October 3, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be writing the newsletter on her behalf.

This past weekend,  I was lucky enough to marry my best friend. With the wedding came a lot of advice from friends and family as to how to have a happy successful marriage, so I thought I would share the advice with you!

1)    Respect each other’s views at all times.

2)    Listen to one another.

3)    Give priority to your spouse over everything else in your life.

4)    Sincerely say “I love you” often.

5)    Take time out and spend a few moments together–just the two of you alone.

6)    Talk graciously to each other about your thoughts–especially things for the two of you to agree upon or do together

7)    Cook for each other, and show that you appreciate the thoughtfulness and the food.

8)    Don’t forget to do the little things that make each of you smile and feel loved.

9)    Be patient with each other as much as possible.

10)    Make sure your partner knows how much you appreciate the little every day things they do, like doing the washing up or making the bed.

“A successful marriage requires falling in love many times, always with the same person.” – Mignon McLaughlin

Also on this Day:

1955 – “The Mickey Mouse Club” premiered on ABC-TV.

1962 – The Sigma VII blasted off from Cape Canaveral for a nine-hour flight.

1988 – The space shuttle Discovery landed safely after its four-day mission. It was the first American shuttle mission since the Challenger disaster. .

1990 – The Berlin Wall was dismantled eleven months after the borders between East and West Germany were dissolved. The unification of Germany ended 45 years of division.

2001 – ESPN began its 10th season of National Hockey League (NHL) coverage.

2006 – The Dow Jones industrial average closed at a new high ending the day at 11,727.34. Earlier in the session, the Dow had risen to 11,758.95. Both previous records had been set on January 14, 2000.

“We must use time wisely and forever realize that the time is always ripe to do right.” – Nelson Mandela

Photos of the Day, October 3^rd:

Indians dressed in traditional attire practice Garba, a form of dance from the west Indian state of Gujarat, to celebrate the upcoming festival of Navratri, in Ahmadabad, India. Navratri, which literally means nine nights, is the festival when nine different forms of goddess Durga are worshiped on consecutive nights. Ajit Solanki/AP

The crescent moon over the mountains is visible from Highway 178, east of Bakersfield, Calif. Casey Christie/The Bakersfield Californian/AP

Market Closes for October 3^rd, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Oct. 3 (Bloomberg) — Canadian stocks fell, sending the benchmark index to a three-week low, as BlackBerry Ltd. slumped and the U.S. government shutdown extended to a third day.

BlackBerry, the smartphone maker looking to sell itself, lost 3.6 percent to pace declines among technology stocks.

WestJet Airlines Ltd. dropped 2.5 percent as load factor slipped in September. Valeant Pharmaceuticals International Inc. rose 1.4 percent after receiving approvals for products in the U.S. and Canada. Agrium Inc. added 0.7 percent after naming a successor for its retiring chief executive officer.

The Standard & Poor’s/TSX Composite Index fell 103.88 points, or 0.8 percent, to 12,735.12 at 4 p.m. in Toronto, the lowest close since Sept. 13. The index has gained 2.4 percent this year for the second-worst performance among developed markets, ahead of only Singapore.

“Markets are in a wait-and-see approach to see what’s happening in the U.S. and that really determines what happens in Canada,” said Anish Chopra, fund manager with TD Asset Management Inc. in Toronto. His firm manages about C$216 billion ($209 billion). “In the past they’ve been able to get to last- minute deals. In this case it might be more of a comprehensive package that includes the debt ceiling. The problem is the ceiling may not be exactly Oct. 17, it could be later and that’s a long way away.”

The first face-to-face talks between U.S. President Barack Obama and congressional leaders failed to break the budget logjam as a partial U.S. government shutdown entered its third day. The Oval Office meeting yesterday evening ended with both sides reiterating their positions and the points they’ve been making for days, increasing the possibility for a prolonged standoff over the government shutdown and raising the U.S. debt limit.

