The Newsletter for July 9, 2013

Dear Friends,

Tangents:

SUMMER

Heavy July.  Too rampant and too lush;

High Summer, dull, fulfilled, and satiate,

Nothing to fear, and little to await.

The very birds are hush.

Dark over-burdened woods: too black, their green.

No leaping promise, no surprise, no keen

Difficult fight against a young, a lean

Sharp air and frozen soil; no contest bright

Of fragile courage winning in despite.

Easy July, when all too warmly blows

The surfeit of the rose

Risking no harm;

And those aggressive indestructible

Bores, the herbaceous plants, that gladly take

Whatever’s given and make no demand

Beyond the careless favour of a stake;

Humble appeal, not arrogant command,

Like some tough spinster, doughty, duteous,

All virtue and no charm…

-from The Garden, V. Sackville-West

On July 9^th, 1962, Bob Dylan recorded Blowin’ In the Wind.

Photos of the Day –July 9th, 2013

Members of the media film a 39,000-year-old female Woolly mammoth, which was found frozen in Siberia, Russia, upon its arrival at an exhibition hall in Yokohama, Japan. Toru Hanai/Reuters

Workers attach photos by Kai Wiedenhoefer to the backside of the East Side Gallery in Berlin. Eight of his photographs of borders and separation walls will be exhibited here until Sept. 13. Paul Zinken/dpa/AP

Market Closes for July 9^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

July 9 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level in three weeks, as an advance in precious metals prices overshadowed disappointing earnings from companies including Alimentation Couche-Tard Inc.

OceanaGold Corp. and Argonaut Gold Inc. rallied at least 7.1 percent as gold climbed. Alimentation Couche-Tard, which operates convenience stores across North America and Europe, slumped 5 percent after adjusted earnings fell short of forecasts due in part to higher expenses in Europe. Jean Coutu Group Inc., the pharmacy company, fell 2.1 percent after posting first-quarter revenue short of estimates.

The Standard & Poor’s/TSX Composite Index rose 88.22 points, or 0.7 percent, to 12,297.09 at 4 p.m. in Toronto. The gauge has rallied 3.9 percent since hitting its low for the year on June 24. Trading volume was 18 percent below the 30-day average at this time of the day.

“We’re seeing some buying in the gold sector, likely because the entire sector was so oversold,” said Arthur Salzer, chief executive officer of Northland Wealth Management in Toronto. The firm manages C$225 million ($213 million). “There was so much optimism in Couche-Tard and Jean Coutu, that once in a while the stocks get ahead of themselves. The underlying numbers were quite good but maybe not what people were hoping for.”

The International Monetary Fund cut its projection for global growth in 2013 for a fifth time, to 3.1 percent from 3.3 percent in April as a U.S. expansion weakens, China’s economy levels off and Europe’s recession deepens. U.S. growth was trimmed to 1.7 percent from 1.9 percent, while China’s was lowered to 7.8 percent from 8 percent.

Raw-materials stocks paced gains in the S&P/TSX, rising 1.7 percent as a group. OceanaGold jumped 8.5 percent to C$1.28 and Argonaut Gold gained 7.1 percent to C$5.58 as gold futures for August delivery advanced 0.9 percent to $1,245.90 an ounce in New York. The S&P/TSX Gold Index climbed 1.1 percent as 18 of 25 members advanced.

First Majestic Silver Corp. rallied 4.7 percent to C$11.70 and Pan American Silver Corp. rose 3.2 percent to C$12.13 as silver prices gained.

BlackBerry Ltd., maker of the BlackBerry 10 line of smartphones, added 1 percent to C$10.20 after investors re- elected the company’s existing directors at an annual general meeting today and approved the company’s name change from Research In Motion Ltd.

Chief Executive Officer Thorsten Heins said at the meeting the company is “100 percent open to partnerships” to drive scale and will explore “every opportunity” to create value.

