Category: Newsletters

Dear Friends,

Tangents:

Clear blue skies, comfortable temperatures (typically 50º to 60º F), and fall foliage make March and April two of the best months to walk the paths less traveled in Australia’s smallest state. Tasmania’s walking routes range from easy strolls along Cornelian Bay in the capital city of Hobart, to challenging bushwalks in remote Southwest National Park, part of the 3.46-million-acre Tasmanian Wilderness World Heritage Area. “Expect stunning scenery in every direction,” says Hobart-based writer Tania Horne. “Whether you choose to walk the countless pristine coastline tracks, across mountains of wilderness sprinkled liberally with dense rain forests, or through the breathtaking patchwork of rural countryside, you’ll be assured of a kaleidoscope of riotous color.”  National Post names Tasmania one of the 10 best spots to visit in the spring time!

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

Buddha

Photos of the day

Raindrops on a car window reflect a man walking past a stock index board in Tokyo. Toru Hanai/Reuters

Two strollers and a dog walk past blooming cherry trees during nice and sunny spring weather in Cologne, Germany. Federico Gambarini/dpa/AP

Market Closes for April 3^rd, 2014

Market  Index	Close	Change
Dow  Jones	16572.55	-0.45    —
S&P 500	1888.77	-2.13    -0.11%
NASDAQ	4237.738	-38.717    -0.91%
TSX	14402.21	-56.90
		-0.39%

International Markets

Market  Index	Close	Change
NIKKEI	15071.88	+125.56
		+0.84%
HANG  SENG	22565.08	+41.14
		+0.18%
SENSEX	22509.07	-42.42
		-0.19%
FTSE 100	6649.14	-9.90
		-0.15%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.546	2.550
CND.  30 Year Bond	3.034	3.040
U.S.   10 Year Bond	2.7972	2.8045
U.S.  30 Year Bond	3.6291	3.6473

Currencies

BOC Close	Today	Previous
Canadian $	0.90613	0.90649
US  $	1.10359	1.10315
Euro Rate  1 Euro=		Inverse
Canadian  $	1.51385	0.66057
US  $	1.37174	0.72900

Commodities

Gold	Close	Previous
London Gold  Fix	1286.69	1290.60
Oil	Close	Previous
WTI Crude Future	100.29	99.62
BRENT	109.360	109.360

Market Commentary:

Canada
By Gerrit De Vynck

Canadian stocks fell, snapping a four-day rally, as raw-material shares paced declines amid losses in copper and gold while Hudson’s Bay Co. said its Lord & Taylor stores’ sales didn’t rebound as expected.

Hudson’s Bay retreated 5.1 percent after reporting that Lord & Taylor’s same-store sales declined 1.3 percent in the latest quarter. UrtheCast Corp. added 4.9 percent after the space imaging company released its first picture from a new camera on the International Space Station.

The Standard & Poor’s/TSX Composite Index lost 56.90 points, or 0.4 percent, to 14,402.21 at 4 p.m. in Toronto. The drop ended a four-day rally that moved the index up 2 percent, including a 0.6 percent advance yesterday.

“We had a very strong day yesterday in the markets, particularly in Canada where you saw the resource sector rally,” said Brian Huen, managing partner at Red Sky Capital Management Ltd. in Toronto. He helps manage about C$225 million ($204 million). “People are not seeing the follow-through from yesterday so they’re taking some money off the table.”

Materials companies fell 0.9 percent as eight of 10 industries in the benchmark index retreated. Phone companies lost 1.3 percent as a group after CIBC World Markets cut its rating on the Canadian cable and telecommunications industry to the equivalent of a sell from the equivalent of a hold, saying government hearings may bring new regulation to the industry.

Richmont Mines Inc. tumbled 6.8 percent to C$1.51 after the gold miner said it would issue 7 million new shares for C$1.45 each, a 10 percent discount to yesterday’s closing price of C$1.62.

Hudson’s Bay declined 5.1 percent, the most since Dec. 11, to C$17.86 after reporting its fourth-quarter results and saying the Lord & Taylor stores didn’t rebound as the company expected. The retailer also forecast lower earnings than analyst had predicted.

UrtheCast rose 4.9 percent to C$2.15 after posting its first image from a camera mounted on the International Space Station to its website. The company also said that it was not affected by the National Aeronautics and Space Administration’s decision to cut ties with the Russian space agency.

Rogers Communications Inc., Canada’s largest wireless company, fell 0.9 percent to C$45 after the industry downgrade from CIBC. Telus Corp. fell 2.7 percent to C$38.10 while Shaw Communications Inc. fell 2.9 percent to C$25.94. Phone companies have gained 12 percent as a group since the beginning of August 2013.

Goldcorp Inc. fell 1.7 percent to C$27.14 after the company said it was pushing back the expiry date of its hostile offer to buy Osisko Mining Corp. to April 15. Yesterday, Yamana Gold Inc. offered to buy half of Osisko for C$1.47 billion, out-pricing Goldcorp’s bid.

West Fraser Timber Co. rose 1.3 percent to C$52.04 as Statistics Canada said the country’s trade balance swung to a surplus in February. Three-quarters of Canada’s 2013 exports went to the U.S.

US
By Joseph Ciolli and Sofia Horta e Costa

U.S. stocks fell, after benchmark indexes climbed to records, while Treasuries rose before the government releases its monthly jobs report. The euro weakened as the region’s central bank said it’s prepared to take action to head off deflation.

The Standard & Poor’s 500 Index slipped 0.1 percent to 1,888.77 at 4 p.m. in New York. The Dow Jones Industrial Average was little changed, closing within five points of its record after reaching an intraday high. Treasury 10-year yields slid for the first time in three days. The euro weakened against 10 of its 16 major peers. Italy’s 10-year yield fell to an eight- year low and Spain’s rate dropped 4 basis points. The Stoxx Europe 600 Index added 0.1 percent. An index of developing- nation shares dropped 0.6 percent, ending the longest run of gains since January 2013.

Initial jobless claims rose more than forecast last week, according to the Labor Department, before the monthly payrolls data due tomorrow. A separate report today showed service industries in the U.S. expanded at a faster pace in March. European Central Bank President Mario Draghi said the ECB would use unconventional policy if required, after leaving the main refinancing rate at an all-time low of 0.25 percent today.

“The market still wants to be positive and has this feeling of goodwill, but at times it runs into a little bit of resistance,” Robert Pavlik, chief market strategist at Banyan Partners LLC, which manages $4.5 billion, said in a phone interview. “People are a little bit more cautious. As we get closer to the payroll report, we’ll be in wait-and-see mode.”

The S&P 500 index rose 0.3 percent yesterday to close at a record. The gauge has climbed 2.2 percent this year, with utilities gaining the most among 10 industry groups. The index now trades at 17.4 times reported earnings. That’s the highest level since 2010 and 11 percent above its five-year average, according to data compiled by Bloomberg.

The Institute for Supply Management’s U.S. non- manufacturing index increased to 53.1 in March from 51.6 a month earlier, the Tempe, Arizona-based group said today. The median forecast in a Bloomberg survey of 77 economists called for a gain to 53.5.

Jobless claims increased 16,000 in the period ended March 29 to a five-week high of 326,000, the Labor Department said. A revised 310,000 applications were filed in the previous week, the fewest since Sept. 7. The median forecast of 52 economists surveyed by Bloomberg called for 319,000 claims.

The government’s monthly jobs report due tomorrow will show that hiring increased in March, according to forecasts compiled by Bloomberg.

Fed Chair Janet Yellen said last week that “considerable slack” in the labor market is evidence that the central bank’s unprecedented accommodation will be needed for “some time” to put Americans back to work.

Reports from hiring to factory output had shown weakness this year as freezing temperatures and mountains of snow kept shoppers indoors, grounded flights and made it harder for shippers to fill product orders.

Investors have added $1.7 billion to U.S. equity exchange- traded funds in the past five days and put $984 million in bond ETFs, data compiled by Bloomberg show. Health-care stocks saw the most money added among industry ETFs, increasing $571 million during the past week. Industrial ETFs took in $459 million in the period.

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, rose 2.1 percent to 13.37 today. The gauge closed yesterday at its lowest since January after five straight declines.

Google Inc. Class C shares rose 0.5 percent to $569.74 while the Class A shares added 0.6 percent to $571.50. The company issued 330 million nonvoting C class shares as part of a move that cements control for founders Sergey Brin and Larry Page. The A shares carry one vote, while non-trading B shares, mostly owned by the founders, have 10 votes.

Treasuries rose, pushing 10-year yields down from almost the highest levels since January, before tomorrow’s jobs report. The U.S. 10-year yield fell one basis point to 2.79 percent.

Italy’s 10-year yield dropped five basis points to 3.25 percent. It touched 3.249 percent, the lowest since September 2005. The yield on 10-year German bunds fell one basis point to 1.60 percent and the Spanish 10-year yield declined four basis points to 3.22 percent.

Draghi said policy makers debated large-scale asset purchases among a range of measures to head off the threat of deflation in the euro region. ECB officials are discussing a new departure as inflation slows to a level that’s just a quarter of their 2 percent goal. With a rising euro and stubbornly high unemployment also threatening the region’s recovery, other options include further rate cuts, which would take the deposit rate into negative territory.

“Draghi tends to speak vaguely and just reiterate earlier speeches but he was more specific and aggressive this time round,” Steven Santos, a broker at X-Trade Brokers DM SA, said by phone from Lisbon. “It looks like the ECB is increasingly pondering cutting the main interest rate and that the central bank might even come up with new measures soon. Markets clearly want more intervention from Draghi.”

The euro weakened for a second day against the dollar, and dropped for the first time in five days versus the yen. The 18- nation currency slipped 0.4 percent to $1.3719 and lost 0.3 percent to 142.57 yen. The dollar was little changed at 103.92 yen.

The Stoxx Europe 600 Index advanced for an eighth day, extending its longest winning streak since October. The equity benchmark has gained 4 percent since March 24.

The MSCI Emerging Markets Index, which rallied 6.8 percent in the previous nine days, lost 0.5 percent amid concern that the crisis in Ukraine will escalate after NATO leaders warned Russia has troops on a high state of readiness on its neighbor’s border.

The ruble lost 0.4 percent against the dollar, and the Micex Index of Russian stocks slid 0.5 percent. Russia ratcheted up pressure on Ukraine with a 26 percent increase in the price of natural gas after Foreign Minister Sergei Lavrov said NATO shouldn’t expand its presence in eastern Europe.

NATO leaders warned yesterday that they haven’t seen signs of a significant reduction in Russian military forces along Ukraine’s border and any incursion would be a “historic mistake.”

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong gained 0.7 percent, while the Shanghai Composite Index dropped 0.7 percent. China outlined a package of measures including tax relief to support the economy and create jobs after a slowdown endangered Premier Li Keqiang’s target of 7.5 percent growth this year.

“We are starting to see more positive talk from officials in terms of the potential for stimulus” in China, said Angus Gluskie, managing director at White Funds Management in Sydney, who helps oversee about $550 million.

U.S. natural gas jumped 2.4 percent as an unusually cold start to spring sent stockpiles to an 11-year low. The Energy Information Administration said stockpiles fell 74 billion cubic feet in the week ended March 28 to 822 billion, the least since 2003. Analyst estimates compiled by Bloomberg showed an expected withdrawal of 75 billion.

Gold fell for the sixth time in seven session as signs of quickening U.S. economic growth bolster forecasts for the Fed to increase interest rates, crimping demand for the metal as a store of value. Futures declined 0.5 percent to $1,284.60.

Brent crude rose the most in a month amid concern that talks between the Libyan government and rebels won’t restore oil exports. Brent gained 1.3 percent to $106.15 a barrel, while West Texas Intermediate crude climbed 0.7 percent to $100.29 a barrel.

The rebels’ Executive Office for Barqa, representing the region of Cyrenaica, denied a report that the group will cede one of the four ports that have been under its control since July to the government in a few days. Libya’s oil output dropped to 250,000 barrels a day in March from 1.4 million a year earlier, according to data compiled by Bloomberg.

 

Have a wonderful evening everyone.

Be magnificent!

 

“Success is not final, failure is not fatal: it is the courage to continue that counts”

Winston Churchill

As ever,

 

Amanda Parnham

Assistant to Carolann Steinhoff

Queensbury Securities

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

 

Dear Friends,

Tangents:

A friend sent this to me today 🙂

Subject: Important Study Results

Johns Hopkins Weight Study

The National  Institutes of Health has just released the results of a $200 million research study completed under a grant to Johns Hopkins.
The new study has found that women who carry a little extra weight live longer than the men who mention it.

Photos of the day

‘Trash People,’ an art exhibit of life-size figures made from 20 tons of recycled iron, glass, computer parts, cans and industrial waste, stands on Hiriya landfill near Tel Aviv, Israel. The exhibit, by German artist HA Schult, has been traveling for 18 years around the world, with stops in Paris La Defense, Moscow’s Red Square, the Great Wall of China, Egypt’s Giza Pyramids, Rome’s Piazza del Popolo and Antarctica. Ariel Schalit/AP

A pelican playfully pecks a smaller pelican in St. James’s Park in London. Six pelicans live in the park, three of whom were a gift from the City of Prague in 2013. Kirsty Wigglesworth/AP

Market Closes for April 2^nd, 2014

Market  Index	Close	Change
Dow  Jones	16573.00	+40.39    +0.24%
S&P 500	1890.90	+5.38    +0.29%
NASDAQ	4276.457	+8.417    +0.20%
TSX	14459.11	+78.56
		+0.55%

International Markets

Market  Index	Close	Change
NIKKEI	14946.32	+154.33
		+1.04%
HANG  SENG	22523.94	+75.40
		+0.34%
SENSEX	22551.49	+105.05
		+0.47%
FTSE 100	6659.04	+6.43
		+0.10%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.550	2.496
CND.  30 Year Bond	3.040	3.009
U.S.   10 Year Bond	2.8045	2.7516
U.S.  30 Year Bond	3.6473	3.6051

Currencies

BOC Close	Today	Previous
Canadian $	0.90649	0.90683
US  $	1.10315	1.10275
Euro Rate  1 Euro=		Inverse
Canadian  $	1.51867	0.65847
US  $	1.37666	0.72640

Commodities

Gold	Close	Previous
London Gold  Fix	1290.60	1279.33
Oil	Close	Previous
WTI Crude Future	99.62	99.74
BRENT	109.360	109.360

Market Commentary:

Canada
By Gerrit De Vynck

April 2 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level since 2008, as materials shares rallied after Osisko Mining Corp. agreed to sell a stake to Yamana Gold Inc. in a bid to block a separate hostile offer.

