Month: March 2016

Dear Friends,

Tangents:

1729 – Louis XV authorizes new issue of playing card money in New France; not enough printed bills or coinage to pay the troops.

Off to the concert by the legendary Israeli-American violinist Itzhak Perlman at the Orpheum in Vancouver tonight…

PHOTOS OF THE DAY

A woman runs through an artwork created by artist Filippo Minelli, where he let off colorful smoke bombs in Somerset House’s courtyard, in London Wednesday. The piece is a new work in his series ‘Silence/Shapes.’ Photographs of similar performances will be shown at a new street art exhibition, ‘Venturing Beyond: Graffiti and the Everyday Utopias of the Street,’ which opens to the public on March 3. Kirsty Wigglesworth/AP

Singaporean artist Hafiz Osman rides past the skyline in his creation, consisting of a bicycle and a temporary shelter, entitled ‘Cycle House’ during a preview of the i Light Marina Bay sustainable light festival in Singapore Wednesday. Edgar Su/Reuters

 

A mountain hare sits in the snow in the Cairngorm mountains near Glenshee in Scotland Wednesday. Russell Cheyne/Reuters

Market Closes for March 2^nd, 2016

Market Index	Close	Change
Dow Jones	16899.32	+34.24   +0.20%
S&P 500	1986.45	+8.10   +0.41%
NASDAQ	4703.422	+13.827   +0.29%
TSX	13017.93	+35.83
		+0.28%

International Markets

Market Index	Close	Change
NIKKEI	16746.55	+661.04
		+4.11%
HANG SENG	20003.49	+596.03
		+3.07%
SENSEX	24242.98	+463.63
		+1.95%
FTSE 100	6147.06	-5.82
		-0.09%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.249	1.239
CND. 30 Year Bond	2.046	2.034
U.S.    10 Year Bond	1.8406	1.8214
U.S. 30 Year Bond	2.6845	2.6946

Currencies

BOC Close	Today	Previous
Canadian $	0.74450	0.74514
US $	1.34319	1.34203
Euro Rate 1 Euro=		Inverse
Canadian $	1.46007	0.68490
US $	1.08702	0.91995

Commodities

Gold	Close	Previous
London Gold Fix	1239.20	1236.50
Oil	Close	Previous
WTI Crude Future	34.66	34.40

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks staged an afternoon comeback to close higher, erasing a loss for the year that reached 9.9 percent at its trough, as a raw-materials and energy producers rebounded with commodities prices.

     The Standard & Poor’s/TSX Composite Index rose 0.3 percent to 13,017.93 at 4 p.m. in Toronto, reversing losses of 1 percent to cap a five-day rally that is the longest this year. The Canadian benchmark is the only market in the developed world to end Wednesday in positive territory. New Zealand’s index is flat for the year as the two measures vie for the top spot and outpace returns from markets in the U.S., U.K. and Germany.

     “The downdraft was quite overdone given what the fundamentals suggested,” said Craig Fehr, Canada market strategist at Edward Jones, in an interview last week as the S&P/TSX neared positive territory. His firm manages $876 billion. “The short-term rebound we’re seeing is quite warranted. We were getting volatility begetting volatility even when it wasn’t warranted. The rebound in crude has provided a nice floor. The worries have abated a bit.”

     Shares in the Canadian benchmark trade at about 20 times earnings, roughly 14 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     Canadian stocks have shown signs of breaking away from their lock-step relationship to crude oil, outperforming global peers this year after being among the worst performers in 2015. Energy producers rose 1.1 Wednesday as New York crude settled at a two-month high after a government report showed U.S. refineries boosted their use of oil.

     CCL Industries Inc., a packaging and label-maker, jumped 12 percent to a record after agreeing to buy Checkpoint Systems Inc. in a friendly deal worth about C$556 million. Checkpoint makes label products for the retail and apparel industry.

     Base metals producers First Quantum Minerals Ltd. and Teck Resources Ltd. surged at least 19 percent as raw-materials producers soared 3.9 percent as a group. Copper climbed to a three-month high. The industry is the best-performing group in the S&P/TSX this year with a 17 percent advance.

     Valeant Pharmaceuticals International Inc. rose 3.2 percent, snapping a four-day slide to rebound from a 2013 low. Shares of the drugmaker pared losses of as much as 11 percent yesterday after Nomura analyst Shibani Malhotra said Valeant was viewed with more confidence after conversations with the company. Malhotra maintained a buy rating on the stock. Shares of the drugmaker have plunged 74 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices.

     Brookfield Asset Management Inc. and Manulife Financial Corp. slipped at least 1.3 percent to lead financial services stocks lower. Toronto-Dominion Bank and Bank of Nova Scotia each lost 0.3 percent.

     Canadian banks’ exposure to the struggling oil-and gas industry totals C$107 billion when including untapped credit lines with outstanding loans, double the C$50 billion generally highlighted by the big banks in quarterly earnings calls and presentations. The nation’s largest lenders reported mixed first-quarter earnings over the past week, with Royal Bank and Toronto-Dominion bank missing analysts’ estimates.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks advanced, extending their eight- week highs, with banks and energy shares rallying for a second day as improving data bolstered optimism on the economy.

     Equities pressed higher in the final hour of trading after swinging between gains and losses for most of the session. Bank of America Corp. increased 2.1 percent to a one-month high, on top of a 5.4 percent gain yesterday, while Exxon Mobil Co. added 1.8 percent. Monsanto Co. fell the most in more than five years after cutting its profit forecast.

     The Standard & Poor’s 500 Index rose 0.4 percent to 1,986.45 at 4 p.m. in New York, holding at the highest since Jan. 6. The Russell 2000 Index of small caps jumped 1.1 percent. The Dow Jones Industrial Average added 34.24 points, or 0.2 percent, to 16,899.39, and the Nasdaq Composite Index increased 0.3 percent. About 8.3 billion shares traded hands on U.S. exchanges, in line with the three-month average.

     “It was the more cyclical businesses that bounced back today,” said Terry Morris, a senior equity manager who helps oversee about $3.2 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co. “The market ended up technically oversold a couple weeks ago, so the market was ripe to snap back, and we saw a continuation of that today. The fact that energy has stabilized has been enough to help the market turn up.”

     A report today showed companies in the U.S. added more workers than forecast to their payrolls, another positive signal on the economy after gauges showing stability at American factories, major carmakers and in the public and private construction industries helped spur a rally yesterday. The improving data has also raised the odds the Federal Reserve will boost borrowing costs this year.

     The S&P 500 has trimmed its 2016 decline to less than 3 percent, from more than 10 percent, amid a recovery from a 22- month low on Feb. 11. Banks, consumer and technology companies have helped boost the comeback. The benchmark is down 6.8 percent from an all-time high reached last May.

     The Chicago Board Options Exchange Volatility Index slipped 3.5 percent Wednesday to 17.09, with the measure of market turbulence known as the VIX dropping to the lowest level since Dec. 29.

     In Tuesday’s votes, Donald Trump and Hillary Clinton solidified their positions in the race to their parties’ presidential nominations. The impact on trading was muddied as global equities rebounded on the U.S. economic data and amid stability in China markets that spurred risk-taking.

     The eighth year of a presidency typically ranks last in terms of equity returns, and the first half of an election year is often even worse. Add everything else that has been weighing on markets in 2016, from China to oil and the Fed, and few money managers see a return to the relative calm that reigned from 2012 to 2015.

     “There will continue to be a lingering concern regarding who the Republican Party will nominate,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey via e-mail. “We expect as the months draw closer to the general election certain sectors performance will improve. Look for a bullish change in sentiment toward the health-care sector as jitters and uncertainty subside.”

     A Fed report today showed the U.S. economy continued to expand across most of the country, while wage growth was described as varying widely, “from flat to strong.” Seven of the Fed’s 12 regional districts characterized the economy as growing “moderately,” at a “modest pace” or “slightly,” according to the central bank’s Beige Book, an economic survey published eight times a year.

     Separately, San Francisco Fed President John Williams said today domestic demand is overwhelming weakness from abroad, and inflation should move back to the central bank’s 2 percent target over the next two years. Traders have raised the odds for rate increases this year, pricing in a 38 percent probability for a June boost in borrowing costs, up from about 26 percent a week ago. Chances for a December move have increased to 65 percent from 42 percent last Wednesday.

     “People were saying for a long time that while the stock market wasn’t doing well, the underlying economy was still doing well,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “We’re seeing proof of that now. It’ll be interesting to see if data continues to improve, and how that affects Fed decision-making. We’re starting to see people talk about an accelerated Fed rate hike schedule.”                      

     Eight of the S&P 500’s 10 main industries increased today, with energy and financial stocks gaining for a second straight day to lead the advance. Raw-material and consumer discretionary companies were the only two groups to decline.

     Energy companies in the benchmark stock index climbed 2.5 percent, the most in two weeks, to extend a two-day increase to 4.7 percent. Crude oil rose 0.8 percent to the highest in almost two months after a government report showed U.S. refineries boosted their use of crude. Marathon Oil Corp. and Devon Energy Corp. advanced more than 11 percent.

