Author: Carolann

Dear Friends,

Tangents:

This weekend marks the peak of Perseid meteor shower, so don’t forget to watch the night sky.  During peak activity, the rate of meteors reaches 60 or more  per hour.  Try to get outside, and away from too many bright lights to enjoy the show.

On this day in 1945, the second atomic bomb was dropped on Nagasaki, three days after Hiroshima.

If you go on with this nuclear arms race, all you are going to do is make the rubble bounce. –Sir Winston Chuchill.

Also on this day, in 1854, Thoreau published Walden or Life in the Woods, decrying Humanity’s increasing reliance on technology.

August 9^th, 1902, King Edward VII is crowned in Westminster Abby, having ascended to the British throne in 1901 upon the death of Queen Victoria.

I read this little treasure today, attributed to Anne Lamott:

Lighthouses don’t go moving all over the island looking for boats to save; they just stand there shining.

Gary and I are off to Seattle on Monday afternoon for Ring Cycle, so have a great week!  My team will send out the nightly Newsletter in my abscence.

Photos of the Day –August 9th, 2013

A visitor enjoys the Luminary tent at the 21st Sziget (Island) Festival on Shipyard Island in Budapest, Hungary. Sziget Festival is a cultural event offering art exhibitions, theatrical and circus performances and concerts. Balazs Mohai/MIT/AP

A woman takes photos of an art installation titled ‘United 65’ by Singaporean artist Ryf Zaini at a mall in Singapore. The work is comprised of 100 suspended umbrellas, each containing a secret symbol which viewers are invited to decipher. Edgar Su/Reuters

Market Closes for August 8^th, 2013

Market  Index	Close	Change
Dow  Jones	15425.51	-72.81    -0.47%
S&P 500	1691.42	-6.06    -0.36%
NASDAQ	3660.108	-9.016    -0.25%
TSX	12542.13	-10.79
		-0.09%

International Markets

Market  Index	Close	Change
NIKKEI	13615.19	+9.63
		+0.07%
HANG  SENG	21807.56	+151.68
		+0.70%
SENSEX	18789.34	+124.46
		+0.67%
FTSE 100	6583.39	+53.71
		+0.82%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.480	2.498
CND.   30 Year Bond	2.983	3.003
U.S.   10 Year Bond	2.5766	2.5892
U.S.   30 Year Bond	3.6345	3.6729

Currencies

BOC Close	Today	Previous
Canadian $	0.97161	0.96826
US   $	1.02922	1.03279
Euro Rate  1 Euro=		Inverse
Canadian   $	1.37324	0.72821
US  $	1.33425	0.74949

Commodities

Gold	Close	Previous
London Gold   Fix	1314.45	1312.00
Oil	Close	Previous
WTI Crude Future	105.97	103.40
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

Aug. 9 (Bloomberg) — Canadian stocks fell, capping the biggest weekly loss since June, as employment unexpectedly decreased in July and profits trailed analysts’ estimates.

Dorel Industries Inc. slid 10 percent after reporting earnings that fell short of projections. Black Diamond Group Ltd. lost 6.4 percent as the company posted lower-than-estimated profit. BlackBerry Ltd. rose 5.7 percent after Reuters reported that the smartphone maker was considering going private. Magna International Inc. climbed 2.7 percent after increasing its annual sales forecast.

The Standard & Poor’s/TSX Composite Index fell 10.79 points, or 0.1 percent, to 12,542.13 at 4 p.m. in Toronto. The index has retreated 0.5 percent this week, the most since June 21. Trading volume was in line with the 30-day average.

“It’s a disappointing report,” said Michael O’Brien, fund manager with TD Asset Management Inc. in Toronto. The firm manages C$216 billion ($210 billion). “Yesterday we had an enormous move in the materials space, so today is a bit of consolidation. It’s encouraging that we’re not giving it all back.”

Raw-material producers in the S&P/TSX jumped 5.9 percent yesterday, the most since 2011, amid a rally in commodities.

Employment fell by 39,400 last month, while the jobless rate rose to 7.2 percent from 7.1 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News projected a 10,000 job gain and an unchanged jobless rate, according to the median forecasts in surveys with 23 responses.

Black Diamond Group slumped 6.4 percent to C$23.52, pacing losses among industrials shares. The group fell 1 percent, the most in the S&P/TSX, as six of 10 industries retreated.

Black Diamond, which rents temporary living spaces for workers in remote areas, reported second-quarter adjusted earnings of 21 Canadian cents a share, short of analysts’ estimates for 30 cents according to a Bloomberg survey.

The company said declines in its energy services business contributed to the weaker results during the quarter.

Dorel Industries, which makes kids’ bicycles, car seats and strollers, sank 10 percent to C$33, the most in almost five years.

The Montreal-based company reported second-quarter adjusted earnings of 45 cents, missing analysts’ projections for 82 cents a share. The company said a late spring in the U.S., Canada and Europe hurt profits. Dorel said it took a $2 million charge due to severance after cutting about 50 jobs, or 5 percent of the workforce.

Pacific Rubiales Energy Corp. slumped 6.4 percent to C$20.15, the most since April 3. The crude producer reported a 74 percent decline in second-quarter profit due to losses associated with Colombian peso depreciation and lower oil prices.

BlackBerry rose 5.7 percent to C$10.05. Chief Executive Officer Thorsten Heins and the company board are considering the idea that going private would give them the leeway to fix problems out of the public view, Reuters reported, citing unidentified sources.

An Aug. 7 report from International Data Corp. said BlackBerry’s global market share of the smartphone market in the second quarter had dropped to 2.9 percent from 4.9 percent a year ago. Google Inc.’s Android operating system owned 79 percent of market share.

Magna rose 2.7 percent to C$82.30 after the company’s sales and earnings beat analysts’ estimates and it raised its 2013 sales forecast.

Teck Resources Ltd. rose 3.9 percent to C$27.33 and First Quantum Minerals Ltd. advanced 4.8 percent to C$17.94. Copper advanced to a two-month high in New York after China’s industrial output rose 9.7 percent in July.

Teck has jumped 12 percent and First Quantum has climbed 14 percent in the past two days. Copper increased 4.2 percent this week.

US

By Nick Taborek and Sofia Horta e Costa

Aug. 9 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its biggest weekly loss since June, as investors pulled money from exchange-traded funds and weighed growing signs the Federal Reserve will cut stimulus this year.

Gap Inc. dropped 3.1 percent after saying July sales at stores open at least a year rose less than analysts estimated.

J.C. Penney Co. fell 5.8 percent as its chairman sparred with the largest shareholder, Bill Ackman’s Pershing Square Capital Management LP, over who should lead the company. Cliffs Natural Resources Inc. jumped 11 percent as metals rallied after Chinese industrial output expanded faster than estimated.

The S&P 500 fell 0.4 percent to 1,691.42 at 4 p.m. in New York. The Dow Jones Industrial Average dropped 72.81 points, or 0.5 percent, to 15,425.51. The gauge lost 1.5 percent in the past five days, halting a string of six weekly advances. About 5.3 billion shares changed hands on U.S. exchanges, 16 percent below the three-month average.

“It’s been a combination of tapering and just trying to digest the new highs,” Chris Bouffard, chief investment officer of the Mutual Fund Store in Overland Park, Kansas, which oversees $8 billion, said in a phone interview. “It’s been a slow news week. It’s just a matter of the normal digestion process and people trying to get comfortable with how quickly and how far we’ve come.”

The S&P 500 has rallied 19 percent in 2013 and closed at a record 1,709.67 on Aug. 2. The gauge topped 1,700 for the first time on Aug. 1, and surpassed it twice yesterday before paring gains to close below that level. Today’s retreat left the index down 1.1 percent in the past five days, the biggest weekly slide since June 21. The Dow’s weekly decline snaps its longest winning streak since August 2012.

Investors pulled almost $1.20 billion from U.S. equity exchange-traded funds over the last four days, according to data compiled by Bloomberg from about 1,500 funds. About $32 billion of deposits went to the funds in July, the most since September 2008, the data show.

Forty stocks in the S&P 500 closed at their highest levels in 52 weeks or longer yesterday, according to data compiled by Bloomberg, compared with 193 on May 15. Less than 79 percent of the 500 companies traded above their 50-day moving averages, down from 93 percent on May 17.

Speculation the Fed will pare bond purchases in September as the economy strengthens increased this week. Charles Evans, Sandra Pianalto and Richard Fisher, regional Fed presidents in Chicago, Cleveland and Dallas, said this week the central bank may be closer to tapering as the labor market recovers. Fed stimulus has helped propel the S&P 500 up more than 150 percent from its bear-market low in 2009.

Data yesterday showed jobless claims fell in July to the lowest monthly rate since before the recession. A report today indicated inventories at U.S. wholesalers unexpectedly declined in June for the third month, the longest string in almost four years, as demand grew.

A separate report showed Chinese factory production grew faster than estimated in July, which may bolster confidence that the nation will avoid a deeper economic slowdown after larger- than-forecast gains in exports and imports as well as improvement in gauges of manufacturing and service industries.

The S&P 500 trades at 15.3 times projected earnings, up from a multiple of 13.1 at the beginning of this year and holding close to a three-year high reached last week. The five- year average for the index is 13.9 times, data compiled by Bloomberg showed.

“The market is at least fairly valued,” said Ivo Weinoehrl, who helps oversee 946 billion euros ($1.27 trillion) as a fund manager at Deutsche Asset & Wealth Management in Frankfurt. “You’ve seen a huge multiple expansion in the S&P over the past two years. I don’t see much upside left from a purely fundamental point of view.”

Better-than-estimated corporate earnings have helped equities rally this year. Of the 447 companies in the S&P 500 to have reported quarterly results this period, 72 percent have exceeded analysts’ profit estimates and 56 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, advanced 5.3 percent to 13.41, extending its weekly rise to 12 percent. The equity volatility gauge reached its 2013 peak in June and has since dropped 35 percent.

Equity investors are piling into securities that hedge losses as a way to protect gains after the S&P 500 surged this year. While volatility has evaporated in the past month amid economic data showing stronger U.S. growth, shares outstanding of the iPath S&P 500 VIX Short-Term Futures ETN, a security designed to rise when stock fluctuations increase, have tripled this year.

Nine out of 10 main industries in the S&P 500 fell. Phone stocks retreated for a fifth straight day, losing 1 percent to extend a weekly loss to 2.5 percent. AT&T Inc. slid 1.4 percent to $34.80.

Gap Inc. dropped 3.1 percent to $44.10. The clothing retailer said July same-store sales rose 1 percent, less than the 1.6 percent estimated by analysts, on declines at its Old Navy and Banana Republic chains.

J.C. Penney declined 5.8 percent to $12.87, the eighth retreat in the past nine sessions. The feud between Ackman and board members began yesterday when the investor publicly released a letter calling for a speedier process to replace Chief Executive Officer Mike Ullman. Chairman Tom Engibous said the CEO “has the overwhelming support” of the board.

Apple Inc. fell for a fourth day, losing 1.4 percent to $454.45. The iPhone maker’s share of China’s smartphone market was cut by almost half in the second quarter as consumers opted for lower-priced handsets from domestic suppliers.

Apple shipments in China fell to 5 percent of the total in the second quarter from 9 percent a year earlier, Nicole Peng, the China research director for Canalys, said in phone interview today.

Juniper Networks Inc. retreated 5.6 percent, the most in more than three months, to $20.92. The No. 2 maker of networking equipment disclosed that it’s being investigated for possible violations of the U.S. Foreign Corrupt Practices Act.

Producers of raw materials rose 0.6 percent as a group, the only industry to advance out of 10 in the S&P 500. All six of the main industrial metals on the London Metal Exchange rose, following the data from China, the biggest commodities consumer.

Cliffs Natural Resources, a diversified miner, rallied 11 percent to $24.35 for the biggest advance in the S&P 500. Alcoa Inc., the largest U.S. aluminum producer, advanced 3.9 percent to $8.22, the steepest rise in the Dow. Freeport-McMoRan Copper & Gold Inc. climbed 2.6 percent to $31.61, its fourth straight gain.

Coal stocks also climbed, extending gains on the factory data from China after Moody’s yesterday raised the industry’s outlook to stable from negative. Peabody Energy Corp., the largest U.S. producer, jumped 7.8 percent to $17.90.

BlackBerry Ltd. rose 5.7 percent to $9.76, the highest in almost six weeks. Reuters reported the smartphone maker’s board may seek a buyer to take it private, citing unidentified people familiar with the talks. The company hasn’t started a formal sale process, according to the report.

Priceline.com Inc. jumped 3.9 percent to $969.89, the highest level since April 1999. The online-travel agent said second-quarter sales exceeded analysts’ estimates.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

The only way to achieve consciousness

is by concentrating on the physical, the mental, and the spiritual.

Concentration on the powers of the spirit to discover unity

in diversity is called consciousness.

All that draws on unity is moral; all that draws on diversity is immoral.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

The most valuable possession you can own is an open heart.

The most powerful weapon you can be is an instrument of

peace.

-Carlos Santana, 1947-

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 1876, Thomas Edison patented the mimeograph, a  precursor to the photocopier. This low cost printing press revolutionized the independent publishing industry.

August 8^th:  When we were visiting a garden this past May in the English countryside, the gardener told us the 8-8-8 rule:  In order to keep beautiful lavender, one must cut in down to 8 inches on August 8^th.

–from A Countrywoman’s Notes, August:

The local flower show was great fun, with lovely dahlias, long carrots, solid cabbages, pansies with delightful faces as well as large, mop-headed chrysanthemums.  The flower arrangements showed plenty of imagination and, I thought, so did the people who had compiled the competitions, for without creative classes there will not be good entries.  There proved to be much scope in the class entitled ‘A nursery rhyme’ when Little Boy Blue and the Old Lady who lived in a Shoe appeared in well-chosen floral form.  While the tug-of-war was going on and the rain threatened we watched small children on fat ponies negotiating painted fences.  But the best value for me, a chance visitor, was undoubtedly the dog show.  The majority were family pets but I spotted a few who had been taught ring behavior.  When under the scrutiny of the judge they held their pose like Hollywood children awaiting the photographer.  Those without  this discipline demonstrated their fondness for the family when the saw them at the ringside.  It was the diverse range of shapes and sizes that gave me such pleasure and must surely have presented the judge with a serious problem.  The smallest was an obviously highly intelligent border terrier, a good ratter, I was sure.  There was a mystery black dog which looked like a soft black shawl, so well draped that no one could really see what its feet were doing.  The lurchers were graceful and the Dobermans well groomed and fit, but it was the Pyrenean mountain dog that I would like to have been given.  I had a chat with its owner who explained how these Blaireau dogs act as guards for sheep in the mountains.  Perhaps in his native country Ben would have taken on  a fiercer attitude but here on show he was deceptively gentle. –Rosemary Verey.