Osisko Mining climbed 7.3 percent after Yamana agreed to acquire mining and exploration assets in a cash and stock deal for C$929.6 million ($842.6 million). Goldcorp Inc., which had made a hostile offer for Osisko, advanced 2 percent. Agrium Inc. retreated 1.4 percent after its first-quarter earnings forecast missed analyst estimates.

The Standard & Poor’s/TSX Index rose 78.56 points, or 0.6 percent, to 14,459.11 at 4 p.m. in Toronto, the highest level since June 2008. The gauge has rallied 2 percent in the past four days.

“The economy is growing slowly but surely,” said Irwin Michael, a fund manager with ABC Funds in Toronto, which manages about C$850 million. U.S. employment numbers released today by the ADP Research Institute didn’t meet economist estimates, but are still encouraging, Michael said by phone. “It’s close enough for us.”

Companies added 191,000 new jobs in March, the biggest increase in three months, said ADP, which is based in Roseland, New Jersey. The median forecast of economists surveyed by Bloomberg was for an advance of 195,000. Canada and the U.S. separately will release monthly employment data on April 4.

Raw-materials shares rallied 1.4 percent for the second- biggest gain among the 10 industries in the S&P/TSX. Technology stocks, which make up a smaller slice of the index, rose 1.7 percent.

Osisko Mining gained 7.3 percent to C$7.38. The deal with Yamana values Osisko at C$7.60 a share. Goldcorp’s hostile bid, announced in January, is worth about C$6.34 a share. Goldcorp increased 2 percent to C$27.61 while Yamana lost 2.2 percent to C$9.50.

Agrium retreated 1.4 percent to C$106.09 after saying first-quarter earnings will be just above break-even. Analysts had estimated earnings of 54 cents a share. The potash miner said its operations were hit by a squeeze on railway availability and a shutdown for repairs at one of its plants.

Potash Corp. of Saskatchewan Inc. slipped 1.4 percent to C$38.40 after Alta Corp. downgraded the stock to underperform, the equivalent of a sell, from sector perform, the equivalent of a hold.

Ballard Power Systems Inc. advanced 7.9 percent to C$5.36 after the company said four buses powered by its fuel cells had been delivered. The stock has risen 233 percent this year on signs the technology is a viable source of power.

US
By Joseph Ciolli and Callie Bost

April 2 (Bloomberg) — The Standard & Poor’s 500 Index extended its all-time high and Treasuries fell as a report showed U.S. companies added to payrolls last month. The dollar strengthened with copper and gold.

The S&P 500 gained 0.3 percent to 1,890.90 at 4 p.m. in New York, after reaching a record yesterday. The Dow Jones Industrial Average rose 0.2 percent, briefly erasing its loss for the year. The yield on 10-year Treasuries increased five basis points to 2.80 percent. The Stoxx Europe 600 Index added 0.2 percent. The dollar climbed to a two-month high against the yen. Copper advanced 0.2 percent following an earthquake in Chile and gold jumped for the first time in six days. Crude futures pared earlier losses.

Companies in the U.S. added 191,000 jobs in March, less than the 195,000 median estimate in a Bloomberg survey, figures from the ADP Research Institute showed before the government’s employment report on Friday. The value of equities worldwide climbed to an all-time high of $63.09 trillion yesterday as reports showed a pickup in American manufacturing and vehicle sales. Mining companies reported no damage after the 8.2- magnitude earthquake in Chile that killed six people.

“The positive tone from yesterday is most likely to continue into the jobs report, absent some big macro piece of data that comes out between now and then,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “Longer-term investors are still of the opinion that the U.S. equity market remains one of the best places to be invested for this year.”

The S&P 500 rose 0.7 percent yesterday as consumer and technology stocks pushed the gauge to a record and an index of manufacturing boosted optimism the economy withstood the severe winter weather.

Federal Reserve stimulus has helped propel the S&P 500 higher by as much as 180 percent from its bear-market low in March 2009. The equity gauge climbed 1.3 percent in the first three months of 2014, its fifth consecutive quarterly advance.

The equities benchmark trades at 17.5 times reported earnings, the highest level since 2010 and 11 percent above its five-year average, according to data compiled by Bloomberg.

Treasuries fell amid speculation the U.S. economy is improving enough for the Fed to raise interest rates next year.

Fed Chair Janet Yellen said last month the central bank may end the bond-buying program it uses to support the economy this fall and increase borrowing costs six months after that. She said this week that “considerable slack” in labor markets showed that the central bank’s accommodative policies will be needed for “some time.”

The central bank has kept its target for federal funds, the rate banks charge each other on overnight loans, in a range of zero to 0.25 percent since 2008.

Fed Bank of St. Louis President James Bullard said in a Bloomberg Radio interview today that a further slowing of inflation could prompt policy makers to suspend tapering of bond purchases, though he doesn’t expect that to happen.

Central bank policy should remain accommodative “for quite some time” given “considerable amount” of economic slack that remains, Atlanta Fed President Dennis Lockhart said in a speech in Miami.

Reports from hiring to factory output had shown weakness this year as freezing temperatures and mountains of snow kept shoppers indoors, grounded flights and made it harder for shippers to fill product orders.

A release from the Commerce Department today showed factory orders rose 1.6 percent in February, topping economists’ estimates for a 1.2 percent advance.

Investors have removed $3.7 billion from U.S. equity exchange-traded funds in the past five days and added $1.3 billion to bond ETFs, data compiled by Bloomberg show. Financial stocks saw the most money removed among industry ETFs, losing $489.2 million during the past week.

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, dropped 0.1 percent to 13.09, falling for a fifth straight day.

The Stoxx 600 climbed for a seventh straight day, the longest streak since October. Deutsche Post AG added 4.6 percent after Europe’s largest mail service predicted operating profit will rise. Deutsche Boerse AG lost 2.2 percent after saying U.S. regulators are probing its Clearstream Banking unit.

German 10-year bonds led most euro-area sovereign debt lower as investors bet the European Central Bank will refrain from adding new stimulus to tackle slowing inflation. The yield climbed 4 basis points to 1.62 percent after ECB Vice President Vitor Constancio said yesterday the euro area will probably avoid outright deflation. Germany sold 2.4 billion euros ($3.3billion) of five-year notes today.

The MSCI Emerging Markets Index increased 0.3 percent, gaining for a ninth straight day. The Shanghai Composite Index climbed 0.6 percent to the highest level in a week as developers rallied on speculation the government will relax housing curbs. Brazil’s Ibovespa rallied 2.8 percent, erasing this year’s drop.

Copper advanced for a second day, climbing to a three-week high. Chile is the biggest producer of the metal. Santiago-based Codelco, the largest miner of copper, KGHM Polska Miedz SA and Pan Pacific Copper Co. said their projects and mines escaped damage from the earthquake.

Aluminum climbed 1.9 percent to the highest since Dec. 30 after trading above the 200-day moving average for the first time since October. Brazilian aluminum companies, producing at the lowest level in 12 years amid high power costs and metal- price declines, expect authorities to ration supply as a drought curbs hydroelectric generation in the country.

Brent crude dropped below $105 a barrel for the first time since November after rebels in eastern Libya said they were close to a deal to reopen ports.

West Texas Intermediate crude fell 0.1 percent to $99.62 a barrel, paring an earlier drop of 0.9 percent. A government report showed that U.S. crude inventories decreased 2.38 million barrels to 380.1 million last week. Stockpiles were projected to climb 2.5 million barrels, according to the median of analyst responses in a Bloomberg survey.

U.S. natural gas jumped 2.1 percent, erasing an earlier loss and snapping a three-day decline, on speculation that an unusually cold start to spring will reduce supplies already at an 11-year low.

Gold rose 0.8 percent to $1,290.90 an ounce, ending the longest slump since November, on speculation that demand for bars and jewelry will increase in China after futures touched a seven-week low. Gold slipped 2.9 percent in March, partly on the outlook for reduced stimulus in the U.S.

The dollar rose against most of its 16 major peers. The U.S. currency strengthened 0.2 percent to 103.86 yen after touching 103.94, the highest since Jan. 23. It jumped 1 percent to 85.54 cents per New Zealand dollar. The euro fell 0.2 percent to $1.3765.

 

Have a wonderful evening everyone.

 

Be magnificent!

Self is not something as opposed to something else,

it is sunya: we are also all things;

the self represented in all forms, good or bad,

not exclusively or exhaustively in any.

Ramchandra Gandhi, 1937-2007

As ever,

 

Carolann

 

Life is a succession of moments.  To live each one

is to succeed.

-Corita Kent, 1918-1986

 

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On March 28^th, 1941, Virginia Woolf put on her overcoat, filled its pockets with stones, walked into the River Ouse near her home and drowned herself.

Her note to her husband Leonard Woolf:

Dearest, I feel certain that I am going mad again. I feel we can’t go through another of those terrible times. And I shan’t recover this time. I begin to hear voices, and I can’t concentrate. So I am doing what seems the best thing to do. You have given me the greatest possible happiness. You have been in every way all that anyone could be. I don’t think two people could have been happier ’til this terrible disease came. I can’t fight any longer. I know that I am spoiling your life, that without me you could work. And you will I know. You see I can’t even write this properly. I can’t read. What I want to say is I owe all the happiness of my life to you. You have been entirely patient with me and incredibly good. I want to say that—everybody knows it. If anybody could have saved me it would have been you. Everything has gone from me but the certainty of your goodness. I can’t go on spoiling your life any longer. I don’t think two people could have been happier than we have been. V.

Virginia Woolf, British novelist, essayist, critic, feminist, socialist, pacifist, and one of the leaders in the modernist movement, she was a significant figure in London literary society and a central figure in the influential Bloomsbury Group of intellectuals.  She is the author of Mrs. Dalloway (1925), To the Lighthouse (1921), Orlando (1928) and A Room of One’s Own (1929).

She was an ardent admirer of Vita Sackville-West; the following letter was written to Vita in 1927.

Look Here Vita – throw over your man, and we’ll go to Hampton Court and dine on the river together and walk in the garden in the moonlight and come home late and have a bottle of wine and get tipsy, and I’ll tell you all the things I have in my head, millions, myriads –They won’t stir by day, only by dark on the river.  Think of that.  Throw over your man, I say, and come.  –from The 50 Greatest Love Letters of All Time, edited by David H. Lowenherz, Random House, 2002.

Photos of the day

An Egyptian Goose shelters its young under its wings at Kew Gardens in London. Kirsty Wigglesworth/AP

People cross the Japanese bridge at the waterlily pond at the Claude Monet museum in Giverny, north west of Paris. A new exhibit at Normandy’s Impressionism Museum tells for the first time the little-known story of American Impressionism from where it all began – at the picturesque water lily-filled Giverny gardens of Claude Monet that Americans colonized for three decades. Michel Euler/AP

Market Closes for March 28^th, 2014

Market Index	Close	Change
Dow Jones	16323.06	+58.83   +0.36%
S&P 500	1857.62	+8.58   +0.46%
NASDAQ	4155.758	+4.525   +0.11%
TSX	14260.72	+81.88
		+0.58%

International Markets

Market Index	Close	Change
NIKKEI	14696.03	+73.14
		+0.50%
HANG SENG	22065.56	+231.08
		+1.06%
SENSEX	22339.97	+125.60
		+0.57%
FTSE 100	6615.58	+27.26
		+0.41%

Bonds

Bonds	% Yield	Previous % Yield
CND. 10 Year Bond	2.447	2.435
CND. 30 Year Bond	2.945	2.934
U.S. 10 Year Bond	2.7208	2.6810
U.S. 30 Year Bond	3.5473	3.5271

Currencies

BOC Close	Today	Previous
Canadian $	0.90404	0.90632
US $	1.10614	1.10336
Euro Rate 1 Euro=		Inverse
Canadian $	1.52102	0.65745
US $	1.37507	0.72724

Commodities

Gold	Close	Previous
London Gold Fix	1295.38	1291.00
Oil	Close	Previous
WTI Crude Future	101.67	101.28
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

March 28 (Bloomberg) — Canadian stocks rose for the first time in three days as raw-materials producers rallied after crude and copper prices advanced to weekly gains.

Teck Resources Ltd., Canada’s largest diversified mining company, added 1.9 percent as copper posted the biggest weekly advance in six months. Kinross Gold Corp. jumped 4.7 percent after analysts at Goldman Sachs Group Inc. raised their rating for the stock. BlackBerry Ltd. slumped 6.6 percent for a fourth day of losses after reporting weaker-than-forecast revenue.

The Standard & Poor’s/TSX Composite Index rose 81.88 points, or 0.6 percent, to 14,260.72 at 4 p.m. in Toronto. The equity benchmark fell 0.5 percent this week.

“It’s a pretty broad-based gain, oil and gas are rising and the materials are looking strong,” said Bruce Campbell, fund manager at StoneCastle Investment Management Inc. in Kelowna, British Columbia. The firm manages about C$100 million ($91 million). “Looking at the past week, the first four days have been risk-off and people were tentative. Now people are buying on the dips and jumping back in.”

Chinese Premier Li Keqiang said in a statement the country has policies in reserve to deal with any economic volatility this year and can’t ignore “difficulties and risks” from a slowdown in the economy. Gross domestic product is forecast to increase 7.4 percent this year, the lowest since 1990, according to the median estimate of 56 economists surveyed by Bloomberg.

American economic data is also improving, Campbell said.

Consumer spending in the U.S. rose 0.3 percent in February, the most in three months, as income increased.

Silvercorp Metals Inc. gained 2.8 percent to C$2.20 and Fortuna Silver Mines Inc. increased 2.5 percent to C$4.10 as raw-materials stocks rallied 1.3 percent as a group. Seven of 10 industries in the S&P/TSX advanced on trading volume 7.1 percent lower compared with the 30-day average.

Silver for May delivery rose 0.4 percent to $19.79 an ounce in New York, snapping a nine-day slump.

Kinross Gold jumped 4.7 percent to C$4.67, snapping five days of losses. Andrew Quail, analyst at Goldman Sachs, raised his rating for the stock to neutral, the equivalent of a hold, from sell due to the company’s recent share price decline. The stock has 12 buys, 14 holds and one sell, according to data compiled by Bloomberg.

“We see greater downside potential elsewhere,” Quail said in a note to clients. Kinross had slumped 17 percent in the past five days.