     Chesapeake Energy Corp. surged 23 percent, the most in more than seven years. Co-founder Aubrey McClendon, who was ousted three years ago, was killed in a car crash in Oklahoma City Wednesday, police said. His death comes a day after he was charged with rigging bids for oil and natural gas leases.

     Banks continued to recover from their lowest levels since 2013, with lenders in the S&P 500 up nearly 14 percent since Feb. 11. Citigroup Inc. and Wells Fargo & Co. gained at least 1.7 percent. The KBW Bank Index advanced 1.8 percent to an almost seven-week high.

     The S&P 500 Information Technology Index was little changed after erasing a 0.6 percent drop. EBay Inc. and Skyworks Solutions Inc. lost more than 2 percent. Even as Skyworks declined, an index of semiconductor companies in the benchmark increased 0.5 percent, with Micron Technology Inc.’s 5.5 percent gain.

     Materials shares in the benchmark index dropped 0.4 percent. Monsanto Co. plunged 7.8 percent to a five-month low after the world’s largest seed producer cut its full-year profit forecast. Chief Executive Officer Hugh Grant said the company may have to push back its long-term profit target to early in the next decade amid pressures from weak agricultural markets. Sherwin-Williams Co. and CF Industries Holdings Inc. declined at least 2.6 percent.

     Consumer discretionary companies closed little changed, paring a 0.8 percent slide. Dollar Tree Inc. fell 4 percent after its rating was cut to market perform from strong buy at Raymond James Financial Inc. The company has gained 28 percent since falling to a one-year low in October. Royal Caribbean Cruises Ltd. and AutoNation Inc. slipped more than 1.7 percent. Homebuilders Lennar Corp. and PulteGroup Inc. added at least 2 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

The golden rule of conduct therefore, is mutual toleration,

seeing that we will never think alike and we shall see the Truth

in fragments and from different angles of vision.

Conscience is not the same thing for all.

While, therefore, it is a good guide for individual conduct,

imposition of that conduct upon all will be an insufferable interference

with everybody’s freedom of conscience.

Mahatma Gandhi

 

As ever,
 

Carolann

 

The measure of life is not its duration, but its donation.

                                            -Peter Marshall, 1926-

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

MARCH:

Pisces & Aries
Birthstone: Aquamarine
Flower: Tulip

The days and nights  approach each other in duration, balancing perfectly at the vernal equinox.  Anything could happen.  Despite the persistent winds, spring is in the air.  “The wind blows where it wants and you can hear the sound of it but you cannot tell where it is coming from and where it is going.  So it is with those who are born of the spirit.”  March is the Martian month.  We feel braced.   There’s warmth in the air.  Nature begins her journey outward into beauty.  Our senses awaken.  Winter’s inwardness, its contraction, begins to turn inside out.  Responding, we begin to flow outward too, to expand.
“March is the month of expectation,” wrote Emily Dickinson.

The month is so called from Mars.  The old Dutch name for it was Lentmaand.  The old Saxon name was hrethmonath, perhaps meaning “rough-month” form its boisterous winds.  This subsequently became lenctenmonath – lengthening month.
March comes in like a lion and goes out like a lamb.

On March 1, 1961, President John F. Kennedy issued an executive order creating the Peace Corps, enlisting men and women for voluntary, unpaid service in developing countries around the world.

 

2010 – Vancouver Olympics end with Canada winning 14 gold medals, the most for any country (host or otherwise) in any Winter Olympics.

PHOTOS OF THE DAY

A woman walks her dog in front of the setting sun near Hannover, northern Germany, Monday evening. Julian Stratenschulte/dpa/AP

A man covered with a plastic bag for protection from the wind and cold fishes through an ice hole in the Finnish Gulf west of St. Petersburg, Russia, Tuesday. Dmitri Lovetsky/AP

Market Closes for March 1^st, 2016

Market Index	Close	Change
Dow Jones	16865.08	+348.58   +2.11%
S&P 500	1974.28	+42.05   +2.18%
NASDAQ	4689.594	+131.644   +2.89%
TSX	12970.38	+110.03
		+0.86%

International Markets

Market Index	Close	Change
NIKKEI	16085.51	+58.75
		+0.37%
HANG SENG	19407.46	+295.53
		+1.55%
SENSEX	23779.35	+777.35
		+3.38%
FTSE 100	6152.88	+55.79
		+0.92%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.239	1.191
CND. 30 Year Bond	2.034	1.975
U.S.    10 Year Bond	1.8214	1.7365
U.S. 30 Year Bond	2.6946	2.6156

Currencies

BOC Close	Today	Previous
Canadian $	0.74514	0.73882
US $	1.34203	1.35352
Euro Rate 1 Euro=		Inverse
Canadian $	1.45858	0.68560
US $	1.08686	0.92008

Commodities

Gold	Close	Previous
London Gold Fix	1236.50	1234.90
Oil	Close	Previous
WTI Crude Future	34.40	33.75

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, with a fourth straight gain pushing the benchmark index to the highest level since Dec. 31, as an unexpected expansion in Canada’s economy last quarter added to optimism that growth is accelerating in America.

     The Standard & Poor’s/TSX Composite Index climbed 1 percent to 12,982.10 at 4 p.m. in Toronto, capping the longest rally in two weeks. The equity gauge has rebounded 7.4 percent from a Feb. 11 low and is 0.2 percent from erasing declines for the year. The index yesterday narrowly avoided a ninth loss in the past 10 months with a 0.3 percent February increase.

     Global stocks rallied and the S&P 500 rebounded from a third monthly loss amid data showing U.S. manufacturing steadied last month. Emerging-market currencies and metals rose on speculation central banks in Asia and Europe will add to stimulus a day after China moved to soften the nation’s economic downturn. The U.S. and China are Canada’s two largest trading partners.

     Canada’s economy unexpectedly rose at a 0.8 percent annualized pace between October and December, Statistics Canada said Tuesday in Ottawa. Economists had forecast output would be flat, according to a Bloomberg survey. The weakened Canadian dollar reduced imports by the most in six years, taking pressure off the central bank to cut interest rates to record lows.

     The S&P/TSX is one of the best-performing markets in the developed world this year, vying with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 14 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     Bank of Nova Scotia, Canada’s third-largest lender by assets, climbed 5.8 percent for the biggest increase in seven years after posting rising first-quarter profit, led by its international-banking business. The lender is the last of the nation’s largest banks to report earnings during this period. Toronto-Dominion Bank and Royal Bank of Canada missed analysts’ estimates, while Bank of Montreal and Canadian Imperial Bank of Commerce beat expectations.

     Maple Leaf Foods Inc. surged 8.1 percent to a record after fourth-quarter earnings and revenue topped the highest estimates among analysts. The food products maker also boosted its dividend.

     Valeant sank 2.3 percent, falling for a fourth day, extending a 2013 low. Shares of the drugmaker pared earlier losses of as much as 11 percent after Nomura analyst Shibani Malhotra said Valeant was viewed with more confidence after conversations with the company. Malhotra maintained a buy rating on the stock.

     Quebec’s securities regulator Autorite des marches financiers earlier said it was “concerned” about allegations made against Valeant and would neither confirm nor deny it was investigating the Laval, Quebec-based company.

     Shares of the drugmaker have plunged 75 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices. The stock added to losses yesterday after the company confirmed the U.S. Securities and Exchange Commission is investigating Valeant in a previously undisclosed probe.

US

By Oliver Renick

     (Bloomberg) — The Nasdaq 100 Index powered to its best day in six months as U.S. equities roared into March amid signs that the world’s largest economy remains on firm footing and foreign central banks stand poised to do what’s needed to shore up sluggishness abroad.

     American factories looked set to emerge from a year-long slump, while monthly sales at major carmakers showed consumers stepping up spending a day after China added to stimulus, alleviating anxieties that had sent U.S. shares to the worst start to a year on record. Banks and technology stocks paced gains Tuesday, as companies hardest hit during the rout continued a three-week rebound.

     The S&P 500 climbed 2.4 percent, the most in a month, to 1,978.35 at 4 p.m. in New York, the highest close since Jan. 6 after sliding 0.8 percent on Monday to cap a third straight monthly drop. The gauge has trimmed its 2016 decline to 3.2 percent, down from more than 10 percent. The Nasdaq 100 gained 3.2 percent, the most since Aug. 26. The Dow Jones Industrial Average added 348.58 points, or 2.1 percent, to 16,865.08.

     “This is a big rally without a whole lot having changed,” said Scott Wren, a senior global equity strategist in St. Louis at Wells Fargo Investment Institute. “We opened above the 50-day moving average and that has driven the day, along with some of the economic news as well and oil above $30. It shows you how desperate these equity markets were for some kind of stability.”

     Equities extended an opening advance after a report showed factory activity in February shrank less than forecast, as gains in new orders and production provided signs that the beleaguered industry could soon stabilize. Another report showed spending on all construction projects, private and public, rose 1.5 percent in January, the most since May.