I’ve failed over and over and over again in my life and that is why I succeed. –Michael Jordan.

Photos of the Day –August 8th, 2013

Chinese inventor Tao Xiangli (behind the robot) controls his self-made humanoid robot at his house located in a old residential area in Beijing, China. The self-taught Chinese inventor built the home-made robot, named ‘The King of Innovation,’ out of scrap metal and electronic wires that he bought from a second-hand market. Kim Kyung-Hoon/Reuters

A US Air Force Wideband Global SATCOM (WGS-6) mission lifts off on a ULA Delta IV rocket from Cape Canaveral Air Force Station, Fla., Wednesday night. The unmanned rocket is carrying a communications satellite for the US military and its partners. Mike Brown/Reuters

Market Closes for August 8^th, 2013

Market  Index	Close	Change
Dow  Jones	15498.32	+27.65    +0.18%
S&P 500	1697.48	+6.57    +0.39%
NASDAQ	3669.124	+15.116    +0.41%
TSX	12552.92	+140.19
		+1.13%

International Markets

Market  Index	Close	Change
NIKKEI	13605.56	-219.38
		-1.59%
HANG  SENG	21655.88	+67.04
		+0.31%
SENSEX	18789.34	+124.46
		+0.67%
FTSE 100	6529.68	+18.47
		+0.28%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.498	2.502
CND.   30 Year Bond	3.003	3.013
U.S.   10 Year Bond	2.5892	2.5986
U.S.   30 Year Bond	3.6729	3.6854

Currencies

BOC Close	Today	Previous
Canadian $	0.96826	0.95960
US   $	1.03279	1.04211
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38200	0.72359
US  $	1.33813	0.74731

Commodities

Gold	Close	Previous
London Gold   Fix	1312.00	1285.74
Oil	Close	Previous
WTI Crude Future	103.40	104.37
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

Aug. 8 (Bloomberg) — Canadian stocks rose the most in a month as exports rebounded in Germany and China, gold rallied and earnings from companies including Canadian Tire Corp. and Tim Hortons Inc. topped analyst estimates.

Canadian Tire soared to a record high and Tim Hortons, the nation’s largest coffee and doughnut chain, gained 0.7 percent.

Turquoise Hill Resources Ltd. jumped 12 percent after parent Rio Tinto Plc loaned $600 million to the company to fund development of its copper and gold mine in Mongolia. Air Canada rallied for a second day after reporting better-than-forecast profits.

The Standard & Poor’s/TSX Composite Index rose 140.19 points, or 1.1 percent, to 12,552.92 at 4 p.m. in Toronto, the biggest increase since July 11. The index has gained 1 percent this year.

“The reasons for the past few down days have been pretty tenuous,” said David Cockfield, a fund manager with Northland Wealth Management in Toronto. The firm manages about C$200 million ($193 million). “The numbers out there aren’t bad at all. This is a long, drawn out recovery but we’re still on the recovery path and I don’t see any reason why this market won’t continue to chug along. I’d like to see the Canadian market shake itself out of its doldrums.”

Chinese shipments overseas climbed 5.1 percent in July from a year earlier after sliding 3.1 percent in June, the General Administration of Customs in Beijing said. China is Canada’s second-largest trading partner. German exports increased 0.6 percent in June from May.

Raw-materials producers climbed the most in the S&P/TSX, gaining 5.9 percent, the most since 2011, as eight of 10 industries advanced. Trading volume was 62 percent higher compared with the 30-day average at this time of the day.

Turquoise Hill jumped 12 percent to C$5.10. Rio Tinto agreed to provide the $600 million loan after Turquoise Hill repaid an earlier $225 million bridge loan, the company said in a statement. The latest loan will mature in December.

Iamgold Corp. surged 14 percent to C$5.13 after announcing an agreement yesterday with the government of Suriname to reduce power rates at its Rosebel mine and lower costs by as much as $50 an ounce.

Barrick Gold Corp. climbed 8.2 percent to C$17.58 and Yamana Gold Inc. advanced 7.7 percent to C$10.03 as the price of gold jumped 1.9 percent to $1,309.90 an ounce in New York, the biggest gain in two weeks.

Teck Resources Ltd. jumped 7.7 percent to C$26.31 and First Quantum Resources Ltd. rallied 8.4 percent to C$17.12 after copper soared to an eight-week high as imports rose to the highest in 14 months in China.

Canadian Tire surged 7.1 percent to C$89.45, a record high.

The retailer reported second-quarter earnings of C$1.91 a share, compared with analysts’ estimates for C$1.77 a share. Canadian Tire is seeking a partner for its C$4.4 billion credit-card portfolio.

Tim Hortons, the nation’s largest coffee-and-doughnut chain, rose 0.7 percent to C$59.90 after the company posted a 14 percent increase in net income. Tim Hortons also announced it will buy back as much as 10 percent of its shares.

Air Canada, the nation’s largest airline, jumped 9.4 percent to C$2.90. The stock has gained 37 percent in the past two days, after reporting second-quarter profit that topped analysts’ estimates as fuel costs dropped.

US

By Nick Taborek

Aug. 8 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index halting a three-day drop, as Chinese trade data topped estimates and jobless claims fell to the lowest monthly rate since before the recession.

Cliffs Natural Resources Inc. and Newmont Mining Corp. gained at least 8.7 percent as metals prices rallied. Tesla Motors Inc. surged 14 percent after reporting second-quarter results that surpassed analysts’ estimates. AT&T Inc. slid 0.8 percent as phone stocks fell the most in the benchmark index.

JPMorgan Chase & Co. dropped 0.9 percent after saying it’s under federal criminal investigation for practices tied to sales of mortgage-backed bonds.

The S&P 500 climbed 0.4 percent to 1,697.48 at 4 p.m. in New York, paring the index’s weekly drop to 0.7 percent. The Dow Jones Industrial Average gained 27.65 points, or 0.2 percent, to 15,498.32. About 5.9 billion shares changed hands on U.S. exchanges, 6.9 percent below the three-month average.

“It shows that the data is moving in the right direction, so at the end of the day that is a positive catalyst for stocks,” Anastasia Amoroso, Global Market Strategist at JPMorgan Funds, which oversees about $400 billion, said in a phone interview. “There could be some short-term volatility around how that impacts Fed policy. One thing to keep in mind is if the Fed does actually reduce the pace of purchases, that is for some very good reasons.”

The S&P 500 declined 1.1 percent the first three days of the week amid growing speculation the Federal Reserve will pare bond purchases this year as the economy strengthens. Fed Bank of Cleveland President Sandra Pianalto said yesterday there had been “meaningful improvement” in the labor market and a scaling back of stimulus may be warranted if it continues.

Fed Bank of Dallas President Richard Fisher told Germany’s Handelsblatt newspaper in an interview today that the central bank should start reducing bond purchases in September if “economic data doesn’t significantly deteriorate.” Fisher, one of the most vocal critics of quantitative easing, said on Aug. 5 the Fed is closer to slowing its stimulus.

Data today showed claims for U.S. unemployment benefits in the four weeks ended Aug. 3 declined to 335,500 on average, the least since November 2007. They rose to 333,000 last week, in line with the median forecast of 50 economists surveyed by Bloomberg, from 328,000 the prior week.

A separate report showed consumers last week were the most upbeat in more than five years. The Bloomberg Consumer Comfort Index rose to minus 23.5 for the period ended Aug. 4, its strongest reading since January 2008.

In Asia, data indicated China’s exports and imports exceeded economists’ forecasts, adding to signs that the world’s second-largest economy is stabilizing following a two-quarter slowdown. Improved trade may bolster Premier Li Keqiang’s chances of achieving the year’s 7.5 percent target for expansion, after official manufacturing and service-industry indexes rose in July.

The trade data “could be a sign that we see some stabilization in Chinese activity,” said Patrick Moonen, who helps oversee $244 billion as senior strategist at ING Investment Management in The Hague. “I don’t think the U.S. equity market is only a matter of monetary policy. As the economy recovers, the earnings backdrop will become the most important element.”

The S&P 500 has rallied 19 percent this year and closed at a record 1,709.67 on Aug. 2. The gauge topped 1,700 for the first time on Aug. 1, after climbing within two points of that level for three times in the week before only to retreat by the close of trading. It briefly rose above 1,700 twice today before slipping back below.

Stocks have also advanced this year as corporate earnings have surpassed estimates. Of the 445 companies in the S&P 500 to have reported quarterly results this period, 72 percent have exceeded analysts’ profit estimates and 56 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, fell 1.9 percent today to 12.73. The equity volatility gauge reached its 2013 peak in June and has since dropped 38 percent.

Nine of 10 industries in the the benchmark gauge advanced.

Materials stocks rallied 1.5 percent to pace gains, boosted by the data from China, which is the largest consumer of raw- materials.

Cliffs Natural Resources, a diversified miner, jumped 8.9 percent to $22.01. Newmont Mining rallied 8.7 percent to $28.78, snapping a six-day losing streak, as copper rose to an eight- week high and gold added the most in two weeks.

Tesla, the electric-car company led by Elon Musk, soared 14 percent to a record $153.48. The carmaker’s results surpassed analysts’ estimates on a surge in Model S sedan deliveries. The company also said it will make money all year on an operating basis, even as it expands to Europe and Asia.

Groupon Inc. rallied 22 percent to $10.60, the biggest jump since December. The operator of the largest daily-deals website’s second-quarter net loss was narrower than analysts forecast. The company also named co-founder Eric Lefkofsky as CEO to lead turnaround plans.

Consumer discretionary shares climbed 0.7 percent as a group. L Brands Inc., which operates Victoria’s Secret, gained 5.2 percent to $60.25 after reporting same-store sales in July rose more than analysts estimated.

J.C. Penney Co. jumped 6.7 percent to $13.66. The department-store chain seeking to rebound from its worst sales year in more than two decades gained for the first time since July 29 after CNBC said the retailer is searching for a new chief executive officer. The stock had lost 23 percent in the seven sessions through yesterday.

Microsoft Corp. rose 2.6 percent to $32.89 for the biggest gain in the Dow. The maker of the Windows operating system was raised to overweight from equalweight by Evercore Partners.

Analyst Kirk Materne said in a note the company has an attractive valuation and may increase its dividend in September.

Phone stocks tumbled 1 percent to pace declines in the S&P 500. AT&T dropped 0.8 percent to $35.29 and Verizon Communications Inc. lost 0.6 percent to $49.62.

CenturyLink Inc. fell 5.6 percent to $34.36 for the biggest drop in the S&P 500. The telecommunications company cut its sales forecast, citing slower acceleration in data-hosting revenue and a faster rate of decline in low bandwidth data services.

JPMorgan Chase declined 0.9 percent to $54.83 for the biggest slide in the Dow and a fifth straight losing session.

The biggest U.S. bank said the Justice Department’s civil division found in May that the bond-sales practices broke civil laws after it examined securities tied to subprime and Alt-A loans sold to investors from 2005 through 2007.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

What is the object of jnâna yoga?  Freedom.

Freedom from what?  Freedom from our imperfections, freedom from the suffering of life.

Why are we unhappy?  We are unhappy because we are enslaved.  And what are we enslaved by?

The enslavement of nature.  Who enslaves us?

We do, ourselves.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

Nothing is a waste of time if you use the

experience wisely.

-Auguste Rodin, 1840-1917

 

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 read this today in the most recent edition of Barron’s:

The August Effect

In August 1913, exactly 100 years ago, General Motors’ stock surged nearly 20% for the month.  Folks were loving Buicks – and besides, it was August.  Stocks generally rose in August in those days, and that remained the case through the early ‘60s.  From 1913 to 1963, gains for the month averaged a strong 2%, says the Bespoke Investment Group.

Then something happened.  For the next 50 years, stocks were flat in August, and eventually they tended to decline.  For the past 20 years, Bespoke says, the Dow averaged a loss of 0.7% for August, the third-worst showing of any month.

We chalk it up to the changing nature of summer vacations.  In the old days, investors took their ease for weeks, sometimes months, at a time, opening their minds to truly fresh ideas as they boarded steamships to Europe or kicked back on the yacht-club porch.  A GM buy order was just a telegram away.

By the ‘50s, vacationers were packing up their Country Squire station wagons and crowding the nascent highway system, all thoughts of investing pushed aside by the loud demands of children and the harrowing antics of fellow drivers.  Stocks went nowhere.

Now, of course, no one really ever gets away, tethered to the market by the Internet.  Frazzled, anxious, and easily unnerved, legions of investors have turned their cellphones into sellphones.  Maybe this August it’s time to take a cue from our forebears and genuinely unplug.  It could do wonders for the market.  –Lawrence C. Strauss

Excellence is not a skill.  It is an attitude.  –Ralph Marston.

Photos of the Day –August 7th, 2013

A girl plays the piano in the park in Russia’s Siberian city of Krasnoyarsk. A group of young enthusiasts bought an old Soviet-made piano, adjusted it, painted it white and placed it in a park for free use by all visitors. Ilya Naymushin/Reuters

A child cools off from hot weather in a fountain at People’s Square in Shanghai, China. A record-setting summer heat wave continues to bake most parts of south China. Aly Song/Reuters

Market Closes for August 7^th, 2013

Market  Index	Close	Change
Dow  Jones	15470.67	-48.07    -0.31%
S&P 500	1690.91	-6.46    -0.38%
NASDAQ	3654.009	-11.761    -0.32%
TSX	12412.73	-56.59
		-0.45%

International Markets

Market  Index	Close	Change
NIKKEI	13824.94	-576.12
		-4.00%
HANG  SENG	21588.84	-334.86
		-1.53%
SENSEX	18664.88	-68.16
		-0.36%
FTSE 100	6511.21	-93.00
		-1.41%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.502	2.512
CND.   30 Year Bond	3.013	3.028
U.S.   10 Year Bond	2.5986	2.6402
U.S.   30 Year Bond	3.6854	3.7261

Currencies

BOC Close	Today	Previous
Canadian $	0.95960	0.96371
US   $	1.04211	1.03765
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39033	0.71925
US  $	1.33416	0.74954

Commodities

Gold	Close	Previous
London Gold   Fix	1285.74	1283.65
Oil	Close	Previous
WTI Crude Future	104.37	105.30
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

Aug. 7 (Bloomberg) — Canadian stocks fell, erasing gains for the year, as financials and energy producers retreated amid weaker-than-forecast housing construction and growing concern the U.S. Federal Reserve may reduce its bond purchases.

Dream Unlimited Corp., a real-estate manager and developer, lost 2.8 percent to pace declines among financial stocks.

