November 18, 2014 Newsletter

Dear Friends,

Tangents:

MY NOVEMBER GUEST

My sorrow, when she’s here with me,
Thinks these dark days of autumn rain
Are beautiful as days can be;
She loves the bare, the withered tree;
She walks the sodden pasture lane…
Not yesterday I learned to know
The love of bare November days
Before the coming of the snow
But it were vain to tell her so,
And they are better for her praise.

                       -Robert Frost

If you are out to describe the truth, leave elegance to the tailor. –Albert Einstein.

Mickey Mouse was born on this day in 1928.

PHOTOS OF THE DAY

Swans are caught in a small lock after being rounded up from Hamburg’s lake Alster. Every year the swans are collected from waterways and taken to winter quarters where they are fed and cared for until spring. Fabian Bimmer/Reuters

A foal (r.) walks toward a mare as fog covers the landscape during an autumn sunrise in Ezquiroz, northern Spain. Alvaro Barrientos/AP

Market Closes for November 18^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Nov. 18 (Bloomberg) — Canadian stocks rose a third day, with the benchmark index closing at the highest level since September, as gold producers rallied to the highest level this month.

     Centerra Gold Inc. and Argonaut Gold Inc. surged at least 15 percent as an index of gold miners jumped 5.6 percent. Valeant Pharmaceuticals International Inc. climbed 3.9 percent after receiving regulatory approval for a saline breast implant. Chemtrade Logistics Income Fund dropped 2.6 percent after deciding to sell shares to pay down debt.

     The Standard & Poor’s/TSX Composite Index rose 90.47 points, or 0.6 percent, to 14,972.97 at 4 p.m. in Toronto, the highest since Sept. 29. The benchmark Canadian equity gauge has advanced in nine of the past 10 sessions and rallied 8 percent from an Oct. 15 low.

     Eight of the 10 industries in the S&P/TSX advanced on trading volume 9.7 percent below the 30-day average. Materials producers surged 3.5 percent, while Valeant led health-care shares to a 3.2 percent gain.

     All of the 24 members of the S&P/TSX Gold Index rallied as the group increased for a third day, the longest stretch of gains since August. The group has surged 25 percent since Nov. 5. Gold surged to a two-week high today, topping $1,200 an ounce after Russia added to reserves.

     Centerra Gold jumped 17 percent to C$5.99 and Argonaut Gold rallied 15 percent to C$2.50.

     Bank of Nova Scotia added 0.6 percent to C$69.17 and Manulife Financial Corp. rose 0.4 percent to C$21.91 as financial stocks increased for a fifth day, the longest rally since July.

     Valeant jumped 3.9 percent to C$160.42, the highest level since March. Valeant has surged for seven days, the longest rally since January 2013. The drugmaker yesterday ended its pursuit of Allergan Inc. after Actavis Plc successfully bid $66 billion for the company.

US

By Callie Bost and Oliver Renick

     Nov. 18 (Bloomberg) — U.S. stocks rose, sending benchmark indexes to all-time highs, as health-care and raw-material companies rallied amid speculation the economy is strong enough to overcome a global slowdown.

     Medtronic Inc. and Actavis Plc rallied more than 4.7 percent to pace gains among health-care companies. Urban Outfitters Inc. dropped 6.6 percent after the clothing retailer posted third-quarter profit that missed analyst estimates. Home Depot Inc. slipped 2.1 percent after failing to raise its forecasts for sales and profit this year amid signs the housing market is cooling.

     The Standard & Poor’s 500 Index rose 0.5 percent to 2,051.80 at 4 p.m. in New York, for its biggest gain since Nov. 5. The Dow Jones Industrial Average increased 40.07 points, or 0.2 percent, to 17,687.82. Both gauges closed at records. The Russell 2000 Index of small-cap shares added 0.5 percent. About 6.1 billion shares changed hands on U.S. exchanges, 5.4 percent below the three-month average.

     “Consumer and investor sentiment is pretty positive at the moment,” Omar Aguilar, the San Francisco-based chief investment officer of equities at Charles Schwab Investment Management, said by phone. “We continue to see M&A as the topic of the day and U.S. economic data is suggesting really good stability.”

     The S&P 500 has rallied to records as better-than-expected earnings and economic data have increased confidence that the U.S. economy is able to weather a global slowdown even as the Federal Reserve winds down its stimulus program.

     The equity benchmark has rebounded 10 percent from a six- month low in October and is trading at 17.1 times the projected earnings of its members, the highest multiple since 2009. JPMorgan Chase & Co. yesterday told investors to dump U.S. equities in favor of their European counterparts because of relative valuations.                      

     The S&P 500 closed the past five days with a move of less than 0.1 percent in either direction, while volatility plunged from a two-year high last month to its 12-month average. The Chicago Board Options Exchange Volatility Index fell 0.9 percent to 13.86 today.

     The Russell 2000 gained after dropping as much as 1.9 percent from a four-month high on Nov. 12. The measure slipped 0.8 percent yesterday as concern over a recession in Japan offset corporate deals.

     “Whether that’s a sign of strength or a bounce-back rally from the weakness we’ve seen, it’s still too early to tell,” Bruce McCain, who helps oversee in excess of $25 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said by phone. “People are still biased towards moving money into equities and you’ve seen that flow prevent any meaningful corrections throughout the year.”

     Investors are watching reports on data from inflation to hiring and economic growth to determine the timing of any Fed interest rate increase. The Fed releases minutes from its Oct. 29 meeting tomorrow.

     Data today showed wholesale prices unexpectedly increased in October as higher costs for services and food outweighed a slump in energy.

     Nine out of 10 industries in the S&P 500 increased today. Health-care companies jumped 1.6 percent, while raw-material producers climbed 1.1 percent. Newmont Mining Corp. added 3.4 percent as gold advanced to a two-week high.

     Actavis rose 8.7 percent, the most in the S&P 500, to a record $269.60. The company advanced 1.7 percent yesterday after agreeing to pay about $66 billion for Allergan Inc., the maker of the anti-wrinkle treatment Botox, in the year’s biggest pharmaceutical deal.

     Medtronic jumped 4.7 percent to a record $72.47. The chance of a repeal of a medical-device tax “looks better than before, but we’ll see,” the company said on a conference call today. Medtronic also increased the lower end of its annual revenue estimate.

     Covidien Plc, which is being acquired by Medtronic, climbed 3.7 percent. UnitedHealth Group Inc. rose 1.8 percent, the most in the Dow.

     Intel Corp. surged 1.4 percent. The company is merging its mobile phone and tablet businesses with the division that makes chips for personal computers. The reorganization of the two units, which have been running at a loss, announced internally, will be completed early next year, Chuck Mulloy, a spokesman for the Santa Clara, California-based chipmaker, said yesterday.

     Urban Outfitters dropped 6.6 percent. The clothing retailer reported third-quarter earnings of 35 cents a share, below the 41 cents a share analysts estimated.

     Home Depot slid 2.1 percent. The largest U.S. home- improvement retailer reiterated its expectations for profit and revenue in the current fiscal year amid slowing gains in domestic home prices and sales.

Have a wonderful evening everyone.

Be magnificent!

To reach cosmic understanding,

it is necessary to unite our feeling with that infinite feeling that penetrates everything.

In fact, for man, true progress coincides with the breadth of the base of our feelings.

All our poetry, philosophy, science, art, and religion

serve to embrace with our understanding

the spheres too vast and high.

Rabindranath Tagore

As ever,

Carolann

A man who limits his interests, limits his life.

                       -Vincent Price, 1911-1993

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