Category: Newsletters

Dear Friends,

Tangents:

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

This past weekend,  I was lucky enough to marry my best friend. With the wedding came a lot of advice from friends and family as to how to have a happy successful marriage, so I thought I would share the advice with you!

1)    Respect each other’s views at all times.

2)    Listen to one another.

3)    Give priority to your spouse over everything else in your life.

4)    Sincerely say “I love you” often.

5)    Take time out and spend a few moments together–just the two of you alone.

6)    Talk graciously to each other about your thoughts–especially things for the two of you to agree upon or do together

7)    Cook for each other, and show that you appreciate the thoughtfulness and the food.

8)    Don’t forget to do the little things that make each of you smile and feel loved.

9)    Be patient with each other as much as possible.

10)    Make sure your partner knows how much you appreciate the little every day things they do, like doing the washing up or making the bed.

“A successful marriage requires falling in love many times, always with the same person.” – Mignon McLaughlin

Also on this Day:

1955 – “The Mickey Mouse Club” premiered on ABC-TV.

1962 – The Sigma VII blasted off from Cape Canaveral for a nine-hour flight.

1988 – The space shuttle Discovery landed safely after its four-day mission. It was the first American shuttle mission since the Challenger disaster. .

1990 – The Berlin Wall was dismantled eleven months after the borders between East and West Germany were dissolved. The unification of Germany ended 45 years of division.

2001 – ESPN began its 10th season of National Hockey League (NHL) coverage.

2006 – The Dow Jones industrial average closed at a new high ending the day at 11,727.34. Earlier in the session, the Dow had risen to 11,758.95. Both previous records had been set on January 14, 2000.

“We must use time wisely and forever realize that the time is always ripe to do right.” – Nelson Mandela

Photos of the Day, October 3^rd:

Indians dressed in traditional attire practice Garba, a form of dance from the west Indian state of Gujarat, to celebrate the upcoming festival of Navratri, in Ahmadabad, India. Navratri, which literally means nine nights, is the festival when nine different forms of goddess Durga are worshiped on consecutive nights. Ajit Solanki/AP

The crescent moon over the mountains is visible from Highway 178, east of Bakersfield, Calif. Casey Christie/The Bakersfield Californian/AP

Market Closes for October 3^rd, 2013

Market  Index	Close	Change
Dow  Jones	14996.48	-136.66    -0.90%
S&P 500	1680.30	-13.57    -0.80%
NASDAQ	3774.343	-40.676    -1.07%
TSX	12744.25	-94.75
		-0.74%

International Markets

Market  Index	Close	Change
NIKKEI	14157.25	-13.24
		-0.09%
HANG  SENG	23214.40	+229.92
		+1.00%
SENSEX	19902.07	+384.92
		+1.97%
FTSE 100	6449.04	+11.54
		+0.18%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.543	2.532
CND.   30 Year Bond	3.096	3.079
U.S.   10 Year Bond	2.6082	2.6155
U.S.   30 Year Bond	3.7083	3.6987

Currencies

BOC Close	Today	Previous
Canadian $	0.96832	0.96749
US   $	1.03272	1.03360
Euro Rate  1 Euro=		Inverse
Canadian   $	1.40651	0.71098
US  $	1.36200	0.73421

Commodities

Gold	Close	Previous
London Gold   Fix	1317.25	1317.05
Oil	Close	Previous
WTI Crude Future	103.59	104.10
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 3 (Bloomberg) — Canadian stocks fell, sending the benchmark index to a three-week low, as BlackBerry Ltd. slumped and the U.S. government shutdown extended to a third day.

BlackBerry, the smartphone maker looking to sell itself, lost 3.6 percent to pace declines among technology stocks.

WestJet Airlines Ltd. dropped 2.5 percent as load factor slipped in September. Valeant Pharmaceuticals International Inc. rose 1.4 percent after receiving approvals for products in the U.S. and Canada. Agrium Inc. added 0.7 percent after naming a successor for its retiring chief executive officer.

The Standard & Poor’s/TSX Composite Index fell 103.88 points, or 0.8 percent, to 12,735.12 at 4 p.m. in Toronto, the lowest close since Sept. 13. The index has gained 2.4 percent this year for the second-worst performance among developed markets, ahead of only Singapore.

“Markets are in a wait-and-see approach to see what’s happening in the U.S. and that really determines what happens in Canada,” said Anish Chopra, fund manager with TD Asset Management Inc. in Toronto. His firm manages about C$216 billion ($209 billion). “In the past they’ve been able to get to last- minute deals. In this case it might be more of a comprehensive package that includes the debt ceiling. The problem is the ceiling may not be exactly Oct. 17, it could be later and that’s a long way away.”

The first face-to-face talks between U.S. President Barack Obama and congressional leaders failed to break the budget logjam as a partial U.S. government shutdown entered its third day. The Oval Office meeting yesterday evening ended with both sides reiterating their positions and the points they’ve been making for days, increasing the possibility for a prolonged standoff over the government shutdown and raising the U.S. debt limit.

WestJet declined 2.5 percent to C$25.41 as industrial stocks retreated 0.9 percent as a group. Nine of 10 industries in the S&P/TSX fell. Trading volume was in line with the 30-day average.

WestJet, based in Calgary, reported a September load factor of 76.6 percent, compared with a record 79.1 percent in the same period last year, the company said in a statement. Load factor is a measure of airline efficiency relative to capacity.

BlackBerry dropped 3.6 percent to C$7.97, the lowest close in almost a year. Pierre Ferragu, analyst with Sanford C. Bernstein, cut hi rating for the stock to underperform, the equivalent of a sell.

Fairfax Financial Holdings Ltd., which has a tentative $4.7 billion offer in place for the struggling smartphone maker, is unlikely to get financing, as BlackBerry’s cash position is worse than expected, Ferragu said.

Imax Corp., the big-screen cinema company, slumped 8.7 percent to C$26.77, the worst decline since July 2011. Analyst David McFadgen of Cormark Securities Inc. lowered his rating for the stock to reduce, the equivalent of sell. Imax has jumped 20 percent this year.

Suncor Energy Inc. slipped 1.3 percent to C$36.32 and Talisman Energy Inc. lost 2.3 percent to C$12.52 as crude fell for a third day this week on concern the U.S. government shutdown will reduce fuel demand.

Valeant Pharmaceuticals gained 1.4 percent to C$114.91, a record high, after the drugmaker’s Bausch and Lomb unit won approval from the U.S. Food and Drug Administration for a monthly disposable contact lens product.

Valeant also secured regulatory approval in Canada for a topical treatment of nail infections caused by fungi.

Agrium, the largest U.S. farm products retailer, added 0.7 percent to C$88.87. The company named Chuck Magro, currently chief operating officer, as the successor to CEO Mike Wilson, effective at the beginning of next year. Wilson plans to retire at the end of the year after 10 years as CEO.

US

By Michael P. Regan and Alex Barinka

Oct. 3 (Bloomberg) — U.S. stocks tumbled as concern grew that a political impasse in Washington over the budget could lead to a recession. Treasuries gained, reversing losses, while gold pared an earlier slide.

The Standard & Poor’s 500 Index fell 0.9 percent to 1,678.66 at 4 p.m. in New York, trimming a loss of as much as 1.4 percent. Trading was about 6 percent higher than the 30-day average. Ten-year Treasury yields decreased one basis point to 2.61 percent after rising three points earlier, while the cost of insuring the debt climbed to an eight-month high. Gold fell for the third time in for days on concern demand is ebbing in China, while the MSCI Emerging Markets Index advanced 0.8 percent as growth in China’s service industries improved.

As a partial government shutdown entered a third day, the Treasury Department warned that a federal default could lead to a recession as bad as the 2008 financial crisis or worse.

President Barack Obama urged House Speaker John Boehner to hold a vote on funding federal operations without strings attached, saying the Republican’s refusal to do so is the only thing standing in the way of reopening of the government. The Institute for Supply Management’s U.S. non-manufacturing index fell to 54.4 last month, below the median economist estimate of 57.

“What we are starting to realize today especially is that this might go on for a while,” Mike Sorrentino, who helps oversee about $3 billion as chief strategist at Global Financial Private Capital LLC, said by phone from Sarasota, Florida. “The debt ceiling is a cause for concern. If we can get through that and we can get through the dysfunction with this government, there will be a much safer road ahead.”

Stocks recovered from their lows of the session after the New York Times reported that House Speaker John Boehner, an Ohio Republican, told colleagues he’s willing to pass bill to avoid default with combination of Republican and Democratic votes. The Times cited an unidentified House Republican.

The government will run out of borrowing authority Oct. 17, according to the Treasury, leaving only cash to pay the bills. A U.S. default caused by Congress failing to raise the $16.7 trillion federal debt limit could have catastrophic consequences that might last decades, Treasury said in a report today.

“Not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation,” the Treasury said in the report.

“In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth — with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression,” the department said in the report.

Another report today showed fewer Americans than forecast filed applications for unemployment benefits last week. Jobless claims rose by 1,000 to 308,000 in the week ended Sept. 28, from a revised 307,000, the Labor Department said. The median forecast of 50 economists surveyed by Bloomberg called for a rise to 315,000.

Gauges of utility, industrial and technology stocks lost at least 1 percent to lead declines in all 10 of the main industry groups in the S&P 500. Boeing Co., Chevron Corp. and DuPont Co. fell at least 2 percent to lead declines in 29 of 30 stocks in the Dow Jones Industrial Average.

Eli Lilly & Co. dropped 3.4 percent after saying it would be “challenging” for the drugmaker to meet its 2014 sales target. United Technologies Corp., a supplier of helicopters and jet engines to the military, retreated 1.2 percent after saying the shutdown would lead to as many as 5,000 temporary layoffs.

The Chicago Board Options Exchange Volatility Index, the benchmark gauge of options prices known as the VIX, jumped 6.4 percent to 17.67, the highest level since June.

The yield on 10-year Treasury notes has retreated from a high for the year of 3.005 percent on Sept. 6. The 10-year average is 3.53 percent.

The cost of insuring against losses on Treasuries rose, with credit-default swaps linked to U.S. government debt increasing almost seven basis points to 42 basis points, the highest since February. That compares with a peak of 56 basis points in July 2011, when a political standoff threatened to shutter programs and delay bond payments.

The amount of debt protected by default swaps has fallen to $3.4 billion dollars from $5.6 billion two years ago and compares with $13 billion of outstanding insurance on German bunds. There are 886 credit-default swaps contracts linked to U.S debt outstanding, according to the Depository Trust & Clearing Corp. There were 56 trades covering a gross $2.1 billion of Treasuries in the week through Sept. 27, compared with 10 trades the week before.

Spain’s 10-year bond yield was little changed at 4.24 percent after jumping six basis points earlier. The government sold 1.18 billion euros ($1.6 billion) of 2023 bonds priced to yield 4.269 percent, the lowest since Sept. 10. Italy’s yield increased one basis point to 4.37 percent.

The dollar weakened against 10 of 16 major peers and the Bloomberg U.S. Dollar Index, a measure of the currency against 10 others, fell for a fifth straight day.

West Texas Intermediate oil slipped 0.8 percent to $103.31 a barrel. Copper, silver and nickel slid at least 0.7 percent to lead the S&P GSCI Index of commodities lower, while soybeans, lean hogs and coffee rose at least 0.8 percent. Gold futures slipped 0.2 percent to $1,317.60 an ounce after losing as much as 1.4 percent.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong climbed 1.8 percent, the most in three weeks, as China’s non-manufacturing index rose to the highest level since March last month, according to the National Bureau of Statistics and Federation of Logistics and Purchasing.

The non-manufacturing purchasing managers’ index rose to 55.4 in September from 53.9 in August, the report showed. A number more than 50 indicates an expansion. Benchmark equity gauges in Taiwan, India and Thailand added at least 1.4 percent.

The ringgit climbed 1 percent versus the dollar and the rupee strengthened 1.2 percent.

The Philippine peso advanced 0.7 percent and the main stock index added 0.4 percent, after falling as much as 0.9 percent.

Moody’s Investors Service upgraded the country’s debt rating to investment grade and said the outlook is positive. The yield on the government’s dollar debt due January 2021 fell six basis points to 3.37 percent.

Trading volume for shares in the Stoxx 600 was 11 percent below the 30-day average as Germany marked the German Unity Day holiday.

Finmeccanica SpA, Italy’s largest arms company, climbed 3 percent as Banca Akros upgraded the shares. The stock has rallied 14 percent this week.

 

Have a wonderful evening everyone!

 

Be magnificent!

 

“Education is the most powerful weapon which you can use to change the world.” – Nelson Mandela

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

Tel: 778-430-5808

Fax: 778-430-5838

 

 

 

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.  Today in history, in 1869, Mahatma Gandhi was born. He was well known for his advocacy of non-violent resistance to fight tyranny and he inspired movements for civil rights and movements for freedom across the world.

“Non-violence is not a garment to be put on and off at will. Its seat is in the heart, and it must be an inseparable part of our being.” – Mahatma Gandhi

Also on this Day:

1870 – Rome was made the capital of Italy.

1950 – “Peanuts,” the comic strip created by Charles M. Schulz, was published for the first time in seven newspapers.

1959 – “The Twilight Zone” debuted on CBS-TV. The show ran for 5 years for a total of 154 episodes.

2001 – The U.S. Postmaster unveiled the “Tribute to America” stamp. The stamp was planned for release the next month.

2001 – NATO, for the first time, invoked a treaty clause that stated that an attack on one member is an attack on all members. The act was in response to the September 11, 2001, terrorist attacks in the United States.

“Happiness is when what you think, what you say, and what you do are in harmony” – Mahatma Ghandi

Photo of the Day:

Indian children dressed like Mahatma Gandhi assemble at an event during Gandhi Jayanti in Ajmer, India. Gandhi Jayanti is the birth anniversary of Gandhi, the father of the nation. Deepak Sharma/AP

Market Closes for October 2^nd, 2013

Market  Index	Close	Change
Dow  Jones	15133.14	-58.56    -0.39%
S&P 500	1693.87	-1.13    -0.07%
NASDAQ	3815.019	-2.963    -0.08%
TSX	12839.00	-8.44
		-0.07%

International Markets

Market  Index	Close	Change
NIKKEI	14170.49	-314.23
		-2.17%
HANG  SENG	22984.48	+124.62
		+0.55%
SENSEX	19517.15	+137.38
		+0.71%
FTSE 100	6437.50	-22.51
		-0.35%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.532	2.556
CND.   30 Year Bond	3.079	3.085
U.S.   10 Year Bond	2.6155	2.6418
U.S.   30 Year Bond	3.6987	3.7083

Currencies

BOC Close	Today	Previous
Canadian $	0.96749	0.96789
US   $	1.03360	1.03317
Euro Rate  1 Euro=		Inverse
Canadian   $	1.40390	0.71230
US  $	1.35826	0.73623

Commodities

Gold	Close	Previous
London Gold   Fix	1317.05	1288.66
Oil	Close	Previous
WTI Crude Future	104.10	102.04
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 2 (Bloomberg) — Canadian stocks fluctuated, after rising the most in almost two weeks yesterday, as gains in gold shares offset a slide in wireless carriers and investors watched for progress in efforts to end a U.S. budget impasse.

BlackBerry Ltd. erased losses after a report said investors have expressed interest in the smartphone maker. BCE Inc., Rogers Communications Inc. and Telus Corp. dropped more than 0.8 percent to pace declines among phone stocks. Semafo Inc. jumped 7.1 percent as gold rebounded. Paladin Energy Ltd. jumped 8.5 percent after reporting cost-cutting plans. Air Canada gained 4.3 percent after winning a pair of slots for flights to a Tokyo airport.

The Standard & Poor’s/TSX Composite Index fell 9.77 points, or 0.1 percent, to 12,837.67 at 2:24 p.m. in Toronto. The index has gained 3.3 percent this year for the third-worst performance among developed markets, ahead of only Hong Kong and Singapore. Trading volume was 12 percent higher than the 30-day average today.

“There was a lot of buying yesterday that was jumping the gun,” Bob Decker, a fund manager with Aurion Capital Management, said in a phone interview from Toronto. His firm manages about C$6 billion ($5.81 billion). “The obvious linkage is what’s happening in Washington isn’t friendly to the economic outlook.”

President Barack Obama summoned the top four leaders of Congress to the White House today for talks on re-opening the U.S. government and raising the debt ceiling.

