May 12, 2014 Newsletter

Dear Friends,

Tangents:

The guys on Car Talk – terrific show on NPR on Saturday mornings, read this letter to their audience last Saturday.  Applicants to NYU must submit an essay with their applications.

This is an actual essay written by a college applicant to NYU. The author was accepted and is now attending NYU.

3A. IN ORDER FOR THE ADMISSIONS STAFF OF OUR COLLEGE TO GET TO KNOW YOU, THE APPLICANT,  BETTER, WE ASK THAT YOU ANSWER THE FOLLOWING QUESTION: ARE THERE ANY SIGNIFICANT EXPERIENCES YOU HAVE HAD, OR ACCOMPLISHMENTS YOU HAVE REALIZED, THAT HAVE HELPED TO DEFINE YOU AS A PERSON?

I am a dynamic figure, often seen scaling walls and crushing ice. I have been known to remodel train stations on my lunch breaks, making them more efficient in the area of heat retention. I translate ethnic slurs for Cuban refugees, I write award-winning operas, I manage time efficiently.

Occasionally, I tread water for three days in a row.

I woo women with my sensuous and godlike trombone playing, I can pilot bicycles up severe inclines with unflagging speed, and I cook Thirty-Minute Brownies in twenty minutes. I am an expert in stucco, a veteran in love, and an outlaw in Peru.

Using only a hoe and a large glass of water, I once single-handedly defended a small village in the Amazon Basin from a horde of ferocious army ants. I play bluegrass cello, I was scouted by the Mets, I am the subject of numerous documentaries. When I’m bored, I build large suspension bridges in my yard. I enjoy urban hang gliding. On Wednesdays, after school, I repair electrical appliances free of charge.

I am an abstract artist, a concrete analyst, and a ruthless bookie. Critics worldwide swoon over my original line of corduroy evening wear. I don’t perspire. I am a private citizen, yet I receive fan mail. I have been caller number nine and have won the weekend passes. Last summer I toured New Jersey with a traveling centrifugal-force demonstration. I bat 400.

My deft floral arrangements have earned me fame in international botany circles. Children trust me.

I can hurl tennis rackets at small moving objects with deadly accuracy. I once read Paradise Lost, Moby Dick, and David Copperfield in one day and still had time to refurbish an entire dining room that evening. I know the exact location of every food item in the supermarket. I have performed several covert operations with the CIA. I sleep once a week; when I do sleep, I sleep in a chair. While on vacation in Canada, I successfully negotiated with a group of terrorists who had seized a small bakery. The laws of physics do not apply to me.

I balance, I weave, I dodge, I frolic, and my bills are all paid. On weekends, to let off steam, I participate in full-contact origami. Years ago I discovered the meaning of life but forgot to write it down. I have made extraordinary four course meals using only a mouli and a toaster oven.

I breed prizewinning clams. I have won bullfights in San Juan, cliff-diving competitions in Sri Lanka, and spelling bees at the Kremlin.

I have played Hamlet, I have performed open-heart surgery, and I have spoken with Elvis.

But I have not yet gone to college.

Photos of the day

A ‘Maya’ girl sits on an altar during the traditional celebration of ‘Las Mayas’ on a street, in central Madrid, Spain. The festival originates from pagan traditions and dates back to the medieval age, taking place annually at the beginning of May to celebrate the beginning of spring. Daniel Ochoa de Olza/AP

Dark clouds hang over flowers on a dyke at the river Oder near Reitwein, eastern Germany. Patrick Pleul/AP

Market Closes for May 12^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Gerrit De Vynck

May 12 (Bloomberg) — Canadian stocks rose, after their worst weekly drop since June, as rallies in the price of copper and gold boosted mining companies.

Lundin Mining Corp. rose 6 percent and Thompson Creek Metals Company Inc. gained 7.7 percent as copper rose as much as  2.4 percent, the most since December. Valeant Pharmaceuticals International Inc. fell as Allergan Inc. rejected the drugmaker’s unsolicited takeover offer. Canadian Tire Corp. fell 1 percent after Credit Suisse cut the stock to the equivalent of a sell.

