September 12, 2014 Newsletter

Dear Friends,

Tangents:

All this discussion on Scotland, independence, makes me reminisce ….about high school English class:

Quarrels unjust against the good and loyal
Destroying them for wealth.

MACDUFF                             This avarice
Sticks deeper, grows with more pernicious root
Than summer-seeming lust; and it hath been
The sword of our slain kings; yet do not fear,
Scotland hath foisons to fill up your will
Of your mere own.  All these are portable,
With other graces weighed.

MALCOLM
But I have none.  The king-becoming graces,
As justice, verity, temp’rance, stableness,
Bounty, perseverance, mercy, lowliness
Devotion, patience, courage, fortitude,
I have no relish of them, but abound
In the division of each several crime,
Acting it many ways.  Nay, had I power, I should
Pour the sweet milk of concord into Hell,
Uproar the universal peace, confound
All unity on earth.

MACDUFF             O Scotland, Scotland.

MALCOLM
If such a one be fit to govern, speak:
I am as I have spoken.

MACDUFF               Fit to govern?
No, not to live.   O nation miserable!
With an untitled tyrant, bloody-sceptered,
When shalt thou see thy wholesome days again?
Since that the truest issue of thy throne
By his own interdiction stands accused,
And does blaspheme his breed?  Thy royal father
Was a most sainted king;  the queen that bore thee,
Oft’ner upon her knees than on her feet,
Died every day she lived.  Fare thee well,
These evils thou repeat’st upon thyself
Hath banished me from Scotland.  O my breast,
Thy hope ends here.

                              -Macbeth, Act 4, Scene 3.

PHOTOS OF THE DAY

An employee at Harris Tweed Hebrides works in the factory on the Isle of Lewis in the Outer Hebrides. The referendum on Scottish independence will take place on September 18, when Scotland will vote whether or not to end the 307-year-old union with the rest of the United Kingdom. Cathal McNaughton/Reuters

People wave ‘estelada’ flags, that symbolize Catalonia’s independence, during a demonstration calling for the independence of Catalonia in Barcelona, Spain. A week before Scotland votes on whether to break away from the United Kingdom, separatists in northeastern Spain were trying to convince hundreds of thousands to protest across Catalonia to demand a secession sentiment vote that the central government in Madrid insists would be illegal. Manu Fernandez/AP

Market Closes for September 12^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Sept. 12 (Bloomberg) — Canadian stocks closed little changed, capping a second straight weekly loss, as gains in consumer and financial shares offset a drop in gold and oil producers.

     Maple Leaf Foods Inc. and Metro Inc. paced an advance in consumer-staples companies. Talisman Energy Inc. and Gibson Energy Inc. sank at least 1.8 percent as crude tumbled to the lowest in more than two years. Alamos Gold Inc. and Alacer Gold Corp. dropped more than 2.5 percent as the metal’s price slid to an eight-month low.

     The Standard & Poor’s/TSX Composite Index fell 2.74 points, or less than 0.1 percent, to 15,531.58 at 4 p.m. in Toronto. The benchmark equity gauge slipped 0.3 percent this week. 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.

     Financial shares added 0.3 percent as a group. Home prices in Canada rose 5 percent in August from year-ago figures, according to the Teranet-National Bank National Composite House Price Index.

     The nation’s ratio of household debt to disposable income rose to 163.6 percent of disposable income in the second quarter, approaching a record high from a revised 163.1 percent in the previous period. The measure reached a record 164.1 percent in the third quarter last year as mortgages have grown.

     OceanaGold Corp. jumped 3.1 percent to C$2.70. The company yesterday brought forward the start date for underground development of its Didipio gold and copper mine by one year to the first quarter of 2015 after an optimization study. The mine is located in the Philippines.

US

By Callie Bost and Namitha Jagadeesh

     Sept. 12 (Bloomberg) — U.S. stocks fell, giving the Standard & Poor’s 500 Index its first weekly drop in more than a month, as investors speculated the Federal Reserve may raise interest rates sooner than estimated after retail sales climbed at the fastest pace in four months.