Enbridge Inc. and Encana Corp. dropped at least 1.6 percent as energy shares slumped. BlackBerry Ltd. retreated 3.3 percent as its market share fell. Athabasca Oil Corp. surged 10 percent after winning approval for its Dover oil-sands project from an Alberta regulator. Air Canada soared 25 percent as profits topped estimates amid falling fuel costs.

The Standard & Poor’s/TSX Composite Index fell 56.59 points, or 0.5 percent, to 12,412.73 at 4 p.m. in Toronto. The benchmark Canadian equity gauge lost 1.5 percent over the past two days, and is down 0.2 percent for the year.

“I thought we needed a rest, a slight pause and a correction,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about $4 billion. “If you go up in a straight line you’re in trouble. There’s some worry over the Fed which has caused the market to sell off, and that nervousness has spilled over into today.”

Canadian equities sank 1.1 percent yesterday as comments from a Fed official fueled concern the U.S. central bank may reduce the pace of its monthly bond buying this year. Fed Bank of Chicago President Charles Evans said he “would clearly not” rule out a decision to begin curbing bond purchases in September. Fed Bank of Cleveland President Sandra Pianalto said today that a tapering may be warranted if the labor market continues to strengthen.

Canadian building permits fell for the first time this year in June, declining 10.3 percent to C$6.65 billion ($6.38 billion) as contractors scaled back intentions for new condominiums. Economists surveyed by Bloomberg had forecast a median drop of 2.8 percent.

Dream Unlimited slumped 2.8 percent to C$12.10 as financial stocks dropped 0.6 percent.

Energy stocks declined 0.9 percent, falling the most as seven of 10 industries in the S&P/TSX retreated. Trading volume was 9.1 percent lower than the 30-day average.

Enbridge lost 1.6 percent to C$44.88 and Encana decreased 1.9 percent to C$18.07 as 42 of 58 members in the S&P/TSX Energy Index fell.

Crude for September delivery dropped 0.9 percent to settle at $104.37 a barrel in New York, after the U.S. government reported an unexpected increase in supplies of gasoline and distillate fuels. Economists had forecast stockpiles to decrease.

BlackBerry lost 3.3 percent to C$9.58, snapping five days of gains. BlackBerry’s global smartphone market share in the second quarter fell to 2.9 percent from 4.9 percent a year ago, a report from International Data Corp. said today. Google Inc.’s Android operating system was the top performer, climbing to a 79 percent market share, the report said.

Athabasca Oil jumped 10 percent to C$8.12. With the Alberta regulator approving the Dover oil-sands project, Athabasca can sell its stake in the project, worth about C$1.3 billion, to PetroChina Co. and use the funds for other projects.

Air Canada climbed 25 percent to C$2.65, the most since May 2009, after reporting second-quarter profit that topped analysts’ estimates. The company said it spent C$831 million on fuel in the second quarter, 6 percent less than the same period a year ago. Capacity will grow 9 percent to 11 percent next year as the company adds Boeing Co. 777 and 787 jets.

Valeant Pharmaceuticals International Inc. rose 2.1 percent to C$101.70, a record high, after raising its full-year earnings forecast. The drugmaker completed its $8.7 billion acquisition of Bausch & Lomb Inc. this month and expects “significantly more than” $800 million in cost synergies from the combined company.

US

By Nick Taborek and Tom Stoukas

Aug. 7 (Bloomberg) — U.S. stocks declined, giving the Standard & Poor’s 500 Index its first three-day drop since June 12, amid growing speculation the Federal Reserve will pare bond purchases this year as the economy strengthens.

Bank of America Corp. declined 0.8 percent after the Department of Justice yesterday accused the company in a lawsuit of misleading investors. Walt Disney Co. dropped 1.7 percent after quarterly profit stalled on lower earnings from films and weaker revenue at its ABC network. Time Warner Inc. fell 0.4 percent, erasing an earlier gain after an analyst downgraded the shares.

The S&P 500 slid 0.4 percent to 1,690.91 at 4 p.m. in New York. The benchmark gauge has fallen 1.1 percent this week after closing at a record on Aug. 2. The Dow Jones Industrial Average decreased 48.07 points, or 0.3 percent, to 15,470.67 today.

About 5.5 billion shares changed hands on U.S. exchanges, 12 percent below the three-month average.

“We’re just going through a period of consolidation,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis, said by phone. His firm manages $112 billion. “We still like the outlook for the broad equity market, but near term we’re probably in a trading range pattern until we get greater clarity as to what happens with quantitative easing.”

The S&P 500 sank the most in six weeks yesterday as trade data and comments from a Fed official fueled concern the central bank may reduce stimulus this year. Fed Bank of Chicago President Charles Evans said he would not rule out a decision to begin tapering in September.

Fed Bank of Cleveland President Sandra Pianalto said today there has been “meaningful improvement” in the labor market and that tapering may be warranted if it continues to strengthen.

Fed policy makers are weighing data to determine whether the economy has improved enough to begin reducing its $85 billion in monthly bond purchases. The stimulus has helped propel the S&P 500 up more than 150 percent from its bear-market low in 2009.

A report Aug. 2 showed American companies added fewer workers than anticipated in July while the jobless rate fell to 7.4 percent. Separate data last week showed U.S. gross domestic product rose at a better-than-forecast rate and manufacturing expanded in July.

“The economic data is probably coming in a little better than expected, and because of that I think the market’s concerned that’s going to give the Fed the potential to begin tapering in September,” Mike Binger, who helps oversee about $360 million as senior portfolio manager at Gradient Investments LLC in Shoreview, Minnesota, said by phone.

Stocks also climbed to records amid better-than-estimated corporate earnings. Of the 436 companies in the gauge that have reported results for the second quarter, 72 percent have exceeded analysts’ profit estimates and 56 percent have beaten sales projections, data compiled by Bloomberg show.

The equity index has advanced 19 percent this year and is trading at 15.3 times estimated earnings, compared with an average of 13.9 over the last five years, data compiled by Bloomberg showed.

The Chicago Board Options Exchange Volatility Index, or VIX, rose 2 percent today to 12.98 for a second day of gains.

The equity volatility gauge reached its 2013 peak in June and has since fallen 37 percent.

Seven of 10 main industry groups in the S&P 500 fell today.

Shares in consumer discretionary and financial companies slid 0.8 percent for the biggest declines.

Bank of America slid 0.8 percent to $14.53, paring an earlier loss of as much as 2.7 percent. The Justice Department said the firm misled investors about the quality of loans tied to $850 million in mortgage-backed securities. The complaint chronicles friction among bank staff in 2007 and 2008 as they excluded risky Alt-A loans while leaving in wholesale debts once scorned as “toxic waste” by the firm’s then-chief.

Disney fell 1.7 percent to $65.91 for the steepest decline in the Dow. The world’s biggest entertainment company said third-quarter profit was little changed from the same time last year amid costs to market the box-office disappointment “The Lone Ranger” and shrinking revenue at ABC television network.

A gauge that tracks homebuilder shares retreated for a third day, falling 2.7 percent to the lowest level since November. All 11 members of the S&P Supercomposite Homebuilders Index declined, extending the measure’s loss this week to 7.1 percent. D.R. Horton Inc. slid 3.2 percent to $18.98 and Toll Brothers Inc. lost 3 percent to $31.23.

Ralph Lauren Corp. fell 8.6 percent to $173.13. The retailer of its namesake brand clothing issued a forecast for the current quarter that implied profit would trail analysts’ estimates.

Clothing retailers slid yesterday after a Janney Montgomery analyst downgraded the sector, citing headwinds including a high level of promotional activity. The group retreated 1.3 percent today.

First Solar Inc. tumbled 13 percent to $40.47 for the biggest loss in the S&P 500. The largest U.S. solar-panel manufacturer said yesterday profit fell short of analysts’ estimates as revenue from its current project pipeline slumped.

Today’s share-price drop was the steepest in five months.

Zillow Inc. tumbled 7.7 percent to $83.73. The operator of the largest U.S. real-estate information website reported a second-quarter loss on higher costs related to advertising and acquisition-related compensation.

The Dow Jones Transportation Average fell for a fourth day, sliding 0.7 percent, as C.H. Robinson Worldwide Inc. lost 5.5 percent to $56.31. The cargo and logistics company was downgraded to underperform from market perform by a Wells Fargo analyst after it reported yesterday sales that missed estimates.

Computer Sciences Corp. jumped 8.5 percent to $54.20 for the biggest gain in the S&P 500. The technology consultant for governments and companies forecast earnings that were higher than analysts estimated as the company cut costs and struck partnerships.

Time Warner fell 0.4 percent to $64.49. The owner of the TNT, CNN and HBO cable channels fell after a B. Riley analyst downgraded the shares to neutral from buy. The company had gained as much as 3 percent earlier in the day after reporting second-quarter profit that topped analysts’ estimates. Network advertising sales rose 11 percent, helped by the National Basketball Association playoffs on TNT and the college basketball tournament.

AOL Inc. rose 1.4 percent to $36.69 after it agreed to buy Adap.tv for about $405 million, gaining online video advertising technology used by the world’s largest brands and agencies. The purchase is the largest by AOL since Chief Executive Officer Tim Armstrong led the spinoff of the company from Time Warner in 2009.

21st Century Fox Inc.’s Class A shares advanced 1.9 percent to $31.81. Rupert Murdoch’s film and television company that in June spun off News Corp.’s publishing operation today posted a gain in fourth-quarter operating profit, bolstered by growth at cable networks including F/X and Fox News.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

What we are about to undertake is an expedition together, a journey of discovery

into the most secret recesses of our consciousness.

And for such an adventure we must travel light, we cannot burden ourselves

with opinions, prejudices, conclusions that is, with all the baggage that we have collected

over the past two thousand years or more.  Forget everything you know about yourself;

forget everything that you have thought about yourself;

we are going to set off as if we know nothing.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Be kind whenever possible.  It is always

possible.

-Dalai Lama, 1935-

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:

Hiroshima Day: the world’s first nuclear weapon used in warfare occurred on this day in 1945.

There is a goddess of Memory, Mnemosyne, but none of Forgetting.  Yet there should be, as they are twin sisters, twin powers and walk on either side of us, disputing for sovereignty over us and who we are, all the way until death.

–Richard Holmes, A meander Through Memory and Forgetting.

Photos of the Day –August 6th, 2013

The Atomic Bomb Dome is silhouetted at sunset in Hiroshima, western Japan. Hiroshima marks the 68th anniversary of the world’s first atomic bombing. Shizuo Kambayashi/AP

Market Closes for August 6^th, 2013

Market  Index	Close	Change
Dow  Jones	15518.74	-93.39    -0.60%
S&P 500	1697.37	-9.77    -0.57%
NASDAQ	3665.770	-27.182    -0.74%
TSX	12469.32	-133.93
		-1.06%

International Markets

Market  Index	Close	Change
NIKKEI	14401.06	+143.02
		+1.00%
HANG  SENG	21923.70	-298.31
		-1.34%
SENSEX	18733.04	-449.22
		-2.34%
FTSE 100	6604.21	-15.37
		-0.23%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.512	2.490
CND.   30 Year Bond	3.028	3.001
U.S.   10 Year Bond	2.6402	2.5979
U.S.   30 Year Bond	3.7261	3.6843

Currencies

BOC Close	Today	Previous
Canadian $	0.96371	0.96226
US   $	1.03765	1.03922
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38072	0.72426
US  $	1.33062	0.75153

Commodities

Gold	Close	Previous
London Gold   Fix	1283.65	1312.80
Oil	Close	Previous
WTI Crude Future	105.30	106.94
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

Aug. 6 (Bloomberg) — Canadian stocks fell for the first time in three days, led lower by precious metals producers and energy companies as commodities extended declines.

Barrick Gold Corp. and Yamana Gold Inc. retreated at least 6.2 percent as the precious metal headed for a sixth straight decline, the longest slump since May. Athabasca Oil Corp. and Suncor Energy Inc. slid at least 1.3 percent as oil prices fell for a third day. Paladin Energy Ltd. sank 6.9 percent to extend losses a second day after the uranium producer agreed to sell additional shares at a discount. BlackBerry Ltd. surged 5.7 percent for a fifth day of gains.

The Standard & Poor’s/TSX Composite Index fell 149.47 points, or 1.2 percent, to 12,453.78 at 2:12 p.m. in Toronto.

Today’s drop trimmed the gauge’s gain for the year to 0.2 percent. Trading volume was 7.1 percent lower than the 30-day average at this time of the day. Canadian markets were closed yesterday for a holiday.

“The commodities are weak and it affects us more than the U.S. market,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. The firm manages about $1 billion.

“Gold looked like it was starting to form a bottom for a while there but now it’s breaking down. It’s been a big disappointment for an awful lot of people. The Fed really gave all the wrong signals and they’ve been trying to repair the damage ever since.”

Federal Reserve Chairman Ben S. Bernanke said last month that it’s too early to decide whether to begin paring asset purchases in September. The comments helped gold rise 7.3 percent in July, the biggest monthly gain since January 2012.

Speculation that the central bank would pull back on stimulus escalated yesterday after Fed Bank of Dallas President Richard Fisher, one of the most vocal critics of quantitative easing, said the Fed is closer to slowing the pace of bond buying. Fed Bank of Chicago President Charles Evans, who has been among the strongest proponents of record monetary accommodation, said today he “would clearly not rule” out a decision to begin dialing back the purchases in September.

Nine of 10 industries in the S&P/TSX retreated. Raw- materials producers lost the most, declining 3.4 percent to the lowest since June.

Barrick Gold, the world’s largest gold producer, tumbled 6.2 percent to C$16.29 and Yamana Gold plunged 6.4 percent to C$9.37, pacing declines in the S&P/TSX Gold Index. The gauge lost 5.4 percent, with 23 of its 24 members retreating. Gold futures for December delivery declined 1.5 percent in New York, on pace for the longest string of drops in 11 weeks.

Athabasca Oil slumped 3.4 percent to C$7.38 and Suncor Energy lost 1.3 percent to C$33.46. Crude for September delivery fell for a third day amid speculation the Fed will reduce stimulus, losing 1.4 percent in New York.

Francisco Blanch, head of commodities research with Bank of America, said in a Bloomberg Radio interview with Tom Keene West Texas Intermediate crude could slide $8 to $10 “unless there is a major geopolitical event” to drive prices higher.

Crude jumped 8.8 percent in July for the biggest monthly gain since August 2012, as U.S. inventories dropped and on concern political instability in Egypt would disrupt exports from the Middle East.

Paladin Energy sank 6.9 percent to 67 Canadian cents. The stock plunged 22 percent on Aug. 2 after the company said it failed to sell part of the Langer Heinrich mine in Namibia. That prompted the uranium miner to sell shares at a 30 percent discount to its previous closing price in Australia to raise about $78 million.