Crew Energy Inc. climbed 4.5 percent to C$8.90 and Bankers Petroleum Ltd. added 0.8 percent to C$5.28 as crude prices rose to a three-week high, increasing 2.2 percent this week, amid shrinking U.S. stockpiles. Suncor Energy Inc., the nation’s largest oil producer, rallied 2.6 percent to C$38.19, the highest in almost three years.

Advantage Oil & Gas Ltd. increased 4.3 percent to C$5.36 after posting a 41 percent increase in funds from operations in the fourth quarter amid rising natural gas prices. The stock has risen for the past 11 days, a record streak.

Teck Resources gained 1.9 percent to C$23.85 and First Quantum Minerals Ltd. increased 2.3 percent to C$20.56 as copper rose 1.6 percent in New York. The price gained 3.1 percent this week, the most since September.

BlackBerry, the Waterloo, Ontario-based smartphone maker, slumped 6.6 percent to C$9.31, the worst decline since November, erasing earlier gains of as much as 6.8 percent to extend a losing streak to four days. BlackBerry posted sales of $976 million in the quarter, a 64 percent slump compared with year- ago figures.

The company also reported an adjusted loss of 8 cents a share, ahead of the 57-cent loss forecast in a Bloomberg survey of analysts.

John Chen, who took over as chief executive officer in November, is working to eliminate a third of the company’s workforce and signed a deal with Foxconn Technology Group to outsource some of its handset production, distribution and design. Last week, BlackBerry agreed to sell most of its real estate in Canada, which could fetch more than $500 million.

US

By Lu Wang and Callie Bost

March 28 (Bloomberg) — U.S. stocks climbed after a two-day slide, as consumer shares rebounded amid data showing household purchases rose the most in three months. Biotechnology shares extended losses, weighing on the Nasdaq Composite Index.

H&R Block Inc. and GameStop Corp. climbed at least 6.2 percent, leading gains among consumer shares. Cognizant Technology Solutions Corp. rallied 4.4 percent after Morgan Stanley raised its recommendation on the stock. The Nasdaq Composite almost erased a 1.3 percent rally as Gilead Sciences Inc. and Biogen Idec Inc. tumbled more than 4 percent, capping the week’s sell-off in riskier assets.

The Standard & Poor’s 500 Index added 0.5 percent to 1,857.62 at 4 p.m. in New York, trimming its loss for the week to 0.5 percent. The Dow Jones Industrial Average rose 58.83 points, or 0.4 percent, to 16,323.06 today. The Nasdaq Composite increased 0.1 percent to 4,155.759, completing the week with a 2.8 percent drop.

“It’s been a choppy market,” Mike McGarr, a portfolio manager at Becker Capital Management Inc. in Portland, Oregon, said by phone. The firm oversees $2.8 billion. “There has been a very noticeable change this month, away from those sorts of high flyers, and back toward value. It’s nice to see the market coming back to more fundamentally real stories.”

Investors have been selling the bull market’s biggest winners, locking in gains as they assess how much of the recent economic weakness is weather-related and if the situation in Ukraine will worsen.

The Nasdaq Biotechnology Index slumped 2.8 percent today, pushing its loss this week to 7 percent. The gauge rallied 79 percent in the 12 months through February. The Russell 2000 Index fell all but one day this week for a 3.5 percent decline.

The measure for smaller companies is down 1 percent this quarter, poised to snap a six-quarter streak of gains, the longest stretch since 1996.

Gilead, the world’s largest maker of HIV medicines, sank 4 percent today to $68.55. Biogen Idec Inc., maker of the multiple sclerosis drugs, tumbled 5.1 percent to $294.12.

Money is flowing to large companies with stable earnings.

Microsoft Corp. surged 2.4 percent today to $40.30 for the biggest gain in the Dow. Energy shares climbed 1.2 percent while Exxon Mobil Corp. added 1.5 percent to $97.70.

Consumer-discretionary shares rallied 0.8 today as data showed household spending in the U.S. rose in February by the most in three months as incomes increased.

Americans were shaking off the effects of the coldest winter in four years as they ventured out to shop, supported by a job market that’s also picking up speed.

Separate data indicated consumer confidence fell less than previously estimated in March.

“If consumers go back in and are confident enough to start spending again, that supports earnings and will certainly support the equity market,” Chris Gaffney, senior market strategist at EverBank Financial in St. Louis, said by phone.  “I feel like we’re forming a base that we can move high now.”

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as VIX, retreated 1.4 percent to 14.41. About 6 billion shares changed hands on U.S. exchanges, 12 percent below the three-month average.

Consumer stocks in the S&P 500 rebounded from a five-day slide. H&R Block, the biggest U.S. tax preparer, climbed 6.2 percent to $30.36 while GameStop, a video-game retailer, advanced 8.8 percent to $40.62.

Restoration Hardware Holdings Inc. surged 13 percent to $71.93. The home-furnishings retailer forecast that adjusted profit will be between 9 cents a share and 11 cents in the first quarter, compared with analysts’ estimates for 6 cents. It said annual profit will be as much as $2.22 a share, beating the average projection for $2.18.

Cognizant gained 4.4 percent to $49.69. The provider of consulting and outsourcing services was boosted to overweight, an equivalent of buy, by Morgan Stanley. The company’s growth potential may have been under-estimated, analyst Katy Huberty wrote in a note.

PG&E Corp. fell 4 percent to $41.89. Charges to be filed by the U.S. Attorney’s office will accuse the company of violating the federal Pipeline Safety Act, leading to the explosion and deaths, according to a company statement. PG&E didn’t say when it expects the charges to be filed, and said it believes they aren’t merited.

Red Hat Inc. slipped 7 percent to $52.23. The largest seller of Linux operating-system software said it expects to earn $1.56 a share this year. That trailed the average analyst estimate of $1.62 in a Bloomberg survey.

BlackBerry Ltd. dropped 7.1 percent to $8.41. The smartphone maker said sales won’t grow until the fiscal year that begins next March, even after cost-cutting helped the company post a smaller quarterly loss than analysts estimated.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

I see these things with an intense joy,

and while I observe, there is no observer, only a beauty almost like love.

For an instant, I am absent, myself and my problems, my anxieties, my troubles: nothing but this wonder exists.

Krishnamurti, 1895-1986

As ever,

 

Carolann

The question isn’t who is going to let me; it’s who is going to stop me.

-Ayn Rand, 1905-1982

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

From Dorothy Wordsworth’s Journal, March 27^th, 1802:

A divine morning.  At breakfast William wrote part of an ode.  Mr Oliff sent the dung and William went to work in the garden.  We sat all day in the orchard.

The ode referred to became “Intimations of Immortality,” of which Gerard Manley Hopkins said: “For my part I should think St George and St Thomas of Canterbury wore roses in heaven for England’s sake on the day that ode, not without their intercession, was penned.

Dove Cottage, Grasmere, the Wordsworths’ Lakeland home.

Photos of the day

A Panamanian golden frog is held up at the aquarium in Vancouver, British Columbia. The aquarium has successfully bred the frogs, thought to be extinct in the wild, as part of a worldwide effort to preserve the species. They are native to the mountainous, higher-altitude regions of western-central Panama. Darryl Dyck/The Canadian Press/AP

Visitors walk under umbrellas symbolizing the earth’s environment in Seoul, South Korea. Lee Jin-man/AP

Market Closes for March 27^th, 2014

Market  Index	Close	Change
Dow  Jones	16264.23	-4.76    -0.03%
S&P 500	1849.04	-3.52    -0.19%
NASDAQ	4151.234	-22.344    -0.54%
TSX	14178.84	-5.26
		-0.04%

International Markets

Market  Index	Close	Change
NIKKEI	14622.89	+145.73
		+1.01%
HANG  SENG	21834.45	-53.30
		-0.24%
SENSEX	22214.37	+119.07
		+0.54%
FTSE 100	6558.32	-16.98
		-0.26%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.435	2.443
CND.  30 Year Bond	2.934	2.960
U.S.   10 Year Bond	2.6810	2.6901
U.S.  30 Year Bond	3.5271	3.5406

Currencies

BOC Close	Today	Previous
Canadian $	0.90632	0.90065
US  $	1.10336	1.11031
Euro Rate  1 Euro=		Inverse
Canadian  $	1.51629	0.65950
US  $	1.37424	0.72767

Commodities

Gold	Close	Previous
London Gold  Fix	1291.00	1303.57
Oil	Close	Previous
WTI Crude Future	101.28	100.26
BRENT	109.360	109.360

Market Commentary:

Canada
By Gerrit De Vynck

March 27 (Bloomberg) — Canadian stocks fell to a one-month low, led by gold miners, as U.S. congressional leaders passed bills imposing more sanctions on Russia.

Kinross Gold Corp. retreated 4.9 percent for the biggest loss in the Standard & Poor’s/TSX Index. BlackBerry dropped 1.8 percent after Societe Generale SA analysts recommended selling the stock. Africa Oil fell 13 percent after a well in Kenya failed to find viable crude deposits.

The S&P/TSX fell 5.26 points, or less than 0.1 percent, to 14,178.84 at 4 p.m. in Toronto, extending yesterday’s 0.8 percent decline that was the biggest since Feb. 3.

“It’s a tug of war,” Paul Gardner, a portfolio manager at Avenue Investment Management, said in a phone interview from Toronto. He helps manage about C$300 million ($272.2 million).

“You’re always dealing with the political risk coming out of Russia and the Ukraine and on the other side you have positive economic numbers coming out of the U.S.”

The Senate bill, passed on a voice vote, includes about $1 billion in loan guarantees and authorizes $150 million in direct assistance to Ukraine. The House legislation would impose additional asset freezes and visa bans on senior Russian officials and corporations.

U.S. gross domestic product grew at a 2.6 percent annualized rate in the last quarter of 2013, faster than previously estimated but slower than the 2.7 percent median forecast of 79 economists surveyed by Bloomberg.

BlackBerry fell 1.8 percent to C$9.97 as Societe General analyst Andy Perkins cut his recommendation on the company’s shares to sell from hold.

Kinross lost 4.9 percent to C$4.46 for a fifth day of losses. The stock has fallen 22 percent in the past two weeks to the lowest since January 2002.

Silver futures posted the longest slump in 13 years and gold dropped to a six-week low as signs of an improving U.S. economy cut demand for haven assets.

Africa Oil fell 13 percent to C$7.50 after saying it plugged and abandoned an oil well that failed to find viable crude reserves at its Emong-1 property in Kenya. The company said it will move the rig to search a different area.

Southern Pacific Resources Corp. rose 23 percent to 33 Canadian cents after Raymond James Ltd. upgraded the oil and gas explorer and said it was a likely takeover target.

ProMetic Life Sciences Inc. rose 3.6 percent to C$1.14 after the pharmaceutical company said it would spend more time developing its products before entering commercial partnerships, allowing it to hold on to more of the profits.

US
By Lu Wang and Callie Bost

March 27 (Bloomberg) — U.S. stocks fell for the fourth time in five days, led by banks and technology companies, as investors resumed a rotation out of the bull market’s biggest winners.

Citigroup Inc. dropped the most since 2012 after its capital plan failed Federal Reserve stress tests. Accenture Plc fell 5 percent after saying it anticipates a continued “challenging” environment for its business. GameStop Corp. lost 4 percent after its earnings forecast trailed analysts’ estimates. Baxter International Inc. jumped 3.9 percent after announcing plans to split into two companies. Alcoa Inc. rallied 6.2 percent to the highest since 2011.

The Standard & Poor’s 500 Index declined 0.2 percent to 1,849.04 at 4 p.m. in New York, trimming a loss of as much as0.6 percent. The Dow Jones Industrial Average fell 4.76 points, or less than 0.1 percent, to 16,264.23. The Nasdaq Composite Index sank 0.5 percent to the lowest since Feb. 10.

“People are reducing their risk portfolios a little bit,”John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said by phone. The firm oversees about $1.9 billion. “Some of the speculative parts of the market have been selling off. If you own a stock and the reason you own it is it’s going up and it stops going up, there’s no reason to own it.”

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility also known as VIX, slid 2.1 percent to 14.62. About 7.2 billion shares changed hands on U.S. exchanges, 6 percent more than the three-month average.

Today’s drop left the S&P 500 unchanged for the year. Losses this month have been steepest in U.S. stocks that led the five-year-old bull market, with consumer discretionary companies falling 4.3 percent after quadrupling since March 2009.

The Nasdaq Biotechnology Index, up 304 percent in the last five years, has fallen 11 percent since the end of February, while the Russell 2000 gauge of smaller companies has slipped 2.7 percent after rallying more than 230 percent.

Some of the biggest losses have occurred in technology companies that sold shares to the public in the last few years.  Facebook Inc. has slipped 11 percent in March, while Yelp Inc. decreased 17 percent, Twitter Inc. declined 16 percent and Pandora Inc. dropped 20 percent. The Dow Jones Internet Composite Index of 40 companies has lost 8.5 percent this month.

Since reaching a 13-year high on March 5, the Nasdaq Composite has fallen 4.7 percent. Illumina Inc., Netflix Inc., Tesla Motors Inc. and TripAdvisor Inc. are all down at least 15 percent over that period.

The S&P 500 yesterday slid 0.7 percent after President Barack Obama warned that the crisis in Ukraine may escalate. The U.S. Senate and House passed separate bills today imposing additional sanctions on Russian officials for the nation’s annexation of Crimea.

Applications for unemployment benefits unexpectedly declined last week to an almost four-month low, a sign companies are confident in the outlook for demand, data today showed.

Gross domestic product grew at a 2.6 percent annualized rate from October through December, less than the 2.7 percent median forecast of 79 economists surveyed by Bloomberg.

Contracts to purchase previously owned U.S. homes unexpectedly fell in February for an eighth straight month, a sign of further weakness in the industry.

“The numbers were neutral from an investors’ standpoint,” Cameron Hinds, the Lincoln, Nebraska-based regional chief investment officer for Wells Fargo Private Bank, which has about $170 billion under management, said by phone. “There was no huge, market-moving information. GDP was slightly below, while claims numbers were a little bit more of a positive. It looks like we’re trending in the right direction from an economic standpoint.”

Investors have removed $6 billion from U.S. equity exchange-traded funds in the past five days and added $555 million to bond ETFs, data compiled by Bloomberg show. Health- care stocks saw the most money removed among industry ETFs, losing $991 million during the past week.

Financial companies fell 0.6 percent for the second-worst performance among 10 S&P 500 industries after technology stocks.

