Author: Carolann

Dear Friends,

Tangents:

We went to the service of one of our most treasured clients who passed away last week.  He was 102 years old and probably died more from a broken heart than anything else.  His wife of 70 years passed away  just over a year ago.  His son stated in the eulogy he gave today at the service that only a week ago his father had inquired about the exchange rate of the pound to the Canadian dollar, and when told, did the mental calculation of what his UK pension was going to be in January.   We smiled because we knew it was true.

Bonnie and I  have known him as our client and friend for almost 25 years.  He emanated the best qualities a human being could possibly hope to possess in their lifetime – honesty, integrity  and loyalty.   When he stopped driving many years ago, he would take the bus from his home in Oak Bay and come to our office and sit in the waiting room where we would serve him tea and he would read the papers – in between interesting conversation.  He gave everyone who knew him hope and inspiration  just through being – the fact that people like him actually do exist!

Things come to those who wait, but only the things left by those who hustle. -Abraham Lincoln

photo of the day

01/23rd/2013

One of the ‘Clavie Crew’ puts wood on the burning Clavie during the Burning Of The Clavie event in Burghead, Scotland January 11, 2013. The Burning Of The Clavie is an ancient Scottish custom, dating roughly from the 1700’s, still observed in Burghead near the Moray Firth. The Clavie, which is a half-cask filled with wood shavings and tar, is set alight and paraded before it becomes a fire beacon on nearby Doorie Hill. Receiving a piece of the burning Clavie is said to bring good luck for the coming year.

Photo: David Moir/Reuters

Market Closes for January 23rd, 2013

Market  Index	Close	Change
Dow  Jones	13779.33	+67.12    +0.49%
S&P 500	1494.81	+2.25    +0.15%
NASDAQ	3153.670	+10.494    +0.33%
TSX	12794.05	-30.58   -0.24%

International Markets

Market  Index	Close	Change
NIKKEI	10486.99	-222.94
		-2.08%
HANG  SENG	23635.10	-23.89
		-0.10%
SENSEX	20026.61	+45.04
		+0.23
FTSE 100	6179.64	+18.47
		+0.30

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.877	1.912
CND.   30 Year Bond	2.474	2.499
U.S.   10 Year Bond	1.8241	1.8417
U.S.   30 Year Bond	3.0182	3.0281

Currencies

BOC Close	Today	Previous
Canadian $	0.99557	0.99219
US   $	1.00043	1.00787
Euro Rate  1 Euro=		Inverse
Canadian   $	1.33076	0.75145
US  $	1.33133	0.75113

Commodities

Gold	Close	Previous
London Gold   Fix	1684.47	1692.53
Oil	Close	Previous
WTI Crude Future	94.58	96.24
BRENT	115.08	114.64

Market Commentary:

Canada

By Leslie Picker

Jan. 23 (Bloomberg) — Canadian stocks fell, following a four-day rally, as commodity shares retreated amid a vote by U.S. lawmakers to temporarily suspend the debt limit.

Iamgold Corp., a producer of gold in Suriname and Burkina Faso, slumped 15 percent after forecasting higher operating costs for 2013 as it mines lower-grade ore and starts up its Westwood project. Research In Motion Ltd. dropped 2.6 percent after surging 25 percent over the previous five days.

The Standard & Poor’s/TSX Composite Index fell 30.58 points, or 0.2 percent, to 12,794.05 at 4 p.m. in Toronto.

Trading volume was 7.5 percent above the 30-day average.

“Markets are meandering after a fairly strong run-up at the beginning of the year,” said Bob Decker, a money manager at Toronto-based Aurion Capital, overseeing C$6 billion ($6 billion). “There’s a small positive influence from pushing out the debt ceiling debate to the May time frame, causing people to unwind some of their protective strategies.”

The U.S. House voted to temporarily suspend the nation’s borrowing limit, removing the debt ceiling for now as a tool for seeking deeper spending cuts. The measure, passed 285-144, lifts the government’s $16.4 trillion borrowing limit until May 19. It goes to the Senate, where Majority Leader Harry Reid said lawmakers will pass the measure unchanged and send it to President Barack Obama.

The Canadian dollar fell to parity against its U.S. counterpart after the Bank of Canada said the need to raise interest rates is less urgent as the economy will take longer to reach full output. The International Monetary Fund cut its global growth forecasts and now projects a second year of contraction in the euro region as progress in battling Europe’s debt crisis fails to produce an economic recovery.

Canadian stocks yesterday rose to the highest level in more than 17 months as producers of raw materials gained after the Bank of Japan said it will introduce open-ended asset purchases.

The benchmark gauge has risen 2.9 percent this year as technology and health-care shares surged at least 8.4 percent.

Commodity producers, which comprise 18 percent of the S&P/TSX, had the biggest decline among 10 industries today. The group dropped 1.2 percent. Measures of telephone and health-care shares in the benchmark gauge rose.

Iamgold slumped 15 percent to C$9.22, the lowest since April 2009. The company’s estimated net present value was cut by about 10 percent because of higher costs, David Haughton, an analyst at BMO Capital Markets in Toronto, said in a note yesterday. Haughton lowered his target price to $14 from $16 and cut his recommendation to hold from buy. Steven Butler, an analyst at Canaccord Financial Inc. in Toronto, reduced his target to $12.75 from $15.25 and cut his rating to hold from buy.

Centerra Gold Inc. dropped 8.2 percent, the most since Dec. 13, to C$8.60. The shares were rated sector perform in new coverage at RBC Capital Markets by equity analyst Jonathan Guy.

The 12-month share-price estimate is C$11.00 per share.

RIM fell 2.6 percent to C$17.30. The shares yesterday jumped to a one-year high as Chief Executive Officer Thorsten Heins reiterated the BlackBerry maker is considering strategic options, including selling its hardware unit.

Metro Inc. rallied 3.3 percent to C$64.79. Canada’s third- largest supermarket chain sold almost half of its stake in Alimentation Couche-Tard Inc. for C$479 million. Metro may seek grocery and pharmacy acquisitions after selling the stake, Keith Howlett, an analyst at Desjardins Securities in Montreal, said in a note today. Marie-Claude Bacon, a spokeswoman for Metro, declined to comment.

US

By Nikolaj Gammeltoft and Sarah Pringle

Jan. 23 (Bloomberg) — U.S. stocks rose, after benchmark indexes reached five-year highs, as lawmakers voted to temporarily suspend the federal debt limit and technology stocks rallied amid better-than-forecast earnings.

Futures on the Nasdaq 100 Index slid 1.8 percent following the close of U.S. markets as Apple Inc. tumbled 11 percent after reporting first-quarter sales below forecasts. Google Inc. and International Business Machines Corp. jumped more than 4.4 percent in regular trading after earnings topped estimates.

Advanced Micro Devices Inc. surged 11 percent after revenue beat forecasts, helped by sales of chips that run servers.

The Standard & Poor’s 500 Index gained 0.2 percent to 1,494.81 at 4 p.m. in New York. The Dow Jones Industrial Average rose 67.12 points, or 0.5 percent, to 13,779.33. About 6.1 billion shares changed hands on U.S. exchanges, in line with the three-month average. Nasdaq 100 futures dropped 1.7 percent to 2,712 as of 6:18 p.m. on Apple’s earnings report.

“Right now it’s all earnings related and the fact that maybe we can put the debt ceiling to rest for maybe a couple more months,” Frank Ingarra, who helps manage $1.4 billion at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a phone interview.

The U.S. House voted to temporarily suspend the nation’s borrowing limit, removing the debt ceiling for now as a tool for seeking deeper spending cuts. The measure, passed 285-144, lifts the government’s $16.4 trillion borrowing limit until May 19. It goes to the Senate, where Majority Leader Harry Reid said lawmakers will pass the measure unchanged and send it to President Barack Obama.

Global investors say the state of U.S. finances is the greatest risk to the world economy and almost half are curbing their investments in response to budget battles, a Bloomberg poll showed. Thirty-six percent of respondents cited the nation’s fiscal woes as the biggest threat, compared with 29 percent who chose Europe’s sovereign debt crisis and 15 percent who named a slowing Chinese economy, according to the Jan. 17 survey of Bloomberg subscribers.

The International Monetary Fund cut its global growth forecasts and now projects a second year of contraction in the euro region as progress in battling Europe’s debt crisis fails to produce an economic recovery. The world economy will expand 3.5 percent this year, less than the 3.6 percent forecast in October, the Washington-based IMF said today in an update of its World Economic Outlook report.

Improving corporate earnings and political steps to resolve fiscal issues in the U.S. have pushed the Dow within 2.8 percent of its October 2007 record of 14,164.53. The S&P 500 is 4.5 percent below its record of 1,565.15. The index rose 4.8 percent in January through yesterday for the best start to a year since 1997, and has rallied six straight days for the longest streak in a month.

Some 75 percent of the 106 companies in the S&P 500 that have released results so far exceeded profit projections, according to data compiled by Bloomberg. Analysts on average forecast growth of 3.8 percent in fourth-quarter profit, the data show.

“Earnings expectations were optimistic and it’s very possible that they will be right,” Bernard Delattre, president of Altimeo Asset Management in Paris, said in a phone interview today. “The situation is improving in the U.S. Growth is sustained and companies will benefit.”

Apple lost 11 percent to $458.94 as of 6:18 p.m. New York time. The world’s most valuable company reported first-quarter sales below analysts’ predictions, adding fuel to investor pessimism that has sent shares down 27 percent since September.

Profit was little changed at $13.1 billion, or $13.81 a share, in the period that ended Dec. 29, Cupertino, California- based Apple said today in a statement. Sales rose 18 percent to $54.5 billion. Analysts had predicted profit of $13.53 a share on revenue of $54.9 billion, the average of estimates compiled by Bloomberg.

Technology shares had the largest gain among 10 groups in the S&P 500, advancing 1.2 percent. Google, owner of the biggest Internet search engine, jumped 5.5 percent to $741.50 as fourth- quarter profit, excluding certain items, rose to $10.65 a share.

Analysts had projected earnings of $10.50, according to data compiled by Bloomberg.

IBM rallied 4.4 percent to $204.72 as per-share earnings exceeded projections. The largest computer-services provider’s profit forecast also topped analyst estimates as the company shifts to data analysis and cloud computing.

AMD rose 11 percent to $2.73. The second-biggest maker of processors for personal computers reported fourth-quarter revenue that topped analysts’ estimates, helped by sales of chips that run servers. AMD is firing workers and selling assets to free up cash for new products, aiming to mitigate its dependence on the PC market.

Symantec Corp. advanced 2.9 percent to $21.46. The biggest maker of antivirus software company reported fiscal third- quarter sales and profit that beat estimates, aided by strong demand for data-management tools.

US Airways Group Inc. rallied 1.5 percent to $15.07. The Tempe, Arizona-based carrier, which is pushing for a merger with bankrupt American Airlines, reported fourth-quarter profits that topped forecasts on strong travel demand and record revenue.

An S&P index of homebuilders climbed 1.8 percent to the highest level since July 2007 as all 11 members advanced. U.S. home prices rose 5.6 percent in the 12 months through November as buyers competed for a dwindling inventory of properties, according to a report by the Federal Housing Finance Agency today.

KB Home surged 8.9 percent to $18.63. The Los Angeles-based homebuilder reported a 54 percent increase in orders for the first seven weeks of its fiscal first quarter. Trulia Inc., the operator of a residential-property listings website, rallied 4.7 percent to $24.50, while its larger rival Zillow Inc. added 3.3 percent to $34.69 on optimism that gains in home prices would help boost advertising revenue.

Cree Inc., a maker of energy-efficient lighting products, gained 22 percent to $40.85 after quarterly profit jumped 69 percent amid surging demand for its light-emitting diodes.

Map Pharmaceuticals Inc. rallied 59 percent to $24.71.

Allergan Inc., the maker of the wrinkle filler Botox, agreed to buy Map in a deal valued at $958 million to gain an experimental inhalable migraine treatment.

Coach Inc., the largest U.S. luxury handbag maker, tumbled 16 percent to $50.75. Sales at stores open at least a year in North America fell 2 percent in the quarter. Chief Executive Officer Lew Frankfort said the company had a “challenging” holiday season amid increased competition for women’s handbags and economic pressure on consumers.

Texas Instruments Inc. lost 1.1 percent to $33.08. The largest maker of analog chips predicted first-quarter sales that fell short of some analysts’ estimates as electronic-device makers postpone orders to keep inventory low amid lackluster demand.

Have a wonderful evening everyone.

 

Be magnificent!

 

Nations cohere because there is a mutual regard among

individuals composing them.

Some day we must extend the national law

to the universe,

even as we have extended the family law

to from nations – a larger family.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Everything you can imagine is real.

-Pablo Picasso, 1881-1973

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1970, the Boeing 747 embarked on its first regularly scheduled commercial flight. The debut voyage went from New York to London. More than 40 years later, international investigations into the battery malfunctions that grounded Boeing’s 787 Dreamliner jets in recent weeks are accelerating. -Steven Russolillo, WSJ, 01/22/13.

Birthday:  January 22^nd, 1788, Lord Byron, poet.

Thou glorious mirror, where the Almightys’s form

Glasses itself  in tempests: in all time,

Calm or convulsed – in breeze, or gale, or storm,

Icing the pole, or in torrid clime

Dark-heaving; boundless, endless and sublime-

The image of Eternity – the throne

Of the Invisible; even from out thy slime

The monsters of the deep are made; each-zone

Obeys thee; thou goest forth, dread, fathomless, alone.