The U.S. government began shuttering some operations yesterday because of a budget stalemate. Congress now faces a dispute over raising the $16.7 trillion debt ceiling this month. The Treasury has said measures to avoid exceeding the borrowing limit will be exhausted on Oct. 17.

A partial shutdown lasting one week would probably shave 0.1 percentage point from economic growth, according to the median estimate of economists, with the costs accelerating if the closing persists.

A private U.S. payrolls report said employment rose a less- than-forecast 166,000 in September, following a revised 159,000 gain in August that was also smaller than estimated, ADP Research Institute said.

BlackBerry was unchanged at C$8.19 after an earlier loss of as much as 5.4 percent. Dow Jones reported that Cerberus Capital Management LP and another investor have expressed interest in the company. Fairfax Financial Holdings Ltd., the largest shareholder of BlackBerry, announced Sept. 23 it was leading a group of investors planning a buyout of the money-losing smartphone maker.

BlackBerry tumbled earlier today after saying it will record costs of about $400 million, four times the amount it originally projected, as it reduces staff by 40 percent and sells off equipment and real estate.

Barrick Gold Corp. climbed 2.4 percent to C$19.04 and Semafo increased 7.1 percent to C$2.41 as gold rebounded from an eight-week low. Gold futures for December delivery rose 2.3 percent to $1,315.80 an ounce in New York, snapping two days of losses.

Canadian Natural Resources Ltd. declined 1.4 percent to C$32.36 and Suncor Energy Inc. slipped 1.2 percent to C$36.72 as energy stocks dropped 0.5 percent as a group.

The U.S. crude production rose last week, the Energy Information Administration said. Output rose to 7.8 million barrels a day in the week ended Sept. 13, the highest level since May 1989.

BCE lost 0.9 percent to C$43.85, Rogers Communications fell 0.9 percent to C$43.95 and Telus retreated 0.8 percent to C$33.93 as telephone stocks dropped the most in the S&P/TSX.

Paladin Energy jumped 8.5 percent to 51 Canadian cents. The company said yesterday it will cut cash costs for 2014 by $23 million, including a 10 percent reduction in board and management base salaries. The company is also pursuing joint venture partners for its undeveloped assets.

Air Canada soared 4.3 percent to C$3.91, headed for the highest close since November 2008. The company, Canada’s largest airline, will get one slot pair for flights to and from Tokyo’s Haneda airport, Japan’s transport ministry said in an e-mailed statement.

US

By Stephen Kirkland and Alex Barinka

Oct. 2 (Bloomberg) — Stocks slid around the world and gold rallied as the U.S. government shutdown entered a second day and a report showed American employers added fewer jobs than forecast. The dollar fell, while the yen and Treasuries rose.

The MSCI All-Country World Index dropped 0.1 percent at 4 p.m. in New York and the Standard & Poor’s 500 Index slipped 0.1 percent, paring an earlier drop of as much as 0.9 percent. Gold and silver jumped more than 2 percent to lead commodities higher, while oil rallied on speculation a pipeline expansion will fuel demand. The 10-year Treasury yield fell three basis points to 2.62 percent. The dollar weakened versus 11 of 16 major currencies, while the yen rose versus 14. The euro and Italian notes rallied.

President Barack Obama summoned the top four leaders of Congress to the White House today for the first high-level talks on reopening the partially shut U.S. government amid few signs of a resolution. Treasury Secretary Jacob J. Lew said the U.S. has begun final extraordinary measures that will be exhausted no later than Oct. 17 to avoid breaching its debt limit. The ECB kept its refinancing rate at 0.5 percent, matching economists’ estimates in a Bloomberg survey.

“It’s all about the lack of progress out of Washington and concerns about the debt ceiling and the government shutdown all being negotiated in one package,” Paul Zemsky, chief investment officer of multi-asset strategies for ING Investment Management, said by phone from New York. His firm oversees $190 billion. “If we fail to reach a debt-ceiling agreement, that could cause a global-type of concern and cause markets to sell off globally.”

The S&P 500 pared yesterday’s 0.8 percent gain as telephone, industrial and health-care shares led declines in six of the 10 main industry groups. The benchmark index has declined 2.3 percent after last reaching a record on Sept. 18 when the Federal Reserve refrained from reducing its stimulus program.

Companies that rely on government contracts helped lead losses today, with United Technologies Corp., Lockheed Martin Corp. and Raytheon Co. slipping at least 1.9 percent.

Monsanto Co. dropped 1 percent as the world’s largest seed company gave a full-year earnings forecast that trailed analyst estimates. Alcoa Inc. slumped 1.8 percent after Deutsche Bank AG lowered its rating on the aluminum producer. Global Payments Inc. rallied 11 percent after boosting its earnings forecast.

Companies increased payrolls by 166,000 in September, figures from ADP Research Institute showed today. The median forecast of 40 economists surveyed by Bloomberg called for an advance of 180,000.

U.S. stocks may reach a new high before dropping by as much as 4 percent in the next four to five weeks, as the S&P 500 forms a rising wedge, according to technical analysts at UBS AG.

While the S&P 500 doesn’t show any bearish divergence in trading indicators such as the NYSE McClellan Oscillator, which measures the moving average of net advancing shares in a market, or the number of stocks above their 20-day moving average, the index may reach another high by mid-October, before falling, Michael Riesner and Marc Mueller wrote in a note dated Oct. 1.

The Stoxx Europe 600 Index fell 0.7 percent for the third decline in four days.

Hochtief AG slumped 7.9 percent after the Sydney Morning Herald reported allegations of corruption at the company’s Australian business. KappAhl AB dropped 9.8 percent after the clothing retailer proposed paying no dividend this financial year. Portugal Telecom SGPS SA jumped 6.5 percent, the most in almost four months, after agreeing to merge with Brazil’s Oi SA to form a network operator with 100 million subscribers.

The MSCI Emerging Markets Index added 0.2 percent, a second straight gain. The Philippine Composite Index jumped 2.7 percent after the Asian Development Bank raised its economic growth forecast for the country, while gauges in Russia and Turkey fell more than 1 percent. Markets in India and China were shut for holidays.

Gold futures jumped 2.7 percent to $1,320.70 an ounce, the first gain in three days, and silver surged 3.4 percent to $21.88 an ounce. West Texas Intermediate oil added 2 percent to $104.10 a barrel after TransCanada Corp. said it expects to complete work on the southern portion of its Keystone pipeline expansion by the end of October.

The 10-year Treasury yield slid as low as 2.59, within one basis point of the lowest level since Aug. 12. The yield is down from the high this year of 3.005 percent on Sept. 6 and compares with the average of 3.53 percent over the past decade.

Treasury market volatility increased by the most in six weeks yesterday. Price swings as measured by the Merrill Lynch Option Volatility Estimate Index jumped 9 percent as the gauge advanced for a fifth day, the longest run of increases in four weeks. The index was at 87.37, versus the average of 69 for the past year.

The cost of insuring against losses on Treasuries fell, with credit-default swaps linked to U.S. government debt rose two basis points to 35.42 basis points, the highest since April.

That compares with a peak of 56 basis points in July 2011, when a political standoff threatened to shutter programs and delay bond payments.

The amount of debt protected by default swaps has fallen to $3.4 billion dollars from $5.6 billion two years ago and compares with $13 billion of outstanding insurance on German bunds. There are 886 credit-default swaps contracts linked to U.S debt outstanding, according to the Depository Trust & Clearing Corp. There were 56 trades covering a gross $2.1 billion of Treasuries in the week through Sept. 27, compared with 10 trades the week before.

Strategists from Bank of America Corp. to Wells Fargo & Co. predict dollar-denominated corporate bonds will outperform stocks this month if political gridlock persists with the government partially shut down this week.

Company debt in the U.S. has gained 1.1 percent since Sept. 17, the day before the Fed surprised investors with its decision to maintain unprecedented economic stimulus. In August 2011, the last time legislators approached a deadline to raise the debt limit, investment grade bonds returned 0.13 percent while U.S. stocks declined 5.4 percent.

Italy’s 10-year bond yield fell five basis points to 4.37 percent. Italian notes gained as Silvio Berlusconi said he’ll back Prime Minister Enrico Letta’s government. The yield on similar-maturity Portuguese notes jumped 18 basis points to 6.77 percent.

The yen appreciated for a second day, gaining 0.7 percent to 97.38 per dollar, while the euro gained 0.4 percent to $1.3586 after European Central Bank President Mario Draghi said the bank is attentive to exchange-rate developments.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“Live as if you were to die tomorrow. Learn as if you were to live forever.” – Mahatma Ghandi

 

As ever,

 

Karen Parnham

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

 

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.  As the Thanksgiving weekend is approaching, many people have begun making plans with family and friends for the big turkey dinner! It is always nice to pair a delicious wine with the Thanksgiving feast.  According to an article in the Globe and Mail, here are a few examples of the best wines to toast a turkey with!

Cambria Julia’s Vineyard Pinot Noir 2009 (California)

This is a Pinot from California. It has a cinnoman taste behind the fruit with also a hint of dark chocolate. It is a very nice wine for turkey, with or without cranberry sauce.

San Pio Valpolicella Ripasso Classico Superiore 2010 (Italy)

This wine has a very fruity taste with a smooth texture, complemented by herbs and black pepper.

Château des Charmes Aligoté 2010 (Ontario)

This type of wine is light and medium bodied. It is dry and crisp, with flavours of green apple, orange and pear, with an almost spritzy finish.

Produttori Vini Manduria Riserva Salice Salentino 2008 (Italy)

This wine is southern-Italian red, it has a dark fruit and chocolate flavour set against juicy acidity and subtle spice. It would pair well with turkey or a lamb roast.

Sandhill Chardonnay 2010 (British Columbia)

This a medium-bodied and well-balanced wine. This white wine carries flavours of peach, lightly toasted oak and subtle brown butter with a fresh, lime acidity.

Enjoy!

Today in History:

1908 – The Model T automobile was introduced by Henry Ford. The purchase price of the car was $850.

1933 – Babe Ruth made his final pitching appearance. He pitched all nine innings and hit a home run in the 5th inning.

1962 – Johnny Carson began hosting the “Tonight” show on NBC-TV. He stayed with the show for 29 years. Jack Paar was the previous host.

1964 – The Free Speech Movement was started at the University of California at Berkeley.

1971 – Walt Disney World opened in Orlando, FL.

1994 – The U.S. and Japan avoided a trade war by reaching a series of trade agreements

“Challenges are what make life interesting and overcoming them is what makes life meaningful” – Joshua J. Marine

Photos of the Day:

The sun rises over Washington DC. Kevin Lamarque/Reuters

People board a US-made car, used as a private collective taxi, as it rains in Havana September 30th. Collective taxis, also known as “almendron” (big nutshell), have established routes around or near Havana, picking up and dropping off passengers along the way. Desmond Boylan/Reuters

Market Closes for October 1^st, 2013

Market  Index	Close	Change
Dow  Jones	15191.70	+62.03    +0.41%
S&P 500	1695.00	+13.45    +0.80%
NASDAQ	3817.982	+46.503    +1.23%
TSX	12847.44	+60.25
		+0.47%

International Markets

Market  Index	Close	Change
NIKKEI	14484.72	+28.92
		+0.20%
HANG  SENG	22859.86	-347.18
		-1.50%
SENSEX	19517.15	+137.38
		+0.71%
FTSE 100	6460.01	-2.21
		-0.03%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.556	2.543
CND.   30 Year Bond	3.085	3.072
U.S.   10 Year Bond	2.6418	2.6100
U.S.   30 Year Bond	3.7083	3.6847

Currencies

BOC Close	Today	Previous
Canadian $	0.96789	0.96960
US   $	1.03317	1.03135
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39738	0.71563
US  $	1.35251	0.73936

Commodities

Gold	Close	Previous
London Gold   Fix	1288.66	1329.00
Oil	Close	Previous
WTI Crude Future	102.04	102.33
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Oct. 1 (Bloomberg) — Canadian stocks rose, after the biggest quarterly advance in a year, as investors speculated the impact of the first U.S. government shutdown in 17 years would be limited.

Air Canada increased 3.4 percent to pace gains among industrial stocks. Valeant Pharmaceuticals International Inc. climbed 3.2 percent after one of its units agreed to a licensing deal for a skin product. Airboss of America Corp. surged 9.1 percent after agreeing to acquire Flexible Products Co. Semafo Inc. and Barrick Gold Corp. dropped more than 3.4 percent as the price of gold slumped below $1,300 to a seven-week low.

The Standard & Poor’s/TSX Composite Index rose 38.63 points, or 0.3 percent, to 12,825.82 at 2:05 p.m. in Toronto. The index rallied 5.4 percent in the last quarter, the best quarterly gain in a year. Trading volume was 19 percent higher than the 30-day average today.

“Part of it may be the market has priced in a short shutdown of the U.S. government, but if it’s extended and you run into the debt impasse as well it could get messy,” said Irwin Michael, portfolio manager with ABC Funds in Toronto. The firm manages about C$800 million ($775 million). “I’m a little surprised New York and Toronto are up because gold is down over $35 but the banks are up, so that may be a bit of an antidote. Investors want to get through one roadblock at a time so hopefully the shutdown will be short.”

The U.S. government started a shutdown that will idle as many as 800,000 federal workers as Republicans and Democrats failed to negotiate a resolution over spending legislation.

Congress now faces a dispute over raising the $16.7 trillion debt ceiling this month. The Treasury has said measures to avoid exceeding the borrowing limit will be exhausted on Oct. 17.

“It would be political suicide for the Republicans to risk being seen as pushing the shutdown beyond October,” said Avery Shenfeld, chief economist with CIBC World Markets, in a note to clients. “Markets could still become more fretful if we actually cross the debt ceiling deadline, but ultimately any market moves would be reversed as the crisis passed.”

National Bank of Canada gained 0.7 percent to C$85.69 and Bank of Montreal rose 0.6 percent to C$69.14. The S&P/TSX Financials Index added 0.4 percent, headed for the highest close in more than five years.

Pacific Rubiales Energy Corp. climbed 4.5 percent to C$21.25 and Talisman Energy Inc. increased 3.6 percent to C$12.25 as energy stocks headed for the highest closing level since July.

Crude for November delivery slipped 1 percent to $101.29 a barrel in New York for a third day of declines.

“Crude remains above $100. Oil companies will do quite well in this environment if you believe the economy is slowly improving,” Michael said.

Encana Corp. rose 1.2 percent to C$18.01 after restructuring its senior management team. Greg Pardy, analyst with Royal Bank of Canada, said in a note the changes are “positive” as establishing senior leadership is important to Encana’s game plan.

Valeant Pharmaceuticals jumped 3.2 percent to C$110.83, a record high, after unit Obagi Medical Products said yesterday it has acquired a global exclusive license to market a skin lightening compound from Sirona Biochem Corp.

Air Canada, the top-performing stock in the S&P/TSX this year, climbed 3.4 percent to C$3.65 as industrial shares added 1.3 percent as a group. Air Canada, the nation’s largest airline, has jumped 109 percent this year.

Airboss, a rubber-based products maker, soared 9.1 percent to C$7.19, the highest since July 2011. The company said yesterday it will acquire Flexible Products in a deal worth about $51 million.

Semafo sank 8.9 percent to C$2.26 and Barrick Gold retreated 3.4 percent to C$18.61 as gold for December delivery tumbled 3 percent to $1,286.80 an ounce in New York. Gold has slumped 24 percent this year, headed for the first annual loss since 2000.

US

By Claudia Carpenter and Nikolaj Gammeltoft

Oct. 1 (Bloomberg) — Stocks rebounded from yesterday’s slide as investors speculated the economic impact from the shutdown of the U.S. government will be limited and counteracted by Federal Reserve stimulus. Treasuries fell as gold tumbled and the dollar recovered from early losses.

The Standard & Poor’s 500 Index advanced 0.8 percent to 1,695.02 at 4 p.m. in New York after the benchmark index retreated 2.6 percent from its last record on Sept. 18. The S&P GSCI gauge of 24 commodities declined 0.5 percent as precious and industrial metals led losses, with gold futures tumbling 3.1 percent to $1,286.10 an ounce. Treasury 10-year yields rose three basis points to 2.64 percent. The Bloomberg U.S. Dollar Index recovered from an early decline to trade little changed.

Congress’s failure to pass a budget closed the government for the first time in 17 years, setting the stage for a debate on raising the U.S. debt ceiling within three weeks. The Bank of Japan’s Tankan survey on business confidence rose to the highest level in almost six years. A report on U.S. manufacturing showed faster-than-forecast growth and factory output in the 17-nation euro area expanded for a third month.