     The S&P 500 entered March lugging its longest stretch of monthly declines since 2011, as equities have been beset this year by worries that China’s slowing economy will hurt growth around the globe, a concern compounded by tumbling commodity prices. That’s led investors to anticipate more support from policy makers, and China’s central bank yesterday cut banks’ reserve requirements, freeing up funds to help spur lending.

     A rebound in oil prices in the final two weeks of February helped the U.S. equity benchmark to recover most of its losses last month, which reached as much as 5.7 percent. The index is now 8.2 percent above a Feb. 11 low, and 7.2 percent off an all- time high reached last May.                          

     The Chicago Board Options Exchange Index, the gauge of options prices known as the VIX, slid 14 percent to 17.70, the biggest one-day drop since Jan. 22 to the lowest level this year. The measure of market turbulence edged up 1.7 percent in February, paring a surge of more than 39 percent during the month. About 8.8 billion shares traded hands on U.S. exchanges, 6 percent above the three-month average.

     Nine of the S&P 500’s 10 main industries increased Tuesday, with financial and technology shares rising more than 3 percent. Seven groups gained more than 1.9 percent. JPMorgan Chase & Co. and Apple Inc. climbed at least 3.9 percent. Within consumer discretionary shares, retailers were strong, with Amazon.com Inc. and Tiffany & Co. more than 4 percent. Ford Motor Co. posted its strongest gain since October 2012 after better-than- expected February sales.

     In the three times this year that the S&P 500 rose more than 2 percent, this is the first instance when a Goldman Sachs Group Inc. index of equities with the highest short interest was up less than the benchmark. During the market’s bounce from Feb. 11 through yesterday, most-shorted shares jumped 13 percent, compared with the S&P 500’s 5.6 percent climb.

     Presidential primaries move into focus today, with more delegates to be awarded than on any other day of the nomination race. Investors are also assessing economic releases to gauge the possible trajectory of interest-rate increases before the Federal Reserve’s next decision on March 16, with the government’s monthly jobs report looming on Friday.

     Before the better-than-forecast data on manufacturing and construction spending, Fed Bank of New York President William C. Dudley said he was less confident in the inflation outlook following recent turbulence in financial markets. Dudley’s views added to officials’ concerns expressed recently about growth and inflation headwinds from abroad.

     Traders are pricing in a 12 percent probability of a rate boost this month, with odds increasing to 50 percent by September and 63 percent in December. That’s up from just 11 percent at the height of last month’s selloff on Feb. 11.

     “The numbers today were pretty decent with manufacturing up from estimates and the construction numbers were pretty good as well, so if inflation keeps moving over the next few months that could be a good thing as we started the year talking about negative rates and deflation,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. “Financials are also bouncing back after getting beat up and as we get some stability in oil prices, things are looking a little better.”

     Financial companies added 3.5 percent, the biggest gain for the 89-member group in three weeks. Wells Fargo & Co. increased 3.8 percent while Bank of America Corp. and Citigroup Inc. climbed more than 5.3 percent. The KBW Bank Index jumped 4.6 percent to a one-month high.

     Ford surged 4.6 percent and Fiat Chrysler Automobiles NV added 7.2 percent to a five-week high. Their February sales beat analysts’ estimates, thanks to promotions tied to the Presidents Day holiday and continued strong demand for sport utility vehicles and pickups. General Motors Co. lagged, gaining 1.9 percent after a surprise decline in its sales.

     Apple rose the most in more than a month to pace the strongest advance for technology shares since Jan. 29. Facebook Inc. and Microsoft Corp. contributed, increasing at least 2.7 percent. Hard-drive makers Seagate Technology Plc and Western Digital Corp. rallied more than 5.9 percent following management presentations late yesterday at a Morgan Stanley conference.

     Raw-materials producers gained for the fourth time in five days to the highest this year. Providers of building materials were among the strongest performers following the construction spending data, with paint maker Sherwin-Williams Co. rising 3.9 percent to a six-month high, while Martin Marietta Materials Inc. and Vulcan Materials Co. added more than 2.9 percent. Steel company Nucor Corp. gained 4.1 percent to a 2016 high.

 

Have a wonderful evening everyone.

 

Be magnificent!

Differentiation, infinitely contradictory, must remain,

but it is not necessary that we should hate each other;

it is not necessary therefore that we should fight each other.

Swami Vivekananda

As ever,
 

Carolann

 

People won’t have time for you if you are always angry or complaining.

                                                            -Stephen Hawking, 1942-

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Calendars That Leap

  -by Amanda Foreman, WSJ

Every four years on Feb. 29, we are reminded of one of life’s most puzzling conundrums: Time is both arbitrary and immutable. The “leap” making its appearance this Monday shows that the Western calendar on which we place so much reliance is a conceit—a piece of fiction introduced by Pope Gregory XIII in October 1582.

Despite the provisional nature of calendars, two real phenomena govern almost all of them: the phases of the moon and the rotations of the sun. Our Mesolithic ancestors were the first people to harness the movements of the cosmos to provide a fixed notion of the past, the present and the future. The oldest known calendar in the world was discovered in a Scottish field in 2013, notched into the earth some 10,000 years ago. Our forebears had created it by shaping 12 specially dug pits around a 164-foot arc to mimic the phases of the moon and track the months.

The design was sophisticated and yet simple enough that it could be modified easily. However, as with the lunar Islamic calendar today, the ancient Scots were constantly having to adjust for the differences between the lunar and solar calendars. To help with realignments, they tied their calibrations to a notch in the ground that marked the rising sun of the midwinter solstice.

Since a solar year is 365 days, five hours and about 49 minutes, every culture and civilization until the global adoption of the Gregorian calendar had to have a method for accommodating the leap days. In ancient times, the Babylonians would add a month at intervals of two and three years. The early Romans had a calendar of only 355 days, which led them to insert an extra month into late February every other year so that religious festivals wouldn’t occur out of season. After Julius Caesar’s reforms in 46 B.C., the Roman year had 12 months, 365 days and a leap year every four years. Even so, the calendar needed resetting every 131 years.

The Mayans made the most ingenious attempt at tackling the accuracy problem. They perfected a system using three corresponding calendars simultaneously. The last of them, the Long Count, measured the universe in life cycles of 7,885 solar years. (Much New Age quackery resulted from the belief that the end of the last cycle on Dec. 21, 2012, signified the end of the world.

Pope Gregory XIII’s calendar was able to prevent Christmas and Easter from creeping forward with a one-time leap forward of 10 days in October 1582. The calendar also used a more-accurate mathematical formula for leap years that excludes from the leap-year calendar any century years unless they’re exactly divisible by 400. But for all its brilliance, the new calendar couldn’t solve the problem that all of history before Oct. 15, 1582, became unmoored from its original dates.

Britain and its colonies stubbornly clung to the old Julian calendar until 1752, when they were also forced to change New Year’s Day from March 25 to Jan. 1.

Among those caught up in the calendar wars was George Washington. He was brought up believing he had been born on Feb. 11, 1731. But by the time he died in 1799, he had not only gained a different birthday but also grown a year younger; the New Year’s Day change had resulted in his birth date moving to Feb. 22, 1732.

Perhaps it’s just as well that his birthday is now celebrated on the uncertain date of the third Monday of every February.

PHOTOS OF THE DAY

A farmer sleeps near cows at the International Agricultural Show in Paris Monday. The show runs from Feb. 27 to March 6.Benoit Tessier/Reuters

A monkey walks on power lines above a busy market in the old quarters of Delhi Monday. Cathal McNaughton/Reuters

Market Closes for February 29^th, 2016

Market Index	Close	Change
Dow Jones	16516.50	-123.47   -0.74%
S&P 500	1932.23	-15.82   -0.81%
NASDAQ	4557.949	-32.523   -0.71%
TSX	12860.35	+62.56
		+0.49%

International Markets

Market Index	Close	Change
NIKKEI	16026.76	-161.65
		-1.00%
HANG SENG	19111.93	-252.22
		-1.30%
SENSEX	23002.00	-152.30
		-0.66%
FTSE 100	6097.09	+1.08
		+0.02%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.191	1.180
CND. 30 Year Bond	1.975	1.960
U.S.    10 Year Bond	1.7365	1.7554
U.S. 30 Year Bond	2.6156	2.6332

Currencies

BOC Close	Today	Previous
Canadian $	0.73882	0.74001
US $	1.35352	1.35115
Euro Rate 1 Euro=		Inverse
Canadian $	1.47330	0.67875
US $	1.08850	0.91870

Commodities

Gold	Close	Previous
London Gold Fix	1234.90	1226.50
Oil	Close	Previous
WTI Crude Future	33.75	32.78

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a third day to halt a three-month slide on February’s final trading day, as advances among commodities producers overshadowed a plunge in Valeant Pharmaceuticals International Inc.

     Shares of the drugmaker, facing intense scrutiny from investors and lawmakers over its pricing practices, plunged 18 percent Monday and widened losses in a flurry of late-afternoon trading after a company spokeswoman confirmed the U.S. Securities and Exchange Commission is investigating Valeant in a previously undisclosed probe. The company has canceled an analyst conference call after it withdrew its guidance and delayed its fourth-quarter results originally scheduled for today.

