December 19, 2014 Newsletter

Dear Friends,

Tangents:

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

PHOTOS OF THE DAYIce covers trees and plants after a storm in Vienna, Va. Melanie Stetson Freeman

Retired lab chimps live at Chimp Haven, which is also the National Chimpanzee Sanctuary, in Keithville, La. ‘I loved seeing all the different personalities of the chimps – like these two who look like they’re gossiping.’ Melanie Stetson Freeman

Market Closes for December 19^th, 2014     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Callie Bost

     (Bloomberg) — Canadian stocks rose for a fourth day, capping their best week in five years, as energy producers led gains in a rally ignited by the Federal Reserve’s pledge to be patient on boosting borrowing costs.

     Energy stocks in the Standard & Poor’s/TSX Composite Index rose 2.9 percent for a 13 percent gain this week, the most in five years. Trican Well Service Ltd. and TransGlobe Energy Corp. soared more than 8.8 percent. BlackBerry Ltd. dropped 1.2 percent after reporting third-quarter revenue short of analysts’ estimates.

     The S&P/TSX index climbed 121.51 points, or 0.9 percent, to 14,468.26 at 4 p.m. in Toronto. The gauge surged 5.6 percent in the past four days as oil prices stabilized and Fed Chair Janet Yellen said the U.S. central bank will probably hold rates near zero at least through the first quarter.

     The index’s weekly gain extended its advance in 2014 to 6.2 percent.

     Canada’s inflation rate slowed more than economists forecast in November, returning to the central bank’s target on a drop in gasoline prices. The consumer price index rose 2.0 percent from a year ago following the October pace of 2.4 percent, Statistics Canada said today from Ottawa.

     A report also showed retail sales were little changed in October as gains in appliances and building materials made up for a drop at automobile dealerships.

     Seven of the 10 main industries in the S&P/TSX advanced. Trading in the benchmark gauge’s stocks was 128 percent above the 30-day average. Volume was heavy because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and stocks expire.

     BlackBerry dropped 1.2 percent to C$11.55. Revenue dropped 34 percent to $793 million in the three months ended Nov. 29, missing analysts’ estimates for $931 million.

     Chief Executive Officer John Chen has said that his goals were to reach break-even cash flow by the end of this fiscal year and then return to sustainable profit and revenue growth next year.

US

By Jeremy Herron and Oliver Renick

     (Bloomberg) — The Standard & Poor’s 500 Index rose a third day, briefly topping its closing record and erasing losses in December, as energy shares surged after oil rebounded. The yen weakened, while metals advanced.

     The S&P 500 rose 0.5 percent at 4 p.m. in New York, extending a three-day rally to 5 percent, the most since November 2011. Energy shares in the index paced gains as U.S. oil rallied as much as 5 percent. The Stoxx Europe 600 Index added 0.4 percent for its best week in a year. The yield on 10- year Treasury notes fell three basis points to 2.18 percent. The ruble strengthened to 59.45 a dollar and Japan’s currency declined against all 16 major peers.

     The MSCI All-Country World Index capped its biggest weekly advance since the end of October after the Federal Reserve pledged patience on raising U.S. interest rates and Switzerland’s central bank introduced negative deposit rates. The Bank of Japan held monetary policy steady today, almost two months after unexpectedly boosting stimulus. U.S. equities trading may be subject to unexpected swings today because of a quarterly event known as quadruple witching, when futures and options contracts on indexes and stocks expire.

     “The Fed set the tone and that what’s fueling the market right now,” Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP, said in a phone interview.

     Fed Chair Janet Yellen said this week that policy makers are likely to hold key rates near zero at least through the first quarter, even as the U.S. economy strengthens. The central bank, in a statement after its last meeting of 2014, replaced a reference to borrowing costs staying low for a “considerable time” with a pledge to be patient on the timing.

     The S&P 500 surged 4.5 percent in the previous two days, erasing four-fifths of the seven-day decline that began Dec. 5. The gauge pulled within one point of its all-time high today.

     The index capped its biggest weekly gain in almost two months with a 3.4 percent gain. It has advanced 0.2 percent in December, headed for a seventh straight advance in the year’s final month.

     A recovery would mark the fifth time this year that the S&P 500 has come back after falling more than 4 percent from a high. In comparable drops beginning in January, April, July and September, the index needed about a month to erase losses, data compiled by Bloomberg show.

     Among shares that moved today, energy producers rallied 3.1 percent. The group climbed 9.8 percent in three days. Raw-materials companies gained 1.2 percent, as nine of the 10 main industries advanced. Nike Inc. slid 2.3 percent after saying future orders trailed analysts’ estimates

     Europe’s Stoxx 600 extended its weekly gain to 3 percent as commodities producers advanced after its worst week in three years.

     Air France-KLM Group lost 8.1 percent after cutting its annual profit target and saying it would push back delivery of some aircraft in the next two years. BASF SE declined 1.6 percent after saying a plan to swap natural gas assets with OAO Gazprom has fallen through. Roche Holding AG fell 6.3 percent after reporting disappointing results from a drug-combination trial of breast-cancer treatments.

     President Francois Hollande became the first major European leader to suggest easing sanctions on Russia, while German Chancellor Angela Merkel said the region is united in its stance.

     The MSCI Emerging Markets Index added 1 percent. It rose 3.8 percent in the past three days, its steepest advance in 13 months, as China’s benchmark stock index climbed to the highest level since November 2010.

     The Shanghai Composite Index rallied 1.7 percent as Aluminum Corp. of China Ltd. led a rally for metal companies on an asset restructuring plan and transport shares surged on lower oil prices. BYD Co. rebounded 14 percent in Hong Kong after the electric carmaker said it confirmed with shareholder Berkshire Hathaway Inc. that it has no intention to cut its stake.

     Russia’s benchmark Micex Index slid 1.9 percent, capping a weekly slide of 0.7 percent. The dollar-denominated RTS Index had it fourth weekly loss.

     The ruble strengthened 5.1 percent to 58.96 a dollar, paring a weekly decline. The currency rebounded from its record low of 80.10 a dollar reached Dec. 16 as as Russian President Vladimir Putin struck an uncompromising stance over the nation’s financial woes.

     The yen depreciated 0.6 percent today to 119.57 per dollar after weakening 2 percent during the previous two days. Japan’s currency declined 0.1 percent to 146.19 per euro. The dollar was up 0.5 percent at $1.2249 per euro.

     The Bank of Japan maintained unprecedented stimulus, as Governor Haruhiko Kuroda’s bid to stoke inflation faces increasing challenges from the tumble in oil prices.

     Exports have shown signs of picking up, while production has started to bottom out, the BOJ said, striking a more upbeat tone in its view of the world’s third-largest economy.

     West Texas Intermediate oil climbed 4.5 percent to settle at $56.52 a barrel in New York, after sinking to the lowest closing price since May 2009 yesterday. The U.S. benchmark is still down 42 percent this year. Brent crude rose 4.5 percent to close at $61.38 a barrel in London.

Have a wonderful evening everyone.

Be magnificent!

“You must understand the whole of life, not just one little part of it. That is why you must read, that is why you must look at the skies, that is why you must sing and dance, and write poems and suffer and understand, for all that is life.” Jiddu Krishnamurti

As ever,

Karen

“Life isn’t about finding yourself. Life is about creating yourself.” George Bernard Shaw

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