Author: Carolann

Dear Friends,

Tangents:

George:  The patron saint of England since his “adoption” by Edward III.  The popularity of St. George in England stems from the time of the early Crusades, for he was said to have come to the assistance of the crusaders at Antioch in 1098.  Many of the Normans under Robert Curthose, son of William The Conqueror, took him as their patron.

Edward Gibbon and others argued that George of Cappadocia (d. 361), the Arian bishop of Alexandria, became the English patron saint, but it is more generally accepted that he was a Roman officer martyred (c. 300) near Lydda during the Diocletian persecution.  He is also the patron saint of Aragon and Portugal.

The legend of St. George and the Dragon is simply an allegorical expression of the triumph of the Christian hero over evil, which St. John the Evangelist envisioned through the image of a dragon.  The legend forms the subject of the ballad “St. George for England” in Percy’s Reliques (1765), and a gently humorous version of the tale, entitled “The Reluctant Dragon” was included by Kenneth Grahame in Dream Days (1898), by evocation of orphan childhood.  –adapted from Brewar’s, 16^th ed.

Photos of the Day –July 25th, 2013

A male (r.) and female American Kestrel, formerly known as the Sparrow Hawk, have a family spat near Newberry, Fla., while teaching their newly fledged young how to make their way in the wild. The American Kestrel is the smallest falcon in North American. The Kestrel feeds on dragon flies, grasshoppers, small rodents, and birds. Phil Sandlin/AP

Customers enjoy a drink in Ice Pub Prague in central Prague, Czech Republic. The interior of the bar is made of ice, and customers are served with drinks in glasses made of ice. Temperatures in the Czech Republic are expected to rise up to 40 degrees Celsius (104 degrees Fahrenheit) on Sunday, Czech Hydrometeorological Institute reported. David W Cerny/Reuters

Market Closes for July 25^th, 2013

Market  Index	Close	Change
Dow  Jones	15555.61	+13.37    +0.09%
S&P 500	1690.27	+4.33    +0.26%
NASDAQ	3605.188	+25.588    +0.71%
TSX	12667.37	-4.93
		-0.04%

International Markets

Market  Index	Close	Change
NIKKEI	14562.93	-168.35
		-1.14%
HANG  SENG	21900.96	-67.97
		-0.31%
SENSEX	19804.76	-285.92
		-1.42%
FTSE 100	6587.95	-32.48
		-0.49%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.462	2.476
CND.   30 Year Bond	2.971	2.983
U.S.   10 Year Bond	2.5721	2.5804
U.S.   30 Year Bond	3.6474	3.6397

Currencies

BOC Close	Today	Previous
Canadian $	0.97246	0.96951
US   $	1.02832	1.03145
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36506	0.73257
US  $	1.32747	0.75332

Commodities

Gold	Close	Previous
London Gold   Fix	1333.84	1320.98
Oil	Close	Previous
WTI Crude Future	105.56	105.10
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

July 25 (Bloomberg) — Canadian stocks fell for a third day as investors weighed earnings from commodity producers including Teck Resources Ltd. and Goldcorp Inc.

Goldcorp, the biggest gold producer by market value, dropped 1.2 percent after taking a $1.96 billion writedown due to falling gold prices. Potash Corp. of Saskatchewan Inc. slumped 2.1 percent as it lowered its 2013 profit forecast. Teck Resources rose 3 percent as its profit beat estimates. Encana Corp. gained 1.7 percent after an analyst with TD Securities Inc. raised his rating for the stock.

The Standard & Poor’s/TSX Composite Index fell 3.16 points, or less than 0.1 percent, to 12,669.14 at 4 p.m. in Toronto.

Trading volume was in line with the 30-day average.

“The Canadian numbers have been less than inspiring,” said Michael O’Brien, a fund manager with TD Asset Management Inc. in Toronto. The firm manages C$216 billion ($210 billion).

“Expectations for these companies were pretty low coming into the quarter. Everybody knew it was going to be a horrendous quarter so people wanted to see just how bad it is and then pick at the pieces.”

Five of 10 industries in the benchmark index fell, led by a 0.8 percent decline in shares of utilities. Atco Ltd. lost 2 percent to C$44.11 as the electric power distributor fell for the fourth time in five days.

Industrial stocks rose the most, adding 0.4 percent as a group, as Canadian Pacific Railway Ltd. advanced 3 percent to C$131.26 to snap four days of losses.

Fifteen companies in the S&P/TSX report earnings today and tomorrow, including TransCanada Corp. and Canadian Utilities Ltd.

Potash Corp., the world’s largest fertilizer producer, sank 2.1 percent to C$38.35, the lowest close since November. The Saskatoon, Saskatchewan-based company said it expects profit of $2.45 to $2.70 a share this year, compared with an April forecast of $2.75 to $3.25 and the $2.84 average of 30 estimates compiled by Bloomberg.

Potash Corp. reported second-quarter profit of 73 cents a share, short of the 80 cent analysts’ average. Prices for potash are down because of plentiful producer inventories and historically low import volumes in India.

Goldcorp fell 1.2 percent to C$28.88 after writing down the value of its assets and announcing it will slow down some project spending due to lower gold prices. The Vancouver-based company reported adjusted earnings of 14 cents a share, trailing the 23-cent average of 19 estimates compiled by Bloomberg.

Gold-mining companies have announced at least $13 billion of writedowns in the past two months after the precious metal’s steepest quarterly drop in London trading in more than nine decades.

Teck Resources, Canada’s largest diversified miner, climbed 3 percent to C$24.41 after reporting adjusted earnings of 34 cents a share, topping analysts’ average forecast of 32 cents.

Teck said output at its Quintette coal mine in British Columbia won’t begin until a recovery in the market for metallurgical coal, and development of its Quebrada Blanca Phase 2 copper project has also been slowed.

Encana added 1.7 percent to C$18.09 after Menno Hulshof, analyst with TD Securities, raised his rating for the company to buy from hold on a positive operations outlook as well as cost- cutting plans. The stock has four buys, 16 holds and 6 sells, according to data compiled by Bloomberg.

Encana yesterday reported second-quarter adjusted earnings of 34 cents a share, topping estimates for 17 cents.

US

By Lu Wang and Katie Brennan

July 25 (Bloomberg) — U.S. stocks rose, halting two days of losses for the Standard & Poor’s 500 Index, as investors weighed corporate earnings and economic reports for clues on when the Federal Reserve may reduce stimulus measures.

Facebook Inc. rallied 30 percent after the world’s most popular social-networking service posted second-quarter revenue and profit that beat analysts’ estimates. Visa Inc. advanced 4.2 percent to a record as profit topped forecasts. Homebuilders sank 4.8 percent as a group after PulteGroup Inc. and D.R. Horton Inc. reported lower-than-expected orders.

The S&P 500 rose 0.3 percent to 1,690.25 at 4 p.m. in New York, after earlier falling as much as 0.4 percent. The Dow Jones Industrial Average added 13.37 points, or 0.1 percent, to 15,555.61. More than 6.4 billion shares traded hands on U.S. exchanges today, in line with the three-month average.

“It seems like market participants on a day-to-day basis want to trade more on the prospect of what that means for the Fed’s tapering plan,” Jeff Layman, chief investment officer of BKD Wealth Advisors in Springfield, Missouri, said in a phone interview. His firm has $2.3 billion under management. “I’d much rather see the market supported by positive underlying economic trend and real activity, rather than supported by the hope that the Fed will continue to artificially suppress the rate.”

The S&P 500 completed its first two-day drop in a month yesterday, after climbing to within 3 points of 1,700 for a third straight day, as housing and manufacturing data fueled speculation the Fed may reduce its asset-buying this year.

Support from central banks and better-than-estimated corporate earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low.

The benchmark gauge rose to session highs today after a Wall Street Journal article suggested the Fed will reassure investors it won’t be quick to raise interest rates at its next policy-making meeting on July 30-31. 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 central bank has said economic data will determine the timing and pace of any reduction in its $85 billion in monthly bond-buying, known as quantitative easing. The Fed will start trimming purchases in September, according to a Bloomberg survey of economists.

Separate reports showed today that orders for durable goods rose more than forecast in June while more Americans filed for unemployment benefits last week as annual auto-plant shutdowns continued to affect data.

“We are kind of stuck in that middle ground where data is not bad enough to be encouraging about more quantitative easing, but it’s not good enough to convince people that there is enough there fundamentally to justify sharply higher prices,” Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in an interview.

Equity valuations have climbed 16 percent this year, with the S&P 500 trading at 16.3 times reported earnings, close to the highest level since May 2010, according to data compiled by Bloomberg. The index closed at record on July 22.

Of the 237 S&P 500 companies that have posted quarterly results, 74 percent have exceeded analysts’ profit estimates and 57 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, dropped 1.6 percent today to 12.97, halting two days of gains. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, is down 28 percent this year.

Nine of the 10 S&P 500 main groups advanced, as utilities and commodity producers rose at least 0.5 percent.

Facebook surged 30 percent to $34.36, the highest level in 14 months. Revenue rose 53 percent to $1.81 billion in the latest quarter, beating the average analyst estimate of $1.62 billion. Profit excluding certain items of 19 cents a share also exceeded the 14-cent average projection of analysts.

Visa advanced 4.2 percent to a record $194.61 as the biggest bank-card network reported a fiscal third-quarter profit that beat analysts’ estimates.

TripAdvisor Inc. jumped 16 percent to $71.10 after posting second-quarter earnings per share of 52 cents. That exceeded the average analyst projection of 48 cents.

Boston Scientific Corp. rallied 13 percent to $10.83. The second-biggest maker of heart-rhythm devices reported profit that beat analysts’ estimates and raised its forecast amid signs that demand for defibrillators is starting to stabilize.

Better-than-expected results from International Paper Co. and Dow Chemical Co. boosted raw-materials producers to the best performance in the S&P 500. International Paper, the world’s largest maker of office paper, jumped 6.3 percent to $50.19. Dow Chemical rose 1.8 percent to $34.99 as stronger transportation and packaging demand helped its plastics unit.

Qualcomm Inc. added 3.3 percent to $63.42. The largest seller of semiconductors for mobile phones forecast fiscal fourth-quarter sales that may exceed analysts’ estimates, buoyed by smartphone demand in emerging markets.

Oneok Inc. surged 26 percent to a record $53.77 for the biggest gain in the S&P 500. The company plans to spin off its distribution business, forming one of the largest natural gas utilities in the U.S. with 2 million customers in at least three states.

E*Trade Financial Corp. climbed 7.9 percent to $14.69. The online brokerage with six chief executive officers since 2007 said it plans to sell a market-making unit that handles orders for its customers and announced earnings that beat estimates.

The S&P Supercomposite Homebuilding Index slumped 4.8 percent to the lowest level since December as all its 11 members declined for a second day.

PulteGroup fell 10 percent to $16.55 for the biggest retreat in the S&P 500. The largest U.S. housebuilder by market value said second-quarter earnings included 17 cents a share in charges that left the total below analyst estimates.

D.R. Horton slid 8.6 percent to $19.38, the lowest this year. The largest U.S. homebuilder by volume said orders increased 12 percent. That’s below analysts’ forecast of 28 percent growth, according to Adam Rudiger, an analyst at Wells Fargo & Co.

Home Depot Inc. the biggest U.S. home-improvement retailer, slipped 1.6 percent to $78.99.

Caterpillar Inc. declined 1.6 percent to $82.14. The largest manufacturer of mining and construction machinery was cut to market perform, an equivalent of neutral, from outperform at BMO Capital Markets by equity analyst Joel Tiss. The company yesterday issued a forecast that missed analyst estimates.

Western Digital Corp. dropped 5.9 percent to $63.53. The maker of hard drives forecast first-quarter adjusted earnings per share of $1.95 to $2.05, less than the average analyst estimate of $2.06. Competitor Seagate Technology LLC slipped 4.7 percent to $42.12.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

You must learn how to be lucid in all your actions;

that is, you must not only be aware of the time, the place, and the circumstances,

in which the action takes place, but also of yourself, the player, of your body

and what is happening at any moment.

It is not only a question of seeing things as they are, but of seeing yourself at the same time,

and the reactions that take place within you.

In other words, you absorb the whole thing within you and you become complete.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

There are no shortcuts in evolution.

-Louis D. Brandeis, 1856-1941

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

The Poem

Parting [1979]

Jasmine hung in clusters upon the vine,

water-lily buds spread everywhere upon the lake,

all along the boundary hedges

the thorny ironwood had flowered.

As I stood gazing,

“This is how spring should be,”

you said, and left.  That day.

 

Today

on the branch of a copper-leaf tree

a solitary bird shivers

ruffling its feathers,

a cloud

is set for a lifetime’s wandering,

and along the shores of the lake

standing on one leg

a lone heron

practices austerities.

-by Cheran

Translated by Lakshimi Holmstöm

 

Photos of the Day –July 24th, 2013

Linda Cerruti performs her routine in the synchronized swimming solo final at the FINA Swimming World Championships in Barcelona, Spain. David J. Phillip/AP

A toad swims between lily leaves in a little pond in Lofer, near Salzburg, Austria. Meteorologists forecast the hot and sunny weather to continue the next days. Kerstin Joensson/AP

Market Closes for July 24^th, 2013

Market  Index	Close	Change
Dow  Jones	15542.24	-25.50    -0.16%
S&P 500	1684.13	-8.26    -0.49%
NASDAQ	3579.600	+0.326    +0.01%
TSX	12659.93	-85.45
		-0.67%

International Markets

Market  Index	Close	Change
NIKKEI	14731.28	-47.23
		-0.32%
HANG  SENG	21968.93	+53.51
		+0.24%
SENSEX	20090.68	-211.45
		-1.04%
FTSE 100	6620.43	+22.99
		+0.35%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.476	2.403
CND.   30 Year Bond	2.983	2.920
U.S.   10 Year Bond	2.5804	2.5021
U.S.   30 Year Bond	3.6397	3.5726

Currencies

BOC Close	Today	Previous
Canadian $	0.96951	0.97180
US   $	1.03145	1.02902
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36097	0.73477
US  $	1.31945	0.75789

Commodities

Gold	Close	Previous
London Gold   Fix	1320.98	1343.10
Oil	Close	Previous
WTI Crude Future	105.10	107.18
BRENT	109.359	109.359

Market Commentary:

Canada

By Eric Lam

July 24 (Bloomberg) — Canadian stocks fell the most in a month as a report showing a manufacturing slowdown in China spurred losses in commodity shares, while Loblaw Cos. rose on better-than-estimated earnings.

Shares in materials producers on the Standard & Poor’s/TSX Composite Index declined 3 percent for the biggest slump in four weeks. Torex Gold Resources Inc. and Barrick Gold Corp. slid more than 5.4 percent. Suncor Energy Inc. lost 1.1 percent as crude tumbled the most in more than a month. Loblaw, Canada’s largest grocer, gained 3.2 percent as profit climbed on higher food and clothing sales.

The equity gauge fell 73.08 points, or 0.6 percent, to 12,672.30 at 4 p.m. in Toronto. The index declined two straight days for the first time in a month, paring its gain for the year to 1.9 percent. Trading volume was 5.8 percent higher than the 30-day average at this time of the day.

“We’ve had a pretty good run here, so the market is taking a bit of a pause as we need to see more earnings reports,” said David Cockfield, a fund manager with Northland Wealth Management in Toronto. The firm manages C$225 million ($219 million).

“Metal producers, in general, are looking at less robust markets for the foreseeable future.”

China’s manufacturing weakened more than estimated in July, according to a preliminary purchasing managers’ index reading of 47.7 released by HSBC Holdings Plc and Markit Economics. Levels below 50 indicate contraction.

Torex Gold plunged 10 percent to C$1.38 and Barrick Gold, the world’s largest producer of gold, lost 5.4 percent to C$17.67. Gold for December delivery sank 1.1 percent, the most in two weeks.

Teck Resources, Canada’s largest diversified miner, fell 2.7 percent to C$23.69. First Quantum Minerals Ltd., a copper producer, retreated 1.4 percent to C$17.13. HudBay Minerals Inc., which produces zinc, copper, gold and silver, lost 6 percent to C$7.25. Copper slipped 0.6 percent in New York, snapping the longest rally in nine months.