     Energy shares in the S&P 500 fell 1.5 percent, extending losses for the week to 3.7 percent. Caterpillar Inc. lost 0.5 percent for its sixth straight decline. Yahoo! Inc. rose 3.9 percent to an eight-year high as Alibaba Group Holding Ltd. prepared for an initial public offering. Conversant Inc. surged 30 percent after Alliance Data Systems Corp. agreed to buy it.

     The S&P 500 fell 0.6 percent to 1,985.54 at 4 p.m. in New York, capping a 1.1 percent slide this week. The Dow Jones Industrial Average slid 61.49 points, or 0.4 percent, to 16,987.51. The Russell 2000 Index dropped 1 percent. About 6 billion shares changed hands on U.S. exchanges, 7.7 percent above the three-month average.

     “Today’s retail sales and consumer confidence data fall into the argument of those who believe the Fed lift-off date may come sooner,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $67 billion in assets, said by phone. “The worry is if the Fed has to lift rates sooner rather than later, there’s the question of when, but also what the trajectory of interest-rate increases will be and if it will undermine this sanguine picture of equities as the only game in town.”

     The 0.6 percent gain in retail sales matched the median forecast of 82 economists surveyed by Bloomberg and followed a 0.3 percent increase the prior month that was stronger than previously reported, Commerce Department figures showed today in Washington. Eleven of 13 major categories showed advances, led by auto dealers and building material stores.

     The Thomson Reuters/University of Michigan preliminary consumer sentiment index rose to 84.6 in September from 82.5 the month before. The median estimate in a Bloomberg survey of economists projected an increase to 83.3.

     The Fed is assessing the strength of the economy as it winds down a bond-buying program and considers raising rates. The central bank, which meets Sept. 16-17, has said that its benchmark rate will stay low for a “considerable time” after it completes the monthly bond purchases.

     The S&P 500 decline this week on concern the Fed may raise interest rates sooner than forecast. The index closed at a record on Sept. 5, after rallying for five straight weeks, the longest winning streak this year. The gauge hasn’t posted a four-day string of losses in all of 2014, and the last time it fell more than 10 percent was three years ago.

     The benchmark gauge is trading at 16.6 times the projected earnings of its members, near the 16.8 multiple reached on Sept. 5 that was the highest valuation since the end of 2009, according to data compiled by Bloomberg.

     The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, increased 3.9 percent to 13.31. The volatility measure jumped 10 percent this week, its biggest gain since Aug. 1.

     All of the 10 main industries in the S&P 500 declined today. Energy shares tumbled 1.5 percent, extending a decline this week to 3.7 percent as crude prices have fallen on concern that global oil demand is slowing. Utility shares slid 1.8 percent as a group.

     Caterpillar slumped 0.5 percent to $105.02. Bank of America earlier this week lowered its rating on the shares to neutral from buy. The shares have lost 3.5 percent since Sept. 4.

     Yahoo rose 3.9 percent to $42.88, the highest level since January 2006. Alibaba received enough demand for its IPO that it plans to stop taking orders, according to people with knowledge of the matter. Yahoo is set to get an $8 billion windfall from the IPO. Alibaba plans to set a final price for the shares on Sept. 18, with trading to begin the next day.

     Conversant, which helps companies target users with Internet advertisements based on their previous online searches, soared 30 percent to $34.80, the highest since 2007. Alliance Data agreed to buy the company for $2.3 billion, or $35 a share, according to a statement.

     Ulta Salon Cosmetics & Fragrance Inc. jumped 18 percent to $114.89 after forecasting third-quarter revenue of as much as $736 million, exceeding the $718 million average analyst estimate in a Bloomberg survey.

Have a wonderful weekend everyone.
 

Be magnificent!

The supreme consideration if man.

Mahatma Gandhi

As ever,

Carolann

The truth is always the strongest argument.

                   -Sophocles, 496-405(6?) BC

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