The KBW Bank Index declined 1.3 percent even as lenders announced more than $60 billion of dividends and share buybacks after the Fed approved capital plans for 25 of the 30 banks in its annual stress tests.

Citigroup lost 5.4 percent to $47.45. The bank failed to win approval to raise its dividend to 5 cents a share and put in place a $6.4 billion buyback. The Fed expressed concern about the lender’s ability to project losses in parts of its global operations and to reflect all business exposures in its internal stress test.

Accenture slumped 5 percent, the most since June, to $78.80. The world’s second-largest technology consulting company said eastern Europe adds to uncertainty even as it raised its full-year earnings projections.

GameStop dropped 4 percent to $37.33. The video-game retailer forecast full-year profit that trailed analysts’ estimates and said it will cut the number of its video-game stores by about 2 percent after last quarter’s sales fell short.

Baxter International jumped 3.9 percent to $72.80. The maker of hemophilia treatments will split into two companies, one focused on developing biotechnology and pharmaceutical medicines and one that sells medical products.

Alcoa surged 6.2 percent to $12.59, the highest since 2011.  A U.K. ruling against London Metal Exchange’s pending warehousing changes is positive for the largest U.S. aluminum producer, according to Sterne, Agee & Leach Inc.

Verizon Communications Inc. and AT&T Inc. rose at least 1 percent to lead an index of phone stocks to the biggest gain in the S&P 500.

Exxon Mobil Corp. jumped 1.6 percent to $96.24 for the steepest climb in the Dow as oil rose to a two-week high on supply concerns.

 

Have a wonderful evening everyone.

Be magnificent!

One must become poor inwardly

for then there is no seeking, no asking,

no desire – nothing!

It is inward poverty

that can see the truth of a life in which

there is not conflict at all.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Never let the fear of striking out get in your way.

-Babe Ruth, 1895-1948

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

February: The month of purification among the ancient Romans – the  Latin februum meaning purgation.  It is said that if the weather is fine and frosty at the close of January and the beginning of February, there is more winter ahead than behind.  Well, that appears to ring true in Victoria where the weather has been very fine, but we are supposedly going to experience snow on Sunday!  I just had a visit from a client who lives in Grande Prairie, Alberta and she was describing what it’s like there right now – six foot high snow banks, no green….I grew up in Montreal, so I remember winters just  like it.  She is an anaesthesiologist and said many of the people she works with have their pilot’s licenses and small planes in order to escape.   The draw is that they’re paid twice as much in Alberta as B.C. and kudos to the Redford government because their provincial health care plan is running a surplus this year.  So, they’ve opened the ORs on weekends for elective surgeries, and paying nurses overtime to work on weekends to keep them running.  Quite the contrast to the onerous wait times for surgeries in this province; one of the ORs here was even closed, extending wait times even more.

The Northwest Flower and Garden Show is taking place in Seattle this weekend with featured gardens for those seeking a contrast.  It is usually very good.  Tower of Power is playing at Jazz Alley  too for an added draw.

Photos of the day

Wildlife caretakers release a Grey Headed Flying Fox, also known as fruitbat, in Centennial Park in Sydney, Australia. Each year thousands of native wildlife are rescued by volunteers caught in anti bird netting. The Grey Headed Flying Fox is considered vulnerable to extinction. Rob Griffith/AP

A military helicopter flies over a Spanish cargo ship that slammed into a jetty in choppy Atlantic Ocean waters off Anglet, southwestern France. The ship had been heading to a nearby port to load up with cargo when its engine failed and the rough waves carried it into the jetty. Bob Edme/AP

Market Closes for February 5^th, 2014

Market  Index	Close	Change
Dow  Jones	15440.23	-5.01    -0.03%
S&P 500	1751.64	-3.56    -0.20%
NASDAQ	4011.552	-19.968    -0.50%
TSX	13559.69	+55.21
		+0.41%

International Markets

Market  Index	Close	Change
NIKKEI	14180.38	+171.91
		+1.23%
HANG  SENG	21269.38	-128.39
		-0.60%
SENSEX	20261.03	+49.10
		+0.24%
FTSE 100	6457.89	+8.62
		+0.13%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.391	2.340
CND.   30 Year Bond	2.988	2.930
U.S.   10 Year Bond	2.6693	2.6222
U.S.   30 Year Bond	3.6477	3.5934

Currencies

BOC Close	Today	Previous
Canadian $	0.90264	0.90251
US   $	1.10786	1.10803
Euro Rate  1 Euro=		Inverse
Canadian   $	1.49931	0.66697
US  $	1.35334	0.73891

Commodities

Gold	Close	Previous
London Gold   Fix	1258.11	1254.77
Oil	Close	Previous
WTI Crude Future	97.38	97.19
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Feb. 5 (Bloomberg) — Canadian stocks rose for a second day, after the benchmark index sank to the lowest level of the year this week, as a rally in energy and financial shares offset data showing U.S. companies added fewer jobs than forecast.

Royal Bank of Canada and Toronto-Dominion Bank rose at least 0.5 percent. Silver Standard Resources Inc. and Lundin Mining Corp. added more than 4.2 percent as precious metals prices advanced. Goldcorp Inc. lost 1.2 percent after agreeing to effectively freeze its hostile offer for Osisko Mining Corp.

Advantage Oil & Gas Ltd. dropped 8.9 percent after ending its strategic review process.

The Standard & Poor’s/TSX Composite Index increased 55.21 points, or 0.4 percent, to 13,559.69 at 4 p.m. in Toronto. The gauge has lost 1 percent this week. It has fallen 0.5 percent this year as the U.S. Federal Reserve pared stimulus and emerging-market currencies slumped amid signs China’s economy is slowing. Trading in S&P/TSX stocks was 16.3 percent higher than the 30-day average at the close.

“We’re still going through this consolidation correction where people are trying to figure out if tapering is going to accelerate or if growth expectations are too high,” Jeff Young, chief investment officer at NexGen Financial Corp., said in a phone interview. The Toronto-based firm manages about C$900 million ($811 million). “Friday’s jobs data is the next big point on the economic scene.”

Colder-than-normal weather limited progress in the U.S. job market as payrolls increased by 175,000, according to the ADP Research Institute in Roseland, New Jersey. The median projection of 40 economists surveyed by Bloomberg called for an advance of 185,000. Canada and the U.S. will both report employment data on Friday.

Another report showed Canadian building permits fell for a second month in December as multiple-unit housing projects dropped to the lowest level in nine months. The value of domestic municipal permits fell 4.1 percent to C$6.48 billion ($5.86 billion), following a 6.6 percent decline in November, Statistics Canada said today in Ottawa. Economists forecast a 1.5 percent gain according to the median of eight responses to a Bloomberg survey.

Six of 10 main industries in the S&P/TSX rose. Financial shares gained 0.9 percent. Royal Bank of Canada climbed 1.5 percent to C$69.08 and Toronto-Dominion increased 0.5 percent to C$47.86.

Energy shares gained 0.8 percent. TransGlobe Energy Corp. climbed 4.3 percent to C$7.82 and Penn West Petroleum Ltd. jumped 4 percent to C$8.52. Peyto Exploration & Development Corp. rose 3.8 percent to C$33.34.

Silver Standard jumped 6.4 percent to C$8.93 and Lundin increased 4.2 percent to C$4.96. Alacer Gold Corp. increased 3 percent to C$2.38.

Gold futures rose 0.5 percent after the U.S. payrolls report boosted demand for the metal as a store of value. The price of silver jumped 2 percent.

Goldcorp decreased 1.2 percent to C$27.48, reversing an earlier rally of as much as 2.3 percent. The Vancouver-based gold producer won’t take up and pay for any Osisko shares tendered to its bid before a judgment on a lawsuit filed by Osisko to block the takeover, Goldcorp said in a statement.

Goldcorp extended the deadline of the offer to March 10 from Feb. 19.

A trial will be held from March 3 to March 5 at the Quebec Superior Court, Montreal-based Osisko said yesterday in a statement. Osisko said Goldcorp misused confidential data in making its cash-and-stock bid. Goldcorp, the world’s second- largest gold producer by market value, denies the allegations.   Osisko fell 0.9 percent to C$6.53.

Advantage Oil & Gas slumped 8.9 percent, the biggest drop since September 2011, to C$4. The Calgary-based company didn’t get an acceptable offer after receiving expressions of interest on potential transactions, according to a statement.

Advantage also sold its shares in Longview Oil Corp.Longview fell 1.8 percent to C$4.37, an all-time low.

Atlantic Power Corp. slumped 3.8 percent to C$2.52, extending a four-day losing streak to 28 percent. Moody’s Investors Service downgraded the energy producer’s corporate family rating to B2 from B1 this week, citing high leverage.

US

By Lu Wang and Nick Taborek

Feb. 5 (Bloomberg) — U.S. stocks fell, sending the Standard & Poor’s 500 Index to its third loss in four days, as a private report showing companies added fewer jobs than forecast overshadowed acceleration in service industries.

Cognizant Technology Solutions Corp. fell 4.3 percent on a disappointing forecast. Estee Lauder Cos. dropped 5.5 percent as its quarterly earnings prediction missed estimates. 3D Systems Corp. slumped 15 percent after its projection trailed expectations amid sluggish consumer demand. Genworth Financial Inc. and Radian Group Inc. rallied at least 2.8 percent after posting profits from insuring U.S. mortgages.

The S&P 500 fell 0.2 percent to 1,751.64 at 4 p.m. in New York. The Dow Jones Industrial Average lost 5.01 points, or less than 0.1 percent, to 15,440.23. About 7.4 billion shares changed hands on U.S. exchanges, 18 percent above the three-month average.

“There’s uncertainty around the economic outlook,” Walter Todd, who oversees about $950 million as chief investment officer of Greenwood Capital Associates LLC in Greenwood, South Carolina, said in a phone interview. “People had a lot of confidence coming into this year that the economy was accelerating, and the recent set of economic statistics have thrown that into question.”

The S&P 500 added 0.8 percent yesterday, rebounding from its biggest slide since June, as companies from Yum! Brands Inc. to Michael Kors Holdings Ltd. reported profit that exceeded projections. The index is down 5.2 percent this year, and lost as much as 5.8 percent since reaching a record 1,848.38 on Jan. 15, the first decline of more than 5 percent since June 2013.

Should it follow the pattern from the 18 times that’s happened since 2009, the S&P 500 would fall to about 1,697 in the next week, then rebound to a new high by mid-April, according to data compiled by Bloomberg and Bespoke Investment Group.

The stock market’s decline this year is healthy and the S&P 500 probably will end 2014 higher, Leon Cooperman, chairman of hedge fund Omega Advisors Inc., said on Bloomberg Television.

BlackRock Inc. Chief Executive Officer Laurence D. Fink said in a separate interview that the recent market decline is a temporary setback as opposed to a departure from current economic growth.

“I look at this as a good old-fashioned correction,” Fink said today during an interview with Erik Schatzker and Stephanie Ruhle on Bloomberg TV’s “Market Makers.” Fink said BlackRock isn’t seeing long-term investors change their behavior.

The market may “unravel quickly” if the major indexes trade lower this week, Tom DeMark, the chief executive officer of DeMark Analytics LLC, said today in an interview on CNBC. If stocks fall today and open lower and trade lower tomorrow, he said, stocks are likely to continue falling regardless of Friday’s jobs data.

The Labor Department may report in two days that businesses added 188,000 employees in January after an 87,000 increase in December, according to the median forecast of economists surveyed by Bloomberg.

Companies added 175,000 payrolls last month as colder-than- normal weather limited progress in the U.S. job market, a report from ADP Research Institute in Roseland, New Jersey showed today. The median projection of 40 economists surveyed by Bloomberg called for an advance of 185,000.

“The market wants to see a happy report” on Friday and today’s ADP data “might mute them slightly,” Michelle Clayman, chief investment officer at New Amsterdam Partners in New York, which manages $1.6 billion. “The ADP number is not a bad number, but it’s certainly down from the rate of last time’s report and slightly below expectations so that’s making people a bit more cautious.”

A separate report today showed a gauge of service industries advanced more than forecast. The Institute for Supply Management’s non-manufacturing index increased to 54 in January from 53 the prior month. Readings greater than 50 signal expansion. The median forecast of 78 respondents in a Bloomberg survey called for a reading of 53.7.

The S&P 500 fell 3.6 percent in January, its first monthly decline since August as the Fed pared stimulus and emerging- market currencies slumped amid signs China’s economy is slowing.

Federal Reserve Bank of Philadelphia President Charles Plosser, who votes on policy this year, said today that he expects the economy to expand 3 percent in 2014 as the jobless rate falls to 6.2 percent by year-end, warranting a quicker tapering to bond purchases by the central bank.

Some 26 companies on the S&P 500 report quarterly results today. Profit for the benchmark’s stocks probably increased by 8.3 percent in the fourth quarter of 2013 and revenue by 2.5 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index added 4.4 percent today to 19.95. The gauge of S&P 500 options known as the VIX has surged 45 percent this year.

Six of 10 S&P 500 industry groups fell as energy, health- care and telephone shares sank at least 0.6 percent for the worst performance. Chevron Corp. lost 1.2 percent to $109.52, among the biggest drops in the Dow.

Cognizant fell 4.3 percent to $92.85. The provider of outsourcing services forecast adjusted earnings of at least $5.02 a share for 2014. That compared with the average analyst estimate for $5.08.

Estee Lauder retreated 5.5 percent to $65.36. The maker of cosmetics and skin care products said it expects to earn no more than 55 cents a share in the fiscal third quarter. That missed the average analyst estimate of 64 cents in a Bloomberg survey.

3D Systems tumbled 15 percent to $64.10. The maker of three-dimensional printers said it expects to earn 85 cents a share this year. Analysts, on average, estimated $1.29.

Gilead Sciences Inc. slipped 4.7 percent to $78.15 even as fourth-quarter earnings beat analysts’ estimates, helped by rising sales from a new medicine for hepatitis C. Shares of the world’s largest maker of HIV drugs more than doubled in the 12 months through yesterday.

Genworth climbed 2.8 percent to $14.93 while Radian jumped 6 percent to $15.19. Genworth, which also offers life insurance and long-term care coverage, had a $6 million operating profit at its U.S. mortgage insurer, compared with a loss a year earlier. Radian reported net income of $36.4 million, after a $177.3 million loss in the last three months of 2012.