-by George Gordon, Lord Byron,

from Ocean (Childe Harold’s Pilgrimage)

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

photos of the day

01/22nd/2013

A man carries a crown of Peter II Karadjordjevic during a solemn ceremony after the remains of Yugoslavia’s last king were flown back to Serbia in Belgrade, Serbia. The former king fled the Nazi occupation of Yugoslavia at the start of World War II and never returned, as Communists took over at the end of the war. He died in exile and was buried at a Serbian Orthodox monastery in Libertyville, Illinois — the only European monarch buried on US soil.  Photo: Darko Vojinovic/AP

A performer dressed as a devil holds a stick spewing fireworks, during the traditional “Correfoc” (fire run) to mark the end of local festivities in Palma de Mallorca on the island of Mallorca January 21, 2013. Correfoc takes place during traditional fiestas in eastern Spain with people dancing in devil costumes lighting fireworks among crowds of spectators. Photo: Enrique Calvo/Reuters

Market Closes, January 22^nd, 2013:

Market  Index	Close	Change
Dow  Jones	13712.21	+62.51    +0.46%
S&P 500	1492.56	+6.58      +0.44%
NASDAQ	3143.177	+8.471      +0.27%
TSX	12824.63	+30.38
		+0.24%

International Markets

Market  Index	Close	Change
NIKKEI	10709.93	-37.81
		-0.35%
HANG  SENG	23658.99	+68.08
		+0.29%
SENSEX	19981.57	-120.25
		-0.60
FTSE 100	6179.17	-1.81
		-0.03

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.912	1.935
CND.   30 Year Bond	2.499	2.508
U.S.   10 Year Bond	1.8417	1.8416
U.S.   30 Year Bond	3.0281	3.0289

Currencies

BOC Close	Today	Previous
Canadian $	0.99219	0.99287
US   $	1.00787	1.00718
Euro Rate  1 Euro=		Inverse
Canadian   $	1.32164	0.75664
US  $	1.33204	0.75073

Commodities

Gold	Close	Previous
London Gold   Fix	1692.53	1690.05
Oil	Close	Previous
WTI Crude Future	96.24	95.56
BRENT	114.64	114.20

Market Commentary:

Canada

By Eric Lam

Jan. 22 (Bloomberg) — Canadian stocks rose to the highest level in more than 17 months, reversing earlier losses, as producers of raw materials advanced after the Bank of Japan said it will introduce open-ended asset purchases.

Yamana Gold Inc. and Eldorado Gold Corp. rose at least 1.5 percent as the metal advanced. Nevsun Resources Ltd., which operates a mine in Eritrea, gained 4 percent after the nation’s ambassador dismissed reports of a coup. First Quantum Minerals Ltd. declined 1.9 percent as Inmet Mining Corp. rejected its hostile takeover bid and said it is in talks with third parties for another potential deal. Inmet rose 0.5 percent.

The Standard & Poor’s/TSX Composite Index gained 30.38 points, or 0.2 percent, to 12,824.63 in Toronto, climbing to its highest level since July 2011. The benchmark gauge has gained 3.2 percent this year.

“It’s a very quiet market and we’re still waiting for macro events over the next few months,” said Anish Chopra, managing director and fund manager with TD Asset Management Inc. in Toronto. The firm manages about C$204 billion ($205.2 billion). “Retail data is very modestly ahead of expectations.”

Canadian retail sales rose 0.2 percent to C$39.4 billion ($39.7 billion) in November, Statistics Canada said today, led by record car purchases. Economists surveyed by Bloomberg had forecast unchanged sales.

Raw-materials producers contributed the most to gains in the S&P/TSX as six of 10 industries advanced. Trading volume was  22 percent higher than the 30-day average.

Yamana Gold climbed 2.5 percent to C$17.96 and Eldorado Gold rose 1.5 percent to C$13.01. Gold for February delivery increased 0.4 percent to settle at $1,693.20 an ounce in New York after the Bank of Japan pledged to buy about 13 trillion yen ($145 billion) in assets a month from January 2014 and doubled its inflation target without setting a deadline.

Nevsun, which operates the Bisha gold mine in Eritrea, rallied 4 percent to C$4.39 after Araya Desta, the nation’s ambassador to the United Nations, said reports of an attempted coup of President Isaias Afwerki’s government were “nonsensical.” Agence France-Presse and other news agencies reported government forces have withdrawn from the capital.

The shares slumped the most in six months yesterday after reports of the possible coup first surfaced.

Canadian Natural Resources Ltd. declined 0.8 percent to C$30.19. Philip Skolnick, an analyst with Canaccord Genuity, lowered his rating to hold from buy as the company is exposed to risk from the wide differential between the Canadian oil price and benchmark West Texas Intermediate and Brent crude prices.

“This is the most exposed name in the group,” he said in a note to clients today.

First Quantum, which took its cash and stock bid directly to Inmet investors on Jan. 9 after two earlier offers were rebuffed by the board, slipped 1.9 percent to C$20.92. Inmet today recommended investors reject First Quantum’s C$5.1 billion bid as it undervalues the company, the company said in a statement. Inmet has also approached third parties interested in “considering alternative transactions” for the company and its assets.

First Quantum also lacks the experience developing a mine the size of Inmet’s Cobre Panama copper project in Panama, the company said. Inmet climbed 0.5 percent to C$71.29.

US

By Sarah Pringle

Jan. 22 (Bloomberg) — U.S. stocks rose, following five- year highs for the benchmark indexes last week, after better- than-forecast earnings from companies including Travelers Cos. and Freeport-McMoRan Copper & Gold Inc.

Travelers rose 2.2 percent after fourth-quarter profit beat estimates. Freeport-McMoRan rallied 4.6 percent as copper sales rose more than anticipated and costs fell. DuPont Co. advanced 1.8 percent after fourth-quarter profit beat estimates as demand climbed for plastics used in autos. Google Inc. jumped 4.8 percent after the close of regular trading as it posted higher fourth-quarter earnings.

The Standard & Poor’s 500 Index rose 0.4 percent to 1,492.51 at 4 p.m. in New York. The Dow Jones Industrial Average advanced 62.51 points, or 0.5 percent, to 13,712.21. About 6.2 billion shares changed hands on U.S. exchanges, or about in line with the three-month average.

“This country is on the verge of an explosion of greatness,” David Tepper, the hedge-fund manager who runs the $15 billion Appaloosa Management LP, said today in an interview with Stephanie Ruhle on Bloomberg Television’s “Market Makers.” “The key is to be long equities this year.”

The S&P 500 has risen 4.7 percent in January for the best start to a year since 1997. The benchmark gauge surged to the highest level since December 2007 last week as companies including General Electric Co. and Goldman Sachs Group Inc. reported better-than-estimated earnings. Some 72 percent of the 76 companies in the benchmark index that have released results so far exceeded projections, according to data compiled by Bloomberg. Analysts on average forecast growth of 3.8 percent in fourth-quarter profit, the data show.

Sales of U.S. existing homes unexpectedly fell 1 percent to a 4.94 million annual rate last month, figures from the National Association of Realtors showed today in Washington. The median forecast of 79 economists surveyed by Bloomberg called for sales to increase to a 5.1 million rate. The reading was still the second-highest since November 2009.

In Asia, the Bank of Japan made its strongest commitment yet to end two decades of stagnation, shifting to Federal Reserve-style open-ended asset purchases. The BOJ pledged to buy about 13 trillion yen ($145 billion) in assets a month from January 2014 and doubled its inflation target without setting a deadline.

Tepper said he’s bullish on U.S. stocks as the economy is set to grow by as much as 3 percent this year. He said investors should own stocks because they’re historically inexpensive, U.S. companies have little debt, interest rates are low, credit is fully valued and the major risks to the global economy, such as a debt crisis in Europe, have diminished.

“Whatever happens in the near-term, there is nothing to suggest the path of least resistance is not higher over the intermediate and longer-term,” Jeffrey Saut, who helps oversee about $350 billion as chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, wrote in a note to clients today. “Therefore, I would accumulate favored stocks, as well as the indices, on any ensuing pullbacks.”

Google rose 4.8 percent to $736.75 as of 4:58 p.m. in New York. The owner of the world’s largest search engine reported higher profit as advertisers boosted spending to reach consumers during the holiday shopping season.

International Business Machines Corp. added 4 percent to $203.97 after the close of regular trading. The world’s biggest computer-services provider forecast profit that exceeded analyst estimates as the company shifts to data analysis and cloud computing.

Materials producers in the S&P 500 rose 0.9 percent, the most among 10 industries in the benchmark equity gauge. All groups advanced except for consumer-staples shares.

Freeport-McMoRan added 4.6 percent to $35.19 as fourth- quarter earnings topped analysts’ estimates. Metal volumes were better than expected because of higher production in North and South America, Freeport said. Copper and gold sales increased from a year earlier when the company’s Grasberg mine in Indonesia, its biggest operation, was affected by a strike. The Phoenix-based mining company agreed last month to buy two energy companies for $9 billion.

DuPont gained 1.8 percent to $47.82. The biggest U.S. chemical company by market value said profit excluding one-time items was 11 cents a share, beating the 7-cent average of 10 estimates compiled by Bloomberg. Sales in 2013 will climb to $36 billion from $34.8 billion, DuPont said, topping the $35.9 billion average of 17 analysts’ estimates.

Travelers, the only insurer in the Dow, rallied 2.2 percent to $77.95 after profit beat estimates on higher income from its investment portfolio, increased sales and a benefit from reserves. Travelers’ fourth-quarter profit fell 51 percent as superstorm Sandy boosted claims costs.

Insurance stocks rallied 1.6 percent as group, the most among 24 industries in the S&P 500, to the highest level since September 2008.

The Dow Jones Transportation Average, which includes 20 members, rallied 1.1 percent to 5,757.44, a record high. Delta Air Lines Inc. jumped 2.9 percent to $14.01. The Atlanta-based carrier plans to cut seating capacity as much as 4 percent while working to curb labor and fuel costs that crimped fourth-quarter earnings.

Johnson & Johnson slumped 0.7 percent to $72.69. Profit for 2013 will be $5.35 to $5.45 a share, the company said in a statement. The guidance missed the $5.49 average of 23 analyst estimates compiled by Bloomberg. Worldwide consumer sales declined in 2012 to $14.4 billion, a 2.9 percent decrease caused by a negative currency impact.

Boeing Co. fell 1.2 percent to $74.16 after saying it will suspend deliveries of 787 Dreamliners while working to meet a U.S. Federal Aviation Administration directive to ensure the plane’s lithium-ion batteries are safe.

Dell Inc. climbed 2.2 percent to $13.12. The company is getting closer to clinching a leveraged buyout with Silver Lake Management LLC, and Microsoft Corp. is planning to provide part of the funding, people with knowledge of the matter said.

Silver Lake and Dell are negotiating a price in the range of $13.50 to $14.25 a share, said one of the people, who asked not to be named because the talks are private. Microsoft is discussing contributing about $2 billion for the deal, which could be announced this week, the person said. Microsoft retreated 0.4 percent to $27.15, erasing earlier gains.

International investors are the most bullish on stocks in at least 3 1/2 years, with close to two-thirds planning to raise their holdings of equities during the next six months, according to a Bloomberg survey.

As the global financial and business elite gather in Davos, Switzerland, for their annual forum, 53 percent of respondents to the Bloomberg Global Poll also say equities will offer the highest return in the next year. That’s a 17 percentage point jump from the last poll in November and the most since the quarterly survey of investors, analysts and traders who subscribe to Bloomberg began in July 2009.

With 72 percent of corporate earnings exceeding analysts’ estimates, it may be difficult for U.S. stocks not to reach a record in 2013.

The S&P 500 is less than 5 percent below the all-time high in October 2007. Profits in the benchmark gauge are forecast to exceed $1 trillion this year, or 31 percent more than when the gauge peaked, according to more than 11,000 analyst estimates compiled by Bloomberg. Even if the price-earnings ratio, now 9.8 percent below the six-decade mean, doesn’t expand, the S&P 500 is poised to recover fully from the financial crisis that began almost six years ago.

“Corporate America has done an incredible job post- recession,” Leo Grohowski, BNY Mellon Wealth Management’s New York-based chief investment officer said in a Jan. 16 phone interview. His firm oversees $179 billion. “It’s not going to be a return to the ’80s and ’90s where we had people retiring from their day jobs to become day traders. I wouldn’t revert to the historic P/E ratio kind of environment. But the good news is I don’t think we need that to reach a record.”

Have a wonderful evening everyone.

 

Be magnificent!

 

Give with faith, and never without faith.

Give with dignity.  Give with humility.  Give with joy.

And give with understanding of the effects of your gift.

Taittiriya Upanishad

As ever,

 

Carolann

 

If you have made mistakes, even serious

ones, there is always another chance for you.

What we call failure is not the falling down,

but the staying down.

-Mary Pickford, 1892-1979

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

It’s Blue Monday.  This was worth a read today:

Beating “Blue Monday”

Think positive thoughts and focus on attainable resolutions

By Brent Jolly | January 21, 2013

British post-punk band New Order released the song Blue Monday in 1983. It became the best-selling 12-inch single of all-time. The song begins with lead singer Bernard Sumner asking the rhetorical question: “How does it feel?”

The answer, according to mental health experts: pretty depressing.

While the song remains a popular post-punk anthem, “Blue Monday” has another meaning. Cardiff University psychologist Cliff Arnall has awarded that title to the third Monday in January, which he has identified as the most depressing day of the year.

Cold, dreary weather, holiday debt and shorter days contribute to “blue” feelings, says Dr. Arya Sharma, chairman in obesity at the University of Alberta in Edmonton. Another contributor may be that many of us have fallen short of those resolutions made three weeks ago.

If blue Monday is getting you down, Sharma recommends the following:

> Look on the bright side
Sharma is quick to point out that the Blue Monday phenomenon is not rooted in the scientific method, so it lacks proper scientific status. Nevertheless, he says, it makes sense.

