February 25, 2014 Newsletter

Dear Friends,

Tangents:

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

March 9^th will mark the end of Dine Around Victoria! Tourism Victoria and the BC Restaurant & Foodservices Association (BCRFA), Victoria Branch, and Dine Around & Stay In Town brings together participating Victoria restaurants offering select three-course menus for $20, $30, $40 or $50 per person per person; vegetarian and gluten free options are also available. To check out the restaurants and menus participating in Dine around Victoria, visit: http://www.tourismvictoria.com/events/dinearound/

“All our dreams can come true, if we have the courage to pursue them.”

Walt Disney

Photos of the day

Crocus flowers bloom in a park near to the Atomium, one of Belgium’s landmarks, in Brussels. Geert Vanden Wijngaert/AP

Birds fly over an Orthodox church in a monastery in the village of Nikolskoye, some 48 km (30 miles) from the eastern city of Donetsk, Ukraine.Vasily Fedosenko/Reuters

Market Closes for February 25^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Eric Lam

Feb. 25 (Bloomberg) — Canadian stocks fell, after touching a five-year high yesterday, as energy and metals producers slipped on concern that demand from China may decline and consumer confidence in the U.S. unexpectedly dropped.

BlackPearl Resources Inc. sank 6.6 percent after selling shares to raise cash. Pan American Silver Corp. fell 3 percent as silver sank. Bank of Montreal rose for the 14th time in 15 days after reporting profit that surpassed estimates. BlackBerry Ltd. jumped 7.9 percent after Chief Executive Officer John Chen said he would consider selling the company’s BlackBerry Messenger service.

The Standard & Poor’s/TSX Composite Index fell 38.10 points, or 0.3 percent, to 14,188.98 at 4 p.m. in Toronto. The benchmark equity gauge has advanced 4.2 percent this year.

“This is just a pause, you’ll have these situations throughout the year,” said Wes Mills, chief investment officer with Scotia Private Client Group. His firm manages about C$14 billion ($13 billion). “We’re consolidating the gains from yesterday. And we just had U.S. consumer confidence numbers released that slipped a bit.”

The index has declined two of the past three sessions after rallying 12 straight days for the longest streak in nearly two decades. The gauge is 0.6 percent below its peak of 14,270.53 reached on April 5, 2011.

Consumer confidence in the U.S. fell to 78.1 in February from a revised 79.4 in January that was weaker than initially estimated as Americans grew more pessimistic about the outlook for the economy and employment. The median forecast for February in a Bloomberg survey of economists was for a reading of 80.

Oil and metals from copper to silver retreated today amid concern that the weakening Chinese yuan and curbs on real-estate lending will lead to lower demand from the biggest consumer of commodities.

Seven of 10 industries in the S&P/TSX fell on trading volume 11 percent lower compared with the 30-day average. Raw- materials stocks fell 0.8 percent as a group to lead losses.

Silver Standard Resources Inc. declined 1.9 percent to C$11.72 and Pan American Silver retreated 3 percent to C$16.33. The price of silver declined 0.4 percent in New York to snap two days of gains. The metal yesterday reached the highest level since October.

Argonaut Gold fell 5.3 percent to C$6.13 and Turquoise Hill Resources Ltd. lost 2.7 percent to C$3.92. An index of gold miners has rallied 29 percent in 2014 as the metal’s price has rebounded from its worst year since 1981. Gold added 0.4 percent today in New York.

BlackPearl Resources decreased 6.6 percent to C$2.56 after it raised C$70.2 million by selling shares. The company plans to use the cash to fund the first phase of development of its Online Lake project.

Peyto Exploration & Development Corp. slumped 3.3 percent to C$35.43 and Birchcliff Energy Ltd. lost 2.3 percent to C$9.91. Crude slipped 1 percent to $101.83 a barrel in New York, the biggest decline in three weeks.

Encana Corp. fell 1.5 percent to C$21.15 as natural gas prices slumped to its biggest two-day slide in more than 6 years on speculation milder U.S. weather may reduce demand for the heating fuel.

Teck Resources Ltd., a diversified miner, declined 2 percent to C$24.49, the lowest since December. Copper prices fell for a fifth day.

BlackBerry jumped 7.9 percent to C$11.73, headed for the highest close in a month. BlackBerry’s Chen, speaking from the Mobile World Congress in Barcelona, said he would consider eventually selling the Waterloo, Ontario-based smartphone maker’s mobile messaging service. The stock has rallied 18 percent since Facebook Inc. agreed to buy instant messaging service WhatsApp Inc. for $19 billion on Feb. 19.

Bank of Montreal, Canada’s fourth-largest lender by assets, gained 0.1 percent to C$72.63, paring an earlier gain of as much as 1.1 percent. Canada’s fourth-largest lender by assets, posted first-quarter profit that beat analysts’ estimates on gains in domestic banking and lower loan-loss provisions.

Royal Bank of Canada is scheduled to report results tomorrow, with Toronto-Dominion Bank and Canadian Imperial Bank of Commerce slated to release earnings on Feb. 27.

