venture with Steinmetz Diamonds at market value, the company said in a statement.

US

By Nick Taborek and Aubrey Pringle

Sept. 17 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index toward a record high, as Microsoft Corp. announced a $40 billion buyback and Federal Reserve policy makers gathered for a two-day policy meeting.

Microsoft increased 0.4 percent, pacing a rally among technology shares, as the world’s largest software maker also raised its quarterly dividend 22 percent. Safeway Inc. rallied 11 percent after adopting a poison-pill to protect against a potential hostile takeover. Mosaic Co. sank 1.2 percent after the fertilizer producer cut its quarterly forecast for potash and phosphate sales and prices.

The S&P 500 added 0.4 percent to 1,704.76 at 4 p.m. in New York. The benchmark index is less than five points below its record high of 1,709.67 reached on Aug. 2. The S&P 500 Equal Weighted Index, which strips out biases related to market value, jumped 0.5 percent to a record. The Dow Jones Industrial Average increased 34.95 points, or 0.2 percent, to 15,529.73 today.

About 5.1 billion shares changed hands on U.S. exchanges, 14 percent below the three-month average.

“Everybody’s looking forward to tomorrow to see what the Fed’s statement is going to be,” Jerry Braakman, the chief investment officer of First American Trust in Santa Ana, California, said by phone. His firm oversees $1 billion. “With inflation being benign, it doesn’t require a more aggressive tightening than the market would expect.” Large buyback plans are “returning capital to the market, which helps propel it to new highs,” he said.

The Federal Open Market Committee will probably lower its $85 billion of monthly bond purchases by $10 billion, according to the median response of 34 economists in a Bloomberg News survey this month. That’s down from the forecast of a $20 billion reduction in a July survey. The central bank’s stimulus program has helped the S&P 500 rally more than 150 percent from its March 2009 low.

Growing speculation about stimulus cuts has whipsawed stocks since May, when Fed officials first indicated reductions could start this year. The S&P 500 tumbled 5.8 percent from a record on May 21 through June 24. It rebounded 8.7 percent to close at its latest all-time high before slumping as much as 4.6 percent from that level.

The S&P 500 climbed 0.6 percent to a six-week high yesterday after tensions over dealing with Syria’s chemical weapons eased and Lawrence Summers withdrew his bid to be Fed chairman. The former Treasury secretary would tighten policy more than Janet Yellen, the current Fed vice chairman who was his main rival to replace Chairman Ben S. Bernanke, according to a Bloomberg Global Poll of investors, analysts and traders last week.

A Labor Department report today showed the cost of living in the U.S. rose less than forecast in August, a sign it will take time for inflation to reach the Fed’s goal. Central bankers have said they are watching prices to ensure the U.S. doesn’t slip into a long period of diminishing increases, or disinflation, that damages the expansion.

In Germany, Europe’s largest economy, investor confidence increased for a second month in September. Foreign-direct investment in China rose 0.6 percent last month, trailing the median estimate of 12.5 percent growth in a Bloomberg survey.

Nine out of 10 industry groups in the S&P 500 rose, as industrial, consumer-discretionary and technology shares added at least 0.5 percent to pace gains. The Russell 2000 Index advanced 1 percent to an all-time high.

The CBOE Volatility Index, the gauge of S&P 500 options prices known as the VIX, rose 1 percent to 14.53. The equity volatility gauge has tumbled 15 percent in September after rallying 26 percent in August, the biggest monthly gain since May 2012.

Microsoft increased 0.4 percent to $32.93. The repurchase program, which has no expiration date, replaces another $40 billion buyback plan that was due to lapse at the end of this month, Redmond, Washington-based Microsoft said in a statement.

The company’s dividend will rise 22 percent to 28 cents a share.

After struggling to keep up with rivals in the smartphone and tablet markets, Microsoft is retooling its strategy and seeking a new chief executive officer. The company has come under pressure from activist investor ValueAct Holdings LP, which pushed Microsoft to return more money to shareholders, according to a person with knowledge of the matter.

