December 10, 2014 Newsletter

Dear Friends,

Tangents:

from The Netherlands:

The world’s first solar bike path was unveiled in this bicycle-loving nation.  It’s a 100-meter test bed of concrete modules with photovoltaic cells under a centimeter of tempered glass.  The power it generates will run street lighting, traffic systems – and eventually vehicles and homes, say its private-sector developers, who call it a big step toward “an energy-neutral mobility system.”

Birthday: Emily Dickenson, poet, born December 10^th, 1830.

There’s a certain
Slant of light.
Winter Afternoon
-that oppresses, like the
Heft Of Cathedral Tunes.

          –Emily Dickenson.

PHOTOS OF THE DAY

Giant waves hit the lighthouse wall in Whitehaven, England, as stormy weather causes disruptions across parts of the UK, with power cuts, ferry and train cancellations, and difficult driving conditions. Owen Humphreys/PA/AP

A woman walks through the snow in Washington Park in Albany, N.Y. A slow-moving coastal storm has dumped more than a foot of snow on parts of upstate New York, knocking out power to more than 10,000 utility customers, closing or causing delayed starts for scores of schools and shutting down a Syracuse-area highway. Mike Groll/AP

A woman pushes a pram through heavy fog in the small town of Zaslavl, Belarus. Vasily Fedosenko/Reuters

Market Closes for December 10^th, 2014     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Dec. 10 (Bloomberg) — Canadian stocks sank the most in 17 months, sending the benchmark gauge to the lowest level since February, as crude resumed a selloff after OPEC said demand will drop next year.

     Penn West Petroleum Ltd. and Crescent Point Energy Corp. plunged at least 9.8 percent as energy producers sank to a 2012 low. Laurentian Bank of Canada dropped 5.3 percent to pace declines among financial services stocks. All 10 main groups in the benchmark index lost at least 0.4 percent.

     The Standard & Poor’s/TSX Composite Index fell 342.78 points, or 2.4 percent, to 13,852.95 at 4 p.m. in Toronto. The equity gauge has dropped 4.3 percent this week, paring its advance this year to 1.7 percent. Trading volume was 38 percent above the 30-day average.

     Oil, bank and raw-materials are the biggest laggards in Canada for the first time since at least 1988, fueling concern the nation’s economy is fading just as the U.S. is taking off. The three industries, which collectively account for two-thirds of the S&P/TSX, are the worst performers among 10 groups this year, led by a 18 percent slump in energy, according to data compiled by Bloomberg.

     Penn West tumbled 13 percent to C$2.67, a 1996 low, and Crescent Point plunged 9.8 percent to C$22.50 as energy stocks sank 5.2 percent as a group. The energy index has fallen 32 percent from a high in June.

     West Texas Intermediate crude fell 4.5 percent to settle at $60.94 in New York and Brent dropped 3.9 percent to a five-year low as the Organization of Petroleum Exporting Countries lowered its estimate for 2015 demand for its oil by about 300,000 barrels a day to 28.9 million.

     Oil has collapsed into a bear market amid the highest U.S. output in more than three decades and signs of slowing global demand growth. Prices now are below what 10 out of OPEC’s 12 members need for their annual budgets to break even, according to data compiled by Bloomberg. Kuwait and Qatar are the exceptions.

     Canadian Pacific Railway Ltd. slipped 4.4 percent to C$201.88 and Canadian National Railway Co. retreated 4.1 percent to C$73.62 as industrial stocks lost 3.1 percent.

     Laurentian Bank of Canada declined 5.3 percent to C$47.60, the biggest drop since June 2011. The bank reported fourth- quarter profit that missed analysts’ estimates on charges from cutting jobs and reorganizing businesses.

     The nation’s largest lenders plunged the most in three years last week after posting disappointing earnings.

US

By Joseph Ciolli

     Dec. 10 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 Index sinking the most in seven weeks, as energy shares renewed a selloff after OPEC cut its forecast on 2015 demand for crude.

     ConocoPhillips, Exxon Mobil Corp. and Chevron Corp. lost more than 2 percent as energy producers in the S&P 500 tumbled to the lowest since April. Yum! Brands Inc. sank 6.2 percent after cutting its 2014 profit forecast amid a health scare in China. United Continental Holdings Inc. and Southwest Airlines Co. rose at least 1.8 percent after an industry group said global airlines will make record profit next year.

     The S&P 500 lost 1.6 percent to 2,026.14 at 4 p.m. in New York, the most since Oct. 13. The benchmark gauge has slumped 2.4 percent over the past three days, after reaching a record on Dec. 5. The Dow Jones Industrial Average dropped 268.05 points, or 1.5 percent, to 17,533.15. The Dow’s retreat was its biggest since Oct. 9.

     “Oil is lower on the reduced demand outlook and it’s not a surprise to see the rest of the market, at least in sympathy, going down on that,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “Without any news to prompt the market to move higher today, it puts the onus back on the bulls to see how much conviction they have in buying stocks.”

     The S&P 500 closed little changed yesterday after reversing a loss of as much as 1.3 percent. The gauge has jumped 9.6 percent in 2014, heading for a third year of gains, fueled by better-than-forecast economic data and corporate earnings.

     Data later this week may show U.S. retail sales increased in November, initial jobless claims last week stayed unchanged from a week earlier, and consumer confidence improved this month, according to economists surveyed by Bloomberg.

     Oil tumbled to a five-year low. OPEC cut its forecast for how much crude it will need to provide in 2015 to the lowest in 12 years amid surging U.S. shale supplies and reduced estimates for global consumption.

     The Organization of Petroleum Exporting Countries lowered its projection for 2015 by about 300,000 barrels a day, to 28.9 million a day. That’s about 1.15 million a day less than the group’s 12 members pumped last month, and the 30-million barrel target they reaffirmed at a meeting in Vienna on Nov. 27. The impact of this year’s 40 percent price collapse on supply and demand remains unclear, OPEC said.

     Energy companies in the S&P 500 dropped 3.1 percent. Denbury Resources Inc. plunged 6.4 percent and Oneok Inc. retreated 7.8 percent. The group is down 13 percent since the beginning of November, and has plummeted 25 percent from a high in June.                         

     All 10 groups in the S&P 500 declined as materials, industrial and technology shares each lost more than 1.6 percent.

     The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, climbed 24 percent to 18.53. The gauge has soared 57 percent in three days, the most since October.

     Banks in the S&P 500 fell as JPMorgan Chase & Co. said it will probably report a “high teens” percentage drop in fourth- quarter trading revenue from a year earlier. JPMorgan dropped 2.8 percent, while Goldman Sachs Group Inc. and Citigroup Inc. each lost 2.5 percent.

     Yum declined 6.2 percent. The owner of the KFC and Taco Bell fast-food chains said earnings per share will rise by a mid-single-digit percentage, excluding some items. That is down from a 20 percent growth forecast that was issued in July.

     A Bloomberg index of U.S. airlines gained 0.8 percent. The industry may generate a record $25 billion in net income next year, the International Air Transport Association said today. United Continental gained 1.9 percent, while Southwest jumped 1.8 percent. American Airlines Group Inc. advanced 1.3 percent.

Have a wonderful evening everyone.

Be magnificent!

To find God, you must welcome everything.

Rabindranath Tagore

As ever,
 

Carolann

Everything you can imagine is real.

        -Pablo Picasso, 1881-1973

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7