Myriad Genetics Inc. surged 15 percent to $31.29. The breast-cancer test provider forecast earnings in 2014 will be $2.09 to $2.12 a share. that’s higher from a November prediction that profit would be no more than $1.97 a share.

Sprint Corp. rallied 8.4 percent to $8.50. The company is getting close to securing $45 billion financing to make an offer for T-Mobile US Inc., DealReporter said, citing people familiar with the situation.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

If a man does not of his own free will put himself last among his creature,

there is not salvation for him.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

Fast is fine but accuracy is everything.

–Xenophon, 431 BC- 365 BC

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Facebook turns 10 today.  It was February 4, 2004 that Mark Zuckerberg launched Facebook while still an undergrad at Harvard.

And…it was 50 years ago this month that the Beatles sparked Beatlemania  with their appearance on the Ed Sullivan Show.

To commemorate, CBS will host The Night That Changed America: A Grammy Salute to the Beatles on the anniversary night, February 9^th at 8 PM.  The Eurythmics, Annie Lennox and David Stewart, are reuniting to perform songs by the Fab Four.   Other artists paying tribute include Alicia Keys, John Legend, John Mayer, Keith Urban and Maroon 5.

Photos of the day

The Tungurahua volcano spews lava, seen from Huambalo, Ecuador. An orange alert was issued in response to the volcanic activity. Cris Toala Olivares/Reuters

A bicyclist crosses Douglas Avenue in downtown Wichita, Kan., during a heavy snowstorm. South-central Kansas is expecting up to seven inches of snow as a winter storm passes through. Travis Heying/The Wichita Eagle/AP

Market Closes for February 4^th, 2014

Market  Index	Close	Change
Dow  Jones	15445.24	+72.44    +0.47%
S&P 500	1756.95	+15.06    +0.86%
NASDAQ	4031.520	+34.562    +0.86%
TSX	13489.86	+3.66
		+0.03%

International Markets

Market  Index	Close	Change
NIKKEI	14008.47	-610.66
		-4.18%
HANG  SENG	21397.77	-637.65
		-2.89%
SENSEX	20211.93	+2.67
		+0.01%
FTSE 100	6449.27	-16.39
		-0.25%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.340	2.296
CND.   30 Year Bond	2.930	2.887
U.S.   10 Year Bond	2.6222	2.5761
U.S.   30 Year Bond	3.5934	3.5307

Currencies

BOC Close	Today	Previous
Canadian $	0.90251	0.89968
US   $	1.10803	1.11150
Euro Rate  1 Euro=		Inverse
Canadian   $	1.49715	0.66794
US  $	1.35110	0.74014

Commodities

Gold	Close	Previous
London Gold   Fix	1254.77	1257.23
Oil	Close	Previous
WTI Crude Future	97.19	96.43
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Feb. 4 (Bloomberg) — Canadian stocks climbed, after a two- day slump sent the benchmark index to the lowest level of the year, as a rise in industrial stocks offset declines in financial and utilities shares.

BlackBerry Ltd. rose 5.6 percent after CIBC World Markets analysts said the company’s operating expenses may be lower than forecasts. WestJet Airlines Ltd. added 3.4 percent after boosting its dividend. Crew Energy Inc. climbed 6.7 percent as natural-gas prices jumped. Silver Standard Resources Inc. fell 1.9 percent after agreeing to buy a mine from Goldcorp Inc. and Barrick Gold Corp.

The Standard & Poor’s/TSX Composite Index rose 18.28 points, or 0.1 percent, to 13,504.48 at 4 p.m. in Toronto. The gauge has dropped 3.5 percent since closing Jan. 20 at 13,990.29, the highest level since April 2011. Trading in S&P/TSX stocks was 7.8 percent higher than the 30-day average at the close.

“There’s not much movement in any sector today,” Gareth Watson, vice president of investment management and research at Richardson GMP Ltd., which oversees C$28 billion ($25 billion), said by phone from Toronto. “It’s been a flat day relative to what you’re seeing in other markets. Our markets haven’t pulled back as much as the U.S., so you haven’t seen the same amount of movement today on our side of the border.”

About $2.9 trillion has been wiped from the value of equities worldwide this year, following the biggest rally in four years in 2013, as China’s growth slows, the Federal Reserve cuts stimulus and anti-government protests spread in emerging markets from Thailand to Ukraine.

The MSCI Emerging Markets Index retreated 1 percent today, extending this year’s slide to 8.5 percent. The Standard & Poor’s 500 Index climbed 0.8 percent after sinking 2.3 percent yesterday. European stocks fell 0.2 percent after earlier losses of as much as 0.8 percent.

Canadian equities have declined 0.9 percent since the beginning of the year, making it the seventh-best performer among 24 developed markets tracked by Bloomberg. Last year, the S&P/TSX rose 9.6 percent, the fourth-worst performance among developed markets, ahead of Austria, Hong Kong and Singapore.

Five of 10 main industries in the index advanced today.

Industrials climbed 0.9 percent and raw-material producers increased 0.5 percent. Energy shares rose 0.4 percent.

BlackBerry jumped 5.6 percent to C$10.64, ending a three- day losing streak of 9.4 percent. CIBC analyst Todd Coupland wrote that the smartphone maker sees itself becoming cash-flow positive by the fourth quarter of 2015. BlackBerry’s quarterly expenses may fall to $500 million from about $900 million, Coupland wrote.

WestJet surged 3.4 percent to C$25.70. The carrier raised its dividend for the fourth time in less than three years after reporting an 11 percent increase in fourth-quarter profit as it flew more passengers.

WestJet is also pressing ahead with a plan to cut C$100 million in expenses by the end of 2014, a year ahead of schedule, Gregg Saretsky, chief executive officer, said on a conference call with analysts.

Crew Energy increased 6.7 percent to C$7.37, the highest level since March, as the price of natural gas in Canada surged.

Silver Standard dropped 1.9 percent to C$8.39. The explorer of the precious metal will purchase the Marigold mine in Nevada for $275 million. Goldcorp rose 1.2 percent to C$27.82, while Barrick fell 1 percent to C$21.21.

Atlantic Power Corp. slipped 2.6 percent to C$2.62, bringing losses this week to 10 percent. Yesterday, Moody’s Investors Service downgraded the energy producer’s corporate family rating to B2 from B1, citing high leverage.

US

By Lu Wang

Feb. 4 (Bloomberg) — U.S. stocks advanced, with the Standard & Poor’s 500 Index rebounding from its biggest drop since June, as investors assessed corporate earnings and data showing factory orders fell less than estimated in December.

Yum! Brands Inc. climbed 8.9 percent after the fast-food retailer reported profit that beat estimates. Michael Kors Holdings Ltd. rallied 17 percent as the luxury-goods maker increased its profit and sales forecasts. Pfizer Inc. advanced 2.8 percent amid an analyst upgrade. J.C. Penney Co. plunged to the lowest level since 1980 after same-store sales rose less than analysts’ estimated.

The S&P 500 climbed 0.8 percent to 1,755.20 at 4 p.m. in New York. The Dow Jones Industrial Average added 72.44 points, or 0.5 percent, to 15,445.24. About 7.6 billion shares changed hands on U.S. exchanges, 21 percent above the three-month average.

“Main Street is still chugging along. Earnings have been fine,” Ethan Anderson, senior portfolio manager at Rehmann Financial in Grand Rapids, Michigan, said in a phone interview.  His firm oversees $1.5 billion. “You put all these together and I’m just not seeing anything that’s suggesting that the train is off the track. We’re pretty much in a very healthy pullback. To me, it’s refreshing.”

The S&P 500 sank 2.3 percent yesterday, as a manufacturing gauge retreated more than estimated, raising concern about the strength of growth in the world’s largest economy. The equities benchmark slipped 5.8 percent since its Jan. 15 record through yesterday, giving it the first drop of at least 5 percent since June. The Dow average plunged 326 points yesterday, bringing its retreat this year to 7.3 percent.

The Dow has risen 0.5 percent on average the day after a loss of more than 300 points during the bull market that began in March 2009, according to data from Bespoke Investment Group LLC. The average 5 percent decline in the S&P 500 during that time has lasted 25 days and extended to a drop of 8.2 percent, the data show.

The losses this year had wiped more than $1.2 trillion off U.S. share prices amid signs of slowing growth in China and as the Argentinian government’s decision to allow the peso to devalue triggered a rout in emerging-market currencies.      The Federal Reserve last week decided to press on with reductions in its monthly bond-buying program.

“The biggest concern for investors right now is, is this the beginning of a bigger pullback in the market?” Joseph Tanious, a global market strategist at JPMorgan Asset Management in New York, said by phone. His firm oversee $1.5 trillion in client assets. “If you look at economic growth, the earnings season and the health of corporate America, all those things appear to be doing quite well. Our advice to investors is to use the dip as the buying opportunity.”

Orders for factory goods in December fell 1.5 percent, less than the average economists’ estimate of a 1.8 percent decline in a Bloomberg survey, data from the Census Bureau showed today.

The U.S. will post the narrowest budget deficit this year as a share of the economy since 2007 as stronger growth helps boost tax revenue, according to the Congressional Budget Office.  The deficit will decline to $514 billion this fiscal year, or 3 percent of the economy, the office forecast.

Investors snapping up insurance against stock losses have pushed the cost of options to a record increase for the start of a year. The Chicago Board Options Exchange Volatility Index jumped 34 percent last month for the biggest January advance since it was created in 1990, according to data compiled by Bloomberg. The VIX plunged 11 percent today, the most since Dec. 18, to 18.65 after climbing 16 percent yesterday to a one-year high.

Fed policy makers said on Jan. 29 that the central bank will reduce its monthly bond purchases by $10 billion to $65 billion, cutting the pace of stimulus for a second straight meeting because of an improving economy.

Fed Bank of Richmond President Jeffrey Lacker said today that a decline in global stock markets probably won’t deter the Fed from further trimming bond purchases.

Three rounds of Fed bond buying have helped drive the S&P 500 up 159 percent from a 12-year low in 2009 while pushing capital into emerging markets in search of higher returns. The S&P 500 surged 30 percent last year, driving valuations to near the highest levels since 2009.

Some 25 companies on the S&P 500 report quarterly results today. Profit for the benchmark’s stocks probably increased by 8.3 percent in the fourth quarter of 2013 and revenue by 2.5 percent, analysts’ estimates compiled by Bloomberg show.

Nine out of 10 S&P 500 main industries advanced as consumer-discretionary, telephone and health-care shares jumped more than 1 percent to lead the rebound. Merck & Co. climbed 2.8 percent to $53.51 for the biggest increase in the Dow. The second-largest U.S. pharmaceuticals company is scheduled to announce earnings tomorrow.

Yum Brands rose 8.9 percent to $72.06. The owner of the KFC and Taco Bell fast-food chains posted profit excluding some items of 86 cents a share in the final three months of 2013, more than the 79-cent average analyst projection compiled by Bloomberg. Sales at restaurants open at least a year for its international unit, which includes France and Russia, climbed 2 percent in the period.

Michael Kors jumped 17 percent to a record $89.91. Annual earnings will probably reach as much as $3.09 a share, more than a November forecast for profit of $2.81 at most, according to a statement today. The company also boosted its full-year sales forecasts after customers in Europe and in North America bought more of its products, which include accessories, footwear, watches and jewelry.  Fossil Inc., the maker of the namesake watch brand, gained 6.1 percent to $114.57.

Pfizer climbed 2.8 percent to $31.44. The world’s largest drugmaker will likely announce more details on a new organizational structure and launch its breast cancer treatment, palbociclib, later this year, Jeffrey Holford, an analyst with Jefferies Group LLC, wrote in a note. He raised the stock’s rating to buy from hold.

McGraw Hill Financial Inc. rose 3.5 percent to $77.02, leading gains among financial companies. The parent of the Standard & Poor’s reported fourth-quarter profit that exceeded analysts’ estimates even as company bond sales slowed.

J.C. Penney slumped 11 percent to $5.08, the lowest level since December 1980. The department-store chain said sales at locations open at least a year rose 2 percent in the fiscal fourth quarter. That missed the average 4.1 percent gain projected by analysts in a Bloomberg survey.

Take-Two Interactive Software Inc., maker of the “Grand Theft Auto V” video game, tumbled 9.7 percent to $17.06. The company forecast profit would not exceed 10 cents a share this quarter, missing the average analyst projection of 13 cents.

Take-Two estimated revenue of $170 million to $200 million, also falling short of estimates.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

You can live with few clothes or with one meal a day, but that is not simplicity.

So be simple, don’t live in a complicated way, contradictory and so on, just be simple inwardly.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

The two most powerful warriors are patience

and time.

-Leo Tolstoy, 1828-1910

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

Writer Gertrude Stein was born on this day in 1874.  I just finished reading a novel that was published by Paula McLean in 2012 entitled The Paris Wife. It is told through the eyes of Hadley Richardson, Ernest Hemingway’s first wife.  It is a portrait of a marriage, and of a writer’s early struggle to come into his own, but it is also a glimpse into the Paris of the early 1920’s when many American and English expatriots lived the Bohemian existence of struggling artists in the city of light.  It describes the importance of Gertude Stein’s Paris salon to the artists and intellectuals who gathered and her early friendship with Hemingway.  All in all, a good read.

Wasn’t that a game yesterday?

Photos of the day

Seattle Seahawks Malcom Smith makes an angel in the confetti after his team defeated the Denver Bronocs in the NFL Super Bowl XLVIII football game in East Rutherford, New Jersey. Shannon Stapleton/Reuters

Denver Broncos quarterback Peyton Manning runs off the field after being defeated by the Seattle Seahawks in the NFL Super Bowl XLVIII football game in East Rutherford, New Jersey. Shannon Stapleton/Reuters

Market Closes for February 3^rd, 2014

Market  Index	Close	Change
Dow  Jones	15372.80	-326.05    -2.08%
S&P 500	1741.89	-40.70    -2.28%
NASDAQ	3996.958	-106.919    -2.61%
TSX	13486.20	-208.74
		-1.52%

International Markets

Market  Index	Close	Change
NIKKEI	14619.13	-295.40
		-1.98%
HANG  SENG	22035.42	-106.19
		-0.48%
SENSEX	20209.26	-304.59
		-1.48%
FTSE 100	6465.66	-44.78
		-0.69%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.296	2.339
CND.   30 Year Bond	2.887	2.925
U.S.   10 Year Bond	2.5761	2.6440
U.S.   30 Year Bond	3.5307	3.5985

Currencies

BOC Close	Today	Previous
Canadian $	0.89968	0.89845
US   $	1.11150	1.11303
Euro Rate  1 Euro=		Inverse
Canadian   $	1.50348	0.66512
US  $	1.35266	0.73929

Commodities

Gold	Close	Previous
London Gold   Fix	1257.23	1244.55
Oil	Close	Previous
WTI Crude Future	96.43	97.49
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Feb. 3 (Bloomberg) — Canadian stocks declined, sending the benchmark index to the lowest level of the year, as energy and industrial shares slumped after manufacturing gauges in China and the U.S. weakened.

