September 24, 2014 Newsletter

Dear Friends,

Tangents:

The Jewish New Year, Rosh HaShanah, begins at sundown this evening.  Rabbi Harry Brechner of Victoria’s Congregation Emanu-El wrote a cogent piece in today’s local paper.  Some thoughts merit reflection:  “When the Jewish new Year begins at sundown tonight, it’s the culmination of a month when we ask ourselves questions that everyone – Jews and non-Jews – should ask in their quest to become better people.

‘Where am I in terms of my relationships?’  ‘Where  am I  in my self-growth?’  ‘What do I hope to achieve next year and in my life?’  ‘What’s the most meaningful thing in my life?’

….In Genesis, it teaches that we as humans are created in God’s image….At the same time, our actual selves that walk around on our planet are capable of feeling envy, lying, hurting ourselves and others.  Our actual selves are what we see in truth in the mirror, with all of our scars, our warts, our bad habit.  The path from our actual selves to our potential selves is our authentic self.  The authentic self is our person on the pathway of teshuvah/repentance…. When we cause pain or hurt, we need to do our utmost to repair that which we have damaged and to seek forgiveness through contrition.  We also need to promise the person we have wronged that we have changed and will not repeat those same behaviours.

  Underlying the concept of forgiving the other is a sense that when I hurt someone, I also hurt God and in turn, hurt myself.  If we see others as God’s children, the parallel is simple:  As a human parent, we know that when our children are hurt and in pain, we as parents feel pain as well…”

On this day in 1957, the Brooklyn Dodgers played their final game at Ebbets Field. The franchise moved to Los Angeles the following season.

Also on this day in 1896, F. Scott Fitzgerald was born.

At 18 our convictions are hills from which we look.  At 45 they are caves in which we hide. –F. Scott Fitzgerald.

And so we beat on, boats against the current, borne back ceaselessly into the past.

                                                                                 -from The Great Gatsby

PHOTOS OF THE DAY

Artist Nathan Sawaya poses for photographs with his Sculpture ‘Yellow’ at the Old Truman Brewery, East London. His exhibition which uses LEGO bricks as his medium will run from September 26 until January 4, 2015. Paul Hackett/Reuters

A devotee lights candles at a Chinese shrine during the annual vegetarian festival in Bangkok. The festival celebrates the local Chinese community’s belief that abstinence from meat and various stimulants during the ninth lunar month of the Chinese calendar will help them obtain good health and peace of mind. Athit Perawongmetha/Reuters

Market Closes for September 24^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Sept. 24 (Bloomberg) — Canadian stocks were little-changed at a six-week low, paring an earlier loss as financial shares retreated while Valeant Pharmaceuticals International Inc. rallied the most in five months.

     Talisman Energy Inc. and TransGlobe Energy Corp. lost at least 2.1 percent as energy stocks slumped to a five-month low. Bank of Nova Scotia sank 1.1 percent to pace losses among lenders. Valeant jumped 7 percent after the company said it expects to report third-quarter results that top estimates.

     The Standard & Poor’s/TSX Composite Index fell less than 0.1 percent to 15,120.54 at 4 p.m. in Toronto, the lowest since Aug. 7, recovering from an earlier loss of as much as 0.8 percent. The index touched a record Sept. 3.

     Five of the 10 main industries in the S&P/TSX dropped today on trading volume 35 percent above the 30-day average.

     Talisman Energy fell 2.9 percent to C$9.97 and TransGlobe Energy lost 2.1 percent to C$6.52. The S&P/TSX Energy Index has fallen for four days, to the lowest since April.

     Financial stocks, which account for about one-third of the weighting in the S&P/TSX, slid 0.5 percent. Bank of Nova Scotia lost 1.1 percent and Toronto-Dominion Bank slipped 0.8 percent.

     Valeant jumped 7 percent to C$137.29, the biggest gain since April. The drugmaker reports third-quarter earnings Oct. 20.

     Sherritt International Corp. jumped 9.7 percent to C$3.62, the biggest rally since December. Base metal prices rallied in London as copper futures rose from a 14-week low.