Cenovus Energy Inc. sank 5.5 percent to C$30.49 as second- quarter profit slumped 55 percent on higher currency losses and lower hedging gains. More than 50 Canadian companies in the S&P/TSX are scheduled to report earnings over the next week.

Suncor lost 1.1 percent to C$32.85 and Canadian Natural Resources Ltd. retreated 1.2 percent to C$33.80. Energy stocks fell 1.3 percent as a group after crude for September delivery dropped 1.7 percent to settle at $105.39 a barrel in New York, the biggest decline since June 21.

Loblaw gained 3.2 percent to C$49.47. The grocer reported second-quarter adjusted profit of 67 Canadian cents a share, ahead of analysts’ estimates of 59 cents, according to data compiled by Bloomberg.

The company, which agreed to buy Shoppers Drug Mart Corp. this month, said it expects “mid-single” digit operating income growth for 2013.

Rogers Communications Inc. rose 1.8 percent to C$41.95.

Canada’s biggest wireless carrier signed up 98,000 customers to long-term contracts in the second quarter, compared with the 74,000 average estimate of seven analysts surveyed by Bloomberg.

US

By Lu Wang and Katie Brennan

July 24 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its first-two day drop in a month, as investors weighed global manufacturing data and earnings reports from Caterpillar Inc. and Apple Inc. Caterpillar slipped 2.4 percent after cutting its forecast.

Broadcom Corp. sank 15 percent after predicting revenue that trailed estimates. Utility shares and homebuilders tumbled amid rising interest rates. Apple advanced 5.1 percent after profit and sales topped forecasts. Ford Motor Co. rose to a 36-month high after raising its full-year earnings target. Facebook Inc. surged 19 percent after the markets closed as the company reported earnings that beat estimates.

The S&P 500 slid 0.4 percent to 1,685.94 at 4 p.m. in New York, after earlier climbing within 3 points of 1,700 for a third straight day. The Dow Jones Industrial Average lost 25.50 points, or 0.2 percent, to 15,542.24, retreating from a record close yesterday.York, extending a record. About 6.3 billion shares traded hands on U.S. exchanges today, in line with the thee-month average.

“The earnings are validating and supporting the market as opposed to pushing the market higher,” Mark Freeman, who oversees about $15.8 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said by telephone. “It just speaks to how far we have come and the amount of positive expectations that have already been cleared by the market.”

The S&P 500 declined yesterday as investors weighed earnings amid speculation on when the Federal Reserve may scale back its asset purchases. Support from central banks and better- than-estimated corporate earnings have driven the S&P 500 up as much as 151 percent from its March 2009 low.

The rally has pushed valuations close to the highest level since May 2010, with the S&P 500 trading at 16.3 times reported earnings, data compiled by Bloomberg show.

When the benchmark index rose to a record close on July 22, the gauge had gained for 12 of the previous 13 trading days, a stretch that hasn’t happened since September 1995, data compiled by Bloomberg show. The 14-day relative-strength index for 83 S&P 500 stocks exceeded 70 that day, 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.

“The market has had a big run and we are a bit overbought here,” Bruce Bittles, chief investment strategist at RW Baird & Co., said in a telephone interview from Sarasota, Florida. His firm oversees $100 billion. “There is a lot of optimism coming into the market short-term, so I wouldn’t be surprised if we rested in here for a while.”

The Fed has said economic data will determine the timing and pace of any reduction in its $85 billion in monthly asset purchases. A report today showed sales of new U.S. homes rose more than forecast in June to the highest level in five years.

Separate data from London-based Markit Economics showed manufacturing indexes based on surveys of purchasing managers rose in the U.S. and Germany this month, while China’s manufacturing contracted more than economists estimated.

Investors have turned to corporate earnings, with some 48 members of the S&P 500 reporting today, for additional clues about the health of the U.S. economy. Of the 169 companies in the benchmark gauge that have posted quarterly results so far, 72 percent have exceeded analysts’ profit estimates and 56 percent have topped sales projections, data compiled by Bloomberg show.

Facebook, which is not a member of the S&P 500, jumped 19 percent to $31.66 at 4:25 p.m. in New York. The operator of the world’s most popular social-networking service reported sales and profit that exceeded estimates as the company attracted more marketers to its mobile-advertising services.

The Chicago Board Options Exchange Volatility Index, or VIX, rose 4.2 percent today to 13.19. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high in June and has since fallen 36 percent.

All 10 S&P 500 main industries fell except for technology companies, which added 1 percent. Utility and commodity shares fell the most, sinking at least 1 percent.

Caterpillar dropped 2.4 percent to $83.44 for the steepest loss in the Dow. The world’s largest maker of mining and construction machinery posted earnings that trailed analysts’ estimates for a third straight quarter and cut its forecast as mining-equipment sales declined on slower commodity demand.

The commodities supercycle, or longer-than-average period of rising prices, is coming to an end and Caterpillar “is tied to the wrong products at the wrong time in the cycle,” short seller Jim Chanos said July 17. Caterpillar’s resource- industries unit is the company’s largest segment by revenue.

Rising Treasury yields, fueled by speculation the Fed will taper bond-buying, accelerated declines among shares of companies that have the highest dividend yields. Utility stocks plunged 1.6 percent today and telephone shares slid 0.6 percent.

The two industries yield the most in the S&P 500.

AT&T Inc. dropped 1.1 percent to $35.40. The largest U.S. phone company posted profit that fell just below analysts’ estimates as costs rose for smartphone discounts used to persuade more customers to sign long-term contracts.

The S&P Supercomposite Homebuilding Index slipped 4.2 percent, with all 11 members declining amid concern rising interest rates may hurt a housing recovery. Lennar Corp. declined 3.8 percent to $33.92. Toll Brothers Inc. retreated 6.2 percent to $32.31.

Broadcom tumbled 15 percent to $27.01 for the biggest drop in the S&P 500. The maker of chips that connect mobile devices to the Internet late yesterday issued a revenue forecast that trailed analysts’ estimates amid slowing smartphone sales.

Motorola Solutions Inc. dropped 6.6 percent to $56.04. The bar-code and two-way radio manufacturer lowered its 2013 sales forecast for the second time since April, citing weak orders.

Walter Energy Inc. plunged 18 percent to $11.53. The metallurgical-coal producer cut its quarterly dividend to 1 cent from 12.5 cents as a condition for amending a $2.73 billion credit pact.

Apple rose 5.1 percent to $440.51, the biggest gain since November. The world’s most valuable technology company, which hasn’t refreshed its iPhone and iPad since last year, managed to top analysts’ earnings projections, even as profit declined from a year earlier and sales were largely flat. The company is slated to release updated versions later this year of its iPhone and iPad, Apple’s top-selling devices. The stock tumbled 40 percent from a record $702.10 on Sept. 19 through yesterday.

“Apple is certainly not a forgotten name, but clearly not looked at with the same intensity as it was when it’s trading at $600, $700,” Rick Bensignor, head of trading strategy at Wells Fargo Securities in New York, said in a phone interview.

“People are just going to look at it to get a sense of some psychology – has it found a bottom?”

Ford gained 2.5 percent to $17.37, the highest since January 2011. The second-largest U.S. automaker raised its forecast after second-quarter earnings climbed more than estimates as the Focus compact and Fusion sedan led a stable of competitive cars.

Eli Lilly & Co. jumped 3.1 percent to $52.55. The maker of the antidepressant Cymbalta and diabetes treatment Humalog reported profit that beat analysts’ estimates and raised its full-year forecast after sales grew faster than expected and cost-cutting programs took effect.

EMC Corp. added 5.6 percent to $26.75. The world’s biggest maker of storage computers posted earnings and sales that matched analysts’ projections. The company said it will buy back $3.5 billion shares in 2013 and the first half of next year.

Electronic Arts Inc., the second-largest U.S. video-game maker, rallied 6.7 percent to $25.41 for the biggest advance in the S&P 500. Growth in sales of Web-delivered titles led to a smaller-than-projected first-quarter loss.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

This craving for position, for prestige, for power, to be recognized by society

as being outstanding in some way, is a wish to dominate others, and this wish to dominate

is a form of aggression.  And what is the reason for this aggressiveness?  It is fear isn’t it?

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Courage is the price that life exacts for granting

peace.

-Amelia Earhart, 1897-1939

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

110 years ago, on July 23^rd, 1903, Henry Ford and his Ford Motor Company, sold the very first Model A car to a dentist in Chicago.

Whether you think you can or think you can’t, you are right. –Henry Ford.

-from, The Garden, Summer:

Water is living; water springs from earth,

Whether from mountains poured in melting stream

Or risen in the stones, a bubbling birth

Struck by some Moses from a somber dream,

Some Pisgah vision, some divining-rod

That finds in rock the hidden hint of God.

Water is living; water tells its tale,

It’s legendary music; coots and swans

Swim to the summons in their various plume,

Olive as water glossy in the gloom,

Blue-white as sumptuous as mountain snows

Sun-smitten where the sources first arose,

-The high land paramount, the land paravail, –

And circle at that bidding, dark or pale,

Around the pool, explore the little creek,

And delicately drink with dipping beak

The silver water from the urn of bronze.

-V. Sackville-West

Photos of the Day –July 23rd, 2013

Kate, the Duchess of Cambridge, carries her new born son, the Prince of Cambridge, who was born on Monday, into public view for the first time, outside the Lindo Wing of St. Mary’s Hospital, in London, Tuesday, July 23, 2013. The boy will be third in line to the British throne. John Stillwell/AP

Michael and Carole Middleton leave the Lindo Wing of St Mary’s Hospital the day after their daughter, Britain’s Catherine, Duchess of Cambridge, gave birth to a baby boy, in London. Suzanne Plunkett/Reuters

Market Closes for July 23^rd, 2013

Market  Index	Close	Change
Dow  Jones	15567.74	+22.19    +0.14%
S&P 500	1692.43	-3.10    -0.18%
NASDAQ	3579.274	-21.115    -0.59%
TSX	12740.04	-18.34
		-0.14%

International Markets

Market  Index	Close	Change
NIKKEI	14778.51	+120.47
		+0.82%
HANG  SENG	21915.42	+498.92
		+2.33%
SENSEX	20302.13	+143.01
		+0.71%
FTSE 100	6597.44	-25.73
		-0.39%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.403	2.356
CND.   30 Year Bond	2.920	2.877
U.S.   10 Year Bond	2.5021	2.4804
U.S.   30 Year Bond	3.5726	3.5501

Currencies

BOC Close	Today	Previous
Canadian $	0.97180	0.96718
US   $	1.02902	1.03394
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36062	0.73496
US  $	1.32225	0.75629

Commodities

Gold	Close	Previous
London Gold   Fix	1343.10	1335.35
Oil	Close	Previous
WTI Crude Future	107.18	106.91
BRENT	109.359	109.36

Market Commentary:

Canada

By Eric Lam

July 23 (Bloomberg) — Canadian stocks fell after climbing to a four-month high yesterday, as a decline among industrials and financial stocks overshadowed gains for copper producers.

Canadian National Railway Co. lost 3.2 percent after the company discussed possible weakness in shipping in the second half of the year. Aimia Inc., a credit card loyalty program manager, jumped 3.8 percent after agreeing to buy a technology provider to U.S. retailers. Teck Resources Ltd. and First Quantum Minerals Ltd. gained at least 1.6 percent.

The Standard & Poor’s/TSX Composite Index lost 13 points, or 0.1 percent, to 12,745.38 at 4 p.m. in Toronto. The drop snapped a four-day rally and left the gauge up 2.5 percent for the year. Trading volume was in line with the 30-day average at this time of day.

“For Canada, today is a bit of a pause” after four days of gains, said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4 billion ($3.89 billion). “There’s a natural inclination to look for laggards when we’re at highs and the whole Canadian market has lagged this year.”

Six of 10 industries in the S&P/TSX retreated. Financial stocks dropped 0.4 percent as a group. National Bank of Canada slid 1.4 percent to C$77.96, snapping a streak of eight straight advances. Bank of Nova Scotia dropped 1 percent to C$58.35.

Industrial shares slid the most, declining 1.5 percent.

Canadian National slumped 3.2 percent to C$101.69. Luc Jobin, the company’s chief financial officer, said on a conference call with analysts yesterday the railroad may face a “challenging” second half due to weakness in shipping bulk products such as grain. Canadian Pacific Railway Ltd. fell 1.8 percent to $130.18.

Canada’s Transport Department also said today it is setting new emergency requirements for railway companies, including having at least two employees operating shipments of dangerous goods and stronger policies about setting brakes, after a deadly train derailment and explosion in Quebec on July 6 killed about 50 and destroyed much of downtown Lac-Megantic.

Health-care stocks declined 0.7 percent, led by a 0.8 percent drop at Valeant Pharmaceuticals International Inc. The drugmaker was sued by a pension fund over allegations its Medicis unit conspired to preserve a monopoly on its acne drug Solodyn.

AlarmForce Industries Inc., a home security system provider, rose 2 percent to C$10, erasing earlier losses, after firing President and Chief Executive Officer Joel Matlin. The company said Matlin will continue as a director. Anthony Pizzonia, the chief financial officer, will serve as the interim CEO while AlarmForce searches for a replacement.

Aimia, which manages customer loyalty programs including the Aeroplan credit-card service, jumped 3.8 percent to C$15.68.

The company agreed to buy Smart Button, a technology provider for national retailers in the U.S., for about $18 million.

Telus Corp. advanced 0.6 percent to C$30.83 after the wireless carrier increased the number of shares it may purchase in a buyback to 31.9 million common shares from 15 million shares, or about 4.9 percent of outstanding stock as of May 17.

Copper miners Teck Resources gained 1.6 percent to C$24.35 and First Quantum Minerals rallied 6.6 percent to C$17.37 as the metal’s price rose for a fourth day ahead of a preliminary report on manufacturing in China tomorrow.

Chinese Premier Li Keqiang said the slowest economic growth policy makers will tolerate is 7 percent, Beijing News reported today. China, Canada’s second-largest trading partner, is the world’s largest consumer of raw materials. Its economy is forecast to grow 7.6 percent in 2013 and 2014, according to the median estimate from a Bloomberg survey of economists.

US

By Lu Wang

July 23 (Bloomberg) — The Standard & Poor’s 500 Index fell, halting a streak of four straight gains, as investors weighed corporate earnings amid speculation on when the Federal Reserve may scale back its asset purchases.

Travelers Cos. sank 3.8 percent after posting the biggest quarterly decline since 2008 in a key measure of the company’s value as higher interest rates pressured its bond portfolio.

Netflix Inc. dropped 4.5 percent amid slower-than-expected subscriber gains. Apple Inc. lost 1.7 percent before the company reports results after the close of regular trading. Texas Instruments Inc. climbed 4 percent after forecasting sales and profit that may exceed estimates.

The S&P 500 dropped 0.2 percent to 1,692.39 at 4 p.m. in New York. The Dow Jones Industrial Average gained 22.19 points, or 0.1 percent, to a record 15,567.74.

“What you’re seeing is revenues are coming in pretty lackluster and profits seem to be doing a little better than gains in sales,” Hank Herrmann, Overland Park, Kansas-based chief executive officer of Waddell & Reed Investment Management Co., said by phone. His firm manages $104 billion. “The market had a period of digesting the confusion over Fed tapering. For the moment, it’s focused on individual company fundamentals.”

The S&P 500 extended a record yesterday, adding to a rally from last week after Fed Chairman Ben S. Bernanke said the central bank remains flexible about the duration of its asset- purchase program. Fed stimulus has helped fuel a surge in stocks worldwide, with the S&P 500 jumping as much as 151 percent from its March 2009 low.

The benchmark equity gauge erased earlier gains of as much as 0.2 percent today after the Richmond Fed’s gauge of manufacturing in the mid-Atlantic region unexpectedly fell in July. The factory index slid to minus 11. Readings greater than zero signal expansion in the area that includes the Carolinas, the District of Columbia, Maryland, Virginia and West Virginia.

