September 13, 2013 Newsletter

Dear Friends,

Tangents:

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

This Sunday, September 15^th marks the 33^rd annual Terry Fox Run.  The run will be taking place at the intersection of Dallas Road and Douglas street, near Mile Zero.  The run from Mile Zero is a 5km run along Dallas Road to St. Charles road and back.  Registration is at 9am with opening ceremonies at 10am feating the band “The Bald Eagles” debuting their newly recorded song for Terry, “Running for our Lives”.  Even if you are not a runner, feel free to come on down and cheer on all the runners!

“Happiness is when what you think, what you say, and what you do are in harmony.” – Mahatma Gandhi

Photos of the Day –September 13^th, 2013

An officer from Contra Costa County Sheriff’s Office climbs a portion of an obstacle course during the Best in the West 2013 Invitational S.W.A.T. Competition in San Jose, California September 12th. The two-day, seven course competition draws S.W.A.T. teams from all over the country. Josh Edelson/Reuters

Competitors pedal their way below the Chateau Frontenac, top, during the UCI World Tour Grand Prix cycling race in Quebec City. Jacques Boissinot/The Canadian Press/AP

Market Closes for September 13th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Aubrey Pringle

Sept. 13 (Bloomberg) — Canadian stocks rose, following the biggest retreat in two weeks yesterday, as commodity producers advanced after concern over possible cuts to U.S. central bank stimulus eased.

Niko Resources Ltd., the Canadian oil and natural gas explorer, jumped 10 percent to lead energy shares higher despite a decline in oil prices amid continuing talks over Syria.

Centerra Gold Inc. and B2Gold Corp. rallied at least 5.2 percent. Canadian Pacific Railway Ltd. and Canadian National Railway Co. gained more than 0.5 percent. Silvercorp Metals Inc. fell 2 percent as the commodity’s price tumbled.

The Standard & Poor’s/TSX Composite Index rose 22.35 points, or 0.2 percent, to 12,723.40 at 4 p.m. in Toronto.

Trading volume was 12 percent below the 30-day average. The benchmark Canadian index trimmed its loss for the week to 0.8 percent.

Stocks rose after a “long week of selling pressure on the Canadian markets” due to the lowering tensions over Syria, Paul Gardner, portfolio manager at Avenue Investment Management, said in a phone interview. His firm oversees C$300 million ($290 million). “What gets hit hard is oil and gold. But it was a bit overdone, so we are seeing a bit of a relief rally” in those industries.

Oil and gold prices led commodities lower today after the U.S. and Russia discussed a plan for Syria to surrender chemical weapons. U.S. Secretary of State John Kerry reported a “constructive” start to the talks. President Barack Obama has delayed a possible U.S. military intervention to take up the proposal for international oversight of Syria’s chemicals arsenal.

Equities rose as concerns eased over possible cuts to U.S. central bank stimulus. Investors, who have been scrutinizing economic data to determine whether growth is robust enough for the Federal Reserve to slow stimulus following its Sept. 17-18 meeting, will see a reduction next week as no big deal, according to a Bloomberg Global Poll of investors.

Fifty-seven percent of those surveyed say they don’t expect a sudden change in the markets because investors already anticipate tapering action.

U.S. data today showed retail sales rose 0.2 percent, the smallest increase in four months and below the 0.5 percent advance seen in Bloomberg survey. Consumer confidence in the U.S. declined in September to the lowest level since April.

Wholesale prices in the U.S. rose more than forecast in August, while a separate report showed inventories at companies increased more than forecast in July.

“The retail sales were somewhat disappointing, but put all of the economic data together and it seems neutral,” Richard Sichel, who oversees about $1.9 billion as chief investment officer at Philadelphia Trust Co., said by phone. “The fear of the Fed taper has gone away, as has the immediacy of the Syrian crisis.”

Energy shares rose 0.2 percent as a group, even as West Texas Intermediate crude capped its biggest weekly drop since July. Six out of 10 industries advanced in the S&P/TSX.

Calgary-based Niko Resources increased 10 percent to C$4.17. The gas and oil company’s stock had plummeted as much as 68 percent this year, reaching an almost 15-year low on Sept. 6.

AltaGas Ltd. shares rose 1.2 percent to C$35.43 after the company said late Thursday it will acquire a 25 percent stake in Petrogas Energy Corp., a privately held North American integrated midstream company.

