Category: Newsletters

Dear Friends,

Tangents:

Amanda commented in the Newsletter last night about flight delays lately because of the fog at Victoria airport.  We experienced it firsthand trying to get home Sunday night; arrived at the Seattle airport only to learn the Victoria airport was shut down….everything was tied up so we had to go back to the city, try for Monday morning; no luck, finally in the afternoon.  Gary’s office had to cancel all his patients booked yesterday – we both felt out of sorts – the feeling you get when you’re supposed to be somewhere else.  The opera was superb, but it’s the most expensive Rigoletto we’ve ever seen, with the back and forth and extra night.

We also had to abandon the float plane on Saturday morning because of fog, so we got to see Spinnaker’s new digs at the Victoria airport. Looks great, feels great – we had very good cappuccinos J.   You have to go through security first and you’ll see it on the other side.  The airport is sure expanding.

Seattle is at a fever pitch right now in anticipation of  the Super Bowl next Sunday.  People are dressed in their number 12 Seahawk jerseys; everywhere you go, people are talking about their team and the game.  Signs posted everywhere.  The route to the airport was lined on both sides with fans cheering the bus that carried the team to the airport for their flight to New York on Sunday.   Sunday’s game  should be exciting – the best offence in the league pitted against the best defense in the league.  Not to mention the B’s star quarterback.

Photos of the day

A visitor checks little lemon trees from Portugal at one of the world’s leading horticultural trade fairs, IPM in Essen, Germany. Martin Meissner/AP

A bird sits on a frozen branch in Waterford, Mich. Temperatures dropped to dangerous lows in Michigan, leading to the closure of hundreds of schools. The morning low of 9 degrees below zero at Detroit Metropolitan Airport in Romulus broke the previous record low. With the winds, it felt like 25 to 30 degrees below zero. Eric Seals/Detroit Free Press/AP

Market Closes for January 28^th, 2014

Market  Index	Close	Change
Dow  Jones	15928.56	+90.68    +0.57%
S&P 500	1792.50	+10.94    +0.61%
NASDAQ	4097.961	+14.352    +0.35%
TSX	13687.66	+105.37
		+0.78%

International Markets

Market  Index	Close	Change
NIKKEI	14980.16	-25.57
		-0.17%
HANG  SENG	21960.64	-15.46
		-0.07%
SENSEX	20683.51	-23.94
		-0.12%
FTSE 100	6572.33	+21.67
		+0.33%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.417	2.426
CND.   30 Year Bond	2.987	2.993
U.S.   10 Year Bond	2.7479	2.7479
U.S.   30 Year Bond	3.6717	3.6649

Currencies

BOC Close	Today	Previous
Canadian $	0.89681	0.89992
US   $	1.11507	1.11121
Euro Rate  1 Euro=		Inverse
Canadian   $	1.52431	0.65603
US  $	1.36696	0.73155

Commodities

Gold	Close	Previous
London Gold   Fix	1254.46	1256.82
Oil	Close	Previous
WTI Crude Future	97.41	95.72
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 28 (Bloomberg) — Canadian stocks rose the most in two weeks, following the biggest three-day slide since June, as commodities producers rallied and global equities rebounded.

Thompson Creek Metals Co. and China Gold International Resources Corp. added at least 4.9 percent to pace gains among miners.  BlackBerry Ltd. jumped 3.1 percent after releasing an updated version the operating system for its handsets. First Quantum Minerals Ltd. climbed 2.6 percent after boosting the production target for its Cobre Panama copper mine. Air Canada plunged 12 percent after Bank of America Corp. lowered its rating on the stock.

The Standard & Poor’s/TSX Composite Index increased 105.37 points, or 0.8 percent, to 13,687.66 at 4 p.m. in Toronto. The gauge closed at a three-week low yesterday after falling 2.9 percent since Jan. 22. Trading in S&P/TSX stocks was in line with than the 30-day average at the close.

“This is a little bit of a relief rally on the back of what has been a pretty ugly three days for North America,”  Brian Huen, a fund manager with Red Sky Capital Management Ltd., which oversees C$225 million ($202 million), said by phone from Toronto. “I think all eyes will be on the Fed tomorrow to make sure that nothing strange is going to happen.”

U.S. stocks advanced on corporate earnings from Ford Motor Co. to Pfizer Inc. and data showing consumer confidence rose more than forecast this month. European equities climbed after three days of losses and the MSCI Emerging Markets Index advanced 0.3 percent, after closing yesterday at the lowest level since August.

The U.S. Federal Reserve began a two-day policy meeting to discuss further cuts to its monthly bond buying that has helped propel global equities higher.

All 10 main industries in the S&P/TSX advanced at least 0.1 percent today, with raw-materials producers adding 1.9 percent.  Thompson Creek jumped 6.3 percent to C$3.03 and China Gold rose 4.9 percent to C$3.22.

Energy stocks added 0.7 percent as crude advanced for the first time in three days. Canadian Natural Resources Ltd. jumped 2.6 percent to C$36.30, the highest level since March 2012.

BlackBerry climbed 3.1 percent to C$11.18, halting a three- day slide that had reduced the share price by 9.4 percent. The smartphone maker announced a new software update for its BlackBerry 10 devices.

First Quantum rose 2.6 percent to C$20.36. The mining company raised its estimate of the cost of building the copper mine to $6.43 billion while boosting the production target.

The company forecast annual production of 320,000 metric tons of copper at the mine starting in the first quarter of 2018. The mine’s previous owner had planned to spend about $6.2 billion to produce 266,000 tons annually from 2016.

Air Canada slumped 12 percent, the most since April, to C$7.63. The stock has plunged 21 percent during a four-day losing streak. It was the best performer on the S&P/TSX in 2013, soaring 323 percent.

Bank of America analyst Glenn Engel lowered his rating to underperform, citing a “sharp” depreciation in the Canadian dollar. The loonie fell against the dollar to its lowest level since July 2009.

Engel also cut his recommendation on WestJet Airlines Ltd. The regional carrier’s stock sank 4.1 percent to C$24.83, the lowest level since October.

USA

By Lu Wang and Whitney Kisling

Jan. 28 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from its worst slump since June, as earnings at companies from Pfizer Inc. to D.R. Horton Inc. topped estimates and consumer confidence increased ahead of a Federal Reserve policy meeting.

Pfizer, the world’s biggest drugmaker, advanced 2.6 percent after earnings beat estimates as it cut costs and saw its tax rate fall. An index of homebuilders surged 5.3 percent as D.R. Horton jumped 9.8 percent and a report showed home prices climbed. American International Group Inc. rose 2.5 percent after Bank of America Corp. said it expects the insurer to buy back $10 billion of stock during the next two years. Apple Inc. tumbled 8 percent as iPhone sales trailed estimates.

The S&P 500 rose 0.6 percent to 1,792.50 at 4 p.m. in New York. The Dow Jones Industrial Average climbed 90.68 points, or 0.6 percent, to 15,928.56. About 6.6 billion shares changed hands on U.S. exchanges, 6.8 percent more than the three-month average.

“Earnings looked pretty good,” Dan Veru, the chief investment officer who helps oversee $4.5 billion at Palisade Capital Management LLC, said by phone from Fort Lee, New Jersey.

“The economy is in the process of being self-reinforcing and it can handle the modest amount of tapering we’re planning to do.”

U.S. equities joined a global rebound as European shares recovered from their biggest three-day decline in seven months while the MSCI Emerging Markets Index rose from its lowest level since August.

The S&P 500 lost 3.4 percent in the past three days, the most since June, with emerging-market currencies sinking amid signs China’s economy is slowing. The benchmark gauge rallied 30 percent last year and is up 165 percent from a bear-market low in 2009.

Some 83 S&P 500 stocks had their 14-day relative-strength index below 30 yesterday, the most since November 2012, data compiled by Bloomberg show. RSI measures the degree to which gains and losses outpace each other, and some analysts who watch charts to predict market moves consider a reading lower than 30 as indicating the stock has fallen too far too fast.

“The ride probably will not be as smooth as we have seen in the last couple years,” Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC, which oversees $63 billion, said in phone interview from Philadelphia. “We’ve had a pretty decent pullback here in equity prices.”

The Federal Open Market Committee started its last meeting under Chairman Ben S. Bernanke today. Policy makers said in December that the central bank would begin to pare the pace of its monthly bond buying by $10 billion to $75 billion this month. The Fed will cut purchases by $10 billion at each of the next six FOMC meetings, with the program ending no later than December, according to economists in a Bloomberg News survey conducted Jan. 10.

The Conference Board’s index of consumer confidence rose to 80.7 in January from a revised 77.5 in the prior month, the New York-based private research group said today. The median forecast in a Bloomberg survey of economists called for a reading of 78.

Stock futures briefly erased early gains as a report showed orders for durable goods unexpectedly slumped in December by the most in five months, reflecting a broad-based retreat that raises the risk business investment will cool in early 2014.

AT&T Inc. and Yahoo! Inc. are among S&P 500 companies reporting quarterly results today. Almost 74 percent of the 152 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 2.3 percent, analysts’ estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index retreated for a second day, sliding 9.3 percent to 15.80. The gauge of S&P 500 options known as the VIX surged 46 percent last week, its biggest gain since May 2010.

Nine out of 10 main industries in the S&P 500 advanced, with financial and health-care stocks rising more than 1.2 percent for the biggest gains.

Pfizer advanced 2.6 percent to $30.42 after posting quarterly profit of 56 cents a share excluding some items. The average analyst estimate was for 52 cents.

An S&P index of homebuilders rallied 5.3 percent, the most since September. Home prices in 20 U.S. cities rose 13.7 percent in November from a year ago, the S&P/Case-Shiller index showed, the biggest 12-month gain since February 2006.

D.R. Horton climbed 9.8 percent, the most in the S&P 500, to $23. The largest U.S. homebuilder by revenue posted earnings that beat analyst estimates as the Fort Worth, Texas-based company raised prices and delivered more homes.

AIG and T. Rowe Price Group Inc. led gains among financial shares. AIG rose 2.5 percent to $48.46 after Bank of America named the stock the top pick among property and casualty insurers for 2014. T. Rowe Price climbed 5.5 percent to $80.70 after the money manager reported fourth-quarter profit that exceeded analysts’ estimates.

Comcast Corp. increased 1.6 percent to $53.35 after people familiar with the matter said the cable company is near a deal to buy assets from Charter Communications Inc. Comcast also reported a 26 percent increase in fourth-quarter profit after adding TV subscribers for the first time in more than six years.

Cliffs Natural Resources Inc., the biggest U.S. iron ore producer, advanced 2.1 percent to $19.81. Casablanca Capital LP, which owns 5.2 percent of Cliffs, said the company’s valuation would rise to $53 if Cliffs spun off foreign assets, doubled its dividend and converted U.S. assets to a master limited partnership to “significantly cut costs.”

Oshkosh Corp., which designs and manufactures specialty trucks and other vehicles, rallied 8 percent to $55.50. The company said replacement demand and earlier orders may indicate a stronger recovery. The company boosted its 2014 earnings forecast to at least $3.40 a share, higher than the average analyst estimate of $3.35, according to data compiled by Bloomberg.

Technology shares sank 0.7 percent for the only loss among 10 S&P 500 groups. Apple slid 8 percent to $506.50, the lowest since October, after reporting that it sold 51 million iPhones in the quarter ended Dec. 28, missing analysts’ estimates for 54.7 million handsets. Apple also projected revenue in the current period may shrink from a year earlier, in what would be the first quarterly sales decline since 2003.

Stagnating growth is adding pressure for the company to release new hit products, be it a television, wearable computer or a way to pay for things with an iPhone. Billionaire activist investor Carl Icahn is betting Apple will deliver, disclosing on Twitter today that he bought another $500 million of Apple shares on top of the $3.6 billion he had as of last week.

Yahoo! Inc. dropped 2.9 percent to $37.10 as of 4:39 p.m. in New York. The company forecast after the close of regular trading 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.

Seagate Technology Plc dropped 11 percent to $51.52 in regular trading. It reported second-quarter earnings of $1.32 a share excluding some items, missing the average analyst estimate of $1.39. The maker of disk drives posted sales of $3.53 billion, falling short of the projected $3.56 billion.

Corning Inc. tumbled 6.2  percent to $17.10 after projecting price declines for LCD, the display technology used in televisions and computer monitors.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Man lives in confusion and fear until he discovers the uniformity of the law in nature;

until then the world is a stranger to him.

And yet, the law discovered is only the perception of the harmony between reason,

which is the soul of man, and the play of nature.

It is the bond that unites man to the world he lives in.

When he discovers it, man feels an intense joy, because he realizes himself in his environment.

To understand this is to find something to which we belong,

and it is the discovery of ourselves outside ourselves that gives us joy.

Rabindranath Tagore, 1861-1901

 

Carolann

 

Be yourself.  The world worships the original.

–Ingrid Bergman, 1915-1982

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:

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

Do you have a trip planned and are leaving in the next couple of days?  Airports are urging passengers to check victoriaairport.com for real-time arrivals and departures and follow-up with their respective airlines in the event of delays or cancellations due to the fog we have been getting over the past few days.  Heavy fog blanketing the Capital Region this morning is causing havoc at Victoria International Airport, causing several delays and cancellations. Early morning flights beginning at 6 a.m. were cancelled to Seattle, San Francisco, Vancouver, and Calgary. Flights to Kelowna and Toronto have been delayed several hours, according to the airport’s website.  Make sure to touch base with your airline prior to heading to the airport!

Photos of the day

Visitors walk through the medals plaza while the Olympic torch is tested before the start of the 2014 Winter Olympics in Olympic Park in Sochi, Russia. David J. Phillip/AP

People take a walk during a snowfall in Berlin. Tobias Schwarz/Reuters

Market Closes for January 27th, 2014

Market  Index	Close	Change
Dow  Jones	15837.88	-41.23    -0.26%
S&P 500	1781.56	-8.73    -0.49%
NASDAQ	4083.609	-44.564    -1.08%
TSX	13582.29	-135.47
		-0.99%

International Markets

Market  Index	Close	Change
NIKKEI	15005.73	-385.83
		-2.51%
HANG  SENG	21976.10	-473.96
		-2.11%
SENSEX	20707.45	-426.11
		-2.02%
FTSE 100	6550.66	-113.08
		-1.70%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.426	2.399
CND.   30 Year Bond	2.993	2.970
U.S.   10 Year Bond	2.7479	2.7169
U.S.   30 Year Bond	3.6649	3.6350

Currencies

BOC Close	Today	Previous
Canadian $	0.89992	0.90214
US   $	1.11121	1.10848
Euro Rate  1 Euro=		Inverse
Canadian   $	1.51927	0.65821
US  $	1.36722	0.73141

Commodities

Gold	Close	Previous
London Gold   Fix	1256.82	1270.07
Oil	Close	Previous
WTI Crude Future	95.72	96.68
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 27 (Bloomberg) — Canadian stocks declined a third day, with the benchmark index erasing a gain for the year, as financial shares retreated and commodities producers slumped with oil and metals prices.

Bank of Montreal sank 2.1 percent after F&C Asset Management Plc said it’s in talks to be bought by the Canadian lender. Horizon North Logistics Inc. plunged 12 percent after the oil services provider reported a drop in preliminary fourth- quarter earnings. Pacific Rubiales Energy Corp. lost 4.2 percent as the price of crude fell a second day.

