October 4, 2013 Newsletter

Dear Friends,

Tangents:

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

The Greater Vancouver International Film Festival is running this year between September 26 and October 11.  The festival brings more than 340 films from 70 countries for audiences to view.  The Greater Vancouver International Film Festival Society was founded in 1982 as a non-profit cultural society whose flagship event is the Vancouver International Film Festival (VIFF), which takes place in early autumn in venues in and around downtown Vancouver. The festival has grown to become one of the five largest in North America, with a focus on documentaries and cinema from Canada and East Asia. Outside East Asia, no festival screens a wider selection of films from that region. If you are interested in attending the festival, tickets can be purchased online through the festival website at http://www.viff.org/.  Enjoy everyone!

Today in History:

1535 – The first complete English translation of the Bible was printed in Zurich, Switzerland.

1648 – The first volunteer fire department was established in New York by Peter Stuyvesant.

1881 – Edward Leveaux received a patent for the player piano.

1895 – The first U.S. Open golf tournament took place in Newport, RI. Horace Rawlins, 19 years old, won the tournament.

1909 – The first airship race in the U.S. took place in St. Louis, MO.

1915 – The Dinosaur National Monument was established. The area covered part of Utah andColorado.

1927 – The first actual work of carving began on Mount Rushmore. 

“You are never too old to set another goal or to dream a new dream.” – C. S. Lewis

Photos of the Day:

A decorated elephant stands at the Nandankanan Zoological park on the outskirts of the eastern Indian city of Bhubaneswar, India, Friday, Oct. 4, 2013. Wild life week is celebrated in India from October 2 to 8. Biswaranjan Rout/AP

Vehicles drive along the M54 Yenisei Federal Highway near the Yenisei River during sunset outside Russia’s Siberian city of Krasnoyarsk, October 3rd. Ilya Naymushin/Reuters

Market Closes for October 4^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Cordell Eddings and John Detrixhe

The Canadian dollar fell against the majority of its most-traded peers this week as investors awaited the outcome of the U.S.’s budget standoff and Canadian crude oil prices dropped relative to a U.S. benchmark.

The currency rose versus its U.S. counterpart today as risk appetite improved on optimism that lawmakers in Washington would reach a deal to end its partial government shutdown and avoid a federal-debt default. The U.S. is Canada’s biggest trade partner. The price spread between Western Canada Select oil and West Texas Intermediate increased.

“The overall growth impact of the U.S. government shutdown is a factor” for the Canadian dollar, Camilla Sutton, head of currency strategy at Bank of Nova Scotia, said by phone from Toronto. “The pricing of oil has moved against the Canadian dollar.”

The loonie, nicknamed for the image of the aquatic bird on the C$1 coin, appreciated 0.4 percent to C$1.0294 per U.S. dollar at 5 p.m. in Toronto. One Canadian dollar buys 97.14 U.S. cents. The currency was little changed on the week against the greenback.

Canada’s government bonds fell for the first time in three days, pushing yields on the benchmark 10-year security up four basis points, or 0.04 percentage point, to 2.58 percent. The price of the 1.5 percent security due in June 2023 dropped 32 cents to C$90.85.

Stocks rose today, with the Standard & Poor’s 500 Index gaining 0.7 percent to 1,690.50.

The U.S. government began its first partial shutdown in 17 years on Oct. 1 as Republicans who control the House insisted on changes to the nation’s 2010 health-care law, President Barack Obama’s signature legislative achievement. The Senate, controlled by Democrats, refused. Congress also faces the statutory debt ceiling, which the Treasury has said will be reached Oct. 17.

“The shutdown is bad for growth in Canada, and as we get closer to the debt-ceiling deadline there is more concern manifesting, which is weighing on the U.S. dollar relative to the loonie,” Shaun Osborne, chief currency strategist at Toronto-Dominion Bank’s TD Securities unit in Toronto, said by phone. “We will probably continue to chop around in a range until this monumental uncertainty is cleared up. It’s all a question of waiting for Washington at this point.”

The discount Canada’s benchmark crude-oil grade, Western Canada Select, faces to West Texas Intermediate oil increased to $34.50 per barrel, the most since January. WTI futures traded at $103.56 a barrel today in New York.

Canada’s purchasing managers increased spending in September by less than economists forecast, according to a gauge released today by Western University’s business school.

The Ivey Purchasing Managers Index rose to 51.9 in September on a seasonally adjusted basis, following an August reading of 51.0, according to a statement on the London, Ontario university’s website. Readings of more than 50 indicate purchasing by governments and companies increased.

Economists projected a reading of 53.6, according to the median of a Bloomberg survey with 10 responses.

US

By Aubrey Pringle and Alex Barinka

U.S. stocks rose, paring a weekly decline in the Standard & Poor’s 500 Index, as optimism grew that lawmakers would reach a deal to end America’s budget standoff. Treasuries and gold fell while Italian bonds advanced.

The S&P 500 gained 0.7 percent at 4 p.m. in New York, while the Stoxx Europe 600 Index climbed 0.1 percent. The yield on 10- year Treasuries increased four basis points to 2.65 percent.

Italy’s 10-year bond yield dropped seven basis points to 4.30 percent. West Texas Intermediate oil added 0.5 percent as Tropical Storm Karen approached the U.S. coast, while gold futures slid 0.6 percent.

A partial U.S. government shutdown entered a fourth day amid wrangling by lawmakers over the budget and debt limit. Bill Gross of Pacific Investment Management Co. and BlackRock Inc.’s Larry Fink said the deadlock will be resolved soon, limiting damage to the economy. House Speaker John Boehner has been telling fellow Republicans that he won’t allow the U.S. to default on its debt, according to two Republican congressional aides.