“You have short days and long nights,” Sharma says. “It’s cold outside and you could have a bit of SAD [seasonal affective disorder], which has an impact on your mood.”

He encourages you to keep a resilient mind by thinking positive thoughts. Consider what you have accomplished recently, not what you still have left on your to-do list.

> Revisit your resolutions
Check in on how well you are doing with your New Year’s resolutions.

If you have been able to keep up with your goals, Sharma says, give yourself a pat on the back. But falling short in this area can be a source of frustration that colours your mood.

Many New Year’s resolutions fail, Sharma says, because they focus on outcomes we can’t control instead of behaviours we can control.

For example, resolving to lose weight calls for a result that is beyond your control. Resolving to eat more salads or quit smoking involves a behavior you can control.

Says Sharma. “It’s the things you are going to do that are the behaviours.”

> Eat healthy
While a healthy diet can contribute to a feeling of wellbeing, overeating can make you feel worse.

When it is time to dine, Sharma says, focus exclusively on eating — not your mobile devices, the television or paperwork. You will feel more full, and thus, eat fewer calories if you are paying attention to your meal.

> Have a plan
The path to good health — like the path to financial wellbeing — is best done with a good roadmap, Sharma says.

That could mean working with a dietician, for example, or mapping out your workouts with an activity monitor and software. In any case, be sure to keep your goals realistic and attainable.

Says Sharma: “If you have [a plan] and use it properly, it will work.”

photo of the day

01/21st/2013

President Obama hugs Vice President Joe Biden before he takes the oath of office during the 57th Presidential Inauguration on Jan. 21, 2013, in Washington, D.C.

Photo: Ann Hermes/Staff

Market Closes for January 21st, 2013:

Market  Index	Close	Change
Dow  Jones	13649.70	Closed
S&P 500	1485.98	Closed
NASDAQ	3134.705	Closed
TSX	12794.25	+68.56
		+0.54%

International Markets

Market  Index	Close	Change
NIKKEI	10747.74	-165.56
		-1.52%
HANG  SENG	23590.91	-10.87
		-0.05%
SENSEX	20101.82	+62.78
		+0.31
FTSE 100	6180.98	+26.57
		+0.43

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.935	1.919
CND.   30 Year Bond	2.508	2.497
U.S.   10 Year Bond	Closed	1.8399
U.S.   30 Year Bond	Closed	3.0248

Currencies

BOC Close	Today	Previous
Canadian $	0.99287	0.90180
US   $	1.00718	1.00827
Euro Rate  1 Euro=		Inverse
Canadian   $	1.32221	0.75631
US  $	1.33171	0.75092

Commodities

Gold	Close	Previous
London Gold   Fix	1690.05	1684.85
Oil	Close	Previous
WTI Crude Future	95.56	95.56
BRENT	114.20	113.99

Market Commentary:

Canada

By Eric Lam

Jan. 21 (Bloomberg) — Canadian stocks rose, closing at the highest level in more than 17 months, as European finance ministers met for the first time this year to discuss a solution to the region’s debt crisis.

Bank of Nova Scotia and Royal Bank of Canada gained at least 0.4 percent. Research In Motion Ltd., maker of the BlackBerry 10 line of smartphones, jumped 11 percent after Die Welt reported Chief Executive Officer Thorsten Heins said in an interview he’s still considering a sale of hardware production.

Golden Predator Corp. surged 17 percent after announcing on Jan. 18 it plans to transition to a royalty mining company. Home- improvement retailer Rona Inc. added 3.1 percent after naming a new executive chairman.

The Standard & Poor’s/TSX Composite Index rose 68.56 points, or 0.5 percent, to 12,794.25 in Toronto, the highest close since August 2011. The benchmark gauge has gained 2.9 percent this year. Markets in New York were closed for Martin Luther King Jr. Day.

“When there were concerns about Europe a year ago markets took a tumble, now maybe investors are looking at Europe as not as important,” David Cockfield, managing director and fund manager with Northland Wealth Management, said from Toronto. His firm manages about C$200 million ($201 million). “There’s not a lot for the market to get upset about. Markets are somewhat relaxed and people who were on the sidelines are edging back in.”

Jean-Claude Juncker, Prime Minister of Luxembourg, stepped down as head of the group of euro-area finance ministers as the policy makers met in Brussels today. Jeroen Dijsselbloem of the Netherlands assumes the informal, unpaid post. The ministers are discussing how and when the 500 billion-euro ($666 billion) European Stability Mechanism can bypass governments and provide direct help to banks.

Scotiabank rose 0.8 percent to C$58.34 and Royal Bank added 0.4 percent to C$61.96 as bank stocks contributed most to gains in the S&P/TSX. Trading volume on the S&P/TSX was 47 percent lower than the 30-day average.

RIM, based in Waterloo, Ontario, rose 11 percent to C$17.41 after Heins, speaking to the German Die Welt newspaper, said the company’s strategic review is continuing. Pressure to sell off assets has diminished because of high cash reserves, and other options include licensing of RIM’s software, Heins said.

Rona, based in Boucherville, Quebec, gained 3.1 percent to C$11.86, the highest close since September.

Rona, with the backing of Caisse de Depot et Placement du Quebec and Invesco Canada Ltd., its two biggest shareholders, has appointed Robert Chevrier as the company’s new executive chairman. Robert Pare has resigned the post and will continue as a board member. Four new directors, including Bernard Dorval, former group head of insurance at Toronto-Dominion Bank, also immediately join the board.

Golden Predator, which is exploring for gold in the Yukon Territory’s Tintina gold belt, soared 17 percent to 39 Canadian cents after announcing on Jan. 18 it will change the company’s name to Gold Bullion Royalty Corp., focused on royalty creation through its 34 existing projects. The company will also spin off its Golden Predator Canada Corp. unit to shareholders through a dividend or other plan, it said in a statement.

Gluskin Sheff + Associates Inc., a Toronto-based wealth- management company, advanced 5.9 percent to C$16.65 after declaring a special semi-annual dividend of 65 Canadian cents a share based on C$34 million of performance fees earned in the six months ended Dec. 31.

Nevsun Resources Ltd., operator of a mine in Eritrea, slumped 8.7 percent to C$4.22 after about 200 Eritrean soldiers mutinied and stormed a Ministry of Information building in the capital of Asmara, Agence France-Presse reported. Nevsun’s Bisha mine is operating normally, an external consultant for the company said today by e-mail.

US

Markets Closed for Martin Luther King Day.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Duties to self, to the family, to the country,

and the world are not independent of one another.

One cannot do good to the country

by injuring himself or his family.

Similarly one cannot serve the country

by injuring the world at large.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Time you enjoy wasting is not wasted

time.

-Marthe Troly-Curtin

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:

Last night, I had to do a presentation to the Board of a Charitable Foundation whose money I manage; they’re on the lower mainland, so I got to see how the improvements to Highway 1 (thank goodness!) are progressing (very well since my last presentation to them) and the new Golden Ears Bridge; big expansion happening.

I was reading Dear Abby’s obituary this morning and it was a nostalgic moment for me;  I remember clearly the very first time I ever saw Dear Abby’s column, like it was yesterday.  I was only about 5 or 6 years old and I was visiting my grandmother in the summertime.  The paper arrived and I thought I’d read it.  When I found Dear Abby, I became a devoted reader every day.

Her style differed from her sister’s Ann Landers; Abby’s replies “were often flippant and occasionally risqué one-liners” writes Steve Karnowski of the Associated Press:

Dear Abby:  My boyfriend is going to be 20 years old next month.  I’d like to give him something nice for his birthday.  What do you thinkhe’f like? –Carol

Dear Carol: Never mind what he’d like, give him a tie.

Dear Abby: What inspires you most to write? –Ted

Dear Ted: The Bureau of Internal Revenue.

Dear Abby: I’ve been going with this girl for a year.  How can I get her to say yes? –Don

Dear Don: What’s the question?

If you can’t explain it to a six year old, you don’t understand it yourself. –Albert Einstein.

Photo of the day

01/18/2013

A giant sculpture of a baby titled ‘Planet’ is unveiled in Singapore at the Gardens By The Bay. ‘Planet’ was created by British artist Marc Quinn in 2008 and represents a 7-month-old child made out of painted bronze and steel, with the illusion of being weightless and suspended in mid-air. This sculpture is the newest addition at the Gardens By The Bay, one of the city-state’s newer attractions.

Photo: Wong Maye-E/AP

Market Closes for January 18th, 2013:

Market  Index	Close	Change
Dow  Jones	13649.70	+53.68    +0.39%
S&P 500	1485.98	+5.04    +0.34
NASDAQ	3134.705	-1.297    -0.04%
TSX	12725.69	+50.96
		+0.40%

International Markets

Market  Index	Close	Change
NIKKEI	10913.30	+303.66
		+2.86%
HANG  SENG	23601.78	+262.02
		+1.12%
SENSEX	20039.04	+75.01
		+0.38
FTSE 100	6154.41	+22.05
		+0.36

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.919	1.949
CND.   30 Year Bond	2.497	2.509
U.S.   10 Year Bond	1.8399	1.8715
U.S.   30 Year Bond	3.0248	3.0655

Currencies

BOC Close	Today	Previous
Canadian $	0.90180	0.98553
US   $	1.00827	1.01468
Euro Rate  1 Euro=		Inverse
Canadian   $	1.32055	0.75726
US  $	1.33147	0.75105

Commodities

Gold	Close	Previous
London Gold   Fix	1684.85	1687.25
Oil	Close	Previous
WTI Crude Future	95.56	95.49
BRENT	113.99	113.05

Market Commentary:

Canada

By Leslie Picker

Jan. 18 (Bloomberg) — Canadian stocks rose, sending the Standard & Poor’s/TSX Composite Index to its third weekly gain, as Research In Motion Ltd. climbed and China’s growth accelerated for the first time in two years.

RIM rallied 7 percent after a Jefferies & Co. analyst upgraded the BlackBerry maker’s stock to buy. Harry Winston Diamond Corp. rose 2.9 percent as Nomura Holdings Inc. analysts said demand for diamonds may exceed supply. Shoppers Drug Mart Corp. plunged 5.2 percent, the most since April 2010, as some Canadian provinces said they will buy generic drugs in bulk.

The S&P/TSX increased 50.96 points, or 0.4 percent, to 12,725.69 at 4 p.m. in Toronto. The benchmark equity gauge, up 1 percent this week, has climbed for the past three weeks, the longest stretch in a year.

“Our fears of a hard landing in China hopefully have been put to rest,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto, which manages about $4 billion. “The rate of growth is higher than the previous quarter, so I think that’s pulling some money into the Canadian market.‘‘ China’s gross domestic product expanded 7.9 percent in the fourth quarter from a year earlier, up from a three-year low of 7.4 percent in the previous period, National Bureau of Statistics data showed. Eight out of 10 groups in the benchmark Canadian equity measure rose today.

Canadian factory sales advanced to a six-month high in November and unfilled orders rose to the most in more than three years on automobile and aircraft demand. Sales climbed 1.7 percent to C$49.9 billion ($50.4 billion), Statistics Canada said today in Ottawa.

RIM climbed to its highest price in almost a year after Jefferies analyst Peter Misek upgraded the stock to a buy, citing the potential for its new software to offer corporate e- mail on rival devices. RIM gained 7 percent to C$15.71, advancing the most in the S&P/TSX.

Shoppers Drug Mart, the country’s largest pharmaceutical chain, posted the biggest loss in the Canadian equity benchmark.

Every province except Quebec and three territories plan to buy six generic drugs, which represent about 20 percent of publicly funded spending on such medicines in Canada, in bulk to lower prices, according to a government press release. It lost 5.2 percent to C$41.83.

Harry Winston advanced 2.9 percent to C$14.76. Nomura rated the diamond retailer and mining company a buy, and said prices will stay near current levels in 2013, though exposure for the long term is ‘‘worth investigating.’’ Demand will outstrip supply from 2015, which should boost margins for the robust producers, the analysts said.

First Quantum Minerals Ltd., the copper producer in the midst of a C$5.1 billion hostile bid for Inmet Mining Corp., added 1 percent to C$21.25. Copper futures for delivery in March increased 0.5 percent to settle at $3.679 a pound in New York.

Bank of Nova Scotia rose 0.8 percent to C$57.86. Canada’s third-largest bank said it can boost small loans in Mexico as much as 20 percent in a push for business in Latin America, where lending margins are double the Canadian average. A measure of financial companies added 0.5 percent.

US

By Lu Wang

Jan. 18 (Bloomberg) — U.S. stocks rose for a third week, driving benchmark indexes to five-year highs, as earnings from companies including General Electric Co. and Goldman Sachs Group Inc. beat estimates and debt-limit talks progressed.

Energy, industrial and consumer companies climbed the most among 10 groups in the Standard & Poor’s 500 Index as GE rallied 4.3 percent. A gauge of homebuilders rose to the highest level since 2007 amid better-than-expected housing data. Morgan Stanley jumped 11 percent after reaching profit-margin targets six months ahead of schedule. Dell Inc. surged 18 percent amid reports it’s in buyout talks. Bank of America Corp. and Intel Corp. sank at least 3.4 percent on disappointing results.

The S&P 500 rose 1 percent to 1,485.98, extending its 2013 advance to 4.2 percent. The Dow Jones Industrial Average added 161.27 points, or 1.2 percent, to 13,649.70. Both measures closed at their highest levels since December 2007.

“What’s driving the market is an improved economic backdrop and some growing hope that the Congress will come to some sort of reasonable solution to the overhang we’ve had,” Hank Herrmann, Overland Park, Kansas-based chairman and chief executive officer of Waddell & Reed Financial Inc., said in a phone interview. His firm manages $100 billion. “The early indications on earnings are that they’ve been reasonably constructive.”