     The Standard & Poor’s/TSX Composite Index still managed to end the day higher, climbing 0.5 percent to 12,860.35 at 4 p.m. in Toronto to erase February losses. The benchmark equity gauge rebounded 6.4 percent from a Feb. 11 low and is less than 1.2 percent from erasing declines for the year. The index narrowly avoided a ninth loss in the past 10 months with a 0.3 percent February increase.

     “There’s a limit to how much further you can go down,” said John Wilson, Chief Executive Officer of Sprott Inc.’s asset management unit, in a Feb. 26 interview. His firm manages C$8.5 billion ($6.28 billion). “I doubt we’ll be sub $30 a barrel for oil two years from now, and the Canadian dollar’s taken most of the punishment it’s going to take. From a valuation standpoint, there’s certainly more attractive opportunities here in Canada.”

     Global equities fluctuated and the S&P 500 erased a February gain for a third monthly loss, while crude advanced with gold after Group of 20 finance chiefs made only vague commitments to spur growth at a Shanghai meeting. China lowered requirements for the amount of cash its lenders had to lock away in a bid to soften the nation’s economic downturn.

     The S&P/TSX is one of the best-performing markets in the developed world this year, battling with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 16 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     Raw-materials producers rallied with metals prices. Gold rose for the fourth time in five days for its biggest monthly gain in four years as investors seek a haven from tumbling global equities. The precious metal is this year’s best- performing major asset, its 16 percent gain topping high-yield bonds, Treasuries, currencies and major stock indexes according to data compiled by Bloomberg.

     Canadian raw-materials producers, led by broad gains among gold and base metals producers including Kinross Gold Corp. and copper producer First Quantum Minerals Ltd., surged 18 percent in February to lead the S&P/TSX’s rebound. Consumer staples stocks, led by a 16 percent rally in beverage maker Cott Corp. after posting a surprise profit, have also contributed to gains in the broader benchmark.

     Energy companies increased 1.6 percent Monday, cutting a monthly slide to 1.5 percent. Canadian Natural Resources Ltd. added 3.3 percent and Encana Corp. surged 10 percent to pace gains. Energy and raw-materials producers account for about 29 percent of the broader S&P/TSX.

     Health-care stocks, meanwhile, trailed the 10-industry S&P/TSX with a 23 percent slide in February, as Valeant slumped 29 percent to account for the majority of the losses. Valeant shares sank earlier in the month when it first disclosed it would restate some earnings due to its relationship with a mail- order pharmacy.

US

By Joseph Ciolli

     (Bloomberg) — The Standard & Poor’s 500 Index erased a February gain Monday, despite a rally in crude oil, as a two- week rebound faltered in the month’s lightly traded final session.

     Banks and health-care shares were the biggest drags today, with lenders capping a third monthly decline, losing 6.9 percent in February. JPMorgan Chase & Co. and Wells Fargo & Co. fell at least 2.1 percent to pace Monday’s retreat. Amgen Inc. sank 3.6 percent and Endo International Plc plunged 21 percent as health- care companies had their worst decline in more than two weeks. Energy shares fell 1.2 percent to post the fourth consecutive monthly drop and ninth in the last 10.

     The S&P 500 fell 0.8 percent to 1,932.23 at 4 p.m. in New York, extending its monthly losing streak to three, the longest in more than four years. It closed 0.4 percent lower for February. The Dow Jones Industrial Average lost 123.47 points, or 0.7 percent, to 16,516.50, though it managed to snap a two- month skid. The Nasdaq Composite Index sank 0.7 percent. Crude rose 3 percent. The S&P 500 hasn’t declined on a day when oil climbed that much since Nov. 23.

     “Following a pretty good week, investors might be taking a little pause, perhaps taking some profits,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “There has been no upside catalyst today. Typically, the market goes in lockstep with oil, which is up today, but that connection has broken down. It would probably be a positive for stocks if they were to unlock.”

     Afternoon declines accelerated as the S&P 500 fell below its average price during the past 50 days. It closed above that level on Thursday for the first time this year. The index halted a two-day advance on Friday after signs of firming inflation spurred speculation interest rates may rise sooner than previously expected. A bank-fueled rebound of 6.5 percent since Feb. 11 through last week had briefly erased the benchmark’s losses for the month.

     Asian shares retreated today amid disappointment that the Group of 20 finance ministers meeting in Shanghai failed to make firm commitments to bolster the global economy. Concern over growth and a deepening rout in oil sent stocks tumbling earlier this year and stoked speculation of more support from policy makers.

     After the close of trading in Asia, China’s central bank cut the amount of cash the nation’s lenders must hold as reserve, marking a return to more traditional easing after policy makers indicated in recent weeks they would spur growth by guiding interbank markets lower and injecting liquidity through open-market operations.

     While the S&P 500 jumped 1.6 percent in the previous five trading sessions, the gains came amid the weakest volume in 2016, signaling a lack of conviction in the rally after losses of as much as 11 percent this year. The benchmark is down 9.3 percent from an all-time high reached last May. About 8.3 billion shares traded hands on U.S. exchanges Monday, in line with the three-month average.                          

     Investors are also assessing economic releases to gauge the trajectory of rate increases, before the Federal Reserve’s next decision on March 16. Data today showed contracts to purchase previously owned homes unexpectedly dropped in January by the most in two years. A February gauge on manufacturing in the Chicago area today also fell more than forecast. Data on Friday showed the Fed’s preferred measure of inflation rose by the most since October 2014.

     After last week’s batch of reports, traders raised their bets for further Fed rate increases this year, though they tempered a bit today. The probability of a June boost is 30 percent, down from 35 percent Friday. Odds of a December move reached almost 54 percent after slipping to 11 percent at the height of this month’s stock selloff on Feb. 11.

     Meanwhile, options traders aren’t currently pricing in the possibility of a Donald Trump presidential victory, Pravit Chintawongvanich, head derivatives strategist at Macro Risk Advisors, wrote in a note last week. The term structure of at- the-money options for the S&P 500 shows the market is pricing in virtually no event premium for the U.S. presidential election, he observed, meaning that the cost of insuring against a move in equities isn’t particularly elevated.

     The Chicago Board Options Exchange Volatility Index rose 3.7 percent Monday to 20.55. The measure of market turbulence known as the VIX slipped 22 percent over the previous two weeks, closing at the lowest level of 2016 last Thursday, though it finished 1.7 percent higher in February.                        

     Nine of the S&P 500’s 10 main industries declined today, with biotechnology companies dragging health-care shares lower, while energy producers retreated despite gains in crude and banks fell for the first time in three sessions. Utilities rose on the way to a third consecutive monthly increase and the fifth in the last six.

     Endo International Plc tumbled 21 percent, the most in more than 12 years. The company forecast 2016 sales and earnings that missed some analysts’ estimates, while also saying it’s winding down its Astora Women’s Health business and increasing its mesh product liability accrual. The Nasdaq Biotechnology Index dropped 2.7 percent and finished 4.9 percent lower for the month.

     Valeant Pharmaceuticals International Inc. slid 18 percent to a more than three-year low, and extended its two-day decline to 22 percent. The company said it’s under investigation by the U.S. Securities and Exchange Commission in a previously undisclosed probe. It earlier said it’s withdrawing its financial forecast and delaying the release of fourth-quarter results, as Chief Executive Officer Michael Pearson returns to the drugmaker after a hiatus.

     Energy companies in the S&P 500 slipped 1.2 percent even as West Texas Intermediate crude futures rallied 3 percent. Southwestern Energy Co. lost 9.4 percent after being cut to underperform from market perform by Raymond James Financial Inc. The company also had its rating cut by Jefferies Group LLC last week. Chesapeake Energy Corp. and Apache Corp. slipped more than 3 percent.

     SunTrust Banks Inc. and Synchrony Financial were the worst performers among financial shares in the benchmark index, falling more than 3.5 percent. For the month, financial companies fell 3.2 percent, marking a third straight monthly decline, the longest since September 2011.

 

Have a wonderful evening everyone.

 

Be magnificent!

To love is to understand and feel that the other person is different.

Swami Prajnanpad

As ever,

 

Carolann

 

Great spirits have always encountered violent opposition from mediocre minds.

                                                                     -Albert Einstein, 1879-1955

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Reminder Alert!  Monday is the last day to make RSP contributions that can be used  on your 2015 tax year return.   It is a big tax savings and a meaningful incentive to save for the future.  You can determine your limit for the 2015 tax year by reviewing your Notice of Assessment that you received from CRA after they assessed your 2014 tax year’s filing.  A convenient way to make your contribution if you haven’t already done so, or to top up your contribution room is to do it online.  Simply add Haywood Securities as a payee and, pay as if you were paying a bill but the amount of bill payment is your RSP contribution.  You will be prompted for your account number when you select Haywood and you can find this on any of your RSP statements.  I am reminding you because many people are familiar with March 1^st as the deadline, but because this year is a leap year, the 29^th of February is the deadline.