“The Fed is looking at this too and seeing how it may hurt economic growth, so their tapering plans are getting delayed,” Thomas Nyheim, a Wilmington, Delaware-based fund manager for Christiana Trust, which oversees about $16.6 billion, said by phone. “That would be a positive for stocks.”

The partial shutdown will put as many as 800,000 federal employees out of work today, halting some government services after Congress failed to break a partisan deadlock.  A government shutdown or failure to raise the debt limit “could have very serious consequences” for the economy and policy makers will have to take that into account, Fed Chairman Ben S. Bernanke said Sept. 18 after the central bank unexpectedly refrained from reducing its bond purchases.

An extended government stoppage may prevent the release of jobs data on Oct. 4 that is closely watched for clues to Fed policy.

The standoff that may be a buying opportunity for stock investors, if history is any guide. The S&P 500 has risen 11 percent on average in the 12 months following past government shutdowns, according to data compiled by Bloomberg on instances since 1976. That compares with an average return of 9 percent over 12 months. In all the cases, the U.S. equity benchmark was higher by the end of the next two years.

The S&P 500 rebounded today after falling in seven of the previous eight sessions and closing at the lowest level since Sept. 9 yesterday. The benchmark gauge rose 4.7 percent last quarter and closed at a record of 1,725.52 on Sept. 18. The MSCI All-Country World Index of global shares dropped 0.8 percent yesterday, the most since Aug. 27, to trim its quarterly gain to 7.4 percent.

Among stocks moving in the U.S., Merck & Co. jumped 2.4 percent after the company announced an overhaul that will eliminate 8,500 workers. Walgreen Co. rose 4.5 percent as profit increased 86 percent after its customer-loyalty card boosted sales. Under Armour Inc. increased 4.1 percent as JPMorgan Chase & Co. upgraded the maker of workout clothing. Ford Motor Co. added 1.9 percent after posting a surprise sales gain in September.

The Institute for Supply Management’s index unexpectedly rose to 56.2, the strongest since April 2011, from 55.7 a month earlier. Readings above 50 indicate growth. The median forecast in a Bloomberg survey of economists was 55.

The Stoxx Europe 600 Index rose 0.8 percent after falling to the lowest level in almost three weeks yesterday. Telecom Italia SpA advanced 5.2 percent after surging a similar amount yesterday amid speculation Chief Executive Officer Franco Bernabe will resign. Goldman Sachs Group Inc. reinstated coverage of the phone company with a buy recommendation.

Unilever slid 2.8 percent after the second-largest consumer- goods maker said sales growth slowed in the last quarter.

In Japan, confidence among large manufacturers rose to the highest level since the early stages of the global credit crisis in 2007, with the quarterly Tankan index for big manufacturers rising to 12 in September from 4 in June, the BOJ said today. Euro-area manufacturing was 51.1 in September compared with 51.4 in August, London-based Market Economics said today. A reading above 50 indicates growth.

The dollar recovered after falling to the weakest level in 19 months against the Swiss franc, trading up 0.1 percent at 90.55 centimes after reaching 89.93. The U.S. currency was little changed at $1.3531 per euro after sliding to $1.3588, the weakest since Feb. 6. The pound erased almost all of this year’s 8.9 percent decline against the greenback and the yen strengthened 0.4 percent to 97.83 per dollar.

The Aussie surged 0.9 percent to 93.98 U.S. cents. Sweden’s krona jumped as a report showed manufacturing expanded at the fastest pace in more than two years.

Spain’s 10-year bond yield fell 13 basis points to 4.17 percent and Portugal’s dropped nine basis points to 6.59 percent.

The MSCI Emerging Markets Index rose 0.7 percent, increasing for the first time in six days after capping its first quarterly gain this year.

The Borsa Istanbul National 100 Index climbed 2.7 percent, the biggest gain in emerging markets, and Turkey’s two-year benchmark notes snapped six days of losses while the lira strengthened. The nation’s manufacturing PMI rose to 54 last month from 50.9 in August, according to data from HSBC Holdings Plc and Markit Economics today.

Indonesia’s JCI Index added 0.7 percent after the country reported an unexpected trade surplus in August, compared with the forecast $810 million deficit in a Bloomberg survey.

Gold, lead, silver and zinc each lost more than 2 percent to lead declines in 18 of the 24 commodities tracked by the S&P GSCI Index. Crude oil fell 0.3 percent to $102.04 a barrel in New York, the lowest level in almost three months. A government report tomorrow may show crude supplies rose last week as refineries idled units for seasonal maintenance, according to a Bloomberg survey.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“Seven Deadly Sins
Wealth without work
Pleasure without conscience
Science without humanity
Knowledge without character
Politics without principle
Commerce without morality
Worship without sacrifice.”
― Mahatma Gandhi

 

As ever,

 

Karen Parnham

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5828

 

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.  Storm season has arrived in Victoria! The last few days here have had high winds and heavy downpours! I thought I would share this poem called “Rainfall” as it is fitting to the type of day we are experiencing!

Rainfall

From out the west, where darkling storm-clouds float,

The ‘waking wind pipes soft its rising note’.

From out the west, o’erhung with fringes grey,

The wind preludes with sighs its roundelay,

Then blowing, singing, piping, laughing loud,

It scurries on before the grey storm-cloud;

Across the hollow and along the hill

It whips and whirls among the maples, till

With boughs upbent, and green of leaves blown wide,

The silver shines upon their underside.

A gusty freshening of humid air,

With showers laden, and with fragrance rare;

And now a little sprinkle, with a dash

Of great cool drops that fall with sudden splash;

Then over field and hollow, grass and grain,

The loud, crisp whiteness of the nearing rain.

Unknown

Today in History:

1947 – The World Series was televised for the first time. The sponsors only paid $65,000 for the entire series between the Brooklyn Dodgers and the New York Yankees.

1954 – The U.S. Navy commissioned the Nautilus submarine at Groton, CT. It was the first atomic-powered vessel. The submarine had been launched on January 21, 1954.

1982 – “Cheers” began an 11-year run on NBC-TV.

1984 – Mike Witt became only the 11th pitcher to throw a perfect game in major league baseball.

1994 – The space shuttle Endeavor took off on an 11-day mission. Part of the mission was to use a radar instrument to map remote areas of the Earth.

“Two roads diverged in a wood, and I took the one less traveled by, and that has made all the difference” – Robert Frost

Photos of the Day:

Russian sailing ship ‘Mir’ participates in a parade for the Mediterranean Tall Ships regatta in Toulon, France. About 37 tall ships have gathered for the competition which ended with a parade in the bay of Toulon. Jean-Paul Pelissier/Reuters

Flamingos stand in a lagoon near Messolongi, in western Greece. The lagoon is part of protected wetlands, that also includes marshes and ponds. The migratory flamingoes use the lagoon and salt evaporation ponds of Messolongi during the summer months before moving further south for the winter. Dimitri Messinis/AP

Market Closes for September 30^th, 2013

Market  Index	Close	Change
Dow  Jones	15129.67	-128.57    -0.84%
S&P 500	1681.55	-10.20    -0.60%
NASDAQ	3771.479	-10.115    -0.27%
TSX	12787.19	-56.89
		-0.44%

International Markets

Market  Index	Close	Change
NIKKEI	14455.80	-304.27
		-2.06%
HANG  SENG	22859.86	-347.18
		-1.50%
SENSEX	19379.77	-347.50
		-1.76%
FTSE 100	6462.22	-50.44
		-0.77%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.543	2.557
CND.   30 Year Bond	3.072	3.080
U.S.   10 Year Bond	2.6100	2.6245
U.S.   30 Year Bond	3.6847	3.6847

Currencies

BOC Close	Today	Previous
Canadian $	0.96960	0.97056
US   $	1.03135	1.03033
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39482	0.71694
US  $	1.35243	0.73941

Commodities

Gold	Close	Previous
London Gold   Fix	1329.00	1336.42
Oil	Close	Previous
WTI Crude Future	102.33	103.03
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam and Lu Wang

Canadian stocks fell, paring the biggest quarterly gain in a year, as a likely U.S. government shutdown weighed on global equities, overshadowing data showing a pickup in growth in the world’s 11th-largest economy.

Pacific Rubiales Energy Corp. fell 5.6 percent after agreeing to buy Petrominerales Ltd. for C$935 million ($912 million). Brookfield Office Properties Inc. jumped 14 percent after Brookfield Property Partners LP offered to buy the shares it doesn’t already own in the office landlord.

The Standard & Poor’s/TSX Composite Index declined 56.89 points, or 0.4 percent, to 12,787.19 at 4 p.m. in Toronto. The benchmark gauge for Canadian equities jumped 5.4 percent this quarter, its best performance since September 2012, and is up 2.8 percent in 2013. Trading volume was 10 percent above the 30- day average.

“No one expects the largest economy in the world to have a gridlock when it comes to the parliament and it’s unfortunate that it’s a very fractious environment,” Irwin Michael, portfolio manager with ABC Funds in Toronto, said in a phone interview. His firm manages C$800 million. “If there is no extended shutdown in the U.S. government, we expect the North American economy to start to become a little more positive in direction.”

The deadlocked U.S. Congress headed into the final hours before the first partial government shutdown in 17 years without any signs of averting widespread furloughs of government workers. The U.S. is Canada’s largest trading partner.

All 24 of the world’s developed stock markets retreated today, with the benchmark U.S. equity gauge sliding 0.6 percent.

A shutdown of the government would reduce fourth-quarter economic growth in the U.S. by as much as 1.4 percentage points depending on its length, economists at Moody’s Analytics Inc. estimated last week.

In Canada, gross domestic product grew 0.6 percent to an annualized C$1.58 trillion, the biggest gain since July 2011, as the economy recovered from a construction strike in Quebec and flooding in Alberta, Statistics Canada said today in Ottawa.

Consumer sentiment climbed to the highest in more than two years as employment rose and the housing market remained buoyant, according to the new Bloomberg Nanos Canadian Confidence Index.

All 10 main industries in the S&P/TSX fell. Health-care stocks slid 1.2 percent for the worst performance as Catamaran Corp. dropped 3.4 percent to C$47.32, its lowest close in 2013.

Pacific Rubiales slipped 5.6 percent to C$20.34. The company agreed to buy Petrominerales as the world’s fastest- growing major crude producer seeks to reduce transport costs.

Petrominerales shareholders will receive C$11 a share and one share in a newly formed exploration and production company, Pacific Rubiales said it will also take on C$640 million in debt, including convertible bonds.

Shares of Petrominerales surged 51 percent to C$11.70.

Brookfield Office paced the gains, surging 14 percent to C$19.74, a five-year high. Brookfield Property, which currently owns 51 percent of Brookfield Office, said it’s planning a tender offer of the landlord’s shares for stock or cash at a value of $19.34 each. The acquisition will create a combined entity with 330 million square feet (31 million square meters) of office, retail and industrial space on four continents, the company said.

SNC-Lavalin Group Inc. rose 2.4 percent to C$42.35.

Canada’s biggest engineering and construction company said it hired Morgan Stanley and Royal Bank of Canada to help sell an equity stake in its AltaLink power-transmission unit.

US

By Emma O’Brien and Nikolaj Gammeltoft

U.S. index futures rose, contracts on Asian equity gauges were mixed and crude oil held declines as investors awaited a potential shutdown of America’s government.

Global stocks fell the most in a month yesterday, paring the biggest quarterly jump since the start of 2012.

Standard & Poor’s 500 Index futures added 0.2 percent by 7:18 a.m. in Tokyo, after the measure lost 0.6 percent in the U.S. Contracts on Australia’s S&P/ASX 200 Index rose 0.1 percent, while Nikkei 225 Stock Average futures traded at 14,535 in Chicago after closing at 14,460 in Japan. The MSCI All Country World Index sank 0.8 percent yesterday. The Bloomberg U.S. Dollar Index lost 0.1 percent in New York and West Texas Intermediate oil held near an almost three-month low.

Hours before a midnight deadline to keep the U.S. government open, President Barack Obama urged lawmakers to pass a funding bill not tied to his health-care legislation for the sake of the economy. China may say manufacturing growth rose a third month today, after a smaller-than-expected increase in a private gauge cast doubt on the strength of the economic rebound. Japan issues data on manufacturing and employment, while Australia will probably keep key interest rates on hold.

“We are at the mercy of whatever develops in Washington,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in an interview. “An attempt to prevent a shutdown is not totally unexpected, but some agreement will be better than none.”

Republicans and Democrats remained at odds over whether to tie any changes to the 2010 Affordable Care Act to a short-term extension of government funding as the shutdown deadline approached. The Senate voted 54-46 yesterday to reject the House of Representative’s latest plan, in a party-line move that puts the pressure back on House Republicans.

Senate Republicans floated the idea to extend by one week the funding deadline to avert a shutdown. Senate Majority Leader Harry Reid said no. Democrats urged House Speaker John Boehner to allow a vote on a spending bill without conditions.

Even if the budget fight is resolved, lawmakers would immediately move to the next fiscal dispute over raising the $16.7 trillion debt ceiling. MSCI’s All-Country Index rose 7.4 percent last quarter, the most since the first three months of 2012.

Closing the government would cut fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, according to economists from Moody’s Analytics Inc. to Economic Outlook Group LLC. Obama said failing to fund government operations would “throw a wrench into the gears of the economy,” in comments from the White House.

The Bloomberg China-US Equity Index of the most-traded Chinese stocks in New York declined 0.6 percent to the lowest close since Sept. 12. Markets in Hong Kong are shut today, while trading in mainland China is closed until Oct. 8 for the National Day holiday break.

China’s official manufacturing purchasing managers’ index may deliver a reading of 51.6 for September, up from 51 in August, according to the median estimate in a Bloomberg survey of 30 economists. Fifty is the threshold between expansion and contraction. HSBC Holdings Plc and Markit Economics’ PMI rose to 50.2, from 50.1 in August, below a preliminary estimate of 51.2, according to data released yesterday.

Premier Li Keqiang said in a speech yesterday that the world’s second-largest economy can meet its main targets for this year. The economy is “stabilizing in a good trend” Li said, as cited by China National Radio in an address before the holidays. The economy probably grew 7.7 percent in the third quarter, according to the median forecast in a Bloomberg survey last month, up from an estimate of 7.5 percent in August.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do, so throw off the bowlines, sail away from safe harbor, catch the trade winds in your sails.  Explore, Dream, Discover” – Mark Twain

As ever,

 

Karen Parnham

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

 

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5828

 

 

Dear Friends,

Tangents:

51 years ago today, on September 27^th, 1962, Rachel Carson’s book, Silent Spring, was published, spurring the environmental movement.

Today, The Wall Street Journal, featured this article:

U.N. Says Humans Are ‘Extremely Likely’ Behind Global Warming Report Says Long-Term Planetary Warming Trend Likely to Continue

By GAUTAM NAIK And JOHANNES LEDEL

A U.N. report on climate change said that while human activity is “extremely likely” to blame for global warming, temperatures aren’t expected to rise as quickly as previously thought. Gunnar Myhre, coordinating lead author for the IPCC, explains the details to WSJ’s Gautam Naik.

STOCKHOLM—A landmark United Nations report issued Friday reaffirmed the growing belief that human activity is the dominant cause behind a rise in global temperatures and reiterated that a long-term planetary warming trend is expected to continue.

The report could have a significant impact on policy-making because it underscores that human activity is pushing atmospheric carbon-dioxide concentrations toward levels whereby the surface temperatures may increase by 2 degrees Celsius. Many governments have pledged to try to keep the temperature rise below that level, which they believe is a threshold beyond which the consequences of climate change will be severe.

Between 1750 and 2011, human activity released 545 gigatons of carbon dioxide, the main greenhouse gas. If a total of 1,000 gigatons is emitted, there is a one-in-three chance that the 2-degree limit will be breached, said Corinne Le Quere, a geophysicist at the University of East Anglia in the U.K. and a lead author of a chapter in the U.N. report.

“We’re eating up our allocation very rapidly. At the current rate, we’ll hit the 1,000-gigaton-level sometime between 2040 and 2050,” she added.

Of all the carbon dioxide emitted so far, two-thirds comes from burning fossil fuels and one-third from land-use change and deforestation. However, in the last decade, 90% of the carbon dioxide released has come from burning fossil fuels, according to Dr. Le Quere.

A summary of the report, the work of more than 800 scientists working for the U.N.’s Intergovernmental Panel on Climate Change over several years, said there is a 95% likelihood that humans are behind global warming, up from the 90% level of certainty in a similar 2007 report.

