January 26, 2015 Newsletter

Dear Friends,

Tangents:

We went to Seattle on the weekend to take in Seattle Opera’s production of Puccini’s Tosca.  It was superb.  Seattle is gripped with Super Bowl fever.  Lots of fans turned out in their Seahawks paraphernalia to line the route to the airport because the team was headed to Phoenix yesterday.  Businesses have signs in their windows referencing the team.  Many cars have Seahawk banners flying – it’s really quite something.

Found a terrific restaurant you might want to visit next time you’re in Seattle.  It is called  Altura and the food is really quite amazing.  Reservations are essential as it is very popular.

I read in the Wall Street Journal this morning that the movie American Sniper has now grossed 200 million in its second week – phenomenal.  Good news for Clint Eastwood.  Brad Cooper who plays US navy SEAL Chris Kyle is superb in this movie.  When we saw it last week , no one in the movie theatre moved when it ended.  Everyone was sort of entranced by what they had just seen.  Even though Brad Cooper’s acting is flawless in the picture, I sort of think the Oscar is going to go to Michael Keaton for his incredible performance in Birdman.   What a fantastic film that was!  All in all, it is a good year for films.  I thought Imitation was terrific too – though tragic….still a couple more nominees to see before Oscar night February 22nd.

PHOTOS OF THE DAY

A man surrounded by snowmen takes a selfie with a cell phone during a protest against the Davos World Economic Forum, WEF, in Davos, Switzerland, Saturday. Jean-Christophe Bott/Keystone/AP

Lindsey Vonn speeds down the course during an alpine ski, women’s World Cup downhill in St. Moritz, Switzerland, Saturday. Marco Trovati/AP

Market Closes for January 26^th, 2015    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a fourth day, extending a two-month high, as industrials and commodities producers advanced to offset a slump in telephone stocks.

     Badger Daylighting Ltd. climbed 4.4 percent to pace gains among industrials shares after announcing it will “conservatively manage” its capital spending amid plunging oil prices. Intertape Polymer Group Inc. plunged 15 percent after lowering its fourth-quarter earnings outlook. Rogers Communications Inc. dropped 4.2 percent, the most since February 2014, after analysts at Canaccord Genuity cut their rating for the stock.

     The Standard & Poor’s/TSX Composite Index rose 18.48 points, or 0.1 percent, to 14,797.83 at 4 p.m. in Toronto. The gauge has advanced 1.1 percent this year to the highest since Nov. 27.

     U.S. markets are thus far operating normally ahead of a “life-threatening” blizzard set to dump as much as two feet of snow from New York to Boston. The storm has already caused more than 1,800 flight cancellations and will probably snarl road and rail traffic, close schools and knock out power across the U.S. Northeast.

     Intertape Polymer, which makes tape, plunged 15 percent, the most since 2009, after cutting its fourth-quarter earnings and revenue projections due to some delays in customer orders and higher than expected employee medical costs.

     Industrial stocks rose 1 percent, the most in the S&P/TSX, as seven of 10 industries in the broader equity gauge advanced. Phone companies fell 1.8 percent. Trading volume was 24 percent lower than the 30-day average today.

     Centerra Gold Inc. jumped 7.2 percent as raw-materials shares climbed 1 percent as a group, reversing an earlier loss. The S&P/TSX Energy Index added 0.4 percent for a fourth day of gains, the longest streak since Dec. 19.

US

By Michelle F. Davis

     (Bloomberg) — The Standard & Poor’s 500 Index rose, following its first weekly advance this year, as gains in energy companies overshadowed a drop in technology shares as investors considered possible fallout from Greek elections.

     The S&P 500 added 0.3 percent to 2,057.09 at 4 p.m. in New York, extending gains in the final 30 minutes of trading. The Dow Jones Industrial Average climbed 6.10 points, or less than 0.1 percent, to 17,678.70. The Nasdaq 100 Index slipped 0.1 percent, while the Russell 2000 Index of small caps rallied 1 percent.

