November 21, 2013 Newsletter

Dear Friends,

Tangents:

To Autumn

Season of mists and mellow fruitfulness,

Close bosom-friend of the maturing sun,

Conspiring with him how to load and bless

With fruit the vines that round the thatch-eaves run;

To bend with apples the mossed cottage-trees,

And fill all fruit with ripeness to the core;

To swell the gourd, and plump the hazel shells

With a sweet kernel; to set budding more,

And still more, later flowers for the bees,

Until they think warm days will never cease,

For Summer has o’er-brimmed their clammy cells.

Who hath not seen the oft amid they store?

Sometimes whoever seeks abroad may find

Thee sitting careless on a granary floor,

Thy hair soft-lifted by the winnowing wind;

Or on a  half-reaped furrow sound asleep,

Drowsed with the fume of poppies, while thy hook

Spared the next swath and all its twined flowers;

And sometimes like a gleaner thou dost keep

Steady thy laden head across a brook;

Or by a cider-press, with a patient look,

Thou watchest the last oozing hours by hours.

Where are the songs of Spring?  Ay, where are they?

Think not of them, thou hast thy music too-

While barred clouds bloom the soft-dying day,

And touch the stubble-plains with rosy hue:

Then in a wailful choir the small gnats  mourn

Among the river sallows, borne aloft

Or sinking as the light wind lives or dies;

And full-grown lambs loud bleat from hilly bourn;

Hedge-crickets sing; and now with treble soft

The re-breast whistles from a garden-croft;

And gathering swallows twitter in the skies.

-John Keats

Photos of the day

Smoke billows from a new island off the coast of Nishinoshima (l.) a small, uninhabited island in the Ogasawara chain, far south of Tokyo The Japan Coast Guard and earthquake experts said a volcanic eruption has raised the new island in the seas to the far south of Tokyo. The coast guard issued an advisory Wednesday warning of heavy black smoke from the eruption. Kyodo News/AP

Students of the Japanese martial art Ninjutsu perform during training inside the Tijuca forest in Rio de Janeiro, November 20. Ninjitsu training, practiced by the shinobi also known as ninjas, involve unconventional warfare tactics, team infiltration and camouflage. Pilar Olivares/Reuters

Market Closes for November 21^st, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Nov. 21 (Bloomberg) — Canadian stocks rose, snapping three days of losses, as gains among oil producers overshadowed a decline in gold prices amid speculation the Federal Reserve will trim asset purchases in coming months.

Whitecap Resources Inc. and Crew Energy Inc. climbed at least 3.5 percent as crude surged the most in seven weeks.

Detour Gold Corp. and Rio Alto Mining Ltd. lost more than 7.6 percent as the price of gold tumbled. Gildan Activewear Inc. retreated 3.3 percent after 2014 forecasts fell short of analysts’ estimates. Lightstream Resources Ltd. sank 7.9 percent after announcing a dividend cut and reduced capital spending.

The Standard & Poor’s/TSX Composite Index climbed 45.32 points, or 0.3 percent, to 13,475.33 at 4 p.m. in Toronto. The benchmark equity gauge has risen 8.4 percent this year, the third-worst performer among the world’s developed markets, ahead of Hong Kong and Singapore.

“Today is a bounce-back from the down days that we’ve had,” said John Kinsey, a fund manager with Caldwell Securities Ltd., said from Toronto. The firm manages about C$1 billion ($952 million). “Yesterday was a knee-jerk reaction to the Fed minutes. Energy seems to be pretty solid here.”

U.S. policy makers expect economic data will signal further improvement in the labor market and “warrant trimming the pace” of bond purchases in coming months, according to minutes from the Fed’s October meeting released yesterday. Stocks have rallied this year, bolstered by the Fed’s $85 billion in monthly asset purchases.

Whitecap Resources rallied 5.5 percent to C$12.36 and Crew Energy increased 3.5 percent to C$5.61 to pace gains among energy stocks. Nine of 10 industries advanced in the S&P/TSX on trading volume 13 percent above the 30-day average at this time of the day.

Crude for January delivery climbed 1.7 percent to $95.44 a barrel in New York, after a report showed jobless claims in the U.S. fell by 21,000 to 323,000 last week.

Bombardier Inc., the world’s third-largest plane maker, advanced 0.4 percent to C$4.68 after the planemaker said it had received firm orders and commitments for as many as 38 aircraft worth up to $2.01 billion at the Dubai airshow.

Air Canada, the nation’s largest airline, climbed 4.5 percent to C$6.98, the highest since June 2008. The stock is the top performer in Canada this year with a 299 percent advance.

Detour Gold declined 9 percent to C$4.44 and Rio Alto Mining retreated 7.6 percent to C$1.58 as gold for December delivery tumbled 1.1 percent to $1,243.60 an ounce in New York, the lowest since July 9.

Endeavour Silver Corp. lost 0.7 percent to C$4.11 and Silvercorp Metals Inc. fell 0.7 percent to C$2.71 as silver prices declined for a second day.

Gildan Activewear slipped 3.3 percent to C$49.60, for its biggest loss since February. The clothing maker forecast first- quarter earnings of 33 cents to 35 cents a share, short of analysts’ estimates for 41 cents.

Gildan also reported fourth-quarter adjusted earnings of 83 cents a share, trailing analysts’ projections of 84 cents.

Lightstream Resources, an oil exploration and production company, tumbled 7.9 percent to C$5.57, a record low. The company said it will reduce its 2014 capital spending program by about 25 percent from estimated 2013 levels, and targeted more than C$600 million in non-core asset sales by the end of 2015.

