Category: Events

Dear Friends,

Tangents:

Lord Byron’s birthday today, b. 1788

OCEAN

From Childe Harold’s Pilgrimage

Roll on, thou deep and dark blue Ocean – roll!
Ten thousand fleets sweep over thee in vain;
Man marks the earth with ruin; his control
Stops with the shore; upon the watery plain
The wrecks are all thy deed, nor doth remain
A shadow of man’s ravage, save his own,
When for a moment, like a drop of rain,
He sinks into thy depths with bubbling groan,
Without a grave, unknelled, uncoffined and unknown.

His steps are not upon thy paths – thy fields
Are not a spoil for him – thou dost arise
And shake him from thee; the vile strength he wields
For earth’s destruction thou dost all despise
Spurning him from thy bosom to the skies,
And sendst him, shivering in thy playful spray,
And howling, to his Gods, where haply lies
His petty hope in some near port or bay,
And dashest him agin to earth – there let him lay.

The armaments which thunderstrike the walls
Of rock-built cities, bidding nations quake,
And monarchs tremble in their capitals,
The oak leviathans, whose huge ribs make
Their clay creator the vain title take
Of lord of thee, and arbiter of war: –
These are thy toys, and, as the snowy flake,
They melt into thy yeast of waves, which mar
Alike the Armada’s pride, or spoils of Trafalgar.

Thy shores are empires, changed in all save thee –
Assyria, Greece, Rome, Carthage, what are they?

They waters washed them power while they were free,
And many a tyrant since: their shores obey
The stranger, slave or savage; their decay
Has dried up realms to deserts: – not so thou,
Unchangeable save to thy wild waves’ play –
Time writes no wrinkle on thine azure brow –
Such as creation’s dawn beheld, thou rollest now.

Thou glorious mirror, where the Almighty’s form
Glasses itself in tempests: in all time,
Calm or convulsed – in breeze, or gale, or storm,
Icing the pole, or in the 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 for the, dread, fathomless, alone.

                                   -George Gordon, Lord Byron

PHOTOS OF THE DAY

Boats sail in the Mediterranean Sea off the coast in Herzeliya, Israel, Thursday. Ariel Schalit/AP

The glow from a Noctiluca scintillans algal blooming along the seashore in Hong Kong, Thursday. The luminescence, also called Sea Sparkle, is triggered by farm pollution that can be devastating to marine life and local fisheries, according to University of Georgia oceanographer Samantha Joye. Kin Cheung/AP

Market Closes for January 22^nd, 2015   

Market Index	Close	Change
Dow Jones	17813.98	+259.70
		+1.48%
S&P 500	2062.09	+29.97   +1.47%
NASDAQ	4750.398	+82.978   +1.78%
TSX	14753.74	+193.32
		+1.33%

International Markets

Market Index	Close	Change
NIKKEI	17392.02	+48.54
		+0.28%
HANG SENG	24522.63	+170.05
		+0.70%
SENSEX	29006.02	+117.16
		+0.41%
FTSE 100	6796.63	+68.59
		+1.02%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.425	1.422
CND. 30 Year Bond	2.069	2.047
U.S.    10 Year Bond	1.8820	1.8632
U.S. 30 Year Bond	2.4523	2.4489

Currencies

BOC Close	Today	Previous
Canadian $	0.80883	0.81089
US $	1.23635	1.23322
Euro Rate 1 Euro=		Inverse
Canadian $	1.40521	0.71164
US $	1.13658	0.87983

Commodities

Gold	Close	Previous
London Gold Fix	1295.75	1293.50
Oil	Close	Previous
WTI Crude Future	45.99	47.28

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose to a two-month high, reversing a loss for the year, as Canadian National Railway Co. rallied and the European Central Bank unveiled a 1.1 trillion euro ($1.3 trillion) stimulus program.

     Canadian National Railway surged 3.9 percent to a record to lead industrial stocks higher. Pengrowth Energy Corp. climbed 4.8 percent after cutting its budget on a drop in oil prices. Royal Bank of Canada lost 1.5 percent after agreeing to buy City National Corp. for about $5.4 billion in its biggest takeover ever. BlackBerry Ltd. climbed 6.6 percent as Samsung Electronics Co. was said to still be considering a bid for the company, according to the Financial Post said.

     The Standard & Poor’s/TSX Composite Index rose 203.56 points, or 1.4 percent, to 14,763.98 at 4 p.m. in Toronto, its highest close since Nov. 27. The Canadian benchmark is up 0.9 percent for the year.

     The ECB will buy 60 billion euros a month of securities until September 2016, in a push to revive inflation and the euro-area economy. The move joins a stimulative push among central banks around the world. The Bank of Canada yesterday unexpectedly cut its key rate, along with surprise cuts in Denmark, Turkey, India and Peru in the past week.

     All 10 industries in the benchmark Canadian equity gauge advanced at least 0.8 percent today on trading volume that was 4.2 percent higher than the 30-day average. Industrials rallied 2.2 percent, while consumer shares gained at least 1.8 percent.

     OceanaGold Corp. added 7.2 percent and Barrick Gold Corp. rose 1.2 percent as gold settled above $1,300 an ounce for the first time since August.

     Bombardier Inc. soared 4.9 percent, the most since April, as industrials companies increased 2.2 percent as a group.

     Royal Bank tumbled 1.7 percent after agreeing to buy City National, the Los Angeles-based banker to the stars, in a cash- and-share deal to expand sales to wealthy U.S. residents.

US

By Joseph Ciolli and Michelle F. Davis

     (Bloomberg) — U.S. stocks rallied for a fourth day, wiping out losses for the year in the Standard & Poor’s 500 Index, as the European Central Bank unveiled an expanded stimulus plan and banks and transportation companies surged on better-than- forecast earnings.

     KeyCorp led gains among banks after fourth-quarter results topped analyst estimates. Southwest Airlines Co. jumped to a record as profit rose 71 percent on lower jet fuel prices. Union Pacific Corp. added 4.8 percent as a strengthening U.S. economy and growing construction market boosted traffic on the rails in the fourth quarter. EBay Inc. increased 7.1 percent after entering a standstill agreement with activist investor Carl Icahn.

     “It’s that halo effect of the follow-through on ECB finally coming to the table and embracing a pretty material stimulus program,” Todd Lowenstein, who helps manage $16 billion at Highmark Capital Management in Los Angeles, said by phone. “It brings some hope that Europe will get pointed in the right direction.”

     The S&P 500 gained 1.5 percent to 2,063.15 at 4 p.m. in New York, the highest since Dec. 30. The gauge climbed above its average price for the past 50 days. The Dow Jones Industrial Average climbed 259.70 points, or 1.5 percent, to 17,813.98. The Russell 2000 Index surged 2.1 percent, the most since Dec. 17. About 7.7 billion shares changed hands on U.S. exchanges today, 15 percent above the three-month average.

     The Chicago Board Options Exchange Volatility Index, known as the VIX, fell 13 percent to 16.40, its lowest level of the year.

     ECB President Mario Draghi announced an expanded asset- purchase program, including private and public securities, of up to 60 billion euros ($69 billion) a month. The buying will continue through September 2016. The announcement came after the ECB kept benchmark rates unchanged at record lows.

     “Markets were expecting big and this sounds like a pretty big program, so that’s good news,” Karyn Cavanaugh, the New York-based senior market strategist at Voya Investment Management LLC, said by phone. Voya oversees $215 billion. “We were all expecting it and finally we got what we were looking for.”

     A near-stagnant economy and the risk of deflation forced Draghi’s hand six years after the Federal Reserve took a similar step to inject cash into the U.S. The 67-year-old Italian’s gamble is that the benefits of quantitative easing  outweigh the threat of a backlash in Germany and that the ECB ends up bailing out profligate, reform-wary governments.                       

     The ECB’s shift exacerbates an emerging global divergence in monetary policy. While the Fed is now considering when to tighten credit, central banks in Denmark, Turkey, India, Canada and Peru all announced surprise rate cuts in the past week. The Swiss National Bank shocked investors by dropping a cap on the franc.

     In the U.S., three rounds of Fed stimulus helped the S&P 500 more than triple from a bear-market low in March 2009. The central bank ended its quantitative easing program three months ago.

     The S&P 500 has climbed 3.5 percent following its second five-day slide this year as investors have weighed earnings reports and oil held above an almost six-year low set Jan. 13. The gauge is 1.3 percent from its all-time high reached Dec. 29.

     The S&P 500 has moved 1.9 percent from its lowest to highest levels on Thursday. That’s the 15th straight swing of more than 1 percent intraday, the longest stretch since an 18- day run ending on June 21, 2012, data compiled by Bloomberg show.

     Daily moves in the U.S. equity benchmark have almost doubled from 2014 as oil’s decline spurred concerns about deflation and earnings estimates fell the most since 2009. While investors are the most rattled they’ve been since Europe’s debt crisis more than two years ago, an accelerating U.S. economy should calm them down, according to a Jan. 20 client note from Goldman Sachs derivatives strategists.

     A majority of those surveyed in a Bloomberg poll forecast that the S&P 500 will rise in the next six months, while only a quarter see it declining. The index is trading at 17 times the projected earnings of its members, according to data compiled by Bloomberg. Valuations reached a five-year high at the end of last year.

     Capital One Financial Corp. and Starbucks Corp. are among 16 companies reporting earnings on Thursday. Profit at S&P 500 companies climbed 0.8 percent in the last three months of 2014, analysts predict, down from an October estimate of 8.1 percent.

     Economic data on Thursday showed more Americans than forecast filed applications for unemployment benefits last week, a sign of lingering holiday turnover.

     Leon Cooperman, who runs Omega Advisors Inc., said stocks can extend their gains as the economy improves and corporate profits rise.

     “There’s no basis to call for a market peak,” Cooperman, 71, said today in an interview on Bloomberg Television with Betty Liu. “It could be a couple more years.”

     Eight out 10 major industries in the S&P 500 advanced. Financial, technology and consumer-discretionary shares had the biggest gains, increasing more than 1.9 percent.

     The Dow Jones Transportation Average rallied the most since October, gaining 2.9 percent. Union Pacific rose to the highest level since Dec. 30 after quarterly profit topped analysts’ estimates on higher cargo shipments. 

     A Bloomberg index of U.S. airlines rose 4.7 percent to the highest since January 2001. United Continental Holdings Inc. and Southwest Airlines predicted that fuel costs will be at their lowest in more than five years this quarter, helping boost profits in a period where travel demand typically slows.

     JetBlue Airways Corp. surged 7.9 percent to the highest since 2007.

     KeyCorp added 7.6 percent as fourth-quarter revenue and earnings topped estimates. City National Corp. surged 19 percent after Royal Bank of Canada agreed to buy the Los Angeles-based banker to the stars for about $5.4 billion. Other regional banks rallied. Regions Financial Corp., Hudson City Bancorp Inc. and M&T Bank Corp. soared more than 4.3 percent.

     Larger institutions also climbed. JPMorgan Chase & Co., Bank of America Corp. and Goldman Sachs Group Inc. surged at least 2.8 percent. Banks have been the worst performers among S&P 500 groups this year, with a loss of 2.9 percent.

     EBay increased 7.1 percent, the biggest gain since September. The company is cutting 2,400 positions, buying back shares and entering into a standstill agreement with Icahn as the company prepares to split its marketplace and payments businesses.

     EBay also said it’s exploring options for its enterprise unit, including a sale or initial public offering, and is adding three new board members, including a representative for Icahn, who had pushed the company to split up.

     Google Inc. climbed 3.2 percent and Apple Inc. advanced 2.6 percent.

     Avon Products Inc. rose 15 percent, the most in the S&P 500, after dealReporter said the company has been having talks with TPG about a potential transaction, citing industry sources.

     Phone companies had the biggest decline among S&P 500 groups, dropping 0.6 percent. Verizon Communications Inc., the largest U.S. wireless carrier, tumbled 0.9 percent after missing analysts’ fourth-quarter profit estimates as a surge in sales of deeply discounted phones squeezed margins. AT&T Inc. lost 0.6 percent.

     American Express Co. fell 3.8 percent, the most in the Dow, after reporting a fourth-quarter profit that missed some analysts’ estimates and saying it would cut more than 4,000 jobs this year.

 

Have a wonderful evening everyone.

 

Be magnificent!

If you see the soul in every living being, you see truly.

If you see immortality in the heart of every mortal being, you see truly.

The Bhagavad Gita

As ever,

 

Carolann

 

Make learning your business, speak little, do much, and receive everyone kindly.

                                                                         -Shammai, 50 BCE-30CE

 

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

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:

KINDNESS

     -Naomi Shihab Nye

…before you know kindness as the deepest thing inside,
you must know sorrow as the other deepest thing.
You must wake up with sorrow.
You must speak to it till your voice
catches the thread of all sorrows
and you see the size of the cloth.
Then it is only kindness that makes sense anymore
…only kindness that raises its head
from the crowd of the world to say,
“It is I you have been looking for,”
and then goes with you everywhere
like a shadow or a friend.