Enlarge Image

An iceberg floats through the water on July 20, 2013, in Ilulissat, Greenland

Getty Images

The IPCC noted that air and oceans are getting warmer, ice and snow is less plentiful, and sea levels are rising.

“Warming of the climate system is unequivocal, and since the 1950s, many of the observed changes are unprecedented over the millennia,” the report says.

The IPCC said the past three decades have been successively warmer at the Earth’s surface that any preceding decade since 1850. That is “a robust signal of a changing planet,” said IPCC co-chair Thomas Stocker at a news conference in Stockholm.

At the same time, the IPCC has moderated projections of rising temperatures for the end of this century. The latest report outlines four scenarios, with the worst scenario predicting a possible increase of 4.8 degrees Celsius toward the end of the century. The prior report had outlined six scenarios, with the worst scenario peaking above 6 degrees Celsius.

Associated Press

Kali, an orphaned male polar bear cub from Point Lay, Alaska, explores the enclosure outside the infirmary at the Alaska Zoo, in a photo taken on March 22, 2013.

IPCC reports draw the attention of governments, environmentalists and key industries such as the oil, gas and coal sector because they provide the scientific backing for many policies on climate change. The narrower range of possible scenarios could help scientists and policy makers fine-tune their responses.

The summary previews a full report that will be issued next week as part of the group’s fifth assessment, which will come in several phases. It is considered a more definitive document than its predecessors because it incorporates more recent scientific findings, a larger set of satellite, oceanic and terrestrial measurements and more robust computer modeling.

“Observations of changes in the climate system are based on multiple lines of independent evidence,” said Qin Dahe, co-chair of the IPCC working group.

The IPCC’s credibility took a hit after some shoddy data made its way into the 2007 report, including a claim that Himalayan glaciers would melt by 2035.

More recently, climate change science has come under attack because of a flattening of temperatures over the past 15 years, even though greenhouse gas emissions have continued to rise.

Scientists at the IPCC played down the apparent slowdown, arguing that a 15-year period is too short to reflect long-term climate trends.

Among the factors that could be behind the apparent slowdown are a cooling of the Pacific Ocean, a natural change in the 11-year solar cycle and nearly a dozen volcanic eruptions since 2005, which can spew sunlight-blocking particles into the atmosphere.

“We couldn’t attribute exactly what was the contribution from each of these factors,” said Dr. Le Quere. “But the overall picture is that the earth is continuing to take up heat even when the surface is warming slowly.”

The newest measurements suggest that current carbon-dioxide concentration in the earth’s atmosphere is 40% above preindustrial levels. Such levels are “unprecedented in at least the last 800,000 years,” the report said. The 2007 report had calculated the same figure but only for the past 650,000 years.

Arctic sea-ice cover has been declining for several decades. The IPCC now says it is “very likely” that the ice cover will continue to shrink and thin, and there will be a reduction in glacier volumes and declines in spring snow cover in the Northern hemisphere. This past summer, Arctic sea ice levels registered an increase, but that partly reflected the record-low levels achieved a year earlier.

The U.N. report also concludes that the global mean sea level will “very likely exceed that observed during 1971 through 2010.”

Corrections & Amplifications
Thomas Stocker said the global surface temperature change for the end of the 21st century is projected to be likely to exceed 1.5 degrees Celsius, which is about 2.7 Fahrenheit. A previous version of this article gave an incorrect conversion of Celsius to Fahrenheit.

Those who dwell, as scientists or laymen, among the beauties and mysteries of the earth are never alone or weary of life. – Rachel Carson, 1907-1964

Market Closes for September 27^th, 2013

Market  Index	Close	Change
Dow  Jones	15258.24	-70.06    -0.46%
S&P 500	1691.72	-6.95    -0.41%
NASDAQ	3781.594	-5.833    -0.15%
TSX	12846.01	+4.39
		+0.03%

International Markets

Market  Index	Close	Change
NIKKEI	14760.07	-39.05
		-0.26%
HANG  SENG	23207.04	+82.01
		+0.35%
SENSEX	19727.27	-166.58
		-0.84%
FTSE 100	6512.66	-52.93
		+0.81%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.557	2.590
CND.   30 Year Bond	3.080	3.109
U.S.   10 Year Bond	2.6245	2.6498
U.S.   30 Year Bond	3.6847	3.6951

Currencies

BOC Close	Today	Previous
Canadian $	0.97056	0.96992
US   $	1.03033	1.03102
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39322	0.71776
US  $	1.35221	0.73953

Commodities

Gold	Close	Previous
London Gold   Fix	1336.42	1323.90
Oil	Close	Previous
WTI Crude Future	103.03	102.86
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Sept. 27 (Bloomberg) — Canadian stocks rose, with the benchmark gauge poised for the best quarterly performance in a year, as gains in consumer-staples companies and oil producers offset a decline in phone shares amid concern that a U.S. budget impasse may shut down the government.

Trilogy Energy Corp. soared 11 percent after providing an update on its operations in Alberta. Telus Corp. and Rogers Communications Inc. slipped at least 1 percent after an analyst with Canadian Imperial Bank of Commerce lowered his price targets for the nation’s largest wireless carriers due to regulatory risks. BlackBerry Ltd. increased 0.7 percent to snap three days of losses after reporting second-quarter earnings.

The Standard & Poor’s/TSX Composite Index rose 2.46 points, or less than 0.1 percent, to 12,844.08 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has jumped 5.9 percent this quarter, the biggest gain since September 2012, and is up 3.3 percent in 2013.

“There’s a lot of anxiety going into the weekend,” said Andrew Pyle, fund manager with ScotiaMcLeod Inc. in Peterborough, Ontario. He manages about C$210 million ($204 million). “Nobody should be naive out there, to think if we get a worst-case scenario with respect to the U.S. budget impasse that Canada comes out of this unscathed. You could see some very heavy losses in the TSX.”

The U.S. Senate voted to finance the government through Nov. 15, sending the bill to the House and setting up a weekend of negotiations and brinkmanship three days before federal spending authority runs out and a few weeks until the country reaches its borrowing limit.

President Barack Obama said in a televised statement that Congress’s failure to approve funding would have a destabilizing effect on the economy. Democrats and Republicans can’t agree on the inclusion of funds for Obama’s health-care law in the bill.

Energy stocks added 0.1 percent as a group, as six of 10 industries in the S&P/TSX rose. Trading volume was 20 percent below the 30-day average.

Trilogy Energy soared 11 percent to C$28.80 after reporting an operating update for its Montney and Duvernay oil projects.

The company said unexpected plant outages reduced third-quarter volumes to about 31,000 barrels of oil equivalent per day, and anticipates levels returning to normal in the fourth quarter.

Athabasca Oil Corp., which is seeking a joint-venture partner for its Duvernay holdings, jumped 9.3 percent to C$7.97, the most in seven weeks.

BlackBerry added 0.7 percent to C$8.28, the first increase in six days. The smartphone maker reported more complete second- quarter earnings, including a loss of 47 cents a share from continuing operations and a 45 percent plunge in sales to $1.57 billion, after disclosing preliminary results on Sept. 20.

“The slight upside likely reflects that there was nothing hidden in the results,” said Bill Kreher, an analyst with Edward Jones & Co., in a phone interview from St. Louis.

Jean Coutu Group Inc. rose 1.8 percent to C$18.29 to pace gains among consumer-staples companies.

Telus dropped 1.2 percent to C$34.52 and Rogers retreated 1 percent to C$44.64. Analyst Robert Bek with CIBC World Markets cut his price targets for the two wireless carriers by 11 percent and 17 percent, respectively, due to the Canadian government’s increasing attention to the space.

Canada’s largest carriers signaled on Sept. 23 their intent to bid in a wireless spectrum auction in January, with no sign of interest from major foreign companies after Verizon Communications Inc. said earlier this month it wouldn’t enter the Canadian market.

Teck Resources Ltd., Canada’s largest diversified miner, dropped 4.1 percent to C$28.10 following two days of gains.

Paretosh Misra, analyst with Morgan Stanley, said the company may move ahead with an oil sands project, as investing in energy assets is an “emerging trend” among miners.

Martinrea International Inc., a metal auto-parts maker, slumped 10 percent to C$10.96 after the company said it received a press release discussing a claim from Nat Rea, former vice chairman of the company. Martinrea has not received the claim or reviewed the allegations and will “respond appropriately in due course.”

Rea, who was fired in June 2012, said he filed a statement of claim alleging breaches of fiduciary duties related to several deals involving suppliers and customers and is calling for a new board of directors. The claims have not been proven in court.

US

By Lu Wang

Sept. 27 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its first weekly drop since August, as concern grew that the budget impasse will hurt economic growth in the world’s largest economy.

Accenture Plc slid 2.4 percent on a disappointing profit projection. United Continental Holdings Inc. dropped 9.3 as the world’s largest carrier cut its third-quarter forecast for a benchmark revenue gauge. J.C. Penney Co. sank 13 percent after the retailer began selling 84 million shares to raise as much as $932 million in cash. Nike Inc. surged 4.7 percent as fiscal first-quarter profit topped analysts’ estimates.

The S&P 500 fell 0.4 percent to 1,691.75 at 4 p.m. in New York. The Dow Jones Industrial Average lost 70.06 points, or 0.5 percent to 15,258.24. About 5.5 billion shares changed hands on U.S. exchanges, 5.7 percent below the three-month average.

“There is nothing in the economic data I can see that tells me I should worry about a recession,” Sam Wardwell, an investment strategist at Pioneer Investments in Boston, said in a phone interview. His firm oversees about $217 billion. “A government shutdown would be a fiscal cliff that’s big enough in this case to drive the economy into a recession and I think that the market is increasingly worried about that risk because the risk seems to be rising.”

The S&P 500 dropped six of the past seven sessions, including a 1.1 percent slide this week, amid the Congressional impasse over the budget that threatens to shut down the government. The index rose 0.3 percent yesterday, snapping its longest losing streak this year, after an unexpected drop in jobless-benefit claims.

The U.S. Senate voted today to finance the government through Nov. 15 after removing language to choke off funding for the health care law. The bill now returns to the House, setting up a weekend of negotiating and brinkmanship that could continue until spending authority expires on Sept. 30.

Congress must also reach a deal to avoid hitting the limit on the government’s ability to borrow. Treasury Secretary Jacob J. Lew said the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt cap could lead to a downgrade of the government’s credit rating.

President Barack Obama said that Congress’s failure to approve funding to keep the government open and an increase in the debt ceiling would have a destabilizing effect on the economy.

A federal shutdown would cut fourth-quarter economic growth by as much as 1.4 percentage points depending on its length, economists said. The Office of Management and Budget estimated 30 days of shutdowns in 1995 and 1996 cost more than $1.4 billion, or $2.09 billion in today’s dollars.

Today’s slide trimmed the S&P 500’s third-quarter rally to 5.3 percent. That compared with a 0.7 percent loss in U.S. Treasuries, according to data compiled by Bloomberg and Bank of America Corp. Investors should expect $23.5 billion in selling of equities and buying of bonds as pension fund managers rebalance their portfolios at the end of the third quarter, Ramon Verastegui, head of engineering and strategy at Societe Generale SA in New York, wrote in a Sept. 25 note.

“The momentum isn’t terrible, but has basically been progressively weakening,” Jim Welsh, a market strategist who helps oversee $5.7 billion at Forward Management LLC in San Francisco, said in a phone interview. “The market is vulnerable to the largest correction so far this year, and it just comes down to what kind of news shows up, whether it turns out to be because of Congress, or whatever.”

The S&P 500’s biggest retreat in 2013 was the 5.8 percent slide that started May 21, when Federal Reserve Chairman Ben S.

Bernanke first suggested the central bank could cut monetary stimulus this year. The gauge is down 2 percent since closing at a record Sept. 18, after the Fed unexpectedly refrained from slowing its monthly bond purchases. The stimulus has helped the S&P 500 rally as much as 155 percent from its 2009 low.

Investors have been weighing data to determine whether economic growth is strong enough to prompt the Fed to begin tapering at its next meeting in October. Fed Bank of New York President William C. Dudley said today he wants to see more momentum in the economy before making cuts.

The showdown in Washington “creates uncertainty about the fiscal outlook and may exert a restraining influence on household and business spending,” he said.

A report today indicated consumer spending rose in August for a fourth consecutive month, as a pickup in incomes bolstered the biggest part of the economy. Separate data showed confidence among consumers declined to a five-month low in September as Americans’ views on the economy dimmed.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, jumped 10 percent to 15.46. The measure has advanced 18 percent this week.

Eight out of 10 S&P 500 main industries fell today as materials and telephone shares sank at least 1 percent for the worst performance.

International Paper Co. dropped 3.9 percent to $45.44, its eighth retreat in the past nine session to lead declines among raw-materials producers. The world’s largest maker of office paper could be forced to shut down some capacity as the industry faces an increasing supply amid sluggish demand, Mark Wilde, an analyst with Deutsche Bank AG, said in a note. He cut the stock’s rating to hold from buy.

Accenture slipped 2.4 percent to $74.09. The world’s second-largest technology-consulting company forecast earnings that may fall short of analysts’ estimates amid increasing competition from Indian providers.

International Business Machines Corp., the largest technology-services provider, lost 1.7 percent to $186.92.

United Continental slid 9.3 percent to $30.91. Revenue for each seat flown a mile will increase 2.5 to 3.5 percentage points, according to a filing yesterday, a range that the carrier said was about 1 percentage point less than previous projections. It cited lower fares on some overseas flights operated in conjunction with other airlines and rivals adding seats on China routes.

J.C. Penney lost 13 percent to $9.05, extending its weekly loss to 30 percent. The stock has plunged the past five days to its lowest since 2000 after a Goldman Sachs Inc. debt analyst said cash will be strained this quarter. J.C. Penney said today it will end the fiscal year with about $1.3 billion in liquidity, excluding the offer proceeds.

International Game Technology dropped 7 percent to $19.23.

The world’s largest maker of slot machines was cut to hold from buy at Deutsche Bank. The stock’s price has reflected expectations for increasing returns to shareholders while the gaming industry is likely to become “more challenged,” analyst Carlo Santarelli wrote in a note to clients.

Nektar Therapeutics tumbled 24 percent, its biggest slide in five years, to $10.54. The company said a study of the slow- release painkiller NKTR-181 showed it failed to meet the primary endpoint of a Phase 2 study, citing an “unusual lack” of a gain in pain scores for patients taking a placebo.

Nike gained 4.7 percent, the most in the Dow, to $73.64.

The world’s largest sporting-goods company posted fiscal first- quarter profit that topped analysts’ estimates after demand for running and basketball shoes helped North American sales.

Microsoft Corp. climbed 1.5 percent to $33.27 for the second-biggest gain in the Dow.

Cerner Corp. rallied 8 percent, the most in the S&P 500, to a record $52.61. The provider of electronic medical records said it reached a multiyear agreement to provide services to Intermountain Healthcare.

 

Have a wonderful weekend everyone.

 

Be magnificent!

 

Sleep is temporary death.  Death is longer sleep.

If the man dies while yet alive, he need not grieve over others’ death.

One’s experience is evident with or without the body, as in waking, dream, and sleep.

Then why should one desire continuance of the bodily shackles?

Let man find out his undying Self and die and be immortal and happy.

Sri Ramana Maharshi, 1879-1950

As ever,

 

Carolann

 

And that’s the way it is.

-Walter Cronkite, 1916-2009

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1969, The Beatles released their last recorded album, Abbey Road.

And on September 26^th, 1960, the first presidential debate was broadcast – Richard Nixon and John F. Kennedy.  Polls indicated that those who listened to the debate on radio, thought Nixon won the debate and those who watched the debate on television thought Kennedy won.

Life imitates art far more than art imitates life.  –Oscar Wilde.

Spend time outdoors:  “Why?  We spend most of our time indoors.  Now researchers have found chemicals from indoor air someplace  we might not want it: our blood.  The research is in the journal Environmental Science and Technology.  A variety of the chemicals used to make everything from carpets to couches resist stains showed up in the serum of 31 Boston office workers.  The researchers found the highest levels of these chemicals in the air inside new buildings and, subsequently, in the blood of those who worked there.”  –from Scientific American.