ARTS ARCHIVE:

The BBC offers an eclectic podcast that explores “pieces of music with a powerful emotional impact” called Soul Music.  New 30-minute podcasts are only added sporadically, but there is a wealth of archives to discover, such as the harrowing stories behind “Strange Fruit,” made famous by Billie Holiday, and the many settings of the much loved 23^rd Psalm.  The podcast is available at http://bit.ly/BBCSoulMusic.

February 28, 2016, 5:30 PM OSCAR NIGHT

PHOTOS OF THE DAY

Oscar statues are painted outside the entrance to the Dolby Theater as preparations continue for the 88th Academy Awards in Hollywood, Los Angeles, Calif., Thursday. The Oscars will be presented Feb. 28. Lucy Nicholson/Reuters

Runners wearing full solid-colored bodysuits take part in a marathon in Tel Aviv, Israel, Friday. Amir Cohen/Reuters

Market Closes for February 26, 2016

Market Index	Close	Change
Dow Jones	16639.97	-57.32 -0.34%
S&P 500	1948.05	-3.65 -0.19%
NASDAQ	4590.473	+8.268 +0.18%
TSX	12797.79	+44.19
		+0.35%

International Markets

Market Index	Close	Change
NIKKEI	16188.41	+48.07
		+0.30%
HANG SENG	19364.15	+475.40
		+2.52%
SENSEX	22976.00	+178.30
		%0.78
FTSE 100	6096.01	+83.20
		+1.38%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.180	1.145
CND. 30 Year Bond	1.960	1.938
U.S.    10 Year Bond	1.7554	1.7157
U.S. 30 Year Bond	2.6332	2.5941

Currencies

BOC Close	Today	Previous
Canadian $	0.74011	0.73845
US $	1.35115	1.35419
Euro Rate 1 Euro=		Inverse
Canadian $	1.47702	0.67704
US $	1.09315	0.91478

Commodities

Gold	Close	Previous
London Gold Fix	1226.50	1236.00
Oil	Close	Previous
WTI Crude Future	32.78	32.17

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks advanced a second day, briefly erasing a monthly loss, as crude oil capped its biggest weekly gain since August to boost energy producers and consumer shares advanced with Magna International Inc. amid data showing faster-than-forecast growth in the U.S.

     The Standard & Poor’s/TSX Composite Index rose 0.4 percent to 12,798.45 at 4 p.m. in Toronto. The benchmark equity gauge has rebounded 5.9 percent from a Feb. 11 low and is less than 2 percent from reversing losses for the year. The index is down 0.2 percent in February, seeking to avoid a ninth loss in the past 10 months.

     Global equities were little changed Friday as a rally fizzled in afternoon trading. Gains came earlier after China signaled it has room for additional stimulus, while optimism over the U.S. economy tempered as signs of firming inflation fueled speculation interest rates may rise sooner than expected. The two nations are Canada’s largest trading partners. The country’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     The S&P/TSX is one of the best-performing markets in the developed world this year, battling with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 13 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show.

     Raw-materials producers, led by broad gains among gold and base metals producers from Kinross Gold Corp. to Teck Resources Ltd., have surged 16 percent in February to lead the S&P/TSX’s rebound. Consumer staples stocks, led by a 15 percent rally in beverage maker Cott Corp. after posting a surprise profit, have also contributed to gains in the broader benchmark.

     Health-care stocks meanwhile trail the 10-industry S&P/TSX with a 13 percent retreat, as Valeant Pharmaceuticals International Inc. slumped 14 percent in February after disclosing it will restate some earnings due to its relationship with a mail-order pharmacy.

     Energy companies advanced 1.3 percent Friday, cutting a monthly slide to 3.1 percent. Oil in New York jumped 11 percent for the week, the most since August. Cenovus Energy Inc. and Husky Energy Inc. each gained 4.5 percent to pace gains.

     Bombardier Inc. lost 1.9 percent as the aircraft maker’s troubled C Series program was dealt another blow after one of its largest customers, Republic Airways Holdings Inc., filed for creditor protection in New York Thursday.

     Magna, the autoparts maker, jumped 7.3 percent for the biggest gain in more than four years after fourth-quarter sales beat estimates. The company also raised its dividend. Goldcorp plunged 13 percent, the most since October 2014, after the world’s third most valuable gold producer posted a surprise quarterly loss on asset writedowns.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks slipped, while still posting a second-straight weekly gain, with optimism on the economy tempered after signs of firming inflation fueled speculation interest rates may rise sooner than previously expected.

     Equities struggled to add to gains Friday after a nearly 7 percent run-up in the two weeks since the Standard & Poor’s 500 Index reached a 22-month low. Higher growth and inflation readings helped spur a stronger dollar, sending some companies with significant overseas business lower. Consumer staples fell, with Coca-Cola Co. losing 2.3 percent. Raw-materials producers rallied on easing growth concerns, with Freeport-McMoRan Inc. rising 4.4 percent as copper surged.

     The S&P 500 fell 0.2 percent to 1,948.05 at 4 p.m. in New York, after rising as much as 0.6 percent. The gauge held above its average price during the past 50 days after climbing through that level yesterday for the first time this year. The Dow Jones Industrial Average lost 57.32 points, or 0.3 percent, to 16,639.97, and the Nasdaq Composite Index increased 0.2 percent.

     “There hasn’t been a lot of conviction,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “It tells me we’re going to be stuck in a range here. We’re up on oil stability, China talk from the PBOC and GDP wasn’t a complete disaster with PCE a little better,” he said referring to the personal consumption expenditures gauge.

     A report today showed the Federal Reserve’s preferred measure of inflation rose by the most since October 2014, illustrating the challenge for U.S. central bankers as they consider tighter monetary policy amid feeble global markets. Also, consumer purchases climbed in January by the most in eight months, while a separate report showed the U.S. economy unexpectedly expanded at a faster pace in the fourth quarter than initially estimated.

     Following the data, traders raised their bets for further Fed rate increases this year. The probability of a June boost rose to 35 percent from less than 24 percent yesterday, while odds of a December move reached 52 percent from 36 percent. Chances for a December hike had slipped to 11 percent at the height of this month’s stock selloff on Feb. 11.

     “Inflation is definitely something that the Fed is looking at and it looks like it is ticking up,” said Thomas Garcia, head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc. “The problem is that we have economies that are not doing so hot. What you don’t want is inflation with an economy that is slowing down.”

     Stocks in Asia and Europe rose after China’s central bank said it sees room for monetary easing, and Group of 20 finance chiefs discussed stimulus efforts. Concern about the impact of China’s slowdown on global growth and a related rout in commodity prices have helped push the S&P 500 down as much as 11 percent this year on a closing basis to its lowest level since 2014.

     The global market turmoil that began the year is heavy on investors’ minds as the G-20 meets. A lack of agreement this weekend on fiscal or monetary initiatives from the group risks disappointing investors who have urged some coordinated action to address stock declines and weak prospects for growth.

     The S&P 500 rose 1.6 percent this week, extending a rebound from its the lowest level since April 2014, as banks and technology shares paced gains and oil showed signs of stabilizing. The gauge has erased a monthly loss of as much as 5.7 percent and cut its 2016 slide by more than half. It rose to a seven-week high yesterday.

     Even as stocks rebounded in the past two weeks, participation has slackened. Daily volume on U.S. exchanges since Feb. 11 was 8.1 billion shares, 13 percent lower than the average volume of 9.3 billion for the year up until then. An average 7.6 billion shares a day changed hands this week. About 7.9 billion shares traded today, 4 percent below the three-month average.

     The Chicago Board Options Exchange Volatility Index rose 3.7 percent to 19.81 Friday. The measure of market turbulence known as the VIX is down about 2 percent this month after erasing a climb of more than 39 percent.

     Six of the S&P 500’s 10 main groups declined, with utilities tumbling 2.7 percent, the biggest drop in three months as rising bond yields made the group’s dividend payout look less attractive. Consumer staples had the steepest slide in five weeks amid speculation their profits could be hurt by a stronger dollar. Raw-material, financial and energy companies rose the most.

     While higher bond yields weighed on utilities, they were a boon for banks as investors bet rising rates would help profits. Lenders in the benchmark rose for a second day, with Bank of America Corp. up 3.1 percent to a three-week high. Citigroup Inc. added 2.3 percent.

     Alcoholic beverage maker Brown-Forman Corp., which generated more than half its sales last year outside the U.S., fell 3.2 percent. PepsiCo. Inc. and Wal-Mart Stores Inc. lost at least 2.2 percent, with Pepsi capping its worst drop this year.

     Within raw-materials, Freeport-McMoRan rose for the first time in four days, and is headed toward its best monthly gain ever, up more nearly 62 percent. Fertilizer makers Mosaic Co. and CF Industries Holdings Inc. increased more than 5.4 percent.                        

     Among shares moving on corporate news, Kraft Heinz Co. rose 3.8 percent after its quarterly earnings topped estimates, helped by growth of condiment sales. J.C. Penney Co. rallied 15 percent, the biggest increase in more than a year, after its profit also exceeded estimates and the retailer forecast an even rosier 2016.