The size of the buyback eclipses most repurchase programs, though it’s smaller than the $50 billion plan announced by Apple Inc. in April. Authorized U.S. buybacks have reached a six-year high of $556 billion this year, data from Birinyi Associates Inc. show. Buyback authorizations have increased 58 percent this year compared with the same period in 2012, Birinyi data through Sept. 13 show.

“The news today is indicative of the trend we’ve seen all year, simply because companies are taking the low rates, borrowing some money, taking the cash, putting it to work,” John Canally, investment strategist for LPL Financial LLC in Boston, said in a phone interview. He helps manage $396.7 billion. “Companies have to find a way to be more efficient with their capital. Companies have to be able to generate earnings in a world where you’re getting relatively low growth.”

Safeway surged 11 percent to $30.99 for the biggest rise in the S&P 500. The grocery store chain adopted a shareholder rights plan to thwart any unfriendly takeovers, saying an undisclosed purchaser has accumulated a “significant amount” of stock.

An S&P 500 index of homebuilders advanced 0.4 percent. KB Home rose 0.6 percent to $17.27 and Lennar Corp. increased 0.8 percent to $35.04.

The National Association of Home Builders/Wells Fargo confidence index registered 58 this month, matching August’s revised reading as the strongest since November 2005, a report from the Washington-based group showed today. Readings greater than 50 mean more builders view conditions as good than poor.

US Airways Group Inc. climbed 3.6 percent to $18.72 and Delta Air Lines Inc. advanced 0.7 percent to $23.32. The two airlines were each raised to overweight from neutral at JPMorgan Chase & Co.

Broadcom Corp. gained 2 percent to $27.45. The chipmaker was raised to positive from neutral by Susquehanna Financial Group analyst Christopher Caso.

Mosaic, North America’s second-largest fertilizer producer, lost 1.2 percent to $45. Global fertilizer markets have weakened, in part, because of fertilizer distributors’ cautiousness related to the breakup of Belarusian Potash Co., Mosaic said in a statement. On July 30, OAO Uralkali, the world’s largest potash producer, quit Belarusian Potash, the largest trader of the crop nutrient, because of a dispute with its partner Belaruskali.

Potash Corp. of Saskatchewan Inc. fell 1.7 percent to $32.45 and Agrium Inc. retreated 1.3 percent to $90.69.

Outerwall Inc., owner of the Redbox DVD kiosks, dropped 12 percent to $49.49 after cutting its third-quarter and full-year forecasts because of discounts and shorter rentals.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

What is change?

One form appears, and another disappears.

Can we say that the butterfly used to be a caterpillar?

A substance in the caterpillar takes on the form of the butterfly.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

Ocean, who is the source of all.

-Homer, c800 BCE-c701 BCE

 

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

We were down in San Francisco on the weekend to see a few of the America’s Cup races.  It is amazing to watch the speeds of these catamarans.  At one point, Emirates reached a speed of 58 MPH.  Today was a day off, but the racing continues tomorrow.  Oracle needs to win 9 more races, the Kiwis, just two to win the cup.  Attached is one of the photos I took with my mobile from the water.

The New Zealanders have a pop-up restaurant docked at Pier 29 until December.  It’s the Waiheke Island Yacht Club and its styled like a New Zealand beach house.  Executive chef Desmond Harris, who heads up Auckland’s acclaimed Clooney restaurant brings a Kiwi influence to the menu.  We had lamb and we both agree it was the best lamb we ever had.  Waihekeislandyachtclub.com.

Also, The Legion of Honor museum in Lincoln Park has  a fantastic exhibit on  how the new recreational sport of sailing influenced impressionists in the mid-nineteenth century and post-impressionists.  They have assembled an impressive collection of masters such as Claude Monet, Manet,  Renoir, Seurat’s, and many others from museums and private collections.  Definitely worth the visit.  There are a few model boats too.

