December 30, 2013 Newsletter

Dear Friends,

Tangents:

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

Looking for something to do with the kids before the clock strikes midnight tomorrow?  Playzone in Langford BC will be hosting a New Year’s celebration for kids with a countdown at 10pm!  It’s a fun, festive way to kick off the New Year with your children.  There will be crafts, face painting, snacks, ice skating, fire pits, balladium and many many more fun activities.  The party will finish after the countdown, which will give parents enough time to make it to another New Years engagement!  Make sure to check out this fun family activity!

Happy New Year everyone!

“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character.”
Martin Luther King, Jr.

Photos of the Day:

A bride poses for a photograph on Westminster Bridge as the fog clears in central London. Olivia Harris/Reuters

An aquarium staff member dressed in a Santa Claus costume embraces a Zebra shark as he swims with fish inside the Sunshine International Aquarium in Tokyo. Shizuo Kambayashi/AP

Market Closes for December 30^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Dec. 30 (Bloomberg) — Canadian stocks fell, after a six- day rally pushed the benchmark gauge to a two-year high, as lower prices for gold and oil dragged down commodity shares.

Iamgold Corp. slid 5.7 percent as the metal retreated for the first time in four sessions in New York. Silver Wheaton Corp. lost 3.2 percent after silver tumbled. Pengrowth Energy Corp. dropped 1.8 percent after crude dropped below $100 a barrel in New York. Loblaw Cos. advanced 1.3 percent to lead consumer-staples producers higher.

The Standard & Poor’s/TSX Composite Index fell 6.59 points, or 0.1 percent, to 13,581.39 at 4 p.m. in Toronto. The benchmark equity gauge had rallied 3.1 percent in the previous six sessions to the highest level since May 2011. Trading volume was 51 percent below the 30-day average.

“We’ve had a tremendous run, especially in the U.S.,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. His firm manages about C$4.7 billion ($4.4 billion). “People in the Canadian market have a dilemma on what to do with the materials sector. Most people are waiting to see what’s going to happen when it comes to economic performance. It’s a race between supply coming on stream and demand.”

The S&P/TSX has risen 9.2 percent this year, on pace for the best annual performance since 2010. The gauge has been the fourth-worst among developed markets this year ahead of Austria, Hong Kong and Singapore. The S&P 500, the U.S. equities benchmark, has rallied 29 percent. The index was little changed today.

Materials stocks have fallen 32 percent as a group in 2013, the most among 10 S&P/TSX industries. The gauge of miners dropped 1.6 percent today to pace declines.

Gold for February delivery fell 0.8 percent in New York today. The price has tumbled 28 percent in 2013, on track for the worst annual plunge since 1981 as some investors lost faith in the metal as a store of value amid a rally in equities and an improving economy.

The S&P/TSX Gold Index plunged 3.2 percent, extending its slide in 2013 to 46 percent. Iamgold retreated 5.7 percent to C$3.50 and Yamana Gold Inc. lost 3.3 percent to C$9.02.

Silver Wheaton fell 3.2 percent to C$21.24 and Silvercorp Metals Inc. sank 2.5 percent to C$2.37. Silver for March delivery dropped 2.2 percent in New York. Through Dec. 27, the metal has tumbled 34 percent this year, on course for the biggest annual slump since 1981.

Energy stocks dropped 0.2 percent as crude slipped below $100 a barrel in the biggest decline in two weeks. Pengrowth Energy lost 1.8 percent to C$6.55.

Producers of consumer staples increased 0.7 percent as a group for the second-biggest gain among 10 main index groups.

Canadian consumers are heading into 2014 with more confidence than a year ago, buoyed by optimism that jobs are more secure and real-estate prices will rise, according to the Bloomberg Nanos Canadian Confidence Index, released today.

Loblaw advanced 1.3 percent to C$42.55 and Shoppers Drug Mart Corp. rose 0.8 percent to C$58.26.

Health-care stocks gained the most, adding 1.9 percent as a group to push the annual gain to 72 percent. Valeant Pharmaceuticals International Inc. jumped 2.8 percent to $124.94, a fourth-straight gain that extended an all-time high.

US

By Callie Bost

Dec. 30 (Bloomberg) — U.S. stocks fluctuated, after the Standard & Poor’s 500 Index reached an all-time high last week and headed toward its biggest annual gain since 1997.

Facebook Inc. declined 2.2 percent, retreating for the third straight trading session. Twitter Inc. fell 2 percent, extending losses after a 13 percent drop on Dec. 27. Walt Disney Co. jumped 2.2 percent after an analyst upgrade. Crocs Inc. rose 21 percent after saying its chief executive officer will retire and Blackstone Group LP will invest $200 million in convertible preferred stock in the maker of colorful plastic clogs.

The S&P 500 fell less than 0.1 percent to 1,840.47 at 3:20 p.m. in New York. The benchmark index is poised for a 29 percent gain this year. The Dow Jones Industrial Average rose 11.65 points, or 0.1 percent, to 16,490.06 today. Trading in S&P 500- listed stocks was 34 percent below the 30-day average at this time of day.