Consumer-staples companies, which include both Jean Coutu and Couche-Tard, lost the most in the S&P/TSX, declining 0.9 percent as a group.

Couche-Tard, the largest publicly traded convenience store chain operator in North America, sank 5 percent to C$58.35, for its biggest decline since May 2012. The Laval, Quebec-based company said fourth-quarter adjusted earnings were 61 cents a share, while analysts surveyed by Bloomberg had estimated 78 cents. Merchandise and service gross margins in the U.S., where Couche-Tard operates the Circle K convenience-store chain, declined 0.1 percent in the quarter.

Jean Coutu lost 2.1 percent to C$17.44. The Longueuil, Quebec-based company reported first-quarter revenue of C$681.6 million, falling short of forecasts for C$688.2 million.

Adjusted earnings for the period were 26 Canadian cents a share, in line with analysts’ estimates.

US

By Alex Barinka and Inyoung Hwang

July 9 (Bloomberg) — U.S. stocks rose for a fourth day amid optimism companies will report better-than-forecast earnings and that economic growth is strong enough to withstand any reduction in Federal Reserve stimulus.

Nine out of 10 groups in the S&P 500 advanced. FedEx Corp. rallied 4.4 percent, to lead industrial shares higher. An S&P gauge of homebuilders added 5.5 percent as all 11 members advanced. Kroger Co. climbed 2.7 percent after saying it will buy Harris Teeter Supermarkets Inc. in a deal valued at $2.5 billion. Alcoa Inc. slipped even after posting earnings that beat analysts’ estimates and maintaining its forecast for global aluminum demand.

The Standard & Poor’s 500 climbed 0.7 percent to 1,652.32 in New York, the highest in almost six weeks. The Dow Jones Industrial Average rose 75.65 points, or 0.5 percent, to 15,300.34 today. More than 5.8 billion shares traded hands on U.S. exchanges today, or 8.1 percent below the three-month average.

“Everybody’s waiting to see what earnings are going to look like,” Brian Jacobsen, who helps oversee $221.2 billion as chief portfolio strategist at Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin, said by telephone. “Until we see more earnings roll in, we’re waiting until tomorrow for what the Fed says. A lot of the other things are preludes or noise.”

The S&P 500 has gained 2.4 percent in the last four days, its longest winning streak since May 15, as better-than- estimated economic data on employment and manufacturing tempered concern over a scaling back of Fed bond buying. Investors will gain more insight into the central bank’s plans tomorrow when Chairman Ben Bernanke speaks and the Federal Open Market Committee publishes minutes from its June meeting.

The benchmark gauge plunged as much as 5.8 percent from a record high on May 21, when Bernanke first suggested the Fed might curb stimulus this year if growth meets the central bank’s estimates. The S&P 500 has since risen 5 percent from its June low and is 1 percent off the record. The index today surpassed its level on June 18, the day before a 4.8 percent rout started as the Fed’s policy-making committee suggested tapering could occur as early as in September.

The International Monetary Fund today lowered its 2013 projection for U.S. growth to 1.7 percent from 1.9 percent in April. The IMF said global growth will struggle to accelerate as U.S. expansion weakens, China’s economy levels off and Europe’s recession deepens.

The Fed stimulus and better-than-estimated corporate earnings have helped fuel a rally that lifted the S&P 500 by as much as 147 percent from its bear-market low in 2009. The start of the earnings season, which is traditionally marked by Alcoa’s report, has been a buying opportunity during that time. The S&P 500 has risen 13 of the 17 times Alcoa has posted results in the bull market, adding an average 1.6 percent in the two weeks following the company’s release.

Earnings at companies listed on the S&P 500 rose 1.8 percent last quarter, down from a projection of 8.3 percent six months ago, according to more than 11,000 analyst estimates compiled by Bloomberg. Lower expectations helped about 73 percent of the companies in the benchmark measure exceed forecasts by an average of 5.1 percent for the first three months of the year, Bloomberg data show. There are no S&P 500 companies scheduled to report today.

