November 19, 2014 Newsletter

Dear Friends,

Tangents:

Caught the Fleetwood Mac concert in Vancouver last night  – it was a pretty enthused band – with Christine McVie joining again after a stint at retiremen.  And a very appreciative audience to have her back in the band.  It really was a terrific show; Lindsay Buckingham remains as energetic and talented as ever on stage – can he play!  Attached  – Gary and me photographed with  Mick Fleetwood.

This tour runs into 2015 with the last date in the UK on July 1, 2015, so  check out the schedule and if you’re near – or considering travelling to any of the cities where future performances are scheduled, you might want to see if there are still tickets to be had.  I am fond of going to concerts in different cities, especially Madison Square Gardens.  We used our accumulated airline travel rewards and went to Philadelphia for the Stones most recent tour because it was the place we could get the best tickets, not far from the stage, and it was worth it.    

Today is the anniversary of The Gettysburg Address November 1, 1863.  Now, whenever I read what is  regarded to be the greatest speech in American history, I think of Daniel Day Lewis, as I’m sure many do.  He was so amazing in the film Lincoln.  You can still watch Daniel Day Lewis reciting the speech on YouTube.

Fourscore and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty and dedicated to the proposition that all men are created equal…  

PHOTOS OF THE DAY

A man dressed up as the Statue of Liberty walks in front of a new digital advertising screen in Times Square, New York, Tuesday. The screen is a full block long and 8 stories tall. It is lit with 24 million LED pixels and has a higher resolution than most TV sets. The advertising rate is reported at $2.5 million USD for a four-week run, making it one of the most expensive outdoor advertising spaces in the world. Carlo Allegri/Reuters

A robot drives around a line during the International Conference on Humanoid Robots in Madrid. Andrea Comas/Reuters

Market Closes for November 19^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Nov. 19 (Bloomberg) — Canadian stocks were little-changed at a September high, as gains in consumer staples firms and banks offset a slump in gold miners after Federal Reserve officials warned against falling inflation expectations.

     Metro Inc. increased 9.7 percent as same-store sales rose in the grocer’s fourth quarter. Potash Corp. of Saskatchewan Inc. climbed 1.5 percent after analysts at Raymond James recommended the stock. Iamgold Corp. and Torex Gold Resources Inc. slid more than 8.5 percent as gold futures extended declines after the release of Fed meeting minutes. BlackBerry dropped 5 percent after Morgan Stanley cut its rating on the shares.

     The Standard & Poor’s/TSX Composite Index rose 7.18 points, or 0.1 percent, to 14,980.15 at 4 p.m. in Toronto. The Canadian benchmark equity gauge has rallied 8 percent from an Oct. 15 low, and is up 10 percent for the year.

     Eight of the 10 industries in the S&P/TSX rose on trading in line with the 30-day average. Metro surged 9.7 percent to a record C$90.50, the most in the S&P/TSX, as consumer staples stocks advanced 2.6 percent as a group.

     Royal Bank of Canada, the nation’s second-largest lender, rose 0.9 percent to C$82.90, the highest since Sept. 18. Bank of Nova Scotia increased 0.7 percent to C$69.66 for a third day of gains.

     Potash Corp. of Saskatchewan rallied 1.5 percent to C$40.61. The company, which produces the fertilizer, has risen 6.9 percent during its three-day rally. The stock was raised to outperform from market perform at Raymond James by equity analyst Steven Hansen. Shares also gained as work was halted at an OAO Uralkali potash mine in Russia yesterday amid concern the mine will be flooded with brine.                   

     Iamgold slumped 9.5 percent to C$2.49 and Torex Gold sank 8.5 percent to C$1.40 as all 24 members of the S&P/TSX Gold Index declined.

     Fed policy makers said they should be on the lookout for signs of a decline in the public’s expectations for inflation, according to minutes from the central bank’s October meeting released today. The Fed ended its bond-buying program at the gathering.

     BlackBerry, the smartphone maker, sank 5 percent to C$11.56 for a fourth straight day of declines. James Faucette, analyst at Morgan Stanley, cut his rating for the stock to underweight from equalweight.

     Investors have become too optimistic on BlackBerry, as it’s unlikely the company will meet a target of $350 million in new software revenue in 2016 due to a competitive market, Faucette said.