     Weight Watchers International Inc. tumbled 29 percent, the most in a year. A high-profile partnership with Oprah Winfrey failed to reverse the company’s financial decline as it posted a surprise fourth-quarter loss.

     With the earnings season drawing to a close, analysts’ predictions for fourth-quarter profits have improved. They estimate a 3.7 percent drop at S&P 500 companies, from Jan. 15 calls for a 7 percent slump. About three-quarters of firms in the benchmark have beat profit projections, while less than half topped sales forecasts.

 

Have a wonderful weekend everyone.

 

Be magnificent!

One person is not another person.

What is he, the?  He is unique.

Swami Prajnanpad

As ever,

 

Carolann

 

It wasn’t raining when Noah built the ark.

                        -Warren Buffett, 1930-

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

I just finished reading a book that I highly recommend to everyone.  It is entitled The Lucky Years –How to Thrive in the Brave New World of Health.  Its author is David B. Angus, M.D. (Simon & Shuster, 2016).  Dr. Angus is an oncologist (he was on Steve Job’s team) and shares many valuable insights into living your best and ensuring a long and healthy life.  Many of the remarkable insights that have been gleaned since the human genome was elucidated in 2003 are revealed as well as therapies that exist as a result and what the future holds.  I cannot recommend it highly enough for everyone, no matter what age.

PHOTOS OF THE DAY

Men dressed as ancient Roman soldiers walk in front of the Brandenburg Gate in Berlin Thursday on their way to a photo session promoting the exhibition ‘Nero.’ The exhibition about the life of Emperor Nero will run in the town of Trier from May 15 until Oct. 16. Fabrizio Bensch/Reuters

A man looks at a Cadillac CT6 displayed inside a fish tank during an event promoting the car’s environmental-friendly features in Shanghai, China, Thursday. China Daily/Reuters

Market Closes for February 25, 2016

Market Index	Close	Change
Dow Jones	16697.29	+212.30 +1.29%
S&P 500	1951.70	+21.90 +1.13%
NASDAQ	4582.207	+39.601 +0.87%
TSX	12753.60	+13.33
		+0.10%

International Markets

Market Index	Close	Change
NIKKEI	16140.34	+224.55
		+1.41%
HANG SENG	18888.75	-303.71
		-1.58%
SENSEX	22976.00	-112.93
		-0.49%
FTSE 100	6012.81	+145.63
		+2.48%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.145	1.151
CND. 30 Year Bond	1.938	1.939
U.S.    10 Year Bond	1.7157	1.7501
U.S. 30 Year Bond	2.5941	2.6079

Currencies

BOC Close	Today	Previous
Canadian $	0.73845	0.72950
US $	1.35419	1.37080
Euro Rate 1 Euro=		Inverse
Canadian $	1.49228	0.67012
US $	1.10195	0.90748

Commodities

Gold	Close	Previous
London Gold Fix	1236.00	1250.75
Oil	Close	Previous
WTI Crude Future	32.17	30.40

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks wiped out a loss in afternoon trading, as oil producers pared declines and better- than-expected earnings from Canadian Imperial Bank of Commerce helped buttress a rally in financial shares.

     The Standard & Poor’s/TSX Composite Index rose 0.1 percent to 12,753.60 at 4 p.m. in Toronto, reversing a loss of as much as 0.8 percent. The advance pushed the benchmark gauge’s rise since Feb. 11 to 5.5 percent and pared its February decline to 0.5 percent. The index is attempting to avoid a ninth loss in the past 10 months.

     The S&P/TSX remains among the best-performing markets in the developed world this year, trailing New Zealand and topping returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 19.5 times earnings, roughly 11 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show.

     CIBC added 2.6 percent after posting higher profit driven by retail and business banking. The lender also raised its dividend. Toronto-Dominion Bank added 1.4 percent after saying fiscal first-quarter profit rose 7.9 percent on gains in its Canadian and U.S. retail businesses. The lender also raised its quarterly dividend by 7.8 percent to 55 cents a share.

     Among 20 S&P/TSX companies to report earnings today, CCL Industries advanced 6.5 percent to a month high after beating expectations, while grocery store owner Loblaw Cos. lost 0.5 percent as earnings missed.

     Energy companies pared losses as oil rebounded. The S&P/TSX Energy Index erased most of its declines after data showed inventories of gasoline dropped for the first time in 15 weeks. Stockpiles fell 2.24 million barrels last week, according to an Energy Information Administration report yesterday. The decline coincided with a gain in crude stockpiles to the highest level since 1930.

     Valeant Pharmaceuticals International Inc. slipped 0.6 percent. Chief Executive Mike Pearson, who has been on medical leave with severe pneumonia, is recovering, a spokeswoman said Thursday, although he remains sidelined from the job. Former Chief Financial Officer Howard Schiller is still acting as interim CEO, the company said.

     Semafo Inc. climbed 9.6 percent, to a September 2014 high, after posting a feasibility study for its Natougou gold project in Burkina Faso. During the first three years, average annual production will be more than 226,000 ounces, according to a statement today.

US

By Anna-Louise Jackson, Jiayue Huang and Dani Burger

     (Bloomberg) — Gains in bank and technology shares helped send the Standard & Poor’s 500 Index to a seven-week high, amid optimism on the economy after data indicated weakness in manufacturing may be easing while crude oil showed further signs of stabilizing.

     Lenders resumed their role as rally leaders, rising for the first time in three days after bolstering the equity rebound last week, with Bank of America Corp. up 1.6 percent. Microsoft Corp. and Intel Corp. added 1.4 percent to boost tech. Energy producers erased declines as crude wiped out losses. United Technologies Corp. stretched its increase this week to 11 percent amid talk of a possible merger with Honeywell International Inc.

     The S&P 500 climbed 1.1 percent to 1,951.70 at 4 p.m. in New York, with the gauge erasing its February decline to advance 0.6 percent for the month. The Dow Jones Industrial Average added 212.30 points, or 1.3 percent, to 16,697.29. The Nasdaq Composite Index increased 0.9 percent. About 7.3 billion shares traded hands on U.S. exchanges, 11 percent below the three-month average.

     “We got some good news this morning from jobless claims and durable goods orders that came in noticeably stronger than expected,” Alan Gayle, senior strategist for Atlanta-based Ridgeworth Investments, which has about $42.5 billion in assets, said by phone. “We had some encouraging macro news that gave the markets the impetus to move higher, particularly on the back of yesterday’s close. After a tough down market, there’s some budding optimism that the worst is perhaps over.”

     The main U.S. equity benchmark eliminated this month’s slide after losing as much as 6.7 percent at the close on Feb. 11. The S&P 500 continued its rebound from a nearly two-year low and has cut its 2016 drop by more than half. The index also topped its average price during the past 50 days for the first time this year, after last closing above the technical level on Dec. 29.

     U.S. equities broke higher in the early afternoon after struggling for direction throughout the morning amid conflicting signals abroad. China’s stocks tumbled the most in a month as surging money-market rates signaled tighter liquidity. Meanwhile, European shares rallied, pace by Lloyds Banking Group Plc, with the Stoxx Europe 600 Index rising 2 percent. Concern that a slowdown of the Chinese economy is deepening, compounded by falling commodity prices led by crude, has roiled equity markets since August.

     Tumbling oil prices, tighter credit conditions and a flatter yield curve spurred Wells Fargo Securities LLC strategist Gina Martin Adams to lower her S&P 500 target to 2,100, down from a previous call of 2,245. “Stocks will move higher over the next 12 months, but perhaps not as robustly as we forecast in early December,” Martin Adams wrote in a research note to clients Thursday. “There is likely also a lid on multiples given deteriorating credit quality.”

     While the S&P 500’s valuation of 16.3 times the forecast earnings of its members is above the 15 times average of the past five years, the measure is down 6.8 percent since the start of the year. The gauge remains more expensive than developed markets in Europe, where the Stoxx 600 Index trades for 14.6 times estimated earnings.

     Investors are scrutinizing economic data to gauge growth in the world’s largest economy, and a report today showed orders for U.S. capital goods rebounded in January by the most since June 2014. Orders for all durable goods rose 4.9 percent, the most since March. Separate data showed the number of Americans filing applications for unemployment benefits rose last week from a three-month low, in part reflecting the typical swings during holiday periods.

     “The data on durable goods will help assuage fears that a recession is lurking,” Quincy M. Krosby, a market strategist at Prudential Financial Inc., which oversees about $1.2 trillion, said by phone from Newark, New Jersey. “If we can get some more data releases showing some less bad data or stabilization it may help push us higher. The market is craving that right now.”

     With the earnings season wrapping up, about three-quarters of S&P 500 firms have exceeded profit projections, while less than half topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

     The Chicago Board Options Exchange Volatility Index fell 7.8 percent to 19.11 Thursday. The measure of market turbulence known as the VIX erased a 9 percent intraday jump yesterday, and is now down 5.4 percent this month after rising more than 39 percent as of Feb. 11.