The Standard & Poor’s/TSX Composite Index rose 120.88 points, or 0.8 percent, to 14,654.94 at 4 p.m. in Toronto, the largest increase since April 16. Investors are jumping back into the market after being spooked by a sell-off in energy companies last week, said Bruce Campbell fund manager at StoneCastle Investment Management Inc.

“There certainly seemed like there were moments last week of the first little inklings of panic,” he said by phone from Kelowna, British Columbia. His firm manages about C$100 million ($92 million). Today the market is making up for that panicked selling, he said.

Energy companies fell 2.6 percent last week after rising 15 percent from January to the end of April. Mining companies in the Canadian benchmark index rose 1.5 percent as a group today, the most since May 2.

Gold for June delivery rose 0.6 percent to $1,295.80 an ounce after rising as much as 1.3 percent as Russian President Vladimir Putin said he respected the results of referendums in eastern Ukraine which separatists said were in favor of independence.

Copper producers including Lundin, Thompson Creek, Nevada Copper Corp., Western Copper and Gold Corp. and Copper Mountain Mining Corp. all rose at least 6 percent.

Valeant Pharmaceuticals fell 0.7 percent to C$141.98 after Allergan said Valeant’s offer “substantially undervalues” the company. Valeant is trying to buy the Botox producer with the help of Bill Ackman’s Pershing Square Capital Management LP, Allergan’s biggest shareholder.

Canadian Tire fell 1 percent to C$110.19 as Credit Suisse downgraded it. The retailer sold 20 percent of its banking business to Bank of Nova Scotia last week for $500 million in cash.

UrtheCast Corp. fell 9.6 percent to C$1.32 after reporting a first quarter loss of 6 Canadian cents per share. The Vancouver-based space imaging company also released a new photo of Earth today taken from its camera on the International Space Station.

Alliance Grain Traders Inc. rose 4.2 percent to $18.99 after reporting higher first quarter revenue than the same period last year. Alliance Grain Traders processes markets beans, peas and lentils.

Athabasca Oil Corp. dropped 5.6 percent to C$7.28, the most since October, after GMP Securities LP cut its rating on the oil sands producer to hold from buy. The Calgary-based company has risen 12 percent so far this year.

US
By Joseph Ciolli

May 12 (Bloomberg) — U.S. stocks climbed, pushing benchmark indexes to records, after Internet and small-cap shares rallied amid deals activity that boosted confidence in the world’s largest economy.

Salesforce.com Inc. and TripAdvisor Inc. jumped at least 5.8 percent as all 41 members in the Dow Jones Internet Index rose. The gauge surged 3 percent after last week plunging 3.6 percent. 21st Century Fox Inc. jumped 3.1 percent after reports that Rupert Murdoch’s British Sky Broadcasting Group Plc is in talks to buy European pay TV assets from Fox. Pinnacle Foods Inc. surged 13 percent after Hillshire Brands Co. agreed to buy it for about $6.6 billion including debt.

The Standard & Poor’s 500 Index rose 1 percent to 1,896.65 at 4 p.m. in New York, rising above its record from April 2. The Dow Jones Industrial Average added 112.13 points, or 0.7 percent, to 16,695.47, extending an all-time high. The Nasdaq Composite Index surged 1.8 percent, the most since January, to trim its decline this year to 0.8 percent. About 5.7 billion shares changed hands on U.S. exchanges, 13 percent below the three-month average.

“The global economy is accelerating, central banks are dovish, companies are making acquisitions and it’s hard to see what could keep the market down from here,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen.

The S&P 500 has rallied 4.5 percent from an April 11 low, recovering all of its losses after a selloff in technology and small-cap stocks that overshadowed optimism about the strength of the economy. Tech shares in the index jumped 1.5 percent today.

While the Nasdaq has recovered 3.6 percent from its April low, it remains 4.9 percent below a 13-year high in March. Netflix Inc., which fell as much as 31 percent from its record two months ago, rallied 5.1 percent today.

Some of the technology shares hardest hit last week rebounded today. Twitter Inc. added 5.9 percent after falling 18 percent last week, the most since its initial public offering in November. Facebook Inc. rose 4.5 percent following a 5.3 percent drop last week. Yahoo! Inc. gained 2 percent after slumping 8.4 percent last week, the most since September 2011.