Apparently there is nothing that cannot happen today.  –Mark Twain

Photos of the day

Ruth Duccini (c.) 95, who portrayed the Munchkin Town Lady in the classic film ‘The Wizard of Oz,’ poses with costumed characters from the film the Tin Man (l.) and Cowardly Lion at the world premiere screening of ‘The Wizard of Oz’ in IMAX 3D at the grand opening of the TCL Chinese Theatre IMAX in Hollywood, California September 15th. Fred Prouser /Reuters

The Costa Concordia ship lies on its side on the Tuscan Island of Giglio, Italy. Engineers succeeded in wresting the hull of the shipwrecked Costa Concordia from the Italian reef where it has been stuck since it capsized in January 2012, leaving them cautiously optimistic they can rotate the luxury liner upright and eventually tow it away. Andrea Sinibaldi/Lapresse/AP

Market Closes for September 16^th, 2013

Market  Index	Close	Change
Dow  Jones	15494.78	+118.72    +0.77%
S&P 500	1697.60	+9.61    +0.57%
NASDAQ	3717.846	-4.338    -0.12%
TSX	12816.88	+93.48
		+0.73

International Markets

Market  Index	Close	Change
NIKKEI	14404.67	+17.40
		+0.12%
HANG  SENG	23252.41	+337.13
		+1.47%
SENSEX	19742.47	+9.71
		+0.05%
FTSE 100	6622.86	+39.06
		+0.59%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.779	2.764
CND.   30 Year Bond	3.273	3.247
U.S.   10 Year Bond	2.8624	2.8846
U.S.   30 Year Bond	3.8658	3.8349

Currencies

BOC Close	Today	Previous
Canadian $	0.96885	0.96590
US   $	1.03216	1.03530
Euro Rate  1 Euro=		Inverse
Canadian   $	1.37661	0.72642
US  $	1.33372	0.74978

Commodities

Gold	Close	Previous
London Gold   Fix	1311.79	1322.12
Oil	Close	Previous
WTI Crude Future	106.59	108.60
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Sept. 16 (Bloomberg) — Canadian stocks rose the most in two weeks as financial firms and metals producers rallied after Lawrence Summers withdrew his bid to be U.S. Federal Reserve chairman and tensions over Syria eased.

Toronto-Dominion Bank and Canadian Imperial Bank of Commerce added at least 0.7 percent to lead financial stocks to the highest close in more than five years. Semafo Inc. and Rio Alto Mining Ltd. jumped at least 6 percent as gold futures gained for the first time in five days. Wi-Lan Inc. soared 6.8 percent after settling pending patent litigations with Alcatel- Lucent USA Inc.

The Standard & Poor’s/TSX Composite Index rose 93.48 points, or 0.7 percent, to 12,816.88 at 4 p.m. in Toronto, the most since Aug. 29. The benchmark Canadian equity gauge has risen 3.1 percent this year.

Summers, former U.S. Treasury secretary and economic adviser to President Barack Obama, was considered the top candidate alongside Fed vice chairman Janet Yellen to succeed Ben S. Bernanke as head of the central bank.

“Yellen is probably the one who will be put in, they might wait until she gets appointed before they make any moves,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. The firm manages about C$1 billion ($971 million).

“Gold is oversold, and it’s getting a little bit of relief today. We’re in kind of a bull trend here and it’s not surprising we’re up. New York’s having a good run here and we’re tagging along.”

Investors are debating the speed at which the Fed will taper its $85 billion in monthly bond purchases, perhaps as soon as this week’s meeting of policy makers beginning on Tuesday.

Rio Alto climbed 6 percent to C$2.29 and Semafo surged 8.8 percent to C$2.10. Gold for December delivery advanced 0.7 percent to $1,317.80 an ounce in New York, snapping four days of declines.

Dream Unlimited Corp. jumped 7.7 percent to C$11.80 as financial stocks gained 1 percent as a group for the highest close since December 2007. All 10 industries in the S&P/TSX advanced.