The median projection in a Bloomberg survey of economists called for a reading of 9.

Investors have been weighing data to determine the timing and pace of any stimulus reduction by the Fed. Half of the economists in a July 18-22 Bloomberg survey expect the central bank to trim at its September meeting the pace of its monthly bond buying to $65 billion from the current $85 billion. That’s up from 44 percent in last month’s poll.

The S&P 500 fell as much as 5.8 percent after Bernanke said on May 21 the Fed could reduce its bond purchases as early as in September. The gauge rallied 7.8 percent from June 24 through yesterday.

“The big step the market has made is that the market now accepts that it needs to be prepared for the Fed beginning to taper sometime in the next four to five months,” Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, said by phone. The firm manages $4.2 billion. “People have accepted a low growth scenario for the U.S., but they also see it a low risk market. The U.S. market is guardedly healthy.”

In Asia, Chinese Premier Li Keqiang said the slowest economic growth policy makers will tolerate is 7 percent, Beijing News reported. China, the world’s second-largest economy, is the biggest consumer of energy and raw materials.

Investors have increasingly turned their attention to earnings, with 35 S&P 500-listed companies releasing results today. Of the 130 companies on the gauge to have already reported, 71 percent have beat analysts’ profit estimates while about 52 percent have surpassed revenue expectations, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, added 2.8 percent today to 12.63, halting a streak of four straight declines. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, is down 30 percent this year.

Six of 10 S&P 500 main industries fell, with technology and health-care shares retreating at least 0.3 percent to lead losses.

Travelers dropped 3.8 percent to $82.21 for the biggest retreat in the Dow. Book value, a measure of assets minus liabilities, slipped to $66.65 per share from $68 three months earlier, the second-largest U.S. commercial insurer said today in a regulatory filing as it announced second-quarter results.

The decline was driven by a $1.77 billion drop in net unrealized gains in its $62.8 billion portfolio of fixed-maturity securities.

Netflix slumped 4.5 percent to $250.26 after saying it added 630,000 new U.S. customers for its Internet TV service in the second quarter, fewer than the average analyst projection of 700,000. The company forecast earnings of 30 cents to 56 cents a share in the third quarter, while the average analyst estimate called for 43 cents. Netflix shares have surged 183 percent this year through yesterday.

Waters Corp. slipped 5.9 percent to $99.17. The maker of laboratory products and instruments cut its full-year earnings forecast to a range of $5 to $5.10 a share. Analysts had estimated $5.21, according to the average estimate.

Broadcom Corp. fell 4.3 percent to $31.83. The maker of chips that help mobile devices connect to the Internet may be losing its market share, Michael McConnell, an analyst with Pacific Crest Securities LLC., said in a note. He cut the stock’s rating to sector perform, an equivalent of neutral, from outperform. The company is due to report results after the market close today.

Tobacco companies fell. The industry may face limits on selling menthol cigarettes in the U.S. after regulators determined the minty flavoring may encourage people to start smoking. Lorillard Inc. dropped 4.5 percent to $44.08. Altria Group Inc. retreated 2.4 percent to $36.

Texas Instruments climbed 4 percent to $38.93 after forecasting third-quarter sales of $3.09 billion to $3.35 billion. Analysts on average had forecast $3.2 billion. The world’s largest analog-chip maker predicted earnings will reach 49 cents to 57 cents a share, according to a statement. Analysts had projected 51 cents.

United Technologies Corp. gained 3 percent to $105.12 for the biggest gain in the Dow. The company boosted the lower end of its 2013 profit forecast after rising demand for jet engines and aerospace components helped second-quarter earnings exceed analysts’ estimates.

Lockheed Martin Corp. added 2 percent to $117.92. The world’s largest defense contractor raised its full-year profit forecast as it reported second-quarter earnings that beat analysts’ estimates. Profit rose at the Lockheed divisions that make missiles and provide training and logistics services, while it fell at the aeronautics unit.

Peabody Energy Corp. added 5 percent to $17.14 for the biggest gain in the S&P 500. The largest U.S. coal producer reported a surprise profit and forecast lower mining costs.

Wendy’s Co. jumped 8.2 percent to $7.23, a five-year high.

The fast-food chain reported earnings that beat estimates and boosted its dividend. The company said it will sell 425 restaurants to franchisees while reducing company ownership to around 15 percent from 22 percent.

Sourcefire Inc. rallied 28 percent to $75.49. Cisco Systems Inc., the biggest maker of networking equipment, agreed to acquire the cybersecurity company for about $2.7 billion. Cisco slid 0.6 percent to $25.56.

CapitalSource Inc. surged 22 percent to $11.97, the most since October 2008. PacWest Bancorp. said it agreed to buy the lender in a deal that will create California’s eighth-biggest commercial bank. CapitalSource investors will get about $11.64 a share in PacWest stock and cash, according to a joint statement.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Freedom is a state of mind – not freedom from something.

Krishnamurti, 1895-1986

As ever,

 

 

Carolann

 

I believe in pink.

I believe that laughing is the  best calorie burner.

I believe in kissing, kissing a lot.

I believe that happy girls are the prettiest girls.

I believe that tomorrow is another day and I believe in miracles.

-Audrey Hepburn, 1929-1993

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:

There’s a Super Full  Moon tonight – don’t forget to look!

July 22nd is Pied Piper of Hamelin Day.  The story is that the town of Hamelin (Hameln), in Westphalia, was infested with rats in 1284, and that mysterious piper in  a parti-coloured suit appeared in the town and offered to rid it of vermin for a certain sum, an offer accepted by the townspeople.  The Pied Piper fulfilled his contract but payment was not forthcoming.  On the following St. John’s Day, he reappeared and again played his pipe.  This time all the children followed him and disappeared into a cave (or went to Transylvania to set up a new German colony, depending on the version).  The story became popular in Britain from Robert Browning’s poem of 1842 of the same name.

Indeed, there are man

The earliest mention of the story seems to have been on a stained glass window placed in the Church of Hamelin c. 1300. The window was described in several accounts between the 14th and 17th centuries.  It was destroyed in 1660. Based on the surviving descriptions, a modern reconstruction of the window has been created by historian Hans Dobbertin. It features the colorful figure of the Pied Piper and several figures of children dressed in white.

This window is generally considered to have been created in memory of a tragic historical event for the town. Also, Hamelin town records start with this event. The earliest written record is from the town chronicles in an entry from 1384 which states: “It is 100 years since our children left.” Although research has been conducted for centuries, no explanation for the historical event is agreed upon. In any case, the rats were first added to the story in a version from c. 1559 and are absent from earlier accounts.

Photos of the Day –July 22nd, 2013

Tony Appleton, a town crier, announces the birth of the royal baby, outside St. Mary’s Hospital exclusive Lindo Wing in London. Palace officials say Prince William’s wife Kate has given birth to a baby boy. The baby was born at 4:24 p.m. and weighs 8 pounds 6 ounces. The infant will become third in line for the British throne after Princes Charles and William. Lefteris Pitarakis/AP

A youth cools off in a fine mist of water as she enjoys the sun at ‘Paris Plage’ (Paris Beach), along the banks of the River Seine in Paris. The beach atmosphere in the heart of the French capital includes stretches of imported sand and various free sporting activities for the public. Christian Hartmann/Reuters

Market Closes for July 22^nd, 2013

Market  Index	Close	Change
Dow  Jones	15545.55	+1.81    +0.01%
S&P 500	1695.53	+3.44    +0.20%
NASDAQ	3600.389	+12.774    +0.36%
TSX	12758.38	+73.25
		+0.58%

International Markets

Market  Index	Close	Change
NIKKEI	14658.04	+68.13
		+0.47%
HANG  SENG	21416.50	+54.08
		+0.25%
SENSEX	20159.12	+9.27
		+0.05%
FTSE 100	6623.17	-7.50
		-0.11%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.356	2.357
CND.   30 Year Bond	2.877	2.885
U.S.   10 Year Bond	2.4804	2.4783
U.S.   30 Year Bond	3.5501	3.5585

Currencies

BOC Close	Today	Previous
Canadian $	0.96718	0.96444
US   $	1.03394	1.03687
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36314	0.73360
US  $	1.31840	0.75850

Commodities

Gold	Close	Previous
London Gold   Fix	1335.35	1295.23
Oil	Close	Previous
WTI Crude Future	106.91	108.13
BRENT	109.36	109.36

Market Commentary:

Canada

By Katie Brennan

July 22 (Bloomberg) — Canadian stocks rose to the highest in four months, as raw-material producers climbed after gold surged the most in a year and industrial metals rallied.

Metals miners accounted for all 10 of the biggest gains in the Standard & Poor’s/TSX Composite Index. Eldorado Gold Corp. surged 9.6 percent as analysts at JPMorgan Chase & Co. recommended buying the shares. Barrick Gold Corp., the world’s largest producer of the precious metal, added 6.2 percent.

Financial stocks gained for a fourth day, with Royal Bank of Canada advancing 0.9 percent to stretch its winning streak to eight days.

The S&P/TSX rose 73.25 points, or 0.6 percent, to 12,758.38 at 4 p.m. in Toronto. The benchmark gauge has rallied 1.9 percent during a four-day winning streak to the highest since March 20. Trading volume was 9.3 percent below the 30-day average.

“These big jumps in financials and positive moves in the commodities may be enough to get people on the sidelines wanting to get back in,” Barry Schwartz, fund manager with Baskin Financial Services Inc. in Toronto, said in a phone interview.

He helps manage about C$500 million ($484 million).  “This may be the beginning of the bear in the Canadian market going back into his cave to hibernate.”

The S&P/TSX has advanced 7.8 percent since June 24, rebounding from a 7.2 percent rout that started May 22. The gauge is up 2.6 percent for the year.

Eight of the ten industries in the S&P/TSX advanced, led by a 3.8 percent surge among producers of raw materials. The S&P/TSX Materials Index is down 26 percent this year, even after a 13 percent surge in the past month, Gold advanced 3.3 percent today, the biggest gain since June 2012, to settle at $1,337.30 an ounce as speculation the Federal Reserve will maintain stimulus spurred demand for the metal. Silver rallied 5.4 percent, the most since April 25.

Copper rose for a third day. Aluminum, lead, nickel, tin and zinc also gained.

Eldorado Gold jumped 9.6 percent to C$8.11, the highest in seven weeks, after JPMorgan analyst John Bridges rated the stock “overweight” in new coverage. Barrick Gold climbed 6.2 percent to C$17.56.

Banks, brokerages and insurers in the S&P/TSX climbed 0.4 percent as a group, extending a gain of 2.7 percent gain from last week.

Royal Bank of Canada, the nation’s largest lender by assets, gained 0.9 percent to a record C$65.56. The stock has advanced 12 of the past 13 sessions for a 8.4 percent jump.

Telephone stocks declined the most in the index, falling 2.4 percent. Telus Corp. lost 3.1 percent to C$30.65 and Rogers Communications Inc. dropped 2.2 percent to C$41.15.

US

By Lu Wang and Katie Brennan

July 22 (Bloomberg) — U.S. stocks rose, as monthly flows into equity exchange-traded funds reached a five-year high, after housing data and earnings from companies including McDonald’s Corp. fueled speculation stimulus would continue.

Financial companies climbed the most among 10 industries in the Standard & Poor’s 500 Index as Bank of America Corp. added 1.2 percent. Newmont Mining Corp. jumped 5.8 percent, leading gains among gold producers, as the metal’s price surged the most in a year. McDonald’s slid 2.7 percent after revenue missed forecasts. Yahoo Inc. dropped 4.3 percent after saying activist investor Daniel Loeb is leaving the board. Homebuilders fell, with D.R. Horton Inc. losing 2.2 percent, as sales of previously owned houses unexpectedly dropped in June.

The S&P 500 rose 0.2 percent to 1,695.53 at 4 p.m. in New York, extending a record. The Dow Jones Industrial Average added 1.81 points, or less than 0.1 percent, to 15,545.55. About 5.2 billion shares traded hands on U.S. exchanges today, 19 percent below the three-month average.

“The earnings reflect a growing economy, but not a robust economy, not a runaway economy,” John Carey, a fund manager at Boston-based Pioneer Investment Management Inc., said by telephone. His firm oversees $211.5 billion. “There was concern that the economy may be doing a little better than the Fed was estimating and that might lead to an earlier tapering. Now with fairly modest economic growth and slow earnings growth, I don’t think people are going to be as worried about the tapering.”

The S&P 500 rallied 0.7 percent last week to a record, after better-than-forecast earnings and Federal Reserve Chairman Ben S. Bernanke said the central bank remains flexible about the duration of its asset-purchase program. Fed stimulus has helped fuel a surge in stocks worldwide, with the S&P 500 jumping 151 percent from its March 2009 low.

Investors have increasingly turned to stocks this month, as U.S. equity exchange-traded funds are getting money at the fastest rate since September 2008. After adding $10.2 billion to ETFs last week, the July total stands at $29.7 billion, according to data compiled by Bloomberg. Mutual funds that invest in U.S. equities had $4.55 billion of inflows during the week through July 10, ending seven consecutive weeks of withdrawals.

Individuals have 69 percent of their assets in mutual funds, almost a percentage point more than the average since 1992 and four points more than in 2012, Goldman Sachs Group Inc. said in a note to clients. Investors are demonstrating the “strongest risk appetite in five years,” according to the note dated July 19.

“What we’ve seen since June is market participants reengage pretty actively,” Arvin Soh, a New York-based portfolio manager with GAM, said by phone. His firm has more than $48 billion under management. “We’re off to a good start in the earnings season. Confidence is pretty high. Certainly, if you were say to say ‘do we know of many people that are bearish right now?’ Absolutely not.”

Data today showed purchases of previously owned houses fell 1.2 percent to a 5.08 million annualized rate last month, according to the National Association of Realtors. The median forecast of 79 economists surveyed by Bloomberg called for a 5.26 million pace. The pace of the demand was the second strongest since November 2009 following May’s downwardly revised 5.14 million rate.

In Asia, Japanese election results from the weekend strengthen Prime Minister Shinzo Abe’s ability to carry out his policy of monetary easing, fiscal stimulus and deregulation.

The broadest rally in U.S. stocks since at least 1990 has lifted shares of everything from the smallest companies to the biggest banks, signaling the bull market for America’s largest corporations will last at least until the end of the year, if history is a guide.

The S&P 500’s advance to a record last week coincided with highs in the Russell 2000 Index of smaller companies, the Dow Jones Transportation Index, the S&P 500 Financials Index and a gauge of economically sensitive equities overseen by Morgan Stanley. Since 1990, the S&P 500 has gained for six months on average after those measures peaked, according to data compiled by Bloomberg.

While bears say the breadth shows indiscriminate buying just as profit growth slows and the Fed prepares to curtail stimulus, gains across stock measures have proved an accurate forecaster of performance. In four market tops during the last 23 years, small-cap stocks and the cyclical gauge never peaked after the S&P 500.

About 84 percent of stocks in the index traded above their average prices from the past 50 days as of the end of last week, 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. There were 84 stocks in the index that closed at a 52-week high yesterday and only one at a 52-week low.

More than 150 S&P 500 companies, including Apple Inc., Amazon.com Inc. and Facebook Inc., report their earnings this week. Of the 108 companies on the gauge to have already reported quarterly results, 71 percent have exceeded analysts’ profit estimates and 52 percent have beaten sales projections, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, or VIX, lost 2 percent today to 12.29 for a fourth straight decline. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, hit a six-month high in June and has since fallen 40 percent.

Five of 10 S&P 500 main industries gained as financial and health-care shares rose more than 0.4 percent.

The KBW Bank Index advanced 1 percent to the highest level since October 2008. Bank of America increased 1.2 percent to $14.92. Financial companies have exceeded expectations so far in the earnings season more than any of other S&P 500 industry, with reported total profits 8.7 percent higher than forecast, data compiled by Bloomberg show.

Newmont, the biggest U.S. gold producer, climbed 5.8 percent to $30.35. Barrick Gold Corp., the world’s largest gold miner, jumped 6.2 percent to $17.56. Bullion futures rose above $1,300 an ounce in New York for the biggest gain in more than a year as speculation the Fed will maintain stimulus spurred demand for the metal.