The company also cut its dividend 50 percent to 4 Canadian cents a month, for annual cash savings of C$40 million a year.

USA

By Nick Taborek

Nov. 21 (Bloomberg) — U.S. stocks rose, sending the Dow Jones Industrial Average to its first close above 16,000, as data showed improvement in the job market and companies including Union Pacific Corp., Johnson Controls Inc. and Ace Ltd. said they would repurchase shares.

Union Pacific, Johnson Controls and Ace advanced at least 1.4 percent. Micron Technology Inc. rallied 6.3 percent, the most since August, as David Einhorn, president of Greenlight Capital Inc., recommended the shares. General Motors Co. gained 1.1 percent after the U.S. Treasury Department said it plans to sell its remaining stake in the company. Target Corp. lost 3.5 percent after reporting profit that trailed analysts’ estimates on a loss in its Canadian unit.

The Standard & Poor’s 500 Index increased 0.8 percent to 1,795.85 at 4 p.m. in New York, erasing most of the decline from the past three days. The Dow average rose 109.17 points, or 0.7 percent, to a record 16,009.60.

“After three consecutive negative days it’s reasonable to expect a breather at least in the beginning of the day,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $364 billion, said in a phone interview. “There is some good news in the labor report too in that it does indicate a degree of improvement.”

Investors are pouring more money into stock mutual funds in the U.S. than they have in 13 years, attracted by a market near record highs and stung by bond losses that would deepen if interest rates rise. Stock funds won $172 billion in the year’s first 10 months, the largest amount since they got $272 billion in all of 2000, according to Morningstar Inc. estimates.

The move marks a reversal from the four years through 2012, when investors put $1 trillion into fixed income as the financial crisis drove many to redeem from stocks and miss out as the S&P 500 almost tripled from its low. The U.S. equity benchmark traded for about 17 times its companies’ reported earnings at its last record on Nov. 15, the highest valuation since May 2010.

The S&P 500 rose above 1,800 for the first time on Nov. 18 before erasing the advance. The equity benchmark dropped during the first three days of the week after forecasts from Best Buy Co. and Campbell Soup Co. disappointed investors and minutes from a Federal Reserve meeting indicated the central bank may reduce monetary stimulus in coming months.

U.S. jobless claims in the week ended Nov. 16 dropped by 21,000 to 323,000, the fewest since the week ended Sept. 28, from a revised 344,000 the previous week, the Labor Department said today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for a drop to 335,000.

American consumers became less pessimistic in November about the economic outlook as the effect of last month’s partial government shutdown dissipated, according to data from the Bloomberg Consumer Comfort Index released. The gap between positive and negative expectations for the economy shrank to minus 14 from a two-year low of minus 31 in October.

Financial stocks in the S&P 500 collectively climbed 1.5 percent, the most among 10 main groups. Ace, an insurer with operations in more than 50 nations, led gains in the industry with a 3.8 percent advance to $101.53. The company said that it is targeting $1.5 billion in share repurchases through the end of next year.

Johnson Controls, the largest U.S. auto-parts maker, climbed 4.4 percent to $50.35 after boosting a stock-repurchase program by $3 billion. Union Pacific Corp. added 1.4 percent to $160.78. The largest U.S. railroad authorized a buyback plan of as much as $9.5 billion in stock.

GM increased 1.1 percent to $38.12. The Treasury said it plans to sell its 31.1 million common shares in the company, as soon as year end depending on market conditions and trading volumes. The wind-down of the U.S. stake in GM would bring to an end a linchpin of the government’s Troubled Asset Relief Program.

Target dropped 3.5 percent to $64.19. The second-largest discount retailer in the U.S. is generating lower sales in Canada than projected as rivals cut prices. Earnings slid to 54 cents a share, from 96 cents a share a year earlier, the company said.

Green Mountain Coffee Roasters Inc. jumped 14 percent to $70.57. The maker of Keurig-brand single-cup pods and machines reported fourth-quarter profit that surpassed analysts’ estimates as K-Cup and brewer sales rose. Excluding some items, the company reported profit of 89 cents a share. Analysts estimated 75 cents, on average.

Micron rallied 6.3 percent to $19.99 for the biggest gain in the S&P 500. Einhorn told investors to buy the shares at the Robin Hood Investors Conference today, according to a person with knowledge of the matter, who asked not to be identified because the presentation was private and closed to media.

Williams-Sonoma Inc. gained 7.6 percent to $59.74. The home accessories retailer raised its profit forecast after same-store sales rose faster than analysts’ estimated in the third-quarter.

Philip Morris International Inc. fell 3 percent to $86.60.

Goldman Sachs Group Inc. cut its rating on the shares. The world’s largest publicly traded tobacco company said yesterday that fewer shipments to Europe and Russia will crimp profit growth.

GameStop Corp. lost 6.9 percent to $48.80. The video game retailer forecast fourth-quarter profit below analysts’ estimates.

Dollar Tree Inc. fell 4.5 percent to $56.28. The retailer reported third-quarter profit that fell short of analysts’ estimates and lowered the top end its full-year revenue forecast.

Have a wonderful evening everyone.

Be magnificent!

In the song of the rushing torrent,

hold onto the joyful assurance:

I will become the sea.

And this is not a vain supposition;

it is absolute humility, because it is the truth.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

Do not pray for easy lives.

Pray to be stronger men.

-John F. Kennedy, 1917-1963

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