December 15, 2014 Newsletter

Dear Friends,

Tangents:

NO MATTER WHAT

No matter what the world claims,
its wisdom always growing, so it’s said,
some things don’t alter with time:
the first  kiss is a good example,
and the flighty sweetness of rhyme.

No matter what the world preaches
spring unfolds in its appointed time,
the violets open and the roses,
snow in its hour builds its shining curves,
there’s the laughter of children at play ,
and the wholesome sweetness of rhyme.

No matter what the world does,
some things don’t alter with time.
The first kiss, the first death.
The sorrowful sweetness of rhyme.

                         -Mary Oliver

Defenders of the Galaxy just arrived on Shaw on Demand, and if you didn’t get a chance to see it when it was recently playing in movie theatres – as I didn’t – here’s your chance.  We think it is a terrific movie.

PHOTOS OF THE DAY

A man stands by tombstones in Bucharest, Romania, carrying names of Romanian military personnel killed in fighting around the Otopeni airport during the anticommunist uprising 25 years ago. The uprising left thousands dead and ended the rule of dictator Nicolae Ceausescu, who was executed. Vadim Ghirda/AP

A girl touches an art installation depicting a gorilla entitled ‘Silver Back,’ by artist David Mach, as she poses for photographers during a press preview in London of a themed auction entitled ‘Creatures Great and Small’ that features the animal as artistic inspiration. Lefteris Pitarakis/AP

Market Closes for December 15^th, 2014     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Oliver Renick

     (Bloomberg) — Canadian stocks fell, extending losses after the worst week in three years, as declines among materials and energy shares offset gains in consumer stocks.

     Materials companies lost 3.3 percent as gold and silver fell on speculation the Federal Reserve is moving closer to raising U.S. interest rates amid an improving economy. Energy shares lost 0.9 percent as oil fell to the lowest level in more than five years. Talisman Energy Inc. rallied 18 percent as people familiar with the matter said Canada Pension Plan Investment Board is weighing a bid for the oil-and-gas explorer.

     The Standard & Poor’s/TSX Composite Index lost 25.91 points, or 0.2 percent, to 13,705.14 at 4 p.m. in Toronto, after rising as much as 0.9 percent and then falling 0.7 percent. The equity gauge dropped 5.1 percent last week, its worst weekly decline since September 2011. Trading in S&P/TSX stocks was 31 percent below the 30-day average at closing time.

     Canadian equities have pared their gain for the year to 0.6 percent, after rallying as much as 15 percent to a record in September. Oil, bank and raw-material shares, which collectively account for two-thirds of the S&P/TSX, are the worst performers among 10 groups this year, led by a 20 percent slump in energy, according to data compiled by Bloomberg.

     The rout in oil prices helped send Canadian consumer sentiment to the lowest in 10 months, according to the Bloomberg Nanos Canadian Confidence Index. Separate data indicated Canada’s housing market stalled in November as demand waned amid over-valuation worries and the slump in oil prices.

     Six of the 10 main groups in the S&P/TSX rose today.                       

     Crude oil resumed losses, with West Texas Intermediate plunging 3.3 percent, after the United Arab Emirates said OPEC won’t rein in production in response to prices that are the lowest in five years.

     Talisman soared 18 percent to C$5.97. Canada Pension initially considered buying parts of Talisman and is now looking at a bid for the whole company after a drop in its share price, one of the people said.

     Repsol SA, which revived acquisition talks with Talisman this month, is discussing a bid for at between C$6 and C$8 a share, two people with knowledge of the matter said. A deal could be reached as soon as this week, the people said.

US

By Callie Bost

     (Bloomberg) — U.S. stocks retreated, sending the Standard & Poor’s 500 Index to its fifth drop in six sessions, as the continuing selloff in oil overshadowed a surge in industrial production and corporate deals.

     The S&P 500 fell 0.6 percent to 1,989.63 at 4 p.m. in New York, falling below its average price for the past 50 days. The gauge lost as much as 1 percent today, slipping below its 100- day moving average before paring the decline. It has lost 4.1 percent since closing at a record on Dec. 5.

     The Dow Jones Industrial Average dropped 100 points today, or 0.6 percent, to 17,180.84. The measure plunged 3.8 percent last week, the biggest drop since November 2011. About 8.4 billion shares changed hands on U.S. exchanges, the highest volume since Oct. 17.