BlackBerry advanced 5.7 percent to C$9.80, giving information-technology stocks the only gain among 10 S&P/TSX groups. The smartphone maker’s shares have risen for five days, the longest streak since February.

U.S.-listed shares in the Waterloo, Ontario-based company jumped 7.4 percent yesterday after a report by GSM Arena included supposed leaked images of new BlackBerry smartphones that are in development.

US

By Nick Taborek and Whitney Kisling

Aug. 6 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its biggest decline since June 24, as retailers’ results disappointed and trade data fueled concern the Federal Reserve may reduce its bond purchases this year.

American Eagle Outfitters Inc. and CVS Caremark Corp. slumped more than 2.8 percent. Newmont Mining Corp. lost 6.5 percent as gold tumbled. International Business Machines Corp. retreated 2.3 percent after requiring most U.S. employees in its hardware division to take a week off amid slowing demand.

Washington Post Co. rallied 4.3 percent as Amazon.com Inc. Chief Executive Officer Jeff Bezos agreed to buy its newspaper assets.

The S&P 500 fell 0.6 percent to 1,697.37 at 4 p.m. in New York, extending yesterday’s loss after a record high last week.

The Dow Jones Industrial Average decreased 93.39 points, or 0.6 percent, to 15,518.74. About 5.6 billion shares changed hands on U.S. exchanges, 12 percent below the three-month average.

“Certainly some of the move is due to increased concern about tapering due to the very strong trade number,” Paul Zemsky, the New York-based head of asset allocation for ING Investment Management which oversees $180 billion, said in an e- mail. “It’s puzzling to me why better GDP growth would be bad for the equity market, but there are some who view it this way. Longer term, we need to see revenue growth, and stronger GDP will deliver that.”

The U.S. trade deficit narrowed more than forecast in June to the lowest level since October 2009 as crude oil imports declined and American companies shipped more goods abroad, showing second-quarter growth was stronger than initially estimated.

Economists at Goldman Sachs Group Inc. and Barclays Plc raised their estimates for second-quarter U.S. gross domestic product, citing the trade report. A Commerce Department report last week showed the economy grew more than projected in the quarter, with GDP rising at a 1.7 percent annualized rate after a 1.1 percent gain the prior quarter.

The S&P 500 fell 0.1 percent yesterday after Fed Bank of Dallas President Richard Fisher, one of the most vocal critics of quantitative easing, said the central bank is closer to slowing its $85 billion in monthly bond buying.

Fed Bank of Chicago President Charles Evans, who has been among the strongest proponents of record monetary accommodation, said today he “would clearly not rule” out a decision to begin dialing back the purchases in September.

“We’ve seen good improvement in the labor market, there’s no question in my mind about that,” Evans said in a meeting with reporters in Chicago. “I’m still wanting to see greater evidence that it’s a sustainable improvement.”

Central bank policy makers have been debating the pace and timing of any cuts in the monetary stimulus that has helped propel the S&P 500 up more than 150 percent from its bear-market low in 2009. The Fed said last week that persistently low inflation could hamper the economy and pledged to keep buying bonds every month. Tapering of the pace of asset purchases may begin in September, according to a growing number of economists surveyed by Bloomberg from July 18 to July 22.

Stocks rallied 1.1 percent last week, sending the S&P 500 above 1,700 for the first time. The equity gauge has advanced 19 percent this year and is trading at 15.4 times estimated earnings, compared with an average of 13.9 over the last five years, data compiled by Bloomberg showed.

Better-than-expected corporate earnings have bolstered stocks in recent weeks. Some 31 companies in the S&P 500 report earnings today, including Marathon Oil Corp. and Walt Disney Co. Of the 419 members that have posted quarterly results so far, 73 percent have exceeded analysts’ estimates for profit, data compiled by Bloomberg show.

“The market is probably just sort of resting, digesting all its earnings numbers, which are good but not great,” Thomas Nyheim, a Wilmington, Delaware-based fund manager for Christiana Trust, which oversees about $16 billion, said by phone.

“Companies have basically hit their earnings numbers through cost cutting and not hiring as much as they should.”

Volumes on exchange-listed stocks reached 4.65 billion yesterday, the slowest full-day trading this year, data compiled by Bloomberg show. Intraday price swings have narrowed, with fluctuations in the S&P 500 averaging 0.65 percent during the past 20 days through yesterday, the smallest change over a comparable period since Feb. 1, the data show.

The Chicago Board Options Exchange Volatility Index, or VIX, jumped 7.4 percent today to 12.72. The equity volatility gauge reached its 2013 peak in June and has since fallen 38 percent.

All 10 main industry groups in the S&P 500 fell, with raw- materials, financial and industrial companies losing at least 0.8 percent to lead declines. Newmont Mining retreated 6.5 percent to $26.63 as gold prices declined 1.5 percent, capping the longest slump in 11 weeks. Caterpillar Inc. slid 1.2 percent to $82.53. Citigroup Inc. fell 2.6 percent to $51.48.

The Morgan Stanley Cyclical Index lost 1.4 percent and the Dow Jones Transportation Average erased 1.3 percent. An S&P index of homebuilders slipped 2.6 percent and the Bloomberg U.S.

Airlines Index dropped 2.7 percent. PulteGroup Inc. declined 4 percent to $16.19 and KB Home tumbled 3.5 percent to $16.79.

United Continental Holdings Inc. retreated 3.8 percent to $33.57 and Delta Air Lines Inc. fell 3.4 percent to $20.98.

Retailers slid. Urban Outfitters Inc. slipped 2.8 percent to $42.47 and Abercrombie & Fitch Co. erased 4.1 percent to $49.57 after a Janney Montgomery analyst downgraded the retail softline sector to underweight from neutral weight, citing headwinds including a high level of promotional activity.

American Eagle Outfitters fell 12 percent, the most since May 2010, to $17.57. The teen apparel chain said second-quarter profit was less than it forecast amid disappointing sales of women’s clothing and weak shopper traffic.

CVS Caremark dropped 2.8 percent to $59.89, the biggest decline since June 20. The largest provider of prescription drugs in the U.S. lowered the top end of its full-year adjusted earnings target to $3.96 a share from $4 a share.

J.C. Penney Co. declined 3.9 percent to $13.28, falling for a sixth straight session to the lowest level since January 2001.

The stock has tumbled 20 percent since July 29.

IBM lost 2.3 percent to $190.99 for the biggest drop in the Dow. The world’s largest computer-services company said U.S. employees in its hardware division will take a furlough week with one-third pay starting either Aug. 24 or Aug. 31.

The company is cutting costs after server demand slowed in the second quarter. Sales in the hardware business, which includes storage devices and microelectronics, slid 12 percent in the period from a year earlier to $3.76 billion.

Regeneron Pharmaceuticals Inc. fell 6.1 percent to $254.50.

The drug company declined after reporting second-quarter profit and sales that missed analysts’ estimates.

Washington Post Co. advanced 4.3 percent to $593. Bezos agreed to buy the Washington Post newspaper that is the core of the company’s weakest division. Washington Post Co., which isn’t selling its Kaplan education division and other businesses, plans to change its name.

Fossil Group Inc. gained 18 percent to $126.55. The fashion accessories designer reported results that beat analysts’ estimates. The company also raised its full-year earnings forecast. Fossil slid the most in the S&P 500 yesterday after a Barclays Plc analyst downgraded the shares to underweight from equalweight.

 

Have  a wonderful evening everyone.

 

Be magnificent!

 

Fear comes from the selfish idea

of cutting one’s self off from the universe.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Success is not final, failure is not fatal: it is the courage

to continue that counts.

-Winston Churchill, 1874-1965

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:

What carries us through

We lie on the driveway, side by side,

old sheet pulled up

to our shoulders to fend off the mosquitoes,

and look

for shooting stars against the August sky.

(I see one – there!  Did you see it?)

Too hot to touch, I feel your hand,

hold a single finger,

love you,

bigger than the sky,

for taking me outside

to see.

-Jennifer Freed

Make a note: The Perseid meteor shower will peak the night of August 12^th.

Photos of the Day –August 2nd, 2013

Star trails form over yurts, traditional nomad felt tents, in a long exposure picture on the mountainous Assy plateau, 56 miles east of Almaty, Kazakhstan. Modern farmers follow centuries old nomadic tradition of relocating from settlements to the plateau to tend their livestock for a summer season. Shamil Zhumatov/Reuters

A general view of Hong Kong’s business district. The Hong Kong Observatory has issued a strong wind signal number three as Tropical Storm Jebi edges closer to Hong Kong. Vincent Yu/AP

Market Closes for August 2^nd, 2013

Market  Index	Close	Change
Dow  Jones	15658.36	+30.34    +0.19%
S&P 500	1709.67	+2.80    +0.16%
NASDAQ	3689.588	+13.844    +0.38%
TSX	12603.25	+9.29
		+0.07%

International Markets

Market  Index	Close	Change
NIKKEI	14466.16	+460.39
		+3.29%
HANG  SENG	22190.97	+102.18
		+0.46%
SENSEX	19164.02	-153.17
		-0.79%
FTSE 100	6647.87	-34.11
		-0.51%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.490	2.547
CND.   30 Year Bond	3.001	3.043
U.S.   10 Year Bond	2.5979	2.7060
U.S.   30 Year Bond	3.6843	3.7542

Currencies

BOC Close	Today	Previous
Canadian $	0.96226	0.96631
US   $	1.03922	1.03486
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38028	0.72449
US  $	1.32819	0.75291

Commodities

Gold	Close	Previous
London Gold   Fix	1312.80	1305.18
Oil	Close	Previous
WTI Crude Future	106.94	107.89
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

Aug. 2 (Bloomberg) — Canadian stocks rose a second day as banks helped lead gains, offsetting a drop in industrials after data showed the U.S. added fewer jobs than forecast in July.

Turquoise Hill Resources Ltd., a unit of Rio Tinto Group, jumped 8.7 percent for a third day of gains after agreeing to new terms for the sale of a stake in a mine. Royal Bank of Canada, the nation’s largest lender, climbed 0.8 percent.  SNC- Lavalin Group Inc., Canada’s largest engineering company, sank 6.1 percent after reporting an unexpected second-quarter loss.

Paladin Energy Ltd. plunged 22 percent after saying it will sell additional shares.

The Standard & Poor’s/TSX Composite Index rose 9.29 points, or 0.1 percent, to 12,603.25 at 4 p.m. in Toronto. The gauge pared a weekly loss to 0.4 percent. Trading volume was about 24 percent lower than the 30-day average.

“It’s time for a bit of a pause,” said Keith Richards, a fund manager with ValueTrend Wealth Management in Barrie, Ontario. The firm manages about C$110 million ($106 million). “We’ve had this great run in the U.S. markets.”

U.S. payrolls rose by 162,000 last month, less than an estimated 185,000 and the smallest advance in four months. The unemployment rate dropped to 7.4 percent from 7.6 percent. The U.S. Federal Reserve has indicated its $85 billion monthly bond buying may be trimmed should the economy meet its forecasts, though Chairman Ben S. Bernanke has said there’s no fixed schedule for reducing stimulus.

Turquoise Hill surged 8.7 percent to C$5 after agreeing to sell its 50 percent stake in Altynalmas Gold Ltd. to Sumeru Gold BV for $235 million, down from $300 million agreed to in February. In exchange, Turquoise Hill will receive advance payment by Aug. 9, ahead of the closing of the transaction.

Silvercorp Metals Inc. gained 2.6 percent to C$3.12 as silver rallied 1.5 percent to $19.912 an ounce in New York, snapping three days of losses.

Royal Bank rose 0.8 percent to C$64.43 and Toronto-Dominion Bank advanced 0.7 percent to C$87.37 as the S&P/TSX Financials Index rose the most in two weeks.

Paladin Energy Ltd. slumped 22 percent to 72 Canadian cents, the biggest loss since in went public in 2005. The Australian company producing uranium in Africa announced it will sell shares to institutions after ending talks to sell a stake in its mine in Namibia, citing low prices for the nuclear fuel.

Athabasca Oil Corp. lost 3.9 percent to C$7.64 and Pengrowth Energy Corp. slipped 1.7 percent to C$5.94. Oil dropped 0.9 percent to $106.94 a barrel, paring a weekly advance.

SNC-Lavalin, based in Montreal, tumbled 6.1 percent to C$40.38 after cutting its annual profit forecast. The company cited losses in the second quarter in its oil and gas division and its infrastructure and environment unit. Chief Executive Officer Robert Card said in the statement that 2013 is “proving to be a very challenging year.”

Bombardier Inc. lost 1.6 percent to C$4.87. The world’s third-biggest aircraft maker said it is working toward a debut takeoff for the CSeries jetliner within the next few weeks, after three delays since November.

US

By Lu Wang and Katie Brennan

Aug. 2 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index erasing an earlier decline, as data showing employers added fewer workers than anticipated in July signaled the Federal Reserve will continue its stimulus efforts.

American International Group Inc. rallied 2.7 percent after saying it will pay its first dividend since 2008 and authorizing a share buyback of as much as $1 billion. LinkedIn Corp. surged 11 percent after increasing its full-year sales forecast. Dell Inc. advanced 5.6 percent as Michael Dell agreed to sweeten his proposal to buy the computer maker with a special dividend.

Chevron Corp. slipped 1.2 percent after posting its biggest second-quarter profit decline in four years.

The S&P 500 rose 0.2 percent to 1,709.67 at 4 p.m. in New York, advancing to a record in the final hour of trading and capping the weekly gain at 1.1 percent. The Dow Jones Industrial Average climbed 30.34 points, or 0.2 percent, to a record 15,658.36 today. About 5.7 billion shares changed hands, 11 percent lower than the three-month average.

“This number isn’t an earth-shaker,” John Manley, who helps oversee $222.7 billion as chief equity strategist for Wells Fargo Funds Management in New York, said in a phone interview. “It is debatable if it was good or bad. It was OK. The number still indicates the Fed is going to be there for a while, that is not bad.”

The 162,000 increase in payrolls last month was the smallest in four months and followed a revised 188,000 rise in June that was less than initially estimated, Labor Department figures showed today in Washington. The median forecast of 93 economists surveyed by Bloomberg called for a 185,000 gain.

Workers spent fewer hours on the job and hourly earnings fell for the first time since October. The unemployment rate dropped to 7.4 percent from 7.6 percent.

Consumer spending rose in line with forecasts in June as Americans’ incomes grew, while orders placed with factories increased, pointing to further stabilization in manufacturing that may help lift second-half growth, separate reports showed.

