October 27, 2014 Newsletter

Dear Friends,

Tangents:

I will be writing the Newsletter on Carolann’s behalf as she is away. 

PHOTOS OF THE DAY

A man dressed as a woman, carries a pig’s head on a platter balanced on his head during the celebration of “Torovenado,” in honor of Masaya’s patron saint, San Jeronimo, in Masaya, Nicaragua, Sunday. The “Torovenado” is a satirical dance festival that ridicules social and political characters since the early years of the Spanish conquest. Esteban Felix/AP

Andy Murray and Tommy Robredo play at the ATP 500 World Tour Valencia Open tennis tournament at the agora building of the Ciudad de las Artes y las Ciencias in Valencia, Spain, Sunday. Alberto Saiz/AP

Market Closes for October 27^th, 2014    

International Markets

Bonds

Currencies

Commodities

 Market Commentary:

Canada

By Joseph Ciolli and Eric Lam

     Oct. 27 (Bloomberg) — Canadian stocks fell, snapping a two-day gain, as commodity producers sank with the price of oil as Goldman Sachs Group Inc. joined other banks in lowering price forecasts.

     Energy stocks decreased the most in the benchmark index as Bankers Petroleum Ltd. and Calfrac Well Services Ltd. sank at least 8 percent. Materials producers declined, with Fortuna Silver Mines Inc. and Argonaut Gold Inc. slipping more than 4.5 percent amid falling gold and silver prices. Precision Drilling Corp. dropped to a more than 15-month low after reporting third- quarter sales that fell short of analyst estimates.

     The Standard & Poor’s/TSX Composite Index decreased 74.82 points, or 0.5 percent, to 14,469 at 4 p.m. in Toronto. The gauge has rallied 6.2 percent this year.

     Four of the 10 industries in the benchmark Canadian equity gauge declined today. Energy producers plunged 2.1 percent as Brent crude fell for a second day and West Texas Intermediate traded near a June 2012 low after Goldman Sachs lowered its price forecast amid concern supplies are outpacing demand.

     The S&P/TSX Gold Index fell 1.6 percent for a fourth drop in five days, as gold futures settled 0.2 percent lower. Argonaut Gold decreased 4.6 percent to C$3.15, while Barrick Gold Corp. fell 1.5 percent to C$14.96. Fortuna Silver Mines slumped 6.9 percent to C$4.88, the most in a month, as silver lost 0.1 percent in New York.

     Canaccord Genuity Group Inc. plunged 8.1 percent to C$8.85 for a third decline in four days. The financial services company has slumped 21 percent in October for a third monthly decline, the worst streak in two years.

     Valeant Pharmaceuticals International Inc. rose 1.1 percent to C$146.84, the highest in a month, after the drugmaker said it’s prepared to raise its hostile takeover bid for Allergan Inc. to at least $200 a share.

US

By Lu Wang

     Oct. 27 (Bloomberg) — The speed of the rebound in U.S. stocks from the biggest selloff in three years is giving  Laszlo Birinyi confidence in his forecast for the Standard & Poor’s 500 Index to reach 2,100 by year-end.

     The benchmark gauge jumped 5.5 percent over the eight days through Oct. 24, recouping about 70 percent of its losses over the previous 27 days, data compiled by Bloomberg show. Since March 2009, declines of 5 percent or more have lasted 26 days and it took median 24 days to fully recover from the retreats, the data show.

     Leading the rebound are Caterpillar Inc., 3M Co. and Delta Air Lines Inc., companies whose earnings are more tied to economic expansion. To Birinyi, president of Birinyi Associates Inc. and one of the earliest bulls of the 5 1/2-year bull market, those gains signal genuine investment, not just short sellers buying back stock they’d borrowed and sold.

     “I was surprised by the intensity of the rally,” Birinyi said in a phone interview on Oct. 24. “If you look at stocks like 3M, Caterpillar, the market is saying that maybe we finally reach the tipping point of real growth, instead of tepid growth.

It’s not just the social network and some of the other stocks which are more speculative.”

     “These are real investors, rather than just somebody trying to cover their short,” he said. “That’s encouraging.”

The S&P 500 last week rallied the most since January 2013, halting a four-week slide amid better-than-estimated earnings and data signaling a strengthening economy. Shares of Peoria, Illinois-based Caterpillar jumped 4.6 percent last week, while 3M, based in St Paul, Minnesota, surged 8.1 percent.

     U.S. stocks fell today, with the S&P 500 slipping 0.2 percent to 1,961.63 at 4 p.m. in New York, as lower oil prices weighed on energy producers.

     The Dow Jones Transportation Average added 0.7 percent today, posting its ninth gain in 10 days. Airline stocks rallied in the past two weeks as Delta, American Airlines and United Airlines beat profit estimates with a boost from higher fares and falling fuel prices.

     Concerns that Europe will slip into a recession just as Federal Reserve bond buying ends sent the S&P 500 down 7.4 percent from an all-time high of 2,011.36 in mid-September.Speculation that Ebola is spreading, concern about the health of the global economy and selling by hedge funds drove the Chicago Board Options Exchange Volatility Index above 26 on Oct. 15, a two-year high.

     Birinyi said that while he wasn’t sure about the reason for the selloff, his firm didn’t cut equity holdings. His year-end forecast for the S&P 500 represents about a 7 percent gain from the recent levels.

     “Sometimes you just have to take a rest,” Birinyi said. “We never stopped being bullish. I’ve felt all along this is going to be a very strong, very long bull market, and it’s even longer perhaps than I would have expected.”

Have a wonderful evening everyone.

“If you want to be found, stand where the seeker seeks.” – Sidney Lanier

Be magnificent!

“The excellence of a gift lies in its appropriateness rather than its value.” – Charles Dudley Warner

As ever,

 Brianna

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7