Hasbro Inc. added 3.3 percent to $46.87 as higher sales in its games unit offset quarterly results that trailed estimates.

The world’s second-largest toymaker said sales of games such as “Monopoly” and “Magic: The Gathering” rose 19 percent to $255.4 million in the second quarter.

Federal-Mogul Corp. surged 31 percent, the most since October 2008, to $13.95. The auto-parts maker controlled by investor Carl Icahn returned to a profit in the second quarter.

McDonald’s fell 2.7 percent, the most in the Dow, to $97.58. The world’s largest restaurant chain posted second- quarter revenue that trailed analysts’ estimates and said economic weakness would hurt sales for the remainder of 2013.

Yahoo tumbled 4.3 percent to $27.86. The company will buy back $1.16 billion of shares held by Third Point LLC, leaving the fund with about 20 million shares, or less than a 2 percent stake. Loeb, who runs the fund, is leaving the board along with two other directors, Harry Wilson and Michael Wolf, added last year to end a proxy fight.

The S&P Supercomposite Homebuilding Index slumped 1.8 percent as all 11 members retreated. D.R. Horton declined 2.2 percent to $21.58. Lennar Corp. fell 2.1 percent to $34.80.

PulteGroup Inc. slid 1.1 percent to $19.14.

Gannett Co. dropped 1.9 percent to $25.87. The publisher of USA Today said second-quarter sales slipped less than 1 percent after print ads continued to slump even as licensing for its TV stations gained 62 percent from a year earlier.

DreamWorks Animation SKG Inc. fell 4.5 percent to $23.77.

The company may incur a writedown of as much as $50 million on the new movie “Turbo” because of a disappointing opening at the box office, James Marsh, a Piper Jaffray analyst in New York, wrote in a note to clients.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

When a man has an idea of what he must be and how he must act,

and undermines this by not ceasing to act in the opposite way,

he must realize that his principles, his beliefs, his ideals,

will inevitably fall prey to hypocrisy and dishonesty.

It is the ideal that begets the opposite of itself.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Science does not know its debt to imagination.

-Ralph Waldo Emerson, 1803-1882

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:

“Summer is a  time when we often seek out books that will charm or entertain us – something sunny to be savored from a  hammock or a beach chair.  But summer reading can touch us more deeply, changing us in ways that linger long after vacation season is over….The love of a book, like any great romance, depends on a peculiar chemistry between souls that’s hard to quantify and even harder to predict.  That’s the essential mystery of reading, that we never quite know when the magic will strike…” –Danny Heitman.

A friend of mine recently gave me a book to read which is an amazing story.  She brought it to me and said, “You have to read this.”   She is very erudite, and I truly respect her opinion on all things, so I started reading it right away.  It is entitled The Garden of Evening Mists by Tan Twan Eng.  It is definitely a page turner.  It was short-listed for The Man Booker Prize in 2012. I highly recommend it.  It will open your eyes/mind to a whole different world.  Happy reading from that hammock or beach chair!

Photo of the Day –July 19th, 2013

Saratoga Race Course pony boy Jesse Costa rides Vegas early morning in Saratoga Springs, N.Y. The 150th horse racing meet at Saratoga opens on Friday, July 19th. Mike Groll/AP

A true friend never gets in your way unless you happen to be going down. –Arnold H. Glasgow, 1905-1998.

Market Closes for July 19^th, 2013

Market  Index	Close	Change
Dow  Jones	15543.36	-5.18    -0.03%
S&P 500	1691.02	+1.65    +0.10%
NASDAQ	3587.615	-23.662    -0.66%
TSX	12684.78	+55.93
		+0.44%

International Markets

Market  Index	Close	Change
NIKKEI	14589.91	-218.59
		-1.48%
HANG  SENG	21362.42	+17.20
		+0.08%
SENSEX	20149.85	+21.44
		+0.11%
FTSE 100	6630.67	-3.69
		-0.06%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.357	2.398
CND.   30 Year Bond	2.885	2.920
U.S.   10 Year Bond	2.4783	2.5302
U.S.   30 Year Bond	3.5585	3.6300

Currencies

BOC Close	Today	Previous
Canadian $	0.96444	0.96373
US   $	1.03687	1.03764
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36253	0.73393
US  $	1.31408	0.76099

Commodities

Gold	Close	Previous
London Gold   Fix	1295.23	1284.37
Oil	Close	Previous
WTI Crude Future	108.13	108.04
BRENT	109.36	110.02

Market Commentary:

Canada

By Katie Brennan

July 19 (Bloomberg) — Canadian stocks rose, capping a fourth straight week of gains for the benchmark index, as an increase in metals prices boosted materials producers and China planned to remove the floor on lending rates.

Centerra Gold Inc. added 4.2 percent as the metal’s price climbed for a second week. Athabasca Oil Corp. jumped 6.7 percent as oil rose to a 16-month high. BlackBerry Ltd. fell 1.3 percent, reversing an earlier rally of as much as 2.2 percent.

The Standard & Poor’s/TSX Composite Index rose 56.28 points, or 0.5 percent, to 12,685.13 at 4 p.m. in Toronto. The benchmark gauge rallied 1.8 percent for the week. Trading volume was 8.4 percent below the 30-day average at this time of day.

“Materials, energy and financials are really the main areas,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. He helps manage about $1 billion ($953 million). “There’s a large commodity factor in the Toronto market. Gold and energy or oil stocks are up and it is nice to see them following the commodities. Financials have had a nice run and are pausing a bit today but are still up.”

A government report showed inflation in June quickening for a second month in June as the prices of gasoline and automobiles rebounded. The consumer price index rose 1.2 percent from a year ago following a 0.7 percent gain in May, matching the Bloomberg economist surveys forecast, Statistics Canada said today from Ottawa.

Bank of Canada Governor Stephen Poloz said this week that inflation will remain below his 2 percent target until mid-2015 and stay “subdued” over the next few months.

The People’s Bank of China said it will remove the floor on lending rates offered by financial institutions starting tomorrow. The announcement builds on pledges by Premier Li Keqiang to expand an overhaul of interest rates, a development the World Bank says must be a priority in reform of the financial system.

Four of 10 groups in the S&P/TSX advanced, led by a 2 percent gain among producers of raw materials.

Centerra Gold added 4.2 percent to C$4.27 and Detour Gold Corp. increased 6.7 percent to C$10. The price of the metal rose 0.7 percent to $1,294 an ounce in New York. Silver and copper also advanced.

Athabasca Oil jumped 6.7 percent to C$7 and Penn West Petroleum Ltd. gained 6.3 percent to C$12.91. Oil was up 1 cent to $108.05 a barrel after climbing as much as 1.2 percent.

Financial shares rose 0.2 percent for the fourth gain in five sessions. The S&P/TSX Commercial Banks Index rose for the seventh straight day to trade near a record high.

BlackBerry dropped 1.3 percent to C$9.30. The stock was up as much as 2.2 percent after BMO Capital Markets analyst Timothy Long upgraded his rating from underperform to market perform, an equivalent of hold. Long said the stock had less downside after plunging 38 percent since June 27, the day before the company reported disappointing sales.

US

By Alex Barinka and Nikolaj Gammeltoft

July 19 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index a fourth straight week of gains, as better-than-forecast results from General Electric Co. offset disappointing earnings from Google Inc. and Microsoft Corp.

GE surged 4.6 percent to the highest in almost five years, pacing gains among industrial shares. Pfizer Inc. advanced 2.1 percent to boost health-care stocks. Technology shares sank 2 percent. Microsoft, the world’s largest software maker, plunged 11 percent and Google, owner of the most popular Internet search engine, lost 1.6 percent. Advanced Micro Devices Inc. retreated 13 percent after saying its gross margin would narrow in the current quarter.

The S&P 500 rose 0.2 percent to a record 1,692.09 at 4 p.m. in New York, erasing an earlier decline of as much as 0.3 percent. The Dow Jones Industrial Average lost 4.8 points, or less than 0.1 percent, to 15,543.74. The Nasdaq 100 Index slid 1.1 percent to 3,044.93, the biggest drop in a month. About 5.9 billion shares traded hands on U.S. exchanges today, or 7.3 percent below the three-month average.

“Earnings have held up reasonably well,” said Henk Potts, who helps oversee $282 billion as an equity strategist at Barclays Plc’s wealth unit in London. “We’ve seen some winners and some losers coming through. There has been disappointment around technology, but we don’t necessarily think that is going to be a long-term trend.”

U.S. stocks rallied yesterday, sending the S&P 500 and the Dow average to records, as earnings from Morgan Stanley and UnitedHealth Group Inc. beat estimates and jobless-benefit claims declined to a two-month low. The S&P 500 climbed 0.7 percent in the past five days and is up 19 percent this year.

About 84 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 108 stocks in the index closed at a 52-week high yesterday; none finished at a 52-week low.

Equities futures got a brief boost today after the People’s Bank of China said it will remove the floor on lending rates offered by financial institutions starting tomorrow. The announcement builds on pledges by Premier Li Keqiang to expand an overhaul of interest rates, a development the World Bank says must be a priority in reform of the financial system.

Federal Reserve stimulus and better-than-forecast corporate earnings have helped fuel a surge in stocks worldwide, with the S&P 500 jumping 150 percent from its March 2009 low. Yesterday’s rally pushed the gauge’s valuation to 15.3 times estimated profit, the highest since April 2010, data compiled by Bloomberg show.

Investors have increasingly turned to stocks this month, as U.S. equity exchange-traded funds are getting money at the fastest rate since September 2008. About $27.9 billion was sent to American share ETFs in the last 13 days, about four times the amount deposited last month and the most in almost five years, according to data compiled by Bloomberg from about 1,500 funds.

Mutual funds that invest in U.S. shares had $4.55 billion of inflows during the week through July 10, ending seven consecutive weeks of withdrawals, according to data from the Washington-based Investment Company Institute released yesterday.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, dropped 8.8 percent to 12.56, its lowest level since May 17. The measure has fallen 11 out of the past 12 trading sessions.

Of the companies on the S&P 500 that have reported earnings so far, about 72 percent have topped analysts’ estimates, according to data compiled by Bloomberg. About 53 percent have beaten revenue projections.

Earnings among financial companies in the S&P 500 have outperformed the index average, with 80 percent of the firms surpassing estimates. The group’s results have exceeded forecasts by an average of 8.7 percent.

Banks and insurers are predicted to report earnings growth of 26 percent this quarter, data compiled by Bloomberg show.

Excluding financial stocks, analysts forecast S&P 500 companies will report a 2 percent drop in profit, the data show.

Capital One Financial Corp. climbed 3.1 percent to $69.14, the highest since October 2007. The lender that gets more than half its revenue from credit cards posted a second-quarter profit that beat analysts’ estimates by 8.3 percent as a boost in U.S. consumer confidence helped fuel spending.

Seven of 10 groups in the S&P 500 advanced. Health-care stocks rallied 1.4 percent as Pfizer gained 2.1 percent to $29.09.

Industrial shares added 1.2 percent. GE surged 4.6 percent to $24.72, the highest since September 2008. Demand for jet engines and drilling equipment drove the company’s order backlog to a record. Adjusted profit from continuing operations fell 8 percent to $3.7 billion, or 36 cents a share. That exceeded the 35-cent average analyst estimate.

Whirlpool Corp. rallied 8 percent to $128.91 for the biggest gain in the S&P 500. The maker of home appliances raised its 2013 earnings target as it anticipates to benefit from U.S. energy tax credits.

Schlumberger Ltd. rose 5.4 percent to $82.74, a two-year high, helping energy shares rally 1.4 percent. The world’s largest oilfield-services provider announced a $10 billion share buyback plan as quarterly profit rose and it forecast “double- digit” customer spending increases on crude exploration.

Chipotle Mexican Grill Inc. jumped 8.6 percent to $408.97, the highest in a year. The burrito chain that recently started selling tofu posted second-quarter profit that topped the average analyst estimate, as an increase in traffic boosted sales at its established restaurants.

Technology stocks led declines today, slumping 2 percent for a second day of losses. Earnings from the group have disappointed the most among 10 industries in the benchmark gauge. The 17 companies that have reported have missed estimates by an average 3.6 percent. The average result for all companies has come in 2.7 percent above forecasts, the data show.

Analysts predict the technology group will report a 8 percent decline in profit, compared with a 2.4 percent increase estimated for the S&P 500 as a whole.

“It is a bit of a lukewarm earnings overall with a couple of high-profile misses,” said James Dunigan, who helps oversee $118 billion as chief investment officer in Philadelphia at PNC Wealth Management. “We will start to see more of a micro view than a macro view of the market, looking at individual stocks and individual sectors across the board.”

Microsoft sank 11 percent to $31.40, the biggest drop since January 2009, after reaching a five-year high on July 16. The software company said fourth-quarter profit missed analysts’ projections by the biggest margin in at least a decade amid weaker demand for personal computers running Windows.

Google fell 1.6 percent to $896.60 after second-quarter sales and profit fell short of estimates as mobile advertising crimped average prices. The stock slid as much as 3.9 percent earlier in the session.

AMD sank 13 percent to $4.03 for the biggest drop in the S&P 500. The second-largest maker of personal-computer processors forecast a drop in third-quarter gross margin, even as it predicted higher sales.

Intel Corp. slipped 0.9 percent for a third day of losses, and EBay Inc. slid 2.5 percent. Both reported on July 17 sales forecasts that fell short of estimates.

Intuitive Surgical Inc. plunged 6.8 percent to $392.67, the lowest since October 2011. The robot surgery company cut its revenue forecast and earnings missed targets. Intuitive has lost about $6 billion in value over five months after disclosures about adverse events with its products, a recent recall and,now, a regulatory warning it hasn’t adequately reported on issues concerning the devices.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

As an individual, a specific entity, you have physical, mental, and nervous limits, among others.

If you know your own limits and try to stay within these limits,

you are free.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

When someone shows you who they are,

believe them the first time.

-Maya Angelou, 1928-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Birthday: July 18, 1918, Nelson Mandela.

After great pain, a formal feeling comes-

The Nerves sit ceremonious, like Tombs-

The stiff Heart questions was it He, that bore,

And Yesterday, or Centuries before?

 

The Feet, mechanical, go round-

Of Ground, or Air, or Ought-

A Wooden way

Regardless grown,

A Quartz contentment, like a stone-

 

This is the Hour of Lead-

Remembered, if outlived,

As Freezing persons, recollect the Snow-

First-Chill-then Stupor-then the letting go-

-Emily Dickinson

Photos of the Day –July 18th, 2013

Learners from the Melpark Primary School in Johannesburg listen to the history of former president Nelson Mandela as they celebrate the 95th birthday of Mandela during their school assembly. The presidency has issued a statement that Mandela’s condition is steadily improving after fears that he was close to death during ongoing hospital treatment. Denis Farrell/AP

Genetically engineered Pterophyllum Scalara fish glow in a tank under a blacklight while being displayed at the 2013 Bio Expo in Taipei, Taiwan. Pichi Chuang/Reuters

Market Closes for July 18^th, 2013

Market  Index	Close	Change
Dow  Jones	15548.54	+78.02    +0.50%
S&P 500	1689.37	+8.46    +0.50%
NASDAQ	3611.277	+1.277    +0.04%
TSX	12628.85	+60.08
		+0.48%

International Markets

Market  Index	Close	Change
NIKKEI	14808.50	+193.46
		+1.32%
HANG  SENG	21345.22	-26.65
		-0.12%
SENSEX	20128.41	+179.68
		+0.90%
FTSE 100	6634.36	+62.43
		+0.95%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.398	2.371
CND.   30 Year Bond	2.920	2.906
U.S.   10 Year Bond	2.5302	2.4888
U.S.   30 Year Bond	3.6300	3.5752

Currencies

BOC Close	Today	Previous
Canadian $	0.96373	0.96087
US   $	1.03764	1.04073
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36049	0.73503
US  $	1.31114	0.76269

Commodities

Gold	Close	Previous
London Gold   Fix	1284.37	1275.23
Oil	Close	Previous
WTI Crude Future	108.04	106.48
BRENT	110.02	110.00

Market Commentary:

Canada

By Katie Brennan

July 18 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest in almost seven weeks, as lenders climbed and U.S. Federal Reserve Chairman Ben S. Bernanke said it’s too early to determine when the central bank will reduce stimulus.

