October 1, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.  As the Thanksgiving weekend is approaching, many people have begun making plans with family and friends for the big turkey dinner! It is always nice to pair a delicious wine with the Thanksgiving feast.  According to an article in the Globe and Mail, here are a few examples of the best wines to toast a turkey with!

Cambria Julia’s Vineyard Pinot Noir 2009 (California)

This is a Pinot from California. It has a cinnoman taste behind the fruit with also a hint of dark chocolate. It is a very nice wine for turkey, with or without cranberry sauce.

San Pio Valpolicella Ripasso Classico Superiore 2010 (Italy)

This wine has a very fruity taste with a smooth texture, complemented by herbs and black pepper.

Château des Charmes Aligoté 2010 (Ontario)

This type of wine is light and medium bodied. It is dry and crisp, with flavours of green apple, orange and pear, with an almost spritzy finish.

Produttori Vini Manduria Riserva Salice Salentino 2008 (Italy)

This wine is southern-Italian red, it has a dark fruit and chocolate flavour set against juicy acidity and subtle spice. It would pair well with turkey or a lamb roast.

Sandhill Chardonnay 2010 (British Columbia)

This a medium-bodied and well-balanced wine. This white wine carries flavours of peach, lightly toasted oak and subtle brown butter with a fresh, lime acidity.

Enjoy!

Today in History:

1908 – The Model T automobile was introduced by Henry Ford. The purchase price of the car was $850.

1933 – Babe Ruth made his final pitching appearance. He pitched all nine innings and hit a home run in the 5th inning.

1962 – Johnny Carson began hosting the “Tonight” show on NBC-TV. He stayed with the show for 29 years. Jack Paar was the previous host.

1964 – The Free Speech Movement was started at the University of California at Berkeley.

1971 – Walt Disney World opened in Orlando, FL.

1994 – The U.S. and Japan avoided a trade war by reaching a series of trade agreements

“Challenges are what make life interesting and overcoming them is what makes life meaningful” – Joshua J. Marine

Photos of the Day:

The sun rises over Washington DC. Kevin Lamarque/Reuters

People board a US-made car, used as a private collective taxi, as it rains in Havana September 30th. Collective taxis, also known as “almendron” (big nutshell), have established routes around or near Havana, picking up and dropping off passengers along the way. Desmond Boylan/Reuters

Market Closes for October 1^st, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Oct. 1 (Bloomberg) — Canadian stocks rose, after the biggest quarterly advance in a year, as investors speculated the impact of the first U.S. government shutdown in 17 years would be limited.

Air Canada increased 3.4 percent to pace gains among industrial stocks. Valeant Pharmaceuticals International Inc. climbed 3.2 percent after one of its units agreed to a licensing deal for a skin product. Airboss of America Corp. surged 9.1 percent after agreeing to acquire Flexible Products Co. Semafo Inc. and Barrick Gold Corp. dropped more than 3.4 percent as the price of gold slumped below $1,300 to a seven-week low.

The Standard & Poor’s/TSX Composite Index rose 38.63 points, or 0.3 percent, to 12,825.82 at 2:05 p.m. in Toronto. The index rallied 5.4 percent in the last quarter, the best quarterly gain in a year. Trading volume was 19 percent higher than the 30-day average today.

“Part of it may be the market has priced in a short shutdown of the U.S. government, but if it’s extended and you run into the debt impasse as well it could get messy,” said Irwin Michael, portfolio manager with ABC Funds in Toronto. The firm manages about C$800 million ($775 million). “I’m a little surprised New York and Toronto are up because gold is down over $35 but the banks are up, so that may be a bit of an antidote. Investors want to get through one roadblock at a time so hopefully the shutdown will be short.”

The U.S. government started a shutdown that will idle as many as 800,000 federal workers as Republicans and Democrats failed to negotiate a resolution over spending legislation.

Congress now faces a dispute over raising the $16.7 trillion debt ceiling this month. The Treasury has said measures to avoid exceeding the borrowing limit will be exhausted on Oct. 17.