Energy producers retreated as Atlantic Power Corp. plunged 7.9 percent. BlackBerry Ltd. dropped 4.5 percent for a third straight day of losses. Cameco Corp. tumbled 5.3 percent after Canaccord Genuity Corp. analysts cut the stock’s rating. Semafo Inc. jumped 2.2 percent after Macquarie North America analysts said it may be a target for mergers and acquisitions.

The Standard & Poor’s/TSX Composite Index decreased 208.74 points, or 1.5 percent, to 13,486.20 at 4 p.m. in Toronto. The gauge erased its gain for the year, falling 1 percent for 2014.

Trading in S&P/TSX stocks was 2.8 percent higher than the 30-day average at the close.

“There’s some worry about what’s going on in emerging markets and if it’s now spreading to developed markets and what the ramifications of this will be,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about C$4.5 billion ($4.1 billion).

“There’s just a general risk aversion that has come into the market today.”

The Institute for Supply Management’s factory index, a measure of U.S. manufacturing activity, decreased to 51.3 in January from 56.5 the prior month, the Tempe, Arizona-based group’s report showed today. Readings above 50 indicate expansion.

China’s Purchasing Managers’ Index decreased in January as output and orders slowed. The gauge was at 50.5 last month, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Feb. 1 in Beijing. The reading in December was at 51. A number above 50 indicates expansion.

Gold for April delivery rallied 1.6 percent as declining global equity markets boosted demand for haven assets. The MSCI All-Country World Index dropped 1.6 percent, while emerging- markets shares slid 1.1 percent.

All 10 main industries in the S&P/TSX retreated at least 1 percent. Technology shares tumbled 2.9 percent, while industrials lost 2 percent. Consumer-discretionary shares and financials declined at least 1.3 percent.

Utilities slid 1.4 percent as Atlantic Power plunged 7.9 percent to C$2.69, an all-time low. Just Energy Group Inc. fell 4.6 percent to C$7.45 and ATCO Ltd. slipped 2.6 percent to C$48.55.

BlackBerry declined 4.5 percent to C$10.08, extending a three-day losing streak to 9.4 percent. Last week, a person familiar with the matter said Lenovo Group Ltd. considered the Motorola Mobility handset unit a better fit for the company than BlackBerry. Lenovo agreed to buy Motorola’s handset unit from Google Inc. for $2.91 billion. Lenovo’s chief financial officer said last year the company was considering a possible deal with BlackBerry.

Cameco tumbled 5.3 percent, the biggest drop since March 2012, to C$22.41. Canaccord analyst Gary Lampard downgraded the uranium explorer’s rating to sell from hold.

Semafo Inc. jumped 2.2 percent to C$3.67. Macquarie analysts led by Michael Gray wrote that the gold mining company could potentially be bought by producers of the precious metal such as Agnico Eagle Mines Ltd., Argonaut Gold Corp. and B2Gold Corp.  B2Gold climbed 2.7 percent to C$2.70. Argonaut increased 1.8 percent to C$5.

US

By Lu Wang

Feb. 3 (Bloomberg) — U.S. stocks fell, sending benchmark indexes to their biggest declines since June, as manufacturing in the world’s largest economy slowed more than estimated.

All but nine stocks in the Standard & Poor’s 500 Index slipped, the broadest decline since April. Telephone shares plunged after AT&T Inc. introduced new service plans, the latest in an escalating price war among wireless carriers. Ford Motor Co. and General Motors Co. fell at least 2.3 percent after reporting declines in January auto sales. Jos. A. Bank Clothiers Inc. slid 5 percent after telling Men’s Wearhouse Inc. it will not enter takeover talks.

The S&P 500 fell 2.3 percent to 1,741.89 at 4 p.m. in New York, the lowest close since Oct. 17. The Dow Jones Industrial Average lost 326.05 points, or 2.1 percent, to 15,372.80. The gauge has fallen 7.3 percent this year to a three-month low.

About 9.5 billion shares changed hands on U.S. exchanges today, the busiest trading since Dec. 20.

“Everyone walked in this year expecting a continuation of at least growing economic activity and the latest data we’ve been seeing throw a bit of cold water on that theory,” Bill Schultz, chief investment officer who oversees about $1.1 billion at McQueen Ball & Associates in Bethlehem, Pennsylvania, said by phone. “Economic activity was not as strong as people expected. People are taking a pause, reassessing where they stand.”

The S&P 500 reached a record 1,848.38 on Jan. 15 and has since fallen 5.8 percent. The market last produced a loss of at least 5 percent in June, when the index dropped 5.8 percent from a May high. The seven months between declines of at least 5 percent was the longest stretch since late 2006, according to Bespoke Investment Group LLC.

The benchmark for American equities sank 3.6 percent in January, its worst opening month since 2010, as the gauge dropped in each of the month’s final three weeks, the longest streak since 2012. Stocks fell as the Federal Reserve trimmed its bond-buying program for the second time in as many months and emerging-market currencies tumbled amid signs growth was slowing in China. The country’s official Purchasing Managers’ Index decreased to a six-month low in January as output and orders slowed.

Data today showed factory activity in the U.S. expanded in January at the weakest pace in eight months as orders slumped, a sign manufacturing cooled at the start of the year along with the weather.

The Institute for Supply Management’s factory index decreased to 51.3 from 56.5 the prior month, the Tempe, Arizona- based group’s report showed. The median forecast of 85 economists surveyed by Bloomberg called for a decrease to 56.  Readings above 50 indicate expansion.

Fed policy makers said on Jan. 29 that the central bank will trim its monthly bond purchases by $10 billion to $65 billion, cutting the pace of stimulus for a second straight meeting because of an improving economy.

Three rounds of Fed bond buying has helped drive the S&P 500 up 157 percent from a 12-year low in 2009 while pushing capital into emerging markets in search of higher returns.

“The market is adjusting to the Fed taking the punch bowl away,” Douglas Cote, chief market strategist at ING U.S. Investment Management in New York, in a telephone interview. His firm oversees about $200 billion. “The fundamentals remain solid. Even though we’re in the correction phase, ultimately the path for the market is up.”

Treasury Secretary Jacob J. Lew today said the U.S. risks breaching the federal debt limit by the end of this month and called on Congress to raise it immediately to sustain economic momentum. The debt ceiling was suspended through Feb. 7 under an agreement between President Barack Obama and congressional Republicans in October. The Treasury Department uses so-called extraordinary measures, or accounting maneuvers, stay under the ceiling.

Anadarko Petroleum Corp. and Yum! Brands Inc. are among 11 S&P 500 companies reporting earnings today. Profit at companies in the benchmark gauge probably increased by 8.3 percent in the fourth quarter of 2013 and their revenue by 2.5 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index jumped 16 percent today to 21.44, the highest level since December 2012. The gauge of S&P 500 options known as the VIX is up 56 percent this year.

The Nasdaq Composite Index plunged 2.6 percent for its biggest decline since June 2012. The Russell 2000 Index slumped 3.2 percent for its steepest slide since April and the Dow Jones Transportation Average lost 3.2 percent to its lowest since November.

All 10 main S&P 500 groups retreated at least 0.8 percent.

Financial, industrial and consumer-discretionary stocks fell more than 2.5 percent.

Phone stocks plunged 3.7 percent, the most since August 2011, to lead declines. AT&T dropped 4.1 percent to $31.95 for the biggest loss in the Dow, while Verizon Communications Inc. fell 3.4 percent to $46.41.

AT&T’s new offer cuts $40 a month from premium users’ bills. The move is an escalation of competition in the mobile market where AT&T and T-Mobile US Inc. have run back-and-forth attack ads and offered $450 in credit to entice customers to switch service providers.

Ford fell 2.7 percent to $14.55, the seventh drop in eight days that left the stock at its lowest level since May. GM slipped 2.3 percent to $35.25. The largest U.S. automakers reported wider declines in deliveries than analysts estimated as the coldest January in two decades kept some shoppers from dealerships. Sales of cars and light trucks fell 12 percent for GM and 7.5 percent for Ford, according to company statements.

Jos. A. Bank dropped 5 percent to $53.39. The retailer, which told Men’s Wearhouse Inc. it won’t enter buyout talks, has been looking at other acquisitions including retailer Eddie Bauer, people familiar with the matter said.

Pfizer Inc. added 0.7 percent to $30.60 for the only gain in the 30-stock Dow index. The world’s largest drugmaker said a phase 2 trial of palbociclib plus letrozole achieved its primary endpoint in treating post-menopausal women with advanced breast cancer.

ArthroCare Corp. rallied 8.2 percent to $49.12. Smith & Nephew Plc agreed to buy the company for $48.25 a share, or $1.7 billion in cash, to add products for minimally invasive surgery used in sports medicine.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

What is the world?  It is the earth below and the sky above and the air in space that connects them.

What is light?  It is fire below and the sun above – and the lightning that connects them.

What is education?  It is the teacher above and the disciple below – and the wisdom that connects them.

Taittiriya Upanishad

As ever,

 

Carolann

 

A rose is a rose is a rose.

-Gertrude Stein, 1894-1946

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1958:

56 years ago

Wernher von Braun, in conjunction with the U.S. Army, launches the first U.S. satellite, Explorer I.

I plan to finally get to see Gravity this weekend.  People have told me that it’s one movie that you should see in a movie theatre and it feels like you are in outer space.    Speaking of movies, we went to see American Hustler a few weeks ago and I thought it was terrific; I recommend it if you haven’t seen it yet.

Enjoy the Super Bowl on Sunday!

Photos of the day

A Seattle Seahawks fan wears a “12th Man” flag on “Super Bowl Boulevard” at Times Square, as part of the Super Bowl lead up, in New York. Andrew Kelly/Reuters

Year decorations with a golden horse are displayed outside a building in Hong Kong. Chinese communities around the world were welcoming the arrival of the year of the horse on Friday, Jan. 31 with equine-themed decorations and celebrations. Vincent Yu/AP

Market Closes for January 31^st, 2014

Market  Index	Close	Change
Dow  Jones	15698.85	-149.76    -0.94%
S&P 500	1782.59	-11.60    -0.65%
NASDAQ	4103.879	-19.246    -0.47%
TSX	13694.94	-40.34
		-0.29%

International Markets

Market  Index	Close	Change
NIKKEI	14914.53	-92.53
		-0.62%
HANG  SENG	22035.42	-106.19
		-0.48%
SENSEX	20513.85	+15.60
		+0.08%
FTSE 100	6510.44	-28.01
		-0.43%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.339	2.374
CND.   30 Year Bond	2.925	2.950
U.S.   10 Year Bond	2.6440	2.6949
U.S.   30 Year Bond	3.5985	3.6341

Currencies

BOC Close	Today	Previous
Canadian $	0.89845	0.89563
US   $	1.11303	1.11654
Euro Rate  1 Euro=		Inverse
Canadian   $	1.50120	0.66613
US  $	1.34875	0.74143

Commodities

Gold	Close	Previous
London Gold   Fix	1244.55	1243.50
Oil	Close	Previous
WTI Crude Future	97.49	98.23
BRENT	109.360	109.360

Market Commentary:

Canada

By Whitney Kisling

Jan. 31 (Bloomberg) — Canadian stocks fell, sending the benchmark equities gauge to a second weekly loss, as financial shares and materials producers sank after emerging-market currencies weakened.

Cameco Corp., Canada’s largest uranium miner, dropped 3.7 percent after selling its stake in Bruce Power. Atlantic Power Corp. plunged 17 percent after TD Securities Inc. cut its rating on the stock. Toronto-Dominion Bank slumped 0.9 percent to a six-week low, as an index of bank stocks dropped to the lowest since October. BlackPearl Resources Inc. climbed 1.2 percent after Canaccord Genuity Corp. recommended buying the shares.

The Standard & Poor’s/TSX Composite Index declined 40.34 points, or 0.3 percent, to 13,694.94 at 4 p.m. in Toronto. The gauge lost 0.2 percent in the past five days after dropping 1.3 percent last week. Trading volume was about 4.7 percent higher than the 30-day average.

“Everything relates to psychology, and the psychology of a fear of deflation, fear of China doing less well, the Fed and tapering,” Irwin Michael, fund manager at ABC Funds in Toronto, said in a phone interview. His firm manages about C$850 million.

“There’s still a real tug-of-war between the positive and negative forces out there.”

Copper fell for an eighth day in London, capping the longest losing streak since December 1998, on concern demand is set to weaken as the economy slows in China. West Texas Intermediate crude fell from the highest level of 2014 on concern that developing economies may shrink.

Canada’s gross domestic product expanded for a fifth straight month in November as the nation’s oil and gas production rebounded, Statistics Canada said today in Ottawa.

Consumer spending in the US. climbed more than forecast in December, even as incomes stagnated. Household purchases, which account for about 70 percent of the economy, rose 0.4 percent, after a 0.6 percent gain the previous month, Commerce Department figures showed today. The U.S. is Canada’s largest trading partner.

Seven of 10 industries in the S&P/TSX declined. Materials producers fell 0.3 percent as a group.

Financial stocks, which account for 34 percent of the index’s weighting, plunged 0.8 percent, extending a decline this year to 3.6 percent.

The S&P/TSX Banks Index lost 1.1 percent to a three-month low. TD Bank fell 0.9 percent to C$96.32 and Royal Bank of Canada slid 1.1 percent to C$68.93.

Cameco slipped 3.7 percent to C$23.67 in the biggest drop since July. The company is selling its stake in Bruce Power to Borealis Infrastructure, an investment arm of the Ontario Municipal Employees Retirement System, for C$450 million to focus on its uranium business. Bruce Power operates eight reactors at the world’s largest nuclear generating facility.

Atlantic Power plunged 17 percent to a record C$2.92 for the biggest drop in the index. The shares were cut to reduce from hold at TD Securities.

BlackPearl Resources, an oil and gas exploration and development company in Western Canada, climbed 1.2 percent to C$2.50. Canaccord Genuity Corp. recommended buying the shares, which have risen 10 percent in 2014.