     All of the S&P 500’s 10 main groups rose, with financial, tech, health-care and raw-materials shares up at least 1.2 percent. Energy stocks were little changed after reversing a drop of at least 1.9 percent for a second day.

     JPMorgan Chase & Co. and Citigroup Inc. added more than 1.3 percent to help drive banks higher. Zions Bancorporation rebounded 2.7 percent after a two-day tumble of 6.9 percent, the best performer today among lenders in the S&P 500. In the broader financial group, Morgan Stanley gained 3.9 percent and Goldman Sachs Group Inc. rose 1.9 percent, its third advance in four days.

     Salesforce.com’s 11 percent rally led the benchmark gauge and was the strongest among technology companies. The shares rose the most since April after the software company issued a forecast that easily topped estimates, giving investors another sign that the cloud-computing pioneer will be able to weather economic headwinds. Adobe Systems Inc. increased 3.9 percent, the most in a month.

     Raw-material companies surged 1.3 percent, with fertilizer maker CF Industries Holdings Inc. rising the most, up 4.4 percent. DuPont Co. and Dow Chemical Co. both added at least 1.9 percent.

     Defensive companies also gained traction, as consumer staples shares rallied to the highest ever and utilities rose for a fourth straight day, sending the group to its highest level in more than a year. Within staples, Campbell Soup Co. increased 3.5 percent to a record after reaffirming its full- year profit outlook.

     Energy producers erased losses on crude’s second-straight reversal. Newfield Exploration Co. rallied 4.2 percent after a better-than-estimated quarterly profit. Ensco Plc fell 4.8 percent to a 20-year low after the company slashed its quarterly dividend yesterday. The stock has slid nearly 10 percent in three sessions.

 

Have a wonderful evening everyone.

 

Be magnificent!

When you see that everything is different, that everything is unique,

you become one with the whole.

This is because you no longer judge, compare, or attribute particular characteristics.

Remove the characteristics,

and you no longer have an entity.

Swami Prajnanpad

As ever

Carolann

 

To live a creative life, we must lose our fear of being wrong.

                                -Joseph Chilton Pearce, 1926-

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On this day:

1955    Apple computer co-founder Steve Jobs was born in San Francisco.

1981    Buckingham Palace announced the engagement of Britain’s Prince Charles to Lady Diana Spencer.

1999    Lauryn Hill won five Grammys for her debut solo album, “The Miseducation of Lauryn Hill.”

2008    Cuba’s parliament named Raul Castro president, ending nearly 50 years of rule by his brother Fidel.

1663 – Louis XIV makes New France a Royal Colony of France; first law courts established.

PHOTOS OF THE DAY

A woman walks in the rain with an umbrella through Times Square in New York Wednesday. Shannon Stapleton/Reuters

Men play accordions during a folk performance just off Red Square in Moscow, Wednesday. Alexander Zemlianichenko/AP

Market Closes for February 24, 2016

Market Index	Close	Change
Dow Jones	16484.99	+53.21   +0.32%
S&P 500	1929.80	+8.53 +0.44%
NASDAQ	4542.605	+39.022   +0.87%
TSX	12740.27	-23.17
		-0.18%

International Markets

Market Index	Close	Change
NIKKEI	15915.79	-136.26
		-0.85%
HANG SENG	19192.45	-222.33
		-1.15%
SENSEX	23088.93	-321.25
		-1.37%
FTSE 100	5867.18	-95.13
		-1.60%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.151	1.123
CND. 30 Year Bond	1.939	1.916
U.S.    10 Year Bond	1.7501	1.7225
U.S. 30 Year Bond	2.6079	2.5789

Currencies

BOC Close	Today	Previous
Canadian $	0.72950	0.72487
US $	1.37080	1.37955
Euro Rate 1 Euro=		Inverse
Canadian $	1.50918	0.66269
US $	1.10102	0.90825

Commodities

Gold	Close	Previous
London Gold Fix	1250.75	1221.35
Oil	Close	Previous
WTI Crude Future	30.40	30.07

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a second day, paring losses in afternoon trading as energy producers led by Encana Corp. rebounded with crude, offsetting a decline by lenders as investors weighed earnings from Royal Bank of Canada.

     The Standard & Poor’s/TSX Composite Index slipped 0.2 percent to 12,740.27 at 4 p.m. in Toronto, largely reversing a loss of as much as 2 percent. The benchmark gauge has lost 0.6 percent in February, headed for a fourth monthly decline, as volatility returned to global markets after a respite last week. Global-growth concerns have resurfaced as investors look to whether lenders will suffer as some energy producers struggle amid low oil prices.

     The S&P/TSX remains among the best-performing markets in the developed world this year, trailing New Zealand and topping returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 19.5 times earnings, about 1.1 times more expensive than the valuation of S&P 500 shares, according to data compiled by Bloomberg.

     A jump in gold due to demand for havens has caused raw- material stocks to be the best-performing group in the S&P/TSX in 2016. Still, energy companies have weighed on returns, as oil trades near the lowest levels in 12 years.

     Financial services stocks sank the most on Wednesday, as five of 10 industries in the S&P/TSX retreated.

     Royal Bank of Canada slumped 2.6 percent, the biggest decline in a month, on first-quarter profit that fell short of analysts’ estimates as earnings from insurance and capital markets fell. The lender set aside more money for soured energy loans amid crude’s slide. RBC is the third to report results this week, followed by Toronto-Dominion Bank and Canadian Imperial Bank of Commerce tomorrow.

     West Texas Intermediate, the U.S. benchmark for crude, rose 0.9 percent to settle at $32.15 a barrel, reversing losses as cheap gasoline boosted U.S. demand and sent inventories lower, according to government data. Supplies fell 2.24 million barrels to 256.5 million. Prices dropped earlier after oil ministers from Iran and Saudi Arabia signaled on Tuesday they’re not willing to curtail production.

     Encana Corp. soared a record 23 percent as the energy producer cut its annual budget, lowered the dividend and announced another 20 percent reduction in its workforce as it reported a fourth straight quarterly loss, amid tumbling oil and natural gas prices. Shares had tumbled 41 percent this year before the announcement.

US

By Anna-Louise Jackson and Jiayue Huang

     (Bloomberg) — Technology and commodity companies paced a rebound in U.S. stocks, with a turnaround in crude-oil prices sparking broader buying that erased declines of as much as 1.7 percent in benchmark indexes.

     The Nasdaq Composite Index rallied 0.9 percent to 4,542.61 at 4 p.m. in New York, boosted by gains in Apple Inc. and Facebook Inc. The Russell 2000 Index surged 1 percent after an early 1.5 percent slide. The Standard & Poor’s 500 Index added 0.4 percent to 1,929.80, after the gauge lost as much as 1.6 percent. The Dow Jones Industrial Average climbed 53.21 points, or 0.3 percent, to 16,484.99. About 8.2 billion shares traded hands on U.S. exchanges, in line with the three-month average.

     “Oil turned positive and that helped accelerate a move higher for equities,” said Kevin Kelly, the New York-based chief investment officer at Recon Capital Partners. “I think everybody’s trying to get a firm footing on where this market’s going to trade. Volatility keeps going up and down, same with intraday moves in the market, it’s really something that’s not new.”

     West Texas Intermediate crude futures erased a 4 percent drop, eventually settling 0.9 percent higher, to help instigate the comeback in equities. Today was the second time this year that the S&P 500 erased an intraday loss of more than 1.5 percent. After such a reversal occurred on Feb. 3, the index fell 3.2 percent over the following week.

     Early on today, it looked as if equities were headed for a second steep selloff at the beckoning of crude. A recent rebound in U.S. stocks had faltered Tuesday as global-growth concerns resurfaced, after the S&P 500 had cut its 2016 declines by more than half over six sessions.

     Wednesday’s gains helped the S&P 500 cut its February decline to 0.5 percent from as much as 6.7 percent on Feb. 11. The index is still heading for a third straight monthly drop which would be the longest stretch in more than four years. Concern that China’s slowdown will hurt global growth, and that lenders will suffer as some energy producers struggle to stay solvent amid low oil prices, has weighed on equities this year, dragging the U.S. benchmark 9.4 percent below its all-time high reached last May.

     Equity strategists at Goldman Sachs Group Inc. said in a note yesterday the recent bounce reflects positioning and short covering rather than greater confidence in fundamentals. While valuations have fallen, they still remain relatively high by historical comparisons and would need to be cheaper for stocks to move meaningfully higher, the strategists wrote.

     In a more bullish view, Canaccord Genuity Inc. equity strategist Tony Dwyer reiterated his S&P 500 target of 2,175 by the end of 2016. “We remain overweight Financials, Info Tech and Consumer Discretionary sectors, and would underweight Utilities and Telecom Services,” Dwyer wrote in a note to clients. “Although we fully expect some further tumultuous activity over the coming few days/weeks, we continue to emphasize the intermediate-term opportunity rather than near-term risk from current levels.”                         

