January 20, 2014 Newsletter

Dear Friends,

Tangents:

Quiet day today in the financial markets, with the US markets closed for Martin Luther King Day….

Two months to the day before he was assassinated, the Rev. Martin Luther King Jr., whose life is marked by a national holiday in the United States today, gave a compelling sermon on what he termed the “Drum Major Instinct.” The sermon was based on a 1952 homily by a Methodist preacher but was adapted to Dr. King’s quest for justice – racial and otherwise.  The drum-major theme is ambition, which is necessary for progress and improvement but can be toxic to the spirit if not contained. Too much of the

instinct to lead the band, he said, can lead to feelings of superiority, which is the animating factor in racial prejudice. Nations, too, can succumb to it, he said, pointedly mentioning the US war in Vietnam.  These were the issues of his time. They go by different names and categories in our time. But the antidote is the same in either case. Greatness, King said, doesn’t mean physical or intellectual power. It is a willingness to serve others: “You don’t have to have a college degree to serve.  You don’t have to make your subject and your verb agree to serve…. You only need a heart full of grace, a soul generated by love.” –by John Yemma.

Photos of the day

President Barack Obama and his daughter Sasha make burritos at DC Central Kitchen as part of a service project in honor of Martin Luther King, Jr. Day, Monday, in Washington. Also helping were first lady Michelle Obama and daughter Malia Obama. Jacquelyn Martin/AP

Members of the Peoples Congregational United Church of Christ chorus sing during a wreath laying ceremony to celebrate the birthday of civil rights leader Martin Luther King, Jr. at the King Memorial in Washington, Monday. Joshua Roberts/Reuters

San Francisco 49ers’ Patrick Willis pauses after the NFL football NFC Championship game against the Seattle Seahawks Sunday, in Seattle. The Seahawks won 23-17 to advance to Super Bowl XLVIII. Marcio Jose Sanchez/AP

Market Closes for January 20^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Jan. 20 (Bloomberg) — Canadian stocks rose a fifth day to a two-year high, as gold producers advanced in anticipation of rising demand in China and BlackBerry Ltd. led gains among technology stocks.

Barrick Gold Corp. and Detour Gold Corp. rallied at least 4 percent as the price of gold traded near a five-week high in London. Pan American Silver Corp. climbed 2.3 percent to C$14.51. BlackBerry jumped 11 percent for a fourth day of gains.

Osisko Mining Corp. slipped 0.3 percent after the company’s board recommended shareholders reject Goldcorp Inc.’s C$2.6 billion ($2.4 billion) unsolicited bid.

The Standard & Poor’s/TSX Composite Index rose 84.68.19 points, or 0.6 percent, to 13,973.06 at 12:11 p.m. in Toronto, heading for the highest since April 2011. The benchmark equity gauge has risen 2.6 percent this year. U.S. markets are closed today for the Martin Luther King Jr. Day holiday.

“When the U.S. market is closed, Canada can go either way, and today is an up day, continuing the firmness we had last week,” said Irwin Michael, fund manager at ABC Funds in Toronto. His firm manages about C$850 million. “There’s a dose of optimism out there. People who were queasy about gold took their losses in November and December and it’s a fresh year now.”

China, which probably overtook India as the largest user of gold last year, celebrates the Lunar New Year on Jan. 31, when consumers traditionally increase gold purchases.

Chinese gross domestic product expanded 7.7 percent in the fourth quarter, compared with 7.8 percent in the previous three months, the National Bureau of Statistics said today. Industrial production rose 9.7 percent in December, short of a 9.8 percent median forecast of analysts and a 10 percent gain in November, the data show.

Raw-materials stocks gained 1.2 percent as a group as all 10 industries in the S&P/TSX advanced. Trading volume was 11 percent lower compared with the 30-day average at this time of day.

Barrick Gold rose 4.6 percent to C$21.56 and Detour Gold rallied 8.1 percent to C$6.68 as the S&P/TSX Gold Index increased 1.6 percent, headed for a two-month high. The gauge has advanced for four days, the longest such streak since August.

Gold for immediate delivery reached as high as $1,260.07 in London, the highest since Dec. 11.

Cameco Corp., a uranium producer, rose 3.3 percent to C$24.89, headed for the highest close in almost two years.

Greg Barnes, an analyst at TD Securities Inc., raised his rating for Cameco to a buy from a hold and increased his price target to C$31 from C$22.

“After three years in the wilderness, we believe that it is time to think about a positive turn in fundamentals for uranium and for Cameco,” Barnes said in the report to clients yesterday.

The stock has 13 buys, six holds and one sell, with a 12- month average price target of C$25.39, according to data compiled by Bloomberg.

Pan American Silver rose 2.5 percent to C$14.53 for a seventh straight daily advance, the longest since September 2012.

BlackBerry soared 10 percent to C$11.01, headed for the highest close since September. The U.S. Department of Defense said it will hook up 80,000 BlackBerrys as well as 1,800 phones and tablets based on Apple Inc.’s iOS and Google Inc.’s Android software at the end of this month.

Bombardier Inc. rose 0.7 percent to C$4.14 after reporting delivery of 238 aircraft in 2013 compared with 233 a year earlier, including 180 business jets versus 179 in 2012.

Osisko Mining slipped 0.5 percent to C$6.44. The company rejected Goldcorp’s offer as too low, and said it’s reviewing other options. Osisko said the bid undervalues its Canadian Malartic mine in Quebec.

Goldcorp on Jan. 13 made a cash-and-stock offer for Osisko including 0.146 Goldcorp shares and C$2.26 in cash per share.

USA

Closed

Have a wonderful evening everyone.

Be magnificent!

True morality consists not in following

the well-beaten track,

but in finding out the true path for ourselves

and in fearlessly following it.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

In the end we will remember not the words of our enemies,

but the silence of our friends.

-Martin Luther King, Jr., 1929-1968.

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7