Toronto-Dominion, the second-largest lender in Canada, gained 1.2 percent to C$91.02 and CIBC rose 0.7 percent to C$81.73 after the two lenders agreed to a deal to split up the latter’s credit-card portfolio.

CIBC will receive about C$3 billion cash, along with an upfront C$200 million, from Toronto-Dominion and Aimia Inc. in exchange for about half of its Aerogold Visa card balances.

Aimia, a loyalty-card operator, picked Toronto-Dominion last month as its primary card partner after a two-decade long relationship with CIBC.

Aimia surged 7.3 percent to C$17.85, for a five-year high.

Encana Corp. retreated 1.8 percent to C$18.29 and Athabasca Oil Corp. slipped 2.3 percent to C$7.39 as crude declined to a three-week low. The U.S. and Russia struck a deal on Sept. 14 demanding the destruction of Syria’s chemical weapons by mid-2014, with the U.S. saying it maintained a military option to ensure compliance.

Torex Gold Resources Inc. increased 0.7 percent to C$1.50 after the gold exploration company reported initial resources from its Media Luna project in Mexico.

“The resource came in at the upper end of expectations,” said Daniel Earle, analyst with TD Securities, said in a note to clients.

Wi-Lan soared 6.8 percent to C$3.62 after granting a multi- year license for some of its wireless products patents to Alcatel-Lucent. Under a separate agreement, Wi-Lan will also acquire a portfolio of patents from Alcatel-Lucent.

CGI Group Inc., Canada’s largest technology company, jumped 5.5 percent to C$35.37, the most in six weeks, after Standard & Poor’s Dow Jones Canadian Index Services added the stock to the S&P/TSX 60 Index.

The addition, effective Sept. 20, is expected to trigger 8 million shares of buying interest in the Montreal-based technology services company, said Thanos Moschopoulos, an analyst with BMO Capital Markets, in an e-mail to Bloomberg.

US

By Nick Taborek, Wes Goodman and Adam Haigh

Sept. 16 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to a five-week high and within 1 percent of a record, after Lawrence Summers withdrew his bid to be Federal Reserve chairman and tensions over dealing with Syria’s chemical weapons eased.

Boeing Co. rallied 3.9 percent to pace gains among industrial shares after Sterne Agee & Leach Inc. raised its price target. PulteGroup Inc. and D.R. Horton Inc. climbed at least 3.6 percent as housing stocks surged. Bristol-Myers Squibb Co. added 3.6 percent after JPMorgan Chase & Co. advised investors to buy the shares. Packaging Corp. of America jumped 11 percent after it agreed to buy Boise Inc. for about $1.27 billion. Apple Inc. fell 3.2 percent, continuing its slide since introducing the latest iPhone on Sept. 10.

The Standard & Poor’s 500 Index added 0.6 percent to 1,697.60 at 4 p.m. in New York, after earlier rising as much as 1 percent. The Dow Jones Industrial Average advanced 118.72 points, or 0.8 percent, to 15,494.78. About 5.7 billion shares changed hands on U.S. exchanges, 4.5 percent below the three- month average.

“I don’t think the market knew what kind of a Fed chairman Summers would be, and having him out of the running makes things look a lot more certain,” Colleen Supran, a principal of Bingham, Osborn & Scarborough in San Francisco, which manages $2.7 billion, said in a phone interview. “This tapering announcement that’s expected for Wednesday seems to be accepted by the markets. It’s probably going to be modest.”

Summers withdrew from contention before a two-day Fed meeting starting tomorrow. The former Treasury secretary would tighten policy more than Janet Yellen, who was his main rival to replace Chairman Ben S. Bernanke, according to a Bloomberg Global Poll of investors, analysts and traders last week.

Summers, 58, was one of three names that Obama had mentioned as possible replacements for Bernanke, whose term as Fed chairman ends on Jan. 31. Yellen, 67, the current Fed vice chairman, was also on Obama’s candidate list along with Donald Kohn, 70, a former Fed vice chairman, the president said earlier.

