June 12, 2014 Newsletter

Dear Friends,

Tangents:

On this day in…
1929- Anne Frank was born.

George Beardmore wrote in his Journal on June 12^th, 1944:

Other side-effects of bombs are the stripping of leaves from wayside trees, the deaths by blast of sparrows, chaffinches etc., and the awful things that happen to cats and dogs.  We had a man complain that thirty of his forty-odd small birds in a  backyard aviary had been killed by blast, half a mile or so away from where the bomb landed.

Also on this day in 1939, Major League Baseball’s Hall of Fame opened in Cooperstown, N.Y.
Baseball is 90% mental; the other half is physical.   –Yogi Berra.

Numbers:
100: Number of starlings, in millions, released into Central Part in 1890 -91 by Eugene Schlieffelin, a Shakespeare devotee.
200: Number of starlings, in millions, descended from those birds.  They range from Mexico to Alaska.

Photos of the day

Four-month-old female orangutan Olivia plays with wood wool during warm and sunny weather in their enclosure at the Hellabrunn zoo in Munich, southern Germany. Rebecca Krizak/dpa/AP

Ryan Hakik attends the 2014 Electronic Entertainment Expo, known as E3, in Los Angeles, Calif., June 11. Jonathan Alcorn/Reuters

Which hair-do do you like better?  🙂

Market Closes for June 12^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Gerrit De Vynck

June 12 (Bloomberg) — Canadian stocks rose for the ninth time in 10 days as gains among energy and materials producers offset losses in financial and telephone shares.

Surge Energy Inc. and Lightstream Resources Ltd. rose at least 4 percent to pace gains among oil and gas companies.
Financial companies fell for a second day after Moody’s Investors Service cut its ratings on six of the country’s biggest banks.

The Standard & Poor’s/TSX Composite Index rose 17.5 points, or 0.1 percent, to 14,909.63 at 4 p.m. in Toronto. The benchmark equity gauge is about 1.1 percent away from a record high.

Prices for benchmark Brent and West Texas Intermediate oil rose at least 2 percent to eight-month highs after fighters linked to al-Qaeda extended their control over parts of northern Iraq. The country is the second-largest producer in OPEC.

Materials companies rose 1.3 percent as a group, the most out of 10 industries on the S&P/TSX. Energy companies rose 1.3 percent as six of the other eight industries fell. Surge Energy increased 4 percent to C$7.59 and Lightstream gained 6.7 percent to C$8.64.

Transat A.T. Inc., which sells travel packages and operates an airline, gained 6.5 percent to C$8.90. The Montreal-based company reported a second-quarter adjusted loss of 19 Canadian cents, less than the average analyst estimate of 34 Canadian cents.

Dollarama Inc. fell 2.7 percent to C$92.65 after the discount retailer missed first-quarter revenue estimates. The company said in a statement it may buy back up to 3.5 percent of its outstanding shares.

Industrial Alliance Insurance and Financial Services Inc. rose 5 percent to C$46.04 after analysts at Desjardins Securities Inc., National Bank Financial and RBC Capital Markets all raised their ratings on the stock.

US
By Oliver Renick and Mark Shenk

June 12 (Bloomberg) — U.S. stocks retreated, with the Standard & Poor’s 500 Index falling the most in three weeks, as industrial and consumer-discretionary shares plunged after escalating violence in Iraq sent oil to an eight-month high while economic data missed estimates.

Delta Air Lines Inc. fell the most in the benchmark index and United Continental Holdings Inc. plunged 5.9 percent to lead industrial stocks lower. The Dow Jones Transportation Average retreated the most in two months as oil prices rose to an eight- month high. Diamond Offshore Drilling Inc. and Noble Corp. climbed at least 3.2 percent as oil and gas companies rallied. Intel Corp. jumped 3.8 percent in extended trading after boosting its full-year revenue target.

The S&P 500 fell 0.7 percent to 1,930.11 at 4 p.m. in New York, giving the index its longest losing streak in two months. The Dow Jones Industrial Average slid 109.69 points, or 0.7 percent, to 16,734.19. The Nasdaq Composite Index lost 0.8 percent, the  most in a month.

“This is a major geopolitical event for the oil market,” said John Kilduff, a partner at Again Capital LLC, a New York- based hedge fund that focuses on energy. “Iraq had been a bright spot ramping up production and now we’re in the midst of a very ugly conflict.”

