September 11, 2014 Newsletter

Dear Friends,

Tangents:

On the 13-year anniversary of 9/11, here’s a look at WSJ’s front page the day after the terrorist attacks. The Journal’s offices were across from the towers at the time, and this paper and subsequent ones were produced at backup facilities in New Jersey.

Sukhdev Sandhu writes about the World Trade Center attack on September 11, 2001:

At first I’m sure it’s going to be a great day.  Sun out.  Bright blue skies.  The end of summer.  Even the sirens and engines that have been wailing outside my apartment window for the last hour don’t seem that unusual.  Just, I assume, part of the hysteric clangour taken for granted by those who live in Manhattan.  Only when I step out onto First Avenue to head downtown do things begin to seem strange.  Hundreds of people are heading in my direction.  Some are running.  Mums are clutching young kids and looking over their shoulders fearfully.  No cars or cabs, but police are everywhere.  In the distance I see a huge black blob disfiguring the sky.  Maybe a thunderstorm’s brewing?  I step in front of a fleeing office worker:  “Excuse me, but has something happened?”  His answer comes out barely comprehensible comic-book babble:  “The World Trade Center has been hit – it was a plane – enemies – terrorists – hijacker – the Pentagon too – the White House – Pittsburgh.”

By the time I reached my department at NYU everyone is ripped with panic…We yell out the names of people we knew who work at the Twin Towers and rummage around in drawers and diaries looking for their cellphone numbers, which we dial frantically, and often in vain.

PHOTOS OF THE DAY

A woman grieves at her husband’s memorial at South Tower Memorial Pool during memorial observances on the 13th anniversary of the Sept. 11 terror attacks on the World Trade Center in New York. Family and friends of those who died read the names of the nearly 3,000 people killed in New York, at the Pentagon and near Shanksville, Pennsylvania. Chang W. Lee/The New York Times/AP

An artwork titled ‘Scattered Light,’ created by American artist Jim Campbell, is lit at an exhibition in Hong Kong’s Central district. The installation that has a structure with 2,000 light bulbs was presented by Hong Kong Arts Development Council. Vincent Yu/AP

Market Closes for September 11^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Sept. 11 (Bloomberg) — Canadian stocks rose, with the benchmark index climbing from a three-week low, as bank shares gained and BlackBerry Ltd. rallied.

     BlackBerry jumped 6.1 percent after acquiring a mobile technology company to shore up its smartphone management features as it targets business users. Royal Bank of Canada climbed 0.8 percent. Bellatrix Exploration Ltd. lost 1.7 percent as two gas plants will go offline, affecting production for September. Athabasca Oil Corp. and Kelt Exploration Ltd. dropped at least 2 percent.

     The Standard & Poor’s/TSX Composite Index rose 62.43 points, or 0.4 percent, to 15,534.32 at 4 p.m. in Toronto. It closed Sept. 3 at a record 15,657.63. The S&P/TSX has advanced 14 percent this year, the second-best performer among the world’s developed markets behind Denmark.

     Royal Bank, the nation’s second-largest lender, rose 0.8 percent to C$81.86 and Bank of Nova Scotia increased 0.6 percent to C$72.76.

     BlackBerry advanced 6.1 percent to C$11.91, the most since June, after acquiring London-based Movirtu Ltd., which has developed a technology that allows users to connect more than one phone number to a single device.

     Athabasca Oil declined 2 percent to C$6.71 and  Kelt Exploration lost 2.9 percent to C$12.75. Brent for October settlement rose 4 cents to $98.08 a barrel on the ICE Futures Europe exchange after earlier sliding as far as $96.72, the lowest since July 2, 2012.

US

By Callie Bost and Lu Wang

     Sept. 11 (Bloomberg) — The Standard & Poor’s 500 Index erased losses, sending the gauge higher for a second day, as a rebound in oil offset concerns over escalating geopolitical tension and the timing of possible interest-rate increases.

     Energy shares in the S&P 500 rose 0.1 percent, erasing an earlier loss of 1.2 percent as crude prices recovered from an eight-month low. Celgene Corp. slipped 2.3 percent to pace declines in health-care stocks. MasterCard Inc. dropped 1.3 percent after losing a court challenge to a European Union antitrust curb on card-payment fees. Lululemon Athletica Inc. soared 14 percent after raising its full-year forecast as quarterly profit exceeded estimates.

     The S&P 500 added 0.1 percent to 1,997.45 at 4 p.m. in New York, after an earlier decline of as much as 0.5 percent. The Dow Jones Industrial Average lost 19.71 points, or 0.1 percent, to 17,049. The Nasdaq Composite Index added 0.1 percent. About 5.5 billion shares changed hands on U.S. exchanges, 1.8 percent below the three-month average.