Equities rose as about 72 percent of the 67 S&P 500 companies that have reported quarterly results beat estimates.

Economic reports showed retail sales advanced more than forecast in December and housing starts climbed 12 percent, capping the best year for the industry since 2008. Confidence among American households unexpectedly fell to a one-year low this month, as higher payroll taxes create a risk that the biggest part of the economy will slow in early 2013.

The benchmark index rallied on the final day of the week after Speaker John Boehner said House Republicans plan to vote on a three-month extension of U.S. borrowing authority in an effort to force the Democratic-led Senate to adopt a budget plan. Lawmakers in Washington remain divided about raising the debt ceiling and cutting government spending.

The Treasury Department has said the U.S. will exceed its $16.4 trillion borrowing authority sometime from mid-February to early March. Since 1960, Congress has raised or revised the limit 79 times, including 49 times under Republican presidents, according to the department.

Apple Inc., Google Inc. and more than 80 other companies in the index are scheduled to announce earnings in the coming week, data compiled by Bloomberg show. Analysts are turning more optimistic, with fourth-quarter earnings projected to grow 3.8 percent, up from 2.5 percent at the end of last week, according to data compiled by Bloomberg.

“The federal spending cuts, sequestration, that overhang still exists,” Timothy Ghriskey, who helps oversee $2 billion as chief investment officer at Solaris Group LLC in Bedford Hills, New York, said in a Jan. 17 interview. “But I think what the quarter is showing us so far is that managers actually overall have not put the brakes on, that they continue to move companies ahead, and will adjust to whatever federal environment the government saddles us with.”

The S&P 500 has more than doubled from a 12-year low in 2009 as corporate earnings continued the three-year expansion and the Federal Reserved expanded its bond purchases to keep interest rates low to spur growth. The index is 5.1 percent below its all-time high of 1,565.15 set in October 2007.

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, fell 6.7 percent during the week to 12.46, the lowest level since April 2007.

Eight out of 10 S&P 500 groups advanced as energy, industrial and consumer companies rose more than 1.5 percent.

The Dow Jones Transportation Average surged 2.2 percent to a record while the Russell 2000 Index added 1.4 percent to an all- time high.

GE increased 4.3 percent to $22.04. The company’s industrial businesses surpassed gains in finance as emerging- market expansion fueled the aviation and health-care divisions, which helped build a record $210 billion order backlog.

Goldman Sachs rallied 5.3 percent to $144.45 after quarterly profit beat estimates and full-year revenue grew for the first time since 2009.

Morgan Stanley jumped 11 percent to $22.38. The owner of the world’s biggest brokerage said earnings from that business more than doubled in the fourth quarter. The brokerage’s higher profitability strengthens Chief Executive Officer James Gorman’s plan to boost returns as he requests regulatory approval to buy Citigroup Inc.’s remaining 35 percent stake in the business.

An S&P index of homebuilders climbed 3.1 percent to the highest level since August 2007. PulteGroup Inc., the largest U.S. homebuilder by revenue, rose 6 percent to $20.49. Lennar Corp. added 2.8 percent to $42.08 after reporting fiscal fourth- quarter earnings that beat analysts’ estimates as revenue jumped 42 percent and profit margins climbed.

Dell rallied 18 percent to $12.84. Silver Lake Management LLC and partners are close to lining up about $15 billion in funds for a buyout of the third-biggest maker of personal computers, said people familiar with the matter.

Hewlett-Packard Co. jumped 5.9 percent to $17.11 for the biggest increase in the Dow. The personal-computer maker has been approached by investment bankers about selling assets, though it’s not currently considering such a move, according to a person with knowledge of the matter.

Bank of America dropped 4.2 percent, the most in the Dow, to $11.14. The second-biggest U.S. bank by assets said profit tumbled 63 percent, hurt by shrinking revenue and more costs from cleaning up bad mortgages.

Intel slumped 3.4 percent to $21.25. The world’s largest chipmaker reported a second straight quarter of declining sales.

Intel also said sales may fall for a third quarter, highlighting the company’s struggle to adapt in a world swiftly embracing mobile devices and leaving behind the personal-computer industry it dominates.

Apple declined 3.9 percent to $500 after the Nikkei newswire reported that production of the iPhone was cut on weak demand. Apple ordered about half the 65 million iPhone 5 displays it originally targeted for this quarter, Nikkei said, citing an unnamed executive at a component maker.

Boeing Co. erased 0.2 percent to $75.04, after fluctuating between gains and losses during the week as defective batteries led regulators to ground the company’s global fleet of 787 Dreamliners.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

I cannot imagine anything nobler or more national than that for, say, one hour in a day,

we should all do the labor that the poor must do,

and thus identify ourselves with them and through them with all mankind.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

I got the blues thinking about the future,

so I left off and made some marmalade.

It’s amazing how it cheers one up

to shred oranges and scrub the floor.

-D .H. Lawrence, 1885-1930

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:

Carolann is away at a meeting this afternoon therefore I will be writing the Newsletter on her behalf.

On Tuesday evening I went to the theatre and saw “Les Miserables” with a girlfriend of mine.  I had previously seen the musical in Vancouver years ago, so I was a bit apprehensive as to how the movie would live up to the live performance. Let me tell you, it was incredible!  The actors/actress’ they chose to play the roles, were absolutely amazing!  The Golden Globes recognized this and awarded “Les Miserables” with the Best Picture, Musical or Comedy this year.  Directed by Tom Hooper, this great film defeated other top competitors such as “Silver Linings Playbook”, “The Best Exotic Marigold Hotel” and a few others.  Along with the Golden Globe Award, “Les Miserables” also received many nominations for the outstanding acting in the movie.  If you haven’t seen this film yet, I encourage you to do so before it leaves the theatre!

“It is easy to sit up and take notice, What is difficult is getting up and taking action.”- Honore de Balzac

On this day:

1806 – James Madison Randolph, grandson of U.S. President Thomas Jefferson, was the first child born in the White House.

1852 – The independence of the Transvaal Boers was recognized by Britain.

1882 – Thomas Edison’s exhibit opened the Crystal Palace Exhibition in London.

1893 – Hawaii‘s monarchy was overthrown when a group of businessmen and sugar planters forced Queen Liliuokalani to abdicate.

1900 – Yaqui Indians in Texas proclaimed their independence from Mexico.

1912 – English explorer Robert Falcon Scott reached the South Pole. Norwegian Roald Amundsen had beaten him there by one month. Scott and his party died during the return trip.

1916 – The Professional Golfers Association was formed in New York City.

1928 – The fully automatic, film-developing machine was patented by A.M. Josepho.

“Continuous effort – not strength or intelligence – is the key to unlocking our potential.” – Winston Churchill

Photos of the day January 17^th, 2013

A man rides his horse through the flames during the “Luminarias” annual religious celebration on the night before Saint Anthony’s, Patron of animals, Day in the village of San Bartolome de los Pinares, about 62 miles northwest of Madrid, Spain, January 16, 2013. According to tradition that dates back 500 years, people ride their horses trough the narrow cobblestone streets of this small village to purify the animals with the smoke from the bonfires.

Photo: Sergio Perez/Reuters

Clearing skies await a tripod-toting photographer looking for a spot to capture the early-morning light at Portland Head Light in Cape Elizabeth, Maine. A snowstorm that ended before dawn temporarily transformed Fort Williams Park into a snowy scene. Photo: Robert F. Bukaty/AP

 

Market Closes for January 17^th, 2013:

Market  Index	Close	Change
Dow  Jones	13596.09	+84.86    +0.63%
S&P 500	1482.49	+9.86    +0.67
NASDAQ	3136.002	+18.458    +0.59%
TSX	12681.35	+72.53
		+0.58%

International Markets

Market  Index	Close	Change
NIKKEI	10609.64	+9.20
		+0.09%
HANG  SENG	23339.76	-17.23
		-0.07%
SENSEX	19964.03	+146.40
		+0.74
FTSE 100	6132.36	+28.38
		+0.46

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.949	1.891
CND.   30 Year Bond	2.509	2.461
U.S.   10 Year Bond	1.8715	1.8273
U.S.   30 Year Bond	3.0655	3.0206

Currencies

BOC Close	Today	Previous
Canadian $	0.98553	0.98554
US   $	1.01468	1.01467
Euro Rate  1 Euro=		Inverse
Canadian   $	1.31808	0.75868
US  $	1.33742	0.74771

Commodities

Gold	Close	Previous
London Gold   Fix	1687.25	1680.20
Oil	Close	Previous
WTI Crude Future	95.49	94.24
BRENT	113.05	111.90

Market Commentary:

Canada

By Eric Lam

Jan. 17 (Bloomberg) — Canadian stocks rose to a 10-month high as banks rallied and crude advanced after U.S. reports showed housing starts climbed more than anticipated in December and initial jobless claims dropped to a five-year low.

Canadian Natural Resources Ltd. gained 2.1 percent as oil rose to a four-month high. Ivanplats Ltd. climbed 2.1 percent after more than doubling resource estimates at its Kamoa copper mine. Sun Life Financial Inc. added 1.1 percent after partnering with Malaysia’s state investment fund to buy an insurance joint venture. H&R Real Estate Investment Trust dropped 2.1 percent as it offered to acquire Primaris Retail Real Estate Investment Trust, trumping a hostile offer from another investor group.

The Standard & Poor’s/TSX Composite Index rose 65.91 points, or 0.5 percent, to 12,674.73 in Toronto, the highest level since March 1. The benchmark gauge has gained 1.9 percent this year.

The U.S. housing and jobs data “is definitely a positive, it’s more validation of a trend that’s been in place,” said Jeff Parent, investment manager with Quadrexx Asset Management in Toronto. The firm manages about C$100 million. “The markets want to move higher but have been pausing and waiting. I’m quite bullish.”

U.S. Commerce Department figures showed housing starts rose 12.1 percent in December to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey and the most since June 2008.

Initial jobless claims fell 37,000 to 335,000 last week, the lowest since January 2008, Labor Department figures showed.

The Toronto-Dominion Bank climbed 1 percent to C$82.69 and Royal Bank of Canada rose 0.6 percent to C$61.44 as financial and energy companies contributed most to gains in the S&P/TSX.

All 10 industries advanced, on trading volume 6.7 percent lower than the 30-day average.

Canadian Natural Resources rose 2.1 percent to C$29.33 and TransCanada Corp., builder of the Keystone XL pipeline project, added 0.8 percent to C$48.58. Crude for February delivery surged 1.3 percent to settle at $95.49 a barrel in New York, the highest settlement since Sept. 17.

Ivanplats rose 2.1 percent to C$5.30 after reporting a 115 percent increase in resource estimates compared with September 2011 at its Kamoa copper project in the Democratic Republic of Congo. Copper futures for March delivery rose the most in two weeks, gaining 1.5 percent to settle at $3.662 a pound in New York.

Aecon Group Inc., a Toronto-based construction company, jumped 7.3 percent to C$11.75 after Michael Tupholme, an analyst with TD Securities, raised his price target to C$16 from C$15.50 while maintaining the stock as a top pick.

“We continue to see meaningful upside potential from current levels,” he said in a note to clients today.

Rogers Communications Inc. gained 1.4 percent to C$45.44 after Phillip Huang, an analyst with UBS Securities, said he expects the telecommunications giant to boost its dividend by 10 percent and renew a share buyback program on Feb. 15.

Sun Life added 1.1 percent to C$28.24. Canada’s third- largest insurer partnered with Khazanah Nasional Bhd., Malaysia’s state investment fund, to purchase 98 percent of Aviva Plc and CIMB Group Holdings Bhd.’s Malaysian insurance joint venture for 1.8 billion Malaysian ringgit ($600 million).

The deal is part of the company’s strategy to grow its business in Asia, said Kevin Strain, president of Sun Life’s Asian operations.

H&R REIT slipped 2.1 percent to C$23.28. It offered about C$27.33 in cash and stock for Primaris, the Canadian shopping mall owner that was the target of a hostile bid from an investor group led by KingSett Capital Inc. Primaris increased 0.3 percent to C$26.58.

US

By Stephen Kirkland and Rita Nazareth

Jan. 17 (Bloomberg) — Stocks rose for a third day and commodities rallied as a jump in U.S. housing starts and drop in jobless claims fueled optimism in the world’s largest economy.

The yen slid to the lowest since 2010 versus the dollar.

The Standard & Poor’s 500 Index gained 0.7 percent to 1,482.96 at 4 p.m. in New York, capping the longest rally in a month. Oil surged 1.3 percent to a four-month high of $95.49 a barrel to pace gains in commodities. The yen slid as much as 1.9 percent as Japan’s economy minister said the currency has more room to decline. The euro strengthened against all 16 major peers while the Swiss franc slid to the weakest level since the central bank introduced a currency cap in 2011. Yields on 10- year Treasuries rose five basis points to 1.87 percent.

Stocks jumped as applications for jobless benefits fell in the week ended Jan. 12 to the lowest level in five years, and housing starts climbed 12.1 percent last month, government data showed. Economy Minister Akira Amari said the yen is still in the process of correcting from excessive gains and that his remarks earlier this week on yen weakness were misinterpreted.

“We’re getting signs that both housing and the labor market are improving,” said Paul Zemsky, the New York-based head of asset allocation for ING Investment Management, which oversees $170 billion. “Housing, in particular, is a huge number. It’s positive for the economy, it’s positive for earnings and for the stock market.”

Intel Corp., Walt Disney Co. and Home Depot Inc. paced gains in the Dow Jones Industrial Average, which climbed above its highest close since 2007 during the day before paring gains.