“There’s a working presumption that this is fundamentally theater and it’s going to work itself out favorably,” Mackintosh Pulsifer, vice chairman and chief investment officer of Fiduciary Trust Co. International in New York, said in a phone interview. He helps oversee $15 billion. “There will not be a default, we’ll find some way to raise the debt ceiling. In a few weeks it’s not going to have any impact.”

The S&P 500’s rally today trimmed the weekly loss to 0.1 percent. The gauge had slumped as much as 1.3 percent for the week through yesterday. The Dow Jones Industrial Average ended the five days with a 1.2 percent drop.

President Barack Obama canceled plans to attend two economic summits in Asia next week as he remains in Washington to seek an end to the government shutdown. The Treasury Department said failure to raise the debt limit has the potential to freeze credit markets and cause the dollar to plunge.

Partially closing the U.S. government for one week would probably shave 0.1 percentage point from economic growth, according to the median of 40 estimates in a Bloomberg survey of economists. Federal Reserve Bank of San Francisco President John Williams estimated yesterday a two-week government halt would trim 0.25 percentage point off fourth-quarter economic growth.

The shutdown delayed the release of the Labor Department’s monthly payrolls report, which was due today. The lack of data is making it harder for Federal Open Market Committee policy makers to assess the health of the economy as they consider when to start paring unprecedented monetary stimulus. Atlanta Fed President Dennis Lockhart said the shortage of economic news “would tend to make me somewhat more cautious” about reducing the pace of bond purchases.

“The taper is off the table for October, that is a silver lining for the market,” Phil Orlando, New York-based chief equity strategist at Federated Investors, said in a phone interview. His firm manages about $380 billion in assets.

“Given the fact that there is no jobs data and given the fact that we have triggered the potential breach of the debt ceiling, in my opinion there is zero chance that the Fed is going to commence the taper at the Oct. 29-30 FOMC meeting.”

The S&P 500 has rallied 19 percent this year. It has surged 150 percent from a March 2009 low amid three rounds of Fed stimulus and better-than-forecast corporate earnings.

Visa Inc. rose 1 percent today after a judge ruled the company didn’t infringe a SmartMetric Inc. patent. Facebook Inc. climbed 3.8 percent after the operator of the world’s most popular social network said it will sell advertising on its Instagram photo service. Union Pacific Corp. declined 1 percent after its earnings forecast missed projections.

Twitter Inc. released its S-1 prospectus for an initial public offering yesterday, with the document suggesting a valuation of $12.8 billion for the microblogging website.

Today’s gain for the Stoxx 600 trimmed its retreat for the week to 0.7 percent. Lindt & Spruengli AG jumped 3.6 percent to its highest since 2008 after saying it will buy back shares worth about 450 million Swiss francs ($498 million). Nokian Renkaat Oyj sank 7.6 percent, the most in almost a year, as the Finnish tiremaker cut its earnings forecasts.

The MSCI Emerging Markets Index added 0.3 percent, gaining for the fourth straight day. The gauge climbed 0.8 percent this week. Malaysia’s ringgit strengthened 0.4 percent after a report showed the trade surplus rose more than analysts estimated as exports jumped.

Treasuries snapped a two-day advance as the U.S. prepared to auction $64 billion of notes and bonds next week.

Money managers are getting out of Treasuries maturing closest to the debt-ceiling deadline on Oct. 17 and buying longer-maturity bills, yields indicate. One-month rates climbed as high as 0.16 percent yesterday, while rates on three-month bills were 0.02 percent, the biggest inversion of the spread since September 2008.

Corporate bond issuance slid 53 percent this week in Europe to the least in seven weeks, while U.S. sales tumbled 81 percent.

Unibail-Rodamco SE, Europe’s largest publicly traded property owner, and Banco Popular Espanol SA were among companies issuing 8.3 billion euros of notes this week, the least since the period ended Aug. 17, data compiled by Bloomberg show. Dollar-denominated offerings fell to $10.9 billion, the least since the period ended Aug. 30.

Italy’s 10-year securities climbed for the third time in four days as Prime Minister Enrico Letta won a confidence vote in parliament. Silvio Berlusconi’s future in Italian politics is hanging in the balance after a Senate panel voted today to recommend expelling the former prime minister from the upper house, following an August tax-fraud conviction.

Spain’s yield dropped four basis points to 4.20 percent today and Portugal’s declined 21 basis points to 6.34 percent, the lowest since Aug. 20.

Australia’s dollar rose 0.4 percent to 94.34 U.S. cents as traders bets reflected increased expectations the central bank won’t cut borrowing costs this year. The pound dropped against 15 of 16 of its major counterparts, falling 0.9 percent to $1.6014.

Gold fell for the fourth time this week in New York, sliding 0.6 percent, amid speculation that the impact of the federal shutdown will be limited. Holdings in global exchange- traded products yesterday reached the lowest since May 2010, wiping about $60.6 billion from the value of the assets this year. Bullion prices dropped 22 percent in 2013 as some investors lost faith in the metal as a store of value.

“Money seems to be chasing equities,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Gold does not seem to be attracting the safe-haven premium.”

Copper futures rose for the second time in three days, gaining 1 percent. Inventories tracked by the London Metal Exchange slid for a 22nd day, to 525,925 metric tons, the lowest since March 15.

West Texas Intermediate increased 0.5 percent to $103.84.

Tropical Storm Karen pushed through the Gulf of Mexico to the U.S. coast, threatening crude production in the region. Karen will make landfall early Oct. 6 on the southeastern tip of Louisiana, according to the National Hurricane Center.

Robusta coffee rallied as much as 3.1 percent after stockpiles in warehouses monitored by NYSE Liffe declined 19 percent in the past two weeks.

Have a wonderful weekend everyone!!!!

Be magnificent!

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