TransCanada Corp., the Calgary-based company, rallied 1.2 percent to C$48.42, the biggest gain of the year. A proposed Keystone XL pipeline cleared a key hurdle today, with the U.S. State Department finding the Canada-U.S. oil pipeline would not greatly increase carbon emissions.

The S&P/TSX is up 0.5 percent in 2014, the seventh best performance among 24 developed markets. Canadian stocks fell short of American peers last year, gaining 9.6 percent compared to the 30 percent rally on the U.S. benchmark, as gold posted its worst annual decline since 1981.

Daily average moves in Canadian stocks are up in 2014. The S&P/TSX rose or fell an average of 0.51 percent per day this month, compared with 0.41 percent in December, according to data compiled by Bloomberg.

US

By Lu Wang

Feb. 1 (Bloomberg) — U.S. stocks fell for a third week, the longest slump since 2012 for the Standard & Poor’s 500 Index, after the Federal Reserve cut stimulus even as a rout in emerging markets spurred concern about the global economy.

Apple Inc. sank 8.3 percent after its sales projection missed expectations. Amazon.com Inc. tumbled 7.5 percent as its earnings report showed revenue growth slowed outside the U.S. and holiday shipping costs surged. Boeing Co. dropped 8.3 percent after its profit forecast trailed predictions amid a slowing pace of jet orders. Caterpillar Inc. jumped 9 percent after announcing a stock buyback and forecasting better-than- expected earnings amid demand for construction equipment.

The S&P 500 slipped 0.4 percent to 1,782.59 in the week and reached the lowest level since November on Jan. 29. The Dow Jones Industrial Average lost 180.26 points, or 1.1 percent, to 15,698.85. Both gauges capped the worst month in almost two years, with the S&P 500 finishing January down 3.6 percent while the Dow dropping 5.3 percent.

“It’s a volatile cocktail,” David Lafferty, chief market strategist for Natixis Global Asset Management in Boston, said in a phone interview from Boston. His firm oversees $838 billion. “The Fed provides an interesting backdrop for capital leaving emerging markets. Earnings have been solid, but the outlook has generally been fairly weak.”

Equities fell as currencies from Turkey to Argentina tumbled, spurring concern that the turmoil in emerging markets may threaten a global economic recovery. While surprise rate increases by central banks in Turkey and South Africa failed to boost their currencies, the U.S. Fed opted to press on with reductions to its monetary stimulus.

Fed policy makers said on Jan. 29 that the central bank will trim its monthly bond purchases by $10 billion to $65 billion, cutting the pace of stimulus for a second straight meeting because of an improving economy.

U.S. gross domestic product expanded 3.2 percent in the fourth quarter, matching economists’ estimates, according to Commerce Department figures. Other reports over the week showed that consumer spending climbed more than forecast even as incomes stagnated while orders for durable goods unexpectedly slumped in December by the most in five months.

Three rounds of Fed bond buying has helped drive the S&P 500 up 163 percent from a 12-year low in 2009 while pushing capital into emerging markets in search of higher returns. The benchmark gauge for U.S. equities reached a record 1,848.38 on Jan. 15 and has fallen 3.6 percent since then.

The S&P 500’s loss for the month marked its first January decline since 2010. A lower January resulted in a full-year decline for the index 58 percent of the time since 1950, according to data compiled by MKM Partners LLC.

“Momentum has weakened,” Jim Welsh, a portfolio manager at Forward Management LLC in San Francisco, said in a phone interview on Jan. 30. His firm oversees $5.5 billion. “Going into this year, a lot of people were talking about a synchronized growth story. I can see later this year where people are disappointed relative to their expectations.”

Walt Disney Co. and Merck & Co. are among 92 companies in the S&P 500 scheduled to announce financial results next week.

Of the 251 companies that have reported, 79 percent beat analysts’ profit estimates while 66 percent exceeded on sales, data compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index added 1.5 percent over the week to 18.41, the highest level since October. The gauge of S&P 500 options known as the VIX has jumped 34 percent this year.

Consumer, energy and technology companies fell the most among 10 S&P 500 groups, sinking at least 0.9 percent.

Apple slumped 8.3 percent to $500.60. The company’s iPhone sales for the holiday season missed analysts’ estimates, adding pressure for Chief Executive Officer Tim Cook to release new hit products to revive growth.

Even after releasing the iPhone through the world’s largest carrier, China Mobile Ltd., Apple said revenue will be $42 billion to $44 billion in the current quarter, compared with analysts’ estimates of $46.1 billion. Anything short of $43.6 billion would mark the company’s first sales decline since 2003.

Amazon sank 7.5 percent to $358.69 in the week, its worst drop since 2011. Net income was 51 cents a share in the fourth quarter, missing the average analyst estimate of 69 cents as the company’s global growth weakened. Amazon’s international sales growth slowed to 13 percent in the quarter from 21 percent a year earlier.

Boeing dropped 8.3 percent to $125.26. The world’s largest planemaker faces U.S. defense cuts and higher financing costs that analysts say may impede commercial aircraft sales that had risen for four years. Earnings excluding some pension expenses will be $7 to $7.20 a share for 2014, the company said. That compares with an average estimate of $7.46 in a Bloomberg survey of 23 analysts.

Yahoo! Inc. fell 5 percent to $36.01. The company forecast first-quarter sales that fell short of some analysts’ estimates as Chief Executive Officer Marissa Mayer struggles to turn user growth at the Web portal into advertising dollars.

ADT Corp., the provider of security services for residences and small businesses, plunged 23 percent to $30.04 for the biggest loss in the S&P 500 after profit and sales trailed analysts’ estimates.

Caterpillar advanced 9 percent to $93.91. The largest maker of mining and construction equipment said profit will be $5.85 a share this year excluding $400 million to $500 million in restructuring costs. That’s more than the $5.77 average estimate. Caterpillar approved a $10 billion share buyback plan through 2018.

Facebook Inc. jumped 15 percent to a record $62.57. The world’s largest social network said more than half its advertising revenue came from mobile devices in the fourth quarter, helping sales rise 63 percent to $2.59 billion.

Alexion Pharmaceuticals Inc. surged 19 percent to $158.73, the biggest gain in the S&P 500 and the most for the stock since 2008. The maker of the rare-disease drug Soliris reported fourth-quarter earnings that exceeded analysts’ estimates, helped by a lower-than-projected tax rate.

 

Have a fabulous weekend everyone.

 

Be magnificent!

 

But unless the development of the mind and body goes hand in hand

with a corresponding awakening of the soul,

the former alone would prove to be a poor lopsided affair.

By spiritual training I mean education of the heart.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

If winning isn’t everything, why do they keep score?

-Vince Lombardi, 1913-1970

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1948, Mahatma Gandhi was assassinated by a Hindu extremist in New Delhi.

1969, the Beatles played an unannounced concert on a London rooftop in what would be their last concert together as a band.

1971, Carole King released her album Tapestry, which would eventually sell 25 million copies.

1972, Northern Ireland’s Bloody Sunday.

January

“Some people are far more sensitive to light than others and are at their happiest when there is plenty of sunlight and they can throw open the windows and walk outside.  None of us is immune to seasonal changes, though we may think we are, but we are certainly less so than plants and animals.  Fading and increasing light tells them to hibernate or drop their leaves, mate or be active.  I welcome winter as a time when I can slightly change my way of life, stay indoors more, read, and give way to a lethargy I do not have in summer.  I am aware that the light as it meets our eyes produces a set of nerve impulses that travel to the gland between the hemispheres of our brain, and that the hormones in this gland have a powerful effect on our sleep as well as our mood, so perhaps my lethargy is quite natural.  ‘ A sad tale’s best for winter’, wrote Shakespeare.  I believe he meant this to fit the winter mood of the reader.  I have just talked to a friend who is moving back to London after two winters and a summer in the country.  She says she feels depressed in the country and wants the companionship and activity of town life.  I am wondering if it is really the lack of sunlight through the naturally short days that she is missing rather than the glitter of town lights.  Soon spring will be with us than days much longer, so our spirits should be lightened too…”  -Rosemary Verey, from A Countrywoman’s Notes, 1989, Frances Lincoln Ltd, Publishers.

Photos of the day

The moon moves between NASA’s Solar Dynamics Observatory (SDO) and the sun, giving the observatory a view of a partial solar eclipse from space beginning at 8:31 am ET. Such a lunar transit happens two to three times each year. This one lasted two and one half hours, which is the longest ever recorded. NASA/SDO/Reuters

Ice crystals glisten in the sunlight on a bridge over Falls Lake in Wake Forest, NC. Temperatures reached the single digits. A storm that dropped just inches of snow Tuesday wreaked havoc across much of the South. AP

Market Closes for January 30^th, 2014

Market  Index	Close	Change
Dow  Jones	15848.61	+109.82    +0.70%
S&P 500	1794.19	+19.99    +1.13%
NASDAQ	4123.125	+71.691    +1.77%
TSX	13735.28	+92.06
		+0.67%

International Markets

Market  Index	Close	Change
NIKKEI	15007.06	-376.85
		-2.45%
HANG  SENG	22035.42	-106.19
		-0.48%
SENSEX	20498.25	-149.05
		-0.72%
FTSE 100	6538.45	-5.83
		-0.09%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.374	2.365
CND.   30 Year Bond	2.950	2.945
U.S.   10 Year Bond	2.6949	2.6767
U.S.   30 Year Bond	3.6341	3.6163

Currencies

BOC Close	Today	Previous
Canadian $	0.89563	0.89519
US   $	1.11654	1.11709
Euro Rate  1 Euro=		Inverse
Canadian   $	1.51376	0.66061
US  $	1.35576	0.73759

Commodities

Gold	Close	Previous
London Gold   Fix	1243.50	1267.54
Oil	Close	Previous
WTI Crude Future	98.23	97.36
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 30 (Bloomberg) — Canadian stocks rose, erasing a loss for the week, as an increase in U.S. consumer spending offset a decline in gold shares amid a report showing manufacturing in China contracted.

NuVista Energy Ltd. soared 9.2 percent after CIBC World Markets analysts upgraded the stock. Methanex Corp. surged 7.8 percent after reporting fourth-quarter earnings that exceeded estimates. Gold producers in the index retreated 2.2 percent as China Gold International Resources Corp. and Osisko Mining Corp. paced losses. Potash Corp. of Saskatchewan Inc. tumbled 1.9 percent after forecasting 2014 earnings that trailed estimates.

The Standard & Poor’s/TSX Composite Index increased 92.06 points, or 0.7 percent, to 13,735.28 4 p.m. in Toronto. The gauge has gained 0.1 percent this week. Trading in S&P/TSX stocks was 5.3 percent below the 30-day average.

“Today is a risk-on market,” Bob Decker, a fund manager with Aurion Capital Management Inc. who helps manage about C$6 billion ($5.37 billion), said by phone from Toronto. “Investors seem to think that emerging markets turmoil will calm down and fairly good earnings in U.S. market could drive gains. People who bought gold yesterday are now selling.”

Americans’ spending climbed the most in three years as the U.S. economy expanded at a 3.2 percent pace in the fourth quarter, data today showed. The annualized gain in gross domestic product matched the median forecast in a Bloomberg survey.

A Chinese manufacturing gauge signaled the first contraction since July. The Purchasing Managers’ Index fell to 49.5 this month from 50.5 in December, HSBC Holdings Plc and Markit Economics said in a statement. The reading compared with the median 49.6 estimate in a Bloomberg News survey of 14 economists. A number below 50 indicates contraction.

Today’s reports come after U.S. Federal Reserve policy makers said yesterday the central bank will cut monthly bond purchases by $10 billion to $65 billion, sticking to a plan for a gradual withdrawal from its unprecedented monetary easing.

Gold for April delivery fell the most in six weeks. The metal had rallied 5 percent this month through yesterday, with a rout in emerging-market currencies this week spurring demand.

Nine of 10 main industries in the S&P/TSX advanced at least 0.6 percent. Industrial shares gained 1.9 percent, as Canadian Pacific Railway Ltd. jumped 3.6 percent to a record, and Canadian National Railway Co. climbed 2.1 percent.

NuVista Energy soared 9.2 percent to C$8.28, the highest level since June. CIBC analyst Adam Gill raised the stock to sector outperform from sector perform with a 12-month target price of C$10.50 a share.

Methanex surged 7.8 percent to C$68.88, an all-time high, after the methanol producer said it earned C$1.72 per share in the fourth quarter.

BlackPearl Resources Inc. increased 2.9 percent to C$2.47.

Macquarie analysts wrote that BlackPearl and other energy producers may attract foreign buyers amid a depreciation in the Canadian dollar.

Air Canada jumped 6.4 percent to C$7.63, stopping a five- day slide of 26 percent. The stock was the best performer on the S&P/TSX in 2013, soaring 323 percent.

An index of raw-materials producers dropped 1.2 percent for the only decline in the benchmark gauge today, as as gold and silver prices tumbled.

The S&P/TSX Gold Index dropped 2.2 percent after two days of gains. China Gold slumped 6.2 percent to C$3.32, halting a two-day rally that added 15 percent to the stock. Osisko Mining slid 4.2 percent to C$6.60, and Iamgold Corp. dropped 3.3 percent to C$4.06.

Potash Corp. tumbled 1.9 percent to C$34.89. The world’s largest fertilizer producer by market value said today that profit for the year will be $1.40 to $1.80 a share, below analysts’ estimates of $2 a share.

Potash Corp. also cut its estimate for 2014 global shipments. Buyers of potash deferred purchases in the second half of 2013 after OAO Uralkali, the world’s largest producer, quit a sales accord in July with its Belarusian competitor and announced plans to boost output.

US

By Stephen Kirkland and Nick Taborek

Jan. 30 (Bloomberg) — U.S. stocks rose, pushing benchmark indexes up from two-month lows, while Treasuries and gold fell as consumer spending climbed and corporate earnings beat estimates. The iShares MSCI emerging-markets exchange-traded fund rose and the dollar gained a fifth day versus the euro.

The Standard & Poor’s 500 Index jumped 1.1 percent to 1,794.19 by 4:32 p.m. in New York, the biggest gain in a month.

The emerging-markets ETF climbed 0.9 percent and European stocks rallied. Ten-year Treasury yields rose two basis points to 2.69 percent. The dollar strengthened 0.8 percent against the euro, while Hungary’s forint retreated. Gold and natural gas slumped more than 1.4 percent while aluminum dropped to a four-year low and West Texas Intermediate oil advanced.