US
By Lu Wang and Callie Bost

Feb. 25 (Bloomberg) — U.S. stocks fell, with the Standard & Poor’s 500 failing to break a record for a second day, after data showed slower growth in home prices and a drop in consumer confidence.

Office Depot Inc. lost 8.8 percent after reporting an unexpected loss. Tenet Healthcare Corp. declined 9.1 percent as its forecast missed analysts’ estimates. Macy’s Inc. and Home Depot Inc. rose at least 4 percent on higher-than-estimated earnings. Tesla Motors Inc. climbed 14 percent as Morgan Stanley more than doubled its projected price for the stock.

The S&P 500 slipped 0.1 percent to 1,845.12 at 4 p.m. in New York. The U.S. equity benchmark briefly surpassed its record closing high and then erased gains in the afternoon. The Dow Jones Industrial Average slid 27.48 points, or 0.2 percent, to 16,179.66. About 6.7 billion shares changed hands on U.S. exchanges, in line with the three-month average.

“We’re kind of teetering with the new all-time high,” Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati, said by phone. “People are taking a step here and watching to see if we can get there again.”

Investors are taking advantage of near record stock prices to book gains. About $1.7 billion was taken out of U.S. equity exchange-traded funds yesterday, bringing total withdrawals to almost $6 billion in February, data compiled by Bloomberg show. A record $139 billion was added to the ETFs in 2013 as the S&P 500 jumped 30 percent for the best annual gain since 1997.

The S&P 500 has rallied almost 6 percent since Feb. 3 as investors speculated that severe winter weather explains the weakness in reports such as housing and hiring. Federal Reserve Chair Janet Yellen said this month that the economy has strengthened enough to withstand stimulus cuts, adding that only a notable change to the outlook would prompt the central bank to slow the pace of tapering.

“The market has done extremely well in February,” Doug Cote, chief market strategist at ING U.S. Investment Management in New York, in a telephone interview. His firm oversees about $200 billion. “2014 is more of a recognition that we’re in a global economic expansion and no longer a recovery.”

Three rounds of stimulus have helped push the S&P 500 173 percent higher from a 12-year low in 2009, including a 3.5 percent gain this month.

Home prices in the U.S. climbed at a slower pace in the year through December, indicating the market is entering a new stage that will help sustain further progress. The S&P/Case- Shiller index of property values in 20 cities rose 13.4 percent from December 2012 after increasing 13.7 percent in the year ended in November, the group said today in New York. It was the first deceleration since June.

A Conference Board report showed a measure of confidence among U.S. consumers fell to 78.1 in February from 79.4 the prior month. The median forecast in a Bloomberg survey of economists called for a reading of 80.

The Chicago Board Options Exchange Volatility Index fell 3.9 percent today to 13.67. The gauge of S&P 500 options known as the VIX is down 0.4 percent for the year.

Office Depot dropped 8.8 percent to $4.88 after reporting an unexpected loss of 3 cents a share in the fourth quarter. Analysts on average had predicted a profit of 3 cents per share.

Tenet lost 9.1 percent to $43.93. Earnings before interest, taxes, depreciation and amortization may be $1.8 billion to $1.9 billion this year, the company said in a statement. Analysts anticipated $1.96 billion, the average of 18 estimates compiled by Bloomberg.

RealPage Inc. plunged 23 percent to $16.03. The property- services company reported fourth-quarter earnings of 16 cents a share, missing the 17-cent median of analyst estimates compiled by Bloomberg. RealPage also acquired the assets of Bookt LLC, which owns the vacation-rental booking website InstaManager.

Macy’s climbed 6.1 percent to $56.25. The second-largest U.S. department-store company topped fourth-quarter profit estimates after recording a smaller-than-projected charge for a cost-cutting program.

Home Depot advanced 4 percent to $80.98. The largest U.S. home-improvement chain has posted six straight years of meeting or exceeding projections as the U.S. housing rebound spurs spending on renovations. The company also raised its quarterly dividend by 21 percent to 47 cents a share.

Tesla climbed 14 percent to $248. Morgan Stanley analyst Adam Jonas raised his price target on the electric car maker to $320. Tesla last week posted results that beat analyst estimates and said it is gearing up for further growth with plans to raise Model S sedan production 56 percent this year and to build a battery plant.

LinkedIn Corp. increased 5.1 percent to $209.84. The professional social-networking company is establishing a Chinese-language website that will restrict some content to adhere to state censorship rules, moving to expand in a country where U.S. technology companies have clashed with the government.

Zulily Inc. jumped 36 percent to $58.41 after saying it expects first-quarter sales of $225 million to $235 million. The forecast exceeded the $223 million average estimate by analysts. The online retailer also reported fourth-quarter earnings of 10 cents a share, exceeding the 4 cent-average of analysts surveyed by Bloomberg.

InterMune Inc. soared 171 percent to $37.80 after its drug pirfenidone for a fatal lung disease met goals of a study expected to support U.S. approval.

Have a fabulous evening everyone!

Be magnificent!

“Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.”

Steve Jobs

As ever,

Amanda Parnham

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7