     “We’re just stuck in a tight range because the market has been so strong this year and every now and then the market needs a little time to cool off,” Dan Miller, director of equities at GW&K Investment Management in Boston, said by phone. The firm oversees more than $20 billion. “Geopolitical events of course always make the market nervous.”

     The S&P 500 halted a two-day slide yesterday as a rally in Apple Inc. boosted technology shares. The gauge fell 0.7 percent on Sept. 9, its first move in either direction of more than 0.5 percent in 15 days, the longest streak since 1995. It closed at a record on Sept. 5.

     The S&P 500 is down 0.5 percent this week as investors focus on the timing of an interest-rate increase from the Federal Reserve. The Fed is gauging the strength of the economy as it winds down a bond-buying program and considers raising rates. Policy officials next meet Sept. 16-17.

     A report today showed the number of Americans filing for unemployment benefits unexpectedly rose last week to a two-month high, interrupting a steady decrease to the lowest level since before the last recession. The week included the Labor Day holiday, and the data are difficult to adjust during such periods, a Labor Department spokesman said.

     Equities slid earlier as European Union officials said new sanctions against Russia will come into force tomorrow because of the country’s continued support of separatists in Ukraine. Ending days of wrangling, EU countries agreed to implement plans to bar some Russian state-owned defense and energy companies from raising capital in the bloc. President Barack Obama said the U.S. is joining the EU in slapping more sanctions on Russia.

     Obama yesterday pledged a “relentless” campaign to destroy Islamic State extremists in Iraq and Syria, with Middle Eastern allies such as Saudi Arabia and Jordan playing crucial supporting roles.                          

     Data overseas showed China’s consumer inflation eased to a four-month low in August while factory-gate prices extended their decline to 30 months, adding to signs of weakness in domestic demand.

     “It’s between earnings seasons so the focus is on macro events and geopolitical risks because that’s all people have to talk about,” John Carey, a Boston-based fund manager at Pioneer Investment Management Inc., which oversees about $230 billion, said in a phone interview. “People continue to look ahead to possibility of higher interest rates next year and next year is getting closer.”

     The Chicago Board Options Exchange Volatility Index, a gauge of S&P 500 derivatives prices, fell 0.6 percent to 12.8 for a second day of losses.

     Seven of 10 main industries in the S&P 500 advanced. Energy companies rose 0.1 percent, wiping out declines as West Texas Intermediate crude rebounded from an eight-month low and Brent oil erased losses.

     Brent crude tumbled to its lowest intraday level in more than two years earlier in the day as the International Energy Agency cut global oil demand forecasts for this year and next. Oil markets in the U.S. and Europe face a glut amid constrained consumption and the recovery of supplies from Libya.

     Energy shares have dropped 3.8 percent in September, poised for the worst monthly loss since January.

     Health-care stocks slipped 0.3 percent for the biggest decline in the S&P 500 today. Celgene slid 2.3 percent to $91.96 and Gilead Sciences Inc. decreased 1.7 percent to $106.39. Biogen Idec Inc. decreased 1.5 percent to $327.11.

     MasterCard lost 1.3 percent to $75.62. The EU’s Court of Justice ruled that the fees set by MasterCard had unfairly restricted competition and that it failed to show benefits to justify its system. Visa Inc. dropped 0.9 percent to $214.95.

     Financial shares gained 0.3 percent as Bank of America Corp. jumped 1.3 percent to $16.57.

     Lululemon soared 14 percent to $43.73. The yogawear maker that ended a dispute with its founder last month reported second-quarter profit that exceeded analyst estimates and increased its earnings forecast for the year by a penny to $1.72 to $1.77 a share. Revenue rose 13 percent to $390.7 million in the second quarter from a year earlier.

     JDS Uniphase Corp. jumped 10 percent to $13.36 on plans to split into two separate publicly traded entities. One company will focus on optical components and commercial lasers, while the other will sell networking equipment, JDS Uniphase disclosed in a filing yesterday.

     International Paper Co. rose 4.2 percent to $50.36 for the biggest gain in the S&P 500. The packaging company said at a conference today that it is working with advisers and has progressed to a more “serious valuation” phase on a master limited partnership structure.

     RadioShack Corp. rallied 9.6 percent to $1.02. The struggling electronics retailer said it’s working with creditors and other parties to get more capital and avoid bankruptcy after posting another quarter of mounting losses and plunging sales.

     RadioShack shares tumbled 42 percent from Aug. 29 through yesterday.
 

Have a wonderful evening everyone.

Be magnificent!

Every man has an equal right

to the necessities of life,

even as birds and beasts have.

Mahatma Gandhi

As ever,
 

Carolann

If you want to understand today, you have to search yesterday.

                                                  -Pearl S. Buck, 1892-1973

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7