“It would be political suicide for the Republicans to risk being seen as pushing the shutdown beyond October,” said Avery Shenfeld, chief economist with CIBC World Markets, in a note to clients. “Markets could still become more fretful if we actually cross the debt ceiling deadline, but ultimately any market moves would be reversed as the crisis passed.”

National Bank of Canada gained 0.7 percent to C$85.69 and Bank of Montreal rose 0.6 percent to C$69.14. The S&P/TSX Financials Index added 0.4 percent, headed for the highest close in more than five years.

Pacific Rubiales Energy Corp. climbed 4.5 percent to C$21.25 and Talisman Energy Inc. increased 3.6 percent to C$12.25 as energy stocks headed for the highest closing level since July.

Crude for November delivery slipped 1 percent to $101.29 a barrel in New York for a third day of declines.

“Crude remains above $100. Oil companies will do quite well in this environment if you believe the economy is slowly improving,” Michael said.

Encana Corp. rose 1.2 percent to C$18.01 after restructuring its senior management team. Greg Pardy, analyst with Royal Bank of Canada, said in a note the changes are “positive” as establishing senior leadership is important to Encana’s game plan.

Valeant Pharmaceuticals jumped 3.2 percent to C$110.83, a record high, after unit Obagi Medical Products said yesterday it has acquired a global exclusive license to market a skin lightening compound from Sirona Biochem Corp.

Air Canada, the top-performing stock in the S&P/TSX this year, climbed 3.4 percent to C$3.65 as industrial shares added 1.3 percent as a group. Air Canada, the nation’s largest airline, has jumped 109 percent this year.

Airboss, a rubber-based products maker, soared 9.1 percent to C$7.19, the highest since July 2011. The company said yesterday it will acquire Flexible Products in a deal worth about $51 million.

Semafo sank 8.9 percent to C$2.26 and Barrick Gold retreated 3.4 percent to C$18.61 as gold for December delivery tumbled 3 percent to $1,286.80 an ounce in New York. Gold has slumped 24 percent this year, headed for the first annual loss since 2000.

US

By Claudia Carpenter and Nikolaj Gammeltoft

Oct. 1 (Bloomberg) — Stocks rebounded from yesterday’s slide as investors speculated the economic impact from the shutdown of the U.S. government will be limited and counteracted by Federal Reserve stimulus. Treasuries fell as gold tumbled and the dollar recovered from early losses.

The Standard & Poor’s 500 Index advanced 0.8 percent to 1,695.02 at 4 p.m. in New York after the benchmark index retreated 2.6 percent from its last record on Sept. 18. The S&P GSCI gauge of 24 commodities declined 0.5 percent as precious and industrial metals led losses, with gold futures tumbling 3.1 percent to $1,286.10 an ounce. Treasury 10-year yields rose three basis points to 2.64 percent. The Bloomberg U.S. Dollar Index recovered from an early decline to trade little changed.

Congress’s failure to pass a budget closed the government for the first time in 17 years, setting the stage for a debate on raising the U.S. debt ceiling within three weeks. The Bank of Japan’s Tankan survey on business confidence rose to the highest level in almost six years. A report on U.S. manufacturing showed faster-than-forecast growth and factory output in the 17-nation euro area expanded for a third month.

“The Fed is looking at this too and seeing how it may hurt economic growth, so their tapering plans are getting delayed,” Thomas Nyheim, a Wilmington, Delaware-based fund manager for Christiana Trust, which oversees about $16.6 billion, said by phone. “That would be a positive for stocks.”

The partial shutdown will put as many as 800,000 federal employees out of work today, halting some government services after Congress failed to break a partisan deadlock.  A government shutdown or failure to raise the debt limit “could have very serious consequences” for the economy and policy makers will have to take that into account, Fed Chairman Ben S. Bernanke said Sept. 18 after the central bank unexpectedly refrained from reducing its bond purchases.

An extended government stoppage may prevent the release of jobs data on Oct. 4 that is closely watched for clues to Fed policy.