PulteGroup Inc. led an S&P gauge of homebuilders to the highest level since 2007.

U.S. housing starts climbed to a 954,000 annual rate, exceeding all forecasts in a Bloomberg survey of economists and the most since June 2008, the Commerce Department reported today. Jobless claims decreased by 37,000 to 335,000 in the week ended Jan. 12, Labor Department figures showed. Economists forecast 369,000 claims, according to the median estimate in a Bloomberg survey.

CBS Corp. jumped 7.9 percent after saying it will convert its outdoor advertising division into a real estate investment trust and seek a buyer for the European and Asian parts of the business.

BlackRock Inc., the world’s biggest money manager, gained 4.4 percent after reporting adjusted fourth-quarter earnings of $3.93 a share, compared with the $3.71 a share average estimate of six analysts surveyed by Bloomberg.

Bank of America Corp. declined 4.2 percent after reporting earnings that decreased 64 percent. Of the 52 companies that posted quarterly results so far, 71 percent topped analysts’ profit projections, according to data compiled by Bloomberg.

Almost four shares rose for every one that declined in the Stoxx 600. Carrefour SA, Delhaize Group SA and Associated British Foods Plc led gains among retailers. Carrefour, France’s biggest retailer, climbed 6.1 percent and Delhaize, the owner of Food Lion supermarkets in the U.S., rallied 10 percent as fourth-quarter revenue increased. AB Foods advanced 3.2 percent as the U.K. sugar producer that owns Primark clothing stores reported a 10 percent gain in first-quarter sales.

The yen slid more than 1.5 percent against its 16 major peers before the Bank of Japan reviews its 1 percent inflation goal at a Jan. 21-22 meeting. Prime Minister Shinzo Abe has called for the target to be doubled as he works to spur economic growth.

BOJ and government officials reached basic agreement on a joint statement calling for a 2 percent inflation target and additional funds for purchasing assets, Nikkei reported without attribution.

The 17-nation euro gained 0.7 percent to $1.3377 as it strengthened against all 16 counterparts after Spain’s borrowing costs decreased at a 4.5 billion bond auction.

Switzerland’s franc fell as much as 1 percent to 1.2490 per euro, the weakest since May 2011. The currency declined against 15 of 16 major peers as signs Europe’s debt crisis is easing sapped demand for haven assets.

Major currencies have been roiled this week as policy makers stepped up warnings on swings in exchange rates.

Thailand’s finance minister today said the baht is “not at a good level,” while a Russian central bank official yesterday said the world is on the brink of a “currency war.” A JPMorgan index of volatility for currencies of Group of Seven nations jumped 5.9 percent to 8.9 today, the highest level since August.

The MSCI Emerging Markets Index rose 0.2 percent. India’s Sensex gained 0.7 percent as foreign investors added to their holdings of domestic shares for a 13th straight day. Russia’s Micex Index was little changed and Brazil’s Bovespa gauge gained 0.7 percent. The Shanghai Composite Index slid 1.1 percent before a report on fourth-quarter growth figures tomorrow.

 

Have a wonderful evening everyone!!

 

Be magnificent!

 

”One of the most tragic things I know about human nature is that all of us tend to put off living. We are all dreaming of some magical rose garden over the horizon instead of enjoying the roses that are blooming outside our windows today.” – Dale Carnegie

 

Kindest Regards,

 

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5838

 

Dear Friends,

Tangents:

John Keats to his sister Georgiana, on this day in 1820:

George [their brother] is busy this morning in making copies of my verses.  He is making now one of an ode to the nightingale, which is like reading an account of the Black Hole at Calcutta on an iceberg. –from the Book of Days.

Photos of the day

01.16.2013

A woman walks near a merry-go-round at Rossio square in Lisbon, Portugal. Photo: Rafael Marchante/Reuters

A statue’s head is seen on the Alexandre III Bridge which crosses the River Seine near the Eiffel Tower in Paris.

Photo: Philippe Wojazer/Reuters

 

Market Closes for January 16th, 2013:

Market  Index	Close	Change
Dow  Jones	13511.23	-23.66    -0.17%
S&P 500	1472.63	+0.29    +0.02
NASDAQ	3117.544	+6.766    +0.22%
TSX	12608.82	-33.15
		-0.26%

International Markets

Market  Index	Close	Change
NIKKEI	10671.29	+70.85
		+0.67%
HANG  SENG	23489.91	+132.92
		+0.57%
SENSEX	19817.63	-169.19
		-0.85
FTSE 100	6103.98	-13.33
		-0.22%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.891	1.908
CND.   30 Year Bond	2.461	2.477
U.S.   10 Year Bond	1.8273	1.8325
U.S.   30 Year Bond	3.0206	3.0197

Currencies

BOC Close	Today	Previous
Canadian $	0.98554	0.98454
US   $	1.01467	1.01570
Euro Rate  1 Euro=		Inverse
Canadian   $	1.31193	0.76224
US  $	1.33118	0.75122

Commodities

Gold	Close	Previous
London Gold   Fix	1680.20	1679.15
Oil	Close	Previous
WTI Crude Future	94.24	93.46
BRENT	111.90	111.45

Market Commentary:

Canada

By Leslie Picker

Jan. 16 (Bloomberg) — Canadian stocks fell for the first time in seven days, led by health-care companies and commodity producers, after the World Bank cut its global growth forecast.

CML Healthcare Inc. slid 4.3 percent as the company said it will sell its diagnostic imaging business. Labrador Iron Ore Royalty Corp. and Taseko Mines Ltd. declined at least 3 percent.

Research In Motion Ltd. rose 2 percent after the BlackBerry 10 maker said more than 1,600 businesses have registered for a training program for the new handsets and software.

The Standard & Poor’s/TSX Composite Index slid 33.15 points, or 0.3 percent, to 12,608.82 at 4 p.m. in Toronto. The index has risen 1.4 percent this year. Trading volume was 9.1 percent lower than the 30-day average.

“Whenever people say global growth is a bit weaker, the knee jerk reaction is to take a little bit out of those spaces,” Michael O’Brien, who oversees $3 billion as a fund manager at TD Asset Management in Toronto, said in a phone interview. “Markets are just deciding to take a breather.”

The World Bank cut its global growth forecast for this year as austerity measures, high unemployment and low business confidence weigh on economies in developed nations. The Washington-based bank yesterday projected the world economy will expand 2.4 percent, down from a June forecast of 3 percent, after growing 2.3 percent in 2012.

CML Healthcare lost 4.3 percent to C$6.92, as the company said it held preliminary talks with prospective buyers for its diagnostic imaging business.

Mining companies declined as copper retreated to a two-week low. Labrador Iron Ore declined 3.2 percent to C$33.28. Taseko Mines, which produces copper and molybdenum, lost 4.4 percent to C$3.25 for the biggest drop in the S&P/TSX.

Copper for delivery in March lost 0.6 percent to $3.6233 a pound.

Rio Alto Mining Ltd., the developer of the La Arena copper and gold mine in Peru, surged the most since June 1 after regulators in the country approved it as an investment for domestic pension funds. Rio Alto Mining Ltd. climbed 5.5 percent to C$5.52.

RIM advanced 2 percent to C$14.55. Of the registered customers, more than 1,000 have already begun using the BlackBerry 10 Ready program since its introduction in early December, Nick Manning, a RIM spokesman, said in an e-mail.

US

By Rita Nazareth and Sarah Pringle

Jan. 16 (Bloomberg) — Most U.S. stocks fell, following yesterday’s gain, as a cut in the World Bank’s growth forecasts offset a rally in Apple Inc. as investors watched earnings.

Boeing Co. slumped 3.4 percent as All Nippon Airways Co. and Japan Airlines Co., the world’s largest users of the 787 jets, grounded their entire fleet of Dreamliners. Custody banks Bank of New York Mellon Corp. and Northern Trust Corp. dropped at least 2.7 percent. Apple, which slid below $500 a share yesterday for the first time in 11 months, rallied 4.2 percent to halt a three-day decline. Goldman Sachs Group Inc. added 4.1 percent after the bank’s profit almost tripled.

Three stocks retreated for every two rising on U.S. exchanges at 4 p.m. New York time. The Standard & Poor’s 500 Index advanced less than 0.1 percent to 1,472.63. The Dow Jones Industrial Average declined 23.66 points, or 0.2 percent, to 13,511.23. About 5.6 billion shares changed hands on U.S. exchanges, or 8.6 percent below the three-month average.

“The cuts in growth forecasts are reminders that there’s still work to be done,” said Brad Sorensen, director of market and sector analysis at San Francisco-based Charles Schwab Corp.

His firm has $1.92 trillion in client assets. “In the U.S., it’s early to talk about the earnings season, but so far we’re relatively pleased with what we’ve seen. We’ve had a good start to the year in stocks. There’s very little doubt that there’s quite a bit of money on the sidelines that could provide a nice boost higher.”

The World Bank cut its global growth forecast for this year as austerity measures, high unemployment and low business confidence weigh on economies in developed nations. German Chancellor Angela Merkel’s government cut its growth forecast for Europe’s biggest economy. Luxembourg Prime Minister Jean- Claude Juncker said the strength of the euro poses a threat to the region’s economy.

The U.S. economy picked up across much of the country last month, boosted by auto and home sales, even as the outlook for unemployment showed few signs of improvement, the Federal Reserve said. Industrial production in the U.S. climbed for a second month in December as demand picked up for business equipment, showing factories expanded even as lawmakers battled over the federal budget.

Besides JPMorgan and Goldman Sachs, nine other companies in the S&P 500 were scheduled to report results today. Almost 75 percent of the 39 S&P 500 companies which reported quarterly results beat analysts forecasts. Fourth-quarter profits grew 2.5 percent, according to analysts’ estimates compiled by Bloomberg.

That would be the second-slowest quarterly growth since 2009, the data show.

The S&P 500 has risen 3.3 percent so far this year, extending 2012’s 13 percent surge. Yet the benchmark gauge is trading at 14.8 times reported earnings, compared with an average of 16.5 since 1954, according to data compiled by Bloomberg.

“On the positive side of the ledger we’ve got at least what I consider to be undemanding valuations for stocks in general,” said Norm Conley, chief executive officer at St. Louis-based J.A. Glynn & Co, which manages about $975 million.

“We’ve got earnings season kicking off here and so far no huge bad surprise, so that is an incremental positive.”

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, lost 1 percent to 13.42. Earlier today, the gauge fell to the lowest level since 2007.

Boeing slumped 3.4 percent to $74.34. The 747 faces fresh scrutiny after the Japanese airlines grounded almost half the world’s Dreamliner fleet for at least two days following an emergency landing. All Nippon Airways pilots on a domestic flight got battery-fault warnings and saw smoke in the cockpit, the U.S. National Transportation Board said today.

The groundings added to the questions plaguing a model that was targeted for a U.S. assessment because of a Jan. 7 fire in a lithium-ion battery pack on a Japan Airlines plane in Boston.

BNY Mellon slumped 2.8 percent to $26.04 and Northern Trust dropped 5.7 percent to $49.78. Both banks have responded to near-zero interest rates by reducing staff and expenses to protect profit margins. While the banks benefited from rising stock prices, which increase fees for overseeing and managing investor money, low interest rates and slow capital-markets activity have hurt their ability to expand earnings.

Chipotle Mexican Grill Inc. fell 5.5 percent to $280.94 after reporting preliminary fourth-quarter profit that trailed analysts’ estimates.

Dell Inc. dropped 4.3 percent to $12.61, after rallying 21 percent over the last two days. The third-largest PC maker is discussing a leveraged buyout with private-equity firms TPG Capital and Silver Lake, a person with knowledge of the matter said this week.

Technology, which comprises the biggest group in the S&P 500, rose the most among 10 industries. Apple rose 4.2 percent to $506.09, after slumping 7.2 percent over the previous three days. The company introduced installment payment plans for buyers of iPhones and MacBook laptops in China as it struggles to compete with low-cost devices in the world’s largest computer and mobile-phone market.

Goldman Sachs rose 4.1 percent to $141.09. Chief Executive Officer Lloyd C. Blankfein, 58, has undertaken a $1.9 billion expense-reduction effort since mid-2011 and said he expected earnings growth to resume when the economy and markets improved.

A stock-market rebound and a $500 million profit from selling a hedge fund-administration unit helped revenue recover from the lowest first half since 2005.

JPMorgan Chase & Co. gained 1 percent to $46.82. The largest U.S. bank by assets said fourth-quarter profit rose 53 percent, beating analysts’ estimates as mortgage revenue more than doubled and the lender set aside less for future losses.

Genworth Financial Inc. rallied 8.9 percent to $8.85. The insurer that named a new chief executive officer this month said it is reorganizing to separate most of the company from the mortgage-guaranty operation that saddled the firm with losses.

Smith & Wesson Holding Corp. rose 5.7 percent to $8.91.

Sturm Ruger & Co. added 5 percent to $50.38. President Barack Obama proposed the most ambitious set of gun control proposals in decades, calling for a renewal of a ban on assault weapons and high-capacity ammunition magazines and setting out 23 executive actions he’ll take such as ordering agencies to share data for background checks and addressing mental health issues.

“These proposals were widely expected to occur today,” said Rommel Dionisio, analyst at Wedbush Securities based in New York.

Constellation Brands Inc. added 6.2 percent to $38.65 after being rated buy in new coverage at Buckingham Research by equity analyst Alice Longley.

The Dow is better positioned to set a record now that its transportation-stock counterpart has done so, according to Richard Moroney, editor of the Dow Theory Forecasts newsletter.

The Dow Jones Transportation Average has led the Dow industrials throughout the rally which started in March 2009. Yesterday the Dow transports closed at 5,639.64, an all-time high. The average had climbed 6.3 percent for the year, its best performance through Jan. 15 since 1987.