WestJet declined 2.5 percent to C$25.41 as industrial stocks retreated 0.9 percent as a group. Nine of 10 industries in the S&P/TSX fell. Trading volume was in line with the 30-day average.

WestJet, based in Calgary, reported a September load factor of 76.6 percent, compared with a record 79.1 percent in the same period last year, the company said in a statement. Load factor is a measure of airline efficiency relative to capacity.

BlackBerry dropped 3.6 percent to C$7.97, the lowest close in almost a year. Pierre Ferragu, analyst with Sanford C. Bernstein, cut hi rating for the stock to underperform, the equivalent of a sell.

Fairfax Financial Holdings Ltd., which has a tentative $4.7 billion offer in place for the struggling smartphone maker, is unlikely to get financing, as BlackBerry’s cash position is worse than expected, Ferragu said.

Imax Corp., the big-screen cinema company, slumped 8.7 percent to C$26.77, the worst decline since July 2011. Analyst David McFadgen of Cormark Securities Inc. lowered his rating for the stock to reduce, the equivalent of sell. Imax has jumped 20 percent this year.

Suncor Energy Inc. slipped 1.3 percent to C$36.32 and Talisman Energy Inc. lost 2.3 percent to C$12.52 as crude fell for a third day this week on concern the U.S. government shutdown will reduce fuel demand.

Valeant Pharmaceuticals gained 1.4 percent to C$114.91, a record high, after the drugmaker’s Bausch and Lomb unit won approval from the U.S. Food and Drug Administration for a monthly disposable contact lens product.

Valeant also secured regulatory approval in Canada for a topical treatment of nail infections caused by fungi.

Agrium, the largest U.S. farm products retailer, added 0.7 percent to C$88.87. The company named Chuck Magro, currently chief operating officer, as the successor to CEO Mike Wilson, effective at the beginning of next year. Wilson plans to retire at the end of the year after 10 years as CEO.

US

By Michael P. Regan and Alex Barinka

Oct. 3 (Bloomberg) — U.S. stocks tumbled as concern grew that a political impasse in Washington over the budget could lead to a recession. Treasuries gained, reversing losses, while gold pared an earlier slide.

The Standard & Poor’s 500 Index fell 0.9 percent to 1,678.66 at 4 p.m. in New York, trimming a loss of as much as 1.4 percent. Trading was about 6 percent higher than the 30-day average. Ten-year Treasury yields decreased one basis point to 2.61 percent after rising three points earlier, while the cost of insuring the debt climbed to an eight-month high. Gold fell for the third time in for days on concern demand is ebbing in China, while the MSCI Emerging Markets Index advanced 0.8 percent as growth in China’s service industries improved.

As a partial government shutdown entered a third day, the Treasury Department warned that a federal default could lead to a recession as bad as the 2008 financial crisis or worse.

President Barack Obama urged House Speaker John Boehner to hold a vote on funding federal operations without strings attached, saying the Republican’s refusal to do so is the only thing standing in the way of reopening of the government. The Institute for Supply Management’s U.S. non-manufacturing index fell to 54.4 last month, below the median economist estimate of 57.

“What we are starting to realize today especially is that this might go on for a while,” Mike Sorrentino, who helps oversee about $3 billion as chief strategist at Global Financial Private Capital LLC, said by phone from Sarasota, Florida. “The debt ceiling is a cause for concern. If we can get through that and we can get through the dysfunction with this government, there will be a much safer road ahead.”

Stocks recovered from their lows of the session after the New York Times reported that House Speaker John Boehner, an Ohio Republican, told colleagues he’s willing to pass bill to avoid default with combination of Republican and Democratic votes. The Times cited an unidentified House Republican.

The government will run out of borrowing authority Oct. 17, according to the Treasury, leaving only cash to pay the bills. A U.S. default caused by Congress failing to raise the $16.7 trillion federal debt limit could have catastrophic consequences that might last decades, Treasury said in a report today.

“Not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation,” the Treasury said in the report.

“In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth — with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression,” the department said in the report.