The rally in American equities erased losses for the week after data showed the U.S. economy expanded 3.2 percent in the fourth quarter and spending climbed the most in three years.

Investors are pulling money from exchange-traded funds that track developing-nation assets at the fastest rate on record, as concerns over a slowdown in China and reductions in central-bank stimulus sink currencies from Turkey to Malaysia.

“The fact we can print a quarter in which GDP growth was more than 3 percent even though government spending contracted as much as it did, is unquestionably a positive,” Dan Greenhaus, chief global strategist at BTIG LLC in New York, said by phone. “The concerns over emerging markets are the dominant topic. To the extent this remains contained, the selloff is likely to be limited.”

More than $7 billion flowed from ETFs investing in developing-nation assets in January, the most since the securities were created, data compiled by Bloomberg show.

Emerging economies have benefited from cheap money as three rounds of Fed bond buying pushed capital into their borders in search of higher returns. The central bank began paring the purchases by $10 billion to $75 billion this month and announced yesterday plans to reduce the amount by another $10 billion.

Facebook Inc. jumped 14 percent after the world’s largest social network reported that more than 50 percent of its advertising revenue came from mobile devices in the last quarter of 2013. Blackstone Group LP and Under Armour Inc. also rallied after reporting better-than-estimated earnings.

The Dow Jones Industrial Average gained 0.7 percent, rising from yesterday’s lowest close since Nov. 7.

Companies in the S&P 500 probably increased their earnings per share by 6.6 percent in the fourth quarter of 2013 and their revenue by 2.6 percent, analysts’ estimates compiled by Bloomberg show.

The annualized gain in U.S. gross domestic product matched the median forecast in a survey of economists and followed a 4.1 percent advance in the prior three months, Commerce Department figures showed today. Growth in the second half of the year was the strongest since the six months ended in March 2012. Consumer spending, which accounts for almost 70 percent of the economy, climbed 3.3 percent, less than estimated.

Separate data showed contracts to purchase previously owned homes in the U.S. plunged in December by the most since May 2010 as higher borrowing costs and bad weather held back sales.

Asian stocks and industrial metals tumbled after a private report showed that China’s manufacturing industry contracted this month. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong lost 0.8 percent, taking this year’s decline to 9.2 percent. Aluminum dropped as much as 1.1 percent to $1,723 a metric ton, the lowest level since July 2009, and zinc fell for a seventh day.

A Chinese Purchasing Managers’ Index fell to 49.5 from 50.5 in December, HSBC Holdings Plc and Markit Economics said in a statement. The reading compared with the median 49.6 estimate in a Bloomberg News survey of 14 economists. A number below 50 indicates contraction.

European stocks advanced, with the Stoxx Europe 600 Index climbing 0.3 percent to pare its monthly decline to 1.5 percent.

Givaudan SA, the world’s largest maker of flavors and fragrances, jumped 6.3 percent after posting full-year net income that beat analyst estimates. Diageo Plc, the biggest distiller, lost 4.7 percent after reporting sales growth that missed forecasts.

Hungary’s forint dropped versus the greenback as emerging- market currencies extended a week-long rout. The forint depreciated 0.8 percent to 228.15 per dollar after earlier dropping as much as 1.6 percent. The currency has declined “too fast, too big” and the central bank is monitoring its move and the market environment, Gyula Pleschinger, a member of the central bank’s Monetary Council, said yesterday.

The dollar’s strength against the euro was driven partly by speculation that emerging-market central banks may take steps to prevent their exchange rates from falling further, according to Geoffrey Yu, senior currency strategist at UBS AG in London.

“If these central banks are getting ready for intervention, they would need to over-fund in dollars,” said Yu. “That may involve selling euro reserves into the U.S. currency.”

The yen has advanced 4.5 percent this year, the biggest gain in Bloomberg Correlation-Weighted Indexes that track 10 developed-nation currencies.

Gold futures tumbled 1.6 percent, the most since Dec. 19, as U.S. economic growth boosted speculation that the Fed will continue to scale back monetary stimulus.

Treasuries declined, with 10-year yields climbing from a two-month low as the U.S. sold $64 billion of notes, the first time it conducted two fixed-coupon debt auctions in a single day since October 2008.

U.S. debt losses were limited as the week-long slide in emerging-market assets boosted demand for the safest fixed- income securities. Today’s five- and seven-year auctions completed four note sales this week totaling $111 billion.

WTI oil rose 0.9 percent to $98.23 a barrel, the highest level in four weeks. Natural gas dropped 8.3 percent as a government report showed a U.S. stockpile decline that matched analyst estimates. Prices are up about 19 percent this month, heading for the biggest gain since September 2009.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

If this individuality is wiped away, the creative joy that crystallized it disappears,

even if no material was lost, even if no atom was destroyed.

And if it is lost, it is also a loss for the entire world.  It is particularly precious because it is not universal.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Fall seven times, stand up eight.

-Japanese Proverb

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1963, the poet Robert Frost died in Boston.    In honor of him:

The Secret Sits

Robert Frost

We dance round in a ring and suppose,

But the Secret sits in the middle and knows.

Devotion

Robert Frost

The heart can think of no devotion

Greater than being shore to the ocean-

Holding the curve of one position,

Counting an endless repetition.

Photos of the day

Fireworks explode over the Singapore skyline during Chinese New Year celebrations. The Lunar New Year, which falls on January 31, marks the year of the horse. Edgar Su/Reuters

Two hikers walk past snow-covered trees in the Thuringian Forest near Masserberg, central Germany. Martin Schutt/dap/AP

Market Closes for January 29^th, 2014

Market  Index	Close	Change
Dow  Jones	15738.79	-189.77    -1.19%
S&P 500	1774.20	-18.30    -1.02%
NASDAQ	4051.434	-46.529    -1.14%
TSX	13643.22	-44.44
		-0.32%

International Markets

Market  Index	Close	Change
NIKKEI	15383.91	+403.75
		+2.70%
HANG  SENG	22141.61	+180.97
		+0.82%
SENSEX	20647.30	-36.21
		-0.18%
FTSE 100	6544.28	-28.05
		-0.43%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.365	2.417
CND.   30 Year Bond	2.945	2.987
U.S.   10 Year Bond	2.6767	2.7479
U.S.   30 Year Bond	3.6163	3.6717

Currencies

BOC Close	Today	Previous
Canadian $	0.89519	0.89681
US   $	1.11709	1.11507
Euro Rate  1 Euro=		Inverse
Canadian   $	1.52593	0.65534
US  $	1.36599	0.73207

Commodities

Gold	Close	Previous
London Gold   Fix	1267.54	1254.46
Oil	Close	Previous
WTI Crude Future	97.36	97.41
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 29 (Bloomberg) — Canadian stocks declined following disappointing corporate earnings, as investors weighed the U.S. Federal Reserve’s decision to reduce stimulus amid turmoil in emerging markets.

CGI Group Inc. plunged 5 percent after first-quarter earnings missed estimates. AGF Management Ltd. slumped 6.3 percent as quarterly profit trailed forecasts. Air Canada dropped 6 percent, extending its slide to a fifth day. Detour Gold Corp. paced gains among miners as gold and silver prices gained amid a rout in emerging-market currencies that spurred demand for the precious metals.

The Standard & Poor’s/TSX Composite Index decreased 44.56 points, or 0.3 percent, to 13,643.10 at 4 p.m. in Toronto. The slump trimmed the gauge’s advance this year to 0.2 percent.

Trading in S&P/TSX stocks was 12 percent higher than the 30-day average.

“There seems to be mixed signals in how investors should react to emerging markets and violent currency movements,” Barry Schwartz, a fund manager with Baskin Financial Services Inc., said in a phone interview from Toronto. His firm manages C$600 million ($538.1 million). “There’s a debate to whether the Fed will taper or not taper. None of the economic data is concerning, so our feeling is once again, stocks should react to earnings.”

The Fed today announced plans to press on with another $10 billion reduction in monthly bond purchases intended to speed a recovery from the worst recession since the Great Depression.

A Bloomberg gauge tracking 20 emerging-market currencies fell to the lowest since April 2009 today even as central banks from South Africa to Turkey tightened monetary policy to bolster their currencies.

Gold for April delivery rose the most in a week, while silver futures advanced 0.3 percent.

Six of 10 main industries in the index retreated. Energy and financial stocks fell at least 0.7 percent, contributing the most to the index’s slide.

CGI plunged 5 percent to C$33.47, the lowest since September. The information-technology company that worked on the Obamacare health exchange software reported first-quarter adjusted earnings of 65 Canadian cents per share, less than analysts’ profit estimates of 70 Canadian cents per share.

AGF slid 6.3 percent to C$11.63 for a sixth day of losses that left the stock at its lowest since July. The investment- management firm reported fourth-quarter earnings of 11 Canadian cents per share, less than the 12 Canadian cents per share analysts forecast.

Air Canada tumbled 6 percent to C$7.17. The carrier’s shares have lost 28 percent in five days of declines. The stock was the best performer on the S&P/TSX in 2013, soaring 323 percent.

Raw-materials producers gained 1.7 percent and an index of gold miners added 3.8 percent to the highest level since September. Detour soared 14 percent to C$7.25 and Barrick Gold Corp. jumped 4.2 percent to C$21.83, the highest since June.

Silvercorp Metals Inc. increased 6.2 percent to C$3.07 to pace gains among producers of the metal.

USA

By Nick Taborek

Jan. 29 (Bloomberg) — U.S. stocks sank, dragging benchmark indexes to the lowest levels since November, amid disappointing earnings forecasts and the Federal Reserve’s plan to reduce stimulus even amid turmoil in emerging markets.

Yahoo! Inc. slumped 8.7 percent, the most since July 2009, as its sales forecast signaled slowing growth. Boeing Co. retreated 5.3 percent for its worst drop in more than two years after its 2014 profit forecast trailed analysts’ estimates amid a slowing pace of jet orders. Dow Chemical Co. jumped 3.9 percent after stepping up its dividend and share-buyback plan.

The Standard & Poor’s 500 Index lost 1 percent to 1,774.20 at 4 p.m. in New York, wiping out yesterday’s advance and sending the benchmark gauge lower for the fourth time in five days. The Dow Jones Industrial Average dropped 189.77 points, or 1.2 percent, to 15,738.79 today. About 7.8 billion shares changed hands in the U.S., 26 percent above the three-month average.

“The emerging markets have been weak now for quite some time, but the drama has heightened really in the past few days,” Erik Davidson, the San Francisco-based deputy chief investment officer for Wells Fargo Private Bank, which oversees $170 billion, said by phone. “It would be out of sorts for the Fed to react on such a short-term news development.”

Stocks extended early losses as Fed policy makers pressed on with another $10 billion reduction in the monthly bond purchases intended to speed a recovery from the worst recession since the Great Depression. Some officials have expressed concern that the Fed’s record $4.1 trillion balance sheet could help create asset-price bubbles.

“Labor market indicators were mixed but on balance showed further improvement,” the Federal Open Market Committee said today in a statement following a two-day meeting in Washington that was the last for Chairman Ben Bernanke, who will be succeeded by Vice Chairman Janet Yellen on Feb. 1. “The unemployment rate declined but remains elevated.”

The Fed this month began paring the purchases by $10 billion a month to $75 billion. The reductions announced today will reduce the pace to $65 billion.

Three rounds of Fed monetary stimulus helped the S&P 500 rise as much as 173 percent from a 12-year low in 2009. The U.S. stock benchmark rallied 30 percent last year, the most since 1997. While the index reached an all-time high of 1,848.38 on Jan. 15, it has slumped 4 percent since then.

Speculation about Fed policy has caused turmoil in emerging market currencies. The Turkish lira depreciated as much as 2.4 percent today, even after the country more than doubled its key interest rate to stem capital outflows. South Africa’s rand also weakened as an unexpected increase in its benchmark interest rate failed to reassure investors.

Facebook Inc., Boeing and Dow Chemical are among the 25 S&P 500 companies reporting earnings today.

About 77 percent of the S&P 500 companies that have posted earnings this season beat analysts’ projections. Profit at S&P 500 companies probably rose 6.6 percent in the fourth quarter of 2013, and sales increased 2.6 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index rose 9.8 percent today to 17.35. The gauge of S&P 500 options known as the VIX has gained 26 percent this year.

Nine of the 10 main groups in the S&P 500 retreated today as consumer staples companies fell 1.8 percent to pace losses.

Raw-materials suppliers advanced 0.5 percent for the only gain as DuPont Co. rallied 1.9 percent, the most in the Dow.

Yahoo slumped 8.7 percent to $34.89. The company forecast first-quarter sales that signaled slowing growth amid competition from Google Inc. and Facebook. Yahoo’s fourth- quarter net income rose 28 percent to $348.2 million, while net sales slipped to $1.2 billion from $1.22 billion a year ago, the company said.

Boeing slumped 5.3 percent, the most since August 2011, to $129.78. The world’s largest planemaker forecast a profit for 2014 that fell short of analysts’ estimates as the pace of its jet orders slows after the second-highest year in 2013.

AT&T Inc. retreated 1.2 percent to $33.31. The second- largest U.S. wireless carrier forecast 2014 earnings-per-share will grow at a “mid-single-digit” rate, compared with analysts’ estimates for an increase of 7 percent.

McCormick & Co. slid 6.2 percent to $65.30. The manufacturer of spices and flavorings forecast profit below analysts’ estimates, citing a higher tax rate and slower growth in its U.S. business.

Dow Chemical jumped 3.9 percent to $44.73. The largest U.S. chemical maker expanded its 2014 buyback plan to $4.5 billion from $1.5 billion, while raising the first-quarter dividend 16 percent to 37 cents. Fourth-quarter profit excluding one-time items was 65 cents, topping the 43-cent average of 20 estimates compiled by Bloomberg.

DuPont climbed 1.9 percent to $60.71 after a 1.1 percent decline in the previous session. The biggest U.S. chemical maker by market value said yesterday it will repurchase $5 billion of its shares after posting fourth-quarter earnings that exceeded analysts’ estimates.

Medivation Inc. gained 11 percent to $84.29 after saying its prostate-cancer drug Xtandi slowed the disease in a study.

The treatment slowed or stopped cancer growth in 59 percent of patients not on chemotherapy compared with 5 percent of those taking a placebo.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

By education I mean an all-round drawing out of the best in a child and man – body, min, and spirit.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

I am not my body.  My body is nothing without me.

-Tom Stoppard, 1937-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7