Royal Bank of Canada and Toronto-Dominion Bank each climbed 1.5 percent to record highs. Husky Energy Inc. and Trilogy Energy Corp. jumped more than 3.8 percent as oil rose to an almost 16-month high. Rubicon Minerals Corp. advanced 4.8 percent as gold increased for the third time in four days.

The Standard & Poor’s/TSX Composite Index rose 60.08 points, or 0.5 percent, to 12,628.85 at 4 p.m. in Toronto.

Trading volume was in line with the 30-day average.

“Investors are focusing on earnings in the U.S. to reengage the market,” said Jeffrey Bradacs, a fund manager with Manulife Asset Management Ltd. He helps oversee about C$1.5 billion ($1.4 billion). “Financials have outperformed and beat expectations.”

Banks, brokerages and insurers in the S&P/TSX climbed 1.2 percent as a group, the most among 10 industries. In the U.S., Morgan Stanley gained after reporting a 66 percent increase in second-quarter profit. Bank of America Corp. and Goldman Sachs Group Inc. reported earnings this week that beat analysts’ forecasts.

More than 80 Canadian companies in the TSX are scheduled to report earnings in the next two weeks.

Royal Bank, Canada’s largest lender by assets, rose 1.5 percent to a record C$64.78. Toronto-Dominion, the second- largest bank, advanced 1.5 percent to C$87.48, also a record high.

Canadian banks are rising as the nation’s housing market defies predictions of a major slowdown. Existing home sales rose 3.3 percent in June, almost matching the previous month’s gain that was the fastest in more than two years, according to Canadian Real Estate Association data on July 15.

Canadian wholesale sales rose at the fastest pace in more than two years in May, reaching a record on sales of fertilizer and food. Sales rose 2.3 percent to C$50.3 billion, Statistics Canada said today in Ottawa, compared with the median estimate for a 0.3 percent gain in a Bloomberg survey with 15 responses.

Fed policy makers have been debating the timing and pace of any cuts in the U.S. central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.

The Fed’s $85 billion in monthly asset purchases “are by no means on a preset course,” Bernanke said yesterday in his semiannual testimony to Congress. He added that the Federal Open Market Committee will “be responding to the data.”

Husky Energy Inc. added 4.1 percent to C$30.60. Trilogy Energy Corp. jumped 3.8 percent to C$31.02. Oil rose 1.5 percent to $108.04 a barrel on the New York Mercantile Exchange, the highest settlement level since March 2012.

Rubicon Minerals Corp. advanced 4.8 percent to C$1.31. Gold futures for December delivery rose 0.5 percent to settle at $1,285.50 an ounce on the Comex in New York.

US

By Nikolaj Gammeltoft and Alex Barinka

July 18 (Bloomberg) — U.S. stocks rose, sending benchmark indexes to records, as earnings from Morgan Stanley and UnitedHealth Group Inc. beat estimates and jobless claims fell amid testimony from Federal Reserve Chairman Ben S. Bernanke.

Morgan Stanley rallied 4.8 percent as stock-trading revenue bolstered profit. International Business Machines Corp. added 2 percent after raising its full-year earnings target.

UnitedHealth jumped 6.7 percent after profit beat estimates as membership surged. Intel Corp. lost 3.7 percent after forecasting third-quarter sales that may fall short of some analysts’ predictions. EBay Inc. tumbled 6.7 percent after its forecast for third-quarter sales missed estimates.

The Standard & Poor’s 500 Index gained 0.5 percent to 1,689.37 at 4 p.m. in New York. The index surpassed its previous intraday high of 1,687.18 set on May 22. The Dow Jones Industrial Average added 78.02 points, or 0.5 percent, to 15,548.54, also a record. More than 6 billion shares traded hands on U.S. exchanges today, or 5.4 percent below the three- month average.

“The underlying concept of what Bernanke is trying to accomplish is taking hold in the marketplace, and that’s a good thing,” Rick Fier, director of equity trading at Conifer Securities LLC in New York, said in an interview. His firm oversees about $8 billion. “The market gets the idea that a tapering is coming, the economy is improving and rates are still going to be low for a time. The initial jobless claims were better than expected. Earnings are coming in OK. All in all it’s hard not to be bullish on the market here.”

Fed stimulus and better-than-forecast corporate earnings have fueled a surge in stocks worldwide, with the benchmark U.S. index jumping as much as 150 percent from its March 2009 low.

Today’s S&P 500 rally pushed the estimated 2013 price-to- earnings ratio to 15.3, the highest since April 2010.

About 81 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 27.8 percent in June. There were 56 stocks in the index that closed at a 52-week high yesterday and none at a 52-week low.

The S&P 500 rose yesterday as Bernanke said the pace of economic recovery will determine when the Fed reduces its asset purchases. In a prepared report, he said the central bank’s asset purchases are not on a preset course. In testimony to the Senate Banking Committee today, Bernanke said data since the Fed’s June meeting is mixed and it is “way too early to make any judgment” as to whether policy makers will start tapering purchases in September.

“Bernanke is really guiding the market so that there are no real shocks when Fed actions do take place,” Jonathan Aldrich-Blake, who helps oversee about $10 billion at Ashburton Ltd., said by phone from Jersey, Channel Islands. “The ‘bad news is good news’ we saw in the market earlier this year is starting to die down as people have more belief in this recovery.”

Equity futures rose today after a report showed fewer Americans than forecast filed applications for unemployment benefits as the effects of auto-plant shutdowns began to ebb.

Separate data from the Conference Board indicated an index of leading indicators in the U.S. economy was unchanged in June.

Stocks extended gains after a report showed the Philadelphia Fed’s general economic index increased to 19.8 in July from 12.5 the prior month. Readings greater than zero signal expansion in the area, which covers eastern Pennsylvania, southern New Jersey and Delaware.

“Jobless claims were a little bit better than expected which gives some comfort,” Richard Sichel, who oversees about $1.9 billion as chief investment officer at Philadelphia Trust Co., said by phone. “And then you have earnings rolling full steam now so it becomes a stock-by-stock market.”

Stocks may also be getting a boost as equity exchange- traded funds and mutual funds are attracting money at the fastest rate since January. Investors pulled in about $27 billion to equity ETFs so far this month after $19.1 million of outflows in June, according to Bloomberg data tracking about 1,500 securities.

Mutual funds that invest in U.S. shares had $4.55 billion of inflows during the week through July 10, ending seven consecutive weeks of withdrawals, according to data from the Washington-based Investment Company Institute released yesterday.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, dropped 0.1 percent to 13.77 for the 10th decline in 11 sessions. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high on June 20 and has fallen 33 percent since.

Some 32 companies, including Google Inc. and Microsoft Corp., were scheduled to post quarterly results today. Per-share earnings topped estimates at about 73 percent of S&P 500 members that have reported for the quarter so far, data compiled by Bloomberg show.

Google slid 5.5 percent to $860.36 at 4:33 p.m. New York time. The owner of the world’s most popular Internet search engine reported second-quarter sales that fell short of analysts’ estimates as advertising tied to mobile devices crimped average prices.

Microsoft, which also reported after the markets closed, dropped 4.8 percent as profit missed analysts’ projections after Windows sales were hurt by shrinking demand for personal computers and the company wrote down the value of unsold inventory of its Surface tablet.

Futures on the Nasdaq 100 Index dropped 1 percent to 3,047.50 after the technology-heavy gauge fell 0.2 percent during the regular session.

Eight of 10 groups in the S&P 500 advanced today, led by a 1.3 percent surge among financial companies. The KBW Bank Index added 1.7 percent to its highest level since October 2008.

Morgan Stanley jumped 4.4 percent to $27.70 after posting a 66 percent earnings increase that beat analysts’ predictions as trading revenue rose and the profit margin at its wealth- management unit climbed.

Bank of America Corp., which yesterday reported earnings that beat estimates, gained 3.1 percent to 14.76. SLM Corp., the student lender known as Sallie Mae, advanced 4.4 percent to $24.44 after reporting second-quarter core earnings that beat analysts’ estimates as private education delinquencies fell.

Shares in companies whose earnings are most closely tied to economic growth rose to a record. The Morgan Stanley Cyclical Index added 1.1 percent to the highest level since the gauge started in 1978.

Automakers climbed 2.3 percent as a group, the biggest gain among 24 industries in the S&P 500. Johnson Controls Inc. led the advance, as shares surged 8.3 percent to $40.43, the most in the benchmark gauge. The largest U.S. auto-parts maker will sell its HomeLink line of installed garage-door openers to Gentex Corp. for $700 million as it seeks a buyer for the rest of its automotive electronics unit.

The Bloomberg U.S. Airlines Index climbed 1.9 percent to the highest since November 2007 as nine of 10 members advanced.

Boeing Co., which is not in the index, jumped 2.7 percent to $107.63. U.K. authorities said a beacon made by Honeywell International Inc. was likely the cause of last week’s fire on one of the planemaker’s 787 Dreamliner jets. Honeywell added 0.6 percent to $82.97, reversing a dip of as much as 0.5 percent.

IBM gained 1.8 percent to $197.99 after predicting earnings will be at least $16.90 a share in 2013, up from its earlier prediction for $16.70. The company is betting that faster- growing market such as cloud computing and data analysis can offset a slowdown in information-technology spending.

UnitedHealth jumped 6.5 percent to $70.55, the most in the Dow. The biggest U.S. health insurer reported second-quarter profit that beat analyst estimates as a Brazilian acquisition and gains in U.S. plans swelled enrollment by 25 percent.

Sherwin-Williams Co. fell 8.3 percent to $167.94. The paint maker’s $2.34 billion bid to acquire Mexican competitor Consorcio Comex SA was rejected by the country’s antitrust regulator, which said the combined company would be able to set artificially high prices.

Intel dropped 3.8 percent to $23.24 for the biggest slide in the Dow. The world’s largest semiconductor maker said late yesterday sales in the current period may miss estimates as a slump in the personal-computer market erodes its largest business.

EBay tumbled 6.7 percent, the most in almost two years, to $53.52. Third-quarter sales will be $3.85 billion to $3.95 billion as e-commerce growth rates in Europe and Korea slow and currencies weaken against the U.S. dollar, the online marketplace provider said. That’s less than the average analyst projection of $3.97 billion.

American Express Co. fell 3.6 percent to $74.01 after the biggest credit-card issuer reported revenue that missed some estimates. The drop extends a two-day decline to 5.4 percent, the most since November 2011, after some analysts said yesterday that a European Commission proposal to cap bank-card fees would crimp profit.

Phone stocks dropped 0.9 percent as a group, for the biggest drop among 10 S&P 500 industries. Verizon Communications Inc. slumped 1.5 percent to $49.97. The second-largest U.S. phone company said the surge in demand for high-speed wireless Internet cut into profit margins and boosted the need for network investments.

Amphenol Corp. plunged 9.7 percent to $76.35 for the biggest drop in the benchmark gauge. The maker of fiber-optic connectors and other telecommunications equipment for companies such as Apple Inc. cut its profit and sales forecasts for the year.

Celgene Corp. declined 2.6 percent to $133.05 after saying it will stop a late-stage trial of its Revlimid drug for treatment of leukemia in elderly patients because of the number of deaths in the study.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The absurd denial of the truth is natural in man.

Man does not want to be, but to appear to be.

He does not want to see what he is, but tries only to see himself as the person other people take him for, when they talk about him.

Swami Prajnanpad, 1891-1974

As ever,

 

Carolann

 

Know how to live the time that is given you.

-Dario Fo,  1926-

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 an amazing story today reported by correspondent Liz Fuller-Wright about an ancient forest that was recently discovered off the coast of Alabama, sixty feet underwater, 10 miles from shore, which has been buried for tens of thousands of years.  She writes, “While most of the once-majestic trees are gone, sonar data has found between 50 and 100 stumps, as well as an unknown number of logs.  The forest itself has been dead at least 50,000 years, say scientists at the Lawrence Livermore Laboratory in California who dated samples from the trees by looking for carbon-14, a radio-active isotope that is found in every living organism but that steadily decays after the organism dies.  The scientists had expected to find that the trees were about 12,000 years old – the age of the last big ice age, when sea levels were low – so they were surprised to find that the trees had no carbon-14 at all, which puts them older than 50,000 years.

Another surprise: The wood still seemed fresh.   Ben Raines, one of the first scuba divers to explore the site, tweeted a picture showing the sap-rich wood:

BEN RAINES/AI.COM/AP

TREE REMAINS: Fish swim past a stump that remains from an ancient forest found in the Gulf waters 10 miles off the coast of Mobile, Ala.

As the story goes, a fisherman went out to sea shortly  after hurricane Katrina scoured the Gulf Coast.  He found an unusual run of red snapper, and after fishing it for several days, he asked a scuba-diving friend to check out what could be causing the usually flat and boring seafloor to teem with life.  ‘It’s a forest,’  the diver reported.

The underwater forest remained a closely guarded secret until Raines tracked down the rumors and headed out with a camera.  His photos reveal that new life has sprung up from these long-dead trees.  [Dr. Grant] Harley [from the University of Southern Mississippi] and paleoclimatologist Kristina DeLong, the Louisiana State University research scientist who prepared the samples for carbon dating, are eager to get back to the forest and gather more samples, in hopes of piecing together a picture of the ancient forest.

They’re just waiting for the jet stream to warm and calm the waters of the Gulf, which should happen by late summer.  They don’t want to wait any longer than that – another hurricane could sweep into the area and rebury the site at any time.”

On this day, July 17^th, in 1959, Mary Leakey found a rare hominid skull in Africa believed to be a human ancestor.  The artifact leads to new theories about the origins of civilization.

Photos of the Day –July 17th, 2013

A monkey plays in a pond surrounded by carp at a wildlife park in Hefei, Anhui province, July 16, 2013. Reuters

German electronic band Kraftwerk performs with a 3D stage set during the 47th Montreux Jazz Festival in Montreux, Switzerland. Denis Balibouse/Reuters

Market Closes for July 17^th, 2013

Market  Index	Close	Change
Dow  Jones	15470.52	+18.67    +0.12%
S&P 500	1680.91	+4.65    +0.28%
NASDAQ	3610.000	+11.499    +0.32%
TSX	12568.77	+51.88
		+0.41%

International Markets

Market  Index	Close	Change
NIKKEI	14615.04	+15.92
		+0.11%
HANG  SENG	21371.87	+59.49
		+0.28%
SENSEX	19948.73	+97.50
		+0.49%
FTSE 100	6571.93	+15.58
		+0.24%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.371	2.407
CND.   30 Year Bond	2.906	2.924
U.S.   10 Year Bond	2.4888	2.5317
U.S.   30 Year Bond	3.5752	3.5855

Currencies

BOC Close	Today	Previous
Canadian $	0.96087	0.96343
US   $	1.04073	1.03796
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36537	0.73240
US  $	1.31194	0.76223

Commodities

Gold	Close	Previous
London Gold   Fix	1275.23	1291.14
Oil	Close	Previous
WTI Crude Future	106.48	106.00
BRENT	110.00	109.27

Market Commentary:

Canada

By Katie Brennan and Eric Lam

July 17 (Bloomberg) — Canadian stocks rose to the highest in six weeks after lenders rallied as the central bank raised its 2013 growth forecast and investors analyzed testimony from U.S. Federal Reserve Chairman Ben S. Bernanke.

Royal Bank of Canada, the nation’s largest lender, climbed to a seven-week high. Pengrowth Energy Corp. surged 8.3 percent as at least two analysts upgraded the company. Cineplex Inc. advanced to a record high after offering to acquire a digital signage company. B2Gold Corp. and Torex Gold Resources Inc. sank at least 7.8 percent as the price of gold slumped.