“Expectations for second-quarter earnings had fallen quite a bit and we’re beginning to see that the downgrades were by too much,” Jacobsen said. “We could see some pleasant surprises in the earnings season.”

Alcoa, the first member of the Dow to release results, slumped 0.1 percent to $7.91. The largest U.S. aluminum producer said profit excluding one-time items was 7 cents a share, more than the 6-cent average of 15 estimates compiled by Bloomberg.

Sales fell to $5.85 billion, also exceeding the $5.79 billion average of nine estimates.

Alcoa maintained its forecast that global aluminum demand will rise by 7 percent this year, led by 11 percent growth in China. Demand will exceed supply by 315,000 tons, the company said in presentation slides for the conference call.

The Chicago Board Options Exchange Volatility Index, or VIX, slid 2.9 percent to 14.35. The equity volatility gauge, which moves in the opposite direction as the S&P 500 about 80 percent of the time, reached a six-month high on June 20 and has fallen 30 percent since.

Industrial stocks rose 1.5 percent for the second-biggest gain among 10 S&P 500 groups behind materials producers.

Caterpillar Inc. surged 2.6 percent to $85.33 for the largest increase in the Dow.

FedEx jumped 4.4 percent to $103.15 amid speculation that it may be an investment target for William Ackman’s Pershing Square Capital Management LP. The company also agreed to settle a lawsuit claiming it had been “systematically overcharging” customers by billing businesses and government offices at higher residential rates. United Parcel Service Inc. added 1.6 percent to $89.73.

The S&P Supercomposite Homebuilding Index rallied 5.5 percent, rebounding after falling yesterday to a low for the year. D.R. Horton Inc. surged 7.6 percent to $21.22, the biggest gain since April. KB Home climbed 6.7 percent to $18.86.

Cisco Systems Inc. jumped 2.2 percent to $25.16 after announcing a deal with Microsoft Corp. on cloud computing infrastructure.

Tesla Motors Inc. advanced 1.5 percent to $123.45. Nasdaq OMX Group Inc. said the maker of electric cars will join the Nasdaq-100, which tracks the biggest companies on the Nasdaq, before the start of trading on July 15. The best-performing automotive stock this year will replace Oracle Corp., which is moving to the New York Stock Exchange.

Barnes & Noble Inc., which is considering separating and spinning off its divisions, jumped 5.4 percent to $18.61. The U.S. bookstore chain said Chief Executive Officer William Lynch resigned. The company promoted Chief Financial Officer Michael Huseby to president of the company and CEO of Nook Media, making him Barnes & Noble’s most senior executive.

International Business Machines Corp. dropped 1.9 percent to $191.30 for the biggest retreat in the Dow. Goldman Sachs Group Inc. downgraded the largest technology-services provider to a neutral rating from buy. The firm expects growing pressure on IBM’s growth areas in emerging markets. Goldman cut the price target for the stock to to $200 from $220.

Kroger, the largest U.S. grocery chain, climbed 2.7 percent to $37.15 after saying it will buy Harris Teeter in a deal valued at $2.5 billion. The smaller regional chain added 1.5 percent to $49.26.

Intuitive Surgical Inc. plunged 16 percent, the most in almost five years, to $419.30 after reporting preliminary results that missed analysts’ estimates as sales slowed for its surgical robots.

Have a wonderful evening everyone.

Be magnificent!

As long as the brain, which is so heavily conditioned, is measuring, “the more,” “the better,”

moving psychologically from this to that, it must inevitably bring about a sense of conflict, and this is disorder.

Not only the words more and better, but the feeling, the reaction, of achieving,

gaining – as long as there is this division, duality, there must be conflict.  And out of conflict is disorder.

Krishnamurti,1895-1986

As ever,

Carolann

Genius is eternal patience.

-Michelangelo, 1475-1564

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5828

www.carolannsteinhoff.com