     “People are going to come into these markets looking at the same things they did last week, oil and secondary interest rates,” Randy Frederick, managing director of trading and derivatives at Charles Schwab Corp., said by phone from Austin, Texas. “To me, the oil selloff is a bit overdone and people’s reactions are a bit negative to it. We need to see stability in oil that lasts a couple of days. If we get that, people will stop being concerned.”

     The S&P 500 erased an early advance of 0.8 percent today as crude reversed gains. The benchmark stocks index then fell as much as 1 percent by midday before paring losses. The gauge lost 3.5 percent last week as crude plunged to a five-year low.

     West Texas Intermediate lost 4.3 percent to $55.30 a barrel today. Oil has tumbled 16 percent this month after the Organization of Petroleum Exporting Countries cut its forecast for how much crude it will need to provide in 2015 and the International Energy Agency forecast weaker consumption and increased supply from countries outside of OPEC.

     “This is a continuation of the past three or four trading days,” Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc., said by phone. “Every time we’ve had a rally, we’ve finished near the low of the day.”

     The S&P 500 pared gains of 1.45 percent Dec. 11 to close the day up 0.5 percent. The next day, U.S. equity losses picked up speed in the final hour as the Dow average plunged more than 100 points and the S&P 500 ended down 1.6 percent, about 2 points above its average price for the last 50 days, a level monitored by technical analysts.                           

     Equities opened higher today as a report showed industrial production surged in November by the most since May 2010 as U.S. assembly lines churned out more consumer goods and business equipment, signaling manufacturing is bolstering economic growth.

     The 1.3 percent gain in output at factories, mines and utilities followed a 0.1 percent increase the prior month that was previously reported as a decline, figures from the Federal Reserve showed. Manufacturing rose 1.1 percent, the most in nine months, and output at utilities was the strongest in almost eight years.

     Investors are also waiting for the Fed’s update on the timing and pace of interest-rate increases. Policy makers may decide on Dec. 17 whether to keep their pledge to hold interest rates low for a considerable time.

     The Chicago Board Options Exchange Volatility Index, also known as the VIX, jumped 78 percent in the past five days, its biggest advance in more than four years. The gauge jumped as much as 18 percent and lost as much as 16 percent today.

     All 10 main industries in the S&P 500 declined. Financials and utilities shares dropped more than 0.8 percent to lead losses, while telephone and industrial stocks performed the best.

     Among U.S. stocks moving today, PetSmart Inc. rose 4.3 percent after a group led by BC Partners agreed to buy it for $8.3 billion. Emerson Electric Co. gained as much as 1.9 percent after selling a power-transmissions business to Regal-Beloit Corp. for $1.4 billion. The stock later pared gains to close down 0.5 percent.

     McDonald’s Corp., Goldman Sachs Group Inc., International Business Machines Corp. and Chevron Corp. lost more than 1.4 percent for the biggest declines in the Dow.

     Boeing Corp. rose the most in the 30-stock gauge, adding 1.1 percent. It extended gains in late trading after saying it would boost its share buyback program and increase its dividend.                      

     Energy shares in the S&P 500 slid 0.7 percent after gaining in early trading, with 34 members declining while nine rose. Chevron dropped 1.5 percent, while QEP Resources Inc. slipped 3.8 percent and Marathon Oil Corp. retreated 2.6 percent.

     Some of last week’s worst performers gained the most today. Nabors Industries Ltd. rose 2.8 percent today after declining 18 percent last week. Exxon Mobil Corp. rose 0.6 percent, following a 7.7 percent plunge last week that was its worst since 2008.

     Diamond Offshore Drilling Inc. climbed 5.6 percent, extending last week’s rally of 12 percent.

     Newmont Mining Corp. lost 5.9 percent for the biggest decline in the S&P 500 as gold for February delivery sank 2.1 percent to $1,196.70 an ounce.

     Ford Motor Co., which is starting to ship its new, fuel- efficient aluminum-bodied F-150 pickup truck, fell 4.7 percent after Deutsche Bank AG downgraded the automaker on concern that the truck won’t command premium prices amid low fuel costs.
 

Have a wonderful evening everyone.

Be magnificent!

He is fire and the sun; he is the moon and the stars, he is the air and the sea.

He is this boy, and that girl.  He appears in countless different forms.

He has no beginning, and no end.  He is the source of all things.

Each type of living being is distinct and different.  But when we pierce the veil of difference,

we see the unity of all beings.

Svetasvatara Upanishad

As ever,

Carolann

Art is never finished, only abandoned.

              -Claude Monet, 1840-1926

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