The Standard & Poor’s/TSX Composite Index rose 51.88 points, or 0.4 percent, to 12,568.77 at 4 p.m. in Toronto, the highest close since June 4. Trading was 5.6 percent lower than the 30-day average.

“The banks are up off of U.S. banks, like Goldman Sachs, whose results so far are pretty good,” said John Goldsmith, deputy head of equities with Montrusco Bolton Investments in Toronto. The firm manages about C$5.6 billion. “Until the end of the month when Canada earnestly kicks off its earnings season, a lot of it will be led by earnings from the States.”

The Fed’s Bernanke said in prepared testimony to Congress this morning that the central bank’s asset purchases “are by no means on a preset course” and could be either reduced or expanded as conditions warrant.

Bank of Canada Governor Stephen Poloz kept his main interest rate unchanged at 1 percent in his first policy decision since taking over the job in June. He said there will be a “gradual normalization” of borrowing costs over time as slack in the economy disappears and inflation picks up.

The central bank raised its economic growth forecast for this year to 1.8 percent from an April prediction of 1.5 percent, while lowering the 2014 prediction to 2.7 percent from 2.8 percent.

Poloz is counting on exports and business investment to accelerate growth in the world’s 11th largest economy. Expansion has been slowed by weak foreign demand, leading to the longest streak of trade deficits in a quarter century.

More than 60 Canadian companies on the TSX are scheduled to report second-quarter earnings in the next two weeks. Bank of America Corp. beat analysts estimates today, posting a 63 percent gain in second-quarter profit. Goldman Sachs Group Inc. said yesterday it doubled its earnings, beating forecasts.

Eight of 10 groups in the S&P/TSX advanced, with financial stocks rising 1 percent as a group.

Royal Bank added 2 percent to C$63.80, the highest close since May 29. Bank of Nova Scotia gained 1.6 percent to C$58.04 and Canadian Imperial Bank of Commerce added 1.5 percent to C$77.12.

Pengrowth Energy surged 8.3 percent to C$5.88, the biggest gain since March 2009, after the oil producer said yesterday it has agreed to sell C$700 million of non-core assets that will be used to fund the first phase of its Lindbergh oil-sands project.

Jeremy Kaliel, analyst with CIBC World Markets, and Jonathan Fleming, analyst with Cormark Securities Inc., each raised their ratings for the stock.

Cineplex, Canada’s largest movie theater chain, added 1.4 percent to C$38.22, the highest close since its initial offering in 2003. The Toronto-based company said today it has offered to acquire London, Ontario-based EK3 Technologies Inc. for an initial price of C$40 million. That figure could rise to C$78 million if certain operating targets are achieved in 2015.

Torex Gold retreated 7.8 percent to C$1.30 and B2Gold lost 7.9 percent to C$2.55 as gold futures for December delivery fell 1 percent to settle at $1,278.80, the biggest loss since July 5.

US

By Alex Barinka and Nikolaj Gammeltoft

July 17 (Bloomberg) — U.S. stocks rose, after the Standard & Poor’s 500 Index snapped an eight-day rally yesterday, as Federal Reserve Chairman Ben S. Bernanke said the central bank’s asset purchases are not on a preset course.

Bank of America Corp. and Bank of New York Mellon Corp. gained more than 1.9 percent after earnings topped forecasts.

Yahoo! Inc. advanced 10 percent as its profit beat estimates.

American Express Co. retreated 1.9 percent after analysts said a European Union proposal would cut profits. Caterpillar Inc. dropped 1.7 percent after short seller Jim Chanos said the company is being hurt by a slowdown in commodities demand.

The S&P 500 rose 0.3 percent to 1,680.91 at 4 p.m. in New York, after falling from a record high yesterday. The Dow Jones Industrial Average climbed 18.67 points, or 0.1 percent, to 15,470.52 today. Almost 5.7 billion shares traded hands on U.S. exchanges today, or 12 percent below the three-month average.

“The market is responding to the fact that the Fed is not going to create an arbitrary definition of when and how the QE program is going to end,” Stephen Wood, the New York-based chief market strategist who helps oversee about $174 billion at Russell Investments, said by phone. “They want to maintain flexibility in their policies.”

Bernanke said the central bank’s bond purchases, or quantitative easing, “are by no means on a preset course” and could be reduced more quickly or expanded as economic conditions warrant.

“We’re going to be responding to the data,” Bernanke said today to the House Financial Services Committee. “If the data are stronger than we expect, we’ll move more quickly” to reduce purchases. If data “don’t meet the kinds of expectations we have about where the economy’s going, then we would delay that process or potentially increase purchases for a time.”

Central bank stimulus has helped fuel a surge in stocks worldwide, with the benchmark U.S. index jumping 148 percent from its March 2009 low. Fed policy makers have been debating the timing and pace of any cuts in the central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.

The U.S. economy maintained a “modest to moderate pace” of growth in recent weeks, the Fed said today in its Beige Book business survey.

“Residential real estate and construction activity increased at a moderate to strong pace in all reporting districts,” the Fed said in the survey, which is based on anecdotal reports from its 12 regional banks. “Manufacturing expanded in most districts since the previous report.”

Data today showed U.S. housing starts unexpectedly fell in June to the lowest level in almost a year. Work began on 836,000 houses at an annualized rate last month, the least since August 2012 and down 9.9 percent from a revised 928,000 pace in May, figures from the Commerce Department showed today in Washington.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, dropped 4.4 percent to 13.78. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high on June 20 and has fallen 33 percent since.

Nine out of 10 industries in the S&P 500 advanced, with phone, raw-material and financial companies increasing more than 0.5 percent.

Some 21 companies, including EBay Inc. and International Business Machines Corp., were due to release results today. Per- share earnings topped estimates at about 71 percent of S&P 500 members that have reported for the quarter so far, data compiled by Bloomberg show.

IBM rose 1.7 percent at 5:25 p.m. New York time, as the computer-services company topped earnings estimates and raised its full-year forecast after the end of regular trading. Among other companies reporting after the market close, eBay tumbled 6.3 percent and Intel Corp. slid 3.4 percent as their revenue forecasts fell short of estimates.

Bank of America added 2.8 percent to $14.31 during regular trading. The second-biggest U.S. lender beat analysts’ estimates by posting a 63 percent gain in profit that was driven by lower provisions for bad credit and a drop in expenses.

Bank of New York Mellon climbed 1.9 percent to $30.92. The world’s largest custody bank said profit rose 79 percent as the stock-market rally boosted assets and fees for overseeing them.

Yahoo rose 10 percent to $29.66, the highest level since February 2008. The company reported second-quarter earnings of 35 cents a share, beating analysts’ estimates. The company made $225 million in earnings in the quarter from its equity interest in both Alibaba Group Holding Ltd. and Yahoo Japan Corp., up from $180 million in the same period last year.

DuPont Co. jumped 5.3 percent, the most in the Dow, to $57.25 after the New York Times’s Andrew Ross Sorkin said Trian Fund Management LP’s Nelson Peltz amassed a “very big” stake in the largest U.S. chemicals company by market value. Sorkin spoke at the CNBC Institutional Investor Delivering Alpha Conference in New York.

Anne Tarbell, a spokeswoman for Trian, declined to comment on DuPont. Michael Hanretta, a spokesman for Wilmington, Delaware-based DuPont, didn’t immediately return a call seeking comment.

An index of U.S. airlines rose 3.7 percent to the highest since 2007 after Morgan Stanley said it expects “more beats than misses” for carriers’ second-quarter earnings. All 10 members in the index advanced.

United Continental Holdings Inc., the world’s largest carrier by passenger traffic, surged 8.1 percent to $33.69, climbing above its average price for the past 50 days. Delta Air Lines Inc. soared 3.3 percent to $19.92, the highest since November 2007.

St. Jude Medical Inc. advanced 5.2 percent to $51. The Minnesota-based maker of heart-rhythm devices surged after second-quarter revenue fell less than analysts had estimated.

U.S. Bancorp, the nation’s largest regional lender, fell 1.4 percent to $36.74 after the firm said it expects mortgage revenue to continue to decline this year. Second-quarter net income climbed 4.9 percent to $1.48 billion, or 76 cents per share, matching the average estimate of 34 analysts.

American Express slipped 1.9 percent to $76.80. The European Commission will propose that interchange fees paid by retailers on card transactions should be capped at 0.2 percent for debit card payments and 0.3 percent for credit cards, according to draft plans obtained by Bloomberg.

The proposal would reduce New York-based American Express’s earnings-per-share by about 3.7 percent because the company gets 11 percent of its business from Europe, Morgan Stanley analysts said in a research note. Credit Suisse analysts said the plan would hurt American Express more than MasterCard Inc. or Visa Inc., which have already agreed to provisionally cap some fees.

American Express reported earnings after the close of regular trading, beating analyst estimates.

Mattel Inc., the largest U.S. toymaker, fell 6.8 percent to $43.16. Second-quarter profit fell short of analyst forecasts, as declining demand for the aging Barbie doll line and increased costs to expand the American Girl chain hurt results. Hasbro Inc. fell 2.4 percent to $46.03.

McDonald’s Corp. slid 0.8 percent to $100.10. Janney Montgomery Scott LLC downgraded the world’s largest restaurant chain to neutral from a buy rating, with a 12-month price target of $105 a share.

Caterpillar dropped 1.7 percent to $86.67. The largest maker of construction and mining equipment “is tied to the wrong products at the wrong time in the cycle,” Chanos said today in a speech at the CNBC Institutional Investor Delivering Alpha Conference in New York.

Chanos, the president and founder of Kynikos Associates Ltd., said he’s shorting the stock and the company is “being aggressive with their acquisitional accounting.”

Jim Dugan, a spokesman for Caterpillar, declined to comment on Chanos’s statements.

American Tower Corp. fell 1.1 percent to $73.87 after short-seller Carson Block said the company is engaged in a “value-destroying investment binge” that will knock shares down 40 percent. Shares of the operator of cell-phone antennas have almost tripled since 2008.

The company has overstated the value of acquisitions in the U.S. and Brazil, and the shares are worth $44.57 a share, Block’s firm, Muddy Waters Research, wrote in a report published on its website today.

Matt Peterson, an American Tower spokesman, didn’t respond to messages seeking comment.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The spiritual can never be attained,

until the material has been extinguished.

Swami Vivekananda, 1863-1902

As ever,

 

Carolann

 

Press on.  Nothing in the world can take the place of persistence.  Talent will not: nothing is more common than unrewarded talent.  Education alone will not: the world is full of educated failures. Persistence alone is omnipotent.

-Calvin Coolidge, 1872-1933

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

“This is the season for picnics, when the weather is set and fair and the ground quite dry; little rain has fallen with us for weeks.   It is perfect to spread out the rug on a newly-mown field and to sit back for a while and feel you are part of the countryside, smelling the grass and the hedgerows and listening to the sounds of the insects around you.  You may find yourself sharing a hamper full of exotic food and sparkling champagne in the peace and beauty of the Glyndbourne garden, the music of the first act still ringing in your ears….In contrast, when the spirit moves you, at a moment’s notice you may gather up a slice of bread, wash a lettuce, hard-boil egg, fill a bottle with newly-made elderflower cordial and settle at the end of your own garden or somebody else’s – unpack your basket and enjoy the solitude of the countryside where you cannot hear the telephone ringing…” –from A Countrywoman’s Notes by Rosemary Verey.

Photos of the Day –July 16th, 2013

A climate-controlled gondola of the SkyView, a 200-foot tall Ferris wheel, rises over Atlanta, Georgia. The giant ferris wheel opened to the public Tuesday. Jaime Henry-White/AP

A Prince Harry lookalike turns up to donate toys to the hospital as a publicity stunt outside the Lindo Wing at St Mary’s Hospital in London. Britain’s Kate, the Duchess of Cambridge will give birth to her first child, who will be third-in-line to the throne, at the hospital in mid-July. Kirsty Wigglesworth/AP

Market Closes for July 16^th, 2013

Market  Index	Close	Change
Dow  Jones	15451.85	-32.41    -0.21%
S&P 500	1676.26	-6.24    -0.37%
NASDAQ	3598.500	-8.991    -0.25%
TSX	12516.89	-11.46
		-0.09%

International Markets

Market  Index	Close	Change
NIKKEI	14599.12	+92.87
		+0.64%
HANG  SENG	21312.38	+9.07
		+0.04%
SENSEX	19851.23	-183.25
		-0.91%
FTSE 100	6556.35	-29.76
		-0.45%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.407	2.414
CND.   30 Year Bond	2.924	2.918
U.S.   10 Year Bond	2.5317	2.5409
U.S.   30 Year Bond	3.5855	3.5967

Currencies

BOC Close	Today	Previous
Canadian $	0.96343	0.95889
US   $	1.03796	1.04288
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36517	0.73251
US  $	1.31524	0.76031

Commodities

Gold	Close	Previous
London Gold   Fix	1291.14	1285.00
Oil	Close	Previous
WTI Crude Future	106.00	106.32
BRENT	109.27	109.32

Market Commentary:

Canada

By Eric Lam

July 16 (Bloomberg) — Canadian stocks fell, dragged down by a drop in health-care companies, as investors awaited earnings and watched for signals from central bank officials.

WestJet Airlines Ltd. lost 3.7 percent to pace declines among industrial stocks. Barrick Gold Corp. and Iamgold Corp. added at least 5.9 percent as gold rose for a second day. Wi-Lan Inc. rallied 14 percent after plunging the most in 12 years yesterday. Teck Resources Ltd. gained 2.3 percent as copper advanced.

The Standard & Poor’s/TSX Composite Index fell 11.46 points, or 0.1 percent, to 12,516.89 at 4 p.m. in Toronto. The gauge has gained 0.7 percent this year. Trading was in line with the 30-day average.

“The summer rally has already happened so now it’s tough to continue further,” said Paul Gardner, a fund manager with Avenue Investment Management in Toronto. The firm manages about C$300 million ($288 million). “You’re waiting for earnings to come in and earnings have generally been pretty good.”

More than 60 Canadian companies on the TSX are scheduled to report second-quarter earnings in the next two weeks.

Bank of Canada Governor Stephen Poloz is set to deliver his first interest-rate decision since taking over the job in June from former governor Mark Carney, who departed to run the Bank of England. Poloz, who has said Canada’s expansion requires “patience,” will probably keep his benchmark interest rate at 1 percent tomorrow where it’s been since September 2010, according to a Bloomberg economist survey.

The world’s 11th largest economy has been slowed by weak foreign demand, leading to the longest streak of trade deficits in a quarter century.

The U.S. Federal Reserve will publish tomorrow its latest beige book, which updates local economic conditions. Fed Bank of Kansas City President Esther George, speaking today on Fox Business News, said the U.S. was on the “right path” for economic recovery and that cuts in the pace of stimulus are “appropriate.” Central bank stimulus has helped fuel a surge in stocks worldwide.

Valeant Pharmaceuticals International Inc. fell for the first time in five days, dropping 2.8 percent to C$94.93 for the biggest loss in a month. Health-care stocks lost the most among 10 industries in the S&P/TSX, declining 2.4 percent.

WestJet, the Calgary-based discount airline, slumped 3.7 percent to C$20.69. North American low-cost airline demand jumped 6.1 percent year-over-year in June, according to a report from George Ferguson, an air transport analyst with Bloomberg Industries.

Load factor, a measure of aircraft capacity and use, rose 20 basis points to 84.7 percent for the industry, with WestJet and JetBlue Airways Corp. registering the only declines, Ferguson said.

Wi-Lan, a patent licensing company based in Ottawa, rallied 14 percent to C$3.83, the biggest gain in two years. The stock yesterday plunged 31 percent, the most since 2001, after losing a U.S. patent infringement trial against Alcatel-Lucent and Ericsson AB.

A jury in Tyler, Texas, said the two companies didn’t infringe on three Wi-Lan patents, while phones made by HTC Corp. and Sony Corp. were cleared for infringement for a fourth patent.

Barrick Gold, the world’s largest producer of the metal, climbed 5.9 percent to C$16.62 while Iamgold increased 6.8 percent to C$4.86. Gold futures for August delivery gained 0.5 percent to settle at $1,290.40 an ounce in New York, for the sixth advance in seven sessions.