The Standard & Poor’s/TSX Composite Index decreased 135.47 points, or 1 percent, to 13,582.29 at 4 p.m. in Toronto. The gauge closed at a three-week low after plunging 2.9 percent since Jan. 22, the biggest three-day slide since June. The index has fallen 0.3 percent this year after rising as much as 2.7 percent earlier in January.

“We’ve had strong markets for a while so we’re due for a checkback,” Jeff Young, chief investment officer at NexGen Financial Corp., said in a phone interview. The Toronto-based firm manages about C$900 million ($815 million). “Financials seem to be the big culprit here. The global markets certainly don’t help. The S&P/TSX is certainly impacted by global growth and more so by emerging markets growth than the U.S.”

Emerging-market stocks have had the worst start to a year since 2009 and currencies from Turkey to South Korea tumbled amid signs growth is slowing in China as the Federal Reserve prepared to review further stimulus cuts this week.

The MSCI Emerging Markets Index slid 1.8 percent, extending this year’s decline to 7 percent.

The Bloomberg Nanos Canadian Confidence Index fell for the second straight reading as optimism about the economy waned during a week where the nation’s currency depreciated to the lowest in more than four years. Consumers grew more pessimistic about their personal finances, the national economy and job security, survey data show.

The Canadian dollar depreciated to the lowest in 4 1/2 years against its U.S. counterpart on Jan. 22 after the Bank of Canada kept its benchmark interest rate unchanged and said the strength of the currency is hurting exporters.

Nine of 10 main industries in the index retreated at least 0.3 percent, on trading volume that was 4 percent above the 30- day average.

Financial stocks, which account for 34 percent of the benchmark index for Canadian equities, dropped 1.5 percent today for a third day of declines. The group of banks and insurers has fallen 3.3 percent this year after rallying 19 percent in 2013.

Bank of Nova Scotia sank 2.2 percent to C$61.69, a three- month low. Royal Bank of Canada lost 1.3 percent to C$69.38, the lowest since Dec. 18.

Bank of Montreal fell 2.1 percent to C$70.46, the lowest this year. Canada’s fourth-largest lender by assets offered about 697 million pounds ($1.2 billion) for F&C Asset Management, the London-based money manager said in a statement today.

Energy stocks declined 0.9 percent as a group as oil dropped for a second day. Pacific Rubiales plunged 4.2 percent to C$16.50, the lowest level since February 2010. TransGlobe Energy Corp. retreated 4.8 percent to C$8.82.

Horizon North plunged 12 percent to C$7.24, the lowest since September. The company reported that preliminary fourth- quarter earnings excluding some items dropped as much as 65 percent from the prior quarter. Revenue for the Calgary-based oil-and-gas service provider decreased as much as 40 percent in the same period.

Raw-materials producers in the benchmark index slid 1.3 percent as copper capped its longest slump in five months.

Turquoise Hill Resources Ltd. fell 2.3 percent to C$3.89.

The S&P/TSX Gold Index lost 2.5 percent, the biggest drop this year. China Gold International Resources Corp. tumbled 6.7 percent to C$3.07 and NovaGold Resources Inc. slipped 6.1 percent to C$3.21. B2Gold Corp. dropped 4.9 percent to C$2.54.

Hudson’s Bay Co. rose 1.2 percent to C$16.34, erasing an earlier drop of 3.9 percent. The retailer announced it will sell its Toronto location for C$650 million in a sale and leaseback transaction. Proceeds of the transaction will be used to reduce debt and invest in growth initiatives, Hudson’s Bay said.

USA

By Whitney Kisling and Lu Wang

Jan. 27 (Bloomberg) — U.S. stocks fell, following the worst week since 2012 for benchmark indexes, as concern over Federal Reserve plans to cut stimulus and an economic slowdown in China tempered gains in industrial shares.

Visa Inc., Microsoft Corp. and Goldman Sachs Group Inc. slumped more than 1.7 percent, leading declines among large companies. Google Inc. and Facebook Inc. paced losses in technology stocks. Caterpillar Inc. jumped 5.9 percent after announcing a stock buyback and forecasting earnings above analysts’ estimates amid demand for construction equipment.

The Standard & Poor’s 500 Index slipped 0.5 percent to 1,781.56 at 4 p.m. in New York after tumbling 2.6 percent last week. The Dow Jones Industrial Average lost 41.23 points, or 0.3 percent, to 15,837.88. Both gauges closed at the lowest levels since mid-December. About 8 billion shares changed hands on U.S. exchanges, 30 percent more than the three-month average.

“I don’t think the emerging market story has played out yet,” Wayne Lin, a portfolio manager at Baltimore-based Legg Mason Inc., which oversees $680 billion, said in a phone interview. “The big question is, is it the beginning of another macro event, or is it just people worried about losing their profits and selling off? People are evaluating whether or not markets are as safe and steady as they have been.”

The S&P 500 sank the most since June 2012 last week as a sell-off in developing-nation currencies spurred concern global markets will become more volatile. The decline pushed the index below its average price in the past 50 days for the first time since October. The threshold is currently about 1,813. The S&P 500 today extended its 2014 retreat to 3.6 percent. The Dow is down 4.5 percent for the year.

Emerging-market stocks are off to the worst start to a year since 2009 and currencies from Turkey to South Korea have tumbled amid signs growth is slowing in China and as the Fed prepares to review further stimulus cuts this week.

The central bank, which starts a two-day meeting tomorrow, decided at its December gathering to begin cutting its monthly bond purchases by $10 billion to $75 billion.

The meeting is the last for Chairman Ben S. Bernanke, as Janet Yellen takes over starting Feb. 1. The Fed stimulus has helped fuel a five-year bull market that has pushed the S&P 500 higher by 165 percent.

Fed officials have been scrutinizing economic data to determine the timing and pace of any reductions to their stimulus. A Commerce Department report today showed that sales of new homes in the U.S. fell more than forecast in December, ending the industry’s best year since 2008 on a sour note.

Eight companies in the S&P 500 were scheduled to report their financial results today. Of the 125 companies in the benchmark that posted earnings so far this season, 74 percent have beaten analysts’ estimates for profit and 68 percent have exceeded projections for sales, according to data compiled by Bloomberg.

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 Chicago Board Options Exchange Volatility Index slid 4 percent to 17.42 today, retreating from the highest level since October. The gauge of S&P 500 options known as the VIX surged 46 percent last week, its biggest gain since May 2010.

“The market is volatile and it just feels like a lot of scared buyers are out there,” Sandy Villere III, a New Orleans- based fund manager at Villere & Co., said in a phone interview.

His firm oversees $3.2 billion. “We don’t see a major pullback. Earnings are largely pretty good and the U.S. is generally healthy.”

Villere said his firm is considering buying some technology, industry and retailer shares after raising cash to a maximum 15 percent at some of the funds at the end of last year.

Seven out of 10 S&P 500 industry groups declined today as technology and health-care companies fell the most, sliding at least 0.8 percent as a group. A gauge of industrial shares added 0.2 percent for the best performance.

Visa, the world’s biggest bank-card network, declined 2.3 percent to $216.22. Microsoft, the largest software developer, slipped 2.1 percent to $36.03. Goldman Sachs lost 1.8 percent to $164.69.

Liberty Global Plc slipped 2.2 percent to $81.42 after the company controlled by billionaire John Malone agreed to take over Dutch broadband provider Ziggo NV for 4.9 billion euros ($6.7 billion). Liberty will combine Ziggo’s 2.7 million customers with its UPC cable unit as it competes with Dutch carrier Royal KPN NV.

The Nasdaq-100 Index declined 0.9 percent, trimming a loss of 1.7 percent earlier. Google slipped 2 percent to $1,101.23 while Facebook, the world’s largest social network, dropped 1.7 percent to $53.55. Both companies are scheduled to report results later this week.

Xerox Corp. dropped 5.6 percent to $10.61. The photocopier pioneer was cut to market perform from outperform at BMO Capital Markets by equity analyst Keith Bachman, who said the stock’s valuation already reflected the company’s improved services and technology mix.

Apple Inc., the most-valuable company in the world, climbed 0.8 percent to $550.50 in regular trading before the company reported fiscal first-quarter results. The shares sank 6.3 percent in extended trading at 4:35 p.m. in New York after the company’s second-quarter revenue forecast of $42 billion to $44 billion trailed the average analyst estimate of $46.10 billion.

Caterpillar rallied 5.9 percent to $91.29 after saying it will spend $10 billion buying back shares. The company also reported earnings of $1.54 a share, exceeding the average analyst estimate of $1.27, data compiled by Bloomberg show.

Construction equipment demand is helping Caterpillar to limit the damage from the slump in orders from mining companies that followed a decline in commodity prices.

Merck & Co. advanced 1.1 percent to $52.53. The second- largest U.S. pharmaceuticals company was raised to overweight, an equivalent of buy, from underweight by Morgan Stanley on expectations that cancer drugs will help Merck boost sales.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“The main purpose of life is to live rightly, think rightly, act rightly. The soul must languish when we give all our thought to the body.”
Mahatma Gandhi

 

As ever,

 

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

 

Dear Friends,

Tangents:

I was happy to receive so much feedback from you on Armagnac after my comments in my newsletter last night.  I guess I’m in the minority – I didn’t realize how popular it is!  One of my clients who lives in Ottawa sent me an email, well, in her words, she’s “an Armagnac fan and during the winter months, I usually have one every evening!  I buy ‘Armagnac de Montal’ (more recent than 1961!) which we can get in Ottawa for about $58.00 a bottle.  Lovely!”

We’re off to see Seattle opera’s performance of Rigoletto this weekend….glad I converted those C$ to U$ when we were at par – not so long ago.  I’m also happy speaking with all my clients these days, telling them what their US$ RRSPs and RRIFs are worth in $C.

It’s hard to believe that today is the 30^th anniversary of the unveiling of apple’s first McIntosh.   One of my clients told me today that he remembers its unveiling during a commercial during the Superbowl that year.  You can still watch it on Youtube.  Just go to Youtube.com and search Mac 1984 superbowl ad.

Photos of the day

Revelers wear costumes as they stretch whilst welcoming others to Morning Glory, at a venue in Hackney, London, January 22nd. Morning Glory is a nightclub which operates once a month from 6:30 to 10:30 am, at which revelers drink fruit smoothies, coffee and dance to high energy music, sometimes in their sleepwear. Andrew Winning/Reuters

Irving Finkel, curator in charge of cuneiform clay tablets at the British Museum, poses with the 4,000-year-old clay tablet containing the story of the Ark and the flood during the launch of his book ‘The Ark Before Noah’ at the British Museum in London. The book tells how he decoded the story of the Flood and offers a new understanding of the Old Testament’s central narratives and how the flood story entered into it. Sang Tan/AP

Market Closes for January 24^th, 2014

Market  Index	Close	Change
Dow  Jones	15879.11	-318.24    -1.96%
S&P 500	1790.29	-38.17    -2.09%
NASDAQ	4128.172	-90.703    -2.15%
TSX	13717.76	-215.21
		-1.54%

International Markets

Market  Index	Close	Change
NIKKEI	15391.56	-304.33
		-1.94%
HANG  SENG	22450.06	-283.84
		-1.25%
SENSEX	21133.56	-240.10
		-1.12%
FTSE 100	6663.74	-109.54
		-1.62%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.399	2.409
CND.   30 Year Bond	2.970	2.986
U.S.   10 Year Bond	2.7169	2.7772
U.S.   30 Year Bond	3.6350	3.6821

Currencies

BOC Close	Today	Previous
Canadian $	0.90214	0.90060
US   $	1.10848	1.11037
Euro Rate  1 Euro=		Inverse
Canadian   $	1.51610	0.65959
US  $	1.36773	0.73114

Commodities

Gold	Close	Previous
London Gold   Fix	1270.07	1263.97
Oil	Close	Previous
WTI Crude Future	96.68	97.37
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 24 (Bloomberg) — Canadian stocks fell a second day, with the benchmark index dropping the most in seven months, as concern that a slowdown in China will hurt economic growth triggered a rout in global equities.

Thompson Creek Metals Co. and HudBay Minerals Inc. sank at least 4 percent to lead a gauge of mining stocks lower. Air Canada dropped 3.3 percent as industrial shares declined. Open Text Corp. soared 11 percent to an all-time high after saying it plans to spend another $3 billion on deals.

The Standard & Poor’s/TSX Composite Index decreased 215.18 points, or 1.5 percent, to 13,717.79 at 4 p.m. in Toronto. The gauge lost 1.2 percent this week after closing Jan. 20 at the highest since April 2011. Trading in S&P/TSX stocks was 16 percent higher than the 30-day average at the close.

“People are concerned that if China starts to weaken they should worry about commodity prices,” Irwin Michael, a fund manager at ABC Funds in Toronto, said in a phone interview. His firm manages about C$850 million ($768 million). “The market was looking for an excuse to check back and they found it with PMI. The China number is just a smokescreen and we believe that the economic numbers will start to improve again.”

Emerging-market shares extended the worst start to a year since 2009, while a measure of European stocks tumbled the most since June and U.S. equities retreated a to a one-month low. The MSCI All-Country World Index declined 1.9 percent, the biggest drop since June.

Data yesterday from China indicated factory output may contract this month, based on a preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics. Prices for industrial metals sank as the data fell below economists’ forecasts. China is the world’s biggest consumer of the metals such as copper and Canada’s second-largest trading partner.

Copper tumbled to a one-month low in New York, while zinc reached a two-week low in London.

Investors also assessed a report from Canada today that showed the nation’s inflation rate last month accelerated less than forecast, reinforcing policy-maker warnings that gains will be sluggish.

Eight of the 10 main industries in the index retreated.  Producers of raw materials plunged 1.9 percent, while energy companies dropped 1.3 percent.

The S&P/TSX Diversified Metals & Mining Index dropped 2 percent for a fourth straight decline, as nine of 10 members in the gauge retreated. Thompson Creek Metals Co. fell 6.7 percent to C$2.80.  HudBay Minerals declined 4 percent to C$8.93 and Capstone Mining Corp. slipped 3.2 percent to C$3.01.

Industrial companies in the S&P/TSX dropped 2.6 percent as Air Canada’s Class B shares decreased 3.3 percent to C$9.23, extending losses for the carrier to almost 5 percent in two trading sessions.

The stock rallied 8 percent on Jan. 22 after the company said its Canadian pension plans are estimated to be in a small surplus position as of Jan. 1.

Open Text soared 11 percent to a record C$110.82. Chief Executive Officer Mark Barrenechea said the business software company is ready to spend $3 billion on acquisitions over the next five years.

Open Text bought GXS Group Inc., a seller of cloud-based software integration services, for $1.17 billion on Jan. 16.  Yesterday, Waterloo, Ontario-based Open Text reported profit and sales that beat analysts’ average estimates and announced a 2-for-1 stock split.

USA

By Nick Taborek

Jan. 24 (Bloomberg) — U.S. stocks sank the most since June, capping the worst week for benchmark indexes since 2012, as a selloff in developing-nation currencies spurred concern global markets will become more volatile.

Caterpillar Inc., General Electric Co. and Boeing Co. slid at least 2.6 percent to pace losses in the Dow Jones Industrial Average. Kansas City Southern plunged 15 percent, the biggest retreat since 2008, after reporting lower-than-estimated earnings. International Game Technology tumbled 15 percent as the maker of slot machines posted first-quarter profit that missed analysts’ projections.