     TransCanada jumped 2.7 percent to C$57.50 as the builder of the stalled Keystone XL pipeline plans to double its dividend growth rate through 2017.

     About $13 billion in small to medium-sized projects scheduled to come online in the next five years will let TransCanada increase its dividend by 8 to 10 percent each year, from 4 percent increases currently, the Calgary-based company said today in a presentation.

     The Keystone XL pipeline is among planned projects. A U.S.Senate effort to force the approval of Keystone came up one vote short yesterday.

US

By Oliver Renick

     Nov. 19 (Bloomberg) — U.S. stocks fell from all-time highs as Federal Reserve minutes showed some members said the central bank should remain attentive to the possibility prices in the economy aren’t rising fast enough.

     Inflation has stagnated despite a strengthening of main labor-market indicators. Policy makers last month “pointed to a somewhat weaker economic outlook and increased downside risks in Europe, China, and Japan,” in addition to a stronger dollar.

     The Standard & Poor’s 500 Index fell 0.2 percent to 2,048.72 as of 4 p.m. in New York, on concern the inflation comments signal pessimism about the economy. The Dow Jones Industrial Average lost 2.1 points, or less than 0.1 percent, to 17,685.73. The Russell 2000 Index of smaller companies retreated 1.1 percent.

     “The Fed is admitting they have no idea where inflation is going long term,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “While I admire their candor, this doesn’t make me want to own stocks this afternoon.”

     Concern economic recoveries from the U.S. to Europe and Japan are failing to spur inflation has been cited by central bankers worldwide as justification for prolonged stimulus efforts. Today’s comments were in contrast from statements by Fed Chair Janet Yellen that the risks had ebbed of price increases holding below policy makers’ goal.                       

     “Many participants observed the committee should remain attentive to evidence of a possible downward shift in longer- term inflation expectations,” according to a record of the Oct. 28-29 Federal Open Market Committee meeting released today in Washington. “Some of them noted that if such an outcome occurred, it would be even more worrisome if growth faltered.”

     The S&P 500 and the Dow have rallied to records as better- than-forecast earnings and data boosted speculation that the economy is strong enough to overcome a global slowdown.

     The benchmark index has rebounded 10 percent from a six- month low in October and is trading at 17 times the projected earnings of its members, the highest multiple since 2009. About 6.3 million shares changed hands Wednesday, 3.6 percent below the three-month average.

     The Chicago Board Options Exchange Volatility Index, the gauge of options prices known as the VIX, added 0.7 percent to 13.96.

     Seven out of 10 main industries in the S&P 500 declined.  Technology and phone shares dropped at least 0.6 percent for the biggest losses. Verizon Communications Inc. retreated 1.4 percent and Microsoft slipped 1.1 percent. Yahoo! Inc. lost 2.3 percent.

     Retailers jumped 1.2 percent as a group amid corporate earnings reports.

     Lowe’s Cos. climbed 6.4 percent to $62.26. The second- largest U.S. home-improvement chain forecast full-year earnings of about $2.68 a share, exceeding its previous prediction and the average analyst estimate of $2.63.

     Target Corp. increased 7.4 percent to $72.50. The retailer posted third-quarter earnings that beat estimates after U.S.sales grew faster than expected and its money-losing expansion into Canada showed signs of improvement.

     Staples added 9.1 percent to $13.92. The world’s largest office-supply chain said earnings will be as much as 32 cents a share in the fourth quarter, beating the 31 cent estimate by analysts.

     “Once we get through Thanksgiving the focus will be on the consumer and retail sales,” KC Mathews, the Kansas City-based chief investment officer at UMB Bank, said by phone. “If you have a good holiday spending season it validates the health of the consumer and sets us up for some momentum in 2015.”

     Jack in the Box Inc. jumped 4.8 to $74.92 percent after the operator of fast-food restaurants across the Western U.S. reported earnings that topped analysts’ estimates.

     Cliff Natural Resources Inc. dropped 20 percent to $8.17.  The company said it is examining exit options for its Eastern Canadian iron ore operations.

Have a wonderful evening everyone.

Be magnificent!

It is only a mind that looks at a tree or the stars or the sparkling waters of a river

with complete abandonment that knows what beauty is,

and when we are actually seeing we are in a state of love.

Krishnamurti

As ever,
 

Carolann

Be kind whenever possible.  It is always possible.

                                                  -Dalai Lama

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