PHOTOS OF THE DAY

Tamborilleros’ wearing their uniforms march in the traditional ‘La Tamborrada’, during ‘El Dia Grande’, the main day of San Sebastian feasts, in the Basque city of San Sebastian, northern Spain, Tuesday. From midnight to midnight companies of perfectly uniformed marchers parade through the streets of San Sebastian playing drums and barrels in honor of their patron saint. Alvaro Barrientos/AP

People hide behind a tree while others throw turnips at the Jarramplas as he makes his way through the streets beating his drum during the Jarramplas Festival in Piornal, Spain, Tuesday. Jarramplas wears a costume and a devil-like mask and beats a drum through the streets of Piornal while residents throw turnips as a punishment for stealing cattle. Daniel Ochoa de Olza/AP

Market Closes for January 21^st, 2015   

Market Index	Close	Change
Dow Jones	17554.28	+39.05
		+0.22%
S&P 500	2032.27	+9.72   +0.48%
NASDAQ	4667.422	+12.576   +0.27%
TSX	14553.73	+245.29
		+1.71%

International Markets

Market Index	Close	Change
NIKKEI	17280.48	-85.82
		-0.49%
HANG SENG	24352.58	+401.42
		+1.68%
SENSEX	28888.86	+104.19
		+0.36%
FTSE 100	6728.04	+107.94
		+1.63%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.422	1.491
CND. 30 Year Bond	2.047	2.058
U.S.    10 Year Bond	1.8632	1.7897
U.S. 30 Year Bond	2.4489	2.3784

Currencies

BOC Close	Today	Previous
Canadian $	0.81089	0.82565
US $	1.23322	1.21116
Euro Rate 1 Euro=		Inverse
Canadian $	1.43238	0.69814
US $	1.16150	0.86096

Commodities

Gold	Close	Previous
London Gold Fix	1293.50	1288.75
Oil	Close	Previous
WTI Crude Future	47.28	46.39

Market Commentary:

Canada

By Eric Lam, Ari Altstedter and Greg Quinn

     (Bloomberg) — Canadian stocks surged, government bond yields slumped to a record and the dollar slid to the weakest in more than five years after the nation’s central bank unexpectedly slashed interest rates amid the collapse in crude.

     The benchmark Standard & Poor’s/TSX Composite Index soared 1.8 percent, led by the biggest rally in financial services stocks in three months. The Canadian dollar, nicknamed the loonie because of the waterfowl on its C$1 coin, dropped 1.8 percent to the lowest since April 2009 versus the greenback. The yield on Canada’s benchmark 10-year government bond fell to as low as 1.365 percent.

     “Every economist I’ve seen or read or heard from today wasn’t expecting this, so I’d say the market was completely caught off-guard,” said Gareth Watson, vice-president of investment management and research at Richardson GMP Ltd. in Toronto. His firm manages about C$28 billion ($22.7 billion). “You’re getting a boost here on the Canadian side to anything that’s interest-sensitive. And people are bailing out of the currency altogether. That’s a function of the lack of expectations of this happening today.”

     Stephen Poloz, governor of the Bank of Canada, cut the rate on overnight loans between commercial banks to 0.75 percent from 1 percent, a decision none of the 22 economists in a Bloomberg News survey predicted. The rate had been unchanged since September 2010.

     Canada, the largest exporter of oil to the U.S., is loosening monetary policy as a plunge in crude prices raises the risk of deflation globally. Oil has dropped more than 10 percent this year following a decline of almost 50 percent last year, the most since the 2008 financial crisis. The U.S. pumped crude at the fastest rate in more than three decades and the Organization of Petroleum Exporting Countries resisted calls to reduce supply.

     “It’s a big shock,” David Doyle, a strategist at Macquarie Capital Markets, said by phone from Toronto. “They’re going to try to provide the necessary medicine here for the soft landing from slowing debt growth, from slowing investment in the oil sands, and I think they thought it needed some stimulus here.”

     Canada, the Group of Seven’s biggest crude exporter, is already feeling the effects of oil dropping below $50 a barrel, as companies such as Calgary-based Suncor Energy Inc. reduce staffing and investment. Canada’s oil sands are among the most expensive reserves to develop.

     The central bank lowered its 2015 forecast for economic growth in Canada to 2.1 percent from 2.4 percent previously, and forecast it will average about 1.5 percent in the first half of the year. The International Monetary Fund early this week made the steepest cut to its global-growth outlook in three years.

     The Bank of Canada’s move comes amid efforts by central banks around the world to stimulate the global economy. The European Central Bank is expected to announce Thursday it will buy as much as 1.1 trillion euros ($1.3 trillion) of debt through December 2016 in a push to fend off deflation. The Bank of Japan has already boosted its asset purchases and the Bank of England said two policy makers had dropped their call for rate increases.

     “We expected the Bank of Canada to open the door a crack to a potential cut, but Governor Poloz decided to swing it wide open,” said Peter Buchanan, economist with CIBC World Markets Inc., in a report today. “Today’s outright target reduction comes as a surprise.”

     Eight of 10 major groups in the S&P/TSX advanced on Wednesday, with energy and health-care shares leading the gains. A measure of volatility of S&P/TSX 60 options sank 12 percent to 18.74, the biggest drop in almost five weeks.

     Royal Bank of Canada, the nation’s second-largest lender by assets, jumped 1.6 percent, the most since October, while Dream Unlimited Corp., a commercial and residential real estate developer, rallied 5.1 percent. The S&P/TSX Financials Index, which accounts for about a third of the broader S&P/TSX, climbed 1.5 percent.

     Energy producers increased 3.2 percent as a group. Crude futures rose 2.8 percent to settle at $47.78 a barrel in New York, retracing some of yesterday’s 4.7 percent slide. Baytex Energy Corp. and Enerplus Corp. jumped at least 5.4 percent.                        

     The 14-day average true range of the loonie, a volatility gauge that takes into account the differences between intraday highs and lows, rose to 0.013 today, the highest since November 2011.

     Goldman Sachs Group Inc. said it’s reviewing the forecast for the Canadian currency following the surprise rate decision. The New-York based bank lowered its six-month projection to C$1.20 from C$1.14 at the beginning of January.

     “The big picture is that this represents a structural break for the BOC, with policy diverging from our expectations for the Fed,” Robin Brooks, a chief currency strategist at Goldman, said in a research note. “This structural break is important and sets the stage for USD/CAD moving materially higher,” he said, referring to the value of the U.S. currency.

     There’s a 68 percent chance the Federal Reserve will raise its benchmark rate for the first time since 2006 by December, according to futures trading.

     The yield on Canada’s benchmark 10-year bond dropped to as low as 1.365 percent before trading at 1.43 percent, about 0.4 percentage point below the U.S. 10-year note yield. It’s the biggest difference since 2007.

     Yields on Canadian two-year securities touched 0.536 percent, and 30-year bond yields reached 2 percent.

US

By Jeremy Herron and Joseph Ciolli

     (Bloomberg) — U.S. stocks advanced for a third day as energy producers gained with the price of oil. European equities rose and Treasuries fell on speculation the European Central Bank will boost stimulus through asset purchases.

     The Standard & Poor’s 500 Index added 0.5 percent at 4 p.m. in New York, trimming its loss this year to 1.3 percent. The Stoxx Europe 600 Index advanced 0.6 percent to extend a seven- year high. It erased a drop of 0.8 percent as the ECB was said to propose 50 billion euros ($58 billion) of asset purchases a month through 2016. Canadian equities rallied as the country’s central bank unexpectedly cut rates. The euro traded at almost an 11-year low. The yield on 10-year Treasury notes climbed, while U.S. crude surged 2.8 percent.

     A ECB Executive Board proposal foresees asset purchases of as much as $1.28 trillion through the end of 2016, according to two euro-area central-bank officials who have seen the document. International Business Machines Corp. fell 3.1 percent, while Netflix Inc. rallied 17 percent after reporting earnings. Oil rebounded from the biggest drop in a week amid that U.S. drilling is slowing. Energy producers in the S&P 500 gained 1.8 percent.

     “The initial move after an ECB stimulus announcement was always going to be up, but the real question is how long it’s going to last,” Matt Maley, an equity strategist at Miller Tabak & Co LLC in Newton, Massachusetts, said in a phone interview. “Earnings will take a backseat for the next few days, but they’ll be back in focus before long.”

     The ECB proposal will be discussed starting Jan. 21 and could still be changed significantly, the people said, asking not to be identified as it is confidential. Purchases won’t start before March 1, one of the people said. The ECB will announce its policy decision on Jan. 22.

     Equities retreated in early U.S. trading and the euro advanced after ECB Governing Council member Ewald Nowotny said investors should not get carried away by one policy meeting. Speculation that ECB President Mario Draghi will broaden asset purchases had increased after the Swiss National Bank scrapped a cap on the franc last week.

     The euro pared gains on the stimulus proposal to trade at almost an 11-year low against the dollar. The shared currency appreciated 0.3 percent to $1.1584 after adding as much as 1.1 percent. It declined to $1.1460 on Jan. 16, the least since 2003. The euro dropped 0.5 percent to 136.57 yen. Japan’s currency strengthened 0.9 percent to 117.73 per dollar.

     The Stoxx Europe 600 Index rose for a fifth day, extending its rally since Jan. 14 to 5.3 percent.

     The yield on 10-year German bunds jumped eight basis points to 0.52 percent, while the rate similar maturity French notes added six basis points to 0.70 percent.

     Treasuries fell on stimulus bets, as the 10-year rate rose six basis points to 1.85 percent. The debt has rallied this year as falling yields around the world made U.S. more attractive on a relative basis even as investors prepare for higher borrowing costs in the U.S.

     “We’re going to see much market movement in response to central bank actions or inactions,” Rex Macey, the Atlanta- based chief allocation officer at Wilmington Trust Investment Advisors, said in a phone interview. The firm oversees $22.3 billion. “Whichever way it goes, the effect of central bank stimulus has been supportive of markets, and we expect that to continue.”

     U.S. investors are also weighing corporate earnings reports, as companies from EBay Inc. to American Express Co. report financial results today. Profit at S&P 500 companies probably climbed 0.8 percent in the final three months of 2014, analysts predicted, down from an October estimate of 8.1 percent.                         

     IBM had the biggest slide in the Dow Jones Industrial Average as a disappointing forecast overshadowed profit that topped estimates. Chevron Corp. rallied 1.6 percent.

     Netflix jumped 17 percent, the most since April 2013, after saying a record gain in international subscribers boosted the worldwide total to 57.4 million. UnitedHealth Group Inc. advanced 3.6 percent to a record as earnings beat estimates.

     “Although investors are very edgy right now, U.S. equities still have a bit further to go,” said William Hobbs, head of equity strategy at Barclays Plc’s wealth-management unit in London. “The hurdle is just a little bit higher because there has been such a big consensus favoring the U.S. and sentiment is already pretty hot on growth. None of these markets are particularly inexpensive.”                       

     The Chicago Board Options Exchange Volatility Index, known as the VIX, fell for a third straight day, declining 4.8 percent to 18.93.

     The S&P 500 is trading at 16.6 times the projected earnings of its members, according to data compiled by Bloomberg. Valuations reached a five-year high at the end of last year. Profit at companies listed on the benchmark measure probably climbed 0.8 percent in the final three months of 2014, analysts predicted, down from an October estimate of 8.1 percent.

     Data in the U.S. today showed new residential construction rose more than forecast in December, capping the best year since 2007 and signaling the industry will probably keep expanding this year. Housing starts increased 4.4 percent to a 1.09 annual rate, following the prior month’s 1.04 million pace that was higher than previously estimated, a Commerce Department report showed.

     The Standard & Poor’s/TSX Composite Index rallied 1.8 percent to the highest since Jan. 2 after the nation’s central bank unexpectedly slashed its main interest rate due to the plunge in oil prices, saying the shock will weigh on everything from inflation to business spending.                      

     While the Bank of Canada became the first central bank in the Group of Seven to cut interest rates in response to plummeting oil prices, emerging market economies that rely on manufacturing may benefit, according to Mary Callahan Erdoes, JPMorgan Chase & Co.’s head of asset management.

     “People are looking at that and saying the manufacturing emerging markets countries are really going to benefit,” Erdoes said in an interview with Bloomberg TV’s Stephanie Ruhle in Davos, Switzerland. “You think about countries like India, you think about countries like Taiwan, Korea, Mexico, even China. All of those are net beneficiaries of lower oil prices which should be able to help those economies to continue to grow. You’re going to see a lot more money coming into that sector for long-term investing.”

     The MSCI Emerging Markets Index rose 1.9 percent to the highest since Dec. 8, as all 10 industry groups advanced. Energy shares in the gauge rallied 2.8 percent.

     Brazil’s Ibovespa advanced 2.8 percent.

     Oil rebounded from the biggest drop in a week amid the most volatile prices in more than three years. Oil climbed 2.8 percent to settle at $47.78 a barrel in New York, retracing a 4.7 percent slide on Tuesday. Brent for March delivery gained 2.2 percent to end at $49.03 a barrel in London.

     OPEC policies are protecting market share over revenue, Oman’s Oil Minister Mohammed Al-Rumhy said at conference in Kuwait City. The nation is not part of the Organization of Petroleum Exporting Countries.

     Silver headed for a bull market in its best start to a year in more than three decades, fueled by speculation that slowing global economic growth will spur haven demand.

     Silver futures for March delivery jumped 1.3 percent to close at $18.193 an ounce in New York. A settlement at $18.4956 would bring the gain from a four-year closing low of $15.413 on Nov. 6 to 20 percent, meeting the common definition of a bull market. Prices are up 17 percent this month.

     Gold futures for February delivery fell less than 0.1 percent to $1,293.70 in New York. The metal has gained 9.3 percent this month, after declining 1.5 percent in 2014.

     Policy makers in Europe and Asia have announced new stimulus measures amid prolonged below-target inflation, boosting demand for bullion as a store of value. On Wednesday, gold jumped to $1,300 an ounce for the first time since August.
 

Have a wonderful evening everyone.

 

Be magnificent!

Energy is action and movement.  All action is movement and all action is energy.

All desire is energy.  All feeling is energy.  All thought is energy.

All living is energy.  All life is energy.

If that energy is allowed to flow without any contradiction,

without any friction, without any conflict, then that energy is boundless, endless.

When there is no friction there are no frontiers to energy.

It is friction which gives energy limitations.  So, having once seen this,

why is it that the human being always brings friction into energy?

Why does he create friction in this movement which we call life?

Is pure energy, energy without limitations just an idea to him?

Does it have no reality?

Krishnamurti

As ever,

 

Carolann

 

Giving up is the ultimate tragedy.