Fortuna Silver Mines Inc. rallied 5.3 percent to C$3.61 as silver for September delivery rose 0.5 percent.

Teck Resources, Canada’s largest diversified miner, rose 2.3 percent to C$23.73 as copper advanced for the first time in three days.

US

By Alex Barinka and Nikolaj Gammeltoft

July 16 (Bloomberg) — U.S. stocks fell, halting the longest rally in the Standard & Poor’s 500 Index since January, as Coca-Cola Co.’s profit dropped and a Federal Reserve official called for cuts to stimulus.

Coca-Cola slid 1.9 percent as the beverage company said volumes missed estimates amid slowing economic growth in China and Europe. Goldman Sachs Group Inc. dropped 1.7 percent even after profit beat analysts’ projections. Automakers plunged 1.8 percent after Goldman downgraded the group to neutral from buy, with Ford Motor Co. sliding 3 percent. Baidu Inc. jumped 4 percent after agreeing to acquire 91 Wireless for $1.9 billion.

The S&P 500 fell 0.4 percent to 1,676.26 at 4 p.m. in New York, after rising eight straight sessions to a record close yesterday. The Dow Jones Industrial Average lost 32.41 points, or 0.2 percent, to 15,451.85. Almost 5.5 billion shares traded hands on U.S. exchanges today, or 15 percent below the three- month average.

“Hawkish comments from Kansas City Fed President George as to the timing of adjustments to the Fed’s bond purchases are putting modest pressure on the indices,” Ryan Larson, the Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in an interview. His firm oversees $290 billion. “Outside of that, earnings are in the early stages and many are waiting for chairman Bernanke’s testimony to Congress tomorrow for further direction about future Fed policy.”

The S&P 500’s decline accelerated after Fed Bank of Kansas City President Esther George said the U.S. was on the “right path” for economic recovery and that cuts in the pace of stimulus are “appropriate.” George, speaking on Fox Business Network, also said inflation appears to be “moderate” and the benchmark interest rate should not be held too low for too long.

Fed Chairman Ben S. Bernanke bolstered the rally last week after he backed sustained monetary stimulus. Bernanke will deliver his semi-annual monetary policy report to Congress this week, starting tomorrow at the House Financial Services Committee.

Central bank stimulus has helped fuel a surge in stocks worldwide, with the benchmark U.S. index jumping as much as 149 percent from its March 2009 low. Fed policy makers have been debating the timing and pace of any cuts in the central bank’s $85 billion in monthly bond purchases. Bernanke has said any reduction will be tied to sustained improvement in the labor market or an increase in inflation.

A report today showed the cost of living in the U.S. rose in June as gasoline prices increased the most in four months.

The consumer-price index increased 0.5 percent after a 0.1 percent gain the prior month, Labor Department figures showed.

The median forecast in a Bloomberg survey called for a 0.3 percent rise.

Separate data showed that industrial production rose in June by the most in four months, signaling U.S. manufacturing is improving heading into the second half of the year. Output at factories, mines and utilities climbed 0.3 percent, the biggest advance since February, after being little changed in May.

The Chicago Board Options Exchange Volatility Index, which measures the cost of protecting against swings on the S&P 500, jumped 4.6 percent to 14.42. The gain snapped eight consecutive declines, the longest streak of losses since October 2011.

About 72 percent of the S&P 500 companies that have reported earnings so far have beaten analyst forecasts, data compiled by Bloomberg show. Yahoo! Inc. fell 1.9 percent at 4:41 p.m. in New York after reporting sales that missed estimates.

Coca-Cola declined 1.9 percent to $40.23 for the biggest drop in the Dow. Profit fell 4 percent, the second quarterly decline in a row, as sales were sapped by economic weakness in China and Europe, shifting tastes in the U.S. and unseasonable weather in places such as India.

Goldman Sachs dropped 1.7 percent to $160.24 even as the bank reported earnings that topped analysts’ estimates on a jump in fixed-income trading and investment-banking revenue. The stock had gained 28 percent this year through yesterday.

Automakers plunged 1.8 percent as a group, the biggest decline among 24 industries in the S&P 500. Goldman cut the industry to neutral for the first time since 2009, saying car stocks typically lag when interest rates rise. Data yesterday showed sales at car and parts dealers gained the most in seven months in June.

Ford Motor Co. slid 3 percent to $16.60 after Goldman removed the carmaker from its conviction buy list. The firm maintained a buy rating on the stock. Delphi Automotive Plc fell 1.8 percent to $54 after Goldman downgraded the parts supplier to neutral from buy.

General Motors Co. dropped 0.9 percent to $36.18, reversing an earlier gain of as much as 1.2 percent. The company said its global first-half sales climbed 3.9 percent on gains in the U.S. and China. Goldman added the stock to its conviction buy list.

Charles Schwab Corp. sank 3.3 percent to $21. The company reported second-quarter adjusted profit of 18 cents a share, below estimates for 19 cents a share.

Cintas Corp. retreated 1.7 percent to $47.06. The uniform maker forecast earnings for the 2014 fiscal period of $2.66 to $2.75 a share. That’s less than the $2.79 per share projected by analysts.

Energy shares dropped 0.6 percent as Marathon Petroleum Corp. became the second oil refiner to say second-quarter results would miss estimates.

Marathon fell 4.3 percent to $69.93, the most in the S&P 500. The company said late yesterday that it expects second- quarter earnings of $1.75 to $1.85 a share, below estimates of $2.62 a share. Competitor Valero Energy Corp. last week issued a forecast that fell short of forecasts. Valero slid 1.7 percent to $34.78 today.

HCA Holdings Inc. climbed 4.4 percent to $38.86. The largest for-profit U.S. hospital chain preliminary earnings beat analysts’ estimates on an increase in patient admissions. Tenet Healthcare Corp. added 3.4 percent to $45.19 for the second- biggest gain in the S&P 500.

DaVita HealthCare Partners Inc. dropped 1.9 percent to $117.96 as Goldman Sachs cut its rating on the provider of kidney-dialysis services to sell from neutral. The stock had slipped only 0.7 percent since the U.S. Medicare system proposed cutting payments by 9.4 percent next year, showing investors may be too optimistic regarding a final dialysis rate, Goldman said.

Baidu Inc. rose 4 percent to $105.69, the highest since February. The owner of China’s largest search engine agreed to buy app store 91 Wireless for $1.9 billion in its biggest announced acquisition, hoping to gain a greater share of the mobile user market.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

As long as you pursue pleasure, you are attached to the sources of pleasure;

and as long as you are attached to the sources of pleasure,

you cannot escape pain and sorrow.  The soul shines in the hearts of all living beings.

When you see the soul in others, you forget your own desires and fears,

and lose yourself in the service of others.

The soul shines equally in people on the farthest island, and in people close at hand.

Mundaka Upanishad

As ever,

 

Carolann

 

I must govern the clock, not be governed by it.

-Golda Meir, 1898-1978

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:

Birthday: July 15, 1606, Rembrandt.

Rembrandt was born in Leiden, the Netherlands on this day in 1606, Rembrandt Harmenszoon van Rijn.  He was the son of a miller.  Despite the fact that he came from modest means, he was able to study art, and by age 22, took his first pupils.  He married Saskia van Uylenburgh, the cousin of a successful art dealer, in 1634.  Rembrandt’s family life was marked by misfortune.  Between 1635 and 1641 Saskia gave birth to four children, but only the last, Titus survived.  Saskia in 1642, at the age of 30.  Hendrickje Stoffels, who became Rembrandt’s housekeeper in 1649, eventually became his wife and was the model for many of his paintings.  Despite Rembrandt’s success as an artist, teacher, and art dealer, his flamboyant living forced him to declare bankruptcy in 1656.  His beloved Hendrickje in 1663, and his son Titus, in 1668 at only 27 years of age.  Eleven months later, on October 4^th, 1669, Rembrandt died in Amsterdam.

Our doubts are traitors, and make us lose the good we oft might win by fearing to attempt. –William Shakespeare.

Photos of the Day –July 15th, 2013

A Peking opera troupe performs at the 49th International Festival of Carthage at the Roman Theatre of Carthage in Tunis, Tunisia. Anis Mili/Reuters

A cygnet is lifted for inspection by the Queen’s Swan Uppers during the annual Swan Upping ceremony on the River Thames between Shepperton and Windsor in southern England. The five-day census of the swan population dates back to the twelfth century when the Crown claimed ownership of all mute swans. Luke MacGregor/Reuters

Market Closes for July 15^th, 2013

Market  Index	Close	Change
Dow  Jones	15484.26	+19.96    +0.13%
S&P 500	1682.44	+2.25    +0.13%
NASDAQ	3607.492	+7.412    +0.21
TSX	12530.23	+68.05
		+0.55%

International Markets

Market  Index	Close	Change
NIKKEI	14506.25	+33.67
		+0.23%
HANG  SENG	21303.31	+26.03
		+0.12%
SENSEX	20034.48	+76.01
		+0.38%
FTSE 100	6586.11	+41.17
		+0.63%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.414	2.431
CND.   30 Year Bond	2.918	2.923
U.S.   10 Year Bond	2.5409	2.5812
U.S.   30 Year Bond	3.5967	3.6279

Currencies

BOC Close	Today	Previous
Canadian $	0.95889	0.96205
US   $	1.04288	1.03944
Euro Rate  1 Euro=		Inverse
Canadian   $	1.36266	0.73386
US  $	1.30664	0.76532

Commodities

Gold	Close	Previous
London Gold   Fix	1285.00	1284.08
Oil	Close	Previous
WTI Crude Future	106.32	105.95
BRENT	109.32	109.22

Market Commentary:

Canada

By Katie Brennan

July 15 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level in almost six weeks, after Loblaw Cos. agreed to the biggest takeover of a Canadian retailer and existing home sales rose in June.

Loblaw jumped 5.4 percent afteragreeing to buy Shoppers Drug Mart Corp. for C$12.4 billion ($11.9 billion). Shoppers surged 24 percent to a record. Endeavor Silver Corp. added 12 percent as the company restated its second-quarter revenue higher. Catamaran Corp. gained 1.5 percent after ISI Group boosted its rating on the stock. Colossus Minerals Inc. plunged 50 percent after delaying gold output at a mine in Brazil.

The Standard & Poor’s/TSX Composite Index rose 66.17 points, or 0.5 percent, to 12,528.35 at 4 p.m. in Toronto, the highest since June 4. The benchmark gauge jumped 2.7 percent last week, its biggest five-day rally since November, to erase a loss for the year.

“The Loblaw deal put a good tone to everything and consumer stocks are all generally higher as a result,” said Bob Decker, fund manager with Aurion Capital Management in Toronto.

He helps manage C$6 billion ($5.8 billion) at the firm. “The housing data is a testament to the resilience of the Canadian housing market and will continue to frustrate bearish commentators.”

Canadian existing home sales rose 3.3 percent in June, almost matching the previous month’s gain that was the fastest in more than two years, as the nation’s housing market defies predictions of a major correction. Recent data suggest the market for residential real estate, while moderating, remains robust.

China’s gross domestic product rose 7.5 percent in the April-to-June quarter from a year earlier. The pace was slower than the 7.7 percent in the first quarter and above the year-ago rate. Comments last week by China’s finance minister that 6.5 percent or 7 percent growth wouldn’t be a “big problem” raised concern the economy of Canada’s second-largest trading partner was cooling faster than estimated.

“It was good the China GDP number didn’t hit the more bearish whisper numbers that were out there,” Decker said. “It was not as bad as feared.”

Eight of the 10 industries in the S&P/TSX advanced, led by a 7 percent surge among producers of consumer staples. Trading volume was 24 percent lower than the 30-day average.

Loblaw, the country’s largest grocery operator by market value, surged 5.4 percent to C$50.13 for the biggest gain since December. The cash and stock deal for the country’s leading drugstore chain is the largest between two Canadian companies since Suncor Energy Inc. bought Petro-Canada in 2009. Shoppers surged 24 percent to C$60.12, helping consumer-staples stocks rise to a record as a group.

Health-care companies jumped 1.2 percent as a group.

Catamaran added 1.5 percent to C$51.91 after an analyst at ISI Group boosted the stock to a strong buy with a price target of $62. Valeant Pharmaceuticals International Inc. gained 1.1 percent to C$97.69.

Endeavor Silver added 12 percent to C$3.77, pacing gains among producers of raw materials. The company revised its second-quarter sales result to $71.3 million, 12 percent higher than originally reported on July 10.

The silver and gold miner said part of the adjustment resulted from its understating realized prices for metals in certain sales. Endeavour is scheduled to report results Aug. 6.

Colossus Minerals plunged 50 percent to C$0.80, the lowest since December 2008. The company is delaying the start of gold production at its Serra Pelada mine venture in Brazil until the fourth quarter after some de-watering wells and pumps did not perform as expected. Stifel Nicholas analyst Craig Stanley downgraded the stock to hold from buy.

US

By Alex Barinka and Nikolaj Gammeltoft

July 15 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its longest winning streak since January, as better-than-estimated earnings at Citigroup Inc. overshadowed a disappointing retail sales report.

Citigroup jumped 2 percent after profit beat analysts’ estimates as stock-trading revenue surged and losses on unwanted assets declined. Leap Wireless International Inc. more than doubled after AT&T Inc. agreed to buy the company for $1.2 billion. Boeing Co. climbed 3.7 percent as a U.K. agency said last week’s fire on a 787 aircraft is unrelated to battery blazes that grounded the fleet earlier this year.

The S&P 500 climbed 0.1 percent to 1,682.50 at 4 p.m. in New York. The index has gained for eight straight days, the longest stretch since Jan. 25. The Dow Jones Industrial Average added 19.96 points, or 0.1 percent, to 15,484.26. Both gauges reached record closing highs. About 4.9 billion shares traded hands on U.S. exchanges today, 25 percent below the three-month average and the lowest level of the year for a full-day session.

“We have our focus on earnings,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.6 billion in assets, said by phone. “Citigroup had a good report this morning and the question is whether earnings will be strong enough to push us higher. That’s where the short-term focus will be.”

The S&P 500 closed at a record last week after Federal Reserve Chairman Ben S. Bernanke backed sustained monetary stimulus. The gauge added 3 percent through the five days, for a third week of gains and its biggest rally since Jan. 4.

An unprecedented three rounds of central bank stimulus have helped drive the S&P 500 up 149 percent from a 12-year low in 2009. The index slumped as much as 5.8 percent after Bernanke signaled on May 22 that the Fed could start scaling back bond purchases as soon as September. Stocks have since recovered all those losses as data on hiring and housing bolstered confidence in the economic recovery.

Profit at companies listed on the S&P 500 rose 2 percent last quarter, down from a projection of 8.7 percent six months ago, according to analyst estimates compiled by Bloomberg.

“Many companies are lowering expectations before we get into the quarter on the hope that they beat them,” Michael Mullaney, chief investment officer for Fiduciary Trust Co. in Boston, said by telephone. His firm manages $9.5 billion. “We don’t know how much longer companies can get blood from the stone.”

Retail sales rose less than projected in June. The 0.4 percent gain followed a 0.5 percent increase in May that was less than previously reported, Commerce Department figures showed today. The median forecast of 82 economists surveyed by Bloomberg called for a 0.8 percent advance. Another report showed manufacturing in the New York region expanded in July at the fastest pace in five months as the area’s factory activity stabilized amid a slowdown in growth.

China’s gross domestic product rose 7.5 percent in the April-to-June quarter from a year earlier, according to the National Bureau of Statistics in Beijing. That equaled the median forecast in a Bloomberg News survey. The economy expanded at a 7.7 percent pace in the first quarter.

“The Chinese GDP data reassured investors that China will not derail the global growth recovery,” Stephane Ekolo, chief European strategist at Market Securities, wrote in an e-mail.

Citigroup rose 2 percent to $51.81. The third-biggest U.S. bank by assets posted adjusted earnings of $1.25 a share for the second quarter, beating the $1.18 average estimate of 27 analysts surveyed by Bloomberg News.