     In New York, officials told residents to stay at home as a blizzard forecasters call “life-threatening” may dump as much as two feet of snow from New York to Boston. Exchanges plan to remain open in the U.S., with the New York Stock Exchange’s owner Intercontinental Exchange Inc. saying it’ll be business as usual.

     About 6.2 billion shares changed hands on U.S. exchanges today, 7 percent below the three-month average.

     The last time NYSE’s trading hours were changed because of a snowstorm was on Jan. 8, 1996, according to the exchange’s website. Weather shut American equity markets for two days in October 2012 in the aftermath of Hurricane Sandy.

     “We’re sort of at an inflection point in the market,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “It needs more to get it moving to higher levels. It’s just trying to digest all of this information and try to make heads or tails of it. You saw the Greek election although that was not a big surprise.”

     The S&P 500 rallied 1.6 percent last week after European Central Bank President Mario Draghi said it plans to buy up to 1.14 trillion euros ($1.28 trillion) of private and public securities.

     European equities rose and the region’s shared currency strengthened, while Greek stocks retreated, after Syriza, whose leader has pledged to renegotiate the nation’s international bailout, won 149 out of a possible 300 seats in Parliament. Prime Minister-elect Alexis Tsipras’ mandate is now to confront the nation’s program of austerity, imposed in return for pledges of 240 billion euros in aid since May 2010.

     The Greek elections “infused a little bit more risk into the market,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “More people are focusing on a pretty busy earnings calendar this week and the Fed commentary on Wednesday. Those are going to be the much bigger focus for traders than the situation in Greece.”

     Federal Reserve officials are scheduled to begin a two-day policy meeting Tuesday. The central bank is trying to determine whether declining oil prices, a slowdown in European growth and any fallout from the Greek elections will threaten the U.S. recovery as it considers raising interest rates. Chair Janet Yellen told reporters after the last meeting not to expect higher borrowing costs before the end of April.                        

     Investors are also watching earnings reports. Microsoft Corp. is among those releasing quarterly results today. United Technologies Corp. changed its plans and will release results after the close of trading today instead of tomorrow morning.

     United Technology slid 2.1 percent in late trading after cutting its earnings forecast. Microsoft slid 1.7 percent in after-market trading.

     Of the S&P 500 companies that have reported so far, 77 percent have exceeded earnings projections after analysts reduced their estimates. Profit at S&P 500 companies climbed 1.1 percent in the last three months of 2014, analysts predict, down from an October estimate of 8.1 percent.

     D.R. Horton Inc. gained 5.5 percent. The largest U.S. homebuilder by revenue posted better-than-expected first-quarter profit as sales and orders jumped.

     An S&P index of homebuilders surged 2.2 percent.

     Energy companies rose 1.4 percent, the most in three weeks, to lead gains among six of the 10 main S&P 500 groups. Chevron Corp. gained 1.9 percent for the biggest rise in the Dow.

     MeadWestvaco Corp. jumped 14 percent. Rock-Tenn Co. agreed to acquire its U.S. rival in a deal valued at about $9.2 billion to create the world’s second-largest packaging company.

     Ocwen Financial Corp. surged 8.4 percent. The company, one of the biggest U.S. mortgage servicers, rejected as “groundless” accusations by an investor group that the company’s practices created defaults on home-loan bonds backed by debt it oversees.

     Mattel Inc. retreated 5 percent after the maker of Barbie dolls said it replaced Chairman and Chief Executive Officer Bryan Stockton amid a five quarter sales slump and holiday- season earnings that trailed analysts’ estimates.

     Seagate Technology Plc sank 7.7 percent to lead a slide among technology shares. The maker of disk drives plunged after projecting quarterly revenue that trailed analysts’ estimates.

Have a wonderful evening everyone.

Be magnificent!

What is the soul?  The soul is consciousness.

It shines a s the light within the heart.

Brihadaranyaka Upanishad

As ever,

Carolann

When you come to the end of your rope, tie a knot and hang on.

                           -Franklin D. Roosevelt, 1882-1945

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