              -Robert J. Donovan, 1939-2014

 

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

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:

Today in history:

On Jan. 20, 1981, Iran released 52 Americans held hostage for 444 days, minutes after the presidency had passed from Jimmy Carter to Ronald Reagan.
1841    Hong Kong was ceded to Great Britain.
1936    Britain’s King George V died.
1942    Nazi officials arrived at a “final solution” that called for exterminating Europe’s Jews, during a conference at Lake Wannsee in Berlin.

EARLY DARKNESS

         -D. Patrick Miller

Think of it as ink:
an indigo dye descending
between the leaves of the trees
and down to the grasses.
There is no dying of the light –
just the washing of a bowl,
and overturning it for night.
When day arrives we must write with bottled darkness.
In the night we can dream free messages of light.

PHOTOS OF THE DAY

People stroll under the Lorraine Bridge on the bank of river Aare in Bern, Switzerland, Sunday. Alessandro della Valle/Keystone/AP

Skiers dressed as witches participate in the 33. downhill race at Blatten-Belalp, southwestern Switzerland, Saturday. During the event, called ‘Hexenabfahrt’ (downhill of the witches,) many participants race down the 5 km slope in colorful costumes. Olivier Maire/Keystone/AP

Market Closes for January 20^th, 2015   

Market Index	Close	Change
Dow Jones	17515.23	+3.66
		+0.02%
S&P 500	2022.55	+3.13   +0.15%
NASDAQ	4654.848	+20.463   +0.44%
TSX	14308.44	-4.06
		-0.03%

International Markets

Market Index	Close	Change
NIKKEI	17366.30	+352.01
		+2.07%
HANG SENG	23951.16	+212.67
		+0.90%
SENSEX	28784.67	+522.66
		+1.85%
FTSE 100	6620.10	+34.57
		+0.52%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.491	1.517
CND. 30 Year Bond	2.058	2.084
U.S.    10 Year Bond	1.7897	1.8368
U.S. 30 Year Bond	2.3784	2.4531

Currencies

BOC Close	Today	Previous
Canadian $	0.82565	0.83736
US $	1.21116	1.19423
Euro Rate 1 Euro=		Inverse
Canadian $	1.39852	0.71504
US $	1.15470	0.86603

Commodities

Gold	Close	Previous
London Gold Fix	1288.75	1273.75
Oil	Close	Previous
WTI Crude Future	46.39	48.69

Market Commentary:

Canada

By Michelle F. Davis

     (Bloomberg) — Canadian stocks were little changed as energy shares slumped with oil and the International Monetary Fund cut its global-growth outlook by the most in three years, offsetting gains among mining companies.

     Gran Tierra Energy tumbled 32 percent, the most ever, as the company said work at its Eslabon Sur well in South America had been suspended. Suncor Energy Inc. fell 1.7 percent to pace declines among energy shares. Barrick Gold Corp. and Goldcorp Inc. advanced more than 2.4 percent as gold futures posted the longest rally in 11 months. OceanaGold Corp. rallied 6.7 percent after a UBS analyst recommended the stock.

     The Standard & Poor’s/TSX Composite Index slid 4.06 points, or less than 0.1 percent, to 14,308.44 at 4 p.m. in Toronto.

     Crude fell as much as 5.8 percent in New York and 2.2 percent in London after Iraqi crude production surged to a record and the IMF cut its global growth outlook.

     The world economy will grow 3.5 percent in 2015, down from the 3.8 percent pace projected in October, the IMF said in its quarterly global outlook released late Monday in Washington. The IMF said slowing growth almost everywhere except the U.S. will more than offset the benefits from lower oil prices.

     Data today showed Canadian factory sales dropped faster than economists predicted in November, with the second straight decline ranging from automobiles to food.

     Bank of Canada Governor Stephen Poloz will deliver his latest estimates for inflation and growth tomorrow along with a decision on interest rates. Policymakers must account for a plunge in the price of crude oil, Canada’s biggest export.

     Canada’s dollar weakened to the lowest in more than five years today on speculation the central bank may signal it’s more likely to lower interest rates than raise them when it releases a growth outlook tomorrow. BOC hasn’t raised its benchmark interest rate in more than four years.                          

     Oil companies comprised eight of the 10 worst performers today in the benchmark index, with Gran Tierra dropping 32 percent and Pacific Rubiales Energy Corp. losing 14 percent. Suncor Energy slid 1.7 percent.

     Five of 10 industries in the S&P/TSX slumped on volume 10 percent higher than the 30-day average.

     Gold rose 1.4 percent to the highest in almost five months as concerns about global growth led to “safe-haven buying in gold,” according to Jonathan Butler, a precious metals strategist at Mitsubishi Corp.

     OceanaGold rose 6.7 percent as UBS equity analyst Jonathan Battershill upgraded the company to buy from neutral. B2Gold Corp. increased 7.4 percent to a near five-month high as the company announced a higher-grade gold mineral resource estimate in a zone adjacent to its new mine in Namibia.

     Potash Corp. of Saskatchewan Inc. rose 3.4 percent following an S&P report that said North American potash producers are poised to benefit from stabilizing market conditions and the completion of capacity expansion projects.

     Canadian Pacific Railway Ltd. gained 2.2 percent and Dream Unlimited Corp. increased 3.2 percent after the companies said they formed a real estate venture to develop about 30 of the rail operator’s properties in Canada and the U.S.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks rose, with the Nasdaq 100 Index rallying as gains from Apple Inc. to Netflix Inc. helped offset concerns that global growth is slowing.

     Yahoo! Inc., Micron Technology Inc. and Apple jumped more than 2.3 percent to lead technology shares. Netflix surged 13 percent in late trading after adding more subscribers than analysts forecast. Delta Air Lines Inc. climbed 7.3 percent after earnings beat projections. Johnson & Johnson tumbled 2.6 percent after forecasting lower earnings in 2015 as competition cuts into revenue for some of its best-selling drugs. A gauge of homebuilders retreated 3 percent, after plunging almost 7 percent last week.

     The Standard & Poor’s 500 Index gained 0.2 percent to 2,022.55 at 4 p.m. in New York, after an earlier decline of 0.7 percent. The Dow Jones Industrial Average added 3.66 points, or less than 0.1 percent, to 17,515.23. The Nasdaq 100 Index gained 0.7 percent. About 7.3 billion shares changed hands on U.S. exchanges today, 8.2 percent above the three-month average. Exchanges were closed yesterday for Martin Luther King Day.

     “Volatility has been so pronounced day-to-day, hour-to- hour,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a phone interview. “The fact that the market is marginally positive is encouraging given all the elements that are out there.”

     The S&P 500 slipped 1.2 percent last week, even with a 1.3 percent rally on Friday, as falling oil, shrinking earnings estimates and concern that slowing global growth will hurt the U.S. economy led to selling. The index is down 1.8 percent for the year.                          

     The International Monetary Fund made the steepest cut to its global-growth outlook in three years, with diminished expectations almost everywhere except the U.S. more than offsetting the boost to expansion from lower oil prices.

     The world economy will grow 3.5 percent in 2015, down from the 3.8 percent pace projected in October, the IMF said in its quarterly global outlook released late Monday. It also cut its estimate for growth next year to 3.7 percent, compared with 4 percent in October.

     “Although the theme is that the U.S. is the best market out there, from a global perspective, you can’t see a slowdown in every country and expect the U.S. to stay above water,” Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc., said in a phone interview.

     The global weakness, along with prolonged below-target inflation, is challenging policy makers across Europe and Asia to come up with fresh ways to stimulate demand more than six years after the global financial crisis.

     The ECB sets monetary policy this week as speculation grows that it will expand asset purchases. President Mario Draghi will probably announce a 550 billion-euro ($638 billion) program of quantitative easing, economists said in a Bloomberg survey.

     “The market is a little oversold here after a pretty wild January so far,” Bruce Bittles, chief investment strategist at Milwaukee-based RW Baird & Co., which oversees $110 billion, said in a phone interview. “If the ECB comes through with a strong quantitative easing strategy, that may be able to pull Europe away from the edge in terms of recession and deflation, which would ease concerns that the U.S. would succumb to slower growth as well.”

     China’s economic growth beat economists’ estimates last quarter, helping the full-year expansion remain close to the government’s target. Gross domestic product rose 7.3 percent in the three months ended December from a year earlier, the statistics bureau said in Beijing, beating the median estimate of 7.2 percent in a Bloomberg survey of analysts. The economy expanded 7.4 percent in 2014, the slowest pace since 1990.

     Later this week, investors will weigh U.S. economic reports including data on housing and manufacturing to gauge the health of the world’s largest economy.

     Netflix rose 3.4 percent during the regular session and then surged 13 percent in late trading after reporting fourth- quarter subscriber growth that exceeded its forecasts, benefiting from faster international growth and more gains in the U.S.

     Bank of America Corp. strategists lowered their estimate for S&P 500 earnings for a second time. The forecast was cut “in order to reflect lower oil and the stronger dollar,” according to the BofA Merrill Lynch Global Research report.

     Earnings per share for companies in the gauge will expand 1 percent in 2015 to $119.50, down from $124 previously and an earlier prediction of $126. The mean estimate among 18 strategists surveyed by Bloomberg was $124.83 as of Jan. 5.

     The Chicago Board Options Exchange Volatility Index, known as the VIX, fell for a second straight day, declining 5.1 percent to 19.89.

     Seven out of 10 major groups in the S&P 500 rose today. Technology and industrial shares had the biggest advance, adding at least 0.7 percent.

     Delta rose 7.3 percent, the most since September 2013, as fourth-quarter profit beat analysts’ estimates, boosted by cheap fuel and strong demand in the U.S.

     Carriers from Southwest Airlines Co. to American Airlines Group Inc. rallied, sending the Dow Jones Transportation Average to a 1 percent gain.

     Johnson & Johnson, the world’s biggest maker of health-care products, tumbled 2.6 percent. The company is seeking to replenish its product lineup as drugs such as hepatitis C treatment Olysio and blood thinner Xarelto face new competition.                       

     Jami Rubin, an analyst at Goldman Sachs Group Inc., lowered her recommendation to sell from neutral on Jan. 15 because she sees the company bringing fewer new drugs to market this year than in previous years, she said in a note.

     Morgan Stanley lost 0.4 percent. The owner of the world’s largest brokerage reported profit that missed analysts’ estimates as fixed-income trading revenue fell to the lowest since the financial crisis.

     Financial companies are the worst-performing group in the S&P 500 so far this year, dropping 5.4 percent. Energy companies have the second-biggest decline, at 4.6 percent.

     JPMorgan Chase & Co. and Citigroup Inc. posted earnings last week that missed analysts’ estimates on bigger-than- expected drops in fixed-income trading revenue. Goldman Sachs posted its lowest full-year trading revenue since 2005.

     An S&P index of homebuilders decreased 3 percent as PulteGroup Inc., D.R. Horton Inc. and KB Home fell more than 3.4 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

The universe is like an ocean in perfect equilibrium.

A wave cannot rise in one place, without creating a hollow elsewhere.

The sum total of the energy of the universe remains identical from one end to the other.

If you take from one place, you must give elsewhere.

 

Swami Vivekananda

As ever,

 

Carolann

 

Forever is composed of nows.

     -Emily Dickinson, 1830-1886

 

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

Senior Vice-President &

Senior Investment Advisor

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

I recently finished reading Edward Rutherford’s fabulous tome entitled Paris.  I highly recommend it.  It oscillates between La Belle Epoch and different historical periods in the history of the city of light.  It describes the building of the Eiffel tower – including one of the character’s personal involvement in building the tower – and concludes with the birth of the French resistance in the second world war.  Amazing really.  I loved it. 

Speaking of Paris, Conrad Black wrote a very moving article in the National Post on Saturday regarding the events that have taken place there recently.  Here’s an excerpt: 

“The Paris March for Unity on Sunday was one of the epochal occasions of this still-young century….Francois Hollande, an extremely unprepossessing occupant of the presidency of France, rose magnificently to the occasion.  He said that France was, above all other things, a democracy, and that there could be ‘no democracy without freedom and no freedom without freedom of the press.’  That meant that irresponsible and even malicious media, such as the targeted magazine Charlie Hebdo, must be tolerated and protected.  He referred to the attack on a kosher market the next day, a related incident in which four more people were murdered, as vile anti-Semitism, an attempted pogrom.  (The Paris special police, very experienced at dealing with terrorists, deftly rescued 15 hostages while killing the perpetrator, and killed the previous day’s attackers and took their accomplice into custody.)

  Hollande called for a march in Paris two days later.  There was no bravura, no shrill and mawkish posturing and faux patriotism.  The spirit of the appeal and of the occasion was of the utmost spontaneity and dignity;  a silent march, no speeches or additional flourishes.  Millions of Parisians joined the mighty, proud shuffling concourse from the Place de la Republique to the Place de la Nation, two miles through an adequately prosperous and ethnically varied area.  The terminal points have witnessed many dramatic moments in 225 years, as France has had two monarchies, two empires, three restorations, a directory, a consulate, three foreign occupations (including the tender mercies of the Gestapo for four years), a government in exile, several provisional governments, and five republics.  The leader of France’s imams, prominent figures in Paris’ Jewish community and many thousands of Muslims and Jews joined the great movement, along with the official representatives of 50 countries, including the leaders or foreign ministers of Algeria, the European Union, Egypt, Germany, Great Britain, Hungary, Israel, Italy, Jordan, the Palestinian Authority, Russia, Spain, Tunisia, Turkey, Ukraine, and the United Arab Emirates.  The bells of Notre Dame pealed for half an hour, for only the fourth time in 200 years, (the others were the ends of the World Wars and the Liberation of Paris on Aug. 26,1944, the last occasion when Parisians massed in such numbers, to acclaim General de Gaulle when he walked down the champs-Elysees)…”

PHOTOS OF THE DAY

Seattle Seahawks’ Jermaine Kearse catches the game-winning touchdown pass during overtime of the NFL football NFC Championship game against the Green Bay Packers Sunday, in Seattle. Jeff Chiu/AP

Hannah Kearney from the US competes to place second in the women’s freestyle skiing single moguls final event at the Freestyle Ski and Snowboard World Championships in Kreischberg, Austria, Sunday. Darko Bandic/AP

Market Closes for January 19^th, 2015   

Market Index	Close	Change
Dow Jones	17511.57	Closed
S&P 500	2019.42	Closed
NASDAQ	4634.383	Closed
TSX	14312.50	+3.09
		+0.02%

International Markets

Market Index	Close	Change
NIKKEI	17014.29	+150.13
		+0.89%
HANG SENG	23738.49	-365.03
		-1.51%
SENSEX	28262.01	+140.12
		+0.50%
FTSE 100	6585.53	+35.26
		+0.54%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.517	1.537
CND. 30 Year Bond	2.084	2.108
U.S.    10 Year Bond	1.8368	1.7292
U.S. 30 Year Bond	2.4531	2.3725

Currencies

BOC Close	Today	Previous
Canadian $	0.83736	0.83429
US $	1.19423	1.19863
Euro Rate 1 Euro=		Inverse
Canadian $	1.38614	0.72143
US $	1.16070	0.86155

Commodities

Gold	Close	Previous
London Gold Fix	1273.75	1277.50
Oil	Close	Previous
WTI Crude Future	48.69	46.25

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little changed, as an advance among the nation’s largest lenders offset oil’s decline in London after Iraq said the country is producing crude at a record pace, worsening a global supply glut.