     BlackBerry Ltd. lost 0.8 percent to C$11.61, erasing an earlier gain. Chief Executive Officer John Chen unveiled a square-screened smartphone at an event in Toronto. The Passport is BlackBerry’s first major new device introduced globally since Chen was named CEO in November.

US

By Joseph Ciolli and Cordell Eddings

     Sept. 24 (Bloomberg) — U.S. stocks rebounded as new-home sales surged and health-care shares erased yesterday’s losses.  European equities rose on central bank stimulus bets, while Treasuries fell and the dollar strengthened.

     The Standard & Poor’s 500 Index climbed 0.8 percent at 4 p.m. in New York, halting a three-day drop. The Stoxx Europe 600 Index increased 0.7 percent. Both gauges closed yesterday at the lowest levels of the month. The yield on 10-year Treasuries rose 4 basis points to 2.57 percent after a notes sale drew lower- than-average demand. The euro fell below $1.28 for the first time in 14 months. Oil jumped 1.4 percent. The Shanghai Composite Index climbed to the highest since March 2013.

     New-home sales in the U.S. surged in August to the highest level in more than six years, a sign that the housing recovery is making progress. German business confidence fell more than forecast in September, after the European Central Bank said earlier this week it’ll be more active in its efforts to bolster the economy. Pfizer Inc. paced a rally in health-care stocks amid signs that efforts to curtail tax-friendly overseas deals might fall short.

     “We had three down days in a row, but the size of the home sales increase was a surprise,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a phone interview. “Improved confidence and stocks being cheaper than they were a few days ago prompted some buying. Stock performance this year has been good because dips haven’t lasted very long.”

     The S&P 500 dropped 1.4 percent during a three-day losing streak after closing Sept. 18 at a record. The gauge has not fallen four straight days since December.                       

     The benchmark index rallied last week as the Fed reaffirmed that its benchmark interest rate will stay low for a “considerable time” after the central bank ends a bond- purchase program intended to spur growth.

     Data today showed sales of new U.S. houses jumped 18 percent to a 504,000 annualized pace, the most since May 2008. The median forecast of 74 economists surveyed by Bloomberg called for the pace to accelerate to 430,000. The one-month increase was the biggest since January 1992.

     Treasuries fell for the first time in five days as the U.S. received the lowest demand at a five-year auction this year, with investors speculating the Fed is moving closer to raising interest rates. The $35 billion sale’s bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.56, versus an average of 2.75 for the past 10 sales.                       

     The benchmark 10-year yield rose four basis points to 2.57 percent after dropping nine basis points the previous four days, according to Bloomberg Bond Trader prices. Treasuries are headed for the steepest monthly loss this year after Fed officials raised their median forecast for borrowing costs earlier this month.

     “The weak auction is reflecting a market that realizes that we are at a crossroads — the Fed seems on course to raise rates,” said Carl Lantz, head of interest-rate strategy in New York at Credit Suisse Group AG, which as a primary dealer is obligated to bid at U.S. auctions. “The market is finally starting to trade with that in mind, and it’s clear that time isn’t on your side anymore.”

     Volatility across stocks, bonds and currencies worldwide is close to record or multi-year lows, even after Fed Chair Janet Yellen cautioned last week that the central bank could pull forward the timing of a rate increase if U.S. economic performance continues to exceed expectations.

     The Chicago Board Options Exchange Volatility Index, the gauge known as the VIX, decreased 11 percent to 13.27 today for the largest decline since Aug. 4. The index had surged 24 percent over the prior three days.                       

     Small-cap and Internet stocks have led recent declines in U.S. equities. Drugmakers with pending cross-border mergers tumbled yesterday after the U.S. disclosed plans to limit tax- driven deals.

     Health-care stocks had the biggest gains among 10 groups in the S&P 500 today, jumping 1.7 percent, amid signs that cross- border deals may continue despite the government’s efforts to curtail inversions. Pfizer climbed 0.9 percent after people with knowledge of the matter said the company has approached Actavis Plc about a deal that could allow it to move its address overseas and reduce taxes.