A surge in violence across northern and central Iraq, three years after U.S. troops withdrew, has raised the prospect of a return to sectarian civil war in OPEC’s second-biggest oil producer. Iraqi forces sought to check the rapid advance of Islamist militants who had seized major cities, as Prime Minister Nouri al-Maliki responded to the greatest threat to his government since taking power. President Barack Obama said he won’t rule out using airstrikes to assist Iraq’s government.

The S&P 500 lost 0.4 percent yesterday and the Dow average halted a five-day rally as the World Bank cut its forecast for global growth and investors weighed equity valuations. The broader index trades at 16.4 times forecast earnings, up from a multiple of 14.8 at the beginning of February. The gauge had closed at a record for four straight sessions through June 10.

Retail sales rose 0.3 percent in May as American consumers took a respite following a three-month surge in shopping. The gain followed a revised 0.5 percent gain in April that was much larger than previously estimated, Commerce Department figures showed. The median forecast of 83 economists surveyed by Bloomberg called for a 0.6 percent advance.

A separate report indicated applications for unemployment benefits in the U.S. rose to 317,000 last week. The median forecast of 52 economists surveyed by Bloomberg called for 310,000. Claims have averaged around 324,000 so far in 2014.

“There is some indication that the economy continues to move forward in a fairly measured fashion,” Rob Lutts, chief investment officer at Salem, Massachusetts-based Cabot Money Management Inc., said in a phone interview. He oversees $600 million of assets. “I think this perpetuates the worry that investors have today. What they want is that clear blue sky economic condition, and we don’t have that.”

The S&P 500 advanced 7.1 percent through yesterday since a low on April 11 as data showed the U.S. economy is recovering from the impact of extreme weather earlier this year. The Federal Reserve is watching the labor market as it moves to complete a monthly stimulus program late this year. Three rounds of bond buying have helped propel the S&P 500 higher by as much as 188 percent from its bear-market low in March 2009.

The Chicago Board Options Exchange Volatility Index rose 8.1 percent to 12.54, a three-week high. The gauge, known as the VIX, trades at the highest since May 15 on a closing basis.

Eight of the 10 main S&P 500 groups retreated, with industrial and consumer-discretionary stocks losing 1.3 percent to pace declines. Caterpillar Inc. dropped 1.9 percent and Disney Co. fell 1.8 percent.

The Dow Jones Transportation Average sank 2 percent, the most since April, as West Texas Intermediate crude jumped 2 percent, the most since Sept. 18. Delta sank 5.4 percent, the most since August, while United Continental lost 5.9 percent and Southwest Airlines Co. dropped 4.5 percent.

Energy producers in the S&P 500 added 0.3 percent. Noble, a contract-drilling company, rallied 3.1 percent, and Diamond Offshore jumped 3.3 percent to pace gains. Chevron Corp. climbed 0.7 percent, the most in the Dow.

Lululemon Athletica Inc. declined 16 percent to $37.25, the lowest since March 2011. The athletics-apparel retailer forecast full-year earnings of as much as $1.76 a share, down from an earlier prediction of as much as $1.90. The forecast also fell short of analyst estimates calling for $1.89.

Keurig Green Mountain Inc. advanced 4.1 percent to $120.75 for the biggest gain in the S&P 500. The company said yesterday it is “committed” to returning more cash to investors.

Restoration Hardware Holdings Inc. rallied 13 percent to a record $80.40. The home-furnishings chain boosted its forecast for full-year profit to at least $2.24 a share, after predicting in March no more than $2.22. Analysts estimate earnings will be $2.21. The Corte Madera, California-based company also raised its outlook for revenue.

Intel added jumped 3.8 percent to $29.01 in extended trading after closing little changed in the regular session. The world’s largest computer-chipmaker raised its forecast for second-quarter revenue as demand for corporate personal computers picks up.

Have a wonderful evening everyone.

Be magnificent!

We are fragmented.  We are one person at the office another at home,

we speak of democracy and are autocrats in our hearts;

we speak of love for our neighbors even as we kill that love with our competitive spirit;

one part of us works, watches, and acts independently of the other.

Are you conscious of the fragmentation of your existence? Is it possible for a mind

that has splintered the structure of its thoughts to perceive the broad field of consciousness?

Krishnamurti, 1895-1986

As ever,

Carolann

Luck is what you have left over after you give 100 percent.

-Langston Coleman

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