“It’s a legitimate move,” Moroney, who serves as the chief investment officer at Horizon Investment Services LLC as well as the newsletter’s editor, said yesterday in a telephone interview. “I take it as a positive.”

All 20 companies in the Dow transports had gains for the year as of yesterday. Delta Air Lines Inc., the world’s second- largest airline, set the pace by rising 15 percent. Most beat the Dow industrials’ 3.3 percent advance for 2013 as well.

Fourth-quarter earnings reports will largely determine whether the industrials reach a record any time soon, according to Moroney. The average would have to advance 4.7 percent to surpass its peak of 14,164.53 in October 2007. It’s 0.6 percent away from beating last year’s high.

Have a wonderful evening everyone.

 

Be magnificent!

 

Whenever I see an erring man, I say to myself I have also erred;

when I see a lustful man I say to myself, so was I once;

and in this way I feel kinship with everyone in the world

and feel that I cannot be happy without the humblest of us being happy.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

For every minute you are angry you lose

sixty seconds of happiness.

-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:

Birthday:  Dr. Martin Luther King, Jr., January 15, 1929.

In 1955, in Montgomery, Alabama, a black woman named Rosa Parks refused to give up her bus seat to a white passenger.  She had defied segregation, which required blacks to sit in the rear of southern buses, and she was fined $14.  The incident led to a boycott of the city’s buses, and Marin Luther King, Jr., a minister who was born on this day in 1929, was chosen to lead it.  A year later the city’s buses were integrated.  King subsequently organized the Southern Christian Leadership Conference to promote civil rights and in 1964 won the Nobel Peace Prize.  By the age of 39, when he was assassinated, he had inspired millions to share his dream of equality.

Personally, I draw more inspiration from Rosa Parks, as I am sure many do….however, as you all know, this quote is on my bulletin board behind my desk:

Our lives begin to end the day we become silent about things that matter. –Martin Luther King, Jr., 1929-1968.

Photos of the day, 01.15.13

Icicles hang from a grove of orange trees in Redlands, Calif. A cold snap that has California farmers struggling to protect a $1.5 billion citrus crop has slowly started to ease, though frigid temperatures were still the norm Tuesday morning throughout the state and across other parts of the West.

Photo: Jae C. Hong/AP

Children enjoy the snow at the river Rhine bank in Duisburg, Germany. Snow and cold temperatures below zero caused traffic problems in the morning rush hours all over Germany.

Photo: Frank Augstein/AP

 

Market Closes for January 15th, 2013:

Market  Index	Close	Change
Dow  Jones	13534.89	+27.57    +0.20%
S&P 500	1472.34	+1.66    +0.11
NASDAQ	3110.778	-6.725    -0.22%
TSX	12641.97	+38.88
		+0.31%

International Markets

Market  Index	Close	Change
NIKKEI	10879.08	+77.51
		+0.72%
HANG  SENG	23381.51	-31.75
		-0.14%
SENSEX	19986.82	+80.41
		+0.40
FTSE 100	6117.31	+9.45
		+0.15%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.908	1.940
CND.   30 Year Bond	2.477	2.505
U.S.   10 Year Bond	1.8325	1.8448
U.S.   30 Year Bond	3.0197	3.0313

Currencies

BOC Close	Today	Previous
Canadian $	0.98454	0.98378
US   $	1.01570	1.01649
Euro Rate  1 Euro=		Inverse
Canadian   $	1.30911	0.76388
US  $	1.32966	0.75207

Commodities

Gold	Close	Previous
London Gold   Fix	1679.15	1667.35
Oil	Close	Previous
WTI Crude Future	93.46	94.14
BRENT	111.45	112.64

Market Commentary:

Canada

By Eric Lam and Leslie Picker

Jan. 15 (Bloomberg) — Canadian stocks rose for a sixth day, the longest stretch since November, as gold producers advanced as the price of the metal increased amid concerns about U.S. debt ceiling discussions.

Centerra Gold Inc. climbed 6.6 percent after its gold production forecast was almost double from last year. Barrick Gold Corp. and Goldcorp Inc. added at least 1 percent as gold rose for a second day. Manulife Financial Corp. lost 1.4 percent after Bank of Montreal analysts lowered their rating on the stock. Lululemon Athletica Inc., the Canadian yoga-wear retailer, sank 4.1 percent on the Toronto Stock Exchange after forecasting fourth-quarter sales that trailed analysts’ estimates.

The Standard & Poor’s/TSX Composite Index rose 38.88 points, or 0.3 percent, to 12,641.97 at 4 p.m. in Toronto. The benchmark gauge has gained 1.7 percent this year. Trading volume was 6.5 percent higher than the 30-day average at this time of the day.

“The one thing that’s holding up the TSX Index today is material stocks, in particular the gold sector,” Youssef Zohny, a fund manager with Stenner Investment Partners of Richardson GMP Ltd., said on the phone from Vancouver. Richardson GMP manages about C$16 billion ($16.3 billion). “We’re seeing Republicans and Democrats start to dig in with their upcoming debt ceiling fights in February and March and that’s helping gold prices today.”

U.S. Treasury Secretary Timothy F. Geithner warned yesterday of severe economic hardship should Congress fail to raise the debt ceiling that lawmakers have increased or revised 79 times since 1960, including 49 times under Republican presidents. President Barack Obama vowed he won’t negotiate over raising the government’s debt ceiling.

Centerra Gold Inc. rallied 6.6 percent to C$10. The company said 2013 gold production will be between 605,000 and 660,000 ounces, almost double its 2012 gold production of 387,076 ounces.

Barrick, the world’s largest producer of gold, gained 1.1 percent to C$34.03 and Goldcorp, the second-largest, rose 1.1 percent to C$36.83.

Gold for February delivery advanced 0.9 percent to $1,683.90 an ounce in New York. U.S. Federal Reserve Chairman Ben S. Bernanke said yesterday that while the economy is responding to monetary stimulus “there is still quite a ways to go.”

Manulife, Canada’s largest insurer, fell 1.4 percent to C$14.12. Tom Mackinnon, analyst with BMO Capital Markets, cut his rating for Manulife to market perform from outperform due to valuation after a 20 percent rally in the past two months.

The shares trade at 25.1 times reported earnings, more than twice the multiple for a group of financials in the S&P/TSX, according to data compiled by Bloomberg.

Lululemon slumped 4.1 percent to C$68.24 on the Toronto Stock Exchange. The company, which has posted double-digit gains in same-store sales for 13 straight quarters, yesterday said it expects a high single-digit increase.

Revenue for the quarter will be at the “high end” of its original forecast of $475 million to $480 million, the company said. Analysts projected $489 million, according to the average of 22 estimates compiled by Bloomberg.

Celestica Inc., an electronic components manufacturer, dropped 1.6 percent to C$8.17. Gus Papageorgiou, an analyst with Bank of Nova Scotia, cut his recommendation on the stock to sector perform from sector outperform, citing its valuation relative to peers. The stock is up 23 percent since touching a three-year low in October.

US

By Rita Nazareth and Sarah Pringle

Jan. 15 (Bloomberg) — U.S. stocks advanced, rebounding from earlier losses in the Standard & Poor’s 500 Index, as a rally in retail and transportation companies overshadowed concern about discussions on raising the debt ceiling.

Consumer discretionary companies led the gains in the S&P 500 as data showed retail sales rose more than forecast in December. Dell Inc. rallied 7.2 percent, following yesterday’s 13 percent surge, as the computer maker is said to be in buyout talks. Apple Inc. and Hewlett-Packard Co. dropped at least 2.4 percent to pace losses in technology shares. Facebook Inc. retreated 2.7 percent after the company introduced a tool for searching information posted to its social network.

The S&P 500 rose 0.1 percent to 1,472.34 at 4 p.m. New York time, after falling as much as 0.5 percent earlier. The Dow Jones Industrial Average added 27.57 points, or 0.2 percent, to 13,534.89. The Dow Jones Transportation Average gained 0.7 percent to a record 5,639.64. About 5.8 billion shares changed hands on U.S. exchanges, or 5.7 percent below the three-month average, according to data compiled by Bloomberg.

“The retail data is good news for economic expansion,” said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC. He spoke in a telephone interview. “It’s encouraging. We have the earnings season going on, people are on wait-and-see mode. In addition, there’s a lot of rhetoric on the debt-ceiling front. Though it’s probably a bit early to start getting concerned about that.”

Retail sales rose more than forecast in December to end 2012 on a positive note, indicating Americans may be able to rise above Washington’s budget rancor to keep contributing to economic growth. Manufacturing in the New York region contracted in January for the sixth straight month as the industry continued to face the effects of fiscal uncertainty in the U.S. and lackluster demand overseas.

With as little as a month until the U.S. runs out of money to pay its bills, President Barack Obama warned Republicans in Congress not to use the need for a debt-limit increase to force through new spending cuts. Obama insisted yesterday he won’t negotiate on raising the debt ceiling because the U.S. has no choice other than to pay for spending it has authorized. Many Republicans in Congress say a boost in borrowing authority must be linked to spending cuts.

The Treasury Department has been using emergency measures since the end of December to prevent a breach of the $16.4 trillion debt limit. In a letter yesterday to House Speaker John Boehner, Treasury Secretary Timothy Geithner said the department expects to exhaust those measures “between mid-February and early March.”

Since 1960, Congress has raised or revised the limit 79 times, including 49 times under Republican presidents, according to the Treasury Department. A failure of U.S. lawmakers to raise the nation’s debt ceiling would prompt a “formal review” of its credit rating, Fitch Ratings said in a press release today.

“The debt-ceiling concern means more uncertainty in play,” Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York, said in a phone interview. “Obama can’t say he won’t negotiate because he has no choice. He’s not Congress. It’s not good for the economy to have a government shutdown. It just feels like August 2011. The Congress is going to take us to the brink once again.”

Investors also watched earnings reports. Almost 80 percent of the 30 S&P 500 companies which reported quarterly results beat analysts forecasts. Fourth-quarter profits at S&P 500 companies grew 2.5 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.

Today’s rally in the Dow Jones Transportation Average extended this year’s advance to 6.3 percent, compared with a 3.2 percent gain in the S&P 500. The index rose 5.7 percent last year, underperforming the S&P 500.

“The transportation sector lagged the general market last year,” Richard Weiss, who oversees $16 billion as a senior portfolio manager at American Century Investments in Mountain View, California, said in a phone interview. “It’s catching up in 2013 pretty significantly. We’re relatively optimistic on the consumer and the economy. I don’t think that anybody is arguing at this point that the consumer and the housing sector are on the mend. That’s a major driver to the U.S. and the global economy.”

Retailers had the second-best performance among 24 industries in the S&P 500. Limited Brands Inc. rose 2 percent to $46.43, Abercrombie & Fitch Co. added 2.8 percent to $50.20, and J.C. Penney Co. climbed 3.4 percent to $18.71.

Dell rallied 7.2 percent to $13.17. The third-largest personal-computer maker is discussing a leveraged buyout with private-equity firms TPG Capital and Silver Lake, a person with knowledge of the matter said yesterday. Its stock has lost 43 percent in the past five years, compared with a 3.8 percent gain by the S&P 500.

Express Inc. rallied 24 percent, the most since its initial public offering in May 2010, to $17.40. The retail apparel chain raised its outlook for the fourth quarter and full year 2012.

Three out of 10 groups in the S&P 500 retreated as phone and technology shares had the biggest losses. Apple, the world’s most valuable company lost 3.2 percent to $485.92. HP dropped 2.5 percent to $16.53. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, rose 0.2 percent to 13.55. The gauge ended last week at the lowest level since 2007.

Facebook fell 2.7 percent to $30.10. The Graph Search, which lets users seek people, photos and places, doesn’t look for Web-based content, Facebook Chief Executive Officer Mark Zuckerberg said at the company’s Menlo Park, California, headquarters. While Zuckerberg said the new feature could be a “business” in the future, he didn’t outline how it will make money soon.

Zuckerberg is adding services to step up revenue growth and shake off the concerns that the company doesn’t know how to make money from its user base. While Facebook has rebounded from a record intraday low of $17.55 on Sept. 4, the company is still in the early stages of generating revenue from ads placed on mobile devices.

Lululemon Athletica Inc. slid 3.9 percent to $69.47 after the Canadian yoga-wear retailer forecast fourth-quarter sales that trailed analysts’ estimates.

U.S. companies from Intel Corp. to General Electric Co. are caught in an earnings slump that shows few signs of improving until midyear as a weak global economy and gridlock in Congress weigh on profits.

Intel, the world’s largest semiconductor maker, is poised to report its biggest quarterly earnings drop in 3 1/2 years this week, based on analysts’ estimates compiled by Bloomberg.

GE, the maker of jet engines and electrical generation equipment, may post its slowest profit growth in three quarters.

The results would contribute to a predicted 2.5 percent increase in fourth-quarter earnings for the S&P 500, the second- worst showing since 2009. Without a bump from financial companies that have cut jobs, the gain would be lower at 0.4 percent. A pickup may start in the second quarter, when analysts foresee earnings rising 8.2 percent from improving employment and housing and more clarity on government spending.

“Many companies slowed down their capital spending until they saw what was going to happen with the fiscal cliff,” said Stanley Nabi, who helps manage more than $11 billion as vice chairman of Silvercrest Asset Management Group in New York. “As employment increases, more people are earning income and spending. This supports the economy. We’ll have higher profits because we’re going to have higher revenue.”

Have a wonderful evening everyone.

 

Be magnificent!

 

Where we suffer we have made it into a personal affair.

We shut out all the suffering of mankind.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

We accept the love we think we deserve.

