September 30, 2014 Newsletter

Dear Friends,

Tangents:

Interesting article in the Wall Street Journal today entitled What’s the Best time to go to Bed?

By  Heidi Mitchell

Sept. 29, 2014 7:01 p.m. ET

Many people categorize themselves as morning larks or night owls, but even they can have trouble finding the optimal moment to turn in for the night. One expert, Rafael Pelayo, a clinical professor in the division of sleep medicine at the Stanford School of Medicine, explains the secret to sorting out bedtime and why 8-year-olds are the best sleepers.

The Brain Goes Tick-Tock

The suprachiasmatic nucleus, or SCN, is the part of the brain where the optic nerves crisscross, (near the hypothalamus), says Dr. Pelayo. It actually ticks, he says, keeping time at about 24 hours and 10 minutes a day. “It’s what forces us to get sleepy when it’s nighttime,” he says. In fact, this internal clock is so important, it gets better blood supply than any part of the brain, and is nearly impossible to destroy, even in a stroke. “There is a very basic need for us to be able to predict time,” says Dr. Pelayo. Humans are diurnal, and adults aren’t normally “random” sleepers.

Always on Alert

Humans’ alertness levels aren’t constant, however, adds Dr. Pelayo. “People think that sleep is like gasoline, that in the morning, just after a good sleep, you’re most alert because your tank is full, but that’s not the case,” he says. Because of our long evolution, humans have developed sleep patterns and alertness to match needs for survival. “People are most alert in midmorning and just before going to bed; we’re less alert in the late afternoon, when the days are hottest and the lions were less likely to attack us,” he says, adding that this explains why many people get drowsy after lunch, but not after breakfast. Later in the day, he says, all humans have a second wind, about two to three hours before their falling-asleep time.

The Cycle of Sleep

The 90-minute sleep cycle also evolved from the need to be alert at times in the night. “Humans are meant to have a brief awakening every 90 minutes for 20 to 30 seconds, look around and be sure everyone is safe, and then fall back asleep,” says Dr. Pelayo, which is why new mothers are able to nurse in the night and then sleep again. “If you’re cozied up in bed and then begin to worry about the door being locked, eventually the biological need to sleep will overpower you. But after three to four hours, you will wake up and check the door,” he says. That need for security is deep-seated, and providing a safe environment is the best way to begin the process of going to sleep.

Serenity Now

There is an old saying that “one hour of sleep before midnight is worth two hours after midnight,” but Dr. Pelayo says this statement is totally false. “It’s a mistake to go to bed too early,” he says. “Trying to go to sleep when your body wants to be awake is like swimming upstream.”

Instead, a good strategy, says Dr. Pelayo, is to lock in the wake-up time and restrict your time in bed to your usual amount of sleep (which may not be the oft-cited eight hours). “Restricting your opportunity to sleep may actually make you go to bed later but the biologic drive to sleep will help you fall asleep faster and sleep deeper,” he says.

By his equation, “your ideal bedtime should be about 10 to 15 minutes before you want to fall asleep,” he says. “So if you want to be up at 7:30 a.m. and want to sleep 7.5 hours, you should get into bed about 11:45 p.m.”

The best sleepers in our society, he says, are 8-year-olds, who still have rules about bedtimes and go to bed without any worries. To sleep like one of those serene children, says Dr. Pelayo, “put your mind at ease, say your day is done, don’t spend too much time in bed and always, always get up at the same time in the morning.”

Email your Burning Questions to burning@wsj.com

On this date in 1927, Yankee great Babe Ruth set a baseball record by hitting his 60th home run of the regular season

Also on this day in 1955, James Dean was killed in an automobile collision.

On September 30^th, 1452, the Gutenberg Bible was published.

1928, Elie Wiesel was born.

1924, Truman Capote was born.