Photos of the day

Bees fly between sunflowers at the Agricenter in Memphis, Tenn., Sept. 25. Jim Weber/The Commercial Appeal/AP

A man leaves ‘Flower Power,’ a vintage camping caravan that was converted into a hotel room at the Base Camp Bonn Young Hostel, the world’s first camping trailer and Pullman coach hostel, in Bonn, Germany, Sept. 20, 2013. Wolfgang Rattay/Reuters

Market Closes for September 26^th, 2013

Market  Index	Close	Change
Dow  Jones	15328.30	+55.04    +0.36%
S&P 500	1698.67	+5.90    +0.35%
NASDAQ	3787.427	+26.329    +0.70%
TSX	12841.62	+4.91
		+0.04%

International Markets

Market  Index	Close	Change
NIKKEI	14799.12	+178.59
		+1.22%
HANG  SENG	23125.03	-84.60
		-0.36%
SENSEX	19893.85	+37.61
		+0.19%
FTSE 100	6565.59	+14.06
		+0.21%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.590	2.574
CND.   30 Year Bond	3.109	3.101
U.S.   10 Year Bond	2.6498	2.6189
U.S.   30 Year Bond	3.6951	3.6585

Currencies

BOC Close	Today	Previous
Canadian $	0.96992	0.96929
US   $	1.03102	1.03168
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39074	0.71904
US  $	1.34890	0.74134

Commodities

Gold	Close	Previous
London Gold   Fix	1323.90	1333.50
Oil	Close	Previous
WTI Crude Future	103.03	102.76
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam and Aubrey Pringle

Sept. 26 (Bloomberg) — Canadian stocks rose for the third time in four days as data showing growth in the U.S. economy offset concern that a budget impasse in Washington could hurt the recovery.

Teck Resources Ltd., Canada’s largest diversified miner, gained 2.5 percent as copper rose the most in a week. Husky Energy Inc. climbed 4.1 percent after reporting “significant discoveries” in the Atlantic. Valeant Pharmaceuticals International Inc. added 0.7 percent after an analyst with Guggenheim Securities LLC initiated coverage of the stock with a buy rating. Alacer Gold Corp. dropped 6.1 percent as Credit Suisse reduced its rating on the shares and gold prices sank.

The Standard & Poor’s/TSX Composite Index rose 4.91 points, or less than 0.1 percent, to 12,841.62 at 4 p.m. in Toronto, trimming an earlier advance of as much as 0.5 percent. The benchmark Canadian equity gauge has surged 5.9 percent this quarter and is up 3.3 percent in 2013.

“The U.S. GDP and jobless claims data, those are the two reasons” for the market’s gains, said Ian Nakamoto, director of research with MacDougall MacDougall and MacTier Inc. in Toronto.

The firm manages about $4 billion. “The guys in Washington will find a compromise, the question is the impact on consumer confidence. My sense is the consumer will stay on.”

The U.S. economy grew at a 2.5 percent annualized pace in the second quarter, after expanding 1.1 percent in the first, a sign the country was weathering federal budget cutbacks and higher taxes. Fewer Americans applied for unemployment benefits last week, with claims dropping by 5,000 to 305,000.

Stocks pared an earlier rally as U.S. House Speaker John Boehner said President Barack Obama can’t avoid negotiations on raising the government’s debt limit, and he doesn’t expect his chamber to pass the stopgap spending bill anticipated from the Senate. The Senate likely will not vote on the bill until this weekend, leaving the House one full workday to act before spending authority for the federal government expires on Oct. 1.

Energy shares rose 0.4 percent as a group, as six out of 10 industries in the S&P/TSX advanced. Trading volume was 18 percent lower than the 30-day average.

Husky Energy climbed 4.1 percent to C$30.26 after the Calgary-based company said it discovered oil in the Flemish Pass Basin off the Atlantic coast of Canada.

Legacy Oil & Gas Inc. rose 1.8 percent to C$6.71 and Imperial Oil Ltd. gained 1.5 percent to C$45.54 as crude prices advanced for the first time in six days.

Teck Resources rose 2.5 percent to C$29.29 as copper jumped 1.1 percent, the most in a week.

Valeant, the biggest drugmaker in Canada, increased 0.7 percent to C$106.41. Louise Chen, analyst with Guggenheim, initiated coverage of Valeant with a buy rating.

Raw-materials companies had the biggest decline among the 10 main industries in the S&P TSX, dropping 1 percent as gold for December delivery sank 0.9 percent. Of 24 companies in the S&P/TSX Gold Index, 23 fell.

Semafo Inc. tumbled 6.9 percent to C$2.42. Alacer Gold sank 6.1 percent to C$3.21 after Credit Suisse cut the stock’s rating to underperform from outperform.

BlackBerry Ltd. lost 0.6 percent to C$8.22, the lowest close since November, for a third day of declines since agreeing to sell itself on Sept. 23 to a group led by Fairfax Financial Holdings Ltd. in a tentative deal worth $9 a share or $4.7 billion. The agreement is subject to securing financing and due diligence.

The smartphone maker has slumped 24 percent in the past five days and is scheduled to officially report second-quarter earnings tomorrow. The company on Sept. 20 disclosed worse-than- estimated earnings and smartphone sales and plans to fire 4,500 workers.

US

By Lu Wang and Sofia Horta e Costa

Sept. 26 (Bloomberg) — U.S. stocks rose, halting the longest slump this year for the Standard & Poor’s 500 Index, as an unexpected drop in jobless claims overshadowed concern that a budget impasse could hurt economic growth.

EBay Inc. jumped 4.5 percent after agreeing to buy Braintree for $800 million to expand its mobile-transactions business. Bed Bath & Beyond Inc. added 4.5 percent after raising the low end of its earnings forecast. Eli Lilly & Co. fell 3 percent as its experimental drug ramucirumab failed to meet its goals for treating breast cancer in a late-stage trial. Hertz Global Holdings Inc. sank 16 percent after cutting its forecasts.

The S&P 500 rose 0.3 percent to 1,698.67 at 4 p.m. in New York, extending its third-quarter rally to 5.8 percent. The Dow Jones Industrial Average climbed 55.04 points, or 0.4 percent, to 15,328.30. About 5.3 billion shares changed hands on U.S. exchanges, 8.6 percent below the three-month average.

“Economic news have been reasonably good,” Mark Foster, chief investment officer who oversees $620 million at Kirr Marbach & Co. in Columbus, Indiana, said in a telephone interview. “On the negative side, we have the short-term budget issues and debt ceiling. I don’t think that’ll end up being a major issue. People just get somewhat immune to all of that.”

The benchmark index declined 1.9 percent during a five-day losing streak through yesterday, retreating from an all-time high on Sept. 18, when the Federal Reserve refrained from reducing the pace of stimulus. Investors have been watching economic reports to help determine whether growth is sufficient for the central bank to begin cutting bond purchases at its next meeting in October.

A Labor Department report today showed the number of Americans filing applications for unemployment benefits unexpectedly fell last week, indicating further progress in the labor market. The economy expanded at faster pace in the second quarter from the previous three months, with gross domestic product rising at a 2.5 percent annualized rate, the Commerce Department said.

A separate report added to signs that rising mortgage rates may have slowed housing market momentum. Fewer Americans signed contracts in August to buy previously owned homes, figures from the National Association of Realtors showed. Data yesterday indicated purchases of new homes rose in August, capping the weakest two months this year.

Investors are also weighing whether lawmakers can avoid a looming government shutdown, with the S&P 500 paring an earlier gain of as much as 0.7 percent after House Speaker John Boehner, an Ohio Republican, said he doesn’t expect his chamber to pass a stopgap spending bill expected from the Senate. He also said he does not expect a government shutdown to happen.

The Senate likely will not vote on its version of the bill until this weekend, leaving the House just one full workday to act before spending authority for the federal government expires on Oct. 1. The House and Senate are at odds over language that withdraws funding for the 2010 health-care law.

The Office of Management and Budget estimated 30 days of shutdowns in 1995 and 1996 cost more than $1.4 billion, or $2.09 billion in today’s dollars.

On another fiscal front, Treasury Secretary Jacob J. Lew told Congress yesterday that the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt limit could lead to a downgrade of the U.S. government’s credit rating.

The S&P 500’s losing streak through yesterday was the longest since Dec. 28, when lawmakers wrangled over impending automatic spending cuts and tax increases known as the fiscal cliff. The index dropped as much as 3.4 percent over the last two weeks of 2012 and then jumped 5 percent in January for the best start to a year since 1997 after a last-minute budget deal was struck.

“Washington has been dragging their feet as of late but eventually they’ll be forced into action,” said Patrick Spencer, head of U.S. equity sales for Robert W. Baird & Co. in London. “We’ve been down this road before. It’s quite natural and healthy to have pull-backs in a bull market. We’ll shift into a stronger gear with a settlement on the budget and what I think will be a very positive earnings season.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, rose 0.4 percent to 14.06 today. The measure has fallen 17 percent this quarter.

Nine of 10 main groups in the S&P 500 advanced, with phone stocks and producers of consumer-discretionary products rising 0.9 percent. Nike Inc., which reported better-than-estimated quarterly earnings after the market’s close today, rose the most in the Dow, climbing 2.1 percent to $70.34. The stock added 5.6 percent to $74.30 at 4:34 p.m. in New York.

EBay climbed 4.5 percent to $56.64, its biggest rally since January. The owner of electronic-payments service PayPal said it will bolster that business by buying Braintree, a global payments platform that works with online and mobile-only startups such as room-rental service Airbnb and online restaurant-reservation company OpenTable Inc.

Bed Bath & Beyond gained 4.5 percent to $77.54. The retailer predicted full-year adjusted earnings per share of $4.88 to $5.01, up from a previous range of $4.84 to $5.01.

Air Products & Chemicals Inc. added 2.3 percent to $109.78.

The industrial gas producer said Chairman and Chief Executive Officer John E. McGlade will leave and it will add three independent directors, less than two months after investor William Ackman’s Pershing Square Capital Management LP became the company’s largest shareholder.

J.C. Penney Co. climbed 3 percent to $10.42, halting a six- day slide that peaked with a 15 percent plunge yesterday. The department-store chain repeated that it expects positive sales trends in the second half of the year, with some key items and sizes helping sales at stores and online. The shares have plunged 47 percent this year amid concern that it is running out of cash.

Eli Lilly fell 3 percent to $51.04. Lilly is counting on experimental drugs for Alzheimer’s, cancer and diabetes to revive growth as the company loses patent protection on some of its top products, including the antidepressant Cymbalta.

Hertz sank 16 percent, the most since May 2009, to $21.63.

The rental-car company trimmed its forecast for full-year revenue and profit, citing weaker than anticipated car rentals at U.S. airports.

Jabil Circuit Inc. lost 9.9 percent to $21.62 for the biggest retreat in the S&P 500. The electronics company that counts BlackBerry Ltd. as its second-largest customer said yesterday it will probably disengage from the struggling Canadian device maker in coming months. Jabil also forecast first-quarter profit below analyst estimates.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

All of our selfish impulses, all of our personal desires, obscure our true vision of the soul,

as they only point out our shabby ego.  When we are aware of our soul,

we perceive the inner life that surpasses our ego

and that has profound affinities with the Whole.

Rabindranath Tagore, 1861-1901

As ever,

 

Carolann

 

The long arm of coincidence.

-Haddon Chambers, 1860-1921

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

I just read the Dow News Wire that Oracle Team US won the America’s cup: this has to rank as one of the biggest comebacks in sports history.  Wow, when we were in San Francisco watching the races a couple of weekends ago, the Kiwis had only to win one more race for the cup, the Americans were down 10.  Just goes to show – never give up.

Getty Images

Oracle Team USA in action

I laughed at Yachtsman Jimmy Spithill’s endearing comment, “You’re a rooster one day; a feather duster the next.”

Every exit is an entry somewhere. – Tom Stoppard

Photos of the day

Britain’s Bradley Wiggins rides past the Basilica of Santa Maria del Fiore, on his way to clinching the silver medal in the men’s individual time trial event, at the road cycling world championships, in Florence, Italy. Fabrizio Giovannozzi/AP

Pittsburgh Pirates left fielder Starling Marte (l.), center fielder Andrew McCutchen (c.) and right fielder Marlon Byrd (r.) celebrate after beating the Chicago Cubs 8-2 during their MLB National League baseball game in Chicago. Jeff Haynes/Reuters

Baseball breaks your heart.  It is designed to break your heart.  The game begins in the spring, when everything else begins again, and it blossoms in the summer, filling the afternoons and evenings, and then as soon as the chill rains come, it stops and leaves you to face the fall alone. – A. Bartlett Giamatti, Major League Baseball Commissioner, 1938-1989.

Market Closes for September 25^th, 2013

Market  Index	Close	Change
Dow  Jones	15273.26	-61.33    -0.40%
S&P 500	1692.77	-4.65    -0.27%
NASDAQ	3761.099	-7.155    -0.19%
TSX	12836.71	-12.18
		-0.09%

International Markets

Market  Index	Close	Change
NIKKEI	14620.53	-112.08
		-0.76%
HANG  SENG	23209.63	+30.59
		+0.13%
SENSEX	19856.24	-63.97
		-0.32%
FTSE 100	6551.53	-19.93
		-0.30%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.574	2.599
CND.   30 Year Bond	3.101	3.124
U.S.   10 Year Bond	2.6189	2.6552
U.S.   30 Year Bond	3.6585	3.6698

Currencies

BOC Close	Today	Previous
Canadian $	0.96929	0.97056
US   $	1.03168	1.03033
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39524	0.71672
US  $	1.35239	0.73943

Commodities

Gold	Close	Previous
London Gold   Fix	1333.50	1323.30
Oil	Close	Previous
WTI Crude Future	102.76	103.17
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Sept. 25 (Bloomberg) — Canadian stocks fell, after a two- day advance, as declines among telephone and consumer-staples companies offset a rally among raw-material shares amid the first gain in commodities prices in five days.

Torex Gold Resources Inc. and Yamana Gold Inc. gained at least 3 percent as the price of the metal snapped three days of losses. Teck Resources Ltd., Canada’s largest diversified miner, rose 1.4 percent as base metals prices advanced. Telus Corp. and BCE Inc. fell more than 1 percent as phone stocks retreated for the first time in nine days. BlackBerry Ltd. slumped 5.8 percent as investors continued to digest a potential $4.7 billion takeover by Fairfax Financial Holdings Ltd.

The Standard & Poor’s/TSX Composite Index fell 12.18 points, or 0.1 percent, to 12,836.71 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.8 percent this quarter and is up 3.2 percent in 2013.

“Today, the market has gold going for it,” said Keith Richards, fund manager with ValueTrend Wealth Management in Barrie, Ontario. His firm manages about C$110 million ($107 million). “The banks have supported the TSX, but they’re maybe a bit overbought, so it’s time to take a pause. I don’t see what else could really drive the TSX. It needs a catalyst and there isn’t one right now.”

Raw-materials stocks gained 1.4 percent as a group, the only increase among 10 industries in the S&P/TSX. Trading volume was 2.8 percent lower than the 30-day average.

“From time to time you see rebounds there in commodities, but the prices are stuck in a range,” said Stephen Gauthier, chief investment officer with Fin-XO Securities Inc. in Montreal. His firm manages about C$550 million. “What you need to see that change is stronger growth worldwide. That’s what people are waiting for.”

Alongside improvements in Europe and China, economic data in the U.S. will need to show signs beyond growth in real estate, Gauthier said. A report today showed U.S. new home sales in August climbed 7.9 percent compared with a revised 14 percent plunge in July.

Alacer Gold Corp. surged 9.6 percent to C$3.42. The gold producer, which is selling mines in Australia, said yesterday it expects to decide on an expansion at its Copler operation in Turkey by the end of 2014.

Torex Gold added 4.3 percent to C$1.46 and Yamana Gold rose 3 percent to C$11.01. Gold for December delivery increased 1.5 percent to $1,336.20 an ounce in New York. The price had declined 3.9 percent in the past three sessions.

Endeavour Silver Corp. climbed 6.6 percent to C$4.71 as silver futures rose 1.4 percent, snapping a three-day, 7.3 percent slide.

Teck Resources rose 1.4 percent to C$28.58 and First Quantum Minerals Ltd. rallied 1 percent to C$19.27 as base metals including copper, aluminum, zinc, tin and lead advanced.

Stockpiles of copper monitored by the London Metal Exchange fell for a 15th session.

Telus lost 2.2 percent to C$34.78 and BCE Inc. fell 1 percent to C$44.13 as telephone stocks slumped 1.1 percent, the first decline since Sept. 12. Telus, BCE and Rogers Communications Inc. have signaled their intent to bid in a wireless spectrum auction that didn’t include any submissions from major foreign companies.