Another report today showed fewer Americans than forecast filed applications for unemployment benefits last week. Jobless claims rose by 1,000 to 308,000 in the week ended Sept. 28, from a revised 307,000, the Labor Department said. The median forecast of 50 economists surveyed by Bloomberg called for a rise to 315,000.

Gauges of utility, industrial and technology stocks lost at least 1 percent to lead declines in all 10 of the main industry groups in the S&P 500. Boeing Co., Chevron Corp. and DuPont Co. fell at least 2 percent to lead declines in 29 of 30 stocks in the Dow Jones Industrial Average.

Eli Lilly & Co. dropped 3.4 percent after saying it would be “challenging” for the drugmaker to meet its 2014 sales target. United Technologies Corp., a supplier of helicopters and jet engines to the military, retreated 1.2 percent after saying the shutdown would lead to as many as 5,000 temporary layoffs.

The Chicago Board Options Exchange Volatility Index, the benchmark gauge of options prices known as the VIX, jumped 6.4 percent to 17.67, the highest level since June.

The yield on 10-year Treasury notes has retreated from a high for the year of 3.005 percent on Sept. 6. The 10-year average is 3.53 percent.

The cost of insuring against losses on Treasuries rose, with credit-default swaps linked to U.S. government debt increasing almost seven basis points to 42 basis points, the highest since February. That compares with a peak of 56 basis points in July 2011, when a political standoff threatened to shutter programs and delay bond payments.

The amount of debt protected by default swaps has fallen to $3.4 billion dollars from $5.6 billion two years ago and compares with $13 billion of outstanding insurance on German bunds. There are 886 credit-default swaps contracts linked to U.S debt outstanding, according to the Depository Trust & Clearing Corp. There were 56 trades covering a gross $2.1 billion of Treasuries in the week through Sept. 27, compared with 10 trades the week before.

Spain’s 10-year bond yield was little changed at 4.24 percent after jumping six basis points earlier. The government sold 1.18 billion euros ($1.6 billion) of 2023 bonds priced to yield 4.269 percent, the lowest since Sept. 10. Italy’s yield increased one basis point to 4.37 percent.

The dollar weakened against 10 of 16 major peers and the Bloomberg U.S. Dollar Index, a measure of the currency against 10 others, fell for a fifth straight day.

West Texas Intermediate oil slipped 0.8 percent to $103.31 a barrel. Copper, silver and nickel slid at least 0.7 percent to lead the S&P GSCI Index of commodities lower, while soybeans, lean hogs and coffee rose at least 0.8 percent. Gold futures slipped 0.2 percent to $1,317.60 an ounce after losing as much as 1.4 percent.

The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong climbed 1.8 percent, the most in three weeks, as China’s non-manufacturing index rose to the highest level since March last month, according to the National Bureau of Statistics and Federation of Logistics and Purchasing.

The non-manufacturing purchasing managers’ index rose to 55.4 in September from 53.9 in August, the report showed. A number more than 50 indicates an expansion. Benchmark equity gauges in Taiwan, India and Thailand added at least 1.4 percent.

The ringgit climbed 1 percent versus the dollar and the rupee strengthened 1.2 percent.

The Philippine peso advanced 0.7 percent and the main stock index added 0.4 percent, after falling as much as 0.9 percent.

Moody’s Investors Service upgraded the country’s debt rating to investment grade and said the outlook is positive. The yield on the government’s dollar debt due January 2021 fell six basis points to 3.37 percent.

Trading volume for shares in the Stoxx 600 was 11 percent below the 30-day average as Germany marked the German Unity Day holiday.

Finmeccanica SpA, Italy’s largest arms company, climbed 3 percent as Banca Akros upgraded the shares. The stock has rallied 14 percent this week.

Have a wonderful evening everyone!

Be magnificent!

“Education is the most powerful weapon which you can use to change the world.” – Nelson Mandela

As ever,

Amanda Bourke

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: 778-430-5838