The standoff that may be a buying opportunity for stock investors, if history is any guide. The S&P 500 has risen 11 percent on average in the 12 months following past government shutdowns, according to data compiled by Bloomberg on instances since 1976. That compares with an average return of 9 percent over 12 months. In all the cases, the U.S. equity benchmark was higher by the end of the next two years.

The S&P 500 rebounded today after falling in seven of the previous eight sessions and closing at the lowest level since Sept. 9 yesterday. The benchmark gauge rose 4.7 percent last quarter and closed at a record of 1,725.52 on Sept. 18. The MSCI All-Country World Index of global shares dropped 0.8 percent yesterday, the most since Aug. 27, to trim its quarterly gain to 7.4 percent.

Among stocks moving in the U.S., Merck & Co. jumped 2.4 percent after the company announced an overhaul that will eliminate 8,500 workers. Walgreen Co. rose 4.5 percent as profit increased 86 percent after its customer-loyalty card boosted sales. Under Armour Inc. increased 4.1 percent as JPMorgan Chase & Co. upgraded the maker of workout clothing. Ford Motor Co. added 1.9 percent after posting a surprise sales gain in September.

The Institute for Supply Management’s index unexpectedly rose to 56.2, the strongest since April 2011, from 55.7 a month earlier. Readings above 50 indicate growth. The median forecast in a Bloomberg survey of economists was 55.

The Stoxx Europe 600 Index rose 0.8 percent after falling to the lowest level in almost three weeks yesterday. Telecom Italia SpA advanced 5.2 percent after surging a similar amount yesterday amid speculation Chief Executive Officer Franco Bernabe will resign. Goldman Sachs Group Inc. reinstated coverage of the phone company with a buy recommendation.

Unilever slid 2.8 percent after the second-largest consumer- goods maker said sales growth slowed in the last quarter.

In Japan, confidence among large manufacturers rose to the highest level since the early stages of the global credit crisis in 2007, with the quarterly Tankan index for big manufacturers rising to 12 in September from 4 in June, the BOJ said today. Euro-area manufacturing was 51.1 in September compared with 51.4 in August, London-based Market Economics said today. A reading above 50 indicates growth.

The dollar recovered after falling to the weakest level in 19 months against the Swiss franc, trading up 0.1 percent at 90.55 centimes after reaching 89.93. The U.S. currency was little changed at $1.3531 per euro after sliding to $1.3588, the weakest since Feb. 6. The pound erased almost all of this year’s 8.9 percent decline against the greenback and the yen strengthened 0.4 percent to 97.83 per dollar.

The Aussie surged 0.9 percent to 93.98 U.S. cents. Sweden’s krona jumped as a report showed manufacturing expanded at the fastest pace in more than two years.

Spain’s 10-year bond yield fell 13 basis points to 4.17 percent and Portugal’s dropped nine basis points to 6.59 percent.

The MSCI Emerging Markets Index rose 0.7 percent, increasing for the first time in six days after capping its first quarterly gain this year.

The Borsa Istanbul National 100 Index climbed 2.7 percent, the biggest gain in emerging markets, and Turkey’s two-year benchmark notes snapped six days of losses while the lira strengthened. The nation’s manufacturing PMI rose to 54 last month from 50.9 in August, according to data from HSBC Holdings Plc and Markit Economics today.

Indonesia’s JCI Index added 0.7 percent after the country reported an unexpected trade surplus in August, compared with the forecast $810 million deficit in a Bloomberg survey.

Gold, lead, silver and zinc each lost more than 2 percent to lead declines in 18 of the 24 commodities tracked by the S&P GSCI Index. Crude oil fell 0.3 percent to $102.04 a barrel in New York, the lowest level in almost three months. A government report tomorrow may show crude supplies rose last week as refineries idled units for seasonal maintenance, according to a Bloomberg survey.

Have a wonderful evening everyone.

Be magnificent!

“Seven Deadly Sins
Wealth without work
Pleasure without conscience
Science without humanity
Knowledge without character
Politics without principle
Commerce without morality
Worship without sacrifice.”
― Mahatma Gandhi

As ever,

Karen Parnham

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5828