Raw-materials stocks added 1.4 percent. Centerra Gold paced gains among mining companies, rising 7 percent to C$6.27 for its largest increase in more than three weeks. B2Gold Corp. climbed 5.2 percent to C$2.63. Gold companies plunged 5.3 percent as a group yesterday.

Gabriel Resources Ltd. rallied 12 percent to 93 Canadian cents. The gold and silver exploration company, backed by billionaire hedge-fund manager John Paulson, slumped 54 percent on Sept. 9, its biggest decline in 25 years. The drop came on news that Romania’s prime minister urged lawmakers to reject plans for a gold mine.

Silvercorp Metals tumbled 2 percent to C$3.41. Silver futures dropped 1.9 percent, while gold for December delivery was down 1.7 percent today. Both metals had the largest weekly decline since June.

Potash Corp. of Saskatchewan Inc., Canada’s largest maker of the fertilizer, rallied 2.3 percent to C$33.57 and Agrium Inc. climbed 1.4 percent to C$92.55.

Russian entrepreneur Vladimir Kogan, a longtime ally of President Vladimir Putin, is the leading bidder for the world’s leading potash producer, OAO Uralkali. Kogan is seeking to buy out the company’s three main shareholders, according to people familiar with the situation.

The talks began after Belarus arrested Uralkali Chief Executive Officer Vladislav Baumgertner Aug. 26, a month after he pulled out of a trading venture with Belarus, said the people familiar with the matter. The breakup of the venture sent potash prices plummeting.

“People view this sale of stock as a precursor event to the BPC export agency getting back together again,” Mark Gulley, a New York-based analyst at BGC Partners LP, said by phone, referring to Uralkali and Belaruskali’s venture, Belarusian Potash Co. “A lot of people believe that this is one of many steps to BPC getting back together again.”

Industrial shares gained 0.4 percent as railroad companies climbed. Canadian Pacific Railway jumped 1.7 percent to C$127.75. Canadian National Railway gained 0.5 percent to C$101.28.

US

By Nikolaj Gammeltoft and Lu Wang

Sept. 13 (Bloomberg) — U.S. stocks rose, with the Dow Jones Industrial Average capping its best week since January, as disappointing economic data fueled bets that any Federal Reserve stimulus cuts this month would be moderate.

Safeway Inc. advanced 6.1 percent after Credit Suisse Group AG raised its recommendation for the shares. Intel Corp. gained 3.6 percent after Jefferies Group LLC upgraded the stock.

GameStop Corp. surged 6.1 percent as U.S. video-game sales saw the first monthly rise 2011, a research group said. Peabody Energy Corp. dropped 3.2 percent as the Environmental Protection Agency revises proposed rules for new power plants.

The Standard & Poor’s 500 Index rose 0.3 percent to 1,687.99 at 4 p.m. in New York. The gauge climbed 2 percent in the past five days, its best week in two months. The Dow jumped 0.5 percent to 15,376.06. It advanced 3 percent this week, the most since Jan. 4. About 5 billion shares changed hands on U.S. exchanges, 16 percent below the three-month average.

“The view is that we’re recovering and continue to do it in a slow pace,” Channing Smith, who helps oversee about $1.2 billion at Capital Advisors Inc. in Tulsa, Oklahoma, said in a phone interview. “The Fed will begin to taper but will be on a magnitude of $10 billion, which shouldn’t have an impact.”

Investors, who have been scrutinizing economic data to determine whether growth is robust enough for the Fed to slow stimulus following its Sept. 17-18 meeting, will see a reduction next week as no big deal, according to a Bloomberg Global Poll of investors.

Fifty-seven percent of those surveyed say they don’t expect a sudden change in the markets because investors already anticipate tapering action.

A Commerce Department report today showed retail sales in the U.S. rose 0.2 percent, the smallest increase in four months and below the 0.5 percent advance seen in Bloomberg survey.

Wholesale prices in the U.S. rose more than forecast in August, adding 0.3 percent on higher costs for food and some fuels.

A separate report showed inventories at companies increased more than forecast in July, trailing a gain in sales that signals a pickup in factory orders. The Thomson Reuters/University of Michigan preliminary September index of consumer sentiment fell to 76.8 from 82.1 last month, which was the lowest since April.