The Standard & Poor’s 500 Index retreated 2.1 percent to 1,790.29 at 4 p.m. in New York to close at the lowest level since Dec. 17. The benchmark index declined 2.6 percent this week. The Dow slid 318.24 points, or 2 percent, to 15,879.11 today. The 30-stock gauge lost 3.5 percent this week. About 8.8 billion shares changed hands on U.S. exchanges, the busiest trading day of the year.

“The volatility of the emerging markets and the currency impacts are affecting U.S. markets,” Eric Teal, who helps oversee $3.5 billion as the chief investment officer at First Citizens BancShares Inc. in Raleigh, North Carolina, said by phone. “Following the strong gains of last year, I think it’s to be expected that you might have an overreaction here of selling.”

Emerging-market currencies had their worst selloff in five years yesterday as Argentine policy makers devalued the peso by reducing support in the foreign-exchange market. The Turkish lira plunged, Ukraine’s hryvnia sank to a four-year low and South Africa’s rand weakened beyond 11 per dollar for the first time since 2008. China’s banking regulator ordered its regional offices to increase scrutiny of credit risks in the coal-mining industry, said two people with knowledge of the matter, signaling government concern about possible defaults.

Investors are losing confidence in some of the biggest developing nations, extending the rout in currencies that began last year when the Federal Reserve signaled it would slow the pace of its monthly purchases of Treasuries and mortgage bonds.

The S&P 500 fell 0.9 percent yesterday and the Dow dropped to a one-month low after a gauge of manufacturing activity in China unexpectedly contracted.

The MSCI Emerging Markets Index lost 1.5 percent today, extending its decline for the year to more than 5 percent, while Europe’s equity benchmark slid the most since June.

Three rounds of Fed monetary stimulus have helped the S&P 500 rise about 165 percent from a 12-year low in 2009. The U.S. equity benchmark rallied 30 percent to a record last year, the most since 1997. Equities have since pared those gains, with the index down more than 3 percent for 2014.

“You’ve had a massive selloff in these emerging-market currencies,” Nick Xanders, a London-based equity strategist at BTIG Ltd., said by telephone. “Ruble, rupee, real, rand: they’ve all fallen and the main cause has been tapering. A lot of companies that have benefited from emerging-markets growth are now seeing it go the other way.”

The S&P 500 trades at about 15.2 times the estimated earnings of its members, more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Ten companies in the S&P 500, including Procter & Gamble Co. and Bristol-Myers Squibb Co., reported results today. Of the 122 index members that have released earnings so far this season, 74 percent have beaten estimates for profit and 67 percent have exceeded sales projections, according to data compiled by Bloomberg.

Per-share profit for companies in the benchmark probably climbed 6.6 percent in the fourth quarter, while sales increased 2.6 percent, according to analysts surveyed by Bloomberg.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, surged the most since April, adding 32 percent to 18.14 today. The gauge rallied 46 percent this week, for the biggest weekly increase since May 2010.

All 10 main S&P 500 groups retreated today. Industrial and materials stocks lost at least 2.7 percent to pace declines.

Boeing sank 3.3 percent to $136.65 and Caterpillar lost 2.6 percent to $86.17, among the biggest declines in the Dow.

Companies whose earnings are most tied to economic swings dropped. The Morgan Stanley Cyclical Index lost 3 percent, the most since April, as Whirlpool Corp. slid 5 percent to $145.68.

An S&P gauge of homebuilders fell 3.4 percent for the steepest decline since August. D.R. Horton Inc. slipped 4.9 percent to $20.88 and PulteGroup Inc. fell 4.1 percent to $18.84.

The Dow Jones Transportation Average, which reached a record yesterday, slid 4.1 percent for the biggest one-day decline since 2011. Delta Air Lines Inc. fell 4.3 percent to $31.11.

Kansas City Southern lost 15 percent to $99.49. The railroad operator reported fourth-quarter profit that missed analysts’ estimates as energy revenue fell 17 percent due to a decline in coal shipments.

International Game Technology tumbled 15 percent to $15.04.  The Las Vegas-based company posted earnings of 25 cents a share, missing the average analyst estimate by 6 cents.

Intuitive Surgical Inc. lost 6.4 percent to $410.76. The maker of a robotic-surgery device said fourth-quarter systems revenue decreased by 23 percent from a year earlier.

Phone, utility and consumer-staples stocks, which have the highest dividend yields among 10 S&P 500 groups, fell less than 1.2 percent, as yields on 10-year Treasuries fell to an eight- week low, boosting the allure of equity income.

Procter & Gamble climbed 1.2 percent to $79.18. The world’s largest consumer-goods maker posted second-quarter profit that topped analysts’ estimates as sales of products such as Pampers diapers rose in emerging markets.

Microsoft Corp. added 2.1 percent, the most in the Dow, to $36.81. Customers flocked to the company’s game consoles and cloud software last quarter, helping sales beat analysts’ projections.

Juniper Networks Inc. rallied 6.6 percent to $27.72 for the biggest gain in the S&P 500. The networking-equipment maker reported sales that exceeded analysts’ estimates. Revenue in the fourth quarter increased 12 percent to $1.27 billion from $1.14 billion a year earlier, the Sunnyvale, California-based company said yesterday in a statement. Analysts had predicted sales of $1.22 billion.

Discover Financial Services climbed 2.8 percent to $53.88. Discover rose the most in three months after reporting profit that beat analysts’ estimates as credit-card spending and loan demand increased.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

Chitragupta, who is supposed to be writing out our deeds in an account book

is no other than the conscious and unconscious parts of our mind.

The Lord of Law, to whom we have to render the account,

is the Soul within us.

Gopla Singh, 1911-1963

As ever,

 

Carolann

 

Life shrinks or expands according

to one’s courage.

-Anaïs Nin, 1903-1977.

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:

We spent an entertaining evening last Thursday night at an “Armagnac Tasting”.  A couple of friends invited us to join them – one of whom loves Armagnac, however she says it is difficult to find  easily in Victoria, so this was going to be a treat.  To be honest, I didn’t even know what Armagnac is, so Karen did a little sleuthing for me before the event. For those who, like me, aren’t well versed on Armagnac, I learned that it is a distinctive kind of brandy produced in the Armagnac region in Gascony, southwest France.  According to Wikipedia, it is distilled from wine usually made from a blend of grapes including Baco 22A, Colombard, Folle blanche and Ugni blanc; the resulting spirit is then aged in oak barrels.  It is the oldest brandy distilled in France, but the overall volume of production is far smaller than Cognac production and therefore is less known outside Europe.  Also, they are for the most part made and sold by small producers, whereas in Cognac production is dominated by big-name brands.

One generous member at the Union Club offered up a sampling of nine different vintages that he had acquired – it turned out to be so much fun.   No prior research was necessary though because the sommelier from Lure Restaurant, Jacques Lacoste, had such a scope of knowledge on the subject  – he is truly amazing.  The tasting included a 1961 Amagnac de Montal that fetches $408/bottle, a 1973 Marie Duffau, a 1973 Domaine D’Ognoas, a 1974 Damblat, a 1975 Marcel Treput, A 1978 Armagnac de Montal, a 1985 Domaine de Baraillon, A 1986 Armagnac du Miquer and a 1993 Armagnac de Montal that can be had for a more reasonable $115/bottle.  All tasted very different – all were good.  Mr. Treput gave a wonderful introduction about the history, the region and even anecdotal comments about t the families who produced the vintages we tasted.

I am now a fan.

Photos of the day

Russian women enjoy a skating rink along a boulevard in Moscow’s Sokolniki Park. Pavel Golovkin/AP

A female leopard runs inside a snow-covered enclosure at Dachigam Wildlife Sanctuary on the outskirts of Srinagar, Indian-Administered Kashmir. Wildlife authorities are making special efforts to provide food to the endangered leopards as they face difficulty in finding vegetation following heavy snowfall. Dar Yasin/AP

Market Closes for January 23^rd, 2014

Market  Index	Close	Change
Dow  Jones	16197.35	-175.99    -1.07%
S&P 500	1828.46	-16.40    -0.89%
NASDAQ	4218.875	-24.125    -0.57%
TSX	13932.97	-55.23
		-0.39%

International Markets

Market  Index	Close	Change
NIKKEI	15695.89	-125.07
		-0.79%
HANG  SENG	22733.90	-348.35
		-1.51%
SENSEX	21373.66	+35.99
		+0.17%
FTSE 100	6773.28	-53.05
		-0.78%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.409	2.487
CND.   30 Year Bond	2.986	3.050
U.S.   10 Year Bond	2.7772	2.8619
U.S.   30 Year Bond	3.6821	3.7577

Currencies

BOC Close	Today	Previous
Canadian $	0.90060	0.90151
US   $	1.11037	1.10926
Euro Rate  1 Euro=		Inverse
Canadian   $	1.52033	0.65775
US  $	1.36924	0.73033

Commodities

Gold	Close	Previous
London Gold   Fix	1263.97	1236.83
Oil	Close	Previous
WTI Crude Future	97.37	96.78
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 23 (Bloomberg) — Canadian stocks declined, led by technology, financial and health-care shares, after a measure of China’s manufacturing contracted. Mining companies gained after gold reached a two-month high.

BlackBerry Ltd. dropped 3.1 percent after yesterday reaching the highest price since September. Penn West Petroleum Ltd. retreated 4 percent, bringing its loss this week to 14 percent. Gold mining stocks soared 3.1 percent as a group with OceanaGold Corp. and China Gold International Resources Corp. jumping more than 5 percent.

The Standard & Poor’s/TSX Composite Index decreased 55.23 points, or 0.4 percent, to 13,932.97 at 4 p.m. in Toronto after earlier rising above 14,000 for the first time since May 2011.

The gauge is about 2.4 percent lower than a three-year high of 14,270.53 in April 2011. Trading in S&P/TSX stocks was 8 percent higher than the 30-day average at the close.

“Investors are letting the market take a pause,” Bob Decker, a fund manager with Aurion Capital Management Inc. who helps manage about C$6 billion ($5.7 billion), said by phone from Toronto. “There’s a general wait-and-see attitude. Other than gold stocks mitigating the decline, we’re seeing a negative tone in the equity markets.”

Chinese factory output may shrink this month, a preliminary survey from HSBC Holdings Plc and Markit Economics indicated today as the People’s Bank of China injected more funds to the financial system to ease a cash shortage. In the U.S., applications for unemployment benefits rose in the latest week.

The S&P/TSX has advanced 2.3 percent this year for the 10th best performance among 24 developed markets tracked by Bloomberg. The gauge trades for about 18.4 times its companies’ reported earnings, the highest valuation in almost three years.

The Canadian index is starting the year off stronger than the S&P 500 Index, the U.S. benchmark gauge, for the first time since 2009. The S&P 500 is down 1.1 percent this year, more than the MSCI All-Country World Index’s 1 percent decline.

The Canadian dollar, the worst performer among the Group of 10 countries in the past six months, slid 0.8 percent to C$1.1174 per U.S. dollar, the weakest level since July 2009.

Global stocks fell today as a survey from HSBC Holdings Plc and Markit Economics signaled that Chinese factory output may contract this month. The preliminary reading of 49.6 for the Purchasing Managers’ Index compared with a final figure of 50.5 in December and a 50.3 median estimate of 19 analysts in a Bloomberg survey.

Canadian retail sales in November increased 0.6 percent to C$41.0 billion ($36.8 billion), Statistics Canada said today in Ottawa, three times faster than the 0.2 percent median of a Bloomberg survey with 18 responses. Motor vehicle and parts sales rose 1.2 percent to C$9.63 billion in November as an early onset of winter boosted demand for seasonal items, Statistics Canada said.

Nine of the 10 main industries in the index retreated.

Health-care companies dropped 1.2 percent, while technology, financial and consumer-staples stocks lost at least 0.5 percent.

Producers of raw materials advanced 1 percent.

Manulife Financial Corp. rose 1.9 percent to C$21.80 and Alaris Royalty Corp. slipped 1.8 percent to C$26.51. Home Capital Group Inc. decreased 1.6 percent to C$78.75.

BlackBerry dropped 3.1 percent to C$11.59. Yesterday, the smartphone maker jumped to the highest level since September after it disclosed plans to sell most of its Canadian real estate for cash.

Penn West lost 4 percent to C$7.89. Yesterday, the oil and gas explorer fell to the lowest level since 1999 after AltaCorp Capital Inc. analyst Jeremy McCrea said Penn West may have a higher risk of missing expected production rates.

RBC Capital Markets analyst Greg Pardy said yesterday the company should divest assets with “modest” output to improve its balance sheet.

The S&P/TSX Gold Index increased 3.1 percent as OceanaGold jumped 9.7 percent to C$2.14 and China Gold International Resources Corp. surged 5.7 percent to C$3.36, leading gains among mining stocks in the gauge. Pretium Resources Inc. climbed 2.1 percent to C$6.97 and NovaGold Resources Inc. rose 4.5 percent to C$3.46.

Gold futures for February delivery rose 1.9 percent to $1,262.30 an ounce in New York. Earlier, the price of gold touched $1,267.10 an ounce, the highest level since Nov. 20.

Agnico Eagle Mines Ltd. increased 7.2 percent to C$33.91, the highest level since August. Sterne, Agee and Leach Inc. analyst Michael Dudas raised the gold producer’s rating to buy from neutral with a 12-month price target of $38 a share.

USA

By Nick Taborek and Nikolaj Gammeltoft

Jan. 23 (Bloomberg) — U.S. stocks fell, with the Dow Jones Industrial Average tumbling to a one-month low, after a gauge of China’s manufacturing contracted and investors analyzed corporate earnings.

Cliffs Natural Resources Inc. slipped 4.3 percent, following European commodity producers lower. JPMorgan Chase & Co. and American Express Co. slid at least 1.9 percent to pace losses among financial firms. American Eagle Outfitters Inc. lost 7.8 percent after saying its chief executive officer is leaving. Netflix Inc. surged 16 percent as it projected customer growth that topped analysts’ estimates.

The Standard & Poor’s 500 Index declined 0.9 percent to 1,828.46 at 4 p.m. in New York. The Dow lost 175.99 points, or 1.1 percent, to 16,197.35. About 7.4 billion shares changed hands on U.S. exchanges, 22 percent above the three-month average.

“U.S. equities were at the intersection of full valuations and increasingly positive sentiment and that combination has made them vulnerable to less than perfect news,” Mark Luschini, chief investment strategist at Janney Montgomery Scott LLC, which oversees $63 billion, said in a phone interview. “We set the stage this morning with the data from China for the market to be a little bit nervous and the data points from the U.S. didn’t help to stem that anxiety.”

The S&P 500 has fallen 1.1 percent for the year while the Dow has tumbled 2.3 percent, after the broader gauge jumped 30 percent to a record last year, the most since 1997. Three rounds of Federal Reserve monetary stimulus have helped the S&P 500 rise 170 percent from a 12-year low in 2009.

The rally has boosted equity valuations to near the highest level since 2009. The S&P 500 trades at 15.5 times the estimated earnings of its members, more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Data today showed applications for U.S. unemployment benefits held near a six-week low, showing firings remain muted following the holidays. U.S. house prices advanced 0.1 percent in November from October, slowing growth that indicates the real estate recovery may be losing strength, the Federal Housing Finance Agency said in another report.

Separate releases indicated purchases of previously owned homes climbed in December for the first time in four months, while the index of U.S. leading indicators rose.

Fed officials have been scrutinizing economic data to determine the timing and  pace of any reductions to their stimulus. The central bank, which next meets Jan. 28-29, decided at its December meeting to start cutting its monthly bond purchases by $10 billion to $75 billion.