-Stephen Chbosky, 1972-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day in 1952, the Yankee Clipper Joe Dimaggio and actress Marilyn Monroe were married in a ceremony that took place in San Francisco at City Hall. –Steve Russolillo, WSJ.

And also on this day in…

1784 – The end of the American Revolution.

1869 – Philosopher Albert Schweitzer was born. You must give some time to your fellow men.  Even if it’s a little thing, do something for others – something for which you get no pay but the privilege of doing it. –Albert Schweitzer

1970 – Diana Ross and the Supremes performed their last concert together, at the Frontier Hotel in Las Vegas.

1993 – Late-night TV talk show host David Letterman announced he was moving from NBC to CBS.

1994 – President Bill Clinton and Russian President Boris Yeltsin signed accords in Moscow to stop aiming missiles at any nation and to dismantle the nuclear arsenal of Ukraine.

2004 – Former Enron finance chief Andrew Fastow pleaded guilty to conspiracy as he accepted a 10-year prison sentence.

2004 – J.P. Morgan Chase and Co. struck a deal to buy Bank One Corp. for $58 billion.

2004 – President George W. Bush unveiled a plan to send astronauts to the moon, Mars and beyond.

2005 – Army Specialist Charles Graner Jr., the reputed ringleader of a band of rogue guards at the Abu Ghraib prison, was convicted at Fort Hood, Texas, of abusing Iraqi detainees. (He was later sentenced to 10 years in prison.)

2008 – Republican Bobby Jindal, the first elected Indian-American governor in the United States, took office in Louisiana.

Success is not so much what we have, as it is what we are.  Jim Rohn

photos of the day

January 14th, 2013

The crescent moon is seen behind an ice sculpture during ice and snow sculptures festival at the ‘Eight Lakes’ Park-Resort outside Almaty, Kazakhstan. Photo: Shamil Zhumatov/Reuters

A Japanese woman in a kimono attends a ceremony celebrating Coming of Age Day in heavy snowfall at Toshimaen amusement park in Tokyo. Youths across Japan are honored with special coming-of-age ceremonies when they reach the age of 20. Photo: Yuya Shino/Reuters

Market Closes for January 14th, 2013:

Market  Index	Close	Change
Dow  Jones	13507.32	+18.89    +0.14%
S&P 500	1470.68	-1.37    -0.09
NASDAQ	3117.503	-8.132    -0.26%
TSX	12603.09	+0.91
		+0.01%

International Markets

Market  Index	Close	Change
NIKKEI	10801.57	+148.93
		+1.40%
HANG  SENG	23413.26	+149.19
		+0.64%
SENSEX	19906.41	+242.77
		+1.23
FTSE 100	6107.86	-13.72
		-0.22%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.940	1.941
CND.   30 Year Bond	2.505	2.506
U.S.   10 Year Bond	1.8448	1.8677
U.S.   30 Year Bond	3.0313	3.0479

Currencies

BOC Close	Today	Previous
Canadian $	0.98378	0.98515
US   $	1.01649	1.01507
Euro Rate  1 Euro=		Inverse
Canadian   $	1.31617	0.75978
US  $	1.33787	0.74746

Commodities

Gold	Close	Previous
London Gold   Fix	1667.35	1662.80
Oil	Close	Previous
WTI Crude Future	94.14	93.56
BRENT	112.64	111.84

Market Commentary:

Canada

By Eric Lam

Jan. 14 (Bloomberg) — Canadian stocks rose for a fifth day, the longest streak since November, as a rally in acquisition targets Aurizon Mines Ltd. and Uranium One Inc. offset declines in energy shares.

Aurizon Mines soared 33 percent as Alamos Gold Inc. offered C$780 million ($793 million) for the company. Alamos sank 12 percent. Uranium One jumped 15 percent as Russian state-owned JSC Atomredmetzoloto planned to buy the rest of the company it doesn’t already own for C$1.3 billion. Research In Motion Ltd. surged 10 percent amid signs that demand for rival Apple Inc.’s iPhone 5 is slipping. Tahoe Resources Inc. slid 6.9 percent after an attack at its silver mine in Guatemala.

The Standard & Poor’s/TSX Composite Index rose 0.91 point, or less than 0.1 percent, to 12,603.09 in Toronto. The benchmark gauge has gained 1.4 percent this year. Trading volume was 43 percent higher than the 30-day average.

“It’s a bit of a quiet start to the week; some of it is nervousness after the strong start to the year,” Greg Taylor, fund manager with Aurion Capital Management, said on the phone from Toronto. His firm manages about C$8 billion. “The Alamos- Aurizon deal has people scratching their heads as there aren’t a lot of synergies. It seems RIM goes up when Apple goes down, and it probably isn’t any more complicated than that.”

RIM climbed 10 percent to C$14.70 as technology companies paced gains in the S&P/TSX. RIM, based in Waterloo, Ontario, is set to debut its BlackBerry 10 line of smartphones on Jan. 30.

A report in Japan’s Nikkei newspaper today said Apple has reduced its orders for iPhone 5 screens this quarter by about half from its original target of 65 million displays. Apple fell 3.6 percent to $501.75 in New York.

Aurizon Mines jumped 33 percent to C$4.55, its biggest gain since May 2006. Alamos Gold, a gold producer in Mexico, offered to buy the company for either C$4.65 or 0.2801 of an Alamos share for each Aurizon share. If successful, the bid would give Alamos Gold access to projects in the Abitibi region of northwestern Quebec.

Alamos, which already owns a 16 percent stake in Aurizon, plunged 12 percent to C$14.90, the biggest loss since January 2009.

Uranium One soared 15 percent to C$2.77, its highest close since May. Russia’s ARMZ together with other units owns 51.4 percent of Uranium One. The C$1.3 billion offer is a 32 percent premium to the company’s 20-day weighted average price in Toronto, the company said.

Harry Winston Diamond Corp. gained 4.4 percent to C$14.90, paring earlier gains of as much as 12 percent after agreeing to sell its watch and jewelry unit to Swiss watchmaker Swatch Group AG for about $1 billion.

Robert A. Gannicott, chief executive officer of the diamond miner, said in an interview that the company also is interested in acquiring Rio Tinto Group’s 60 percent stake in the Diavik mine in the Northwest Territories. Harry Winston owns 40 percent.

Tahoe Resources sank 6.9 percent to C$16.96 after the company said two security guards were killed in an ambush at its Escobal silver mine in Guatemala on Jan. 12. The attack was one of three against mining entities in Guatemala this week, Tahoe said.

Talisman Energy Inc. lost 2.6 percent to C$11.78. Talisman slumped after the stock was cut to market perform from outperform at Raymond James Financial Inc.

Encana Corp., Canada’s largest natural gas producer, slipped 2.3 percent to C$19.05 after Chief Executive Officer Randall Eresman resigned on Jan. 11. Eresman will serve as an adviser until Feb. 28. Clayton Woitas, a member of the board, will fill in as chief executive until a successor is found.

US

By Rita Nazareth and Sarah Pringle

Jan. 14 (Bloomberg) — The Standard & Poor’s 500 Index declined from near a five-year high as Apple Inc.’s slump amid concern about iPhone sales offset a rally in Dell Inc.

Apple, the most valuable company, sank 3.6 percent on reports it curbed iPhone production on weak demand. Sprint Nextel Corp. dropped 3.9 percent after the wireless carrier was cut at JPMorgan Chase & Co. Dell surged 13 percent as two people with knowledge of the matter said the company is in buyout talks with private-equity firms. Hewlett Packard Co. rose 4.9 percent as market researcher Gartner Inc. said it retook the spot as the top personal-computer maker from Lenovo Group Ltd.

The S&P 500 retreated 0.1 percent to 1,470.68 at 4 p.m. New York time. The benchmark gauge for U.S. equities trimmed a decline of as much as 0.4 percent amid Dell’s rally. The Dow Jones Industrial Average advanced 18.89 points, or 0.1 percent, to 13,507.32. About 5.6 billion shares changed hands on U.S. exchanges, or 8.1 percent below the three-month average.

“As Apple goes, so goes the market,” Frank Ingarra, who helps manage $1.4 billion at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a phone interview.

“The problem you run into is that eventually they run out of people to sell stuff to. There’s just not enough people in the world to keep buying all these Apple products. It makes sense that it’s pulling back, and it makes sense that its effecting the market because it’s such a large weight.”

Almost 80 percent of the 28 S&P 500 companies which reported quarterly results beat analysts forecasts. Fourth- quarter profits at S&P 500 companies grew 2.5 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.

Consumer staples and industrial shares in the S&P 500 rose today while phone and technology companies slumped. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, rose 1.2 percent to 13.52. The gauge ended last week at the lowest level since 2007.

Apple sank 3.6 percent to $501.75. The Cupertino, California-based company reduced its original target to order 65 million iPhone 5 displays this quarter by about half, Nikkei said, citing an unidentified senior executive at a component maker it didn’t name. IPhone sales are slowing because smartphones have saturated developed markets, where Apple is strongest, said James Cordwell, an analyst at Atlantic Equities Service in London.

Research In Motion Ltd. added 10 percent to $14.95. The maker of the BlackBerry smartphone jumped amid signs that demand for rival Apple’s market-leading iPhone is ebbing.

Sprint Nextel slid 3.9 percent to $5.69. The company was downgraded to neutral from overweight at JPMorgan by equity analyst Philip Cusick. The 12-month share-price estimate is $6.

Scripps Networks Interactive Inc. slid 1.1 percent to $59.15. The television home of Paula Deen’s mashed potatoes was cut to hold from buy at Deutsche Bank AG by equity analyst Douglas Mitchelson. The 12-month share-price estimate is $65.

H&R Block Inc. slumped 2.9 percent to $19.41. The biggest U.S. tax preparer was cut to underweight from equalweight at Morgan Stanley.

International Business Machines Corp. dropped 0.9 percent to $192.62. The company was downgraded to neutral from overweight at JPMorgan by equity analyst Mark Moskowitz. The 12- month share-price estimate is $197.

SunPower Corp. slid 6 percent to $7.70. The solar-panel company majority-owned by Total SA fell after an announcement of higher-than-anticipated restructuring costs and a downgrade by Credit Agricole Securities.

Dell surged 13 percent, the most since October 2008, to $12.29. Round Rock, Texas-based Dell is discussing going private with at least two firms, said one of the people, who declined to be identified because the talks are private. The discussions are preliminary and could fall apart because the firms may not be able to line up the needed financing or resolve how to exit the investment in the future, the people said.

“There’s nothing like a good rumor to get the market going in the absence of macro news,” Bruce McCain, chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a phone interview. His firm oversees $20 billion.

“We’ve had a pretty decent 2012 in stocks and a good start to this year and people are watching the earnings season.”

Hewlett Packard added 4.9 percent to $16.95. While Lenovo’s sales growth of 8.2 percent from a year earlier was the fastest of the top five computer makers, Hewlett Packard’s dominance in professional PCs helped it retake the lead from Lenovo, market researcher Gartner said in a report today. Hewlett-Packard shipped 16.2 percent of PCs last quarter compared with 15.5 percent a year earlier.

Cisco Systems Inc. gained 2.4 percent to $20.97. The biggest maker of computer networking equipment was raised to outperform at both Robert W. Baird & Co. and William Blair & Co.

Sears Holdings Corp. rose 8.9 percent to $44.60 after Chairman Edward Lampert disclosed that he increased his stake in the retailer last week after being named chief executive officer.

Harry Winston Diamond Corp. jumped 4.3 percent to $15.08, the highest level since April. Swatch Group AG, the biggest maker of Swiss timepieces, agreed to buy the Harry Winston watch and jewelry unit for about $1 billion, adding a luxury label in its biggest acquisition.

Herbalife Ltd. rose 10 percent to $44.08. The shares rallied to the highest price since before hedge-fund manager Bill Ackman called the nutrition company a pyramid scheme and announced he had taken a short position in the shares.

United Parcel Service Inc. climbed 1.7 percent to $79.24.

The company said it scrapped a 5.16 billion-euro ($6.9 billion) bid for TNT Express NV after European regulators moved to block the deal. Separately, the stock was raised to market perform from underperform at Avondale Partners LLC.

Starz Class A stock gained 9.8 percent to $15.59. The rival to HBO and Showtime in the premium-cable channel market rose on its first day of trading after being broken off from Liberty Media Corp. in a spinoff. Shares of the Englewood, Colorado- based company traded under the ticker STRZA on the Nasdaq Stock Market.

Volatility will deter investors from moving into stocks from bonds in 2013 even as dividend returns exceed fixed-income yields, according to Goldman Sachs Group Inc.’s U.S. equity strategist.

“It’s the drawdown risk that is inhibiting investors from reducing bond holdings and increasing equity holdings,” David Kostin said at a presentation in London today. “You need to have more stable markets. I do not anticipate flows into equities from bonds. It should happen; it won’t happen this year.”

The forecast is at odds with Goldman Sachs Asset Management Chairman Jim O’Neill’s comment this year that funds may see a “great rotation” into equities. Investor deposits into global equity mutual funds in the first week of January were higher than any other period except one, a sign they may be returning to stocks after withdrawing cash for the past six years, according to data from EPFR Global.

The S&P 500 ended last year with a dividend yield that was 56 basis points, or 0.56 percentage points, higher than the yield on the benchmark 10-year Treasury, according to Bloomberg data. The spread reached a record weekly high of 1.16 percentage points in 2009 in favor of equities.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Nonviolence is the summit of bravery.

-Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Knowledge is a comfortable and necessary retreat

and shelter for us in advanced age, and if we do not

plant it while young, it will give us no shade

when we grow old.