Equities pared earlier losses as Federal Reserve Bank of St. Louis President James Bullard, who backed this week’s Fed decision to continue bond buying, said the central bank should wait for evidence the labor market and economy are strengthening before tapering purchases.

The S&P 500 climbed above the 1,700 level yesterday for the first time as central banks vowed to maintain stimulus efforts and data on global manufacturing beat forecasts. The benchmark gauge is trading at 15.5 times projected earnings, compared with an average of 13.9 over the last five years, according to data compiled by Bloomberg.

About 83 percent of stocks in the index traded above their average prices from the past 50 days as of yesterday, according to data compiled by Bloomberg. While that’s below a 19-month high of 93 percent reached in May, it’s up from its 2013 bottom of 12.8 percent in June.

Some 115 S&P 500 stocks had their 14-day relative-strength index exceeding 70 yesterday, the most since May 21, 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 over 70 as indicating the stock has risen too far too fast.

Three rounds of bond purchases by the Fed, coupled with improving earnings and economic growth, has helped propel the S&P 500 up more than 150 percent from its bear-market low in 2009. Speculation about the Fed’s monthly bond purchases has whipsawed stocks since May, when Chairman Ben S. Bernanke first indicated policy makers could begin reducing the stimulus this year if the job market continues to improve.

Fed officials said this week the labor market has shown “improvement,” while a report showed the U.S. economy grew more than projected in the second quarter. The central bank may begin tapering the pace of its asset purchases in September, according to a growing number of economists surveyed by Bloomberg from July 18 to July 22.

“The market will read today’s jobs report as part of the mixed data that’s shaping the Fed’s policy,” Stephen Wood, the New York-based chief market strategist who helps oversee about $237 billion at Russell Investments. “The pattern of economic growth looks more lumpy coming into this quarter. The market is going to turn its focus back to the earnings season and look at the revenue guidance with a microscope.”

Chevron and Berkshire Hathaway Inc. are among nine S&P 500 companies reporting results today. Of the 390 companies in the gauge to have already reported quarterly earnings, 74 percent have exceeded analysts’ profit estimates and 56 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, dropped 7.4 percent today to 11.98, the lowest closing level since March 15. The equity volatility gauge reached its 2013 peak in June and has since fallen 42 percent.

Seven of the 10 main industries in the S&P 500 advanced, with consumer-discretionary, raw-materials and technology companies rising at least 0.5 percent to lead gains.

AIG jumped 2.7 percent to $48.33. The insurer that repaid a government bailout last year announced a quarterly dividend of 10 cents a share. It also posted net income that climbed 17 percent to $2.73 billion in the second quarter.

LinkedIn surged 11 percent to $235.58. The operator of the biggest online professional-networking service said revenue jumped 59 percent to $363.7 million in the second quarter. That exceeded the average analyst estimate of $354.3 million.

Facebook Inc. rose 1.5 percent to $38.05, a closing price not seen since the social-networking company’s May 18, 2012, initial public offering. The stock had tumbled to a low of $17.55 in September, less than half the $38 IPO price.

Dell increased 5.6 percent to $13.68. Michael Dell and Silver Lake Management LLC agreed to increase their offer for the computer maker to $13.75 a share with a special dividend of 13 cents. Dell and Silver Lake had offered $13.65.

Sealed Air Corp. rallied 8.9 percent to $30.36 for the largest advance in the S&P 500. The packing-material maker reported second-quarter adjusted profit of 35 cents a share, beating the average analyst estimate of 25 cents.

Viacom Inc. jumped 6.5 percent to $79.17. The owner of cable networks MTV and Nickelodeon doubled its stock-buyback program to $20 billion and posted higher-than-estimated sales.

Charter Communications Inc. climbed 4.7 percent to $134.

The fourth-largest U.S. cable company by subscribers has held talks about combining with rival Cox Communications Inc., according to two people with knowledge of the matter.

Charter and its shareholder Liberty Media Corp. are still pursuing an acquisition of Time Warner Cable Inc., the people said. Time Warner Cable, which has been resistant to a combination with Charter, slipped 0.5 percent to $117.10.

Cablevision Systems Corp. climbed 5.2 percent to $19.61 even after the fifth-largest U.S. cable provider reported second-quarter sales that missed analysts’ estimates. The stock climbed 25 percent this year through yesterday, driven by speculation it may be an acquisition target.

Chief Executive Officer James Dolan said on the earnings call that “you never say never” to potential mergers and acquisitions.

Energy companies fell 0.6 percent as a group, the most in the S&P 500. Chevron slipped 1.2 percent to $124.95. The world’s second-largest energy company by market value missed analysts’ estimates as crude oil prices and production fell.

Eaton Corp. slid 5.5 percent to $66.06. The equipment maker cut the high end of its 2013 forecast, saying it expects to earn no more than $4.25 a share. Analysts estimated $4.33 on average.

CareFusion Corp. tumbled 6 percent, the most in the S&P 500, to $36.61. Smiths Group said talks with a “potential counterparty” to sell its medical equipment division had collapsed. The U.S. maker of medical pumps, ventilators and medicine dispensers was a potential buyer for the U.K. technology company’s unit, the Financial Times said in May.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

When a man begins to have a vision larger than his own truth,

when he realizes that it is much larger than it at first seemed, he begins to become conscious of his moral nature.

His perspective on life necessarily changes , and his will takes the place of his desires,

So comes about the conflict between our inferior self and our superior self,

between our desires and our will, between our greed for objects that appeal to our senses

and the purpose that comes from the bottom of our heart.

Rabindranath Tagore,1861-1901

As ever,

 

Carolann

 

Wear a smile and have friends; wear a scowl

and have wrinkles.

-George Eliot, 1819-1880

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…

1819, Herman Melville was born.

1831, King William IV and Queen Adelaide officiate at the River Thames to debut the London Bridge.

1936, Yves St. Laurent was born.

1936, The Berlin Olympics opening ceremony took place.

1944, Anne Frank writes the last entry in her diary before her hidden family is discovered.

1960, Aretha Franklin records her first studio demos which lands her a contract with Columbia Records.

1990, The World Wide Web was established.

Computers make very fast, very accurate mistakes.

Retirement?

Alfred Feld started working for Goldman Sachs in 1933 as an office boy, when the U.S. unemployment rate was 25%, the Wall Street Journal reports.

He still works there.

Feld is now 98, and spent most of that time working as a financial advisor. While he no longer works directly with clients, he serves as a mentor and ambassador for the wealth-management arm of GS.

When the New York Times profiled him in 2008 for his 75th anniversary, he said he had no plans to retire.

What’s money?  A man is a success if he gets up in the morning and goes to bed at night and in between does what he wants to do. –Bob Dylan.

Photos of the Day –August 1st, 2013

More than 400 hot-air balloons take off in Chambley-Bussieres, eastern France, Wednesday in an attempt to set a world record for collective take-offs during an international hot-air balloon meeting. Alexandre Marchi/L’est Republicain/AP

Japanese actor Takeshi Tsuruno clowns around with a replica of the Velociraptor during the opening ceremony of the dinosaurs exhibition in Tokyo. Koji Sasahara/AP

Market Closes for August 1^st, 2013

Market  Index	Close	Change
Dow  Jones	15628.02	+128.48    +0.83%
S&P 500	1706.87	+21.14    +1.25%
NASDAQ	3675.744	+49.373    +1.36%
TSX	12593.96	+107.32
		+0.86%

International Markets

Market  Index	Close	Change
NIKKEI	14005.77	+337.45
		+2.47%
HANG  SENG	22088.79	+205.13
		+0.94%
SENSEX	19317.19	-28.51
		-0.15%
FTSE 100	6681.98	+60.92
		+0.92%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.547	2.452
CND.   30 Year Bond	3.043	2.971
U.S.   10 Year Bond	2.7060	2.5762
U.S.   30 Year Bond	3.7542	3.6353

Currencies

BOC Close	Today	Previous
Canadian $	0.96631	0.97221
US   $	1.03486	1.02858
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36680	0.73163
US  $	1.32076	0.75714

Commodities

Gold	Close	Previous
London Gold   Fix	1305.18	1326.20
Oil	Close	Previous
WTI Crude Future	107.89	105.03
BRENT	109.359	109.359

Market Commentary:

Canada

By Katie Brennan

Aug. 1 (Bloomberg) — Canadian stocks rose, capping the biggest gain in three weeks, after companies reported higher- than-estimated earnings and manufacturing in the U.S. and China strengthened.

Suncor Energy Inc., Canada’s largest energy company by market value, advanced 3.9 percent after second-quarter profit more than doubled. Catamaran Corp., a manager of prescription drug benefits, surged 9.1 percent after boosting its profit forecast for the year and announcing an acquisition. Athabasca Oil Corp. and BlackPearl Resources Inc. added at least 10 percent as oil climbed the most since since July 10.

The Standard & Poor’s/TSX Composite Index gained 107.32 points, or 0.9 percent, to 12,593.96 at 4 p.m. in Toronto. The gauge advanced 3 percent last month, the largest increase since September 2012. Trading volume was 3.6 percent below the 30-day average.

“We saw strong manufacturing data out of China and the U.S., and another key driver we’ve had lately is earnings,” said Jeffrey Bradacs, a fund manager with Manulife Asset Management Ltd., in a phone interview from Toronto. He helps oversee about C$1.50 billion ($1.47 billion) with his team.

“Today we had a number of companies in Canada report with strong earnings and that is helping our market.”

China’s manufacturing unexpectedly expanded in July, suggesting a slowdown in the world’s second-largest economy may be stabilizing as the government rolls out targeted measures to support growth. The Institute for Supply Management’s U.S. manufacturing index grew at the fastest pace in more than two years as orders and production jumped. China and the U.S. are Canada’s largest trading partners.

Seven of 10 industries in the Canadian equity benchmark rose. Health-care and energy companies paced gains, adding at least 1.9 percent.

About 57 percent of the companies in the S&P/TSX that have reported earnings have exceeded analysts’ profit forecasts, data compiled by Bloomberg show. More than 90 companies in the gauge are scheduled to report earnings between tomorrow and the end of next week.

Catamaran surged 9.1 percent to a record C$59.03 after beating second-quarter earnings estimates and increasing its full-year profit forecast. The company also announced it will buy pharmacy benefit manager Restat for $409.5 million in cash.

Athabasca Oil climbed 10 percent to C$7.95 and BlackPearl Resources added 13 percent to C$1.81 as oil rose 2.7 percent.

Suncor Energy gained 3.9 percent to C$33.74. The company’s second-quarter profit more than doubled after earnings a year ago were crimped by a one-time charge on its Syrian operations.

Chief Executive Officer Steve Williams has been cutting costs by halting or delaying projects.

Potash Corp of Saskatchewan Inc. added 2.6 percent to C$30.56. The fertilizer producer fell 22 percent in two days after OAO Uralkali, the world’s largest potash producer, predicted prices for the crop nutrient will fall about 25 percent after it exits an export cartel.

Barrick Gold Corp. added 2.7 percent to C$17.46. The company reported sales and earnings excluding one-time items that surpassed analysts’ estimates.

Cameco Corp. fell 1.6 percent to C$20.53. The world’s third-largest uranium producer said it will sell less of the nuclear fuel via its German trading unit than previously planned prices have fallen 27 percent in the past year.

US

By Lu Wang and Nick Taborek

Aug. 1 (Bloomberg) — U.S. stocks rallied, sending the Standard & Poor’s 500 Index above 1,700 for the first time, after central banks vowed to maintain stimulus and data on global manufacturing beat forecasts.

All 10 S&P 500 main industries advanced. MetLife Inc. and Procter & Gamble Co. rose more than 1.7 percent as earnings topped estimates. DreamWorks Animation SKG Inc. jumped 8.8 percent as net income surged on the hit movie “The Croods.”

Exxon Mobil Corp. slid 1.1 percent as profit trailed estimates by the most in more than a decade.

The S&P 500 rose 1.3 percent to 1,706.87 at 4 p.m. in New York. The Dow Jones Industrial Average advanced 128.48 points, or 0.8 percent, to a record 15,628.02. About 6.8 billion shares changed hands, or 7 percent above the three-month average.

“Central banks throughout the world remain accommodative and you do not want to fight the central banks,” Phil Orlando, New York-based chief equity strategist at Federated Investors, which manages about $380 billion in assets, said by phone. “All of the data from an economic standpoint is telling that the economy is continuing to get better, the labor market is improving, and corporate earnings are coming in better than expected. So this market should continue to work higher.”

The Fed said yesterday that persistently low inflation could hamper the economy and pledged to keep buying $85 billion in bonds every month. The statement came as data showed the U.S. economy grew more than projected in the second quarter. European Central Bank President Mario Draghi said today that recent economic indicators signal that the euro region is through the worst and reiterated that officials plan to keep interest rates low for the foreseeable future.

Three rounds of bond purchases by the Fed, coupled with improving earnings and economic growth, has helped propel the S&P 500 up 152 percent from its bear-market low in 2009.

Speculation about the Fed’s monthly bond purchases has whipsawed stocks since May, when Chairman Ben S. Bernanke first indicated policy makers could begin reducing the stimulus this year if the job market continues to improve.

Investors poured $38.1 billion into exchange-traded funds listed in the U.S. last month, the most since December 2008 and the fourth-highest inflow ever, according to data compiled by Bloomberg since 2000. Almost $30 billion of the deposits went to funds that buy and sell American equities.

“When you see milestones, that gets people interested,” Randy Bateman, who oversees $15 billion as chief investment officer of Huntington Asset Advisors in Columbus, Ohio, said by phone. “Maybe there’s still a lot of money sitting on the sidelines that might be tempted to come into the market. I think it’s a bullish thing.”

The benchmark index gained 5 percent in July, its biggest monthly advance since January. The gauge is trading at 15.5 times estimated earnings, compared with an average valuation of 13.9 times profit over the past five years, according to data compiled by Bloomberg.

Manufacturing in the U.S. expanded at the fastest pace in more than two years as orders and production jumped, according to the Institute for Supply Management’s factory index. Separate reports overseas showed manufacturing grew more than forecast in China and Europe.

In the U.S., applications for unemployment insurance payments declined by 19,000 to 326,000 in the week ended July 27, the fewest since January 2008, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 345,000.

Labor Department data tomorrow may show U.S. employers added 185,000 people to payrolls in July, as the jobless rate fell to 7.5 percent from 7.6 percent, according to Bloomberg surveys of more than 80 economists.

Some 40 companies in the S&P 500 were scheduled to report results today. Of the 373 companies in the gauge to have already reported quarterly results, 73 percent have exceeded analysts’ profit estimates and 56 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, slipped 3.8 percent to 12.94 today. The equity volatility gauge reached its highest level this year in June and has since fallen 37 percent.

