September 3, 2014 Newsletter

Dear Friends,

Tangents:

HERE

…Now it is September
and I am there, between
the silhouette of broken fences
and weeds with yellow hair
seizing their own piece of buried sun.
Rain streams down my face.
A poplar breathes.
Over the only house I can see.
Burned and gutted…

      Lawrence Joseph

Photos of the Day

A police officer walks past a Scout Specialist Vehicle (r.) and a Foxhound armoured vehicle on the fairway at Celtic Manor golf club near Newport in Wales. Celtic Manor will host the NATO summit which starts tomorrow. Andrew Winning/Reuters

The Statue of Liberty is seen through the sails of a boat along the southern tip of Manhattan in New York. The temperature hit 92 degrees fahrenheit in Central Park today for the first time in 2014. Brendan McDermid/Reuters

Market Closes for September 3^rd, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Sept. 3 (Bloomberg) — Canadian stocks rose to a record, as the central bank left interest rates unchanged and global equities rallied after talks on a cease-fire advanced between Russia and Ukraine.

     Alimentation Couche-Tard Inc. climbed 6.7 percent to a record after agreeing to sell its aviation fuel business. Canadian Energy Services & Technology Corp. and Pembina Pipeline Corp. rallied more than 2.5 percent as crude in New York rose from the lowest price since January.

     The Standard & Poor’s/TSX Composite Index rose 38.55 points, or 0.3 percent, to 15,657.63 at 4 p.m. in Toronto, a record close.

     The Canadian equities benchmark has surged 15 percent this year, making it the second-best performer among developed equity markets behind Denmark. Trading volume in the S&P/TSX was 20 percent above the 30-day average today.

     Russian President Vladimir Putin and his Ukrainian counterpart Petro Poroshenko have agreed on a “cease-fire regime” and they reached a mutual understanding on the steps toward peace, Poroshenko said on his website.

     The MSCI All-Country World Index, which includes both emerging and developed markets, rallied 0.4 percent to near an all-time high.

     Canadian Energy Services added 2.8 percent to C$10.90 and Pembina rose 2.6 percent to C$52.77 as energy producers climbed 0.2 percent as a group. Crude for October delivery advanced 2.9 percent to settle at $95.54 a barrel in New York. Brent crude rebounded from a 16-month low.

     Alimentation Couche-Tard jumped 6.7 percent to C$35.45, the biggest gain in more than two years. The convenience store and gas-station operator reported better-than-expected first-quarter earnings and raised its dividend.

     Lightstream Resources Ltd. fell 1 percent to C$6.08 after agreeing to sell conventional oil assets to Crescent Point Energy Corp. Crescent Point dropped 3.1 percent to C$43.17.

     The Bank of Canada maintained its policy interest rate at 1 percent, extending the country’s rate pause to four years, and remained neutral on his next move, due to slack in the economy that will keep inflation in check. The decision from Ottawa was expected by all 18 economists in a Bloomberg News survey.

     Toronto-Dominion Bank climbed 0.7 percent to C$57.72 and Bank of Montreal rose 0.5 percent to C$85.03 to extend a record as shares of the nation’s largest lenders advanced a third day.

US

By Elena Popina and Joseph Ciolli

     Sept. 3 (Bloomberg) — The Nasdaq Composite Index fell as Apple Inc. tumbled while investors assessed the prospects for a resolution to the conflict in Ukraine. Emerging-market stocks rallied and the ruble jumped with oil prices.

     The Nasdaq Composite lost 0.6 percent at 4 p.m. in New York, as Apple tumbled 4.2 percent. The Standard & Poor’s 500 Index fell 0.1 percent to 2,000.72, erasing gains after reaching an all-time high. The MSCI Emerging Market Index advanced 1.3 percent to its highest level in three years, and the Stoxx Europe 600 Index rose 0.7 percent to the highest since July 4. Russia’s ruble strengthened 1.6 percent and Brent oil rose 2.4 percent.

     Russian President Vladimir Putin outlined a peace plan for Ukraine after agreeing with his Ukrainian counterpart Petro Poroshenko on steps toward a cease-fire in the conflict. A measure of services activity in the euro zone dropped more than forecast, adding to speculation that European Central Bank President Mario Draghi will announce additional stimulus. U.S.factory orders expanded in July and a private gauge showed non-  manufacturing activity in China jumped in August.

     “The pop this morning was a very small sense that there is some positive movement out of Russia and Ukraine,” Kevin Caron, who helps oversee $170 billion at Stifel Nicolaus & Co. in Florham Park, New Jersey, said in a phone interview. “But on second look most people are realizing that not too much has changed there.”