     National Bank of Canada gained 1 percent as financials rose a second day. Pacific Rubiales Energy Corp. and Lightstream Resources Ltd. declined at least 6.1 percent, the most among energy producers. Goldcorp Inc. rose 0.6 percent after agreeing to buy Probe Mines Ltd. for about C$526 million ($440 million). Bombardier Inc. slid 5.2 percent after analysts at Bank of Nova Scotia said investors should avoid the stock.

     The Standard & Poor’s/TSX Composite Index rose 3.09 points, or less than 0.1 percent, to 14,312.50 at 4 p.m. in Toronto. The Canadian benchmark has lost 2.2 percent this year. U.S. markets are closed today for the Martin Luther King Jr. holiday.

     Pacific Rubiales lost 6.1 percent and Lightstream Resources tumbled 8.9 percent as energy shares retreated 1.1 percent, the only industry among 10 industries in the equity gauge to decline. Trading volume was 61 percent lower than the 30-day average.

     Crude prices fell from a one-week high in London. Iraq is pumping at a record pace of 4 million barrels a day, and will continue to boost exports this year amid a supply glut that’s pushed oil into a bear market, Oil Minister Adel Abdul Mahdi said at a press conference.

     Detour Gold Corp. climbed 4.6 percent as raw-materials shares advanced 0.4 percent for a third day of gains.

     Foreigners divested C$580 million in Canadian stocks in November, the first such sale in 15 months, according to data from Statistics Canada. Overseas investors bought C$4.29 billion more Canadian securities overall, led by C$4.75 billion in bond purchases, slower than October’s C$9.53 billion.

     “November was still in the early stages of negative sentiment on Canadian equities as energy price retreated,” said Avery Shenfeld, chief economist at CIBC World Markets, in a report today.

     The Shanghai Composite Index tumbled the most in more than six years as regulators cracked down on margin lending. The nation’s largest brokerages slumped after regulators introduced a three-month ban on new loans to equity traders. China is Canada’s second-largest trading partner after the U.S.

     Bombardier slumped 5.2 percent for a third day of losses. Turan Quettawala, analyst at Scotiabank, slashed the company’s rating to underperform, the equivalent of a sell. Bombardier has plunged 34 percent since halting its Learjet 85 program Jan. 15, cutting 1,000 jobs and booking $1.4 billion in pretax fourth- quarter costs.

US

Closed for Martin Luther King Day.

 

Have a wonderful evening everyone.

 

Be magnificent!

The universe is the energy of the soul; and from this energy comes life, consciousness, and the elements.

The universe is the will of the soul; and from this will comes the law of cause and effect..

From the soul one became many; but in the soul many are one.

Mundaka Upanishad

As ever,

 

Carolann

 

Believe that life is worth living and your belief will help create the fact.

                                                          -William James, 1842-1910

 

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

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:

Today is poet Robert Service’s birthday, whose indelible words are always with me:

“Ah! The clock is always slow; it is later than you think.”

Also on this day, in 1919, Prohibition took effect, outlawing the “manufacture, sale, or transportation of intoxicating liquors for beverage purposes.” It wasn’t until 1933 that the 21^st Amendment to the Constitution was passed and ratified, repealing the ban on alcohol.  The speakeasies then went out of business ha!

The Vancouver Sun featured Vancouver’s best new restaurants in 2014; they are:

-by Mia Stainsby

1. Au Comptoir, aucomptoir.ca; 2278 West 4^th Ave; 604-569-2278.
2. The Abbey, abbeyvan.com; 17 West Pender St; 604-336-7100.
3. Blacktail, blacktailflorist.ca; 332 Water ST; 604-699-0249.
4. Boulevard, restaurant_bar.htm; 845 Burrard St;604-642-2900.
5. Bufala, bufala.ca; 5395 West Boulevard; 604-267-7499.
6. Café Medina, medinacafe.com; 780 Richards St; 604-879-3114.
7. Canyon, thecanyon.ca; 3135 Edgemont Boulevard; 604-987-8812.
8. Cinara, cinara.ca; 350 West Pender St; 604-428-9694.
9. The Fat Badger, fatbadger.ca; 1616 Alberni St; 604-336-5577.

10. Jamjar, jamjaronthedrive.com; 604-252-3957.

11. My Shanti, myshanti.com; 15869 Croyden Dr; 604-560-4416.

12. Temper, temperpastry.com; 2409 Marine Dr; 604-281-1152.

PHOTOS OF THE DAY

American Yoga teacher Dashama poses on a Yoga-board during a preview of the 46th International Boat Fair in Duesseldorf on Friday.Ina Fassbender/Reuters

A woman rides her electric bicycle along a street amid thick haze in Chiping county, Shandong province, China on Friday. China Daily/Reuters

Market Closes for January 16^th, 2015   

Market Index	Close	Change
Dow Jones	17511.57	+190.86
		+1.10%
S&P 500	2019.42	+26.75   +1.34%
NASDAQ	4634.383	+63.559
		+1.39%
TSX	14309.41	+267.59
		+1.91%

International Markets

Market Index	Close	Change
NIKKEI	16864.16	-244.54
		-1.43%
HANG SENG	24103.52	-247.39
		-1.02%
SENSEX	28121.89	+46.34
		+0.17%
FTSE 100	6550.27	+51.49
		+0.79%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.537	1.475
CND. 30 Year Bond	2.108	2.060
U.S.    10 Year Bond	1.8368	1.7292
U.S. 30 Year Bond	2.4531	2.3725

Currencies

BOC Close	Today	Previous
Canadian $	0.83429	0.83630
US $	1.19863	1.19575
Euro Rate 1 Euro=		Inverse
Canadian $	1.38588	0.72156
US $	1.15622	0.86489

Commodities

Gold	Close	Previous
London Gold Fix	1277.50	1259.00
Oil	Close	Previous
WTI Crude Future	48.69	46.25

Market Commentary:

Canada

By Michelle F. Davis and Eric Lam

     (Bloomberg) — Canadian stocks advanced the most in a month, halting the longest slide in six weeks, as raw-materials and energy shares rose with the price of oil.

     Suncor Energy Inc. and Canadian Natural Resources Ltd. increased more than 5.2 percent as oil jumped 5.3 percent to erase a weekly loss. Valeant Pharmaceuticals International Inc. rallied 1.8 percent after selling $1 billion of junk bonds.

     The Standard & Poor’s/TSX Composite Index jumped 267.59 points, or 1.9 percent, to 14,309.41 at 4 p.m. in Toronto, the most since Dec. 17. The gauge fell 2.9 percent over the previous five days.

     Nine of 10 industries in the S&P/TSX rallied on trading volume 19 percent above the 30-day average.

     Energy shares advanced 5 percent, the biggest gain in four weeks, as oil capped the first weekly advance since November amid news the International Energy Agency lowered forecasts for supplies from outside OPEC and said prices could recover.

     Suncor Energy increased 5.2 percent and Canadian Natural Resources gained 8.8 percent. Surge Energy Inc. jumped 9.9 percent.

     Valeant Pharmaceuticals increased 1.8 percent after it said yesterday it sold $1 billion of junk bonds, its first sale since 2013. After being outbid last year for Allergan Inc. by Actavis Plc, Valeant Chief Executive Officer Mike Pearson said last week on a conference call he predicts a steady flow of acquisitions.

     U.S. economic data today showed consumer confidence jumped in January to the highest level in 11 years as steady job gains and plunging gas prices brightened the outlook for U.S. households.

     Capstone Mining Corp. jumped 6.5 percent, snapping a four- day losing streak, as it entered into an up to $500 million corporate credit facility with Bank of Nova Scotia and Canadian Imperial Bank of Commerce.

     Bombardier Inc. plunged 5.9 percent, bringing its two-day decline to 31 percent, the most since at least 1988. The air and railway technology company said yesterday it’s halting work on its Learjet 85 business aircraft, amassing $1.4 billion in pretax fourth-quarter costs and cutting jobs.

     Moody’s Investors Service placed Bombardier’s debt ratings under review for a possible downgrade due to “materially lowered” earnings and cash flow forecast for 2014. Raymond James analyst Steve Hansen today cut the company to market perform from outperform, citing concerns over its deteriorating financial position.

US

By Joseph Ciolli and Callie Bost

     (Bloomberg) — U.S. stocks rallied, with the Standard & Poor’s 500 Index advancing for the first time in six days, as gains in energy shares and a jump in consumer confidence overshadowed fallout from the Swiss currency shock.

     Eight of the 10 best performers in the S&P 500 were energy companies, as the group rebounded with oil. Exxon Mobil Corp. and Chevron Corp. rallied more than 2.4 percent. Goldman Sachs Group Inc. lost 0.7 percent, declining for its sixth straight session, as it posted the lowest annual trading revenue since 2005.

     The S&P 500 rose 1.3 percent to 2,019.42 at 4 p.m. in New York, climbing above its average price for the past 100 days. The benchmark index pared its loss for the week to 1.2 percent. The Dow Jones Industrial Average added 190.86 points, or 1.1 percent, to 17,511.57. The Russell 2000 Index of smaller companies gained 1.9 percent, the most in a month. More than 7.7 billion shares changed hands on U.S. exchanges, 14 percent above the three-month average. U.S. markets will be closed Monday for Martin Luther King Day.

     “Momentum is ruling the day,” Jeff Sica, president and CEO of advisory firm Circle Squared Alternative Investments, which oversees $1.5 billion, said in a phone interview. “The market is so zeroed in on oil prices right now. We’re seeing an oversold bounce amid oil momentum and optimism over ECB QE.”

     The S&P 500 slid 3.4 percent from Jan. 8 to Jan. 15, posting its second slide of five straight days after going through all of 2014 without a losing streak of more than three days. The gauge is 3.4 percent below a Dec. 29 record.

     Data today showed consumer confidence jumped in January to the highest level in 11 years as steady job gains and plunging gas prices brightened the outlook for U.S. households.

     Another report showed the cost of living declined by the most in six years amid the plunge in energy costs, increasing speculation the Federal Reserve will remain patient in its plans to raise interest rates. The biggest drop in clothing costs since 1998 combined with falling air fares and cheaper new and used cars signal the deceleration in inflation is spreading beyond energy as Japan and Europe are in or near a recession and some emerging markets cool.

     “We’ve traded with oil tick for tick all week, and until we get news from the ECB next week, that’s going to continue,” Matt Maley, an equity strategist at Miller Tabak & Co LLC in Newton, Massachusetts, said in a phone interview. “You also have more fears that it’s going to be very difficult for the economy to grow fast enough for the Fed to raise rates sooner rather than later. Expectations for a rate hike are starting to get pushed out.”                        

     All 10 groups in the S&P 500 advanced today, with energy companies rallying 3.2 percent to pace gains. Crude surged 5.3 percent as the International Energy Agency lowered forecasts for supplies from outside OPEC and said prices could recover.

     Exxon jumped 2.4 percent, while Chevron added 2.4 percent.  Newfield Exploration Co. soared 10 percent, the most in two months, while Cimarex Energy Co. surged 7.7 percent.

     U.S. stock futures fell earlier amid fallout from the Swiss currency shock. Switzerland’s central bank surprised markets Thursday by removing its cap on the franc versus the euro, sending the franc surging as much as 41 percent versus the regional currency.

     FXCM Inc., the largest U.S. retail foreign-exchange brokerage, tumbled more than 90 percent in premarket trading after saying clients owe $225 million on their accounts.

     Trading halted during the day pending an afternoon announcement that Leucadia National Corp., which owns Jefferies Group, gave FXCM a $300 million cash infusion, extending a lifeline to the currency brokerage. The transaction allows FXCM to “continue normal operations,” according to a statement.                         

     The Swiss National Bank decided to drop its currency cap, set in September 2011 to shield the economy from the euro area’s debt crisis, because it was no longer “sustainable,” central bank President Thomas Jordan said. The move is preempting possible pressure on the franc should the European Central Bank announce a government-bond purchase program, or quantitative easing, at its Jan. 22 meeting.

     ECB Executive Board member Benoit Coeure said in an interview with the Irish Times that there is no decision on quantitative easing yet though “the only thing I can say is that, for it to be efficient, it would have to be big.”

     The Chicago Board Options Exchange Volatility Index fell 6.4 percent to 20.95, after five days of gains. The gauge, which surged 19 percent this week, reached a one-month high yesterday.

     Yesterday was the 36th day since Oct. 7 that the S&P 500 incurred an intraday move of more than 1 percent. Such frequent spurts of volatility last hit the market in 36 of the 70 days through Sept. 10, 2012, data compiled by Bloomberg show.                        