The Fed will taper its $85 billion in monthly bond-buying by $10 billion to $75 billion after next week’s meeting, according to the median forecast of economists in a Bloomberg News survey. Fed stimulus helped push the S&P 500 more than 150 higher from its March 2009 low, as better-than-estimated corporate earnings also fueled gains.

The S&P 500 fell 0.3 percent yesterday, halting a seven-day win streak, amid concern that the U.S. has not ruled out military action against Syria. The threat of a U.S. strike roiled markets in August, dropping the S&P 500 to its worst performance since May 2012. The gauge has rallied 3.4 percent so far in September.

Secretary of State John Kerry reported a “constructive” start to talks with his Russian counterpart over bringing Syria’s chemical weapons under international oversight, while giving no sign of a breakthrough. Kerry told Syrian opposition figures yesterday that the option of a U.S. military strike remains on the table.

“Syria had a negative impact on markets in August, and now the negative impact is coming off,” Randy Warren, chief investment officer at Warren Financial Service, said in a phone interview. His firm oversees $100 million.

Investors are also watching renewed political wrangling over the approaching limit on federal spending. Government funding expires Oct. 1 and the Treasury is expected to exhaust its ability to borrow funds in mid-October, when it will hit the statutory debt limit.

U.S. House members left Washington for the weekend yesterday after leaders shifted strategies in an effort to win over dissenting Republicans willing to risk a financial crisis to sidetrack President Barack Obama’s health-care law.

Republicans said they will try to use the spending-bill talks to delay the health-care law instead of defunding it.

The CBOE Volatility Index, the gauge of S&P 500 options prices known as the VIX, fell 0.9 percent to 14.16, capping an 11 percent five-day drop, its biggest weekly slide since July 5.

The equity volatility gauge has tumbled 17 percent in September after rallying 26 percent in August, the biggest monthly gain since May 2012.

All 10 main industries in the S&P 500 advanced today, with producers of consumer staples and utility stocks rising at least 0.8 percent. Procter & Gamble Co. added 1 percent to $79.05 and NRG Energy Inc. jumped 3 percent to $27.14.

Intel climbed 3.6 percent, the most since June, to $23.44 for the biggest gain in the Dow. Jefferies boosted its recommendation on the world’s largest chipmaker to buy from hold.

Safeway surged 6.1 percent to $28.20. Credit Suisse upgraded the second-largest U.S. supermarket chain to outperform, similar to buy, from underperform.

GameStop rose the most in the benchmark index, adding 6.1 percent to $52.45. U.S. sales of video-game products rose 1 percent last month to $521 million, the first four-week gain in almost two years, driven by new titles including Walt Disney Co.’s “Infinity,” featuring collectible characters. GameStop is the largest retailer in the market.

Ulta Salon, Cosmetics & Fragrance Inc. surged 17 percent to a record $117.53 after reporting second-quarter earnings of 70 cents a share, beating the 67-cent average projection by analysts in a Bloomberg survey.

Peabody Energy dropped 3.2 percent to $17.98. The stock has fallen three straight days after reports that the Obama administration would ban new coal plants without strict emission controls. The environmental rules are expected to be released next week. Cliffs Natural Resources Inc. lost 1.6 percent to $22.07.

Apple Inc. dropped 1.7 percent to $464.90. The world’s most valuable technology company lost 6.7 percent this week as the price of its new lower-cost iPhone disappointed analysts.

Twitter Inc. disclosed it had filed to go public in one of its 140-character postings yesterday, giving no other financial figures or details on when it will actually list. Twitter’s market debut will be led by Goldman Sachs Group Inc. and is likely to be the most anticipated initial public offering since Facebook Inc. listed last year.

“What Twitter management and Goldman are doing is observing that valuations are at healthy levels and that it’s a good time to attempt an IPO of this scale,” Lawrence Creatura, a Rochester, New York-based fund manager at Federated Investors Inc., which oversees about $364 billion, said in a phone interview.

The S&P 500 trades at 16.2 times reported earnings, above the average multiple of 15.3 over the past five years, data compiled by Bloomberg show. The gauge has advanced 18 percent this year.

Have a wonderful weekend everyone!!!

Be magnificent!

“To enjoy good health, to bring true happiness to one’s family, to bring peace to all, one must first discipline and control one’s own mind. If a man can control his mind he can find the way to Enlightenment, and all wisdom and virtue will naturally come to him.” – Buddha

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