PHOTOS OF THE DAY

Postman Fiete Nissen, poses in his trolley on the track from the coast of Dagebuell, north of Hamburg, to the tiny North Sea islands of Oland and Langeness on his last working-day. Nissen was the official postman for the islands’ 139 residents for more than 37 years. Fabian Bimmer/Reuters

Vehicles drive by as a display of Aurora Borealis (Northern Lights) is seen north of the Arctic Circle, over the village of Mestervik in northern Norway. Yannis Behrakis/Reuters

Aerial view of a river in Peru’s Amazon region of Loreto. Enrique Castro-Mendivil/Reuters

Market Closes for September 30^th, 2014    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     Sept. 30 (Bloomberg) — Canadian stocks fell a second day, capping the biggest monthly loss in more than two years, as oil slumped the most in almost two years and data showed economic growth in the nation unexpectedly stalled in July.

     Ithaca Energy Inc. and BlackPearl Resources Inc. plunged at least 6.7 percent to pace declines among energy stocks. Detour Gold Corp. and Centerra Gold Inc. slipped at least 6 percent as the price of gold retreated to an eight-month low. Canadian Pacific Railway Ltd. climbed 1.7 percent to pace an advance among industrial companies.

     The Standard & Poor’s/TSX Composite Index fell 16.41 points, or 0.1 percent, to 14,960.51 at 4 p.m. in Toronto. The index lost 4.3 percent in September, the most since may 2012, and fell 1.2 percent in the third quarter.

     Canada’s gross domestic product was little changed in July, short of the median forecast for a 0.3 percent expansion in a Bloomberg survey of economists. Oil and gas extraction fell by 1.6 percent in July as cooler-than-normal temperatures curbed output of utilities, Statistics Canada said.

     BlackPearl Resources slumped 6.7 percent to C$2.10 and Ithaca Energy lost 7.9 percent to C$2.10. Crude in New York sank 3.6 percent to $91.16 a barrel and plunged 13 percent in the quarter, the most since June 2012.

     Detour Gold sank 6 percent to C$8.78 and Centerra Gold slumped 7.6 percent to C$5.02 as raw-materials stocks retreated 1 percent as a group, the most in the S&P/TSX.

     Sherritt International Corp. plunged 11 percent to C$3.10, a six-month low. Nickel, which fell into a bear market yesterday, lost 2.2 percent in London.

     Industrial shares jumped 0.6  percent and financial stocks added 0.2 percent as six of 10 groups in the benchmark Canadian equity gauge rose on trading volume 25 percent higher than the 30-day average today.

US

By Callie Bost and Eric Lam

     Sept. 30 (Bloomberg) — U.S. stocks fell, trimming a seventh straight quarterly gain in the Standard & Poor’s 500 Index, as small-cap and energy shares slumped amid an unexpected decline in consumer confidence.

     Energy shares in the S&P 500 tumbled 1.2 percent as oil futures plunged more than 3.5 percent. Ford Motor Co. dropped 2.1 percent after saying it will miss a profit forecast for 2014. EBay Inc. jumped 7.5 percent after the world’s biggest online marketplace said it will separate from its payments unit PayPal next year. Move Inc. rallied 37 percent after News Corp. agreed to buy the owner of real-estate websites.

     The S&P 500 fell 0.3 percent to 1,972.29 at 4 p.m. in New York, ending the quarter with a 0.6 percent gain. The Dow Jones Industrial Average lost 28.32 points, or 0.2 percent, to 17,042.90. The Russell 2000 Index of smaller shares dropped 1.5 percent, capping its worst quarter in three years. About 7.2 billion shares changed hands on U.S. exchanges, 29 percent higher than the three-month average.

     “It’s quarter-end, investors are parsing out the economic data and the geopolitical landscape,” said Craig Fehr, Canadian market strategist at Edward Jones on the phone from St. Louis. The firm manages about $800 billion globally. “Investors are trying to digest all of this news and we’re here at the end of the month and end of the quarter so there’s some short-term repositioning in the market.”

     The S&P 500 fell 0.3 percent yesterday as Hong Kong protests spurred political concern and a rebound in consumer spending fueled speculation the Federal Reserve may raise interest rates sooner than anticipated. The gauge lost 1.6 percent in September with the Fed on course to end its monthly bond-buying program, known as quantitative easing, in October.