     Investors are also assessing earnings reports to determine the impact of plunging oil on corporate profits. About 200 companies in the S&P 500 are scheduled to report earnings through the end of the month.

     Profit for companies in the gauge expanded 0.8 percent in the fourth quarter, according to analysts surveyed by Bloomberg Jan. 16. Analysts’ expectations have declined since Nov. 14, when they predicted earnings growth of 4.1 percent for S&P 500 stocks.

     Goldman Sachs dropped 0.7 percent to the lowest since October. The decline in revenue helped push fourth-quarter net income 7.1 percent lower to $2.17 billion, or $4.38 a share, from $2.33 billion, or $4.60, a year earlier.

     The three largest U.S. banks — JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. — have posted their worst combined quarterly trading revenue since 2011, led by a 23 percent drop in fixed-income, currencies and commodities, or FICC.

     Precision Castparts Corp. declined 9.1 percent, the most in six years, after reporting disappointing fiscal third-quarter earnings amid a drop in demand from the energy industry.

     Home Depot Inc. rose 3.1 percent after the company said its Chief Executive Officer Craig Menear will add the chairman role to his duties next month when Frank Blake retires on Feb. 2.
 

Have a fantastic weekend everyone!

 

Be magnificent!

The universe is not ruled by arbitrary, temporary martial law.

No force exists that is powerful enough to derail it, or to continue indefinitely on its own path unregulated,

like an outlaw who disrupts all harmony around him.  On the contrary, every force must return

to a state of equilibrium along a preordained curve.  Waves rise, each to its own level,

with an apparent attitude of relentless  rivalry, but only up to a certain point.  We can thus understand

the vast serenity of the sea, to which all the waves are connected,

and to which they must all subside in the rhythm of marvelous beauty.

 

Rabindranath Tagore

 

As ever,

 

Carolann

 

A single lie destroys a whole reputation for integrity.

                             -Baltasar Gracian, 1601-1658

 

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

Senior Vice-President &

Senior Investment Advisor

Dear Friends,

Tangents:

The Ides of January!

POEM by Mary Oliver:

RUMI (for Coleman Barks)

When Rumi went into the tavern
I followed.
I heard a lot of crazy talk
and a lot of wise talk.

But the roses wouldn’t grow in my hair.

When Rumi left the tavern
I followed.
I don’t mean just to peek at
such a famous fellow.
Indeed he was rather ridiculous with his
long beard and his dusty feet.
But I heard less of  the crazy talk and
a lot more of the wise talk and I was
hopeful enough to keep listening

until the day I found myself
transformed into an entire garden
of roses.

PHOTOS OF THE DAY

A hot air balloon floats upwards during the International Balloon trophy in the village of Filzmoos, Austria on Wednesday. Over 35 hot air balloons from all over Europe participated in the week long event in the middle of the Austrian Alps. Leonhard Foeger/Reuters

People look at the sea as a helicopter, part of a rescue team, continues its search for five missing fishermen at Macas beach, near Sintra on Wednesday. Rescuers continued their search for the missing fishermen after their boat was shipwrecked on the beach last night, according to authorities. Rafael Marchante/Reuters

Market Closes for January 15^th, 2015   

Market Index	Close	Change
Dow Jones	17320.71	-106.38
		-0.61%
S&P 500	1993.06	-18.21   -0.91%
NASDAQ	4570.824	-68.498
		-1.48%
TSX	14054.29	-30.14
		-0.21%

International Markets

Market Index	Close	Change
NIKKEI	17108.70	+312.74
		+1.86%
HANG SENG	24350.91	+238.31
		+0.99%
SENSEX	28075.55	+728.73
		+2.66%
FTSE 100	6498.78	+110.32
		+1.73%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.475	1.573
CND. 30 Year Bond	2.060	2.138
U.S.    10 Year Bond	1.7292	1.8501
U.S. 30 Year Bond	2.3725	2.4616

Currencies

BOC Close	Today	Previous
Canadian $	0.83630	0.83683
US $	1.19575	1.19499
Euro Rate 1 Euro=		Inverse
Canadian $	1.38981	0.71952
US $	1.16229	0.86037

Commodities

Gold	Close	Previous
London Gold Fix	1259.00	1235.00
Oil	Close	Previous
WTI Crude Future	46.25	48.48

Market Commentary:

Canada

By Michelle F. Davis

     (Bloomberg) — Canadian stocks retreated a fifth day, extending their longest slide in six weeks, as plunges of more than 20 percent in BlackBerry Ltd. and Bombardier Inc. and declines among energy companies overshadowed a rally in raw- materials shares.

     BlackBerry tumbled 20 percent after the smartphone maker and Samsung Electronics So. said they’re not in talks about a deal. Bombardier tumbled the most ever after moving to cut about 1,000 jobs and book $1.4 billion in pretax fourth-quarter costs. Goldcorp Inc., Barrick Gold Corp. and Franco-Nevada Corp. surged at least 6.1 percent as the metal rallied to a four-month high.

     The Standard & Poor’s/TSX Composite Index slipped 42.61 points, or 0.3 percent, to 14,041.82 at the close in Toronto. The gauge has fallen 2.9 percent during its slide and is now down by 4 percent this year.

     West Texas Intermediate oil fell for the fourth time in five days, pushing energy shares in the S&P/TSX down 1.1 percent, as OPEC said it expects weaker demand for its crude and U.S. output climbed to the highest in records dating to January 1983.

     BlackBerry lost 20 percent, the most since June 2013, after it denied a report that it is in talks to be acquired by Samsung. Shares of the mobile-device maker surged 31 percent yesterday after Reuters reported Samsung recently proposed acquiring the company for as much as $7.5 billion.

     Bombardier dropped 26 percent after saying it will cut jobs as it halts work on the Learjet 85 business aircraft. Bombardier’s pullback on the jet, which was described as a “pause” in the face of weak demand, underscored the company’s struggle in developing new planes.                         

     Seven of 10 industries in the S&P/TSX slumped on trading volume 35 percent higher than the 30-day average.

     Data today showed Canadian existing home sales declined 5.8 percent from the previous month in December.

     Goldcorp and Barrick jumped at least 9.5 percent, the most in six years, and Franco-Nevada rose 6.1 percent as gold futures climbed to the highest since September. The precious metal rallied 2 percent as the dollar weakened after Switzerland decoupled its currency to the euro and lowered the deposit rate.

     Gold demand will rebound in 2015 as bullion consumption in Asia increases and investors return to exchange-traded products backed by the metal, according to HSBC Securities (USA) Inc.

     Canada retailers increased after Target Corp. said it plans to stop operations in Canada amid plunging profits. The second- largest U.S. retailer increased 1.8 percent in the U.S. while competitors Dollarama Inc. and Loblaw Cos. jumped at least 2.3 percent in Toronto.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks fell for a fifth straight day as banks and Best Buy Co. slid after corporate earnings disappointed, while Apple Inc. paced a decline in technology shares.

     Bank of America Corp. and Citigroup Inc. fell at least 3.7 percent as both banks reported a drop in fourth-quarter profit as revenue from fixed-income trading declined. Best Buy tumbled 14 percent as the largest electronics retailer warned that price pressure and sluggish demand may hamper results in the coming year. A gauge of homebuilders plunged the most since June 2013.

     Equity futures fluctuated earlier in the day after Switzerland’s central bank unexpectedly gave up its minimum exchange rate.

     “There’s a lot of uncertainty today,” Thomas Garcia, the head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc., said by phone. “There’s uncertainty about what to do with your Swiss holdings and their competitors, and commodities are all over the place. The other thing is we’ve had mixed economic data and you’ve got earnings this week, which are going to have a big effect on the markets as people keep an eye on the consumer.”

     The S&P 500 fell 0.9 percent to 1,992.73 as of 4 p.m. in New York, the lowest close since Dec. 16. The Dow Jones Industrial Average lost 102.37 points, or 0.6 percent, to 17,324.72. The Nasdaq 100 Index retreated 1.4 percent as Apple declined 2.7 percent. Trading in S&P 500 companies was 32 percent above the 30-day average for this time of the day.

     A decline in American retail sales combined with a slump in copper prices weighed on stock markets yesterday, causing the S&P 500 to have its worst start to the year since 2009. The benchmark gauge is down 3.4 percent over the past five days.

     After going through all of 2014 without a losing streak of more than three days, the S&P 500 yesterday completed its second slide of at least four straight days. The Chicago Board Options Exchange Volatility Index, known as the VIX, rose for a fifth straight day, climbing 6.5 percent to 22.88.

     Among today’s data, a Fed gauge of manufacturing in the New York region topped economists estimates, while a Philadelphia- area survey missed forecasts. Separate data showed more Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays.

     Wholesale prices in the U.S. declined 0.3 percent in December, the most in three years, showing little sign that inflation’s bubbling up amid plunging energy costs.

     A sustained plunge in energy prices is keeping a lid on inflation throughout the pipeline, from bills for businesses to the consumer’s cost of living. Weak price growth has convinced Federal Reserve officials to remain “patient” in their timing of the first interest rate increase since 2006 after ending monthly asset purchases three months ago.                       

     Concern about the impact of falling oil on investment and earnings growth are testing the resilience of U.S. stocks that have tripled since 2009, as investors speculate that demand for raw materials won’t be enough to eliminate a supply gut.

     Copper advanced after losing 5.2 percent yesterday, while gold capped the longest rally in more than six months. Oil lost 4.6 percent for the fourth decline in five sessions. The S&P 500 has moved in the same direction of the commodity 10 out of the past 11 trading sessions.

     “Put copper together with oil, the strength of the dollar, and the Swiss National Bank move and what you’ve got is a broader concern about the global growth story similar to what we saw in October,” said Paul Christopher, the St. Louis-based head of international strategy for Wells Fargo Investment Institute, which oversees $1.6 trillion.

     Equities futures were whipsawed earlier in the day as the Swiss National Bank unexpectedly gave up its minimum exchange rate of 1.20 per euro today, ending a three-year-old policy designed to shield the economy from the euro area’s sovereign debt crisis.

     The latest move marks an attempt by the SNB to reinforce defenses before government bond purchases by the European Central Bank. The change comes just one week before ECB policy makers meet to discuss introducing new stimulus, including quantitative easing, a move that may add to pressure on the franc against the euro.

     “The Swiss Bank move was a huge surprise, which was unsettling,” Ron Sanchez, chief investment officer at Fiduciary Trust Company International in New York, said via phone. “The predictability of the market has been a little compromised and markets are moving pretty clearly to risk-off.”
 

Have a wonderful evening everyone.

 

Be magnificent!

Brahman is like the clay of substance

out of which an infinite variety of articles are fashioned.

As clay, they are all one; but form or manifestation differentiates them.  Before every one of them was made,

they all existed potentially in clay, and of course, they are identical substantially; but when formed,

and so long as the form remains, they are separate and different.

 

Swami Vivekananda

As ever,

 

Carolann

 

The difference between life and the movies is that a script has to make sense,

and life doesn’t.

                                           -Joseph L. Mankiewicz, 1909-1993

 

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

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:

Something interesting I learned during our time in the Maldives over the holidays; thought you might find it interesting too:

Charles Anderson, a British marine biologist working and living in the Maldives for 26 years, reports on how him noticing the sudden emergence of dragonflies in the Maldives at certain times of the year led him to discover the world’s longest migratory journey taken by any insect.  It is a truly riveting story of curiosity and scientific discovery.

Each year, millions of dragonflies arrive on the Maldive Islands, an event which is well known to people living there.  But no one knew where they came from.  Their appearance is especially peculiar because the 1200 islands that make up the Maldives lie 500 to 1000km from the mainland of southern India, and all are coral cays with almost no surface freshwater, which dragonflies need to complete their lifecycle.  Anderson noticed the dragonflies after he first arrived in the Maldives in 1983.  He started keeping detailed records each year from 1996 and now collates data collected by local observers at other localities in the Maldives, in India and on vessels at sea.

When Anderson compared these observations with those in southern India, he found a clear progression of arrival dates from north to south, with dragonflies arriving first in southern India, then in the Republic of the Maldives’ capital Male, and then on more southern atolls.  Each year, dragonflies first appear in Male between 4 and 23 October, with numbers peaking in November and December, before the insects then disappear  once more.  The insects arrive in waves, with each staying for no more than a few days.

The dragonflies are clearly migrating from India across the open sea to the Maldives, says Anderson.  “That by itself is fairly amazing, as it involves a journey of 600 to 800 km across the ocean,” he says.  Quite how they do it was a bit of a mystery, as in October they appear to be flying against the prevailing winds.  However, in October, and continuing into November and December, a weather system called the Inter-tropical Convergence Zone moves southwards over the Maldives.  Ahead of the ITCZ the wind blows towards India, but above and behind it the winds blow from India.  So it seems that the dragonflies are able to reach Maldives by flying on these winds at an altitude above 1000m.

Large numbers of dragonflies also start appearing in the northern Seychelles, some 2700km from India, in November, and then in Aldabra in the Seychelles, 3800km from India, in December.

It is also known that dragonflies appear in large numbers through eastern and southern Africa.  In Uganda, they appear twice each year in March or April and again in September, while further south in Tanzania and Mozambique they appear in December and January.

Anderson says the migratory paths of a number of insect-eating bird species, including cuckoos, nightjars, falcons and bee-eaters, follow that of the dragonfly migration, form southern India to their wintering grounds in Africa.  That suggests the birds feed on the dragonflies as they travel.