CGI Group Inc. rose 0.3 percent to C$36.85, a record high, after the technology services company said it has signed an eight-year deal worth 75 million British pounds ($121 million) with Smart DCC Ltd. to develop and operate a system to link gas and electricity meters for utility companies.

BlackBerry, the smartphone maker, slumped 5.8 percent to C$8.27, the lowest close since November 2012.

On Sept. 23, BlackBerry said it had agreed to a tentative deal to sell itself to a group led by Fairfax, the largest company shareholder. The sale, for $9 a share in cash, is still subject to several conditions including securing financing and due diligence.

BlackBerry has plunged 24 percent in the past four days, since announcing on Sept. 20 worse-than-estimated earnings and smartphone sales for its second quarter and plans to fire 4,500 employees.

Consumer-staples shares slid 0.7 percent. Maple Leaf Foods Inc., the Canadian food processor, retreated 2.3 percent to C$13 for its fifth straight loss. Alimentation Couche-Tard Inc., the largest public convenience-store operator in North America, tumbled 2.4 percent to C$63.77.

US

By Lu Wang

Sept. 25 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its longest slump this year, as Wal- Mart Stores Inc. retreated and concern grew that a political showdown over government spending poses a threat to growth.

Wal-Mart lost 1.5 percent after the retailer told suppliers it’s cutting orders this quarter and next to address rising inventories. J.C. Penney Co. slumped 15 percent as Goldman Sachs Group Inc. said the department-store chain’s liquidity will be strained. Stryker Corp. slipped 2.9 percent on an agreement to buy Mako Surgical Corp. for $1.65 billion. Noble Corp. added 1.8 percent after the offshore rig contractor said it plans to spin off about half its fleet.

The S&P 500 fell 0.3 percent to 1,692.77 at 4 p.m. in New York, its fifth straight losing session. The Dow Jones Industrial Average, which includes Wal-Mart, slid 61.33 points, or 0.4 percent, to 15,273.26. About 5.9 billion shares changed hands on U.S. exchanges, in-line with the three-month average.

“There is a lot of noise that’s disruptive to people doing anything with a great deal of confidence,” Don Hodges, founder of Dallas-based Hodges Funds, said in a phone interview,referring to budget negotiations. His firm manages about $1.3 billion. “Anytime the market is as strong as it’s been in the last few weeks, you just know that it’s capable of having a pullback that shakes off people a little bit.”

The S&P 500 has dropped 1.9 percent in the past five days as investors weighed whether a looming government shutdown will hamper economic growth. The current losing streak is the index’s longest since Dec. 28, when lawmakers wrangled over impending automatic spending cuts and tax increases known as the fiscal cliff.

The Senate likely will not vote on a stopgap spending bill until this weekend, leaving the House just one full workday to act before spending authority for the federal government expires on Oct. 1. The House and Senate are at odds over language that withdraws funding for the 2010 health-care law.

On another fiscal front, Treasury Secretary Jacob J. Lew told Congress that the extraordinary measures being used to avoid breaching the debt ceiling “will be exhausted no later than Oct. 17.” Failure to increase the debt limit could lead to a downgrade of the U.S. government’s credit rating.

The wrangling comes as Americans are losing faith in the nation’s economic recovery, according to a Sept. 20-23 Bloomberg National Poll. Forty-four percent of poll respondents say they expect the economy, which has expanded for nine consecutive quarters, to remain about the same over the next year, while 28 percent see it weakening.

Investors have also been scrutinizing data to determine whether economic growth is robust enough for the Federal Reserve to begin paring back its $85 billion in monthly bond purchases.

A report from the Commerce Department today indicated purchases of new homes rose in August, capping the weakest two months this year, showing the fallout from mortgage rates at a two-year high is cooling the real-estate rebound. Demand slumped 14 percent in July. Separate government data showed orders for equipment such as computers and machinery climbed less than forecast in August.

The central bank’s decision Sept. 18 to refrain from slowing stimulus sent the S&P 500 to a record close of 1,725.52.

The gauge has retreated every session since the decision, as policy makers send mixed signals on the timing of the central bank’s next move. Fed Bank of St. Louis President James Bullard said Sept. 20 that tapering could start in October. William Dudley, head of the New York Fed, said yesterday any cut would depend on the economy’s performance.

“There has been some push and pull on whether this is just a temporary waiting for the taper to actually start, or whether lower for longer is the new reality,” Diane Jaffee, the New York-based group managing director for U.S. equities who oversees about $6.4 billion in assets at TCW Group Inc., said in a phone interview.

The S&P 500 has rallied 5.7 percent in the third quarter while Treasuries retreated 0.1 percent through yesterday, according to data compiled by Bloomberg and Bank of America Corp. The divergence will cause some funds to sell stocks and buy bonds to rebalance asset allocations. UBS AG strategist Boris Rjavinski projects “significant” outflows from U.S. equities into Treasuries, with as much as $41 billion in stocks being sold and up to $22 billion of fixed-income investments purchased.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, lost 0.5 percent to 14.01. The measure has fallen 22 percent this year.

Eight of 10 S&P 500 main industries fell as consumer- staples and health-care stocks dropped at least 0.7 percent.

Wal-Mart lost 1.5 percent to $74.65, the steepest drop in the Dow. Last week, an ordering manager at the company’s Bentonville, Arkansas, headquarters described the pullback in orders in an e-mail to a supplier, who said others got similar messages.

Merchandise has been piling up because consumers have been spending less freely than Wal-Mart projected, and the company has forfeited some sales because it doesn’t have enough workers in stores to keep shelves adequately stocked.

“We’ve seen a little bit of weakening in the strength of the consumer recently and Wal-Mart could be a good example of that, where people are starting to pull back on marginal purchases,” James W. Gaul, a fund manager at Boston Advisors LLC, which oversees about $2.3 billion from Boston, said by phone.

J.C. Penney sank 15 percent to $10.12, the lowest since December 2000. The stock has tumbled 49 percent in 2013.

“Weak fundamentals, inventory rebuilding, and an underperforming home department will likely challenge J.C. Penney’s liquidity levels in the third quarter,” Kristen McDuffy, at New York-based analyst for Goldman, wrote yesterday in a note to clients.

Stryker fell 2.9 percent to $68.79. The second-largest seller of orthopedic devices agreed to buy Mako for $30 a share to add technology for robot-assisted surgeries. Mako surged 82 percent to $29.46.

Carnival Corp. lost 5.3 percent to $32.70, extending a 7.7 percent drop yesterday to put the stock at its lowest since June. The world’s largest cruise-ship operator forecast an unexpected loss for the fourth quarter, and Morgan Stanley cut its recommendation to underweight, similar to a sell rating, from equal weight. Bank of America Corp. lowered its rating to neutral from buy.

JPMorgan Chase & Co. rallied 2.7 percent, the most in the Dow, to $51.70, snapping a two-day losing streak that pushed the stock down 4.7 percent.

The lender resumed settlement talks with the U.S. after authorities prepared to sue the bank yesterday in California federal court alleging it misrepresented the quality of mortgage-backed securities it sold from 2005 to 2007, a person familiar with the matter said.

A settlement may include $7 billion in cash and $4 billion for consumer relief, the Associated Press reported, citing an official familiar with ongoing negotiations among federal and state officials.

Noble advanced 1.8 percent to $38.60. The contractor said the planned spinoff will let it focus on higher-priced rigs working in deeper waters. An initial public offering of as much as 20 percent of the new company’s shares may precede a tax-free distribution of the new stock to existing Noble investors.

Facebook Inc. rallied 2.1 percent to $49.46, the stock’s sixth gain in the past seven sessions, with each advance setting a fresh record. Canaccord Financial Inc. initiated coverage of the social media company with a buy rating. Facebook is “very early in generating revenue from its enormous user base,” Michael Graham wrote in a note, giving the stock a price target of $60.

U.S. stocks are delivering the best risk-adjusted returns among the world’s biggest developed markets as a third straight year of earnings growth produces steadier gains. The S&P 500 has risen 1.9 percent in 2013 when adjusted for price swings, the top advance among 24 of the largest developed nations, according to the data compiled by Bloomberg. The performance exceeds Japan, where prices have surged almost twice as much this year, as a measure of U.S. volatility reached a six-year low.

U.S. equities have provided more stable returns as China’s economy expands at the slowest pace in at least two decades and Europe faces record joblessness, prompting investors to seek safety in American companies. The Fed’s unprecedented bond purchases and five years of S&P 500 profit growth have helped rebuild investor confidence after the financial crisis and reduce price swings.

“The U.S. continues to be the most resilient economy across the world and its markets have reflected that with the least amount of volatility,” Joseph Tanious, global market strategist for J.P. Morgan Asset Management, said in a phone interview from New York. His firm oversees about $1.5 trillion.

“Earnings growth has continued to hit record highs. There is less skepticism about the long-term potential in U.S. markets.”

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Death is extraordinarily like life,

when we know how to live.

You cannot live without dying.

You cannot live if you do not die

psychologically every minute.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

Reason only discovers the shortest way: it does not

discover the destination.

-George Bernard Shaw, 1856-1950

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:

“September is an optimistic month,” writes Lindsey Taylor in the Wall Street Journal.  “all one has to do is look up.  The clouds in the vast, clear, corn-flower-blue skies are transfixing – whiter, fresher and puffier than seems possible….a restless September sky.”

Pompeii up Close: If you happen to have London on your itinerary, you can take in the exhibit “Life and Death in Pompeii and Herculaneum” at the British Museum.  The rest of us can head to the nearest movie theater that shows Fathom Events on Sept. 25 to catch an in-depth tour of the museum’s blockbuster exhibit (open through September).  Pompeii From the British Museum is a behind-the-scenes look at this collection of artifacts from the ancient Roman civilization destroyed by the eruption of Mount Vesuvius.  Check for local showings at www.fathomevents.com. –CSM, September, 2013.

Jim Henson, the muppet creator was born on this day in 1936.

Photos of the day

Bert and Ernie, as well as Elmo are among a donation of additional Jim Henson objects to the Smithsonian’s National Museum of American History in Washington, D.C. Henson’s daughter, Cheryl Henson, is donating 20 more puppets and props to the National Museum of American History. Jacquelyn Martin/AP

Left to right, Florence Mayor Matteo Renzi, New York Mayor Michael Bloomberg, London Mayor Boris Johnson, and Warsaw Mayor Hanna Gronkiewicz-Waltz, during the Mayors Challenge competition, at City Hall in London. Mayor Bloomberg is offering European cities millions of dollars to be government groundbreakers, tapping his personal fortune to extend his cities-as-civic-laboratories campaign. Matt Dunham/AP

Market Closes for September 24^th, 2013

Market  Index	Close	Change
Dow  Jones	15334.59	-66.79    -0.43%
S&P 500	1697.42	-4.42    -0.26%
NASDAQ	3768.254	+2.966    +0.08%
TSX	12848.89	+37.71
		+0.29%

International Markets

Market  Index	Close	Change
NIKKEI	14732.61	-9.81
		-0.07%
HANG  SENG	23179.04	-192.50
		-0.82%
SENSEX	19920.21	+19.25
		+0.10%
FTSE 100	6571.46	+14.09
		+0.21%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.599	2.648
CND.   30 Year Bond	3.124	3.165
U.S.   10 Year Bond	2.6552	2.6999
U.S.   30 Year Bond	3.6698	3.7250

Currencies

BOC Close	Today	Previous
Canadian $	0.97056	0.97237
US   $	1.03033	1.02841
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38803	0.72045
US  $	1.34717	0.74230

Commodities

Gold	Close	Previous
London Gold   Fix	1323.30	1322.86
Oil	Close	Previous
WTI Crude Future	103.17	103.69
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle and Eric Lam

Sept. 24 (Bloomberg) — Canadian stocks rose for a second day as consumer shares rallied after better-than-expected retail sales boosted prospects for economic growth.

Alimentation Couche-Tard Inc. advanced 2.5 percent to lead consumer-staples producers higher. Canadian Utilities Ltd. added 2.5 percent to pace gains among utilities companies. Air Canada, the nation’s largest airline, rallied to a two-year high.

BlackBerry Ltd. dropped 3.3 percent as investors weighed a $4.7 billion deal to take the smartphone maker private.

The Standard & Poor’s/TSX Composite Index rose 37.71 points, or 0.3 percent, to 12,848.89 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.9 percent this quarter and is up 3.3 percent in 2013. Trading volume was 2.9 percent below the 30-day average.

“The retail numbers are showing that GDP numbers are going to look a little bit better because of that,” said Paul Harris, partner and portfolio manager at Avenue Investment Management, which manages C$300 million ($290 million), said in a phone interview from Toronto. “They show that the market is a little bit better.”

Statistics Canada said today that retail sales rose more than forecast in July, reversing a drop a month earlier and adding to evidence that growth in the world’s 11th largest economy is gaining momentum.

All 10 main industries in the benchmark equities gauge advanced. Producers of consumer staples rallied the most, adding 1.1 percent with 10 of 11 members rising.

Alimentation Couche-Tard, which operates 24-hour convenience stores, jumped 2.5 percent to C$65.33. North West Co., a general purpose retailer, gained 2.8 percent to C$24.

Canadian Utilities gained 2.5 percent to C$35.68 as utilities stocks increased 0.8 percent as a group.

Air Canada gained 5.7 percent to C$3.52, the highest close since January 2011. The stock has rallied 7.3 percent in the past three days. The company yesterday said it was looking for bids for several U.S. cross-border routes, beginning in mid-2014.

Phone stocks gained for an eighth day, with the S&P/TSX Telecom Services Index closing at its highest level since June 18. Manitoba Telecom Services Ltd. gained 0.9 percent to C$33.20 and Telus Corp. rose 0.3 percent to C$35.56, a three-month high.

Energy shares added 0.1 percent, erasing earlier losses after U.S. President Barack Obama said recent overtures from Iran may offer a basis for a “meaningful agreement” to resolve the confrontation over the Persian Gulf nation’s nuclear program, one of the primary sources of instability in the Middle East. Oil fell to an eight-week low but remained 6.8 percent higher this quarter, the most in a year, and up 12 percent in 2013.

Commodities stocks “are quite attractive,” said John Kinsey, fund manager with Caldwell Securities Ltd. in Toronto.

The firm manages about C$1 billion. “The oil stocks, some of them now have performed quite nicely so they’re catching up” to the price of oil, he said.

Commodity shares, which have lost 29 percent this year, fluctuated between gains and losses as investors watched a looming political clash over the U.S. budget that could shut down the federal government as early as next week and damp growth in the world’s biggest economy. America is Canada’s largest trading partner and the second-biggest user of industrial metals such as copper.

BlackBerry dropped 3.3 percent to C$8.78, below the $9 a share that its biggest shareholder, Fairfax Financial Holdings Ltd., agreed to pay in a tentative buyout deal.

The $4.7 billion offer forges a path to go private after years of losing ground to Apple Inc.’s iPhone and Google Inc.’s Android.

US

By Lu Wang

Sept. 24 (Bloomberg) — U.S. stocks fell for a fourth day amid concerns over budget talks and economic growth as investors weighed prospects for easing tensions in the Middle East.

Red Hat Inc. slumped 12 percent after billings at the largest seller of the Linux operating system trailed estimates.

Homebuilders gained 2.3 percent as a group after a report showed home prices increased by the most in more than seven years and Lennar Corp.’s profit beat analyst estimates. Applied Materials Inc. advanced 9.1 percent after agreeing to buy Tokyo Electron Ltd. for about $9.39 billion in stock.

The Standard & Poor’s 500 Index fell 0.3 percent to 1,697.42 at 4 p.m. in New York. The Dow Jones Industrial Average lost 66.79 points, or 0.4 percent, to 15,334.59. About 6 billion shares changed hands on U.S. exchanges, in line with the three- month average.

The market is “riding waves of news, both good and bad,” Malcolm Polley, the chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said in a telephone interview. His firm manages $1.1 billion. “The market is very dependent on macro news.”

The S&P 500 initially fell as much as 0.4 percent after the Conference Board’s index of U.S. consumer confidence slumped in September to a four-month low. A separate report showed a gauge of manufacturing in the region covered by the Federal Reserve Bank of Richmond shrank in September.

The equity benchmark index erased earlier losses as President Barack Obama said recent overtures from Iran may offer a basis for a “meaningful agreement” to resolve the confrontation over the Persian Gulf nation’s nuclear program, one of the primary sources of instability in the Middle East.

Iranian officials told the U.S. that the time isn’t right for direct contact between the two countries’ leaders.