     Confidence among U.S. consumers unexpectedly declined in September to a four-month low as Americans’ views of the labor market deteriorated. The Conference Board’s index decreased to 86 this month, weaker than the most pessimistic forecast in a Bloomberg survey of economists, from an August reading of 93.4 that was the strongest since October 2007.

     The S&P/Case-Shiller index of property values increased 6.7 percent from July 2013, the smallest 12-month gain since November 2012, a report from the group showed today.

     Investors are analyzing reports to assess whether economic growth is strong enough to withstand higher interest rates. The S&P 500 reached a record on Sept. 18 as the Fed maintained a commitment to keep interest rates near zero for a considerable time after completing asset purchases. The central bank also said that the timing could move forward if data continue to exceed expectations.

     Data on the manufacturing and services industries are due later this week, in addition to the government’s monthly labor report. Alcoa Inc. unofficially kicks off the earnings season when it reports quarterly results on Oct. 8.

     “The idea of earnings growing is going to be the more vital issue over the next year, as opposed to P/E expansion,”  David Kostin, chief U.S. equity strategist at Goldman Sachs Group Inc., said in an interview on Bloomberg Television’s “Market Makers” with Erik Schatzker and Stephanie Ruhle. “The idea of an expanding economy is what drives sales.”

     Kostin reiterated his year-end forecast of 2,050 for the S&P 500. He forecasts that the benchmark gauge will increased 8.5 percent to 2,150 over the next 12 months.

     Equity futures fell earlier in the day as two officials with direct knowledge of the discussions said Russia’s central bank is weighing the introduction of temporary capital controls if the flow of money out of the country intensifies. Stocks rebounded after the central bank said on its website that it isn’t considering imposing limits on cross-border capital flows.

     “There’s just a lot of cross currents out there today,”  James W. Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.9 billion, said by phone. “With earnings season looming around the corner, there’s not a lot of impetus to move either way. We could just be taking a pause and waiting for the next catalyst to move us either way.”

     The S&P 500 is up 0.6 percent for the quarter, its seventh straight advance and longest rally since June 1998. It has not had a four-day losing streak this year and has not fallen more than 10 percent in three years. The technology-heavy Nasdaq 100 Index jumped 5.2 percent in the three months.

     Small-cap stocks haven’t had the same success. The Russell 2000 is down 7.7 percent for the quarter, and has dropped 8.9 percent from a record reached in March as investors have sold more speculative shares.

     The Chicago Board Options Volatility Index, a gauge of investor trepidation derived from options, averaged 14.5 last week, 12 percent above its mean level during the third quarter. The VIX climbed 2.1 percent to 16.31 today.

     Six out of 10 main industries in the S&P 500 declined. Energy shares had the biggest drop, losing 1.2 percent. The group has lost 9.2 percent for the quarter, the worst showing in the S&P 500 and its largest retreat in three years.

     Ford dropped 2.1 percent to $14.79, adding to yesterday’s 7.5 percent plunge. The second-largest U.S. automaker said it will miss a profit forecast for 2014 as weakening sales in Russia, deflation in South America and recall costs in North America reduce income.

     EBay jumped 7.5 percent to $56.63. The San Jose, California-based company announced it will split itself into two publicly listed entities. The announcement follows activist shareholder Carl Icahn’s campaign earlier this year for PayPal’s spinoff.

     Move rallied 37 percent to $20.96. News Corp. will buy the San Jose, California-based company for $21 a share. That’s 37 percent higher than Move’s $15.29 closing price yesterday. News Corp. fell 2.7 percent to $16.35.
 

Have a wonderful evening  everyone.

Be magnificent!
 

I often ask myself at what point can a man and a beast that cannot talk recognize each other.

From the early paradise, at the dawn of creation, runs the path where their hearts meet.

Although their connection has long been forgotten,

traces of their continuing association has not been erased.

And , suddenly, in a wordless harmony,

a dim memory awakens and the beast looks on the face of the man with tender trust

and the man casts his eyes upon the beast with an amused tenderness.

It is as if two friends, both wearing masks, meet

and vaguely recognize each other through their disguises.

Rabindranath Tagore

As ever,

Carolann

You cannot open a book without learning something.

                           -Confucius, 551 BCE – 479 BCE

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7