June 13, 2014 Newsletter

Dear Friends,

Tangents:

Friday the 13th is generally an unlucky day, but stock investors have actually done quite well by “Friday the June 13th.” Since 1928, the S&P 500 has risen in 10 of the prior 12 times Friday the 13th has landed in June, according to S&P’s data whiz Howard Silverblatt.

Friday was regarded by the Norsemen as the luckiest day of the week, when weddings took place, but among Christians it has been regarded as the unluckiest, because it was the day of the crucifixion.  While no longer a day of compulsory abstinence for Roman Catholics, they are urged to set Friday apart for some voluntary act of self-denial.

Friday is the Sabbath for Muslims, who hold that Adam was created on a Friday and that it was on Friday that Adam and Eve ate the forbidden fruit and on Friday that they died.  It is also held unlucky among Buddhists and Brahmans.

In England it is not unlucky to be born on this day, since “Friday’s child is loving and giving.”
It is held to be a bad day for ships to put to sea, but in 1492 Columbus set sail on a Friday and sighted land on a Friday.

Full moon tonight.  The moon is in Sagittarius tonight.

Happy Father’s Day to all the fathers reading this.  Father’s Day was devised in 1910 in Spokane, Washington as a counterpart to Mother’s Day.

Birthday:  William Butler Yeats, June 13, 1865:

THE LAKE ISLE OF INNISFREE

I will arise and go now, and go to Innisfree,
And a small cabin build there, of clay and wattles made:
Nine bean-rows will I have there, a hive for the honey-bee,
And live alone in the bee-loud glade.

And I shall have some peace there, for peace comes dropping slow,
Dropping from the veils of the morning to where the cricket sings;
There  midnight’s all a glimmer, and noon a purple glow,
And evening full of the linnet’s wings.

I will arise and go now, for always night and day
I hear lake water lapping with low sounds by the shore;
While I stand on the roadway, or on the pavements grey,
I hear it in the deep heart’s core.

~William Butler Yeats

Photos of the day

Pakistani soccer fans hoist flags of countries in the World Cup in Brazil, to celebrate in Karachi’s slums, Pakistan, June 13, 2014. From the stadium in Sao Paulo to sofas in Germany, from a pub in Nairobi to a cafe in Miami, from a Rio slum to outer space, nearly half the world’s population was expected to tune in to the World Cup, soccer’s premier event which kicked off Thursday in Brazil. Fareed Khan/AP

An octopus named Hacchan predicts Japan’s victory in their 2014 World Cup soccer match against Ivory Coast by choosing the mock goal with the Japanese national flag, at Shinagawa Aqua Stadium aquarium in Tokyo, June 13, 2014. Issei Kato/Reuters

Market Closes for June 13^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Gerrit De Vynck

June 13 (Bloomberg) — Canadian stocks rose, sending the benchmark index above 15,000 points, as energy companies were boosted by oil prices amid escalating violence in Iraq.

Legacy Oil & Gas Inc. and Crew Energy Inc. increased at least 4.8 percent, pacing gains among energy companies. Amaya Gaming Group Inc. jumped 42 percent after agreeing to acquire PokerStars. Pilot Gold Inc. fell 8 percent as the miner announced a pact to buy Cadillac Mining Corp.

The Standard & Poor’s/TSX Composite Index rose 91.98 points, or 0.6 percent, to 15,001.61 at 4 p.m. in Toronto. The gauge has risen 10 of the last 11 days, and is 0.5 percent below its all-time high of 15,073.13 reached in June 2008. The index is up 10 percent this year.

Energy companies increased 1.7 percent as a group, the biggest jump since August, as an advance by Islamist fighters in Iraq threatened to disrupt world oil supplies.

Legacy Oil & Gas rose 5.8 percent to C$9.71 and Crew Energy added 4.8 percent to C$11.51.

Amaya Gaming jumped 42 percent to C$20 after announcing the $4.9 billion deal to buy PokerStars. The purchase will make Amaya the biggest publicly held online gambling company in the world, the company said.

Pilot Gold lost 8 percent to C$1.50 after saying it would buy Cadillac at a 121 percent premium to its closing price on June 12. Cadillac, which trades on the TSX Venture Exchange, more than doubled to 20 Canadian cents.

Canadian factory sales posted a surprise decline in April, the first drop in four months. Sales fell 0.1 percent to C$50.9 billion, Statistics Canada said. Economists surveyed by Bloomberg predicted a rise of 0.5 percent.

US
By Oliver Renick

June 13 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index paring its first weekly decline in a month, as a rally in Intel Corp. and corporate deals overshadowed concern that violence in Iraq will disrupt oil supplies.

Intel jumped the most in three years after raising its sales forecasts for the second quarter and the full year. Express Inc. surged 21 percent after Sycamore Partners said it plans to buy the clothing chain. Priceline Group Inc. dropped 3 percent after agreeing to buy OpenTable Inc. for $2.6 billion in cash. Citigroup Inc. fell 1.4 percent after the U.S. Justice Department said it will seek $10 billion as part of a probe into mortgage-backed bond sales.