Stocks turned lower in the last 30 minutes of trading as investors watched the debate in Washington over spending cuts.

U.S. Senate Democrats offered a new proposal that funds the government through Nov. 15, complicating efforts to avoid a government shutdown in a week as Republican Senator Ted Cruz began an extended speech in opposition to funding for the health-care law.

“We may have a couple few weeks where there is still lingering concern over the Fed along with very much headline risk around the budget ceiling debate,” David Chalupnik, head of equities at Nuveen Asset Management in Minneapolis, said in a phone interview. His firm manages more than $115 billion. “Over the short term, we would see the market continue to either muddle through or consolidate before we hit earnings season.”

The S&P 500 has declined 1.6 percent over four days after reaching an all-time high of 1,725.52 as the Federal Reserve refrained from cutting stimulus. The Federal Open Market Committee said after its Sept. 17-18 meeting that it wants more evidence of an economic recovery before paring its $85 billion of monthly asset purchases, surprising economists who had forecast a reduction. The S&P 500 has gained 5.7 percent this quarter and is up about 19 percent for the year.

Fed Bank of New York President William C. Dudley said today the central bank may reduce the pace of its quantitative easing program in 2013 depending on the economy’s performance.

“If the economy were behaving in a way aligned with the Fed’s June forecast, then it’s certainly likely that the Fed would begin to taper later this year,” Dudley said in an interview with CNBC. “I certainly wouldn’t want to rule it out. But it depends on the data.”

Stocks fell on Sept. 20 as Fed Bank of St. Louis President James Bullard said policy makers may decide to reduce their monthly bond purchases at the meeting in October.

“There are so many different views from the Fed itself and there is no one voice that seems to be articulating a common message,” Mark Freeman, who oversees about $15.8 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said by phone. “What they ultimately created is uncertainty and that’s never a positive for the market.”

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, slipped 1.6 percent to 14.08, extending its drop for the year to 22 percent.

Seven out of 10 S&P 500 groups fell as telephone and consumer-staples companies declined more than 0.7 percent for the worst performance.

Red Hat tumbled 12 percent, the most in the S&P 500, to $46.73. Billings, a predictor of future revenue, rose 8 percent in the second quarter from a year earlier to $376 million.

Analysts at CLSA had projected an increase of 17 percent, and Stifel Nicolaus & Co. predicted 14 percent growth.

JPMorgan Chase & Co. fell 2.2 percent to $50.32 for the biggest retreat in the Dow. The lender resumed settlement talks with the U.S. as the government was preparing to sue the bank in California federal court alleging it misrepresented the quality of mortgage-backed securities it sold from 2005 to 2007, according to a person familiar with the matter.

The bank offered to pay about $3 billion to settle an array of probes, the Wall Street Journal reported today, citing a person familiar with the matter. The Justice Department pressed the bank to pay more, the report said, citing the person.

Carnival Corp. slipped 7.7 percent to $34.54. The world’s largest cruise-ship operator forecast fourth-quarter results that trailed analysts’ estimates, citing a decline in advance bookings and higher fuel prices.

The S&P Supercomposite Homebuilding Index rose 2.3 percent, with all its 11 members gaining, as an industry report showed home prices in 20 U.S. cities increased in the 12 months through July by the most in more than seven years.

Lennar, the third-largest U.S. homebuilder by revenue, rose 4.3 percent to $36.01 after fiscal third-quarter earnings topped analysts’ estimates, driven by higher sales and home prices.

Applied Materials advanced 9.1 percent to $17.45 as the largest supplier of chipmaking equipment agreed to buy Tokyo Electron. Gary Dickerson, chief executive officer of Applied Materials, will become CEO of the combined company, which will be 68 percent owned by Applied Materials shareholders.

Facebook Inc. climbed 2.7 percent to $48.45. Citigroup Inc.’s Mark May raised his recommendation on the social-network operator to buy from neutral, saying feedback from advertisers and agencies suggest that the growth seen in the second quarter is sustainable. May also boosted his price estimate by 72 percent to $55 a share.

CarMax Inc. gained 3.6 percent to $51.79. The car dealer’s second-quarter profit beat analyst estimates as used car sales climbed 20 percent from a year ago.

Have a wonderful evening everyone.

 

Be magnificent!

 

We would rather cling to the known than face the unknown –

the known being our house, our furniture, our family,

our character, our work, our knowledge, our fame, our loneliness, our gods –

that little thing that moves around incessantly within itself,

with its own limited embittered existence.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

At 18 our convictions are hills from which we look; at 45

they are caves in which we hide.

-F. Scott Fitzgerald, 1896-1940

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

 

Dear Friends,

Tangents:

On this day in 1930, Ray Charles was born.  It was wonderful to read about the new stamp (see photo below) being issued to commemorate him.  During his lifetime, he gave the world more than 50 years of jazz, blues, R & B, country and gospel.  He worked as a professional musician in Florida, but at age 17, he took his savings of $600 and moved to Seattle.  There he met Quincy Jones, who was 14 years old at the time, and a friendship began that would last a lifetime.

Must be an auspicious day for musicians –  Bruce Springsteen turns 64 today.  John Coltrane was born on September 23^rd, 1926.

Singer Hank Williams had his last studio session on September 23, 1952, recording Your Cheatin’ Heart and other songs.

The planet Neptune has a birthday of sorts today – it was discovered on this date in 1846 by German astronomer Johann Gottfried Galle.

You better live every day like your last because one day you’re going to be right. –Ray Charles, 1930-2004.

Photos of the Day –September 23rd, 2013

A stamp featuring musician Ray Charles is unveiled as singer Ashanti performs at the event at Morehouse College in Atlanta. The US Postal Service is planning to add soul singer Ray Charles to its ‘Music Icons Forever’ stamp series. David Goldman/AP

A member of the media tries out a Surface 2 tablet during the launch of the Microsoft Surface 2 tablets in New York. Shannon Stapleton/Reuters

Market Closes for September 23^rd, 2013

Market  Index	Close	Change
Dow  Jones	15401.38	-49.71    -0.32%
S&P 500	1701.84	-8.07    -0.47%
NASDAQ	3765.288	-9.440    -0.25%
TSX	12811.18	+4.71
		+0.04%

International Markets

Market  Index	Close	Change
NIKKEI	14742.42	-23.76
		-0.16%
HANG  SENG	23371.54	-130.97
		-0.56%
SENSEX	19900.96	-362.75
		-1.79%
FTSE 100	6557.37	-39.06
		-0.59%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.648	2.687
CND.   30 Year Bond	3.165	3.206
U.S.   10 Year Bond	2.6999	2.7374
U.S.   30 Year Bond	3.7250	3.7649

Currencies

BOC Close	Today	Previous
Canadian $	0.97237	0.97078
US   $	1.02841	1.03010
Euro Rate  1 Euro=		Inverse
Canadian   $	1.38758	0.72068
US  $	1.34924	0.74116

Commodities

Gold	Close	Previous
London Gold   Fix	1322.86	1325.60
Oil	Close	Previous
WTI Crude Future	103.69	105.51
BRENT	109.360	109.360

Market Commentary:

Canada

By Eric Lam

Sept. 23 (Bloomberg) — Canadian stocks rose, halting a two-day slide, as phone stocks gained after foreign competitors signaled no intention to join a wireless-spectrum auction and BlackBerry Ltd. pared declines after agreeing to a buyout.

BlackBerry was unchanged, erasing earlier losses of as much as 8.2 percent, after saying it has a deal to sell itself for $4.7 billion to a group led by Fairfax Financial Holdings Ltd.

Rogers Communications Inc. rose 1.2 percent as Canada’s three largest phone carriers placed deposits to bid in a spectrum auction that is not expected to attract a foreign competitor.

National Bank of Canada climbed 0.9 percent to pace gains among the nation’s lenders. Catamaran Corp. dropped 3.5 percent after Morgan Stanley cut its rating on the stock.

The Standard & Poor’s/TSX Composite Index rose 4.71 points, or less than 0.1 percent, to 12,811.18 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has surged 5.6 percent this quarter and is up 3 percent in 2013. Trading volume was 3.3 percent above the 30-day average.

“The big news event today was BlackBerry,” said John O’Connell, chief executive officer with Davis Rea Ltd. in Toronto. The firm manages about C$600 million. The gains among phone stocks show “the markets were overreacting to the threat of an entrance from foreign telecoms,” he said.

The S&P/TSX traded little changed for most of the morning session before the BlackBerry announcement sent the index up by as much as 0.2 percent. The company’s shares erased an earlier drop to turn as high as 4.1 percent before finishing the day unchanged at C$9.08.

That’s roughly in line with the $9 a share offered by a group led by Fairfax, its largest shareholder, in a tentative deal. The deal values BlackBerry at a 3.1 percent premium over its closing price last week.

The stock plunged 16 percent Sept. 20 after the company released second-quarter earnings on that fell short of analysts’ estimates. The Waterloo, Ontario-based company also said it’s cutting 4,500 jobs and taking a writedown of as much as $960 million for unsold inventory of its Z10 phone — a touch-screen device unveiled in January as its answer to the iPhone.

The acquirers will have six weeks to scrutinize BlackBerry’s books, a span in which the smartphone maker can seek other takeover offers. Fairfax, a financial services holding company, added 1.1 percent to C$420.45.

Wireless carriers rallied after the industry’s largest domestic players applied to bid in a wireless spectrum auction on Jan. 14, according to a list on Industry Canada’s website.

Rogers Communications, Canada’s largest wireless carrier, increased 1.2 percent to C$45.36 and BCE Inc. added 1.3 percent to C$44.51. Telus Corp. jumped 2.5 percent to C$35.44.

The roster of applicants doesn’t appear to include major foreign players. Verizon Communications Inc. said Sept. 3 it wouldn’t enter the Canadian market after saying earlier in the summer it was exploring the idea.

It’s “good for incumbents,” Greg MacDonald, an analyst in Toronto at Macquarie Capital Markets, said in an e-mail, referring to the three largest companies.

Financial firms advanced. National Bank rose 0.9 percent to C$85.78 and Canadian Imperial Bank of Commerce gained 0.8 percent to C$83.47. Royal Bank of Canada, the nation’s largest lender, added 0.5 percent to C$66.26.

Materials producers declined as prices for metals from gold to copper slumped amid speculation the U.S. Federal Reserve will reduce fiscal stimulus, outweighing data from China showing a preliminary manufacturing index gauge climbed more than expected in September.

Iamgold Corp. retreated 4.2 percent to C$4.99 and Osisko Mining Corp. tumbled 5.6 percent to C$5.11. Silver Standard Resources Inc. dropped 7.5 percent to C$6.57.

Catamaran, a pharmacy benefits management company, slumped 3.5 percent to C$49.29, the lowest close since May. The stock has lost 14 percent since customer Walgreen Co. said on Sept. 17 it is moving staff into a private health exchange. Analysts with Morgan Stanley today lowered Catamaran’s rating to equal weight, the equivalent of a hold.

Agrium Inc., North America’s third-largest fertilizer producer, lost 3.1 percent to C$89.49, the biggest drop since July 30. The company said earnings will fall in its wholesale unit this quarter because of declines in sales volumes of as much as 30 percent compared with a year earlier.

Prices for potash, a major fertilizer used to strengthen crops, have declined since OAO Uralkali, the world’s biggest producer, pulled out of a trading venture with Belarus in July and said it would sell its product at a lower price.

US

By Lu Wang

Sept. 23 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index having the longest retreat in a month, as financial shares slumped and investors watched speeches from Federal Reserve officials for clues on monetary policies.

Goldman Sachs Group Inc. and Citigroup Inc. declined more than 2.7 percent as Atlantic Equities LLP forecast a drop in fixed-income trading revenue for the biggest U.S. banks.

Homebuilders slipped 1.6 percent as a group before Lennar Corp. and KB Home report earnings tomorrow. Apple Inc. surged 5 percent after saying first-weekend sales of its new iPhones topped 9 million units.

The S&P 500 retreated 0.5 percent to 1,701.84 at 4 p.m. in New York. The benchmark gauge has lost 1.4 percent over three days, giving back all its gains from the Fed’s unexpected move last week to maintain stimulus levels. The Dow Jones Industrial Average slipped 49.71 points, or 0.3 percent, to 15,401.38.

About 5.8 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“At some point, investors are going to say, ‘What’s underpinning this strong rally? We need some solid numbers,’” Scott Armiger, chief investment officer at Christiana Trust in Wilmington, Delaware, said in a phone interview. The firm has $6 billion under administration. Fed policy makers “are trying to neutralize the market. This time Bernanke said no tapering and they’re all running out and saying ‘wait a minute, folks, don’t get carried away.’”

The S&P 500 rose 1.3 percent last week, touching a record high, as the Federal Open Market Committee said at its Sept. 17-18 meeting that it will continue to buy $85 billion of assets a month, surprising economists who had forecast a reduction. The S&P 500 has gained 6 percent for the quarter and is up 19 percent for the year.

The central bank has left its main interest rate near zero since December 2008 and has expanded its balance sheet to a record $3.66 trillion through three rounds of stimulus. The quantitative easing program has helped the S&P 500 surge more than 150 percent since March 2009.

The rally has pushed equities to their highest valuations in more than three years. At a record close on Sept. 18, the S&P 500 traded at 16.5 times reported earnings, a multiple not seen since May 2010, data compiled by Bloomberg show.

Three regional bank presidents spoke today. Fed Bank of New York President William C. Dudley said policy makers must “forcefully” push against economic headwinds as the U.S. has yet to show “any meaningful pickup” in momentum. Fed Bank of Atlanta President Dennis Lockhart said monetary policy should focus on creating a more dynamic economy. Fed Bank of Dallas President Richard Fisher said the central bank harmed its credibility with the decision last week.

The S&P 500 fell 0.7 percent on Sept. 20 as Fed Bank of St. Louis President James Bullard said policy makers may decide to reduce their monthly bond purchases at the meeting in October.

“The more people who speak from the Fed in one day, the less clarity there is,” Richard Sichel, who oversees about $1.9 billion as chief investment officer at Philadelphia Trust Co., said by phone. “People will be hanging at every word that’s said for more clues about our monetary policy.”

Even as investors focus on the Fed’s policies, a risk is rising from another corner of Washington. Hardening positions on the federal budget and borrowing limit, and recent political setbacks suffered by both President Barack Obama and Republican congressional leaders as they go into the fight, are raising the odds of a government shutdown, debt default or near-miss that could roil equities markets.

Forty percent of global investors surveyed in a Sept. 10 Bloomberg poll said they would pull back on U.S. markets in the event of a government shutdown, which many economists say would be less damaging than a debt default.

“We are in for another ugly confrontation,” said Howard Ward, the chief investment officer for growth equity at Rye, New York-based Gamco Investors Inc., which oversees about $40 billion. “Even though everyone knows the impasse will be short- lived, it is a sad reminder of how dysfunctional Washington has become. It will be a catalyst for taking profits after the recent run-up.”

Outside the U.S., German Chancellor Angela Merkel was re- elected yesterday, winning the biggest tally since Helmut Kohl’s post-reunification victory of 1990. In Asia, the preliminary reading of a purchasing managers’ index for Chinese manufacturing compiled by HSBC Holdings Plc and Markit Economics climbed to 51.2 in September from 50.1 in August. That beat the 50.9 median estimate of economists surveyed by Bloomberg News.

U.S. equities will likely extend their declines this week, if history is any guide, after the Sept. 20 expiration in futures and options contracts, according to MacNeil Curry, a New York-based technical strategist at Bank of America Corp.

When the quarterly expiration process known as triple witching occurs in September, the following week has resulted in losses 68 percent of the time for the S&P 500 since equity index futures were created in 1982, according to a study by Curry. In the past 10 years, the S&P 500 has fallen 80 percent of the time in the week after September triple witching, averaging a decline of 1.9 percent, the data show.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options prices known as the VIX, jumped 9.1 percent, the most since Aug. 27, to 14.31. The measure is still down 21 percent this year.

Seven of 10 S&P 500 industry groups declined, with financial shares falling 1.5 percent as a group for the largest drop. Utility and technology shares had the best performance, rising 1.2 percent and 0.3 percent, respectively.

The largest U.S. banks’ fixed-income trading revenue will probably fall 20 percent in the third quarter from a year ago on lower volumes, Richard Staite, an analyst at Atlantic Equities wrote in a note. Staite cut his estimate for Goldman Sachs’s per-share earnings 18 percent to $2.47 and Citigroup’s by 14 percent to $1.05.

