November 12, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.

11/12/13, marks the second to last sequential number for calendar dates, with the last one being 12/13/14.  Aziz Inan, professor of electrical engineering at the University of Portland says that sequential dates are rare.  Each century contains 12 sequential calendar dates, with the first being 01/02/03 and the last one 12/13/14.  December 13^th, 2014 will mark the last sequential calendar date in the 21^st century.  Here’s a couple interesting facts to leave you with:

1. It is the 316th day of the year in the Gregorian calendar. There are 49 days remaining until the end of the year.

2. David’s Bridal estimates that more than 3,000 couples will get married on 11/12/13; compared to Nov. 11 of last year, that’s a 722 percent increase.

“Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship.” Buddha

Photos of the Day:

Students from the Brazilian Santa Claus school throw their hats into the air, during their graduation ceremony in Rio de Janeiro. The school provides lessons in Santa-training, teaching Christmas carols, how to interact with children, and also how to wear the heavy red suit in Rio’s typical 104-degree F. summer weather. Pilar Olivares/Reuters

Mylene Paquette of Canada celebrates as she arrives at Lorient harbor, France. Paquette reached Brittany after more than 140 days at sea, to become the first North American woman to row solo across the Atlantic. Stephane Mahe

Market Closes for November 12^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Nov. 12 (Bloomberg) — Canadian stocks fell a second day as raw-material and energy producers slumped after copper dropped and crude prices tumbled to a five-month low.

BlackPearl Resources Inc. and Legacy Oil & Gas Inc. lost at least 1 percent as the price of crude declined for the first time in three days on rising U.S. inventory forecasts. Air Canada, the best-performing Canadian stock this year, climbed 4.6 percent for a fourth day of gains. Teck Resources Ltd. and Lundin Mining Corp. dropped more than 2.6 percent as copper prices slid.

The Standard & Poor’s/TSX Composite Index fell 32.35 points, or 0.2 percent, to 13,326.04 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 7.2 percent this year, the third-worst performance among global developed markets, ahead of Hong Kong and Singapore.

“People are staying away from taking drastic positions before the year-end,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. The firm manages about C$220 million. “There’s a lot of different views developing on what tapering will look like from the Fed, so more people are talking about tapering in December. A lot of people are clearly watching for that.”

Global equities have rallied this year as the U.S. Federal Reserve refrained from curbing its $85 billion in monthly asset purchases. Economists forecast the central bank will delay tapering its asset purchases until March.

Bonterra Energy Corp. lost 3.6 percent to C$54.95, the most since April, after the company reported third-quarter production declined 6.6 percent compared with the previous quarter.

BlackPearl Resources lost 1 percent to C$1.91 and Legacy Oil & Gas retreated 3.4 percent to C$6.53 as crude for December delivery declined 2.2 percent to $93.04 in New York, the lowest since May 31.

Bombardier Inc., the world’s third-largest planemaker, dropped 2.4 percent to C$4.53 for a second day of losses. The stock sank 10 percent on Oct. 31 for the biggest decline in more than four years after posting a quarterly profit that missed analysts’ estimates.

Wi-Lan Inc. rose 3 percent to C$3.44 and CGI Group Inc. added 2.7 percent to C$37.11 as technology stocks added 1.1 percent as a group in the S&P/TSX.

Six of 10 industries advanced in the benchmark Canadian equity gauge on trading volume in line with the 30-day average.

National Bank of Canada added 1.1 percent to C$92.52, a record high, to pace gains among Canada’s largest lenders.

Air Canada, the nation’s largest airline, increased 4.6 percent to C$6.90, extending a five-year high. The stock has surged 27 percent in the past four days. The carrier reported third-quarter profit on Nov. 8 that beat analysts’ estimates amid progress in its cost-cutting plan.

Air Canada is the top-performing stock in the S&P/TSX this year with a 294 percent gain.

