October 23, 2014 Newsletter

Dear Friends,

Tangents:

Caught Gordon Lightfoot’s concert at the Royal last night….he’s performing  a second show there  tonight and there are apparently still a few tickets available. He is in Vancouver on Saturday night as the Canadian part of his tour takes off.  What an amazing talent he is – such a prolific songwriter and musician.  A living legend really.  Gary used to play guitar with some bandmates in bars and coffee houses during medical school to try to make some money and they were big fans of Lightfoot – his music composing most of their repertoire and so, I’ve listened to him play guitar and sing mostly Lightfoot all our married years together.   So when I read he was going to be touring, I was on the phone as soon as the ticket office opened.  Glad I did – it was a memorable evening.  It’s amazing that at 75 years old, Lightfoot can effortlessly remember all the lyrics still.

  We learned recently that one of the guys Gary grew up with – who became a really successful commercial developer in Ontario and always kept in touch with us, visiting Victoria with his wife and kids , has been recently diagnosed with beginning stage of Alzheimer’s at the prime of his life.   Forgetting things etc. led to the diagnosis.  So, I wanted to share something with you that I came across recently:

Low Vitamin D and Dementia

  Low vitamin D is associated with an increased risk of Alzheimer’s disease and other forms of dementia, according to a new report, though whether low vitamin D is a cause of the disorders remains unknown.

  The scientists measured blood levels of vitamin D in 1,658 men and women with an average age of 73 (Gary’s friend is much younger than this) and without dementia at the start of the study.  Over an average follow-up of more than five years, 171 developed dementia.

  The study, published online in the journal Neurology, controlled for many dementia risk factors, including age, education, sex, body mass index, smoking, alcohol use, diabetes and hypertension.  It found that compared with those who had vitamin D levels of 50 or more nanomoles per liter, those with levels of 25 to 50 had a 53 percent increased risk for Alzheimer’s.  People with readings of 25 or less were more than twice as likely to have Alzheimer’s or another form of dementia.

  There is little agreement on the ideal vitamin D level,  but according to the National Institutes of Health, levels below 50 are inadequate.

  “These are exciting and suggestive results, but they’re only observational,” said a co-author, Iain A. Lang, a senior lecturer at the University of Exeter in England.

  “We can’t say anything about whether people should be supplementing, because that’s beyond the scope of what we looked at.”

PHOTOS OF THE DAY

Tenements housing mostly fishermen’s families are illuminated with lights to celebrate Diwali in Mumbai, India. Diwali, the festival of lights, is one of Hinduism’s most important festivals dedicated to the worship of Lakshmi, the Hindu goddess of wealth. Rafiq Maqbool/AP

A shopping cart presentation is among Judith Scott’s cocoon-like sculptures installed at the Brooklyn Museum in New York. Scott, who is a deaf mute, and who was born with Down syndrome, was in her 40’s when she began creating intricate sculptures of yarn, fabric, and other fibers tightly wrapped around an array of found objects. The exhibition opens Friday and runs through March 29. Bebeto Matthews/AP

Market Closes for October 23^rd, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Oct. 23 (Bloomberg) — Canadian stocks rallied, after slumping the most in 16 months yesterday amid a shooting in the nation’s capital, as energy producers rebounded with oil.

     Penn West Petroleum Ltd. climbed 3.4 percent after agreeing to sell non-core assets to a private company. Bankers Petroleum Ltd. and Surge Energy Inc. jumped at least 3.6 percent as energy shares rallied more than 2 percent as a group. Bombardier Inc. and Air Canada surged more than 3.7 percent to pace gains among industrial shares. Rogers Communications Inc. lost 1.5 percent after posting third-quarter earnings that fell short of expectations.

     The Standard & Poor’s/TSX Composite Index climbed 174.76 points, or 1.2 percent, to 14,486.83 at 4 p.m. in Toronto. The Canadian benchmark equity gauge plunged 1.6 percent yesterday, halting a four-day advance, after a shooting on Parliament Hill in Ottawa that left two people dead.

     Trading volume today was 2.8 percent below the 30-day average, according to data compiled by Bloomberg.

     The S&P/TSX trades at 18.4 times reported earnings, down from a peak of 21 set in June, according to data compiled by Bloomberg.

     Nine of the 10 main groups in the equity benchmark advanced, led by energy and industrial shares.

     Penn West Petroleum climbed 3.4 percent to C$5.50 after agreeing to sell assets in south central Alberta to an unidentified private company for about C$355 million. The assets currently produce about 7,500 barrels of oil equivalent a day.

     Cenovus Energy Inc. jumped 6.5 percent to C$27.97, its biggest ever increase, after the company’s third-quarter earnings beat analysts’ estimates, helped by added oil-sands production.

     Bankers Petroleum gained 4.3 percent to C$4.64 and Surge Energy rose 3.6 percent to C$6.57. The S&P/TSX Energy Index added 2.1 percent.

     West Texas Intermediate rose from a two-year low and Brent crude advanced the most in four months. Saudi Arabia, the world’s largest crude exporter, cut September supply to clients by 328,000 barrels a day to 9.36 million, according to a person familiar with the country’s policy.

US

By Callie Bost

     Oct. 23 (Bloomberg) — U.S. stocks rallied, recovering from yesterday’s loss, as earnings from Caterpillar Inc. to 3M Co. exceeded analysts’ estimates and data signaled stronger growth in the European economy.