Chief Executive Officer Michael Corbat, 53, has fired thousands of workers and scaled back operations in some countries to cut costs since replacing Vikram Pandit, 56, in October. Citi Holdings, the unit created in 2009 as a home for the company’s unwanted assets after the financial crisis, posted its smallest loss ever.

Financial companies in the S&P 500 rose 0.4 percent as a group, while the KBW Bank Index added 0.6 percent to its highest level since October 2008.

Leap Wireless surged 112 percent to $16.95. AT&T, the second-biggest U.S. wireless carrier, lost 0.7 percent to $35.55. The deal adds pressure on smaller competitors such as Sprint Corp. and Dish Network Corp. to bulk up through mergers and acquisitions of their own.

Sprint rallied 4.2 percent to $6.72 and Dish jumped 3.1 percent to $44.45.

Smaller regional companies such as U.S. Cellular Corp. or NTelos Holdings Corp. also may become takeover bait, said Chetan Sharma, a wireless-industry analyst in Issaquah, Washington.

U.S. Cellular soared 8.3 percent to $38.77 and NTelos gained 6.1 percent to $17.81.

Boeing gained the most in the Dow, climbing 3.7 percent to $105.66 after the stock had its biggest drop in two years on July 12. U.K. regulators are still seeking the cause of last week’s fire on a Boeing Co. 787 parked at London’s Heathrow airport after saying they see no direct link to battery blazes that grounded the fleet earlier this year.

Tiffany & Co., the world’s second-largest jewelry retailer, added 3.6 percent to $79.78. Stifel Financial Corp. upgraded its recommendation on the shares to buy from hold, with a price target of $92.

Monster Beverage Corp. rose 1.6 percent to $60.80. Stifel said the maker of energy drinks is likely to beat second-quarter earnings estimates and raised the price target to $70 from $62.

All 11 members of an S&P index of homebuilders fell as the gauge slumped 3 percent. D.R. Horton Inc. dropped 4.6 percent to $21.72. PulteGroup Inc. sank 3.4 percent to $19.54. Lennar Corp. declined 4.1 percent to $35.55.

Wagers that U.S. stock volatility will decline have reached their highest level in almost two years as the Fed pledges to preserve stimulus and data from jobs to home sales show economic growth.

Put trading on the Chicago Board Options Exchange Volatility Index exceeded calls by 73 percent on July 11, the most since October 2011, according to data compiled by Bloomberg. The VIX, a gauge of S&P 500 option prices, dropped 0.4 percent to 13.79 today, extending its declines to an eighth day, the longest streak of consecutive losses in 21 months. The gauge is down 23 percent for the year.

“The government stands as a backstop to the marketplace, so there is no real fear about the downside,” Alan Salzbank, who helps oversee about $620 million in options and stocks as a managing partner at Gargoyle Asset Management LLC in Englewood, New Jersey, said by phone on July 12. “The VIX at this point is really in a tough spot, because when the government can’t control things any longer, the VIX will explode. But in the meantime, they’re keeping it bottled up by continuing with QE.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

When a man is deprived of the foundation that provides him everything,

his poverty loses its best virtue, simplicity, to become no more than disgraceful and sordid.

His wealth is no longer splendid, but becomes merely extravagant.

His appetites no longer remain within natural limits; they no longer have the one goal

of meeting the needs of his life; they become an end in themselves,

setting fire to his existence, and dancing madly by the light of the flames.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Lost time is never found again.

-Benjamin Franklin, 1706-1790

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 July 12, 1912 – 101 years ago – Sarah Bernhardt starred in the first feature-length movie to premiere in the United States.  The French-made Queen Elizabeth lasted 40 minutes and cost $1 to see.

Also on this day in 1954 – 59 years ago – the 19-year-old Elvis Presley quit his job at Crown Electric and sought his dream of a musical career by signing a contract with Sun Records.

And on this day in 1962 – 51 years ago! The Rolling Stones, fronted by Keith Richards, made their debut performance at the Marquee Club in London.

Birthdays to note:

July 12^th, 1817: Henry David Thoreau was born.

1895: Buckminster Fuller was born on this day

1904: Pablo Neruda, the poet was born.

–from Henry David Thoreau:

 

I am a parcel of vain strivings tied

By chance bond together,

Dangling this way and that, their links

Were made so loose and wide,

Methinks,

For milder weather.

 

A bunch of violets without their roots,

And sorrel intermixed,

Encircled by a wisp of straw

Once coiled about their shoots,

The law

By which I’m fixed.

 

A nosegay which Time clutched from out

Those fair Elysian fields,

With weeds and broken stems, in haste,

Doth make the rabble rout

That waste

The day he yields.

 

And here I bloom for a short hour unseen,

Drinking my juices up,

With no root in the land

To keep my branches green,

But stand

In a bare cup.

 

Some tender buds were left upon my stem

In mimicry of life,

But ah!  the children will not know,

Till time has withered them,

The woe

With which they’re rife.

 

But now I see I was not plucked for naught,

And after in life’s vase

Of glass set while I might survive,

But  by a kind hand brought

Alive

To a strange place.

 

That stock thus thinned will soon redeem its hours,

And by another year,

Such as God knows, with freer air,

More fruits and fairer flowers

Will bear,

While I droop here.

Photos of the Day –July 12th, 2013 Belgian shrimp fisherman Xavier Vanbillemont rides a cart horse to haul a net out of the sea during low tide at the coastal town of Oostduinkerke, Belgium. This traditional method of catching shrimp along the North Sea coast, which dates back to some 500 years, attracts tourists every summer. Yves Herman/Reuters

A runner is caught between the horns of a bull during the sixth running of the bulls of the San Fermin festival in Pamplona, Spain. Susana Vera/Reuters

Market Closes for July 11^th, 2013

Market  Index	Close	Change
Dow  Jones	15464.30	+3.38    +0.02%
S&P 500	1680.08	+5.06      +0.30%
NASDAQ	3600.080	+21.776      +0.61
TSX	12460.47	-32.79
		-0.26%

International Markets

Market  Index	Close	Change
NIKKEI	14506.25	+33.67
		+0.23%
HANG  SENG	21277.28	-160.21
		-0.75%
SENSEX	19958.47	+282.41
		+1.44%
FTSE 100	6544.94	+1.53
		+0.02%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.431	2.440
CND.   30 Year Bond	2.923	2.923
U.S.   10 Year Bond	2.5812	2.5702
U.S.   30 Year Bond	3.6279	3.6230

Currencies

BOC Close	Today	Previous
Canadian $	0.96205	0.96427
US   $	1.03944	1.03706
Euro Rate  1 Euro=		Inverse
Canadian   $	1.35805	0.73635
US  $	1.30652	0.76539

Commodities

Gold	Close	Previous
London Gold   Fix	1284.08	1285.04
Oil	Close	Previous
WTI Crude Future	105.95	104.88
BRENT	109.22	108.32

Market Commentary:

Canada

By Katie Brennan

July 12 (Bloomberg) — Canadian stocks fell, following the biggest rally in 11 months, as raw-materials companies declined amid signs China may tolerate slower growth and a U.S. Federal Reserve official urged slower stimulus.

Pretium Resources Inc. lost 4 percent and Alamos Gold Inc.

dropped 3.7 percent as falling metals prices weighed on raw- materials producers. Catamaran Corp. added 0.9 percent, pacing gains among health-care companies. Niko Resources Ltd. surged 3.4 percent after entering an agreement for a $60 million loan.

The Standard & Poor’s/TSX Composite Index fell 31.09 points, or 0.3 percent, to 12,462.17 at 4 p.m. in Toronto, erasing an earlier gain of 0.2 percent. The loss pared the index’s weekly gain to 2.7 percent, its biggest five-day advance since November. Trading was 27 percent below the 30-day average.

“It has been a zigzag worth of news coming out from the Fed,” said Irwin Michael, fund manager with ABC Funds in Toronto. He helps manage about C$800 million ($759 million).

“The market is moving on how people are processing the information coming out.”

The benchmark gauge jumped the most since August 2012 yesterday, erasing a loss for the year, after Fed Chairman Ben S. Bernanke backed sustained monetary stimulus for the economy of Canada’s biggest trading partner. Stocks slumped today after Philadelphia Fed Bank President Charles Plosser said the central bank should begin tapering its $85 billion in monthly bond buying in September and end the stimulus by year-end.

China’s Finance Minister, Lou Jiwei, speaking yesterday at the U.S.-China Strategic and Economic Dialogue in Washington, said he remains confident of achieving a 7 percent growth rate this year. That’s lower than the government’s target for 2013 of 7.5 percent. A report due on July 15 may show economic growth slowed for a second quarter in the three months ended March 31.

China, the world’s biggest consumer of industrial metals and energy, is Canada’s second-largest trading partner.

Six of the gauge’s ten groups declined. Raw-materials producers lost the most, falling 1.7 percent, as prices for metals from silver to copper dropped.

Pretium Resources, a diversified miner, slid 4 percent to C$7.52. Alamos Gold tumbled 3.7 percent to C$13.41 after agreeing to buy precious metals producer Esperanza Resources Corp. for about C$69.4 million.

Health-care companies gained the most, as Catamaran Corp. added 0.9 percent to C$51.16.

Railroad companies drove industrial stocks up 0.5 percent after BMO analyst Fadi Chamoun wrote in a note that railroads’

market share in heavy crude oil shipments will “materially increase” over the next two years.

Canadian National Railway Co. added 0.9 percent to C$104.93 and Canadian Pacific Railway Ltd. rose 1.7 percent to C$131.73.

Niko Resources surged 3.4 percent to $8.64 after the company entered an agreement for a $60 million loan that will be funded by a group of institutional investors. Net proceeds from the loan will be used to fund working capital requirements.

US

By Inyoung Hwang and Alex Barinka

July 12 (Bloomberg) — U.S. stocks rose for a seventh day, extending a record for the Standard & Poor’s 500 Index, as better-than-estimated bank earnings overshadowed a reduced profit forecast from United Parcel Service Inc.

Financial stocks rose the most out of 10 S&P 500 groups after Wells Fargo & Co. reported earnings that topped analysts’ estimates. UPS fell 5.8 percent as it lowered its forecast for earnings in 2013, citing a slowing economy in the second quarter. Boeing Co. plunged 4.7 percent after a parked 787 Dreamliner caught fire at London’s Heathrow Airport.

The S&P 500 advanced 0.3 percent to a record 1,680.19 at 4 p.m. in New York. The Dow Jones Industrial Average added 3.38 points, or less than 0.1 percent, to 15,464.3, also an all-time high. More than 5.4 billion shares traded hands on U.S. exchanges today, or 15 percent below the three-month average.

“Earnings are going to be very important,” Stephen Wood, the New York-based chief market strategist who helps oversee $173 billion at Russell Investments, said by telephone. “It’s going to be the story of the week and the story of the month.”

The S&P 500’s advance today extended a record from yesterday, when the gauge jumped 1.4 percent after Fed Chairman Ben S. Bernanke backed sustained monetary stimulus. The index has added 3 percent in the past five days for a third week of gains and its biggest rally since Jan. 4. The surge has helped to erase losses since Bernanke first signaled the Fed may trim its $85 billion in monthly bond purchases later this year.

Equities retreated earlier today after Fed Bank of Philadelphia President Charles Plosser, who has opposed the central bank’s current round of asset purchases, said the Fed should begin tapering in September. The benchmark gauge halted the decline after Fed Bank of St. Louis President James Bullard said the central bank shouldn’t cut back until inflation accelerates toward the Fed’s 2 percent goal.

The debate among policy makers in the past six weeks has sent markets lurching as investors speculate on the timing and rate of any cuts in bond buying. Central bank stimulus has helped fuel a rally in stocks worldwide, with the benchmark U.S. index surging 148 percent from its March 2009 low.

The S&P 500 sank as much as 5.8 percent after reaching a record May 21, the day before Bernanke said the Fed may start paring stimulus efforts as soon as September if the economy improves in line with its forecasts. The index has rebounded 6.8 percent from a June 24 bottom, the fastest rally since December 2011, as economic data from hiring to housing tempered concern over possible tapering.

“The Fed’s hope is that investors shift over time from liquidity-driven strength to economy-driven strength,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.6 billion in assets, said by phone. “I don’t know if we’ve seen true economic strength here yet, but we’re a lot closer than we were a couple of years ago.”

A report today showed consumer confidence unexpectedly cooled in July as Americans became less optimistic about the outlook for the economy. Separate data indicated wholesale prices in the U.S. rose more than projected in June, reflecting higher costs for energy and automobiles.

The Chicago Board Options Exchange Volatility Index, or VIX, slid 1.2 percent to 13.84. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, has declined seven straight days, the longest streak of losses since October 2011. The index reached a six-month high on June 20 and has fallen 32 percent since.

Investors have also turned their attention to earnings results this week. Profit at companies listed on the S&P 500 rose 2 percent last quarter, down from a projection of 8.7 percent six months ago, according to analyst estimates compiled by Bloomberg. Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, Bloomberg data show.

Reports from JPMorgan and Wells Fargo, the first of the six largest U.S. lenders to report, drove bank stocks 1.5 percent higher as a group. The lenders were the only two S&P 500 companies to release earnings today.

Wells Fargo rose 1.8 percent to $42.63. The largest U.S. home lender said second-quarter profit climbed 19 percent as the company clamped down on expenses.

JPMorgan slipped 0.3 percent to $54.97 after Chief Executive Officer Jamie Dimon warned investors that higher interest rates could lead to a “dramatic reduction” in the bank’s profits by eroding demand for mortgage refinancing.

The biggest U.S. bank by assets reported a 31 percent increase in second-quarter profit that beat analysts’ estimates as revenue from trading stocks and bonds climbed.

Netflix Inc. gained 5.4 percent to $257.26, the highest level since August 2011. The largest subscription video- streaming service rose to its highest in more than 23 months as expectations for strong customer growth prompted Barclays Plc to boost its price target for the shares.

Alexion Pharmaceuticals Inc. surged 13 percent to $114.26.

Roche Holding AG, the largest maker of cancer drugs, is seeking billions of dollars in financing for a potential takeover of the maker of a drug for rare blood diseases, people with knowledge of the situation said.

Alexion led the Nasdaq 100 Index to a 13th straight gain, matching its longest rally since 1992.

Regeneron Pharmaceuticals Inc. added 7.3 percent to $266 after Joshua Schimmer, a New York-based analyst at Lazard Capital Markets Ltd., lifted his rating on the maker of the eye medicine Eylea to buy from neutral.

WebMD Health Corp. surged 25 percent, the most since 2008, to $33.82. The company said second-quarter revenue rose to as much as $125 million, above analyst estimates for $117 million.

The health information services provider raised its full-year earnings outlook to as much as $11 million, from a previously anticipated loss of as much as $13 million. Shares have more than doubled this year.

UPS said a slowing U.S. economy hurt second-quarter profit and revenue. The world’s largest package delivery company and rival FedEx Corp. are often viewed as economic bellwethers because they transport goods across the world.

UPS tumbled 5.8 percent to $86.12, the most since December 2008. FedEx slid 2 percent to $102.29.

Boeing plunged 4.7 percent to $101.87 for the biggest retreat in the Dow. London Heathrow airport closed to flights after a fire involving a Boeing 787 jet operated by Ethiopian Airlines Enterprise, while a second Dreamliner was forced to abandon a trip with technical issues.

The aircraft, Boeing’s newest model and beset by battery- related fire incidents that grounded the global fleet earlier this year, was sprayed with fire-retardant foam after the Heathrow event.

Precision Castparts Corp., the maker of metal forgings for jet engines and a Boeing supplier, slid 1.1 percent to $234.69.

 

Have a wonderful weekend everyone.

Be magnificent!

 

Those who are focused on the objects of the senses, become attached to those objects.

From attachment comes desire; and from desire comes anger; from anger comes confusion of mind;

from confusion of mind comes loss of memory; from loss of memory comes loss of intelligence;

and from loss of intelligence comes destruction.

The Bhagavad Gita

 

As ever,

Carolann

 

Endurance is nobler than strength, and patience than beauty.

-John Ruskin, 1819-1900

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

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com