Teck Resources, the nation’s largest diversified miner, dropped 2.6 percent to C$27.34 and Lundin Mining retreated 2.8 percent to C$4.58 as copper fell in New York. Output in China, the world’s largest user of the metal, increased 23 percent in October to a monthly record.

US

By Aubrey Pringle

Nov. 12 (Bloomberg) — U.S. stocks fell, with the Dow Jones Industrial Average retreating from a record, as corporate earnings and an improving economy fueled speculation the Federal Reserve will reduce stimulus next month.

NRG Energy Inc. slipped 3.5 percent after the power generator lowered its 2013 adjusted earnings target. News Corp. dropped 1.6 percent as the publisher of the Wall Street Journal reported a decline in revenue. Dish Network Corp. rose 6 percent as the second-largest U.S. satellite-television provider’s earnings exceeded estimates.

The Standard & Poor’s 500 Index fell 0.2 percent to 1,767.69 at 4 p.m. in New York, after closing yesterday within a point of its all-time high. The Dow lost 32.43 points, or 0.2 percent, to 15,750.67. About 5.9 billion shares changed hands on U.S. exchanges today, 2.9 percent below the three-month average.

“The jobs report Friday, that’s really what changed the idea that we could have a December taper, and ever since then you’ve had more and more comments coming out of the Fed that perhaps it is on the table,” James Paulsen, the Minneapolis- based chief investment strategist at Wells Capital Management, which oversees about $340 billion, said in a phone interview.

“Last night it was Fisher and now Lockhart. What he came out and said today isn’t earth-shattering but it does add to the momentum to the idea.”

The S&P 500 and the Dow Jones Industrial Average have touched records this quarter as the Fed refrained from curbing its $85 billion in monthly asset purchases, while better-than- forecast data and corporate earnings indicate the economy may be strong enough to withstand less stimulus.

“Some discussion of tapering could well take place” next month, Fed Bank of Atlanta President Dennis Lockhart said today in a Bloomberg Radio interview with Kathleen Hays. Dallas Fed President Richard Fisher said in a speech in Melbourne today that monetary accommodation “becomes riskier by the day.”

Economists forecast the central bank will delay tapering asset purchases until the March 18-19 meeting. Policy makers will probably pare the monthly pace of bond buying to $70 billion at that time, according to the median of 32 estimates in a Bloomberg survey Nov. 8. The group next meets Dec. 17-18.

Investors will scrutinize economic reports this week on jobless-benefit claims and manufacturing in the New York area.

Data last week showed the U.S. economy grew faster than forecast in the third quarter and hiring rose more than estimated in October. There was no data yesterday and the U.S. Treasury markets were closed for the Veterans Day holiday.

The market may get some insight into Fed thinking when Vice Chairman Janet Yellen testifies before the Senate Banking Committee Nov. 14 during her confirmation hearing to succeed Ben S. Bernanke as chairman.

The Fed support has helped propel the S&P 500 higher by more than 160 percent from its March 2009 low. The gauge has rallied 24 percent so far in 2013, poised for its best year in a decade, and is trading at 16 times projected earnings, more than the five-year average of 14 times earnings, according to data compiled by Bloomberg.

“A lot of U.S. financial firms will start to close their books for the year now after this decent performance,” said Ioan Smith, a market strategist at KCG Europe Ltd. in London.

“If you’ve had good returns and you outperformed, how much more are you going to get this year? There is a big argument to lock in what gains you’ve got given the risk-reward is not conducive of any significant gains from these levels.”

Some 13 members of the S&P 500 reported earnings today.

Seventy-four percent of the 450 companies that have released results so far have beaten analysts’ estimates, according to data compiled by Bloomberg.

“It was a good earnings season, it definitely helped the market,” Richard Sichel, chief investment officer at Philadelphia Trust Co., said by phone. He helps oversee $1.9 billion.

The Chicago Board Options Exchange Volatility Index, which measures future volatility signaled by S&P 500 options, rose 2.3 percent to 12.82.