The S&P 500 rose 2 percent last week and today came within five points of its record high of 1,709.67 on Aug. 2. The benchmark gauge has rallied nine of 10 sessions this month, rising 4 percent to rebound from the worst monthly loss since May 2012, as reports showed China’s economy strengthened and the U.S. looked less likely to attack Syria.

The U.S. and Russia struck a deal on Sept. 14 demanding the destruction of Syria’s chemical weapons by mid-2014, with the U.S. saying it maintained a military option to ensure compliance.

Economists expect the U.S. central bank to reduce its $85 billion in monthly bond-buying by $10 billion this week, according to the median forecast in a Bloomberg News survey. The stimulus has helped the S&P 500 rally more than 150 percent from its March 2009 low.

Investors have been closely watching data to determine the timing and pace of any Fed stimulus reductions. A report today showed manufacturing in the New York region expanded less than forecast in September even as orders and shipments picked up.

Separate data showed industrial production rose in August by the most in six months, indicating U.S. manufacturing will contribute more to the expansion.

Growing speculation about stimulus cuts has whipsawed stocks since May, when Fed officials first indicated reductions could start this year. The S&P 500 tumbled 5.8 percent from a record on May 21 through June 24. It rebounded 8.7 percent to close at its latest all-time high before slumping as much as 4.6 percent from that level.

“Summers had been seen as a person who can add volatility to the market given his bias toward more aggressive tightening, should he take up the Fed chairmanship,” Gary Dugan, the Singapore-based chief investment officer for Asia and the Middle East at Coutts & Co., said in a telephone interview. “This brings Janet Yellen to the forefront and the consensus is she’ll build a follow-through of Bernanke’s policies.”

Options traders have scaled back hedges against potential stock losses. The CBOE Volatility Index, the gauge of S&P 500 options prices known as the VIX, last week capped an 11 percent five-day drop, its biggest weekly slide since the week ended July 5. The gauge advanced 1.6 percent to 14.38 today.

The S&P 500 pared its gain around 1:40 p.m. as U.S. options exchanges halted trading for about an hour after reporting a malfunction with the industry data feed for disseminating prices. CBOE Holdings Inc., NYSE Euronext, Nasdaq OMX Group Inc. and Bats Global Markets Inc. reported shutdowns that were later resolved.

The interruption occurred days after securities regulators told market operators to find ways to make their systems more reliable. In a meeting with the heads of major U.S. securities markets last week, Mary Jo White, the chairman of the Securities and Exchange Commission, urged the executives to shore up price feeds in serving investors and traders.

Nine of 10 main groups in the S&P 500 advanced, with industrial companies, materials producers and financial firms rising at least 1.1 percent. About 19 percent of companies in the S&P 500 reached a new 52-week high today, the most since Aug. 1, according to data compiled by Bloomberg.

Boeing surged 3.9 percent to a record $115.67 for the biggest rise in the Dow. Sterne Agee analyst Peter Arment said the aerospace company is a “must-own stock” among large industrials and raised his price target to $164 from $120.

Delta Air Lines Inc. jumped 3 percent to $23.15 to pace gains in an gauge of air carriers. The Bloomberg U.S. Airlines Index rose 1.9 percent to the highest level since Aug. 2. The measure has rallied 55 percent this year.

Financial shares rallied 1.1 percent as all but three of an S&P index’s 81 members advanced. Wells Fargo & Co., the biggest U.S. home lender, climbed 1.7 percent to $42.89. Travelers Cos. gained 1.2 percent to $84.57.

Bristol-Myers, the maker of the Eliquis blood thinner and the Bydureon diabetes treatment, rose 3.6 percent to $45.14.

JPMorgan raised its recommendation for the stock to overweight, a rating similar to buy, from neutral.

A team of JPMorgan analysts led by Chris Schott forecast the drugs company’s earnings may grow by an average 13 percent through 2020, driven by its forthcoming products. The analysts increased their price estimate for the shares to $52 from their earlier prediction of $50.