PHOTOS OF THE DAY

People light a paper lantern during the celebrations to mark the Makar Sankranti festival, in the western Indian city of Ahmedabad on Wednesday. Amit Dave/Reuters

Thousands of starlings fly over marshes as they return to roost at dusk near Glastonbury in Somerset, south west England on Wednesday. The daily display at dawn and dusk during winter months, known as ‘murmurations’, is particularly spectacular in this part of the south west of England and on the England-Scotland border near Gretna. Toby Melville/Reuters

Market Closes for January 14^th, 2015   

Market Index	Close	Change
Dow Jones	17427.09	-186.59
		-1.06%
S&P 500	2011.27	-11.76   -0.58%
NASDAQ	4639.320	-22.176
		-0.48%
TSX	14084.43	-102.73
		-0.72%

International Markets

Market Index	Close	Change
NIKKEI	16795.96	-291.75
		-1.71%
HANG SENG	24112.60	-103.37
		-0.43%
SENSEX	27346.82	-78.91
		-0.29%
FTSE 100	6388.46	-153.74
		-2.35%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.573	1.600
CND. 30 Year Bond	2.138	2.165
U.S.    10 Year Bond	1.8501	1.9000
U.S. 30 Year Bond	2.4616	2.4992

Currencies

BOC Close	Today	Previous
Canadian $	0.83683	0.83666
US $	1.19499	1.19522
Euro Rate 1 Euro=		Inverse
Canadian $	1.40818	0.71013
US $	1.17841	0.84860

Commodities

Gold	Close	Previous
London Gold Fix	1235.00	1231.50
Oil	Close	Previous
WTI Crude Future	48.48	45.89

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a fourth day, posting the longest slide in six weeks, as consumer shares declined and metal miners plunged after copper slid to a three-year low.

     Equities pared declines in afternoon trading as oil surged the most in 2 1/2 years and BlackBerry Ltd. rallied after Reuters reported Samsung Electronics Co. recently proposed acquiring the company for as much as $7.5 billion.

     First Quantum Minerals Ltd. and Teck Resources Ltd. plunged more than 6.5 percent as base metals producers tumbled with copper. Magna International Inc., the autoparts maker, slumped 6.1 percent after disclosing 2015 sales forecasts short of analyst estimates.

     The Standard & Poor’s/TSX Composite Index fell 102.73 points, or 0.7 percent, to 14,084.43 at 4 p.m. in Toronto, the lowest level since Dec. 16, after falling as much as 2.1 percent earlier.

     The benchmark equity gauge has dropped 3.8 percent this year, tied with Japan as the second-worst performer among developed markets in the world according to data collected by Bloomberg.

     A volatility index of S&P/TSX 60 options jumped 5.7 percent to 24.85, the highest since June 2012. The gauge has surged 31 percent in four days.

     Seven of 10 industries in the S&P/TSX retreated on trading volume 17 percent higher than the 30-day average. Global stocks slid 0.7 percent as the World Bank cut its growth forecast.

     The world economy will expand 3 percent in 2015, down from a projection of 3.4 percent in June, according to the World Bank’s semiannual Global Economic Prospects report, released yesterday. The U.S. is the only bright spot as the lender lowered its projections for the euro area, Japan and China.

     Retail sales in the U.S. slumped 0.9 percent in December, the biggest in almost a year as consumers chose to save rather than spend their savings from cheaper gas prices.

     Consumer shares in Canada tumbled as a gauge of producers of discretionary products sank 2.7 percent, the most in three years. Magna International led the slide, while Corus Entertainment Inc. slid 3.7 percent.

     Copper for delivery in three months plunged 5.3 percent, the most in almost six years.

     Banks led losses on U.S. equities markets as the first of the country’s six largest lenders reported results. JPMorgan Chase & Co.’s earnings retreated, while Wells Fargo & Co. reported an increase in expenses.                        

     Toronto-Dominion Bank, the largest lender in Canada, dropped 2.8 percent to C$50.54, a March low, and Royal Bank of Canada retreated 1.3 percent. The S&P/TSX Banks Index lost 1.6 percent for a fourth day of declines.

     The S&P/TSX Energy Index rose 1.7 percent, reversing an earlier loss of as much as 2.1 percent as crude rebounded from a 5 1/2 year low.

     The group has fallen 8.4 percent this year for the worst performance in the S&P/TSX. The group accounts for about 20 percent of the broader index’s weighting.

     BlackBerry, the Waterloo, Ontario-based smartphone maker, surged 34 percent to C$15.51 for the biggest gain since December 2003.

     Samsung recently proposed acquiring the Canadian company for as much as $7.5 billion, based on an offer price of $13.35 to $15.59 a share, Reuters reported citing an unnamed person familiar with the matter and documents.

US

By Michelle F. Davis, Oliver Renick and Joseph Ciolli

     (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index to a fourth straight loss, as a decline in American retail sales and slump in copper prices spurred concern that global growth is slowing.

     Equities pared losses during the afternoon after oil prices wiped out a drop of 1.9 percent and proceeded to rally, while the Federal Reserve’s Beige Book said the U.S. economy continued to expand last month.

     The S&P 500 dropped 0.6 percent to 2,011.27 at 4 p.m. in New York, trimming an earlier decline of 1.7 percent. The Dow Jones Industrial Average lost 186.59 points, or 1.1 percent, to 17,427.09. About 8.1 billion shares traded hands on U.S. exchanges, 18 percent above the three-month average.

     Freeport-McMoRan Inc., the largest publicly-traded copper producer, dropped 11 percent as the metal’s price plunged 5.3 percent, the most in almost six years. JPMorgan Chase & Co. lost 3.5 percent after fourth-quarter profits slumped, while an index of banks tumbled 10 percent from a December high. Wal-Mart Stores Inc. retreated 3 percent as the World Bank lowered its outlook for the global economy.

     “People are starting to get very nervous as commodity prices are faltering and we know it’s because the global growth rate has been brought down,” Tom Stringfellow, president and chief investment officer of San Antonio-based Frost Investment Advisors LLC, which manages about $10 billion, said in a phone interview. “The U.S. alone can’t support the world and the retail sales are a warning shot across the bow.”                      

     After going through all of 2014 without a losing streak of more than three days, the S&P 500 today completed its second slide of at least four straight days. The gauge has tumbled 3.8 percent since Dec. 29.

     The Chicago Board Options Exchange Volatility Index, known as the VIX, rose for a fourth straight day, climbing 4.5 percent to 21.48. It has rallied 26 percent over the four-day period to the highest in almost a month.

     Concern about the impact of plunging oil on investment and what falling yields signal about economic growth are testing the resilience of U.S. stocks that have tripled since 2009.

     The recent plunge in crude is spreading to the metals market, as copper tumbled amid speculation that demand for raw materials won’t be enough to eliminate a supply glut. The World Bank cut its forecast for global growth this year, as an improving U.S. economy and low fuel prices fail to offset disappointing results from Europe to China.

     Retail sales in the U.S. slumped in December by the most in almost a year, reflecting a broad-based retreat that will probably prompt economists to cut growth forecasts.

     “The retail sales are disappointing because there were expectations for better numbers based on what we’ve seen with lower oil prices, and that didn’t materialize,” Ed Hyland, an Atlanta-based global investment specialist at JP Morgan Private Bank, said by phone. The firm oversees about $1 trillion.

     Stocks pared losses in the afternoon after the Fed’s release of its Beige Book report and as energy shares erased declines. The U.S. economy continued to expand from mid-November through late December, bolstered by higher consumer spending and expanded manufacturing in most places as prices “increased slightly” on balance, the report said.

     Oil surged the most in more than 2 1/2 years, climbing  5.6 percent after dropping 1.9 percent earlier. Energy shares rose 0.1 percent after tumbling as much as 2.6 percent.

     The market volatility comes as investors are heading into a U.S. earnings season that has seen analysts cut estimates at the fastest rate since the bull market began. Profit is forecast to have grown 2 percent in the final three months of 2014 and increase 2.8 percent for the current quarter, down from analysts’ October estimates of 8.1 percent and 9.2 percent, respectively.

     JPMorgan Chase declined 3.5 percent, the most since October. The biggest U.S. bank said fourth-quarter profit fell 6.6 percent as fixed-income trading revenue dropped 23 percent and legal costs were about twice as high as some analysts estimated.

     Wells Fargo & Co. slumped 1.2 percent. Expenses rose to the highest level in two years as the lender paid employees more and increased spending on risk-monitoring.

     The KBW Bank Index, a gauge of 24 banks, declined for a fourth day to the lowest since October. The gauge is down 10 percent from a December peak. Goldman Sachs Group Inc. slid 2.5 percent. Bank of America Corp. and Citigroup Inc., which post earnings tomorrow, lost at least 1.9 percent.

     Freeport-McMoRan, the largest publicly-traded copper producer, fell 11 percent, after plunging 8.8 percent yesterday. Southern Copper Corp. retreated 3.7 percent. Alcoa Inc. lost 5.4 percent.                       

     Eight of 10 major groups in the S&P 500 declined. Financial, raw-material and consumer-discretionary shares had the biggest losses, slumping more than 1.1 percent. Merck & Co., Pfizer Inc. and UnitedHealth Group Inc. were the only three stocks in the Dow to advance.

     Utilities had the best performance among the S&P 500 industries, gaining 1 percent, as investors gravitated toward safety amid plunging Treasury yields. The group has the second- highest dividend yield among the 10 industries.

     “There’s a lot of nervousness out there,” James Liu, a global market strategist at JPMorgan Asset Management in New York, said by phone. The firm oversees about $1.7 trillion. “Utilities represent defensiveness and a search for income.”

     Tesla Motors Inc. fell 5.7 percent. Chief Executive Officer Elon Musk said the electric-car maker might become profitable by 2020 when annual sales reach 500,000, and that business has slowed in China on charging concerns.

     GameStop Corp. surged 11 percent, posting the largest advance in the S&P 500, after it said increased sales of new games during the holiday period helped counter waning demand for consoles. The biggest video-game also reaffirmed its earnings forecast as new software sales rose 5.8 percent.

     “It’s a lot of little factors here that add up to one big mess, frankly,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “Think about it like little tremors indicating an earthquake – crude price, copper price, overall index volatility, weakening data, retail sales data. Global growth is threatened.”
 

Have a wonderful evening everyone.

 

Be magnificent!

Unity in diversity is the order of the universe.  Just as we are all human, we are all distinct.

As a human being, I am like you.  As Mr. X, I am different from you.

As a man, you are different from a woman, but in being all humans, we are one.

In that you are alive, you are as the animals and all that lives, but as a human being, you are distinct.

 

Swami Vivekananda

As ever,

 

Carolann

Deep in their roots, all flowers keep the light.

                 -Theodore Roethke, 1908-1963

 

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

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:

Good to be back in the land of  plunging oil and a plunging dollar after a little reprieve from news and noise over the holidays.  We just spent a few weeks in the Maldives where upon arrival, we were asked for our  shoes which quickly disappeared – at least the islands we chose to spend our time.  The mantra of our hosts  is “No Shoes.  No News.”   Being a news junkie, I must say I initially suffered some withdrawal, but quickly recovered when I discovered how pleasant it can be – to shut the world out temporarily. 

If you don’t break your ropes while you’re alive
do you think
ghosts will do it after?
-Kabir

PHOTOS OF THE DAY

A backcountry skier climbs up towards the Mederger Flue peak on Monday, in Davos, Switzerland. Gian Ehrenzeller/AP


Waterbirds swim in a canal bearing the reflection of trees in Beijing on Tuesday. Kim Kyung-Hoon/Reuters

Market Closes for January 13^th, 2015   

Market Index	Close	Change
Dow Jones	17613.68	-27.16
		-0.15%
S&P 500	2023.03	-5.23   -0.26%
NASDAQ	4661.496	-3.210
		-0.07%
TSX	14187.16	-77.85
		-0.55%

International Markets

Market Index	Close	Change
NIKKEI	17087.71	-110.02
		-0.64%
HANG SENG	24215.97	+189.51
		+0.79%
SENSEX	27425.73	-159.54
		-0.58%
FTSE 100	6542.20	+40.78
		+0.63%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.600	1.606
CND. 30 Year Bond	2.165	2.172
U.S.    10 Year Bond	1.9000	1.9070
U.S. 30 Year Bond	2.4992	2.4965

Currencies

BOC Close	Today	Previous
Canadian $	0.83666	0.83562
US $	1.19522	1.19724
Euro Rate 1 Euro=		Inverse
Canadian $	1.40784	0.71031
US $	1.17789	0.84898

Commodities

Gold	Close	Previous
London Gold Fix	1231.50	1226.50
Oil	Close	Previous
WTI Crude Future	45.89	46.07

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — The Canadian equity market is engulfed in volatility at levels not seen since the euro area debt crisis of 2012 as a continued plunge in commodities sent stocks to a one- month low.

     Capstone Mining Corp. and First Quantum Minerals Ltd. sank at least 15 percent as base-metals producers plunged with the price of copper. Legacy Oil & Gas Inc. lost 10 percent as energy shares retreated. Onex Corp. climbed 6 percent after agreeing yesterday to buy Survitec Group Ltd. for $680 million.

     The Standard & Poor’s/TSX Composite Index fell 77.85 points, or 0.6 percent, to 14,187.16 at 4 p.m. in Toronto, erasing an earlier gain of as much as 0.7 percent. The benchmark equity gauge has dropped 3 percent this year.

     A volatility index of S&P/TSX 60 options jumped as much as 9.5 percent to 24.88, the highest level since June 2012, before closing at 23.51. Energy stocks make up about 21 percent of the S&P/TSX 60 Index, a gauge of the 60 largest, most liquid shares in Canada.

     “The VIXC is spiking, it’s all about oil, worries about deflation and slowing growth globally,” said John Stephenson, chief executive officer of Stephenson & Co. Capital Management in Toronto. His firm manages about C$50 million ($41.8 million). “Canada’s much more of a one-trick pony because of the energy weighting. The TSX will quite handily underperform the S&P 500 this year.”

     Capstone plunged 17 percent, the biggest decline since 2008, and First Quantum sank 15 percent as raw-materials shares retreated 4.7 percent as a group, the most since October. Trading volume was 11 percent higher than the 30-day average.