The S&P 500 rose 0.3 percent to 1,936.15 at 4 p.m. in New York, trimming its first weekly slide in a month to 0.7 percent. The equities benchmark nearly erased its gains in the final hour of trading before capping its first advance in four days. The Dow Jones Industrial Average climbed 41.55 points, or 0.3 percent, to 16,775.74. About 5.1 billion shares changed hands on U.S. exchanges today, 18 percent below the three-month average.

“There’s a lot of potential uncertainty surrounding the situation in Iraq,,” Joe Bell, senior equity analyst at Cincinnati-based Schaeffer’s Investment Research Inc., said by phone. “Any time you have conflict around the world, and especially there, where we’ve withdrawn troops from just in the past year, it can cause some nervousness.”

The S&P 500’s gain today halted its longest losing streak in two months. The gauge has advanced 6.6 percent since a low on April 11 as data showed the economy is recovering from the impact of extreme weather earlier this year. It had closed at a record for four straight sessions through June 9.

Islamist fighters in Iraq extended their advance today, entering two northeastern towns as government forces failed to halt an offensive that triggered concern over a civil war and prompted the U.S. not to rule out airstrikes.

The insurgency highlights the risks to oil supply from a nation forecast to provide about 60 percent of OPEC’s output growth for the rest of this decade, the International Energy Agency said.

Investors are also watching data to determine the strength of the world’s largest economy. Reports yesterday on jobless claims and retail sales fell short of estimates.

Wholesale prices in the U.S. unexpectedly fell in May, suggesting demand isn’t robust enough to push inflation closer to the Federal Reserve’s target.

The Thomson Reuters/University of Michigan index of consumer sentiment unexpectedly fell this month from 81.9 in May, a report today indicated.

“I think there’s some consumer fatigue,” Ian Kerrigan, global investment specialist at JP Morgan Private Bank in Seattle, said in a phone interview. “It comes down to how important the consumer is to our economy and if they don’t have that confidence to go out and spend or be employed and have that discretionary income, that definitely has an impact on the recovery.”

The Fed is watching the labor market as it moves to complete a monthly stimulus program late this year. Policy makers meet next week, with a decision on rates and bond buying due June 18. The stimulus has 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 slid 4.4 percent to 12.01. The gauge, known as the VIX, has jumped 12 percent this week.

Nine of the 10 main S&P 500 groups advanced today, with technology stocks rallying behind Intel. An S&P 500 index of semiconductor companies surged 2.9 percent for its 16th gain in the past 17 sessions, leaving it at the highest in 10 years.

Intel jumped 6.8 percent to $29.87, the biggest gain in three years. The world’s largest semiconductor maker raised its second-quarter revenue forecast and said annual sales will increase for the first time since 2011, buoyed by improving business demand for personal computers.

Applied Materials Inc., which manufactures and services semiconductor wafer fabrication equipment, gained 2.9 percent to $22.37, poised for the highest close in almost seven years. Micron Technology Inc., the largest U.S. maker of memory chips, gained 1 percent to $31.17.

“Large companies like Intel have broad geographic coverage, disparate lines of business, so positive news can be a sign that things are good generally,” Lawrence Creatura, Rochester-based portfolio manager at Federated Investors Inc., which oversees $366 billion in assets. “It can help market sentiment.”

Express jumped 21 percent to $16.45. Sycamore Partners told the company’s board it would like to perform due diligence to determine an offer price. Sycamore owns a 9.9 percent stake in Express.

International Game Technology surged 11 percent to $15.86, the highest in three months. The world’s largest maker of slot machines, which has been exploring a sale for two months, has received bids from include lottery operator GTech SpA and billionaire Ron Perelman’s MacAndrews & Forbes Holdings Inc., Reuters reported.

OpenTable rallied 48 percent to $104.48. Priceline, the online travel agent, offered $103 a share, 46 percent above OpenTable’s closing price yesterday. Priceline dropped 2.5 percent to $1,195.61.

Finisar Corp. sank 22 percent to $19.71. The maker of fiber-optic communications devices forecast first-quarter earnings that missed analysts’ estimates.

Citigroup slid 1.4 percent to $47.59 for a fourth day of losses. The Justice Department asked the bank for more than $10 billion to settle a probe into its sale of mortgage-backed bonds in the run up to the 2008 financial crisis, according to a person familiar with the negotiations.
Have a wonderful weekend everyone.

Be magnificent!

In the physical world there is an indestructible continuity of relations

between hot and cold, light and darkness, movement and repose,

as well as between the bass and treble notes of a piano.

This is because opposites do not bring confusion to the world; they bring harmony.

Rabindranath Tagore,1861-1901

As ever,

Carolann

Train yourself to let go of the things you fear to lose.

-George Lucas, 1944-

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