In China, a report today indicated factory output may contract this month, based on a preliminary Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics.

“China has been the growth story for the better part of 10 or 15 years, and all of a sudden we’re starting to see contraction,” Chris Bouffard, chief investment officer of the Mutual Fund Store in Overland Park, Kansas, which oversees $8.5 billion, said in a phone interview. “That’s going to take a while for market participants to get comfortable with.”

The U.S. equities benchmark had gained 0.3 percent in the previous two sessions as investors assessed corporate earnings.

Some 20 members of the index report results today, including Microsoft Corp. and McDonald’s Corp. Of the 109 index members that have released earnings so far this season, 74 percent have beaten estimates for profit and 67 percent have exceeded sales projections, according to data compiled by Bloomberg.

Per-share profit for companies in the index probably climbed 6 percent in the fourth quarter, while sales increased 2.2 percent, according to analysts surveyed by Bloomberg.

The Chicago Board Options Exchange Volatility Index rose 7.2 percent today to 13.77, the highest in three weeks. The gauge of S&P 500 options known as the VIX has gained 0.4 percent this year.

Nine of the 10 main groups in the S&P 500 retreated at least 0.3 percent today. Financial stocks dropped 1.7 percent, as JPMorgan Chase fell 1.9 percent to $56.47 and Citigroup Inc. slid 2.3 percent to $50.72. American Express lost 2.2 percent to $89.17 for the biggest loss in the Dow.

Berkshire Hathaway Inc. Class B shares fell 1.5 percent to $113.50. Regulators are starting to scrutinize Warren Buffett’s conglomerate to determine whether it is important enough to the financial system to require Fed supervision, according to two people with knowledge of the matter.

KeyCorp slid 3.3 percent to $13.68. The Cleveland-based bank today said noninterest expenses in the fourth quarter were $712 million, surpassing its guidance of $680 million to $700 million, including one-time charges. Profit rose 21 percent.

Materials producers declined 1.5 percent as a group after commodity stocks retreated in Europe. Prices for industrial metals sank as the manufacturing data from China, the world’s biggest consumer, fell below economists’ forecasts.

DuPont Co. fell 2 percent to $61.75. Alcoa Inc., the largest U.S. aluminum producer, dropped 1.2 percent to $12.07.

Cliffs Natural Resources, the biggest U.S. iron-ore producer, dropped 4.3 percent to $20.29, the lowest since October.

Noble Corp. fell 8.6 percent to $33.13 for the steepest decline in the S&P 500. The oil driller said the offshore industry may be due for a cyclical pause. Diamond Offshore Drilling Inc. fell 5.2 percent to $51.88 and Rowan Cos. lost 2.6 percent to $32.78.

American Eagle Outfitters lost 7.8 percent to $13.19 after the teen-apparel retailer said Chief Executive Officer Robert Hanson is leaving the company and Executive Chairman Jay Schottenstein will replace him on an interim basis.

Herbalife Ltd. tumbled 10 percent to $65.92, a two-month low. The nutrition company that hedge fund manager Bill Ackman has accused of being a pyramid scheme fell the most in a year after a U.S. senator called for a probe into the company’s operations.

Zhone Technologies Inc. tumbled 26 percent to $4.62 after the provider of network products for voice, data and video services reported fourth-quarter revenue of $32.3 million, missing an estimate for $32.5 million.

Netflix surged 16 percent to $388.72. The world’s largest subscription streaming service forecast customer growth ahead of analysts’ estimates and saying it may charge new users more to share accounts.

Netflix predicted 2.25 million new domestic subscribers this quarter. The Los Gatos, California-based company also estimated first-quarter profit of $48 million, or 78 cents a share, compared with analysts’ projections of 75 cents.

AT&T Inc. gained 1.4 percent to $33.80 and Verizon Communications Inc. added 1.1 percent to $47.86, as phone stocks were the only group to advance in the S&P 500.

Union Pacific Corp. climbed 3.3 percent to $174.12. The biggest U.S. railroad reported fourth-quarter profit that beat analysts’ estimates after a record corn crop increased shipments of agricultural products. Shipments of automobiles and industrial products also rose.

McDonald’s rose 0.5 percent to $95.32. The world’s largest restaurant chain posted fourth-quarter profit that was little changed from a year earlier even as U.S. same-store sales fell amid shaky consumer confidence and increased competition.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

The human voice can never reach the distance

that is covered by the still small voice of conscience.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

The least I can do is speak out for those who cannot

speak for themselves.

-Jane Goodall, 1934-

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:

Thought I’d share with you this interesting article  that I read this morning:

Why do birds fly in a V?

ENERGY SAVINGS, AERODYNAMIC BENEFITS ARE FACTORS, STUDY SHOWS

-by SUDESHNA CHOWDHURY

The reason why some birds fly in a big V is more than just aesthetics, say scientists.  A team led by University of London biologists Steven Portugal and James Usherwood equipped a flock of 14 bald ibises with various measurement devices and monitored the endangered birds as they migrated from Austria to Italy.  The precision of these measurements allowed the scientists to track the relative positioning of the birds in a V, according to the university’s Royal Veterinary College. As the birds flew, the scientists observed them for just over 43 minutes, recording each bird’s position, speed, and direction, according to a press release from the science journal Nature.

Their findings, published in the Jan. 16 issue of Nature, revealed that birds changed their position of flight or flapped their wings in a manner that gave them “the best aerodynamic advantage.”  The ones flying in V formation flapped their wings in phase so that the trailing bird could get an extra lift from the one that was ahead of it, stated the study. Those flying directly behind another bird flapped their wings out of phase to reduce the effects of “detrimental downwash” from the bird ahead of it. It is basically a balancing act, says Dr. Usherwood, who was involved in the study.  “The intricate mechanisms involved in Vformation flight indicate remarkable awareness and ability of birds to respond to the wing path of nearby flock-mates,” said Dr. Portugal.  “Birds in V formation seem to have developed complex phasing strategies to cope with the dynamic wakes produced by flapping wings.”  This behavior also helps conserve energy while flying, says Usherwood, Not all birds fly in V patterns. Only certain species of birds, such as cranes, pelicans, and geese, do. “Birds which fly in V-formation are fairly big,” Usherwood says. “They fly at the same speed and fly large distances. They usually have long wings.”  This study opens the door to further research about how birds can sense the flow of air, says Usherwood. “This can also help us look into how aircraft fly together,” he says.  These findings also show that birds can sense and predict the patterns of air turbulence caused by the other birds in the flock.

Birthday today: poet Lord Byron was born on this day in 1788.

She walks in beauty, like the night

Of cloudless, climes and starry skies;

And all that’s best of dark and bright

Meet in her aspect and her eyes.

–Lord Byron, from She Walks in Beauty, 1815.

Photos of the day

The sun illuminates windblown snow as a man walks under elevated train tracks in Philadelphia. A winter storm stretched from Kentucky to New England and hit hardest along the heavily populated Interstate 95 corridor between Philadelphia and Boston. Matt Rourke/AP

Members of movement Oxford Committee for Famine Relief (Oxfam) put white roses on symbolic gravestones, on the opening day of the Geneva II peace talks on Syria, in Montreux, Switzerland. Representatives of Syrian President Bashar Assad, a divided opposition, world powers and regional bodies started the peace conference. Salvatore Di Nolfi/Keystone/AP

Market Closes for January 22^nd, 2014

Market  Index	Close	Change
Dow  Jones	16373.34	-41.10    -0.25%
S&P 500	1844.86	+1.06    +0.06%
NASDAQ	4243.000	+17.240    +0.41%
TSX	13988.20	+36.43
		+0.26%

International Markets

Market  Index	Close	Change
NIKKEI	15820.96	+25.00
		+0.16%
HANG  SENG	23082.25	+49.13
		+0.21%
SENSEX	21337.67	+86.55
		+0.41%
FTSE 100	6826.33	-7.93
		-0.12%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.487	2.507
CND.   30 Year Bond	3.050	3.057
U.S.   10 Year Bond	2.8619	2.8286
U.S.   30 Year Bond	3.7577	3.7445

Currencies

BOC Close	Today	Previous
Canadian $	0.90151	0.91152
US   $	1.10926	1.09707
Euro Rate  1 Euro=		Inverse
Canadian   $	1.50269	0.66547
US  $	1.35470	0.73817

Commodities

Gold	Close	Previous
London Gold   Fix	1236.83	1241.43
Oil	Close	Previous
WTI Crude Future	96.78	94.99
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 22 (Bloomberg) — Canadian stocks rose for the sixth time in seven days after Bank of Canada governor Stephen Poloz maintained the benchmark interest rate and said the direction of the next move will depend on the economy.

BlackBerry Ltd. climbed 9.9 percent on plans to sell most of its Canadian real estate for cash. Gran Tierra Energy Inc. rallied 10 percent after FirstEnergy raised its rating on the stock. Torex Gold Resources Inc. plunged 5 for a second day of losses after announcing it is seeking to raise C$125 million in a share offering.

The Standard & Poor’s/TSX Composite Index increased 36.43 points, or 0.3 percent, to 13,988.20 at 4 p.m. in Toronto after losing 0.1 percent earlier. The gauge has advanced 2.7 percent this year.

“The market’s just awaiting the earnings picture that begins next week,” John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto, said by phone. The firm manages about C$1 billion ($916.6 million). “The market will probably go quiet until we see some of these numbers. It’s had a good run the last little while and we’re hopeful that with the large commodity content that it has, the world economies are going to do a little better in 2014 than in 2013, and that will be beneficial for our markets.”

Policy makers kept the benchmark rate on overnight loans between commercial banks at 1 percent, where it’s been since September 2010, as expected by all 21 economists in a Bloomberg News survey. The bank’s updated forecast lifted the outlook for 2014 economic growth to 2.5 percent from 2.3 percent and said inflation will be further below target throughout 2014.

The Canadian dollar, or the loonie, lost 1 percent to a four-year low of C$1.1087 per U.S. dollar. The loonie has fallen against all of its 16 major peers this year after Poloz said he’s concerned that inflation is too low.

BlackBerry rallied 9.9 percent to C$11.96. The struggling smartphone maker is working with CBRE Group Inc. to sell vacant properties as well as occupied space it would then lease back from buyers, according to a statement today. The assets cover more than 3 million square feet (280,000 square meters), the amount of office space in the 104-story One World Trade Center skyscraper in lower Manhattan.

Gran Tierra rallied 10 percent to C$8.58. The stock was raised to top pick from market perform by FirstEnergy analyst Darren Engels after the company reported “significant” reserves at its Bretana field in Peru.

Torex Gold plunged 5 percent to C$1.14, extending yesterday’s 9.8 percent decline, after the mining company said it will sell shares at C$1.20 each to finance the development of its El Limon and Guajes projects and for general corporate purposes.

Bombardier Inc. slipped 1 percent to C$3.91. Chief Executive Officer Pierre Beaudoin said the company will not have to raise additional funds this year after delaying delivery of its CSeries narrow-body plane for a fourth time.

The manufacturer delayed its CSeries jetliner again on Jan. 16, saying the aircraft won’t enter commercial service until late next year instead of 2014 because it needs more time for tests.

Penn West Petroleum Ltd. dropped 9 percent to C$8.22. The company may have a higher risk of missing expected production rates, AltaCorp Capital Inc. analyst Jeremy McCrea wrote in note. RBC analyst Greg Pardy said the oil and gas explorer should divest assets with “modest” output to improve its balance sheet.

USA

By Lu Wang

Jan. 22 (Bloomberg) — Most U.S. stocks rose as investors assessed earnings from companies including Norfolk Southern Corp., Coach Inc., International Business Machines Corp.

Norfolk Southern, the second-largest U.S. eastern railroad, climbed 4.8 percent after posting a fourth-quarter profit that exceeded analysts’ estimates. BlackBerry Ltd. rose 8.6 percent as the smartphone maker said it plans to sell most of its Canadian real estate to raise cash for its turnaround plan.

Coach, the largest U.S. luxury handbag maker, slumped 6 percent after sales missed analysts’ estimates. IBM slid 3.3 percent as revenue declined for a seventh consecutive quarter amid weaker demand for servers.

Three stocks rose for every two that declined in the Standard & Poor’s 500 Index. The U.S. equity benchmark added less than 0.1 percent to 1,844.86 at 4 p.m. in New York. The Dow Jones Industrial Average lost 41.10 points, or 0.3 percent, to 16,373.34 for a second day of declines. About 6.3 billion shares changed hands on U.S. exchanges, 3 percent above the three-month average, according to data compiled by Bloomberg.

“Earnings are all that matters,” Dan Morris, who helps oversee about $564 billion as global investment strategist at TIAA-CREF Asset Management in New York, said in a phone interview. “To see the justification for meaningful higher prices, we just need to wait for earnings to catch up and accelerate a bit and that may take a quarter or two.”

Twenty-five companies in the S&P 500 including Northern Trust Corp., Netflix Inc. and EBay Inc. report earnings today.

Of the 86 index members that have posted results so far this season, 70 percent have beaten estimates for profit and 65 percent have exceeded sales projections, according to data compiled by Bloomberg.

Per-share profit for companies in the benchmark probably climbed 6 percent in the fourth quarter, while sales increased 2.2 percent, according to analysts surveyed by Bloomberg.

A five-year rally that lifted the S&P 500 up more than 170 percent from a bear-market low has boosted equity valuations to near the highest level since 2009. The index trades at 15.6 times the estimated earnings of its members, more than the five- year average multiple of 14.1, data compiled by Bloomberg show.

The Dow is diverging from the S&P 500 by the most in more than two years amid weaker results from companies such as Johnson & Johnson and IBM. The average difference between their performance in the past three days has been 0.5 percentage point, the most since October 2011.

“Earnings have been mixed,” David Chalupnik, head of equities at Nuveen Asset Management in Minneapolis, said in a phone interview. His firm manages about $120 billion. “If we as a country, we as a world, stay in the muted economic growth we’ve experienced in the past two years, the market probably can’t support the valuations here. We need better economic numbers and we need earnings to follow that.”

Traders are buying record amounts of options that pay off if the calm that is blanketing markets proves temporary.

Outstanding call options on the Chicago Board Options Exchange Volatility Index has reached a record 8.4 million, exceeding the previous high of 7.7 million in March, according to data compiled by Bloomberg.

The contracts, which expire today, are used by investors as insurance against losses because the VIX usually climbs when equities fall. Investors are positioning for stock swings with more than 180 companies in the S&P 500 getting ready to release quarterly results by the end of next week. The VIX slid 0.2 percent today to 12.84, bringing its decline for 2014 to 6.4 percent.

Energy, consumer-discretionary and industrial stocks rose the most among 10 main industries in the S&P 500, climbing more than 0.2 percent. Telephone and raw-materials companies dropped at least 0.7 percent for the worst performance.

Norfolk Southern jumped 4.8 percent to $92.94. The company’s profit exceeded analysts’ forecast amid higher shipments of chemicals, automotive and agricultural products.

BlackBerry rose 8.6 percent to $10.78. The company said in a statement that it will work with CBRE Group Inc. to sell vacant properties as well as occupied space it will then lease back from the new owners.

Textron Inc. advanced 5.3 percent to $38. The manufacturer of Cessna aircraft said it earned 60 cents a share in the fourth quarter. That beat the average analyst estimate by 1 cent.

Brinker International Inc., which owns Chili’s Grill & Bar restaurants, climbed 6.5 percent to $49.72. The restaurant chain reported second-quarter profit and sales above analysts’ estimates.