Companies whose growth is most tied to economic swings led the rally. The Morgan Stanley Cyclical Index rose 1.8 percent.

The Dow Jones Transportation Average surged 3.2 percent to a record, while the Russell 1000 Index, the S&P Midcap 400 Index and the Russell 2000 Index for smaller companies hit all-time highs, climbing at least 1.3 percent. The Nasdaq Composite Index added 1.4 percent to the highest level since September 2000.

The KBW Bank Index rallied 1.9 percent as all its 24 members gained. American Express Co. advanced 2.5 percent to $75.63 for the biggest gain in the Dow, and Bank of America Corp. climbed 2.4 percent to $14.95.

MetLife jumped 6.3 percent to $51.47. The largest U.S. life insurer said earnings, which exclude some investment results, were $1.44 a share. That beat the $1.33 average estimate of 20 analysts surveyed by Bloomberg.

Procter & Gamble rose 1.7 percent to $81.64. Earnings beat analyst forecasts, giving Chief Executive Officer A.G. Lafley some breathing room as he works to turn around the company he rejoined two months ago.

DreamWorks climbed 8.8 percent to $26.95. The independent film studio run by Jeffrey Katzenberg reported a 75 percent surge in profit. “The Croods” was released on March 22 in the U.S. and later in countries including China and France, generating $71.8 million in revenue in the quarter.

Automakers advanced 2.2 percent as a group in the S&P 500, as vehicle sales extended a resurgence that’s putting the industry on course for its best year since 2007. Ford Motor Co. gained 1.8 percent to $17.19 as light-vehicle sales increased 11 percent in July. General Motors Co. rose 1.7 percent to $36.47 after its deliveries jumped 16 percent last month.

Industrial companies rose 1.7 percent as a group for the best performance among 10 S&P 500 groups. Quanta Services Inc. jumped 5 to $28.14. The biggest U.S. power line contractor exceeded analysts’ estimates for a ninth straight quarter, according to data compiled by Bloomberg. The company boosted its full-year forecast.

Yelp Inc. soared 23 percent to $51.50. The company, whose website compiles consumer-business reviews, said second-quarter sales climbed 69 percent to $55 million, topping the $53.3 million average analyst prediction compiled by Bloomberg.

CBS Corp. gained 3.9 percent to $54.88. The owner of the most-watched U.S. TV network said second-quarter profit rose 11 percent, spurred by higher rates from pay-TV systems and new Internet streaming agreements.

Pioneer Natural Resources Co. jumped 13 percent to $174.15.

At least three analysts raised their share-price forecasts for the oil and gas producer, according to data compiled by Bloomberg. Results from Pioneer’s Wolfcamp drilling site appear to show the company has “established a giant resource play,” Jonathan Wolff, an analyst with International Strategy & Investment Group LLC, wrote in a note.

Sprouts Farmers Market LLC more than doubled to $40.11 on the first day of trading. The organic grocery chain and existing owners sold 18.5 million shares, or a 13 percent stake, for $18 apiece, pricing its initial public offering above the marketed range as increasing consumer confidence ignites interest in companies from restaurants to cruise lines.

Exxon Mobil dropped 1.1 percent to $92.73. The world’s biggest energy company by market value reported profit of $1.55 a share as returns from its fuel-making business plunged. That missed the average analyst estimate by 18 percent, the biggest gap since at least the fourth quarter of 2002.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Everyone is but a manifestation of the Impersonal, the basis of all being,

and misery consists in thinking of ourselves as different from this Infinite, Impersonal Being,

and liberation consists in knowing our unity with this wonderful Impersonality.

Swami Vivekananda, 1863-1902

As ever,

 

A smile is happiness you’ll find

right under your nose.

-Tom Wilson

Carolann

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…

1898, In Michigan, W.K. Kellogg and his brother unintentionally invent corn flakes.

1935, Paperback books were first introduced.

1954, In Memphis, a 19-year-old Elvis Presley appeared in concert for the first time.

1971, Apollo 15 became the fourth mission to land on the moon.

1975, Jimmy Hoffa, former Teamsters union president, disappears in Detroit, never to be heard from again.

It has been my experience that folks who have no vices have very few virtues. –Abraham Lincoln.

July~ With mid-day temperatures up in the 80s I become limp like the fast-fading flowers in the garden and unable to do anything active.  So I must resort to early rising before the sun gets too high, which means adjusting my internal clock.  It is amazing how much more one gets through when no one else is about to interrupt actions or trains of thought, when no telephone or door-bell rings and even the letters are left lying as they fell when the postman pushed them through the letter-box.

By ten o’clock I have done a full morning’s work and can enjoy a feeling of achievement.  The stillness of the early morning scene enables me to take in and enjoy many things which pass me by during the bustle of the day.  First there are the scents, which seem even more generous with their offerings than they are in the evening.  The good old-fashioned dog-rose in the hedgerow was almost effusive in its fragrance and the leaves of the Sweetbriar or Eglantine, so loved by the Elizabethans, had a richness, which must have been caused by the dew, far surpassing anything they usually provide, except after rain…-from A Countrywoman’s Notes, Rosemary Verey, Gryffon Publications, 2009.

Photos of the Day –July 30th, 2013

Ginger Huber from the United States performs during the women’s 20 meter high dive final at the FINA Swimming World Championships in Barcelona, Spain. Daniel Ochoa de Olza/AP

Uighur acrobat Aisikaier Wubulikasimu walks on a 59-foot-long, two-inch-wide tightrope strung between two hot air balloons in Shilin county, Yunnan province, China. Reuters

Market Closes for July 30^th, 2013

Market  Index	Close	Change
Dow  Jones	15520.59	-1.38    -0.01%
S&P 500	1685.96	+0.63    +0.04%
NASDAQ	3616.467	+17.327    +0.48%
TSX	12581.75	-87.29
		-0.69%

International Markets

Market  Index	Close	Change
NIKKEI	13869.82	+208.69
		+1.53%
HANG  SENG	21953.96	+103.81
		+0.48%
SENSEX	19348.34	-244.94
		-1.25%
FTSE 100	6570.95	+10.70
		+0.16%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.509	2.496
CND.   30 Year Bond	3.021	3.000
U.S.   10 Year Bond	2.6007	2.6023
U.S.   30 Year Bond	3.6706	3.6744

Currencies

BOC Close	Today	Previous
Canadian $	0.97024	0.97427
US   $	1.03067	1.02641
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36686	0.73160
US  $	1.32618	0.75404

Commodities

Gold	Close	Previous
London Gold   Fix	1326.42	1328.61
Oil	Close	Previous
WTI Crude Future	103.08	104.55
BRENT	109.359	109.359

Market Commentary:

Canada

By Katie Brennan

July 30 (Bloomberg) — Canadian stocks fell the most in a month after OAO Uralkali, the world’s largest potash producer, predicted prices for the crop nutrient will fall about 25 percent after it exits an export cartel.

Potash Corp. of Saskatchewan Inc. dropped 16 percent, the most in four years, as Uralkali predicted potash prices may fall below $300 a ton after a change in the company’s trading policy.

Agrium Inc., which also produces fertilizer, lost 5 percent.

Toronto-Dominion Bank fell 1.9 percent after saying it expects a third-quarter loss in its insurance division of as much as C$290 million due to severe weather claims.

The S&P/TSX fell 87.29 points, or 0.7 percent, to 12,581.75 at 4 p.m. in Toronto. The gauge has gained 1.2 percent this year. Trading volume was 16 percent higher than the 30-day average.

“The Uralkali announcement was really the nail in the coffin for Canadian resource players,” Bob Decker, a fund manager with Aurion Capital Management in Toronto, said in a phone interview. He helps manage C$6 billion ($5.8 billion) at the firm. “Potash was a resource people were using as a hiding place because of the sustainability of high prices, but that has been broken by the Uralkali announcement this morning.”

Uralkali upended the $20 billion-a-year potash industry by ending limits on production that underpinned prices and halting cooperation with Belarus that controlled supplies from the former Soviet Union. The move by the Berezniki, Russia-based company may push prices for the soil nutrient used in fertilizer to less than $300 a ton, Uralkali Chief Executive Officer Vladislav Baumgertner told reporters today.

Potash Corp., Canada’s largest maker of the fertilizer, plunged 16 percent to C$32.66 for the biggest decline since December 2008. Trading volume in the stock was 17 times the three-month average. Agrium fell 5 percent to C$89.15.

Six of 10 groups in the SPX/TSX declined, led by a 3.7 percent drop in raw-materials producers. Utility companies and financial stocks dropped at least 0.5 percent. Health-care and industrial stocks rose the most, adding at least 0.2 percent.

TD fell 1.9 percent to C$87.22. The bank will take a charge of about C$418 million, or 45 cents a share, for flood-related costs in Alberta and Toronto and increased general insurance claims, the Toronto-based lender said today in a statement.

“Banks have had a strong run up and there is going to be some profit taking,” said Decker of Aurion Capital Management.

The eight-company Standard & Poor’s/TSX Commercial Banks Index has gained 4.8 percent this month.

TransAlta Corp. lost 5 percent to C$14.13. Canada’s largest publicly traded power generator posted second-quarter profit that missed analysts’ estimates as a force majeure at a plant reduced its generating capacity.

Open Text Corp. dropped 5.6 percent to C$69.48, the lowest in more than two months. Susquehanna Financial Group analyst Derrick Wood said in a note that growth is weak across the software maker’s product sets.

FirstService Corp. gained 6.4 percent to C$36.61, the most since 2009, after the property-services company posted second- quarter adjusted earnings per share that were 45 percent higher than analysts’ estimates.

Progressive Waste Solutions Ltd. added 3.2 percent to C$23.77. The Vaughan, Ontario-based trash collection company posted better-than-estimated second-quarter earnings and said it saw “notable improvement” in industrial collection volumes.

US

By Alex Barinka and Nick Taborek

July 30 (Bloomberg) — The Standard & Poor’s 500 Index rose, heading for its biggest monthly gain since January, as investors analyzed corporate earnings and awaited results from the Federal Reserve’s two-day meeting.

Eastman Chemical Co. and Goodyear Tire & Rubber Co. jumped more than 6.3 percent as earnings topped estimates. Mosaic Co. and Agrium Inc. plunged at least 5.4 percent after OAO Uralkali ended limits on potash production and said the price of the soil nutrient may fall 25 percent. Coach Inc. lost 7.9 percent as discounts and weak handbag sales hurt revenue in North America.

The S&P 500 added less than 0.1 percent to 1,685.96 at 4 p.m. in New York, after swinging between gains and losses during the trading session. The Dow Jones Industrial Average fell 1.38 points to 15,520.59 today. About 5.9 billion shares changed hands, 7.7 percent below the three-month average.

“We’re waiting again to hear what the Fed has to say because everybody’s on tenterhooks,” Sarah Hunt, an associate fund manager and analyst who helps oversee $4.5 billion at Purchase, New York-based Alpine Woods Capital Investors LLC, said in a phone interview. “Earnings have been a mixed bag but I would say mostly positive.”

The S&P 500 is heading for a 5 percent advance this month, as companies from Facebook Inc. to Visa Inc. reported better- than-estimated earnings. The benchmark index surged 149 percent since March 2009, driven by three rounds of bond purchases by the U.S. central bank. The gauge fell in June, after seven months of increases, on concern the Fed will begin to reduce its $85 billion of monthly bond purchases.

The Federal Open Market Committee, which has said it may start paring stimulus should the U.S. economy meet the central bank’s forecasts, started a two-day meeting today. The Fed will probably maintain its benchmark interest rate at 0.25 percent, economists predict. Policy makers will begin to reduce the central bank’s bond-purchase program in September, a Bloomberg survey of economists shows.

Home prices rose in May by the most in more than seven years as the recovery in U.S. residential real estate gained momentum, a report showed today. The S&P/Case-Shiller index of property values climbed 12.2 percent from May 2012, after advancing 12.1 percent a month earlier. The median projection of 31 economists surveyed by Bloomberg called for a 12.4 percent advance.

“The Fed is going to be very measured. They let the genie out of the bottle and said that tapering is going to begin,” Douglas Cote, chief market strategist at ING U.S. Investment Management in New York, said in a telephone interview. His firm oversees $185 billion. “Housing is a pillar of the economy right now because of how it’s related to the consumer and how it’s related to jobs.”

The Conference Board’s index of U.S. consumer confidence decreased to 80.3 in July from 82.1 a month earlier, data from the New York-based private research group showed. Investors will get further clues to the state of the economy later this week with the release of data on U.S. gross domestic product and the monthly labor report.

President Barack Obama, prodding Congress to consider fresh economic proposals after two years of gridlock, called for restructuring business taxes so long as the initial revenue generated goes toward job creation in a speech today in Chattanooga, Tennessee.

Investors are also watching earnings reports. Of the 305 companies in the S&P 500 that have posted quarterly results so far, 72 percent have exceeded analysts’ estimates for profit and 55 percent have topped sales projections, data compiled by Bloomberg show.

Technology shares rose the most among 10 main industries in the S&P 500 today. Western Union Co. jumped 4.5 percent to $17.75, the highest level since October, as the world’s biggest money-transfer business reported profit that exceeded analysts’ estimates. Cisco Systems Inc. advanced 1.3 percent to $25.67 for the largest increase in the Dow.

Eastman Chemical climbed 6.3 percent to $79.75 after the biggest U.S. producer of chemicals from coal said it expects full-year earnings of $6.40 to $6.50 a share, compared with its previous forecast of $6.30 to $6.40. Analysts on average projected $6.34 a share.

Goodyear jumped 8.9 percent to $18.56. The largest U.S. tiremaker said second-quarter earnings were 76 cents a share.

Analysts surveyed by Bloomberg had estimated 48 cents a share.

Herbalife Ltd. increased 0.9 percent to $60.04 after the nutrition company reported second-quarter profit that exceeded analysts’ estimates and said earnings this year will be as much as $4.95 a share, up from a previous projection of a maximum of $4.80.

Sprint Corp. advanced 7.3 percent to $6.16. Chief Executive Officer Dan Hesse predicted the carrier would begin adding monthly contract customers in 2014 after the shutdown of its ill-fated Nextel network last month. Sprint posted a loss of $1.6 billion, or 53 cents, for the second quarter, wider than the 31 cents estimated by analysts.

Pitney Bowes, rose 13 percent to $16.60, the most in the S&P 500. The provider of postal meters and other equipment agreed to sell its management-services unit to Apollo Global Management LLC for about $400 million in cash.

Phone stocks fell 1.5 percent, the most among 10 industries in the S&P 500. Raw-materials producers slid 0.3 percent.