“We’re seeing a little bit of a bounce back from some of the stocks that got hit the most over the last couple weeks,” Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview. “We’ve had a big divergence between large cap versus small cap, and growth versus value. If you look at the Russell 2000 and some of the technology or Internet-related stocks, they’ve really taken a pounding.”

About 76 percent of the 453 S&P 500 companies that have released results this earnings season have beaten estimates for profit, while 53 percent have exceeded revenue projections, data compiled by Bloomberg show.

Profit at the companies will probably rise 7.2 percent this year, as sales will climb 4 percent, according to analysts’ estimates compiled by Bloomberg.

Retailers including Macy’s Inc., Kohl’s Corp. and Nordstrom Inc. are among companies scheduled to disclose results this week. Investors will also scrutinize data on retail sales tomorrow.

Data last week showed services, the biggest chunk of the economy, picked up in April while fewer Americans than forecast filed applications for unemployment benefits, a sign the labor market continues to gain traction.

“Profits from the latest quarterly reporting season have exceeded expectations, while the outlook for the U.S. economy looks increasingly positive,” said Richard Hunter, head of equities at Hargreaves Lansdown Plc in London.

Russia indicated it “respects” the results of two disputed referendums in eastern Ukraine, which separatists said backed independence, while the European Union added companies to its list of sanctions for the first time.

Russia praised the high turnout in yesterday’s ballots, according to a statement e-mailed today by President Vladimir Putin’s press service. The U.S. and the EU deem the votes illegal and the government in Kiev called them a “farce.” Donetsk showed 90 percent backing for the breakaway plan, while in Luhansk, 94 percent to 98 percent supported autonomy with turnout at 75 percent, Russia’s state-run RIA Novosti reported.

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, fell 5.34 percent today to 12.23, the lowest level since Jan. 10. The gauge has fallen 43 percent since reaching a two-year high on Feb. 3.

Eight of the 10 main S&P 500 groups advanced today. Producers of raw materials rallied 1.3 percent to pace gains, as Alcoa Inc. gained 4.2 percent. United Technologies Corp. and General Electric Co. rose at least 1.4 percent as industrial shares advanced.

21st Century Fox Class A shares added 3.1 percent to $35.19. BSkyB, 39 percent owned by Fox, said today it’s in talks to buy the Italian and German pay-TV assets of Fox. Such a deal, for control of satellite carriers Sky Italia and Sky Deutschland AG, would be valued at about 10 billion euros ($14 billion), people with knowledge of the matter told Bloomberg News, which reported the talks on May 9. Fox has about 57 percent of Sky Deutschland and 100 percent of Sky Italia.

Hillshire Brands fell 3.2 percent to $35.76. The maker of Jimmy Dean sausages and Sara Lee frozen bakery goods agreed to pay $18 in cash for each Pinnacle Foods share plus 0.5 shares of Hillshire Brands stock, Chicago-based Hillshire and Pinnacle said today in a statement. Pinnacle Foods shares jumped 13 percent to $34.47.

RadioShack Corp. rose 4.5 percent to $1.39. Standard General reported a 9.8 percent stake in the electronics chain, up from a 4.83 percent at the end of December.

RadioShack, which said in March it would close as many as 1,100 locations to cut costs, is proceeding with a plan to shut fewer stores because of a snag with its lender agreements.

Vantiv Inc. gained 3.1 percent to $29.82. The payment- processing company is near a deal to acquire Mercury Payment Systems Inc. for about $1.65 billion, people familiar with the matter said.

Allergan Inc. slipped 1 percent to $159.72. The maker of the Botox wrinkle treatment said Valeant Pharmaceuticals International Inc.’s offer “substantially undervalues” the company. The bid, which valued Allergan at $45.7 billion in cash and stock when it was announced, creates “significant risks and uncertainties” and isn’t in the best interest of shareholders, the Irvine, California-based company said in a statement today.

Have a wonderful evening everyone.

Be magnificent!

If you do not think he is different, he is unique, he exists in his own right,

there cannot be any relationship.

Swami Prajnanpad, 1891-1974

As ever,

Carolann
Things do not change, we do.

-Henry David Thoreau, 1817-1862

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