Nuance Communications Inc. jumped 7.8 percent to $16.05.

The provider of voice applications to corporate customers said first-quarter preliminary adjusted earnings per share probably amounted to 23 cents to 24 cents, more than the 20-cent average estimate of analysts. The company predicted profit of 18 cents to 21 cents a share in November.

Coach slid 6 percent to $49.38. Revenue for the quarter through Dec. 28 amounted to $1.42 billion, missing the average analyst estimate of $1.48 billion. The maker of luxury accessories posted earnings per share of $1.06, falling short of the $1.11 that analysts had projected.

IBM dropped 3.3 percent to $182.25 for the biggest retreat in the Dow. The world’s biggest computer-services provider said revenue declined to $27.7 billion in the three months through December. Profit dropped at the company’s hardware unit partly because of its x86 server business, according to Chief Financial Officer Martin Schroeter.

Advanced Micro Devices Inc. slumped 12 percent to $3.67 for the biggest drop since October. The maker of processors for personal computers predicted that revenue will be from $1.29 billion to $1.38 billion in the first quarter. The average analyst projection had called for sales of $1.37 billion, according to a Bloomberg survey.

Motorola Solutions Inc. fell 3.9 percent to $64.51. The mobile communications company forecast first-quarter profit below analyst estimates and said it expects sales to decline between 4 percent and 6 percent. Analysts were predicting a 2 percent revenue gain.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

In Sanskrit, one calls the bird twice born.

And this name is also given to the man who submits for at least twelve years

to the discipline of mastering his self and the noble thought, who emerges from it with simple needs,

with a pure heart, and ready to take upon himself all the responsibilities of life

in a broad and disinterested spirit.  One estimates that this man is born again from the blind envelopment

of the ego to the freedom of the life of the soul,

that he has entered into lively connection with his environment,

that he has become one with the Whole.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

Now hatred is by far the longest pleasure.  Men love in haste,

but they detest at leisure.

–Lord Byron, 1788-1824.

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:

One of my favorite writers (a frequent contributor to The New Yorker magazine) is Adam Gopnik.  This past weekend I read a recent article he wrote about the new year.

TWO SHIPS

We make the turn toward the new year this January with trepidation.  Well, we make the turn toward every new year with trepidation, but added to the anticipatory jumps this year are what might be called the retrospective willies.  You don’t have to  have a very enlarged sense of history to remember what happened last time Western Civilization sped around the corner from ’13 to ’14.  Not so good.  The year 1913 had been full of rumbling energy and matchless artistic accomplishment – Proust kicking off, the Cubists kicking back, Stravinsky kicking out – and then, within a few months, the Archduke was assassinated in Sarajevo and the troop trains were running and, pretty soon, the whole positive and optimistic and  progressive culture was on its way to committing suicide.  The Great War left more than ten million Europeans dead and a civilization in ruins (and presaged a still worse war to come).  Naturally, a lot of people, staring at this year’s tea leaves – at rising new powers and frightened old ones – are searching for parallels between that ’14 and this one, and finding them.  In the Times recently, the historian Margaret MacMillan pointed out a few, clustering around the folly of “toxic nationalisms” that draw big powers into smaller local disputes, with the Russians trying to play a better hand today in Syria than they played in Serbia a century ago.

Lodged somewhere in our collective memory of that catastrophe is an image, a  metaphor of hubris, from just  a year or so before:  a great four-funnelled ocean liner, the biggest and most luxurious ever built, whose passengers, rich and poor, crowd on board, the whole watched over by a bearded man named Edward John Smith, with the chief designer, Thomas Andrews, along for the maiden voyage, too.  Then the ship sets off from Southampton, sure of itself, unsinkable, until it comes to the ice fields of the North Atlantic, off the coast of Newfoundland – and speeds right on through them to its anchorage, here in New York.  Because this ship isn’t the Titanic but its nearly identical twin sister, the Olympic, made at the same time, by the same people, to do the same job in the same way.  (A single memorable image exists of the two ships in dock together.)  The Olympic not only successfully completed its maiden voyage but became known as Old Reliable, serving as a troop carrier in the First World War, and sailing on for twenty years more. (A third, , late-released liner in the same class, the Britannic, hit a mine in the Aegean, in 1916, while serving as a hospital ship, and sank, a true casualty of war.)

The story of the two ships is one to keep in mind as we peer ahead into the new year.  It reminds us that our imagination of disaster is dangerously more fertile than our imagination of the ordinary.  You have certainly heard of the Titanic; you probably never heard of the Olympic.  We have a fatal attraction to fatality….If our history leads us to the First World War, then we imagine that we were always bound on that collision course, and we cannot imagine that, with a bit of luck and another set of contingencies, we might have been on the Olympic, not the Titanic.  We search for parallels of disaster, and miss parallels of hope.  False positives are the great curs of diagnostic, in historical parallels and prostate screenings alike.

Is it all chance and contingency though?   Do we not know what boat we’re on until the iceberg informs us?  Leafing through recent books on the last encounter with ’14, you find one thing that does seem to have the chill of ice about it.  Even open societies, so to speak, on the open seas of history, are not immune to the appeal to honor and the fear of humiliation.  The relentless emphasis on shame and face, on position and credibility, on the dread of being perceived as weak sounds an icy note through the rhetoric of 1914 – from the moment Franz Ferdinand is shot to the moment the troops are sent to the Western Front.  The prospect of being discredited, “reduced to a second-rate power,” was what drove the war forward.  The German Kaiser kept saying that he would never again allow himself to be embarrassed by the British.  Lloyd George, in London, felt that Britain had to go to war or it would never “be taken seriously” in the councils of Europe.  Needless wars are rushed alone, it seems, by an overcharge of the language of honor and credibility, when the language of common sense and compromise would be a lot more helpful.   When someone says, “Ram the iceberg!  We can’t afford to let it make us look weak,”  it’s time to run for the deck.  Sanity lurks in sailing around the ice.

But then, sanity doesn’t necessarily guarantee safe passage.  Two boats set sail in those prewar years a century ago: the boat that sailed on the boat that sank.  Olympic or Titanic?  Which is ours?  It is, perhaps, essential to life to think that we know where we’re going when we set out –our politics and plans alike depend on the illusion that someone knows where we’re going.  The cold-water truth that the past provides, though, may be that we can’t.  To be a passenger in history is to be unsure until we get to port – or the life boats – and, looking back at the prow of our ship, discover the name, invisible to our deck-bound eyes, that it possessed all alone.  –Adam Gopnik.

Photos of the day

People make use of good weather conditions as they kite surf at Scarborough, on the outskirts of Cape Town, South Africa. Thousands of kite surfers visit the Western Cape each year to practice their sport on pristine beaches. Schalk van Zuydam/AP

People walk and ride on ‘La Promenade des Anglais’, in Nice, southeastern France. Temperatures on the French Riviera reached 14 degrees Celsius (57 Fahrenheit). Lionel Cironneau/AP

Market Closes for January 21^st, 2014

Market  Index	Close	Change
Dow  Jones	16414.44	-44.12    -0.27%
S&P 500	1843.80	+5.10    +0.28
NASDAQ	4225.762	+28.180    +0.67
TSX	13951.77	-38.52
		-0.28%

International Markets

Market  Index	Close	Change
NIKKEI	15795.96	+154.28
		+0.99%
HANG  SENG	23033.12	+104.17
		+0.45%
SENSEX	21251.12	+46.07
		+0.22%
FTSE 100	6834.26	-2.47
		-0.04%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.507	2.491
CND.   30 Year Bond	3.057	3.056
U.S.   10 Year Bond	2.8286	2.8194
U.S.   30 Year Bond	3.7445	3.7480

Currencies

BOC Close	Today	Previous
Canadian $	0.91152	0.91339
US   $	1.09707	1.09482
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48752	0.67226
US  $	1.35591	0.73751

Commodities

Gold	Close	Previous
London Gold   Fix	1241.43	1254.66
Oil	Close	Previous
WTI Crude Future	94.99	94.37
BRENT	109.360	109.360

Market Commentary:

Canada

By Callie Bost

Jan. 21 (Bloomberg) — Canadian stocks fell, after closing yesterday at a more than two-year high, as a drop in gold prices dragged mining companies lower while energy and consumer discretionary shares advanced.

Gold miners slid 0.8 percent as a group with Detour Gold Corp. and NovaGold Resources Inc. decreasing at least 2.6 percent as the metal fell the most in three weeks. Talisman Energy Inc. declined 1.1 percent on reports GDF Suez SA hadn’t placed a bid for the company. Raging River Exploration Inc. rose 3.7 percent after it raised its outlook for fourth-quarter oil production.

The Standard & Poor’s/TSX Composite Index decreased 38.52 points, or 0.3 percent, to 13,951.77 at 4 p.m. in Toronto. The gauge is 2 percent lower than in April 2011, when it climbed to the highest level since 2008. Trading in S&P/TSX stocks was 29 percent higher than the 30-day average at the close.

“There was some good news out of recent earnings reports, especially financials, and that’s given the index a relief rally,” Paul Gardner, portfolio manager at Avenue Investment Management, said by phone from Toronto. He helps manage C$300 million ($290 million). ’’That being said, Canada is under pressure because gold as an underlying commodity is selling out on speculation the Fed may taper sooner rather than later, which will affect gold rates.’’

Gold for immediate delivery fell 1 percent to $1,241.90 an ounce, the biggest loss for the precious metal in three weeks.  Bullion slid 28 percent last year, the most since 1981, as some investors lost faith in the metal as a store of value.

The Canadian dollar weakened to C$1.10 for the first time in more than four years amid speculation the U.S. Federal Reserve will slow its monetary stimulus as the Bank of Canada signals more may be on its way. The Canadian central bank will release a policy statement on rates tomorrow, while the Federal Open Market Committee is scheduled to meet Jan. 28-29.

Canadian factory sales rose to a two-year high in November, while domestic wholesale sales held steady at a record high in the same period, Statistics Canada said today in Ottawa.

Eight of the 10 main industries in the S&P/TSX declined as producers of raw materials slid 0.9 percent. Energy and consumer discretionary companies in the index gained less than 0.1 percent.

The S&P/TSX Gold Index retreated 0.8 percent. Detour dropped 4.7 percent to C$6.30 and NovaGold slipped 2.6 percent to C$3.43.

Argonaut plunged 8.9 percent, the biggest drop since June, to C$5.31. Macquarie Capital Markets analyst Michael Siperco cut the gold producer to neutral from outperform, citing a weaker- than-expected outlook for 2014 and concerns regarding ongoing development projects.

Talisman decreased 1.1 percent to C$12.69. GDF Chief Executive Officer Gerard Mestrallet said at a press conference in Paris that GDF hadn’t bid to buy the Canadian oil and gas producer.

GDF has “no plans” for large acquisitions and development plans outside Europe will be achieved mostly through organic growth, Mestrallet said.

Raging River increased 3.7 percent to C$7.39, an all-time high. The oil explorer reported a 148 percent increase in year- end reserves for 2013 and said fourth-quarter production will be higher than previously forecast.

Capital Power Corp. jumped 3.3 percent to C$22.41, the highest level since May. Scotia Capital Inc. analyst Matthew Akman raised the company to sector outperform from outperform yesterday with a target price of $26 a share.

USA

By Lu Wang and Nick Taborek

Jan. 21 (Bloomberg) — Most U.S. stocks rose as optimism about global economic growth was overshadowed by disappointing results from Johnson & Johnson and Verizon Communications Inc.

J&J declined 1.1 percent, the most in a month, after its earnings forecast trailed analysts’ estimates. Verizon slipped 1.3 percent as subscriber growth slowed from a record. Dow Chemical Co. rallied 6.6 percent after Daniel Loeb’s hedge fund Third Point LLC took a stake. Alcoa Inc. jumped 6.8 percent after JPMorgan Chase & Co. recommended buying the stock.

The S&P 500 gained 0.3 percent to 1,843.80 at 4 p.m. in New York. Three stocks rose for every two that fell in the gauge.

The Dow Jones Industrial Average lost 44.12 points, or 0.3 percent, to 16,414.44. The Russell 2000 Index of small-cap stocks increased 0.6 percent to a record 1,175.72. About 6.8 billion shares changed hands on U.S. exchanges, 12 percent above the three-month average.

“In the short term, continued earnings growth is particularly important,” James W. Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.5 billion from Boston, said by phone. “We are no longer cheap, perhaps not even fairly valued at this point. Investor sentiment is quite optimistic. We need some positive news to get us going.”

Stocks pared early gains today after the S&P 500 approached 1,850, a level that has halted the index’s advance three times in the past month. The benchmark gauge reached an intraday record of 1,850.84 on Jan. 15.

The International Monetary Fund raised its forecast for global growth this year as expansions in the U.S. and U.K. accelerate. The global economy will grow 3.7 percent this year, compared with an October estimate of 3.6 percent, according to the report.

European stocks rose to a six-year high today and Chinese shares led gains in Asia after the country’s money-market rates fell the most in four weeks. The U.S. equities benchmark fell 0.2 percent last week, after touching an all-time high, as weaker-than-estimated earnings at companies from Citigroup Inc. to CSX Corp. offset an improving outlook for the global economy.

For every U.S. company predicting in January that earnings will beat analyst estimates, 2.5 are projecting results that fall short, matching the worst ratio since the rally began in March 2009, according to data compiled by Bloomberg. While analysts say S&P 500 profits will rise 8.8 percent in 2014, that’s almost the same estimate they generated a year ago for 2013, when earnings ended up increasing at about half that rate, the data show.

A five-year rally that lifted the S&P 500 up more than 170 percent from a bear-market low has boosted equity valuations to near the highest level since 2009. The S&P 500 trades at 15.6 times the estimated earnings of its members, more than the five- year average multiple of 14.1, data compiled by Bloomberg show.

Fourteen companies in the S&P 500 including Texas Instruments Inc. and Travelers Cos. report financial results today. Per-share profit for companies in the benchmark probably climbed 6 percent in the fourth quarter, while sales increased 2.2 percent, according to analysts surveyed by Bloomberg.

Of the 62 S&P 500 members that have reported results so far this season, 68 percent have beaten estimates for profit and 66 percent have exceeded sales projections, according to data compiled by Bloomberg.

The Chicago Board Options Exchange Volatility Index rose 3.5 percent today to 12.87. The gauge of S&P 500 options known as the VIX is down 6.2 percent this year.

Eight of 10 industries in the S&P 500 gained as utility companies climbed 1.2 percent for the biggest gain. Telephone shares dropped 0.7 percent for the worst performance.

J&J slipped 1.1 percent to $94.03. The world’s biggest maker of health-care products forecast 2014 profit of $5.75 to $5.85 a share, excluding one-time items. The outlook was below the $5.86 average of analysts’ estimates compiled by Bloomberg.

Verizon lost 1.3 percent to $47.70. The second-largest U.S. phone company added 1.6 million monthly subscribers during the fourth quarter, fewer than the record 2.1 million gained a year earlier. The average estimate was for 1.3 million new subscribers, based on a Bloomberg survey of nine analysts.

Travelers Cos. lost 1.7 percent to $85 after the insurer said rates charged to customers renewing their policies increased at a slower pace.

“The larger focus for investors today may be the clear headline pricing deceleration,” Randy Binner, an analyst at FBR Capital Markets, said in a research note. “The declining pricing trend has been a tough one for investors.”

Halliburton Co. slid 1.7 percent to $49.78. The energy services company said North American revenue will rise at a “mid-single digit” growth rate this year. The company in November predicted the expansion at a “high-single digit” pace.