-Lord Chesterfield, 1694-1773

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1863, the London Underground opened.  John Allemang writes in the Globe & Mail today:

“Lord Palmerston, the 79-year old prime minister, skipped the VIP preview the day before – at his age, he said, he preferred to stay above ground as long as he could.  The private-sector backers of the seven-stop Metropolitan Railway had reason to fear they would have trouble luring travelers into London’s murky depths, described by the skeptical Times newspaper as ‘foul subsoil’ that was ‘beyond the reach of light or life.’  But 30,000 people rode the world’s first urban subway line on opening day, reassured by the gas-lamps on the wooden carriages that made subterranean travel a rational, everyday experience.  However, pollution from coal-fired steam locomotives was hellish in the unventilated tunnels – electrification was decades away.  But in a Victorian boomtown choked with horse-drawn traffic, underground travel turned out to be an irresistible idea, progress at its most basic.”

Look at the first picture below…

I personally loved riding the subway, the Metro as it is called in Montreal, into school every day when I was a girl; you could read a book or chat with the person next to you or just daydream away.

And also on this day in…

1878 – Women’s Suffrage Amendment was introduced.

1920 – the League of Nations was founded.

1946 – The United States Army Signal Corps successfully conducts Project Diana, bouncing radio waves off the moon and receiving the reflected signals.

1954 – BOAC Flight 781, a de Havilland DH.106 Comet 1, explodes and falls into the Tyrrhenian Sea killing 35 people.

1962 – Apollo program: NASA announces plans to build the C-5 rocket launch vehicle. It became better known as the Saturn V Moon rocket, which launched every Apollo Moon mission.

1972 – Sheikh Mujibur Rahman returns to the newly independent Bangladesh as president after spending over nine months in prison in Pakistan.

1981 – Salvadoran Civil War: The FMLN launches its first major offensive, gaining control of most of Morazán and Chalatenango departments.

1984 – The United States and Vatican City establish full diplomatic relations after 117 years.

1985 – Sandinista Daniel Ortega becomes president of Nicaragua and vows to continue the transformation to socialism and alliance with the Soviet Union and Cuba; American policy continues to support the Contras in their revolt against the Nicaraguan government.

1990 – Time Warner is formed by the merger of Time Inc. and Warner Communications.

1999 – Sanjeev Nanda kills three policemen in New Delhi, India with his car, an act for which he was later acquitted, resulting in a sharp drop in public confidence in the Indian legal system.

Patience and passage of time do more than strength and fury. –Jean de la Fontaine, 1621-95.

photos of the day

January 10th, 2013

Passengers arrive at Canary Wharf underground station in London. Britain’s capital began year-long celebrations for the 150th anniversary of the world’s oldest underground passenger railway with reams of newsprint and plans for exhibitions, books, poetry, and a commemorative steam train ride.

Photo: Olivia Harris/Reuters

Volunteers and employees of Selfridges department store on Oxford Street in London, pose for the media in ‘The Silence Room,’ a space they unveiled for shoppers to quietly relax in. The Silence Room, where shoes are to be left outside and mobile phones not to be used, is part of a campaign by the store to integrate shopping with meditation to encourage people to be more considered and mindful in their everyday life.

Photo: Matt Dunham/AP

Market Closes for January 10th, 2013:

Market  Index	Close	Change
Dow  Jones	13471.22	+80.71    +0.60%
S&P 500	1472.12	+11.10    +0.76%
NASDAQ	3121.759	+15.947    +0.51%
TSX	12599.74	+77.50
		+0.62%

International Markets

Market  Index	Close	Change
NIKKEI	10652.64	+74.07
		+0.70%
HANG  SENG	23354.31	+135.84
		+0.59%
SENSEX	19663.55	-3.04
		-0.02%
FTSE 100	6101.51	+2.86
		+0.05%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.956	1.907
CND.   30 Year Bond	2.517	2.475
U.S.   10 Year Bond	1.8958	1.8639
U.S.   30 Year Bond	3.0796	3.0662

Currencies

BOC Close	Today	Previous
Canadian $	0.98295	0.98785
US   $	1.01735	1.01230
Euro Rate  1 Euro=		Inverse
Canadian   $	1.30456	0.76654
US  $	1.32720	0.75347

Commodities

Gold	Close	Previous
London Gold   Fix	1674.65	1655.85
Oil	Close	Previous
WTI Crude Future	93.82	93.10
BRENT	113.09	112.96

Market Commentary:

Canada

By Eric Lam

Jan. 10 (Bloomberg) — Canadian stocks rose for a third day as resource companies advanced after China’s exports jumped more than forecast last month.

Canadian Natural Resources Ltd. and Suncor Energy Inc. added at least 0.9 percent as crude rose to a three-month high.

Yamana Gold Inc. gained 5.8 percent as gold rose the most in two months. First Quantum Minerals Ltd. added 2.2 percent after Leucadia National Corp., the top shareholder of Inmet Mining Corp., said it plans to tender its shares to First Quantum’s hostile C$5.1 billion ($5.2 billion) bid for the copper mining company.

The Standard & Poor’s/TSX Composite Index rose 77.5 points, or 0.6 percent, to 12,599.74 in Toronto. The benchmark gauge has gained 1.3 percent this year.

“The market today is moving primarily on the Chinese data, so gold is up and crude is up which is very good for the Canadian market,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. His firm manages about C$1 billion.

“Those are the two areas that have been dragging.” Materials and energy stocks fell the most among 10 industries in the benchmark Canadian equity gauge in 2012, slumping 6.9 percent and 3.7 percent respectively.

Overseas shipments increased 14.1 percent in November from a year earlier, the most since May, China customs administration data showed today, compared with the 5 percent median forecast in a Bloomberg News survey of 40 economists.

Raw-materials and energy stocks contributed the most to gains in the S&P/TSX today as nine of 10 industries advanced.

Trading volume was 15 percent higher than the 30-day average at this time of the day.

The S&P/TSX Gold subindex rallied 2.5 percent, the most in more than a week, as 25 of 31 members advanced.

Yamana climbed 5.8 percent to C$17.26 and Eldorado Gold Corp. advanced 3.8 percent to C$12.67 as gold futures for February delivery gained 1.4 percent to settle at $1,678 an ounce in New York, the biggest jump for a most-active contract since Nov. 6.

Colossus Minerals Inc. increased 4.1 percent to C$4.87. The company reported drill results that included high-grade gold values near the surface in the Elefante area in Brazil.

First Quantum added 2.2 percent to C$21.05. Leucadia, which owns about 16 percent of Inmet, said it will tender its shares into First Quantum’s C$72-a-share hostile offer unless a better deal emerges.

Suncor gained 0.9 percent to C$33.58 and Canadian Natural Resources Ltd. added 1.8 percent to C$29.69. Crude for February delivery increased 0.8 percent to $93.82 a barrel in New York, the highest settlement since Sept. 18.

Karnalyte Resources Inc., a potash mining company based in Okotoks, Alberta, jumped 6.1 percent to C$8.49 after announcing Gujarat State Fertilizers & Chemicals Ltd. will buy a 20 percent stake in the company for C$45 million.

The publicly-traded Indian agribusiness company has also agreed to a 20-year deal for potash from Karnalyte’s Wynyard project in Saskatchewan.

US

By Rita Nazareth and Sarah Pringle

Jan. 10 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index to the highest level in five years, amid better-than-estimated data on Chinese exports.

Financial shares had the biggest gain in the S&P 500 among 10 industry groups as Bank of America Corp. and Morgan Stanley rallied at least 3 percent. Ford Motor Co. climbed 2.7 percent after boosting its dividend. Supervalu Inc. rose 14 percent as a Cerberus Capital Management LP-led investor group agreed to buy five of its chains in a deal valued at about $3.3 billion.

Tiffany & Co. slumped 4.5 percent as the jewelry retailer said full-year earnings will be at the low end of its forecast.

The S&P 500 advanced 0.8 percent to 1,472.12 at 4 p.m. New York time, the highest level since December 2007. The Dow Jones Industrial Average added 80.71 points, or 0.6 percent, to 13,471.22. About 6.8 billion shares changed hands on U.S. exchanges, or 9.9 percent above the three-month average.

“The market is encouraged by evidence of healing on the international front,” said Alan Gayle, senior strategist at RidgeWorth Capital Management in Richmond, Virginia, which oversees about $47 billion. “In the U.S., the earnings season is just getting started and there’s a lot of things that we don’t know. Investors will still be on that wait-and-see mode.”

Equities followed global shares higher as China’s overseas sales rose 14.1 percent in December from a year earlier, almost triple the 5 percent gain predicted. European Central Bank President Mario Draghi said the euro-area economy will slowly return to health in 2013 as the region’s bond markets stabilize after three years of turmoil. More Americans than forecast filed applications for unemployment benefits last week.

Investors also watched corporate results. Fourth-quarter profits at S&P 500 companies grew 2.9 percent, according to analysts’ estimates compiled by Bloomberg. That would be the second-slowest quarterly growth since 2009, the data show.

All 10 groups in the S&P 500 rose today as financial and energy shares had the biggest gains. The KBW Bank Index of 24 stocks added 1.3 percent. Bank of America rallied 3.1 percent to $11.78, after tumbling 5.6 percent over the previous three days.

Morgan Stanley rose 3.7 percent to $20.34.

Wall Street banks such as Morgan Stanley will benefit more from shareholders demanding reforms than regulators imposing new rules, CLSA Ltd.’s Mike Mayo said.

Activist investors including Nelson Peltz’s Trian Fund Management LP and Dan Loeb’s Third Point LLC will have more success in changing the biggest U.S. banks by holding managements’ “feet to the fire,” Mayo said today in a Bloomberg Television interview with Betty Liu.

“We need more Dan Loebs than we need regulators,” Mayo said. “We need more shareholders to step up to the plate.”

Ford jumped 2.7 percent to $13.83. The second-largest U.S. automaker doubled its dividend to 10 cents per share after record profit margins boosted its cash. Ford, which resumed paying a dividend last year after a five-year hiatus, cited its strengthening business as the reason for boosting the payout.

Supervalu climbed 14 percent to $3.47. A Cerberus-led investor group agreed to acquire Supervalu’s Albertsons, Acme, Jewel-Osco, Shaw’s and Star Market grocery stores. Cerberus also will lead a group to conduct a tender offer to buy as much as 30 percent of Supervalu’s common stock for $4 a share in cash, the companies said today in a statement.

DirecTV jumped 1.1 percent to $52.44. The company is planning to raise $750 million with bonds that may fund share repurchases at the largest U.S. satellite-TV operator, whose stock trades cheaper relative to earnings than its average U.S. competitor.

News Corp. gained 2.2 percent to $26.97. The media company run by billionaire Rupert Murdoch was raised to outperform from market perform at Sanford C Bernstein & Co.

Altria Group Inc. rose 2.5 percent to $32.70. The largest seller of tobacco in the U.S. was raised to buy from hold at Stifel Nicolaus Corp. by equity analyst Christopher Growe. The 12-month share-price estimate is $36.

Legg Mason Inc. rallied 3.2 percent to $26.84. The money manager searching for a new chief executive officer rose after Reuters said today that two large private-equity investors showed interest in financing a buyout led by the Baltimore-based firm’s largest affiliates. Legg Mason’s board has refused to engage in discussions about a sale, said Reuters, citing unidentified people with knowledge of the matter.

Tiffany slumped 4.5 percent to $60.40. High-income consumers’ confidence waned in the U.S. as the prospect of higher taxes approached, David Schick, an analyst at Stifel Financial Corp., who recommends holding the shares, wrote in a Jan. 7 note.

Orbitz Worldwide Inc. dropped 10 percent to $2.98.  The resignation of Chief Financial Officer Mitch Marcus amplified investor concerns about the company’s ability to expand hotel bookings.

Herbalife Ltd. slipped 1.8 percent to $39.24, reversing an earlier rally of 7.6 percent. Chief Executive Officer Michael Johnson accused hedge fund manager Bill Ackman of “gross mischaracterizations” about the nutrition company’s direct- selling model as Herbalife executives mounted a point-by-point defense for investors.

Ackman said today in a statement that Herbalife “distorted, mischaracterized, and outright ignored” major portions of a Dec. 20 presentation accusing Herbalife of using inflated pricing, misleading sales information and a complicated incentive structure to hide a pyramid scheme.

Molycorp Inc. tumbled 23 percent to $8.34. The owner of the largest rare-earth deposit outside China missed its 2012 output target and said revenue will be lower than forecast this year after the new chief executive officer changed its ramp-up schedule.

Microsoft Corp. lost 0.9 percent to $26.46. The world’s largest software maker was downgraded to equalweight from overweight at Morgan Stanley.

The two-month rally in U.S. stocks will end as the advance in the S&P 500 toward 1,500 depletes buyers, according to Tom DeMark, the creator of indicators to show turning points in securities.

The benchmark index for U.S. equities will climb to an intraday high of 1,492.73 and form a sell signal on a daily Combo indicator, which is designed to identify market tops and bottoms, said DeMark, who has spent more than 40 years developing market-timing indicators. The S&P 500 will then fall at least 5.5 percent, he said.

“This high could occur as early as tomorrow,” DeMark wrote in an e-mail. “1,492.73 is just shy of psychological 1,500 as most traders are predisposed to look at markets in terms of round numbers and will expect 1,500 to be hit. And just to confound them, expect market to trade not quite to 1,500.”

Have a wonderful evening everyone.

 

Be magnificent!

 

Nonviolence is not a cloistered virtue to be practiced

by the individual for peace and final salvation,

but it is a rule of conduct for society,

if it is to live consistently with human dignity

and make progress towards the attainment of peace

for which it has been yearning for ages past.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

We can pay our debt to the past by putting

the future in debt to ourselves.

-John Buchan, 1875-1940

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7