Mosaic plummeted 17 percent to $43.81 and Agrium lost 5.4 percent to $86.50. Uralkali, the world’s largest potash producer, upended the $20 billion-a-year industry by abandoning limits on production that underpinned prices and halting cooperation with Belarus that controlled supplies from the former Soviet Union.

The decision sent shares of potash producers plunging as much as 27 percent from Israel to Germany to Canada and the U.S. as investors speculated a flood of supplies will lead to lower prices for potash, a soil nutrient that strengthens plant roots.

Coach tumbled 7.9 percent to $53.30. The largest U.S. luxury handbag maker said fiscal fourth-quarter profit fell 12 percent. Sales at stores open at least a year in North America sank 1.7 percent in the quarter, and Chief Executive Officer Lew Frankfort said in a statement that he wasn’t satisfied with handbag sales.

Health Management Associates fell 11 percent to $13.30 after receiving additional subpoenas from regulators regarding certain emergency room operations that supplement earlier ones from 2011. Community Health Systems Inc., the second-largest U.S. hospital chain, said today it has agreed to buy Health Management for $3.9 billion in cash and stock.

The sale came amid pressure from Glenview Capital Management LLC, which owns about 15 percent of Health Management. Glenview proposed ousting the company’s board and management because of its “substandard strategic and financial approach.” Community Health slipped 3.5 percent to $45.58.

Xylem Inc. tumbled 10 percent to $25.54. The water company spun off by ITT Corp. lowered full-year revenue forecasts citing weaker demand.

Nasdaq OMX Group Inc. fell 1.7 percent to $32.46 after Goldman Sachs Group Inc. advised selling the shares, saying the company’s diversification strategy will reduce profit margins and may cause the exchange operator to miss earnings forecasts.

NYSE Euronext added 0.7 percent to $41.70. The U.S. exchange operator being bought by IntercontinentalExchange Inc. reported earnings that beat estimates as revenue from derivatives trading rose and costs fell.

 

Have  a wonderful evening everyone.

 

Be magnificent!

 

Fear is one of the greatest problems in life.  A mind that is caught in fear

lives in confusion, in conflict, and therefore must be violent, distorted and aggressive.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

A smile is a curve that sets everything straight.

-Phyllis Diller, 1917-2012

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:

July 29^th, 1958: NASA established.

-from a recent article in the NY Times by Richard A. Friedman, Professor at the Weill Cornell Medical College:

“Ah, the languorous days of endless summer!  Who among us doesn’t remember those days and wonder wistfully where they’ve gone?  Why does time seem to speed up as we age?  Even the summer solstice – the longest, sunniest day of the year – seems to have passed in a flash.  No less than the great William James opined on the matter, thinking that the apparent speed of time’s passage was a result of adults’ experiencing fewer memorable events:

‘Each passing year converts some of this experience into automatic routine which we hardly note at all, the days and the weeks smooth themselves out in recollection to content-less units, and the years grow hollow and collapse.’

Don’t despair.  I am happy to tell you that the apparent velocity of time is a big fat cognitive illusion and happy to say there may be a way to slow the velocity of our later lives….here’s a possible answer:  Think about what it’s like when you learn something for the first time – for example how, when you are young, you learn to ride a bike or navigate your way home from school.  It takes time to learn new tasks and to encode them in your memory.  And when you are learning about the world for the first time, you are forming a fairly steady stream of new memories of events, places and people.  When, as and adult, you look back at your childhood experiences, they appear to unfold in slow motion probably because the sheer number of them gives you the impression that they must have taken forever to acquire.  So when you recall the summer vacation when you first learned to swim or row a boat, it feels endless.  But this is merely an illusion, the way adults understand the past when they look through the telescope of lost time.   This, though, is not an illusion:  almost all of us faced far steeper learning curves when we were young.  Most adults do not explore and learn about the world the way they did when they were young;  adult life lacks the constant discovery and endless novelty of childhood.  Studies have shown that the greater the cognitive demands of a task, the longer its duration is perceived to be.  Dr. David Eagleman at Baylor College of Medicine found that repeated stimuli appear briefer in duration than novel stimuli of equal duration.  Is it possible that learning new things might slow down our internal sense of time?

The question and the possibility it presents put me in mind of my father, who died a few years ago at age 86.  An engineer by training, he read constantly after he retired.  His range was enormous; he read about everything from astronomy to natural history, travel and gardening.  I remember once discovering dozens of magazines and journals in the house and was convinced that my parents had become the victims of a mail-order scam.

Thinking I’d help with the clutter, I began to bundle up the magazines for recycling when my father angrily confronted me, demanding to know what the hell I was doing.  ‘I read all of these,’ he said.

And then it dawned on me.  I cannot recall his ever having remarked on how fast or slow his life seemed to be going.  He was constantly learning, always alive to new ideas and experience.  Maybe that’s why he never seemed to notice that time was passing.

So what, you might say, if we have an illusion about time speeding up?  But it matters, I think, because the distortion signals that we might squeeze more out of life.

It’s simple:  if you want time to slow down, become a student again.  Learn something that requires sustained effort; do something novel.  Put down the thriller when you’re sitting on the beach and break out  a book on evolutionary theory or Spanish for beginners or  a how-to book on something you’ve always wanted to do.  Take a new route to work; vacation at an unknown spot.  And take your sweet time about it.”

Photos of the Day –July 29th, 2013

People walk underneath an umbrella canopy in downtown Belgrade, Serbia. Marko Djurica/Reuters

A child plays at a public fountain in a park in Bucharest, Romania. Bogdan Cristel/Reuters

A person slides down a huge water pipe at a public swimming pool on a hot sunny day in Vienna. Leonhard Foeger/Reuters

Market Closes for July 29^th, 2013

Market  Index	Close	Change
Dow  Jones	15521.97	-36.86    -0.24%
S&P 500	1685.33	-6.32    -0.37%
NASDAQ	3599.140	-14.025    -0.39%
TSX	12669.04	+21.14
		+0.17%

International Markets

Market  Index	Close	Change
NIKKEI	13661.13	-468.85
		-3.32%
HANG  SENG	21850.15	-118.80
		-0.54%
SENSEX	19593.28	-154.91
		-0.78%
FTSE 100	6560.25	+5.46
		+0.08%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.496	2.452
CND.   30 Year Bond	3.000	2.956
U.S.   10 Year Bond	2.6023	2.5624
U.S.   30 Year Bond	3.6744	3.6190

Currencies

BOC Close	Today	Previous
Canadian $	0.97427	0.97271
US   $	1.02641	1.02805
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36132	0.73458
US  $	1.32630	0.75398

Commodities

Gold	Close	Previous
London Gold   Fix	1328.61	1333.86
Oil	Close	Previous
WTI Crude Future	104.55	104.59
BRENT	109.359	109.359

Market Commentary:

Canada

By Katie Brennan

July 29 (Bloomberg) — Canadian stocks rose, snapping a four-day slump in the benchmark index, as Hudson’s Bay Co. rallied after announcing a $2.4 billion acquisition and telephone stocks jumped.

Hudson’s Bay, the operator of Canada’s largest department- store chain, surged 5.8 percent after agreeing to acquire luxury U.S. retailer Saks Inc. Telus Corp. and Rogers Communications Inc. added more than 1.4 percent as the industry minister reportedly met with executives of the country’s largest phone companies. Turquoise Hill Resources Ltd. fell 17 percent after parent Rio Tinto Group delayed work on a $5.1 billion underground expansion of a copper mine in Mongolia.

The Standard & Poor’s/TSX Composite Index added 21.14 points, or 0.2 percent, to 12,669.04 at 4 p.m. in Toronto. The gauge declined 0.3 percent last week. Trading volume was 33 percent lower than the 30-day average.

“The Hudson’s Bay, Saks merger is a decent-sized transaction so it’s getting lots of interest. The real-estate implications will continue to garner additional interest as they spin this thing out,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. He helps manage C$220 million ($210 million). “We expect lots of M&A and we are focused on that.”

Hudson’s Bay, Canada’s oldest company, gained 5.8 percent to C$17.45 after agreeing to pay $16 a share in cash for Saks, in a deal that may spur the creation of a real estate investment trust. The price is a 30 percent premium to New York-based Saks’s closing price on May 20, the day before media reports began, according to a statement today. The transaction, which brings together the Lord & Taylor and Saks Fifth Avenue brands, creates a company that will operate 320 stores.

Seven of the 10 groups in the benchmark index rose, as telephone stocks gained the most with a 0.9 percent advance.

Telus added 1.8 percent to C$31.95 and Rogers Communications climbed 1.4 percent to C$41.92.

Canadian Industry Minister James Moore met with senior executives from the country’s mobile-phone companies about their concerns over the possible entry of Verizon Communications Inc. into the market, according to a person familiar with the meetings. Verizon said June 18 that it is interested in acquiring Canadian carriers such as Wind Mobile.

Commodities producers slumped, with energy and raw- materials companies erasing at least 0.1 percent. Health-care companies fell the most, losing 0.6 percent as a group.

Bombardier Inc. added 3.3 percent to C$5.06 after GMP Securities LP analyst Deepak Kaushal rated the world’s largest maker of corporate jets a buy in new coverage, with a target price of C$7. The company also won a contract to provide technology for a new metro line in Riyadh, Saudi Arabia.

Bombardier’s share of the contract amounts to $383 million.

Canadian Natural Resources Ltd. slid 0.7 percent to C$31.97 as Macquarie Research analyst Chris Feltin and Toronto-Dominion Bank downgraded their ratings on the stock to the equivalent of hold. The nation’s largest producer of heavy crude fell the most in more than three months Friday on concern that output next year will be affected due to a leak at its Primrose oil-sands project.

Turquoise Hill lost the most in the S&P/TSX, falling 20 percent to C$4.38 after Rio Tinto delayed the expansion of its Oyu Tolgoi copper mine, pending financing approval by Mongolia’s parliament. Rio controls the mine through its 51 percent stake in Turquoise Hill, which in turn owns 66 percent of the operation. The government owns the remaining stake in the mine, which is forecast to account for a third of Mongolia’s economy.

US

By Alex Barinka

July 29 (Bloomberg) — U.S. stocks fell, paring a monthly gain for the Standard & Poor’s 500 Index, as fewer Americans signed contracts in June to buy previously owned homes.

Energy stocks and financial companies lost more than 0.7 percent for the biggest declines among 10 industries in the S&P 500. Perrigo Co. fell 6.8 percent after saying it will buy Irish drugmaker Elan Corp. for $8.6 billion. Facebook Inc. gained 4.2 percent to the highest price since May 2012, the month of its public offering, amid optimism over mobile ad sales.

The S&P 500 slipped 0.4 percent to 1,685.33 at 4 p.m. in New York. The equity benchmark lost less than 0.1 percent last week, halting its longest streak of weekly gains since May 17.

The Dow Jones Industrial Average dropped 36.86 points, or 0.2 percent, to 15,521.97 today. About 5.19 billion shares changed hands, 18 percent below the three-month average.

“Some of the economic data appears softer than we anticipated,” Eric Teal, who helps oversee $5 billion as chief investment officer at First Citizens BancShares Inc., said via phone from Raleigh. “Some pause might be in order over the next few months after the strong gains the first half of the year.”

The S&P 500 has climbed 4.9 percent this month. The benchmark index surged 149 percent since March 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases by the U.S. central bank. The gauge fell in June, after seven consecutive months of gains, as investors examined economic data to assess when the Federal Reserve will reduce its $85 billion of monthly bond purchases.

The Fed has said economic data will determine the timing and pace of any reduction in its asset purchases. The central bank will probably maintain its benchmark interest rate at 0.25 percent after concluding its two-day policy-setting meeting on July 31, economists predicted. The Fed will begin to reduce its bond-purchase program in September, according to economists surveyed by Bloomberg.

Fewer Americans signed contracts in June to buy previously owned homes, showing rising mortgage rates are beginning to restrain the housing market. The index of pending home sales dropped 0.4 percent, less than forecast, to 110.9 in June after climbing a month earlier to the highest level since December 2006, figures from the National Association of Realtors showed today in Washington. The median forecast in a Bloomberg survey of 40 economists called for a 1 percent decline.

The week will offer further clues to the state of the economy, with the release of data on U.S. gross domestic product and the monthly labor report, as well as monetary policy announcements by the Fed and the European Central Bank.

Investors will also watch this week’s earnings from more than 130 companies listed on the S&P 500. Of the 269 companies in the S&P 500 that have posted results so far this earnings season, 73 percent have exceeded analysts’ estimates for profit and 56 percent have beaten sales projections, data compiled by Bloomberg show.

“It’s still the case that macro is driving markets at the moment,” Ramin Nakisa, an asset allocation strategist at UBS AG in London, told Francine Lacqua on Bloomberg Television. “We are entering a world in which rates are rising, and the Fed’s going to taper. There may be higher volatility, but there will be a bigger appetite for risk. Now we’re seeing a rotation into cyclicals, so markets are saying we want growth.”

The Chicago Board Options Exchange Volatility Index, or VIX, climbed 5.3 percent to 13.39, after adding 1.4 percent last week. The equity volatility gauge reached its highest level this year in June and has since fallen 35 percent.

Energy and financial stocks fell 0.8 percent each. Exxon Mobil Corp. slipped 0.8 percent to $94.03 and Chevron Corp. slumped 1.1 percent to $126.17. Bank of America Corp. lost 1.4 percent to $14.52 for the biggest decline in the Dow while JPMorgan Chase & Co. declined 0.6 percent to $55.69.

Chesapeake Energy Corp., the second-biggest U.S. natural- gas producer after Exxon, dropped 0.4 percent to $22.75. Gas futures slumped in New York to the lowest price in 21 weeks on forecasts for mild weather, after tropical storm Dorian fell apart in the Atlantic.

Perrigo lost 6.8 percent to $125.17 today. The maker of over-the-counter medicines will pay holders of Elan’s American depositary receipts $16.50 per ADR in cash and stock, according to a joint statement today. That’s 11 percent greater than the July 26 closing price for the ADRs. Elan rose 3.6 percent to $15.46 in U.S trading.

Omnicom Group Inc. slipped 0.6 percent to $64.75, reversing an earlier rally of as much as 8.3 percent, after agreeing to merge with Publicis to create a company with revenue of $23 billion and a market value of $35 billion. The shareholders of Publicis and Omnicom will each hold about 50 percent of the new entity, Publicis Omnicom Group.

The combined business will use its scale to negotiate better advertising rates for its clients. Publicis’s Chief Executive Officer Maurice Levy and Omnicom’s CEO John Wren will jointly run Publicis Omnicom.

Interpublic Group of Cos. jumped 4.7 percent to $16.61.

AT&T Inc. rose 0.8 percent to $35.88 as phone stocks advanced the most in the S&P 500.