     Copper for delivery in three months fell 2.6 percent to $5,860 a metric ton in London, for a fifth day of losses and the lowest in more than five years.

     The S&P/TSX Energy Index fell 0.5 percent to the lowest since Dec. 15. Energy shares are the worst-performing industry in the S&P/TSX this year with a 9.9 percent decline. The group accounts for 20 percent of the broader index’s weighting.

     Investors who first started buying equities after the winter holidays are pulling back out just as quickly as they came in, said Frank Maeba, managing partner at Breton Hill Capital in Toronto. His firm manages about C$700 million.

     “When you don’t get that pop early on, the shorter term holders of risk are more willing to ditch that risk,” Maeba said. “The market is pretty choppy, choppier than it’s been in three to six months. Energy is driving a lot of that right now. When you start trying to trade equities by using oil as a proxy for risk, you’re going to get a lot of big swings.”

     West Texas Intermediate crude rose 0.1 percent in electronic trading as of 5:23 p.m. in New York. Futures fell 0.4 percent in regular trading to settle at $45.89 a barrel, the lowest since April 2009. The commodity slipped below $45 a barrel earlier, slumping as much as 4.1 percent.

     Crude inventories in the U.S. probably gained by 1.5 million barrels last week, a Bloomberg News survey showed ahead of government data tomorrow, raising speculation a global supply glut that’s forced prices into a bear market will continue

USA

By Jeremy Herron

     (Bloomberg) — Volatility surged in the U.S. equity market, with the Dow Jones Industrial Average erasing both a 282-point rally and a 143-point decline to close lower for a third day amid a slump in commodity prices. Copper slid with crude oil and the euro, while Treasuries advanced.

     The Chicago Board Options Exchange Volatility Index, which tracks expectations of U.S. stock swings, climbed a third day, adding 4.9 percent by 4:15 p.m. in New York. The Dow ended the session down 0.2 percent, while the Standard & Poor’s 500 Index fell 0.3 percent, after earlier jumping as much as 1.4 percent. Copper sank to its lowest price since 2009 as Brent oil fell 1.8 percent to $46.59 a barrel, briefly trading below U.S. crude for the first time in 1 1/2 years. The euro slumped to a nine-year low on bets policy makers will ramp up stimulus, while yields on 10-year Treasuries fell to match a 20-month low.

     The S&P 500 has moved an average of 0.95 percent per day so far in 2015. That’s more than double the average daily price change of 0.53 percent for 2014, which was the calmest year in U.S. stocks since 2006. Crude dipped below $45 a barrel amid speculation U.S. supplies have increased, exacerbating a global supply glut. Alcoa Inc. kicked off the U.S. reporting season with better-than-estimated profit after oil’s drop spurred analysts to cut earnings forecasts for S&P 500 companies.

     “Until we have concrete earnings data in aggregate, the market will be somewhat trendless, and trendless blended with volatility is not a good environment,” Kevin Divney, chief investment officer at Beaconcrest Capital Management LLC, said by phone. “It goes back to the same drivers we’ve been seeing for about two quarters now, where we have a very robust U.S. economy, a weak foreign economy, and our exposure to that could make the U.S. economy not as appealing.”                         

     The volatility index, known as the VIX, rose to 20.56, its highest close since Jan. 6. A gauge of stock swings in Japan also climbed, with the Nikkei Stock Average Volatility Index up 2.5 percent as the equity index slipped 0.6 percent in its first day of trading this week.

     The S&P 500 moved 49 points from peak to trough today, the biggest intraday swing since Oct. 15, when the benchmark gauge erased nearly all of its 3 percent decline.

     Trading in futures tracking the S&P 500 accelerated as U.S. stocks erased gains between 1 and 1:30 p.m. in New York. About 77,000 contracts in the Chicago Mercantile Exchange’s e-mini future changed hands between 1:10 and 1:20 p.m. and about 74,000 traded between 1:20 and 1:30 p.m., data compiled by Bloomberg show. In both cases volume was about three times greater than the 10-day average for those time intervals.                           

     Energy shares in the S&P 500 sank 0.7 percent today after a 2.8 percent slump yesterday that dragged the broader S&P 500 down 0.8 percent. The benchmark gauge has dropped 3.5 percent since reaching a record in December.

     West Texas Intermediate oil extended losses today, slipping 0.4 percent in a third day of declines to settle at $45.89 a barrel, its lowest close since April 2009. Futures touched as low as $44.20. Brent, the basis for European and African cargoes, briefly sank to $45.19 in London, trading below WTI for the first time since July 2013 amid signs U.S. exports are poised to increase.

     American crude inventories probably increased by 1.75 million barrels last week, according to a Bloomberg survey of energy analysts before government data tomorrow. The United Arab Emirates, a member of the Organization of Petroleum Exporting Countries, will stand by its plan to expand output capacity even with “unstable oil prices,” according to Energy Minister Suhail Al Mazrouei.                      

     Faster global economic growth will be needed to help absorb the oil surplus estimated at 1.8 million barrels a day, Kuwait Oil Minister Ali Al-Omair told reporters in parliament. A demand-led recovery is seen in the second half, the U.A.E.’s Governor to OPEC Ali Al Yabhouni told reporters at a conference in Abu Dhabi.

     “There was an anticipation that we would stabilize in oil prices and we’re really not,” Jeff Sica, president and CEO of advisory firm Circle Squared Alternative Investments, which oversees $1.5 billion, said by phone. “My contention has been that we’re beginning to see some very severe structural damage to the economy as oil prices continue to fall.”

     The Bloomberg Commodity Index retreated 0.6 percent to the lowest level since November 2002. Copper for three-month delivery dropped for the eighth day this year, slipping to $5,860 a metric ton after touching $5,774.75, its lowest intraday price since August 2009. Nickel and zinc fell more than 2 percent, while corn futures tumbled 4 percent. Silver and U.S. natural gas increased.                         

     Housing shares slumped after KB Home, a U.S. house builder, said that its first-quarter margins will contract. The stock plunged as much as 19 percent, the most intraday in more than three years. The S&P homebuilder index retreated 3.2 percent, the biggest drop in a month. D.R. Horton Inc. sank 4.8 percent and Lennar Corp. lost 1.7 percent.

     “There’s a limit to how high the market can go, and now we face the challenge of figuring out what’s going to drive it further,” Kevin Caron, who helps oversee $170 billion at Stifel Nicolaus & Co. in Florham Park, New Jersey, said in a phone interview. “The market is taking a little bit of a breather here as oil creates uncertainty.”

     Alcoa, the biggest U.S. aluminum producer, forecast global demand will grow 7 percent this year, boosting optimism in the U.S. economy. The company’s fourth-quarter profit and revenue topped analysts’ projections yesterday amid orders for the metal from the auto and aerospace industries. Alcoa shares dropped 2.3 percent today after five days of gains.                         

     JPMorgan Chase & Co., Citigroup Inc., and Intel Corp. and 16 other S&P 500 companies are due to report results this week. Earnings at companies in the gauge probably climbed 2 percent in the final quarter of 2014, analysts predict. That’s down from an average October estimate of 8.5 percent.

     The MSCI Emerging Markets Index added 0.5 percent today as Chinese exports grew more than economists estimated and oil’s decline spurred gains in consumer-discretionary shares.

     Government bonds rose around the world as lower commodity prices damped the outlook for consumer prices. Weaker inflation boosts demand for debt by preserving the value of its fixed payments. It’s also fueling speculation central banks will extend stimulus, keeping borrowing costs low to fulfill their mandates.

     The effective yield on the Bank of America Merrill Lynch Global Broad Market Sovereign Plus Index dropped to 1.21 percent yesterday, a record low in data starting in 1996.

     U.S. 10-year yields touched 1.8622 percent, matching the low reached  Oct. 15 that was the least in 20 months. Rates closed down one basis point at 1.90 percent.

     Japan’s five-year yield fell to zero and rates on the nation’s 10-year securities slipped to a record-low. Australia’s 10-year yields declined to 2.603 percent, also an all-time low. U.K. 30-year yields fell to an unprecedented 2.248 percent.

     The euro fell to its lowest level since December 2005, depreciating as much as 0.7 percent to $1.1753 as regional officials stoked speculation that the European Central Bank will begin buying government bonds as early as next week to stave off deflation.

     The yen strengthened as much as 0.7 percent to 117.54 a dollar, the strongest level since Dec. 17. The Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, gained 0.1 percent.
 

Have a wonderful evening everyone.

 

Be magnificent!

The energy in the world flows from God at the centre, and back to God.

The sages see life as a  wheel, with each individual going round and round through birth and death.

Individuals remain on this wheel so long as they believe themselves to be separate;

but once they realize their unity with God, then they break free.

Svetasvatara Upanishad

As ever,

 

Carolann

 

Climate is what we expect, weather is what we get.

                                  -Mark Twain, 1835-1910

 

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

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 out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

A dog runs during snowfall in winter with the air temperature around minus 7.6 degrees Fahrenheit at a park in Krasnoyarsk, Siberia on Monday. Ilya Naymushin/Reuters

Waves crash over the harbor wall as gale force winds hit Porthcawl in south Wales on Monday. Rebecca Naden/Reuters

Market Closes for January 12^th, 2015   

Market Index	Close	Change
Dow Jones	17640.84	-96.53
		-0.54%
S&P 500	2028.26	-16.55   -0.81%
NASDAQ	4664.707	-39.360
		-0.84%
TSX	14265.01	-119.91
		-0.83%

International Markets

Market Index	Close	Change
NIKKEI	17197.73	+30.63
		+0.18%
HANG SENG	24026.46	+106.51
		+0.45%
SENSEX	27585.27	+126.89
		+0.46%
FTSE 100	6501.42	+0.28
		—

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.606	1.655
CND. 30 Year Bond	2.172	2.221
U.S.    10 Year Bond	1.9070	1.9449
U.S. 30 Year Bond	2.4965	2.5289

Currencies

BOC Close	Today	Previous
Canadian $	0.83562	0.84265
US $	1.19724	1.18673
Euro Rate 1 Euro=		Inverse
Canadian $	1.41619	0.70612
US $	1.18288	0.84539

Commodities

Gold	Close	Previous
London Gold Fix	1226.50	1222.52
Oil	Close	Previous
WTI Crude Future	46.07	48.36

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a second day as commodities plunged to a 12-year low, with crude prices tumbling after Goldman Sachs Group Inc. cut its price forecasts.

     Legacy Oil & Gas Inc., MEG Energy Corp. and Surge Energy Inc. plunged at least 11 percent. Canadian Western Bank and National Bank of Canada dropped at least 3.2 percent to pace declines among financials stocks in the Standard & Poor’s/TSX Composite Index. Amaya Inc. jumped 12 percent as the online gaming operator said it is considering proposals for one of its properties. Ebola drugmaker Tekmira Pharmaceuticals Corp. soared 56 percent after agreeing to a merger with OnCore Biopharma Inc.

     The S&P/TSX fell 119.91 points, or 0.8 percent, to 14,265.01 at 4 p.m. in Toronto. The benchmark equity gauge has dropped 2.5 percent this year.

     Legacy Oil & Gas sank 15 percent, MEG Energy retreated 11 percent and Surge Energy plunged 12 percent to C$2.52, the lowest since 2009, as all 66 members of the S&P/TSX Energy Index fell. The group lost 3.8 percent as five of 10 industries in the benchmark Canadian equity gauge retreated on trading volume 6.6 percent higher than the 30-day average.

     Canadian Natural Resources Ltd. declined 4.1 percent after cutting C$2.4 billion of 2015 capital spending, to C$6.2 billion due to the plunge in oil prices.

     The Bloomberg Commodity Index, which tracks a basket of global commodities prices, slumped 1.7 percent to a 2002 low.

     West Texas Intermediate crude plunged 4.7 percent to $46.07 a barrel in New York after a seventh weekly drop.

     Crude has to “stay lower for longer” and trade near $40 a barrel in the first half of the year if investment in shale is to be curtailed to re-balance the global market, according to Goldman analysts in a report.

     First Quantum Minerals Ltd. sank 6.5 percent and Teck Resources Ltd. dropped 3.5 percent. Copper fell in London, touching $5,966, the lowest since October 2009, on concern demand is weakening in China, the largest consumer of the metal, to the weakest since 1990.

     The economy in China is forecast to slow to 7 percent in 2015 from 7.4 percent last year, according to economists’ estimates compiled by Bloomberg.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks fell, after the Standard & Poor’s 500 Index posted its first back-to-back weekly retreats since October, as the continuing selloff in crude pulled down energy shares before the start of corporate earnings.

     Energy shares tumbled 2.8 percent, the most among 10 groups in the S&P 500, as crude dropped 4.7 percent. Tiffany & Co. lost 14 percent after the jewelry retailer lowered its annual forecast after sales declined during the holiday. SanDisk Corp. fell the most in almost six years after reporting preliminary results below its own estimates.

     The S&P 500 slid 0.8 percent to 2,028.26 at 4 p.m. in New York. Losses accelerated after the market’s open as the benchmark gauge fell through its average price for the past 50 days. The Dow Jones Industrial Average lost 96.53 points, or 0.5 percent, to 17,640.84. The Nasdaq 100 Index slid 1 percent as technology shares retreated. About 6.6 billion shares changed hands on U.S. exchanges, 4 percent below the three-month average.

     “When you get the kind of 1 percent moves we’ve had in both directions, there’s definitely still uncertainty out there and that’s usually not the sign of a healthy market,” Matt Maley, an equity strategist at Miller Tabak & Co. in Newton, Massachusetts, said by phone. “With earnings kicking off the question is going to be how much of the decline in energy company earnings is already priced in.”

     The index lost 0.7 percent last week, following a 1.5 percent drop the prior period, amid concern over sliding oil prices, falling U.S. wages and that the European Central Bank’s bond-buying plan won’t be enough to combat deflation.