     Among other movers, Bed Bath & Beyond Inc. rallied 7.4 percent after posting quarterly profit and sales that topped analysts’ estimates. Wal-Mart Stores Inc. jumped 2 percent after reaching a deal with prepaid-card firm Green Dot Corp. to offer checking accounts to the retailer’s customers. Citizens Financial Group Inc. gained 7.4 percent in its trading debut after raising $3 billion in an initial public offering.

     The Stoxx 600 rose after sliding 1.4 percent yesterday, the most since July 8. The volume of shares changing hands was 15 percent above the 30-day average, according to data compiled by Bloomberg.

     The Ifo institute’s business climate index, based on a survey of 7,000 executives, dropped to 104.7 from 106.3 in August. Economists predicted a decline to 105.8, according to the median of 36 estimates in a Bloomberg survey. The index is now at its lowest since April 2013.

     Since June, ECB President Mario Draghi has cut interest rates to record lows, offered cheap long-term cash to banks, and pledged to buy asset-backed securities and covered bonds in a bid to revive the euro-area economy. He has said policy makers will go further if needed, leaving open the option of quantitative easing, or large-scale buying of sovereign debt.                     

      “At least for the ECB, today’s Ifo index is good news,” said Carsten Brzeski, chief economist at ING-DiBa in Frankfurt. “It should hush German protests against the latest asset- purchasing program and even against future possible quantitative easing.”

     The euro dropped 0.5 percent to $1.2780 on bets the ECB will add further monetary stimulus. The shared currency declined against most of its 31 major counterparts after Draghi said the exchange rate is in line with the divergence of monetary policy in Europe from other countries.

     The Bloomberg Dollar Spot Index rose 0.2 percent, strengthening for a fourth day and extending a four-year high.  The U.S. currency climbed 0.2 percent to 109.05 yen.

     Gold futures fell 0.2 percent to $1,219.50 as the dollar rallied, damping demand for the precious metal as an alternative investment.

     Oil jumped 1.4 percent after the Energy Information Administration said inventories dropped to an eight-month low. U.S. crude supplies decreased 4.27 million barrels last week as imports declined, according to the Energy Department’s statistical arm. Analysts surveyed by Bloomberg had expected an increase.

     The MSCI All-Country World Index gained 0.4 percent, after three days of declines. The gauge closed at its lowest level since Aug. 12 yesterday. The MSCI Emerging Markets Index rose 0.2 percent, after four straight sessions of losses. The gauge is down 4.7 percent for September. The MSCI AC Asia Pacific Index was little changed after closing at its lowest level since June 5.

     Russia’s Micex added 0.9 percent and the ruble strengthened 1.2 percent against the dollar as the government held its first local debt auction in 10 weeks.

     NATO said Russia has embarked on a “significant” withdrawal of forces from Ukraine, adding to signs that a truce is taking hold between the Kiev government and separatist groups.

     Markets in the Middle East mostly declined. Dubai’s DFM General Index and Saudi Arabia’s benchmark stock gauge dropped1.2 percent and 1.4 percent, respectively.

     The bombing of Islamic State militants in Syria is being carried out by the broadest Arab-U.S. military coalition since the 1991 Gulf War. Saudi Arabia, the United Arab Emirates, Jordan, Bahrain and Qatar all joined the first wave of U.S.-led airstrikes against the group yesterday.

     The Shanghai Composite Index rose 1.5 percent as a jump in new trading accounts lifted brokerages. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rallied 1.4 percent, rebounding from a two-month low.

     Cotton fell 2 percent and touched 61.02 cents a pound, the lowest price since 2009. China, the biggest buyer of the fiber, will restrict imports next year to encourage use of domestic cotton, the government said on Sept. 22.
 

Have a wonderful evening everyone.

Be magnificent!

I make no distinction between one religion and another.

People may worship me in any form they wish.

The form of worship does not matter to me;

my only concern is the quality of love which is expressed in worship.

I accept every kind of worship, because I am supreme.

The Bhagavad Gita

As ever,
 

Carolann

Jealousy is the tribute mediocrity pays to genius.

                          -Fulton J. Sheen, 1895-1979

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