Saks Inc. added 4.2 percent to $15.95. Toronto-based Hudson’s Bay Co. will buy the luxury department-store retailer for $16 a share in cash, or $2.4 billion, according to a joint statement today.

Facebook gained 4.2 percent to $35.43, the highest price since the month of its initial public offering. The world’s largest social network last week reported that ads on smartphones and tablets generated 41 percent of revenue in the second quarter, up from 14 percent a year earlier.

Caterpillar Inc. rose 1.2 percent to $83.02 for the biggest gain in the Dow. The largest maker of mining equipment said it will buy back $1 billion of common stock from Societe Generale.

Pfizer Inc. added 0.6 percent to $29.54. The world’s biggest drugmaker said it will split up its three major internal businesses and shuffle the management that leads them, part of the company’s preparation for a further break up.

Synta Pharmaceuticals Corp. soared 41 percent to $7.15 for the biggest gain in more than four years. A small trial of its drug in breast cancer met goals warranting expansion of the study.

U.S. financial companies, fueled by the fastest earnings growth in the S&P 500, are poised to reclaim their position as the market’s biggest industry for the first time since the credit crisis.

Banks, brokers and insurance companies make up 16.8 percent of the S&P 500, almost double the level from 2009 and closing in on technology companies at 17.6 percent, according to data compiled by Bloomberg. Bank of America and Morgan Stanley are helping lead gains in the index this month after profits topped analyst estimates. Intel Corp. and Microsoft Corp. are among the worst after earnings trailed forecasts.

For bulls, the change signals banks will lead the economy even after the Fed begins to reduce stimulus. Bears say S&P 500 profits would be down this quarter if not for banks. They note that the last time financials were the biggest industry was in 2008 and the consequences were disastrous.

“The fact that we are seeing banks perform reasonably well provides a certain sense of confidence in the underlying economy,” Kevin Caron, a Florham Park, New Jersey-based market strategist at Stifel Nicolaus & Co., which oversees about $130 billion, said in a July 25 phone interview. “Without the financials working, it would be hard to imagine that all the rest would be working at all.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Fear is man’s greatest enemy,

and it manifests itself in forms as diverse as shame, jealousy, anger, insolence, arrogance…

What causes fear?  Lack of confidence in oneself.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

Our lives improve only when we take chances – and the first

and most difficult risk we can take is to be honest

with ourselves.

-Walter Anderson, 1903-1965

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:

Mick Jagger turns 70 years old today!

Today is the anniversary of the unveiling of the Vimy Ridge Memorial on July 26^th, 1936.  It took 11 years to build and honors the 11,285 Canadian soldiers killed in France during the First World War, their final resting places unknown.

And also on this day, in 1945, British Prime Minister Winston Churchill lost the general election to the Labour Party’s Clement Attlee.  Churchill tendered his resignation.

After hearing the news of Labour’s election, James Agate, Ego, July 26^th, 1945, reported:

I rang up the head waiter at one of my favourite restaurants and said, “Listen to me carefully, Paul.  I am quite willing that in future you address me as ‘comrade’ or ‘fellow-worker’, and chuck the food at me in the manner of Socialists to their kind.  But that doesn’t start until tomorrow morning.  Tonight I am bringing two friends with the intention that we may together eat our last meal as gentlemen.  There will e a magnum of champagne and the best food your restaurant can provide.  You, Paul, will behave with your wonted obsequiousness.  The sommelier, the table waiter, and the commis waiter will smirk and cringe in the usual way.  From tomorrow you will get no more tips.  Tonight you will all be tipped royally.”  The head waiter said, “Bien, m’sieu.”   That was at a quarter-past six.  At a quarter-past nine I arrived and was escorted by bowing menials to my table, where I found the magnum standing in its bucket, and three plates each containing two small slices of spam!  Who would have thought a head waiter to have so much wit in him?

Photos of the Day –July 26th, 2013

Two girls walk past beach huts built in 1911 on the North Bay in Scarborough, northern England. Nigel Roddis/Reuters

Hot air balloons, including a 115-foot-tall flying lighthouse, are inflated during the 31st annual QuickChek New Jersey Festival of Ballooning in Readington Township, N.J. Mel Evans/AP

Market Closes for July 26^th, 2013

Market  Index	Close	Change
Dow  Jones	15558.83	+3.22    +0.02%
S&P 500	1691.65	+1.40    +0.08%
NASDAQ	3613.165	+7.977    +0.22%
TSX	12645.38	-23.76
		-0.19%

International Markets

Market  Index	Close	Change
NIKKEI	14129.98	-432.95
		-2.97%
HANG  SENG	21968.95	+67.99
		+0.31%
SENSEX	19748.19	-56.57
		-0.29%
FTSE 100	6554.79	-33.16
		-0.50%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.452	2.462
CND.   30 Year Bond	2.956	2.971
U.S.   10 Year Bond	2.5624	2.5721
U.S.   30 Year Bond	3.6190	3.6474

Currencies

BOC Close	Today	Previous
Canadian $	0.97271	0.97246
US   $	1.02805	1.02832
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36515	0.73252
US  $	1.32790	0.75307

Commodities

Gold	Close	Previous
London Gold   Fix	1333.86	1333.84
Oil	Close	Previous
WTI Crude Future	104.59	105.56
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

July 26 (Bloomberg) — Canadian stocks slid for a fourth day, the longest stretch in seven weeks, as commodities fell after China ordered companies to cut excess production capacity.

Advantage Oil & Gas Ltd. lost 5.9 percent as crude posted a weekly decline. Dundee Precious Metals Inc. retreated 2.8 percent as the price of gold slipped. Celestica Inc., an electronics manufacturer, surged 6.3 percent after second- quarter profit topped analysts’ estimates. Canfor Corp., a lumber and paper producer, jumped 7.3 percent for the biggest gain in two years on better-than-expected earnings.

The Standard & Poor’s/TSX Composite Index fell 21.24 points, or 0.2 percent, to 12,647.90 at 4 p.m. in Toronto. The gauge fell 0.3 percent this week, the first decline in five weeks. Trading volume was 25 percent lower than the 30-day average.

“We’re waiting for more earnings,” said Irwin Michael, a fund manager with ABC Funds in Toronto. His firm manages C$800 million ($778 million). “Oil is lower and copper is down. People are a little nervous.”

Six of 10 industries in the S&P/TSX retreated, led by a 0.9 percent decline in oil and gas producers. The S&P/TSX Energy Index slumped to a two-week low as 42 of 58 stocks fell.

China ordered more than 1,400 companies in 19 industries to cut excess production capacity this year. Steel, ferroalloys, electrolytic aluminum and cement are among areas affected, the Ministry of Industry and Information Technology said this week.

Advantage Oil & Gas slumped 5.9 percent to C$3.70 and Canadian Natural Resources Ltd. retreated 4.5 percent to C$32.20. Crude for September delivery dropped 0.7 percent to settle at $104.70 a barrel in New York. Oil fell 3.1 percent this week for the first weekly drop in more than a month.

Dundee Precious Metals sank 2.8 percent to C$5.21. Gold for December delivery declined 0.6 percent to settle at $1,321.90 an ounce in New York.

First Majestic Silver Corp. lost 1.7 percent to C$13.32 and Silver Wheaton Corp. slipped 0.5 percent to C$23.76 as silver fell 1.9 percent.

Potash Corp. of Saskatchewan Inc. fell 0.6 percent to C$38.14, extending losses for a fourth day. Raymond James Financial Inc. analyst Steven Hansen lowered his rating for the stock to market perform from outperform.

Yesterday, the fertilizer producer cut its earnings forecast and reported profit that missed analysts’ estimates after a drop in potash prices.

Celestica soared 6.3 percent to C$10.40. The company said third-quarter earnings may reach 17 cents to 23 cents a share, compared with analysts’ estimates for 20 cents a share.

Canfor, based in Vancouver, rallied 7.3 percent to C$21.45, the biggest gain since July 2011. The company posted second- quarter adjusted profit of 61 Canadian cents a share, topping the 38-cent average of eight analysts surveyed by Bloomberg.

Lumber production and shipments increased during the quarter.

US

By Lu Wang

July 26 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index erasing losses in the final 30 minutes of trading, as investors weighed corporate earnings and consumer confidence before central-bank meetings next week.

Starbucks Corp. jumped 7.6 percent after reporting profit that beat estimates. Amazon.com Inc. advanced 2.8 percent as Oppenheimer & Co. lifted its stock-price projection. Expedia Inc. sank 27 percent on disappointing sales and profit. Zynga Inc. plunged 14 percent after abandoning plans to enter online gambling and forecasting earnings that fell short of estimates.

The S&P 500 climbed 0.1 percent to 1,691.65 at 4 p.m. in New York, reversing an earlier drop of 0.8 percent. The benchmark index finished the week down less than 0.1 percent, snapping a four-week rally. The Dow Jones Industrial Average added 3.22 points, or less than 0.1 percent, to 15,558.83. About 5.36 billion shares changed hands, or 16 percent below the three-month average.

“The market has been so used to the pace of accommodation and any reduction in the accommodation could be a slight drag in the short term,” Anastasia Amoroso, a global market strategist at JPMorgan Funds, said in a phone interview. The firm manages about $400 billion. “The market is in the process of an adjustment to rising rates, coming to the realization that rising rates do not mean the death of equities.”

Consumer confidence unexpectedly increased in July to the highest level in six years as Americans’ views of their finances improved, according to the Thomson Reuters/University of Michigan final index of U.S. consumer sentiment. The measure advanced to 85.1 in July from 84.1 at the end of June.

Economists in a Bloomberg survey called for 84, according to the median projection after a preliminary reading of 83.9.

Consumer prices in Japan excluding food rose 0.4 percent in June, more than economists estimated and the biggest jump since 2008, damping speculation the country will need to expand stimulus. In China, the government directed more than 1,400 companies in industries from steelmaking to papermaking to cut excess capacity by year-end.

The S&P 500 is up 5.3 percent this month, heading for its biggest monthly advance since October 2011. The gauge fell in June, after seven successive months of gains, as investors examine economic data for clues on when the Fed will start to reduce its $85 billion of monthly bond purchases.

Support from central banks and better-than-estimated earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low to record highs. The Fed has said economic data will determine the timing and pace of any reduction in its bond-buying.

The Fed will start trimming its purchases in September, according to a Bloomberg survey of economists. Fed Chairman Ben S. Bernanke said last week it is “way too early to make any judgment” as to whether policy makers will start tapering purchases in September. The Fed’s Open Market Committee next meets to review policy on July 30-31.

Investors will watch next week’s data on U.S. gross domestic product and the monthly labor report, as well as monetary policy announcements by the Fed and the European Central Bank, to gauge the market outlook.

U.S. economic growth probably slowed to 1 percent in the second quarter from the 1.8 percent pace in the previous period while employers added 185,000 workers in July, down from 195,000 in June, economists surveyed by Bloomberg forecast. The ECB is likely to leave its benchmark rate at a record low of 0.5 percent, according to the median estimate of economists in a Bloomberg survey.

Equity valuations have climbed 16 percent this year, with the S&P 500 trading at 16.1 times reported earnings, close to the highest level since May 2010, data compiled by Bloomberg show.

Investors are also watching company earnings reports. Of the 260 companies in the S&P 500 that have posted quarterly results so far, 73 percent have exceeded analysts’ estimates for profit and 57 percent have topped sales projections, data compiled by Bloomberg show.

“Fundamentals have been good, but the fundamentals from here are not going to support a run higher,” Timothy Hoyle, the director of research at Radnor, Pennsylvania-based Haverford Investments, which oversees about $6 billion of assets, said in a phone interview. “Earnings are coming in through efficiencies, lower expenses, and lower interest costs. We don’t still see end market demand in the economy and that’s what’s going to take to get the stock market to make a leg up.”

The Chicago Board Options Exchange Volatility Index, or VIX, dropped 1.9 percent today to 12.72. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, is down 29 percent this year.

Five of 10 main industries in the S&P 500 gained. Health- care and telephone companies rose the most, climbing at least 0.4 percent. Commodity stocks fell more than 0.3 percent for the worst performance.

Starbucks rose 7.6 percent to a record $73.36. Chief Executive Officer Howard Schultz’s push into food is starting to pay off, driving traffic into U.S. stores and lifting sales and profit. The world’s largest coffee-shop operator posted third- quarter earnings of 55 cents a share, higher than the 53 cent profit forecast by analysts, and raised its projection for fiscal 2013 profit.

Amazon climbed 2.8 percent to an all-time high of $312.01.

Jason Helfstein, an analyst with Oppenheimer, raised his share- price estimate for the world’s largest online retailer to $367 from $325, citing better-than-estimated growth in gross profits and stable sales during the second quarter. Amazon reported a surprise net loss yesterday.

Activision Blizzard Inc. surged 15 percent to $17.46, the highest level since September 2008. The company and a management group led by Chief Executive Officer Bobby Kotick agreed to buy out parent Vivendi SA’s controlling stake in the biggest U.S. video-game publisher for $8.17 billion.

Cliffs Natural Resources Inc., the worst-performing stock in the S&P 500 so far this year, jumped 7.2 percent to $19.71.

The largest iron-ore producer in the U.S. posted second-quarter earnings of 82 cents a share, surpassing the average analyst estimate of 59 cents. Revenue in the period also topped forecasts and Cliffs increased its capital-expenditure outlay for 2013 to $1 billion from no more than $850 million.

Tesla Motors Inc. gained 4.3 percent to $129.39 after Deutsche Bank AG analyst Dan Galves boosted his rating on the stock to buy from hold. He said shares of the electric-car maker could more than double in the next three to four years, citing a rise in U.S. orders and lowered concern over quality issues after a Consumer Reports review.

Expedia sank 27 percent to $47.20 for the biggest retreat in the S&P 500. The online travel agency posted second-quarter earnings, excluding some items, of 64 cents a share, falling short of the 81 cents analysts predicted on average.

Zynga plunged 14 percent to $3.01 after abandoning plans to enter the online-gambling business in the U.S. The maker of the social-networking game “FarmVille” also forecast third-quarter sales and earnings that fell short of analysts’ estimates as fewer users access its titles on Facebook Inc.’s website.

Vertex Pharmaceuticals Inc. slumped 7.9 percent to $80.71.

The company said U.S. regulators placed a partial clinical hold on its trial of a drug for hepatitis C after patients receiving a high dose of the medicine showed signs of potential liver toxicity.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

How is this dream to be broken,

how shall we wake up from this dream

that we are little men and women,

and all such things?

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Wisdom doesn’t automatically come with old age.

Nothing does – except wrinkles.  It’s true, some wines

improve with age.  But only if the grapes were good

in the first place.

-Abigail Van Buren, 1918-2013

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