“It’s a slow market right now without any dramatic news and I don’t see much happening between now and trading through close tomorrow,” John Carey, a fund manager at Pioneer Investment Management, which oversees about $220 billion, said in a telephone interview. “Then we’re off to the races in the new year.”

The S&P 500 has gained 1.9 percent in December, heading for its fourth straight monthly advance. The gauge climbed 3.7 percent from Dec. 13 through Dec. 27, its biggest two-week rally since July, as the Federal Reserve announced plans to reduce the pace of bond buying amid faster-than-estimated economic growth.

Three rounds of stimulus, known as quantitative easing, have sent the S&P 500 up 172 percent from a 12-year low in 2009.

Pending home sales increased 0.2 percent, the first gain in six months, after a 1.2 percent drop in October that was larger than initially reported, the National Association of Realtors said today in Washington. The median projection in a Bloomberg survey of economists called for a 1 percent advance.

Five years after the equity bull market started, U.S. investors returned to stocks in 2013, just in time for the best relative returns versus bonds on record.

Exchange-traded and mutual funds investing in shares took in about $162 billion, the most since 2000, according to data compiled by Bloomberg and the Investment Company Institute. At the same time, the S&P 500’s 29 percent advance has beaten government debt by 32 percentage points, the widest spread since at least 1978, according to data compiled by Bank of America Merrill Lynch and Bloomberg.

“The equity culture is not dead,” Joseph Quinlan, the chief market strategist at Bank of America Corp.’s U.S. Trust, said in a Dec. 13 phone interview from New York. His firm oversees $333 billion in client assets. “We kind of lost sight of the fact that equities still provide long-term good returns.”

Equity returns will slow next year, Wall Street strategists forecast. The S&P 500 will end 2014 at 1,950, according to the average of 20 estimates compiled by Bloomberg. That represents a 5.9 percent gain over the next 12 months.

The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, rose 8 percent to 13.46 today, poised for a second day of gains. The gauge has dropped 25 percent this year.

Energy producers dropped 0.6 percent for the biggest decline among main industries in the S&P 500. Pioneer Natural Resources Co. slid 2.9 percent to $182.09 while Tesoro Corp. decreased 1.2 percent to $56.71. Exxon Mobil Corp. lost 1 percent to $100.49 and Chevron Corp. slipped 0.6 percent to $124.44.

Facebook declined 2.2 percent to $54.20. Shares of the social-networking company have plunged 6.4 percent since reaching a record on Dec. 24. Facebook is poised for its biggest monthly gain since September, rallying 16 percent in December.

Twitter decreased 2 percent to $62.50. The social- networking company on Dec. 27 fell the most since it debuted on the New York Stock Exchange after Macquarie Capital downgraded the shares, saying they had risen “too far, too fast.”

Myriad Genetics Inc. fell 14 percent to $20.86. Piper Jaffray Cos. lowered its price estimate for the supplier of genetic tests to $29 from $36, citing a decision by the U.S. Centers for Medicare and Medicaid Services to reduce the reimbursement rate by about 49 percent for screening devices to help predict breast cancer risk.

Crocs rose 21 percent, the biggest jump since August 2009, to $16.12. CEO John McCarvel will step down on April 30. The shoemaker will use the Blackstone funds to increase stock repurchases to $350 million, Niwot, Colorado-based Crocs said.

Walt Disney jumped 2.2 percent to a record $76.01. The world’s largest entertainment company was raised to buy from neutral by Guggenheim Securities LLC analyst Michael Morris.

Morris’ 12-month target price is $87.

Cooper Tire & Rubber Co. rose 4.5 percent to $23.99 after it dropped plans to be bought by India’s Apollo Tyres Ltd., citing a lack of financing for the transaction, and said it will seek damages. Cooper said on June 12 that Apollo planned to buy the U.S. tiremaker for $35 a share in a $2.5 billion deal.

All 10 main industries in the S&P 500 have advanced this year, led by a 40 percent gain in consumer-discretionary companies. Phone companies have the weakest performance, with a 6.6 percent increase.

Netflix Inc. has soared 298 percent, the biggest gain this year in the S&P 500, as the world’s largest video-subscription company reported earnings that surged more than analysts forecast. Micron Technology Inc. has rallied 237 percent as the chipmaker is projected to return to a profit in the fiscal year ending in August.

Best Buy Co. has climbed 237 percent this year, rebounding after a 49 percent drop in 2012. Urban Outfitters Inc. has the only loss among consumer-discretionary shares, dropping 5.2 percent.

Newmont Mining Corp., has plunged 50 percent this year, the biggest annual loss in the S&P 500. The price of gold has dropped 28 percent in 2013, heading for its first annual loss since 2000. Cliffs Natural Resources Inc., the second-worst performer in the index, has lost 30 percent.

Have a wonderful evening everyone.

Be magnificent!

“Success is dependent on effort.”
Sophocles

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