Dow Chemical rallied 6.6 percent to $45.93. Third Point, the hedge fund led by billionaire Loeb, took a stake in the firm, calling for a share buyback and a spinoff of its petrochemicals business to improve profitability.

Third Point’s stake in Dow is the hedge fund’s largest current investment, Third Point said in a letter to investors, a copy of which was obtained by Bloomberg News. Dow should hire external advisers to review its strategy and the potential benefits of a spinoff, Third Point said.

Alcoa advanced 6.8 percent to $12.13. JPMorgan raised its rating on the largest U.S. aluminum producer to overweight, a recommendation similar to buy, from neutral. The brokerage boosted its 12-month price estimate for the stock to $15 from $9 and said increasing premiums and tightening supply will support the company’s earnings growth.

Delta Air Lines Inc. climbed 3.3 percent to a record $32.08 as earnings beat analysts’ estimates, helped by increased holiday travel, higher fares and lower fuel costs.

Chesapeake Energy Corp. advanced 3.9 percent to $26.45. The oil and gas company was raised to buy from neutral at SunTrust Robinson Humphrey Inc., which said Chesapeake has leading positions in three of the best U.S. gas fields and may sell lower-return assets such as its oilfield services unit.

Investors are the most upbeat about the global economy in almost five years, encouraged by the U.S.-led revival of industrialized nations, according to a Bloomberg Global Poll.  Seventy-two percent in the survey of Bloomberg subscribers said the U.S. economy is improving, up from 53 percent a year ago.

Jeff Altman and John Paulson, two of last year’s best- performing hedge-fund managers, are predicting that stocks will continue their rally in 2014 even as the bull market approaches its sixth year. They’re among a number of top money managers betting markets are robust enough to weather a gradual reduction in the pace of the Federal Reserve’s asset purchases as the central bank signaled it will keep interest rates at their current low for the foreseeable future, according to interviews with more than half a dozen investors.

“The wind will continue to be at the markets’ backs with the Fed,” said Altman, head of the $3.2 billion Owl Creek Asset Management LP. He’s betting on telecommunications and aerospace companies, the same industries that helped him gain 49 percent last year, putting him in the top 10 of Bloomberg’s annual hedge fund ranking.

 

Have a wonderful evening everyone.

 

Be magnificent!

The purity of life is the highest and most authentic art to follow.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

A bird doesn’t sing because it has an answer,

it sings because it has a song.

-Maya Angelou, 1928-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

Quiet day today in the financial markets, with the US markets closed for Martin Luther King Day….

Two months to the day before he was assassinated, the Rev. Martin Luther King Jr., whose life is marked by a national holiday in the United States today, gave a compelling sermon on what he termed the “Drum Major Instinct.” The sermon was based on a 1952 homily by a Methodist preacher but was adapted to Dr. King’s quest for justice – racial and otherwise.  The drum-major theme is ambition, which is necessary for progress and improvement but can be toxic to the spirit if not contained. Too much of the

instinct to lead the band, he said, can lead to feelings of superiority, which is the animating factor in racial prejudice. Nations, too, can succumb to it, he said, pointedly mentioning the US war in Vietnam.  These were the issues of his time. They go by different names and categories in our time. But the antidote is the same in either case. Greatness, King said, doesn’t mean physical or intellectual power. It is a willingness to serve others: “You don’t have to have a college degree to serve.  You don’t have to make your subject and your verb agree to serve…. You only need a heart full of grace, a soul generated by love.” –by John Yemma.

Photos of the day

President Barack Obama and his daughter Sasha make burritos at DC Central Kitchen as part of a service project in honor of Martin Luther King, Jr. Day, Monday, in Washington. Also helping were first lady Michelle Obama and daughter Malia Obama. Jacquelyn Martin/AP

Members of the Peoples Congregational United Church of Christ chorus sing during a wreath laying ceremony to celebrate the birthday of civil rights leader Martin Luther King, Jr. at the King Memorial in Washington, Monday. Joshua Roberts/Reuters

San Francisco 49ers’ Patrick Willis pauses after the NFL football NFC Championship game against the Seattle Seahawks Sunday, in Seattle. The Seahawks won 23-17 to advance to Super Bowl XLVIII. Marcio Jose Sanchez/AP

Market Closes for January 20^th, 2014

Market  Index	Close	Change
Dow  Jones	16458.56	Closed
S&P 500	1838.70	Closed
NASDAQ	4197.582	Closed
TSX	13990.29	+102.08
		+0.74%

International Markets

Market  Index	Close	Change
NIKKEI	15641.68	-92.78
		-0.59%
HANG  SENG	22928.95	-204.40
		-0.88%
SENSEX	21205.05	+141.43
		+0.67%
FTSE 100	6836.73	+7.43
		+0.11%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.491	2.505
CND.   30 Year Bond	3.056	3.066
U.S.   10 Year Bond	2.8194	2.8194
U.S.   30 Year Bond	3.7480	3.7480

Currencies

BOC Close	Today	Previous
Canadian $	0.91339	0.91220
US   $	1.09482	1.09625
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48419	0.67377
US  $	1.35573	0.73761

Commodities

Gold	Close	Previous
London Gold   Fix	1254.66	1254.05
Oil	Close	Previous
WTI Crude Future	94.37	94.37
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 20 (Bloomberg) — Canadian stocks rose a fifth day to a two-year high, as gold producers advanced in anticipation of rising demand in China and BlackBerry Ltd. led gains among technology stocks.

Barrick Gold Corp. and Detour Gold Corp. rallied at least 4 percent as the price of gold traded near a five-week high in London. Pan American Silver Corp. climbed 2.3 percent to C$14.51. BlackBerry jumped 11 percent for a fourth day of gains.

Osisko Mining Corp. slipped 0.3 percent after the company’s board recommended shareholders reject Goldcorp Inc.’s C$2.6 billion ($2.4 billion) unsolicited bid.

The Standard & Poor’s/TSX Composite Index rose 84.68.19 points, or 0.6 percent, to 13,973.06 at 12:11 p.m. in Toronto, heading for the highest since April 2011. The benchmark equity gauge has risen 2.6 percent this year. U.S. markets are closed today for the Martin Luther King Jr. Day holiday.

“When the U.S. market is closed, Canada can go either way, and today is an up day, continuing the firmness we had last week,” said Irwin Michael, fund manager at ABC Funds in Toronto. His firm manages about C$850 million. “There’s a dose of optimism out there. People who were queasy about gold took their losses in November and December and it’s a fresh year now.”

China, which probably overtook India as the largest user of gold last year, celebrates the Lunar New Year on Jan. 31, when consumers traditionally increase gold purchases.

Chinese gross domestic product expanded 7.7 percent in the fourth quarter, compared with 7.8 percent in the previous three months, the National Bureau of Statistics said today. Industrial production rose 9.7 percent in December, short of a 9.8 percent median forecast of analysts and a 10 percent gain in November, the data show.

Raw-materials stocks gained 1.2 percent as a group as all 10 industries in the S&P/TSX advanced. Trading volume was 11 percent lower compared with the 30-day average at this time of day.

Barrick Gold rose 4.6 percent to C$21.56 and Detour Gold rallied 8.1 percent to C$6.68 as the S&P/TSX Gold Index increased 1.6 percent, headed for a two-month high. The gauge has advanced for four days, the longest such streak since August.

Gold for immediate delivery reached as high as $1,260.07 in London, the highest since Dec. 11.

Cameco Corp., a uranium producer, rose 3.3 percent to C$24.89, headed for the highest close in almost two years.

Greg Barnes, an analyst at TD Securities Inc., raised his rating for Cameco to a buy from a hold and increased his price target to C$31 from C$22.

“After three years in the wilderness, we believe that it is time to think about a positive turn in fundamentals for uranium and for Cameco,” Barnes said in the report to clients yesterday.

The stock has 13 buys, six holds and one sell, with a 12- month average price target of C$25.39, according to data compiled by Bloomberg.

Pan American Silver rose 2.5 percent to C$14.53 for a seventh straight daily advance, the longest since September 2012.

BlackBerry soared 10 percent to C$11.01, headed for the highest close since September. The U.S. Department of Defense said it will hook up 80,000 BlackBerrys as well as 1,800 phones and tablets based on Apple Inc.’s iOS and Google Inc.’s Android software at the end of this month.

Bombardier Inc. rose 0.7 percent to C$4.14 after reporting delivery of 238 aircraft in 2013 compared with 233 a year earlier, including 180 business jets versus 179 in 2012.

Osisko Mining slipped 0.5 percent to C$6.44. The company rejected Goldcorp’s offer as too low, and said it’s reviewing other options. Osisko said the bid undervalues its Canadian Malartic mine in Quebec.

Goldcorp on Jan. 13 made a cash-and-stock offer for Osisko including 0.146 Goldcorp shares and C$2.26 in cash per share.

USA

Closed

Have a wonderful evening everyone.

 

Be magnificent!

True morality consists not in following

the well-beaten track,

but in finding out the true path for ourselves

and in fearlessly following it.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

In the end we will remember not the words of our enemies,

but the silence of our friends.

-Martin Luther King, Jr., 1929-1968.

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:

Ben Franklin was born on this day in 1706.  Around 1730, while he was in his mid-20s, he developed his own self-improvement program, listing 13 virtues that he felt were an important guide for living.  They are:  Temperance, Silence, Order, Resolution, Frugality, Industry, Sincerity, Justice, Moderation, Cleanliness, Tranquility, Chastity, Humility.  Mastering all these virtues at once was “a task of more difficulty than I had imagined,” so he decided to tackle them one at a time.  For most of his life he kept a small journal with a separate page for each virtue, evaluating himself regarding each one daily.  He also focused on one virtue per week, four times per year.  In one edition of Poor Richard’s Almanac, he advised “Be temperate in eating, wine, girls, and cloth, or the Gout will seize your and plague you both.”

So how virtuous was Ben?  Franklin was known to relish his food, womanize, and sometimes dress to impress people.  His food and wine-drinking habits led him to be plagued with the gout for much of his life.  To which he might say, “Search others for their virtues, thy self for thy vices.”  –from Cosmo Doogood’s Urban Almanac.

Photos of the day

A Tribal Tiwa woman participates in a community fishing event as part of Jonbeel festival near Jagiroad, east of Gauhati, India. Tribal communities like Tiwa, Karbi, Khasi, and Jaintia from nearby hills participate in large numbers in the festival that signifies harmony and brotherhood amongst various tribes and communities. Anupam Nath/AP

A couple stand at Lisbon, Portugal’s Portas do Sol ‘Sun Gates’ viewpoint as a ferry crosses the Tagus river during a rainy winter’s day. The area is a popular tourist spot where people can enjoy the view over the old Alfama neighborhood and the river. Francisco Seco/AP

Market Closes for January 17^th, 2014

Market  Index	Close	Change
Dow  Jones	16458.56	+41.55    +0.25%
S&P 500	1838.70	-7.19    -0.39%
NASDAQ	4197.582	-21.106    -0.50%
TSX	13888.21	+56.63
		+0.41%

International Markets

Market  Index	Close	Change
NIKKEI	15734.46	-12.74
		-0.08%
HANG  SENG	23133.35	+146.94
		+0.64%
SENSEX	21063.62	-201.56
		-0.95%
FTSE 100	6829.30	+13.88
		+0.20%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.505	2.529
CND.   30 Year Bond	3.066	3.083
U.S.   10 Year Bond	2.8194	2.8414
U.S.   30 Year Bond	3.7480	3.7699

Currencies

BOC Close	Today	Previous
Canadian $	0.91220	0.91501
US   $	1.09625	1.09288
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48431	0.67371
US  $	1.35399	0.73856

Commodities

Gold	Close	Previous
London Gold   Fix	1254.05	1241.88
Oil	Close	Previous
WTI Crude Future	94.37	93.96
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 17 (Bloomberg) — Canadian stocks rose a fourth day, extending a two-year high, as raw-material producers rallied with higher commodity prices on better-than-projected U.S. housing data.

Torex Gold Resources Inc. and Kinross Gold Corp. gained at least 7.4 percent as gold erased a weekly loss. Pengrowth Energy Corp. rallied 6.4 percent as oil rose to a two-week high. Copper Mountain Mining Corp. added 4.8 percent as copper rose in New York.

The Standard & Poor’s/TSX Composite Index rose 56.63 points, or 0.4 percent, to 13,888.21 at 4 p.m. in Toronto. The benchmark equity gauge has gained 2 percent this year.

“The TSX is based on gold, and gold is popping today,” said Kevin Headland, a fund manager with Manulife Asset Management Ltd., on the phone from Toronto. The firm manages about C$265 billion ($241.6 billion). “I’m not expecting a crazy rally, but it seems we’re turning a corner.”

Raw-materials stocks rose 1.7 percent as a group, the most in the S&P/TSX, as seven of 10 industries advanced. Trading volume was 30 percent above the 30-day average. Of the top 10 advancers in the benchmark equity gauge today, eight were mining stocks including six gold producers.

U.S. industrial production rose for a fifth month in December, capping the strongest quarter since 2010 and indicating manufacturing is helping propel the economy. Output at factories, mines and utilities climbed 0.3 percent after a revised 1 percent increase in November, figures from the Federal Reserve showed today in Washington.

The pace of U.S. home construction dropped less than forecast in December. Housing starts fell 9.8 percent to a  999,000 annualized rate following November’s revised 1.11 million pace, which was the highest since November 2007, the Commerce Department reported today in Washington. The median estimate of 83 economists surveyed by Bloomberg called for 985,000.

Torex Gold jumped 10 percent to C$1.30 and B2Gold Corp. rallied 8.3 percent to C$2.74. Kinross Gold rose 7.4 percent to C$5.22 as the price of gold climbed 0.9 percent to settle at $1,251.90. The S&P/TSX Gold Index gained 4.1 percent, closing at the highest level in more than two months.

Gold gained 0.4 percent this week for a fourth straight advance, the longest weekly streak of gains since August.

Gold traders and analysts are bullish on speculation physical demand will increase. The U.S. Mint has sold 69,000 ounces of American Eagle gold coins in January, compared with 56,000 ounces for all of December and the most since 70,000 ounces sold in May, according to data from the Mint.

Silver Standard Resources Inc. advanced 5.5 percent to C$8.97 and Silver Wheaton Corp. rose 2.7 percent to C$24.49 as silver prices rallied 1.2 percent.

Pengrowth Energy added 6.4 percent to C$7.17, the highest close in 16 months, after Aaron Bilkoski, analyst at TD Securities, raised his rating for the stock to buy from hold.  Pengrowth has seven buys, nine holds and four sells, data collected by Bloomberg show.

Bankers Petroleum Ltd. climbed 2.7 percent to C$4.61 and Advantage Oil & Gas Ltd. rose 3.5 percent to C$4.76. Crude for February delivery rose 0.4 percent to $94.37 in New York, the most in two weeks.

Copper Mountain Mining rose 4.8 percent to C$1.75. Copper posted a 0.5 percent weekly increase, the first in three weeks, on speculation demand will increase as the U.S. economy recovers.

USA

By Nick Taborek

Jan. 17 (Bloomberg) — The Standard & Poor’s 500 Index fell for the week, after touching an all-time high, as weaker-than- estimated earnings at companies from Citigroup Inc. to CSX Corp. offset an improving outlook for the global economy.