Packaging Corp. jumped 11 percent to $60.43. The fourth- largest U.S. producer of corrugated shipping boxes agreed to pay $12.55 for each Boise share, 26 percent more than Boise’s Sept. 13 closing prices. The deal includes $714 million in debt. Boise rallied 26 percent to $12.56, an all-time high.

Whole Foods Market Inc. added 1.1 percent to a record $57.71. The shares have advanced 12 straight days, the longest winning streak in the stock’s history. Royal Caribbean Cruises Ltd. also extended its record rally to 12 days, rising 1.5 percent to $39.79. The world’s second-largest cruise-line operator, under pressure from its largest shareholder, doubled its quarterly dividend on Sept. 11.

An S&P gauge of homebuilders surged 2.1 percent. D.R. Horton jumped 3.7 percent to $19.84 and PulteGroup gained 3.8 percent to $17.14. Yields on 10-year Treasury notes retreated two basis points, or 0.02 percentage point, to 2.86 percent.

Apple Inc. fell 3.2 percent to $450.12 for the biggest drop in the S&P 500. The stock has fallen 11 percent since the day before the world’s most valuable technology company introduced a new, lower-cost version of the iPhone.

Technology stocks were the only group to retreat in the S&P 500, sliding 0.3 percent. Hewlett-Packard Co. dropped 1.5 percent to $21.74 for the Dow’s steepest slide.

Citigroup Inc. expects the S&P 500 to rally 12 percent to 1,900 by the end of next year as valuations rise and investors pour money into mutual funds.

Tobias Levkovich, the firm’s chief U.S. equity strategist, said he favors shares of larger companies over smaller ones because foreigners will boost U.S. holdings and may prefer to buy well-known stocks. Computer makers, health-care providers and consumer discretionary stocks will outperform, he said.

“There is plenty of dry powder to push share prices higher as confidence returns,” Levkovich said in a Sept. 13 note. “A shift toward growth stocks seems appropriate along with large- cap names especially if foreign money moves into U.S. markets.”

The dollar depreciated 1.2 percent in the past week through yesterday, the biggest drop among 10 developed-nation currencies tracked by Bloomberg Correlation Weighted Indexes. Treasuries lost 0.4 percent in September to the end of last week, heading for a fifth monthly decline, according to the Bloomberg U.S. Treasury Bond Index.

“Markets were priced for the likelihood of a Summers nomination, primarily for the notion that he might raise interest rates sooner than perhaps other candidates, including Janet Yellen,” Tony Crescenzi, a portfolio manager and strategist at Newport Beach, California-based Pacific Investment Management Co., which runs the world’s biggest bond fund, said in an e-mail. “This news should result in outperformance of shorter maturities” before the Federal Reserve Open Market Committee meeting starting tomorrow.

Summers had been the president’s favorite for the job.

Twenty U.S. senators, 19 Democrats and one independent, signed a letter of support for Yellen in July, who would be the first female Fed chairman if nominated and confirmed.

Former Treasury Secretary Timothy Geithner, sometimes mentioned as another alternative, doesn’t want the Fed post and has made that clear since leaving the Treasury early this year, according to a person familiar with his thinking, who asked for anonymity to discuss private conversations.

“Summers withdrawing helps to crystalize the outlook and it does put the market on a more dovish stance going forward,” Tai Hui, the Hong Kong-based chief Asia market strategist at JPMorgan Asset Management, which oversees about $1.5 trillion, said by telephone. “Obviously we have other names, but the reality seems a bit more support for Yellen after Summers’ exit from the race.”

A poll of investors, analysts and traders who are Bloomberg subscribers, conducted Sept. 10, showed Yellen was viewed more favorably. Sixty percent of respondents had a positive view of Yellen, compared with 37 percent for Summers.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Life is an aspiration.  Its mission is to strive after perfection, which is self-fulfillment.

The ideal must not be lowered because of our weaknesses or imperfections.

-Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

It is a great art to saunter.

-Henry David Thoreau, 1817-1862

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