Six of 10 main S&P 500 groups retreated, with utility and financial stocks sliding at least 0.9 percent to pace losses.

Travelers Cos. dropped 1.7 percent to $86.44 for the steepest slide in the Dow.

NRG fell 3.5 to $27.06, the lowest in two months. The power generator lowered the upper end of its 2013 adjusted earnings range and cut its 2014 target.

Energy companies retreated 0.9 percent as a group. Cliffs Natural Resources Inc., an iron ore miner, lost 4 percent to $26.27, for the biggest slide in the S&P 500. Peabody Energy Corp., a coal miner, slid 2.9 percent to $20.18.

News Corp. slid 1.6 percent to $17.15 as the publisher reported a 2.8 percent decline in first-quarter revenue, hurt by shrinking demand for print advertising. The news division, which owns papers in the U.S., the U.K. and Australia, saw revenue fall 10 percent to $1.5 billion.

Liberty Global Plc, the European cable operator owned by John Malone, fell 1.1 percent to $78.58. The company is in talks to acquire Intel Corp.’s online pay-TV service under development, according to three people with knowledge of the situation. Malone would use Intel’s system outside the U.S., said one of the people, who asked not to be identified because the talks are private.

Dean Foods Co. fell 7.7 percent to $18.20 after the company lowered its full year earnings forecast. Dallas-based Dean said dairy commodity prices remain high, creating a more challenging environment than previously thought. The milk producer also said it will start paying a dividend of 7 cents in the first quarter.

Hologic Inc. sank 10 percent to $20.51, the biggest drop since May 2010. The X-ray company’s 2014 forecasts for sales and adjusted revenues fell short of analysts’ estimates as the company sees “headwinds.” At least four research firms cut Hologic’s stock to the equivalent of a hold rating.

Sarepta Therapeutics Inc. plunged 64 percent to $13.16, the lowest since September 2012. U.S. regulators indicated more data may be needed before the company files a new drug application for its experimental treatment for Duchenne muscular dystrophy.

Sarepta has no products on the market. The stock had climbed 42 percent this year through yesterday.

Xerox Corp. rose 4 percent to $10.69 for its largest increase in a month. The printer and photocopier pioneer predicted that 2014 earnings may grow more than analysts estimate, as business services account for a bigger chunk of its revenue.

Dish Network climbed 6 percent to $50.35, the highest since May 2000. The satellite-television provider reported third- quarter profit that exceeded estimates after luring more customers away from cable companies. Chairman Charlie Ergen, who made a failed attempt to acquire Sprint Corp. earlier this year, said buying Sprint’s smaller rival T-Mobile US Inc. isn’t “off the table.”

D.R. Horton Inc. gained 4.7 percent to $18.91, the biggest gain in the S&P 500. The largest U.S. homebuilder by revenue reported a higher quarterly profit as it increased prices amid a nationwide housing recovery.

The Bloomberg U.S. Airlines Index added 2.5 percent for the highest close since April 2007. Delta Air Lines Inc. rose 2.4 percent to $28.12. Carriers are benefiting as jet fuel prices retreat from an eight-month high against diesel amid rising output and the lowest seasonal demand in more than two decades.

US Airways Group Inc. added 1.1 percent to $23.52. The carrier and American Airlines reached an agreement with the U.S. Justice Department over the government’s bid to block their merger, clearing the way to a tie-up that would create the world’s biggest carrier.

The airlines must give up slots at Washington Ronald Reagan National Airport and New York’s LaGuardia Airport under a proposed settlement. AMR Corp., American’s parent company that is in bankruptcy, rose 26 percent to $12 in over-the-counter trading.

Have a wonderful evening everyone.

Be magnificent!

“We gain strength, and courage, and confidence by each experience in which we really stop to look fear in the face… we must do that which we think we cannot.” – Eleanor Roosevelt

As ever,

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7