     Investors were whipsawed during the week as the S&P 500 had up and down swings of more than 1 percent on three separate days, with an average daily move of 1.3 percent for the full week. The volatility stands in contrast to 2014, when the gauge fluctuated 0.53 percent on average each day for the calmest year in U.S. stocks since 2006.

     The S&P 500 has fallen 3 percent since a record in December amid sliding oil prices. That’s prompted analysts to cut their profit forecasts for companies in the index, with reductions spread across nine of 10 industry groups and energy producers seeing the biggest cut.

     “Markets have been volatile because they still haven’t made up their mind whether lower oil prices are positive for consumers and the overall world economy or whether it means more financial stress,” Otto Waser, chief investment officer at R&A Research & Asset Management AG in Zurich, said by telephone. “This has been the tug of war between the two camps. We think it’ll be positive for consumption. We’re overweight in the U.S. this year.”

     Falling oil prices have damped inflation, leaving it below the Federal Reserve’s target even as the economy shows signs of accelerating.

     Equities extended declines in the final minutes of trading after Fed Bank of San Francisco President John Williams, who will vote on policy this year, said raising interest rates in June would be a close call amid “strong momentum” in the labor market and weaker wage gains.

     Fed Chair Janet Yellen told reporters last month not to expect the central bank to raise rates before the end of April, leaving expectations intact for a move around mid-year.

     Profit at companies in the benchmark gauge probably climbed 2 percent in the final quarter of 2014, and 2.8 percent this period, analysts forecast. That’s down from October estimates of 8.1 percent and 9.2 percent, respectively.

     Alcoa Inc. advanced 1.2 percent in late trading after reporting fourth-quarter profit that surpassed analysts’ estimates. The company typically unofficially kicks off the earnings season. Later this week, investors will weigh reports for clues on the health of the world’s largest economy, including retail sales, manufacturing in the New York region and industrial production.

     Schlumberger Ltd., which posts earnings this week, fell 3.9 percent. The world’s largest oilfield-services provider was cut to neutral, the equivalent of a hold, from buy at Goldman Sachs Group Inc.

     Other energy stocks also retreated after Goldman reduced its forecasts for global benchmark crude prices, predicting inventories will increase over the first half of this year. Oil needs to trade near $40 a barrel in the first half of this year to curb shale investments, the bank said. U.S. crude closed near $46 a barrel.

     “Many people are fearful that this is a sign of deflation coming,” Rob Lutts, chief investment officer at Salem, Massachusetts-based Cabot Wealth Management Inc., said via phone. “There’s a little bit more fear in the air and it revolves around things we can’t control, including overseas economies and concern over how fast they’re growing.”

     Exxon Mobil Corp. and Chevron Corp. plunged at least 1.9 percent today to lead declines in the Dow. Forty-two of the 43 members in the S&P 500 Energy Index retreated, as the gauge slumped 2.8 percent. Transocean Ltd. lost 3.7 percent for a 10th straight drop and the lowest level since 1995.

     In Europe, oil-and-gas producers tumbled 1.3 percent for the second-biggest drop in the Stoxx Europe 600, while an index of developing-nation energy companies slid 1.9 percent to pace losses in the MSCI Emerging Markets Index.

     Technology companies in the S&P 500 declined 1.3 percent as SanDisk lost 14 percent. The maker of data-storage chips for mobile devices reported preliminary quarterly revenue that trailed its own forecast on lower sales of retail and flash- technology products.

     Health-care companies declined 0.1 percent amid corporate deals.

     Foundation Medicine Inc. surged 95 percent to $46.74. Roche Holding AG will buy 5 million newly issued shares of Foundation for $50 each, then begin an offer for about half of the company’s existing stock for the same price. The offer is 109 percent above Foundation’s closing stock price last week.

     NPS Pharmaceuticals Inc. jumped 8.2 percent as Shire Plc said it will pay $46 a share in cash. That’s a 9.8 percent premium to NPS’s closing price on Jan. 9 and more than 50 percent higher than its close on Dec. 16, before news broke of Shire’s interest.

     Bristol-Myers Squibb Co. climbed 3.1 percent. The drugmaker said its Opdivo treatment showed better overall survival rates compared with docetaxel, a form of chemotherapy, in a study of patients with a type of lung cancer.

     Express Inc. surged 3.2 percent. The clothing chain boosted its forecast for fourth-quarter earnings and 2015 profit, saying business strengthened in December and the first week of January.

     Lululemon Athletica Inc. gained 6.8 percent. The yogawear maker boosted its forecast for fourth-quarter profit to at least 71 cents a share after previously projecting no more than 69 cents. Analysts estimated profit during the period would be 69 cents. The company also raised its forecast for fourth-quarter revenue.

 

Have a wonderful evening everyone!

 

Be magnificent!

 

“If opportunity doesn’t knock, build a door.” Milton Berle

As ever,

 

Karen

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

A demonstrator holds pencils in tribute to the victims of a shooting by gunmen at the offices of French satirical weekly Charlie Hebdo, during a demonstration organized by the NGO Rio de Paz (Rio of Peace) in Niteroi, near Rio de Janeiro. Ricardo Moraes/Reuters

A rescued female grizzly bear lies in the snow in its new habitat at New York’s Central Park Zoo. The Central Park Zoo introduced to the public two new inhabitants, grizzly bears Betty and Veronica, who were rescued in 1995 by the Wildlife Conservation Society.

Market Closes for January 9^th, 2015   

Market Index	Close	Change
Dow Jones	17737.37	-170.50
		-0.95%
S&P 500	2044.81	-17.33   -0.84%
NASDAQ	4704.066	-32.121
		-0.68%
TSX	14384.92	-72.80
		-0.50%

International Markets

Market Index	Close	Change
NIKKEI	17197.73	+30.63
		+0.18%
HANG SENG	23919.95	+84.42
		+0.35%
SENSEX	27458.38	+183.67
		+0.67%
FTSE 100	6501.14	-68.82
		-1.05%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	1.655	1.707
CND. 30 Year Bond	2.221	2.274
U.S.    10 Year Bond	1.9449	2.0092
U.S. 30 Year Bond	2.5289	2.5914

Currencies

BOC Close	Today	Previous
Canadian $	0.84265	0.84526
US $	1.18673	1.18306
Euro Rate 1 Euro=		Inverse
Canadian $	1.40532	0.71158
US $	1.18420	0.84445

Commodities

Gold	Close	Previous
London Gold Fix	1222.52	1215.50
Oil	Close	Previous
WTI Crude Future	48.36	48.83

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, resuming a decline after climbing the most in three weeks yesterday, as bank shares slid to a seven-month low after the economy unexpectedly lost jobs for a second month.

     Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank fell at least 1.2 percent. Kinross Gold Corp. and Yamana Gold Inc. rose at least 5.7 percent as raw-materials shares paced gains. TransCanada Corp. added 0.8 percent after the Nebraska Supreme Court approved a plan for the company’s proposed Keystone XL pipeline to cross the state.

     The Standard & Poor’s/TSX Composite Index fell 72.80 points, or 0.5 percent, to 14,384.92 at 4 p.m. in Toronto. The benchmark equity gauge dropped 2.5 percent this week, snapping three straight gains.

     CIBC sank 1.4 percent to the lowest since March. The S&P/TSX Banks Index lost 1.7 percent, the lowest close since May 2014. Nine of the 10 main industries in the S&P/TSX declined as trading volume was 11 percent below the 30-day average.

     In Canada, employment fell by 4,300, led by declines in part-time positions at hotels and restaurants. The unemployment rate held at 6.6 percent as 11,200 people left the labor force. Economists surveyed by Bloomberg had projected a 15,000 job increase, according to median forecasts.

     The U.S. added 252,000 jobs in December, more than forecast, and the jobless rate declined to 5.6 percent to cap the best year for the labor market since 1999. The report wasn’t all good news as earnings unexpectedly declined from a month earlier.

     West Texas Intermediate crude slipped 0.9 percent to settle at $48.36 a barrel in New York. The price has lost 8.2 percent this week for a seventh straight weekly decline. The S&P/TSX Energy Index has slumped 7.2 percent this week, the most in a month.

     Kinross and Yamana added more than 5.7 percent as raw- materials shares rose 1.7 percent as a group. Gold futures for February delivery gained 0.6 percent to $1,216.10 an ounce in New York.

     Air Canada rose 1 percent, to a seven-year high.

US

By Callie Bost and Michelle F. Davis

     (Bloomberg) — The wildest trading to start a year since 2009 left the Standard & Poor’s 500 Index lower for the week after three straight annual gains of more than 10 percent.

     Investors were whipsawed as the S&P 500 had up and down swings of more than 1 percent on three separate days, with an average move of 1.3 percent for the full five days. The volatility stands in contrast to 2014, when the gauge fluctuated 0.53 percent on average each day for the calmest year in U.S. stocks since 2006.

     Speculation that central banks will support global growth and signs of strength in the U.S. economy spurred the biggest two-day equities rally in three weeks. That optimism gave way to concern over falling U.S. wages and Europe’s ability to fight low inflation. Looming throughout the week was the selloff in oil and its potential to spoil corporate earnings.

     “They talk about the early days of January being a forecast for the year,” Bruce McCain, who helps oversee in excess of $25 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said by phone. “When you look at the trading that we’ve seen — the rapid shift from worries about what the data mean to at least less worry if not some enthusiasm — that’s probably a pretty good template for what we’re going to see.”

     The S&P 500 lost 0.7 percent to 2,044.81 in the five days for its first back-to-back weekly declines since October. The Dow Jones Industrial Average fell 95.62 points, or 0.5 percent, to 17,737.37.

     The broader index tumbled 2.7 percent on the first two days of the week, capping a five-day slide for the worst start to a year since 2008. The gauge rebounded 3 percent in the next two sessions to erase its loss in 2015 before dropping 0.8 percent in the final day.

     Strategists are telling equity derivatives clients to prepare for more frequent bouts of volatility as the bull market approaches its seventh year with a gain of about 200 percent in the S&P 500. Deutsche Bank AG, for one, predicts the end of Federal Reserve stimulus and intermittent panic about the rate of global growth will lead to more equity upheaval.

     The Chicago Board Options Exchange Volatility Index, the gauge of investor anxiety known as the VIX, rose as much as 12 percent and slid as much as 12 percent, mirroring moves in the equity gauge. The VIX finished the week lower by 1.4 percent

     The rout in oil prices weighed on the S&P 500 to start the week, as crude sank below $48 for the first time since 2009. Selling spread from the energy industry to the broader equities market amid concern that cuts in capital spending will hurt corporate results.

     Caterpillar Inc. declined 4.6 percent and an index of railroad stocks lost 3.8 percent on speculation the crude slump may hurt spending on energy-services equipment and oil transportation.

     “Earnings season is kicking off next week and any signs of stress with oil prices turning down is causing investors to be more nervous,” Steven Rees, who helps oversee about $1 trillion as global head of equity strategy at JPMorgan Chase Bank, said via phone. “There’s general anxiety. The overall tone for earnings might be a little more tempered.”

     West Texas Intermediate crude ended the week at the lowest in more than five years on growing evidence OPEC won’t pare output to reduce a global supply surplus.

     Schlumberger Ltd., the oil-services firm that plunged 5.2 percent in the five days, is among the S&P 500 companies that will disclose fourth-quarter earnings next week, after Alcoa Inc. unofficially kicks off the reporting season on Jan. 12. Results for companies in the index will show earnings per share grew 2 percent in the period, analysts tracked by Bloomberg estimate.

     Stocks broke their five-day slide after minutes from the Fed’s last meeting indicated no change in policy makers’ approach to rates. Optimism in the economy grew as data showed a drop in weekly jobless claims and the best year for consumer confidence since 2007.

     The rally got a boost from overseas, where European Central Bank President Mario Draghi said in a letter that central bank stimulus measures may include sovereign-bond buying, while lawmakers in Chancellor Angela Merkel’s party signaled Germany will take a more flexible stance in debt negotiations with Greece.

     The Stoxx 600 Europe erased a gain for the week on the final day of trading on speculation that the ECB’s bond-buying plans won’t be enough to shore up the economy. People familiar with the situation said the central bank is studying models for buying investment-grade assets at amounts less than analysts say is needed.

     U.S. equities dropped 0.8 percent on the week’s last day, as concern over Europe and the biggest drop in American wages since 2006 overshadowed better-than-forecast employment growth and a decline in the jobless rate to 5.6 percent in December.

     “What we experienced this week was a lot like what we saw in the fourth quarter, which was heightened volatility,” Ron Sanchez, executive vice president and chief investment officer at New York-based Fiduciary Trust Co. International, said by phone. “There’s a lot of uncertainty about global growth and lack thereof and as a result, the volatility we exhibited in late 2014 is here to stay. We have some sorting out to do.”

     Eight of 10 main industries in the S&P 500 declined in the week. Energy shares in the index sank the most, plunging 3.6 percent for a third weekly decline.

     Nabors Industries Ltd., Oneok Inc. and Transocean Ltd. retreated at least 11 percent for the biggest losses in the group. Chevron Corp. lost 3.9 percent, while Exxon Mobil Corp. sank 0.8 percent for a third weekly decline.

     JPMorgan Chase & Co. sank 5 percent to lead financial shares lower, while Caterpillar’s slide dragged down industrial stocks. Merck & Co. rallied 9.4 percent for the biggest advance in the Dow, while Boston Scientific Corp. surged 11 percent for the best performance in the S&P 500.

     “What we saw this week was a lot of nervous Nellies that were worried about anything and everything,” Bob Pavlik, who helps oversee $4.5 billion as chief market strategist at Banyan Partners LLC in New York, said by telephone. “There’s volatility — let it scare the traders but don’t let it scare the long-term investor. There’s nothing in the overall concerns that has me changing my outlook. This year is going to continue to improve.”

 

Have a wonderful weekend everyone!

 

Be magnificent!

“One of the most beautiful qualities of true friendship is to understand and to be understood.” Lucius Annaeus Seneca

As ever,

 

Leyla

 

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