Goldman Sachs slid 2.7 percent to $165.25 for the biggest retreat in the Dow. Citigroup sank 3.2 percent to $49.57.

JPMorgan Chase & Co. retreated 2.5 percent to $51.46 and Bank of America Corp. erased 2.1 percent to $14.14.

The S&P Supercomposite Homebuilding Index declined 1.6 percent, with all 11 members falling. Lennar slid 1.7 percent to $34.54 while KB Home lost 3.4 percent to $17.03.

Lennar’s profit growth during the three months ended August probably slowed to 13 percent from 105 percent in the previous quarter while KB Home’s earnings may have increased 32 percent, less than half its pace in the previous quarter, analyst estimates compiled by Bloomberg show.

Apple jumped 5 percent, the most in the S&P 500 and its biggest gain since July 24, to $490.64. The company sold 9 million iPhone 5s and 5c models. That topped the 5 million in opening-weekend sales for last year’s model and surpassed analyst estimates that ranged from 6 million to 7.75 million, according to a Bloomberg poll.

Pandora Media Inc., the biggest web radio service, tumbled 10 percent to $24.26 after Apple said more than 11 million listeners have used iTunes Radio since its launch this year.

BlackBerry Ltd. added 1.1 percent to $8.82. The company entered a tentative agreement for a $4.7 billion buyout from a group led by its biggest shareholder, Fairfax Financial Holdings Ltd., forging a path to go private after a new line of smartphones failed to catch on.

Shares of BlackBerry fell as much as 6.1 percent earlier as Jefferies Group LLC lowered its rating on the shares to hold from buy, saying the handset business has a negative value. The stock tumbled 17 percent on Sept. 20 after the company posted quarterly sales that trailed analysts’ estimates by half and announced 4,500 job cuts.

General Electric Co. advanced 1.1 percent to $24.28 after winning contracts worth $2.7 billion from a unit of Sonelgaz, Algeria’s state-owned electricity and gas company. GE will supply heavy-duty gas turbines, steam turbines and generators for nine power plants, according to a statement.

Walgreen Co. added 1.3 percent to a record $56.23. Morgan Stanley boosted its rating on the drugstore chain to overweight from equal weight.

Have a wonderful evening everyone.

 

Be magnificent!

 

A mind that is burdened with the past is a sorrowful mind.

Krishnamurti, 1895-1986

As ever,

 

Carolann

 

From even the greatest of horrors

irony is seldom absent.

-H.P. Lovecraft, 1890-1937

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

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

Last Thursday, here in Victoria we had a lightning storm that lit up the sky.  Did any of you have the chance to watch it?  I found some amazing pictures of the storm last Thursday that I wanted to share with you, as well as some fun facts on lighting!

• There are bolts of lightning striking somewhere on Earth every second.
• Lightning strikes usually last around 1 or 2 microseconds.
• Lightning contains millions of volts of electricity.
• Thunder is the sound caused by lightning.
• The average temperature of lightning is around 20000 °C (36000 °F).
• The study of lightning is known as fulminology.
• Astraphobia is the fear of thunder and lightning.

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

Photos of the Day –September 20^th, 2013

The moon shines near the top of Tokyo SkyTree in Tokyo on the mid-autumn festival day. Kazunori Kasahara/Tokyo Shimbun/AP

Steam from the Verso paper mill is backlit by the light of the setting moon in this time-exposure in Bucksport, Maine. Verso makes coated papers used by publications such as catalogs and magazines. Robert F. Bukaty/AP

Market Closes for September 20^th, 2013

Market  Index	Close	Change
Dow  Jones	15451.01	-185.54    -1.19%
S&P 500	1710.52	-11.82    -0.69%
NASDAQ	3774.728	-14.656    -0.39%
TSX	12829.62	-97.16
		-0.75%

International Markets

Market  Index	Close	Change
NIKKEI	14742.42	-23.76
		-0.16%
HANG  SENG	23502.51	+385.06
		+1.67%
SENSEX	20263.71	-382.93
		-1.85%
FTSE 100	6596.43	-28.96
		-0.44%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	2.687	2.705
CND.   30 Year Bond	3.206	3.221
U.S.   10 Year Bond	2.7374	2.7446
U.S.   30 Year Bond	3.7649	3.7962

Currencies

BOC Close	Today	Previous
Canadian $	0.97078	0.97416
US   $	1.03010	1.02652
Euro Rate  1 Euro=		Inverse
Canadian   $	1.39332	0.71771
US  $	1.35260	0.73932

Commodities

Gold	Close	Previous
London Gold   Fix	1325.60	1366.29
Oil	Close	Previous
WTI Crude Future	105.51	106.39
BRENT	109.360	109.360

Market Commentary:

Canada

By Aubrey Pringle and Eric Lam

Sept. 20 (Bloomberg) — Canadian stocks fell for a second day as BlackBerry Ltd. plunged the most in three months and gold producers slumped after a Federal Reserve policy maker said a small tapering of bond buying is possible next month.

BlackBerry tumbled 16 percent after saying it will cut 4,500 jobs and record an inventory writedown of as much as $960 million after a new set of devices failed to catch on with consumers. Iamgold Corp. and Eldorado Gold Corp. retreated at least 7.7 percent as gold fell the most in 11 weeks. Goldcorp Inc. slid 3.8 percent after Chairman Ian Telfer agreed to pay a C$200,000 ($194,000) fine in a settlement over allegations that he violated securities laws.

The Standard & Poor’s/TSX Index fell 120.31 points, or 0.9 percent, to 12,806.47 at 4 p.m. in Toronto, paring a weekly gain of 0.7 percent. Trading volume was 117 percent higher than the 30-day average.

Once a quarter, futures and options for indexes and single stocks expire on the same day, leading to a phenomenon called quadruple witching, with increased volume as investors close out their positions.

A comment by Federal Reserve Bank of St. Louis President James Bullard “saying tapering could happen in October got people all nervous, and corresponding with that gold went lower,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. His firm manages about C$220 million ($213.7 million). “The message is not clear, so there’s some nervousness out there.”

“There’s an index rebalancing happening as well as quadruple witching for options, so you’ll see some volatility at the close,” he said.

Bullard, a voter on policy this year who has backed the Fed’s bond buying, said today the decision not to taper stimulus was a close call and “small” cuts are possible next month.

Policy makers meet Oct. 29-30.

The benchmark Canadian equity gauge soared to a two-year high on Sept. 18 after the U.S. Fed said it will “await more evidence” for sustained economic recovery before reducing its $85 billion in monthly bond buying.

Iamgold plunged 11 percent to C$5.25 and Eldorado Gold sank 7.7 percent to C$7.15 as gold for December delivery tumbled 2.7 percent to $1,332.50 an ounce in New York, the biggest drop since July 5.

Gold stocks slumped 5.6 percent as a group, the worst decline in six weeks, as all 24 members of the S&P/TSX Gold Index retreated. Nine of 10 industries in the S&P/TSX fell.

BlackBerry, based in Waterloo, Ontario, plunged 16 percent to C$9.08, the most since June 28. The smartphone maker, which is evaluating a sale, expects to report a net operating loss of as much as $995 million for the fiscal second quarter, according to a statement today.

Sales in the quarter were about $1.6 billion, just more than half the $3.03 billion average estimate of analysts surveyed by Bloomberg. The company sold about 5.9 million smartphones in the quarter.

Goldcorp lost 3.8 percent to C$26.96. Telfer, the company’s chairman, was included in an Ontario Securities Commission statement of allegations in February 2012 regarding an alleged insider-trading scheme.

Telfer admitted his conduct fell below standards expected, Cullen Price, representing OSC staff, said at a hearing today in Toronto. In addition to paying a fine to the regulator, Telfer will be banned from arranging the right for people to buy shares in private placements for one year.

S&P Dow Jones Canadian Index Services said on Sept. 13 that it will make changes to the benchmark S&P/TSX at the close today. Additions include Air Canada, the nation’s largest air carrier, and NuVista Energy Ltd. Niko Resources Ltd. will be removed from the index.

Air Canada slid 2.4 percent to C$3.20 and NuVista slipped 4.9 percent to C$7.01. Niko lost 1.2 percent to C$4.07.

US

By Lu Wang and Jeff Sutherland

Sept. 20 (Bloomberg) — U.S. stocks fell the most since August and Treasuries rose as concerns grew that political debate over government spending and potential Federal Reserve stimulus cuts may pose a threat to economic growth. Emerging- markets shares dropped and gold retreated the most in 11 weeks.

The Standard & Poor’s 500 Index dropped 0.7 percent at 4 p.m. in New York for its biggest drop since Aug. 27. The Stoxx Europe 600 Index declined 0.3 percent. Yields on 10-year Treasuries slipped two basis point to 2.73 percent. The MSCI Emerging Markets Index fell after rallying 2.2 percent yesterday, as India’s banks drove a slump in financial shares.

The S&P GSCI Index slid 0.7 percent after gold declined 2.7 percent and silver had the biggest retreat in three months. Oil fell to a one-month low.

Fed Bank of St. Louis President James Bullard said a small tapering of bond buying is possible next month after the central bank made a close call this week in deciding not to slow purchases. The Federal Open Market Committee said it wants more evidence of an economic recovery before paring its $85 billion- a-month bond-buying program. The U.S. House voted to finance the federal government through mid-December and choke off funding for President Barack Obama’s health-care law, setting up a showdown with the Senate and the White House.

“It’s probably a little confusing to the market what’s coming out of the Fed,” John Kvantas, a San Antonio, Texas- based executive director who helps manage more than $16 billion at USAA Investments, said in a phone interview. “Maybe the Fed is trying to send a message that ‘yeah we didn’t taper, but it doesn’t mean we will never taper and maybe actually will taper still quite soon.’”

About 8.9 billion shares changed hands on U.S. exchanges, the most since June 28, as futures and options contracts expire in a process known as quadruple witching. Announced index changes, including the addition of Visa Inc., Goldman Sachs Group Inc. and Nike Inc. to the Dow Jones Industrial Average, take effect after the markets’ close. The operator of the S&P 500 also did its quarterly rebalancing of the index to adjust member weightings. The Dow tumbled 1.2 percent, the most since Aug. 15.

The S&P 500 rallied 1.3 percent this week and is up 4.7 percent for September, rebounding from its worst month since May 2012, after the central bank unexpectedly refrained from reducing monetary stimulus. The stimulus helped boost the equity index as much as 155 percent higher since March 2009. The S&P 500 and the Dow Jones Industrial Average reached record highs on Sept. 18 after the Fed’s announcement.

Bullard said today at the New York Association for Business Economics luncheon that he wants to see higher inflation before backing less accommodation from the central bank. Kansas City Fed President Esther George, who dissented at the last FOMC meeting, said at the Manhattan Institute for Policy Research that the Fed needs credibility for markets to trust its guidance. Policy makers meet Oct. 29-30.

“Weaker data came in,” Bullard said earlier in the day on Bloomberg Television’s “Bloomberg Surveillance” with Tom Keene and Michael McKee. “That was a borderline decision,” and “the committee came down on the side of, ‘Let’s wait.’” With inflation low, Bullard said, “we can afford to be patient.”

Twenty-four of 41 economists surveyed Sept. 18-19 said the Fed will now wait until December before taking the first step in slowing its $85 billion in monthly bond purchases, according to a Bloomberg survey. The median estimate in an Aug. 9-13 poll projected the Fed would begin paring at this week’s meeting.

Reports next week on data from second-quarter gross domestic product to consumer confidence and new home sales may help investors gauge the prospect of economic growth.

Investors are also watching the political wrangling over the approaching limit on federal spending. Government funding expires Oct. 1 and the Treasury is expected to exhaust its ability to borrow funds in mid-October, when it will hit the statutory debt limit. The White House said President Obama would veto the House bill. The Senate will consider its version of the funding measure next week.

“When you look at political uncertainty and a fight going forward and the government really faces a shutdown, I don’t know how that can be construed as a positive in markets’ mind,” Bill Schultz, chief investment officer who oversees about $1.1 billion at McQueen Ball & Associates in Bethlehem, Pennsylvania, said by phone. “If anything, it just means potentially less economic activities.”

Microsoft Corp. and General Electric Co. slipped at least 1.8 percent to pace declines among large companies. Caterpillar Inc. slumped 3.4 percent after its global retail machine sales dropped for a ninth consecutive month. BlackBerry Ltd. plunged 17 percent after announcing 4,500 job cuts. AK Steel Holding Corp. sank 8 percent, leading declines among steelmakers, after predicting a third-quarter loss.

Utilities and phone companies, which offer the highest dividend payouts among 10 S&P 500 groups, had the largest drops.

Apple Inc. fell 1 percent as its iPhone 5s and 5c handsets went on sale.

Among Dow additions, Visa climbed 2.1 percent, Goldman Sachs added 1.2 percent and Nike lost 0.2 percent. They will replace Hewlett-Packard Co., which slipped 0.4 percent, and Alcoa Inc. and Bank of America Corp, which fell 1.8 percent and 1.2 percent, respectively.

The yield on 10-year Treasuries dropped 15 basis points this week, the most since the five days ended July 12. The rate, the benchmark for loans ranging from mortgages to corporate bonds, climbed to a two-year high of 3.01 percent on Sept. 6, from 1.93 percent on May 21, the day before Fed Chairman Ben S.

Bernanke said the central bank could slow the pace of asset purchases in the next few policy meetings.

Global equity funds attracted the largest inflows since at least 2005 in the week ended Sept. 18 as investors piled into stocks.

The funds lured a net $25.9 billion in the period, Wei Liang Chang, a foreign-exchange strategist at Australia & New Zealand Banking Group Ltd., said by phone from Singapore today, citing data from EPFR Global. Developed markets posted $24.3 billion of inflows, while emerging-nation funds drew $1.6 billion, according to Chang.

The dollar rose versus most of its 16 biggest peers. The euro fell 0.1 percent to $1.3523, ending a four-day run of gains. It dropped 0.2 percent to 134.35 yen.

Germany holds elections on Sunday to decide whether Chancellor Angela Merkel wins a third term. An INSA opinion poll in Germany published yesterday showed the opposition Social Democrats climbing one percentage point to 28 percent, 10 points behind Merkel’s Christian Democratic-led group.

The Stoxx Europe 600 Index pared its gain for the week to 0.9 percent. Adidas AG fell 3 percent as the world’s second- largest maker of sporting goods cut its profit forecast. Direct Line Insurance Group Plc retreated 3.7 percent as Royal Bank of Scotland Group Plc sold a 630 million-pound ($1 billion) stake in the U.K. insurer. Foxtons Group Plc surged 16 percent in London on the real estate broker’s first day of trading after its initial public offering.

The MSCI Emerging Markets Index fell from a four-month high, dropping 0.9 percent to 1,013.18, led by Indian shares.

The gauge rose 2.7 percent this week. The measure’s 14-day relative strength index was at 69.6, falling below 70 for the first time in five days. The level of 70 indicates to some analysts a security has climbed too far too fast.

India’s benchmark Sensex Index tumbled 1.9 percent, the steepest drop in more than two weeks, after central bank Governor Raghuram Rajan surprised analysts by raising the benchmark interest rate in his first policy review. Lenders led the decline, with ICICI Bank Ltd. tumbling 4.7 percent. The rupee slid 0.8 percent against the dollar.

Rajan, who took office two weeks ago, boosted the repurchase rate by a quarter point to 7.5 percent. All 36 analysts in a Bloomberg News survey predicted no change.

Markets in China, Hong Kong, South Korea and Taiwan were shut for holidays.

Turkey’s lira weakened 1.1 percent to 1.9815 against the dollar, trimming this week’s rally to 2.3 percent, the biggest gain since January 2012.

Gold declined the most since July 5, losing 2.7 percent to $1,332.50 an ounce. The metal climbed 1.8 percent this week.

Silver slumped 5.9 percent, the biggest drop since June 20, to $21.93 an ounce to lead declines among 24 raw materials in the S&P GSCI Index.

West Texas Intermediate oil dropped 1.6 percent to $104.67 a barrel after decreasing the same amount yesterday as Libya’s oil production expanded and President Bashar al-Assad said Syria will make information about its chemical weapons available.

Crude lost 3.3 percent for the week, the biggest five-day drop since June.

 

Have a wonderful weekend everyone!!!

 

Be magnificent!

 

“Being busy does not always mean real work. The object of all work is production or accomplishment and to either of these ends there must be forethought, system, planning, intelligence, and honest purpose, as well as perspiration. Seeming to do is not doing.”
Thomas A. Edison

As ever,

 

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.