     Benchmark indexes pared gains following a New York Post report that a doctor who had been treating Ebola patients in Africa was rushed to a New York hospital with symptoms of the virus. The paper cited unnamed sources.

     Caterpillar, the largest construction equipment maker, added 5 percent after raising its full-year earnings forecast amid higher sales of construction machinery in North America. 3M climbed 4.4 percent as the maker of Post-it notes boosted sales in all of its businesses. Tractor Supply Co. surged 16 percent, the most in the Standard & Poor’s 500 Index, after increasing its profit forecast. Amazon.com Inc. sank 10 percent in late trading after its earnings and forecast missed estimates.

     The S&P 500 gained 1.2 percent to 1,950.82 at 4 p.m. in New York after earlier surging as much as 1.8 percent. The index recouped losses from yesterday, when it slid 0.7 percent. The Dow Jones Industrial Average increased 216.58 points, or 1.3 percent, to 16,677.9 today, erasing its loss for the year. The Nasdaq Composite Index advanced 1.6 percent.

     “We’re seeing some peace here in earnings and better macro data, which is helping to fuel investor confidence,” Alan Gayle, who helps oversee $45 billion as director of asset allocation for RidgeWorth Investments in Atlanta, said by phone. “That trend in jobless claims suggests we are going to see another good job increase for October.”

     The S&P 500 has risen five times in the past six days, pushing the gauge up 4.7 percent since Oct. 15 and recouping about half the losses from a selloff that began in mid- September. The equity benchmark is still down 3 percent from a record.

     Economic data today suggested the euro-area economy may have moved one step away from another recession. A Purchasing Managers’ Index showed manufacturing in the region unexpectedly grew this month, while Spain’s economy showed signs of a further recovery, with third-quarter unemployment dropping to the lowest level since 2011. In Germany, factories rebounded from a slump in September.

     Fewer Americans filed applications for unemployment benefits over the past month than at any time in 14 years as an improving economy prompted employers to hold on to staff. The four-week average of jobless claims, a less-volatile measure than the weekly figure, dropped to 281,000, the lowest since May 2000, from 284,000 the week before, a Labor Department report showed.

    The Chicago Board Options Exchange Volatility Index dropped 7.5 percent to 16.53. About 7.1 billion shares changed hands on U.S. exchanges, 13 percent higher than the three-month average.

     Eight of 10 main industries in the S&P 500 rose. Industrials jumped 2.2 percent, while energy shares advanced 1.8 percent. Phone companies slid 1.2 percent.

     Caterpillar rallied 5 percent to $99.27. The improvement in office and commercial construction in North America, and the gradual pickup in residential activity, is boosting demand for the company’s excavators and bulldozers.

     “The Caterpillar earnings were really good,” Joe “JJ” Kinahan, chief strategist at TD Ameritrade Holding Corp., which oversees $666 billion in client assets, said in a phone interview. “It’s hard not to be optimistic on this market if we close above 1,950. If we get above 1,950, we’re in general striking distance of all-time highs again.”

     3M increased 4.4 percent to $145.05. Since taking over in 2012, Chief Executive Officer Inge Thulin has emphasized international growth that now accounts for about two-thirds of sales. Revenue rose in all units, led by a 4.7 percent gain in the health-care business.

     Tractor Supply soared 16 percent to $71. The farm supplies retailer reported higher-than-estimated earnings and analysts at Raymond James Financial Inc. told clients to buy the shares.

     Parker Hannifin Corp. surged 6.6 percent to $116.39. The company yesterday boosted its quarterly dividend and announced plans to buy back as many as 35 million shares. The stock has increased 11 percent since Oct. 17, poised for the biggest weekly gain in three years.

     Alibaba Group Holding Ltd. jumped 3.1 percent to $94.45, an all-time high. Shares of the Chinese e-commerce company have climbed 39 percent since it raised a record $25 billion in an initial public offering last month.

     Yelp Inc. plunged 19 percent to $57.17, the biggest drop since the company went public in 2012. The local-reviews company said yesterday that fourth-quarter revenue would be $107 million to $108 million, below the $111 million estimated on average by analysts, according to data compiled by Bloomberg.

     AT&T Inc. slumped 2.4 percent to $33.66. The second-largest U.S. wireless carrier missed profit estimates and cut its sales forecast for 2014 as promotions and price cuts took a toll.

     Amazon.com sank 11 percent to $279.87 in late trading. The company forecast sales and profit for the holiday quarter that missed analysts’ projections, underlining the limits to Chief Executive Officer Jeff Bezos’s strategy of spending big to fuel growth. The stock was little changed during the regular session.

     “The fundamental focus is on earnings,” Leo Grohowski, chief investment officer at New York-based BNY Mellon Wealth Management, which oversees about $187 billion, said in a phone interview. “The bigger picture fear of global growth slowdown is going to remain with us. That’s going to prevent any meaningful market appreciation. Investors should be prepared for a choppy ride.”

Have a wonderful evening everyone.

Be magnificent!

True civilization does not mean congregating in cities and living a foolish life,

but going Godward, controlling the senses, and thus becoming the ruler in this house of the Self.

Swami Vivekananda

As ever,

Carolann

Roots are not in landscape or a country, or a people, they are inside you.

                                                                -Isabel Allende, 1942-

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