Citigroup and CSX dropped at least 4.4 percent as quarterly results missed analysts’ estimates. Best Buy Co. sank 35 percent after price cuts failed to draw as many holiday shoppers as expected. American Express Co. rallied 2.7 percent as fourth- quarter profit doubled. Beam Inc. jumped 24 percent after Suntory Holdings Ltd. said it will acquire the spirits maker in a $16 billion deal.

The S&P 500 declined 0.2 percent to 1,838.70 for the five- day period. The Dow Jones Industrial Average gained 21.51 points, or 0.1 percent, to 16,458.56 for the week.

“A period of consolidation is in order,” Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, said in a phone interview from Minneapolis. He helps oversee $112 billion. “We’re in a sideways trending market. Earnings are front and center and to that end I think it’s still too early to have a good read on fourth-quarter results.”

Twenty-eight companies in the S&P 500 including Goldman Sachs Group Inc. and Bank of America Corp. reported quarterly earnings during the week. Out of the 52 companies in the gauge that have posted fourth-quarter results so far, 62 percent have exceeded analysts’ profit estimates, and 63 percent have topped revenue projections, according to data compiled by Bloomberg.

Per-share profit for companies in the benchmark probably climbed 6 percent in the fourth quarter, while sales increased 2 percent, according to analysts surveyed by Bloomberg.

Equities also fell during the week amid concern over valuations. The S&P 500 trades at 15.6 times the estimated earnings of its members, near the highest level since 2009 and more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Three rounds of Federal Reserve monetary stimulus helped the S&P 500 rise 172 percent from a 12-year low in 2009. The benchmark index rallied 30 percent last year, the most since 1997.

“We’re asking our clients to rein in their expectations for stock market returns,” Michael Binger, who helps oversee $450 million as senior portfolio manager for Gradient Investments in Arden Hills, Minnesota, said in a phone interview. “This is going to be a more normalized year for stock returns, and by normalized we mean somewhere between five and 10 percent. This year we think that return is going to be driven by earnings growth, not multiple expansion.”

The S&P 500 touched a record on Jan. 15 as the World Bank said it sees improvement in the euro-zone helping the world economy expand 3.2 percent this year, compared with a June projection of 3 percent. Data during the week showed U.S. retail sales rose in December while New York-area manufacturing grew more than forecast.

The Federal Reserve in its Beige Book business survey said that “moderate” growth across most of the country last month was buoyed by gains in holiday spending by consumers, an improving labor market and strength in manufacturing.

“The markets are taking all of this in stride with only minimal declines because in reality the reasons for optimism for the overall economy continue,” Anastasia Amoroso, global market strategist at J.P. Morgan Funds, which oversees about $400 billion, said in a phone interview. “We’ve managed to make this shift from an economy that’s been on life support to an economy that is in a self-sustaining expansion.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, advanced 2.5 percent for the week to 12.44. The gauge has fallen 9.3 percent this year.

Six of 10 main S&P 500 groups retreated for the week, with consumer-discretionary and energy companies dropping at least 1.1 percent to lead declines. Nike Inc. lost 4.6 percent to $73.39 for the worst performance in the Dow.

Best Buy plunged 35 percent, the most since 2000, to $24.43 after U.S. same-store sales fell in the holiday shopping season.

Chief Executive Officer Hubert Joly, in a bid to stop customers from defecting to online rivals such as Amazon.com Inc., has piled on discounts and made permanent a policy of matching competitors’ prices to cut down on the practice known as “showrooming,” when shoppers use Best Buy stores to scout products they later buy online elsewhere.

J.C. Penney Co. fell 11 percent to $6.52 after saying it will close 33 stores and eliminate about 2,000 jobs to help save $65 million a year. The struggling department store-chain is unlikely to recover and may have to dilute shareholders by raising more capital this year, Craig-Hallum Capital Group Ltd. analyst Alex Fuhrman said in a note to clients.

CSX tumbled 5.7 percent to $27.23. The biggest railroad in the eastern U.S. posted profit that trailed analysts’ estimates for the first time in eight quarters as coal shipments declined amid a shift to natural gas.

Citigroup slid 4.5 percent to $52.27 as a slump in bond trading contributed to fourth-quarter results that missed Wall Street estimates. Earnings were marred by a 15 percent drop in fixed-income revenue excluding accounting charges, with adjusted profit down 8 percent in securities and banking, and 16 percent in global consumer banking, Citigroup said.

Financial companies in the S&P 500 lost 0.5 percent for the week, as Goldman Sachs declined 1.2 percent to $176.28 and JPMorgan Chase & Co. retreated 0.7 percent to $58.11.

PNC Financial Services Group Inc. rose 4.4 percent to $82.26. The second-biggest U.S. regional bank posted fourth- quarter profit that beat analysts’ estimates as the lender trimmed expenses and set aside less money for soured loans.

American Express, the biggest credit-card issuer by purchases, advanced 2.7 percent to a record $90.97. A pickup in household wealth and consumer confidence propelled card purchases, boosting fourth-quarter net income to $1.3 billion from $637 million a year earlier.  Visa Inc., the world’s biggest bank-card network, climbed 5 percent to $232.18 for the largest advance in the Dow.

Beam jumped 24 percent to $83.34. Suntory, the Japanese whiskey and beer maker, is seeking to boost overseas growth by gaining brands such as Maker’s Mark whiskey, Jim Beam and Canadian Club liquor. The deal, once completed, will create the world’s third-largest premium spirits company.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

My work will be finished if I succeed in carrying conviction to the human family,

that every man or woman, however weak in body,

is the guardian of his or her self-respect and liberty, and that this defence prevails,

though the world be against the against the individual resister.

Mahatma Gandhi, 1869-1948

 

As ever,

 

Carolann

 

Success isn’t permanent, and failure isn’t fatal.

-Mike Ditka, 1939-

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

-from  A Countrywoman’s Notes:

JANUARY

I enjoy patterns, man-made and natural, and as I start looking around me, they are everywhere.  The countryside in winter has tree skeletons silhouetted against the sky – trees without leaves.  One day their background is dark grey, another it is clear blue, but there is always a natural pattern of trunk and branches, a lesson in symmetry with variations.  As the snow slowly melts, man-made patterns, filled with snow, scar the fields where the wheelmarks of tractors crossed the newly sown corn last autumn, sometimes straight, sometimes following the line of the walls or hedgerows.  Then, looking up. you see a thin white line of snow clinging, still frozen, to the telegraph wires and television aerials.  The snow on the tops of walls lasts much longer than on the soil all around.  Look across the countryside and you will find a pattern created by the wall-builders years ago, a random pattern you may think, but as they worked the wall was dictated by the lie of the land, the farmer’s whims and needful boundaries.  The sheep have made their mark too – regular paths that they have walked crossing the hills for generations.  We know man takes great pleasure in creating a sense of order by devising geometric shapes in architecture and gardens but when we see regularity in the world of nature we react with surprise.  Snowflakes through the microscope, or fairy rings – have they happened by accident any more than the concentric circles on the pond when we throw in a stone and disturb its calm?  Sounds have their pattern too.  The repeated rhythmic song of the blackbird, the soft lilt of the woodpigeon, the cuckoo calling – these are more noticeable to our ears than the disorganized twitter of the house sparrows.  Wherever you look or listen there is some pattern to discover, creating rhythm or calm satisfaction…-by Rosemary Verey.

Photos of the day

A car drives away from the Colby Fire in the hills above Glendora, Calif. The fire had scorched 125 acres. Mario Anzuoni/Reuters

An entertainer dressed as Darth Vader from ‘Star Wars’ walks down the corridor to pose for the media during the opening of Lucasfilm’s new animation production facility, the Sandcrawler, in Singapore. Edgar Su/Reuters

Market Closes for January 16^th, 2014

Market  Index	Close	Change
Dow  Jones	16417.01	-64.93    -0.39%
S&P 500	1845.89	-2.49    -0.13%
NASDAQ	4218.688	+3.804    +0.09%
TSX	13831.58	+59.00
		+0.43%

International Markets

Market  Index	Close	Change
NIKKEI	15747.20	-61.53
		-0.39%
HANG  SENG	22986.41	+84.41
		+0.37%
SENSEX	21265.18	-24.31
		-0.11%
FTSE 100	6815.42	-4.44
		-0.07%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.529	2.581
CND.   30 Year Bond	3.083	3.124
U.S.   10 Year Bond	2.8414	2.8912
U.S.   30 Year Bond	3.7699	3.8212

Currencies

BOC Close	Today	Previous
Canadian $	0.91501	0.91271
US   $	1.09288	1.09564
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48770	0.67218
US  $	1.36126	0.73461

Commodities

Gold	Close	Previous
London Gold   Fix	1241.88	1241.42
Oil	Close	Previous
WTI Crude Future	93.96	94.17
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 16 (Bloomberg) — Canadian stocks rose for the seventh time in eight days, extending a two-year high, as a gain in energy and raw-materials shares offset losses at Bombardier Inc. and railroad companies.

Torex Gold Resources Inc. and Eldorado Gold Corp. climbed more than 3.4 percent as the metal’s price advanced. Bombardier dropped 7.7 percent after postponing its CSeries jetliner’s entry into commercial service until 2015, the latest in a series of delays for the aircraft. Canadian National Railway Co. slipped 1.8 percent after CSX Corp., the largest eastern U.S. railroad, missed profit forecasts for the first time in two years.

The Standard & Poor’s/TSX Composite Index rose 59 points, or 0.4 percent, to 13,831.58 at 4 p.m. in Toronto, erasing earlier declines of as much as 0.2 percent. The benchmark equity gauge has rallied 1.7 percent in the past eight sessions.

Trading was 34 percent above the 30-day average.

“Some stocks are doing well in the mining space and that’s encouraging,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto. The firm manages about C$1 billion ($916.6 million).

Raw-materials stocks added 1 percent, giving the S&P/TSX Materials Index its ninth advance in 11 trading days this year.  The gauge has rallied 8.2 percent in 2014 after plunging 31 percent last year.

Thompson Creek Metals Co. added 3.5 percent to C$3.27 for a third day of gains. The stock has rallied 38 percent since Jan. 14, after Bank of America Inc. upgraded its rating on the stock.

Torex Gold advanced 8.3 percent to C$1.18 and Eldorado Gold rallied 3.4 percent to C$6.96 as gold futures for February delivery added 0.2 percent to $1,240.20 an ounce.

Allied Nevada Gold Corp. rose 4 percent to C$5.25. The stock has increased for six days, the longest streak since August 2011. Allied Nevada surged as much as 28 percent on Jan. 14 after China Gold Stone Mining Development Ltd. retracted a $779.6 million offer for the company it said was published in error.

Birchcliff Energy Ltd. jumped 11 percent to C$8.43, the biggest gain since October 2011, after the company boosted its 2014 exit production forecast to 37,500 to 39,500 barrels of oil equivalent per day from 36,000 to 38,000 previously.

Raging River Exploration Inc. climbed 6.3 percent to C$7.10 and Baytex Energy Corp. rose 3.5 percent to C$41.45 to pace gains among energy stocks. The S&P/TSX Energy Index rallied 0.8 percent as all but 10 of its 63 members advanced.

Industrial stocks slumped 1.1 percent as a group, the only decline in the S&P/TSX. Bombardier tumbled 7.7 percent to C$4.17, an eight-month low. The Montreal-based company delayed its CSeries jetliner for a fourth time, saying the aircraft needs more time for flight tests.

Canadian National Railway declined 1.8 percent to C$58.64 and Canadian Pacific Railway Ltd. lost 0.4 percent to C$163.52.

CSX, the U.S. railroad, reported net income of 42 cents a share, short of the 43-cent average of 25 analyst estimates compiled by Bloomberg as coal shipments slumped.

Canadian Pacific is scheduled to report fourth-quarter results on Jan. 29, followed by Canadian National on Jan. 30.

U.S. competitors Union Pacific Corp., Norfolk Southern Corp. and Kansas City Southern report next week.

Alamos Gold Inc. plunged 17 percent to C$11.31, the biggest decrease since November 2008, after reporting 2014 gold production will be in the range of 150,000 to 170,000 ounces, short of the 190,000 ounces produced in 2013.

USA

By Lu Wang and Callie Bost

Jan. 16 (Bloomberg) — U.S. stocks fell, after the Standard & Poor’s 500 Index closed at a record yesterday, as Best Buy Co. tumbled and earnings at companies from Citigroup Inc. to CSX Corp. disappointed investors.

Best Buy slumped 29 percent after reporting a drop in U.S. same-store sales during the holiday shopping season. Citigroup and Goldman Sachs Group Inc. led declines among banks after releasing fourth-quarter results. CSX dropped 6.8 percent as profit missed analysts’ forecasts for the first time in two years. Intel Corp. slid 2.6 percent in extended trading after forecasting sales that may fall short of some estimates.

The S&P 500 lost 0.1 percent to 1,845.89 at 4 p.m. in New York, dragging the gauge lower for the year. The Dow Jones Industrial Average fell 64.93 points, or 0.4 percent, to 16,417.01. About 6.3 billion shares changed hands on U.S. exchanges, 4.4 percent above the 30-day average.

“It’s not going to be a straight road up like what we saw in 2013,” Robert Pavlik, chief market strategist at Banyan Partners LLC, which manages $4.5 billion, said in a phone interview. “A lot of what we saw in 2013 was predicated on money flowing into the market from the Fed. It’s going to be an upwards revision to earnings consensus this year that will push the market higher.”

The S&P 500 gained 0.5 percent yesterday, briefly erasing its losses for 2014, as the World Bank raised its global-growth forecast and better-than-estimated earnings from Bank of America Corp. fueled a rally in financial shares. The benchmark measure trades at 15.6 times the estimated earnings of its members, more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Citigroup, Goldman Sachs and 12 other S&P 500 companies report earnings today. Per-share profit for companies in the index probably climbed 4.9 percent on average in the fourth quarter, while sales increased 1.8 percent, according to analysts surveyed by Bloomberg.

“When you look at fundamentals, the market is not screamingly cheap, but it’s not screamingly expensive either,” Sandy Lincoln, the Chicago-based chief market strategist in the U.S. with BMO Global Asset Management, which oversees about $130 billion, said in a phone interview. “We like the market here. There is reason be skeptical about what companies are able to do. The top line hopefully will be supportive enough to overcome the skepticism.”

BlackRock Inc. Chief Executive Officer Laurence D. Fink said U.S. stocks may rise as much as 10 percent this year after the S&P 500 jumped 30 percent in 2013.

Fewer Americans filed applications for unemployment benefits last week, a sign the labor market continues to strengthen. Jobless claims decreased by 2,000 to 326,000, the least since the end of November, from a revised 328,000 in the prior period, a Labor Department report showed today. The median forecast of 51 economists surveyed by Bloomberg called for 328,000.

Another report showed the cost of living in the U.S. climbed in December by the most in six months, led by gains in fuel and rents. The 0.3 percent increase in the consumer-price index was the biggest since June and followed no change the prior month.

The Fed said in its Beige Book yesterday that it saw “moderate” growth across most of the U.S. The business survey is based on reports gathered on or before Jan. 6. The central bank, which next meets Jan. 28-29, decided at its December meeting to start reducing the pace of monthly bond purchases by $10 billion to $75 billion.

The Chicago Board Options Exchange Volatility Index gained 2 percent to 12.53. The gauge of S&P 500 options known as the VIX is down 8.7 percent this year.

Four of 10 S&P 500 groups retreated as financial and consumer-discretionary shares dropped more than 0.5 percent to lead declines.