     Global equities rallied early in the day amid signs of easing tensions in Ukraine. Putin called for an end to the rebels’ offensive in the country’s easternmost regions and urged the withdrawal of the Ukrainian military from residential areas as part of a seven-point proposal he presented today in Ulaanbaatar, Mongolia.

     Ukrainian Prime Minister Arseniy Yatsenyuk dismissed Putin’s peace plan as “window dressing for the international community ahead of the NATO summit” and a ploy to duck sanctions. Putin’s “true plan is to ruin Ukraine and restore the Soviet Union,” Yatsenyuk said in an e-mailed statement.

     “The cease-fire in Ukraine is very important,” said Heinz-Gerd Sonnenschein, a strategist at Deutsche Postbank AG in Bonn. “People are beginning to wonder whether there will finally be a conclusion to the crisis, and if investors can focus on other factors, like economic indicators and central- bank policy.”

     The ruble strengthened the most since March against the dollar, after finishing yesterday at its lowest level since at least 2003. The Micex Index jumped 3.5 percent, its biggest gain in almost four months. The Ukrainian Equities Index climbed 1 percent.                         

     Treasuries erased losses as investors continued to seek a haven in U.S. government securities. The rate on 10-year Treasuries fell two basis points to 2.40 percent, after touching 2.47 percent, its highest level since Aug. 13.

     The S&P 500 slipped from a record yesterday, after gaining 3.8 percent in August to breach the 2,000 level for the first time on bets that the Federal Reserve will keep interest rates low even as the economy shows signs of picking up.

     The Fed said today the U.S. economy continued to expand during the summer, with none of the country’s regions experiencing a shift in the pace of growth. Trends in employment, wages and prices were little changed during the July-August period, according to the Beige Book survey released today based on reports from the 12 regional banks in the Fed system. Policy makers will meet Sept. 16-17.                        

     Data today showed factory goods orders rose 10.5 percent in July, the largest gain since records began in 1992.

     The U.S. economy expanded more than previously forecast in the second quarter, propelled by the biggest gain in business investment in more than two years, the Commerce Department reported last month. A Labor Department report on Sept. 5 will show payrolls rose by more than 200,000 in August for a seventh straight month, a Bloomberg survey of economists showed.

     The ECB and the Bank of Japan update monetary policy tomorrow amid speculation over the outlook for stimulus after disappointing economic reports.

     Technology shares in the S&P 500 slumped 0.7 percent as a group. Apple sank 4.2 percent, the most since January, after rival Samsung Electronics Co. introduced new smartphones and the company faced criticism following the theft of celebrity photos.

     Apple is set to unveil new iPhones, a wearable device and a mobile-payments system at an event on Sept. 9, people with knowledge of the matter have said. Pacific Crest Securities LLC said it would likely cut Apple’s outperform rating unless the event shows “massive incremental profit opportunities.”

     “Apple stock’s had a pretty strong move in the last several months,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in an interview. “A lot of positives from the iPhone launch are built into the stock price at these levels. People are merely taking profits.”

     Apple had rallied in 15 of the previous 17 sessions, adding 9.3 percent since Aug. 7 to reach a record close of $103.30 yesterday.

     The Bloomberg Dollar Spot Index slipped 0.2 percent, after three days of gains, as the U.S. currency weakened against most of its major counterparts. It fell the most versus Australia’s dollar.

     Brent oil rose 2.4 percent to $102.77 a barrel, rebounding from its lowest closing price since May 2013, on speculation cease-fire talks between Russia and Ukraine will ease sanctions against the biggest energy exporter. West Texas Intermediate soared 2.9 percent to $95.54 a barrel.

     Gold climbed 0.4 percent to $1,270.30 an ounce. Palladium declined to the lowest in almost two weeks after climbing to a 13-year high yesterday.

     The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong jumped 3.2 percent to its highest level this year after a report showed services activity accelerated in the world’s second-largest economy. The Shanghai Composite Index rose 1 percent.
 

Have a wonderful evening everyone.

Be magnificent!

If the recognized leaders of mankind who have control over the engines of destructions

were wholly to renounce their use, with full knowledge of its implications, permanent peace can be obtained.

This is clearly impossible without the Great Powers of the earth renouncing their imperialistic design.

This again seems impossible without great nations ceasing to believe in soul-destroying competition

and to desire to multiply wants and, therefore, increase their material possessions.

Mahatma Gandhi

As ever,

Carolann

The wisest men follow their own direction.

                   -Euripides, 480 BC-406 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