Best Buy tumbled 29 percent, the most in the S&P 500, to $26.83. The consumer-electronics retailer said same-store sales fell 0.9 percent in the nine weeks ended Jan. 4, as price cuts and the first new video-game consoles in several years didn’t draw as many shoppers as expected.

Citigroup lost 4.4 percent, the most since November 2012, to $52.60. The third-biggest U.S. bank reported fourth-quarter profit that missed Wall Street estimates as bond trading slumped.

Goldman Sachs fell 2 percent to $175.17 even as results beat analysts’ estimates. Chief Executive Officer Lloyd C. Blankfein reported a fourth straight year of lower profitability than the firm achieved in the decade before the financial crisis. Goldman Sachs’s return on equity, a gauge of profitability, was 11 percent last year, and the company has struggled to reach 10 percent in the past three years, a level that Blankfein has called “hardly aspirational.”

The Dow Jones Transportation Average slipped 0.6 percent from a record. CSX sank 6.8 percent, the most since September 2011, to $27.24 after the biggest railroad in the eastern U.S. said fourth-quarter net income slid 5.1 percent to $426 million, or 42 cents a share. Analysts had projected an average of 43 cents.

Other rail stocks fell. Norfolk Southern Corp. slid 3.7 percent to $87.76 while Kansas City Southern lost 1.7 percent to $117.10. Both companies report results next week.

J.C. Penney Co. dropped 1.6 percent to $6.90 after saying it will close 33 stores and eliminate about 2,000 jobs, resulting in pretax charges of $26 million in the fourth quarter and $17 million in future periods. The department-store chain has gone nine straight quarters without posting a profit.

Kroger Co. fell 4.9 percent to $37.35. The largest U.S. grocery chain is “particularly vulnerable” in the supermarket industry, where competition is rising and volume growth is weakening, analysts at Credit Suisse Group AG wrote in a note.

They cut the stock’s rating to neutral from outperform.

Intel slipped 2.6 percent to $25.86 as of 4:24 p.m. in New York. After the market’s close, the world’s largest chipmaker forecast first-quarter sales that may fall short of some estimates as corporate spending on personal computers falters.

Hewlett-Packard Co. added 2.5 percent to $29.56 in regular trading. Bank of America raised its recommendation to buy from neutral, citing potential for increased earnings amid a restructuring. The maker of personal computers is committed to returning cash to shareholders through dividends and buybacks, the brokerage said.

BlackRock gained 1.6 percent to $317.78. The world’s biggest money manager said fourth-quarter net income increased 22 percent as investors put money into funds, boosting client assets and fees for managing them.

PNC Financial Services Group Inc. jumped 2.7 percent to $80.93, the highest level since September 2008. The second- biggest U.S. regional bank said fourth-quarter profit grew 53 percent, beating analyst estimates, as the lender trimmed expenses and set aside less money for soured loans.

Charles Schwab Corp. climbed 3 percent to $26.80, the highest close since February 2001. The financial-services provider reported fourth-quarter earnings of 23 cents a share, beating analysts’ estimates of 21 cents.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Fearlessness is the first requirement of spirituality.

Cowards can never be moral.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

 

You always pass failure on the way

to success.

-Mickey Rooney, 1920-

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: Full moon tonight!  Don’t forget to gaze at the stars J.

Birthday: January 15^th, 1929, Martin Luther King Jr.

Even if I knew that tomorrow the world would go to pieces, I would still plant my apple tree. – Martin Luther King, quoting Martin Luther.

Photo of the day

An angler fishes on opening day of salmon season on the River Tay in Kenmore, Scotland. Russell Cheyne/Reuters

Market Closes for January 15^th, 2014

Market  Index	Close	Change
Dow  Jones	16481.94	+108.08    +0.66%
S&P 500	1848.38	+9.50    +0.52%
NASDAQ	4214.883	+31.867    +0.76%
TSX	13772.58	+80.20
		+0.59%

International Markets

Market  Index	Close	Change
NIKKEI	15859.63	+50.90
		+0.32%
HANG  SENG	22902.00	+110.72
		+0.49%
SENSEX	21289.49	+256.61
		+1.22%
FTSE 100	6819.86	+53.00
		+0.78%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.581	2.579
CND.   30 Year Bond	3.124	3.122
U.S.   10 Year Bond	2.8912	2.8709
U.S.   30 Year Bond	3.8212	3.8035

Currencies

BOC Close	Today	Previous
Canadian $	0.91271	0.91305
US   $	1.09564	1.09524
Euro Rate  1 Euro=		Inverse
Canadian   $	1.48887	0.67165
US  $	1.35890	0.73589

Commodities

Gold	Close	Previous
London Gold   Fix	1241.42	1245.14
Oil	Close	Previous
WTI Crude Future	94.17	92.59
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Jan. 15 (Bloomberg) — Canadian stocks rose a second day, reaching a more than two-year high, as base metals producers rallied after the World Bank raised its global growth forecast and insurance companies led financial shares higher.

Sun Life Financial Inc. and Manulife Financial Corp. advanced at least 1.5 percent to pace gains among financial stocks. Copper Mountain Mining Corp. added 6.3 percent after reporting improved production in the fourth quarter. NuVista Energy Ltd. climbed 3.5 percent as crude prices advanced for a second day. DragonWave Inc., a network equipment maker, soared 26 percent after announcing a deal to sell its services into the Chinese market.

The Standard & Poor’s/TSX Composite Index rose 80.20 points, or 0.6 percent, to 13,772.58 at 4 p.m. in Toronto for the highest close since May 2011. The benchmark equity gauge has advanced 1.1 percent this year.

“We’ve seen some positivity in the markets the last couple of days, we’re trading in line with the U.S. today,” said Brian Huen, fund manager at Red Sky Capital Management Ltd. in Toronto. His firm manages about C$225 million ($205.6 million).

“The banks are a barometer for the market, when the banks do well the rest of the market does well. We’re positive on financials.”

Eight of 10 industries in the S&P/TSX advanced on trading volume 25 percent higher than the 30-day average. Financial stocks account for nearly 35 percent of the S&P/TSX, the largest single industry group by weighting, followed by energy at almost 25 percent.

Sun Life Financial rose 1.5 percent to C$38.20 and Manulife Financial increased 1.8 percent to C$21.96 to pace a 0.5 percent advance among financial stocks.

Toronto-Dominion Bank, Canada’s largest lender by assets, added 0.3 percent to C$97.60 and Royal Bank of Canada, the second-largest, gained 0.2 percent to C$71.06.

Materials producers rallied 1.7 percent, the most in the S&P/TSX. The group has gained on all but two of the 11 sessions this year.

Copper prices advanced in London on speculation that an improving global economy will increase demand, as the World Bank raised this year’s growth forecast to 3.2 percent from 3 percent. Nickel also advanced.

Copper Mountain Mining jumped 6.3 percent to C$1.68. The company said output of copper, gold and silver last quarter was the most since the mine began operations.

Lundin Mining Corp. rose 4.3 percent to C$4.91 and First Quantum Minerals Ltd. increased 4.2 percent to C$19.40 as the price of copper erased earlier losses in London.

Thompson Creek Metals Co. climbed 12 percent to C$3.16. The stock has rallied 33 percent in the past two sessions, the biggest two-day advance since September 2006, after Bank of America raised its rating on the stock to buy from underperform.

NuVista Energy advanced 3.5 percent to C$7.47 and Bankers Petroleum Ltd. rose 1.4 percent to C$4.51. Crude for February delivery advanced 1.7 percent in New York to settle at $94.17 a barrel after the U.S. Energy Information Administration said stockpiles decreased more than five times as much as forecast.

DragonWave surged 26 percent to C$1.95, the biggest increase since April. The Ottawa-based company has signed a strategic sales agreement with China’s Xi’an Potevio Communications, focused on sales and distribution in China.

Potash Corp. of Saskatchewan Inc. climbed 2.5 percent to C$38.46 for the highest close since July, after a report from researcher Fertecon Ltd. said producer OAO Uralkali is seeking to raise prices for the potash fertilizer in Brazil and China to $350 a ton.

USA

By Lu Wang and Callie Bost

Jan. 15 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index erasing a loss for 2014 to close at a record, as the World Bank lifted its global growth forecast and Bank of America Corp.’s profit spurred a rally in financial shares.

Bank of America jumped 2.3 percent after the second-biggest U.S. lender reported fourth-quarter earnings and revenue that beat analysts’ estimates. Apple Inc. gained 2 percent after China Mobile Ltd. said pre-orders for iPhones had reached 1 million. Regeneron Pharmaceuticals Inc. declined 4.3 percent amid an analyst downgrade.

The S&P 500 added 0.5 percent to 1,848.38 at 4 p.m. in New York, surpassing its previous record of 1,848.36 from Dec. 31.

The Dow Jones Industrial Average gained 108.08 points, or 0.7 percent, to 16,481.94. About 6.8 billion shares changed hands on U.S. exchanges, 12 percent above the 30-day average.

“It’s a true, cyclical, macro upswing that’s broad- based,” Jerry Braakman, chief investment officer of First American Trust in Santa Ana, California, said in a phone interview. His firm manages $1.1 billion. “People who have reported have posted really solid numbers, specifically yesterday’s JPMorgan and today with BofA. Just tells us that when the banks are doing well, the economy is going well.”

The benchmark for U.S. equities is little changed in 2014 after declining as much as 1.6 percent. The gauge gained 1.1 percent yesterday, the most since Dec. 18, as better-than- forecast retail sales and corporate merger activity signaled confidence in the economy.

The index rallied 30 percent last year, sending the gauge to a record and its highest valuation since the end of 2009. The S&P 500 trades at 15.6 times the estimated earnings of its members, more than the five-year average multiple of 14.1, data compiled by Bloomberg show.

Shares in shipping stocks and companies with smaller market capitalizations, considered most closely tied to economic swings, hit records today. The Russell 2000 Index of small stocks increased 0.7 percent to an all-time high while the Dow Jones Transportation Average added 0.6 percent to a record.

“When most of the averages are making new highs together, that shows that the overall market is in a pretty good shape,”  Jim Welsh, a market strategist who helps oversee $5.7 billion at Forward Management LLC in San Francisco, said in a phone interview. “The odds favor that there will be nother rally to one more new high by the end of the first quarter.”

The World Bank raised its global growth forecasts as a recovery in advanced economies tempers the effects of tighter monetary conditions on developing markets. The forecast for the richest nations was raised to 2.2 percent from 2 percent. Part of the increase reflects improvement in the 18-country euro area, with the U.S. ahead of developed peers, growing twice as fast as Japan.

International Monetary Fund Managing Director Christine Lagarde said today that momentum in the world economy seen in the second half of last year should continue in 2014. The Washington-based fund plans to raise its forecast for global growth when it releases a report later this month.

Data today indicated that manufacturing in New York, northern New Jersey and southern Connecticut grew at a faster pace this month. The Federal Reserve Bank of NewYork’s general economic index surged to 12.5, topping the 3.5 estimate in a Bloomberg survey. Positive readings mean that activity expanded.

A separate report showed wholesale prices in the U.S. climbed in December for the first time in three months to cap the smallest annual increase in five years.

Investors are watching economic data for signals on the pace of Federal Reserve stimulus cuts. Three rounds of monetary stimulus from the central bank have helped push the S&P 500 higher by 173 percent from a 12-year low in 2009.

The Fed said ‘‘moderate’’ growth across most of the country last month was buoyed by gains in holiday spending by consumers, an improving labor market and strength in manufacturing.

“The economic outlook is positive in most districts, with some reports citing expectations of ‘more of the same’ and some expecting a pickup in growth,” the Fed said today in its Beige Book business survey, based on reports gathered on or before Jan. 6.

The officials decided at their December meeting to reduce their monthly bond buying by $10 billion to $75 billion. They cited the improving labor market.

Bank of America and Fastenal Co. are among companies reporting financial results today. Fourteen members of the S&P 500, including Goldman Sachs Group Inc. and Citigroup Inc., release earnings tomorrow.

Profit per share for companies in the index probably climbed 4.9 percent on average in the fourth quarter, while sales increased 1.8 percent, according to analysts surveyed by Bloomberg.

“Expectations are not really high for earnings season,”  Richard Sichel, chief investment officer at Philadelphia Trust Co., said in a telephone interview. He helps oversee $1.9 billion. “The main thing that each quarter needs is top line growth. Companies can only go for so long squeezing earnings out of the bottom line. We need to some improvement in growth.”

The Chicago Board Options Exchange Volatility Index was unchanged today at 12.28. The gauge of S&P 500 options known as the VIX is down 11 percent this year.

Seven out of 10 industry groups in the S&P 500 advanced as telephone, technology and financial companies climbed more than 1.1 percent to lead the gains. Microsoft Corp. surged 2.7 percent to $36.76 and Verizon Communications Inc. gained 2.5 percent to $48.27 among the biggest advances in the Dow.

Bank of America climbed 2.3 percent to $17.15, the highest since May 2010. The lender’s profit more than quadrupled as the company quelled claims tied to defective mortgages.

Wells Fargo & Co., the largest U.S. home lender that yesterday reported record quarterly profit, rose 1.8 percent to an all-time high of $46.40. JPMorgan Chase & Co., whose earnings beat analysts’ estimates this week, rallied 3 percent to $59.49, the highest level since April 2000.

Technology companies in the S&P 500 rallied 1.2 percent as a group and the Nasdaq-100 Index rose 0.8 percent to the highest level since September 2000.

Apple climbed 2 percent to $557.36. China Mobile, the world’s largest phone company by users, said pre-orders for the iPhone have reached about 1 million units ahead of sales in the carrier’s outlets that start at the end of this week.

Data-storage companies rallied after Datalink Corp.’s quarterly earnings and sales surpassed its expectations.

Datalink surged 38 percent to $14.96, the highest since August 2000. NetApp Inc. jumped 8.3 percent to $43.51 for the best performance in the S&P 500 and Teradata Corp. climbed 4 percent to $47.63.

Tesla Motors Inc. advanced 1.8 percent to $164.13, the highest since November. Elon Musk predicted that the company will deliver its first Model S vehicles to China in March. The electric-car maker surged 16 percent yesterday after saying it delivered 6,900 Model S cars in the fourth quarter, pushing its full-year sales beyond a company target.

Aeropostale Inc. added 0.7 percent to $7.78 after earlier rising as much as 6.2 percent. The teen-clothing retailer has contacted at least two private-equity firms as management explores strategic options, people with knowledge of the matter said.

General Motors Co. declined 1.6 percent to $39.38. The carmaker forecast 2014 profit to “modestly” improve as it introduces 15 new or refreshed vehicles in the U.S. The company yesterday announced a dividend of 30 cents a share, the first payout since 2008.

GM also named Chuck Stevens as its new chief financial officer. Mary Barra, who had been the company’s product chief, today becomes the first female chief executive officer of a global automaker, succeeding Dan Akerson, who is retiring.

Regeneron dropped 4.3 percent to $287.49. Jim Birchenough, an analyst with BMO Capital Markets Corp., cut the stock’s rating to market perform, an equivalent of neutral, from outperform, saying the market opportunity of the eye drug Eylea, the company’s top-selling product, is fairly valued.

Fastenal lost 4.5 percent to $46.06 for the biggest decline in the S&P 500. The seller of industrial and construction supplies reported profit and revenue that fell short of analysts’ forecasts.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Strength does not come from physical capacity.  It comes from an indomitable will.

Mahatma Gandhi, 1869-1948

As ever,

 

Carolann

Experience teaches only the teachable.

-Aldous Huxley, 1894-1963.

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