     Investors are keeping watch on economic data for signs that slowing abroad, particularly in China, is seeping into the U.S. A report today showed purchases of new homes dropped more than forecast in January as contract signings slumped in the western U.S. by the most since May 2010.

     “The big question is whether the U.S. economy is going into a recession and the jury is still out on that, in my view,” said Charlie Bilello, director of research at New York-based Pension Partners. “The fact that that question is out there is going to lead to continued volatility and volatility’s going to be on the upside and on the downside.”                          

     The Chicago Board Options Exchange Volatility Index fell 1.2 percent Wednesday to 20.72, reversing a 9 percent morning jump. The measure of market turbulence known as the VIX yesterday halted six days of declines, the longest since November.

     Nine of the S&P 500’s 10 main groups advanced, with raw- materials, energy and technology shares rising at least 0.8 percent after wiping out declines of more than 1.4 percent. Financial shares slipped 0.2 percent as banks fell for a second day.

     Owens-Illinois Inc. and Sealed Air Corp. rallied more than 3.3 percent to lead gains among raw-materials companies. Alcoa Inc. bounced 2.7 percent after losing 4.3 percent yesterday and as much as 3.3 percent this morning.

     A midday reversal in oil prices helped to stabilize energy stocks. Chesapeake Energy Corp. surged 23 percent, the most in seven years, on a pledge to lower its debt load. Refiners Valero Energy Corp. and Tesoro Corp. gained more than 4.5 percent after a report showed gasoline supplies fell. Transocean Ltd. lost 4 percent to its lowest level ever after the company got an early termination from Esso Exploration Angola Limited for a drilling contract.

     Apple, Facebook and Intel Corp. advanced at least 1.3 percent to help push the tech group higher. Semiconductors were the strongest performers, led by First Solar Inc.’s rally, while Microchip Technology Inc. added 3.4 percent.

     Zions Bancorporation and Regions Financial Corp. were the biggest losers among lenders in the benchmark, falling at least 1.9 percent. Zions capped its biggest two-day drop this year.  Wells Fargo & Co. slipped 1 percent.

     Auto stocks, which rallied 10 percent in the six sessions through Monday, fell for a second day. Ford Motor Co. declined 2.7 percent while General Motors Co. decreased 1.8 percent. Morgan Stanley analyst Adam Jonas said in a note their profits are more at risk in a recession than the automakers have estimated.

     Better-than-expected earnings buoyed shares of several companies. Target Corp. surged 4 percent, to its highest level since November, while First Solar added 12 percent, the most since August, after the company posted profit that doubled analysts’ expectations.

     With the earnings season wrapping up, about three-quarters of S&P 500 firms have exceeded profit projections, while less than half topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

Have a wonderful evening everyone.

 

Be magnificent!

If you do not think he is different, he is unique, he exists in his own right,

there cannot be any relationship.

Swami Prajnanpad

As ever,

Carolann

 

The science of today is the technology of tomorrow.

                                 -Edward Teller, 1908-2003

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

1909: Silver Dart makes aviation history

On Feb. 23, 1909, engineer J.A.D. McCurdy piloted the first powered airplane flight by a British subject in the British Empire – and made Canadian history.

On Feb. 23, 1954, the first mass inoculation of children against polio with the Salk vaccine began in Pittsburgh.

PHOTOS OF THE DAY

A full moon rises over the Statue of Liberty seen from the Port Liberte neighborhood of Jersey City, N.J., Monday. Julio Cortez/AP

A man plays hockey on Lake Ontario at sunset in Kingston, Canada, Monday. Lars Hagberg/The Canadian Press/AP

A fisherman prepares to cast his line standing in the surf as a full moon rises at Mollymook Beach, located south of Sydney, Australia, Tuesday. David Gray/Reuters

Market Closes for February 23, 2016

MarketIndex	Close	Change
DowJones	16431.78	-188.88  -1.14%
S&P 500	1921.27	-24.23-1.25%
NASDAQ	4503.582	-67.025  -1.47%
TSX	12763.44	-82.19
		-0.64%

International Markets

MarketIndex	Close	Change
NIKKEI	16052.05	-59.00
		-0.37%
HANGSENG	19414.78	-49.31
		-0.25%
SENSEX	23410.18	-378.61
		-1.59%
FTSE 100	5962.31	-75.42
		-1.25%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.123	1.128
CND.30 Year Bond	1.916	1.925
U.S.   10 Year Bond	1.7225	1.7570
U.S.30 Year Bond	2.5789	2.6086

Currencies

BOC Close	Today	Previous
Canadian $	0.72487	0.72937
US$	1.37955	1.37105
Euro Rate1 Euro=		Inverse
Canadian $	1.52839	0.65429
US$	1.10137	0.90796

Commodities

Gold	Close	Previous
London GoldFix	1221.35	1211.00
Oil	Close	Previous
WTI Crude Future	30.07	31.48

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks erased their gains and ended lower as a selloff in energy companies overshadowed a rebound in Valeant Pharmaceuticals International Inc.

     The Standard & Poor’s/TSX Composite Index lost 0.6 percent to 12,763.44 at 4 p.m. in Toronto. The benchmark gauge rallied as much as 0.9 percent before a rout in crude led to plunging energy stocks.

     The S&P/TSX has outpaced equities across the developed world this year, topping returns from markets in the U.S., U.K. and Germany and is less than 2 percent away from wiping out declines for the year. The MSCI World Index of developed-nation markets is down 7.4 percent in 2016. While raw-material stocks have performed the best in the Canadian equity index this year, the resource-rich gauge has been whipsawed by swings in oil and commodity prices.

     Energy producers sank 2.7 percent as five of 10 industries in the S&P/TSX retreated on trading volume 8.4 percent lower than the 30-day average. Shares in the benchmark gauge currently trade at almost 20 times earnings, about 1.1 times more expensive than S&P 500 shares, according to data compiled by Bloomberg.

     Oil fell 4.6 percent in New York, slipping from a two-week high. Saudi Arabian Oil Minister Ali al-Naimi, speaking at the IHS CERAWeek oil conference in Houston, said his country isn’t cutting output. Saudi Arabia agreed with Russia last week to freeze output on the condition other major producers, notably Iran and Iraq, follow suit.

     Iran’s oil minister earlier called the proposal “ridiculous” as it puts unrealistic demands on the country, according to the ministry’s news agency Shana. Saudi Arabia, Russia, Venezuela and Qatar reached a preliminary agreement in Doha last week to freeze output at January levels. Oil is still down about 14 percent this year.

     Valeant Pharmaceuticals International Inc. rebounded 5 percent for the first increase in four days. The company had tumbled 20 percent during its three-day slide. Valeant will restate some of its past earnings after a board committee reviewed the drugmaker’s relationship with mail-order pharmacy Philidor. Valeant didn’t rule out further disclosures. The company plans to hold a call to discuss fourth-quarter results on Feb. 29.

     Valeant, briefly the largest company in the S&P/TSX by market capitalization last year before the stock plunged amid scrutiny over its pricing practices, slumped last week after analysts at Wells Fargo Securities initiated coverage with an underperform rating, the equivalent of a sell, on Feb. 19.

     Bank of Montreal slipped 0.2 percent, erasing a gain after reporting first-quarter earnings that were ahead of analysts’ estimates Tuesday. Profit was boosted by contributions from its purchase of General Electric Co.’s transportation-finance business. It’s among the first of the nation’s largest lenders to report results this week. National Bank of Canada lost 2.3 percent as profit declined after writing off C$164 million on its investment in Maple Financial Group Inc.

US

By Anna-Louise Jackson and Jiayue Huang

     (Bloomberg) — U.S. stocks declined from six-week highs, paced by banks as the recent rally’s strongest performers lost momentum while investors assessed global growth prospects amid renewed concern that China will remain a drag.

     Lenders, which have buttressed the latest rebound in equities, fell Tuesday with JPMorgan Chase & Co. and Citigroup Inc. losing at least 3.2 percent. Freeport-McMoRan Inc. declined 8.7 percent and Chevron Corp. sank 4.4 percent as a rout in crude oil weighed on commodity shares. Apple Inc. and Microsoft Corp. fell more than 2.2 percent, dragging down the technology group.

     The Standard & Poor’s 500 Index fell 1.3 percent to 1,921.27 at 4 p.m. in New York, a day after surging 1.5 percent to the highest since Jan. 6. The Dow Jones Industrial Average slid 188.88 points, or 1.1 percent, to 16,431.78. The Nasdaq Composite Index lost 1.5 percent. About 7.1 billion shares traded hands on U.S. exchanges, 13 percent below the three-month average.

     “Things started to go downhill a little bit last night after the PBOC decided to allow the yuan to depreciate relative to the dollar,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242 billion. “We need to get a bit more clarity from Fed officials as far as how they’re viewing China to get a better handle on what the global growth outlook looks like and also what the future path of U.S. interest rates looks like.”

     A global stock rally stumbled today after the People’s Bank of China lowered its daily reference rate for the yuan by the most in six weeks, reigniting concerns over the health of the world’s second-biggest economy. This anxiety had eased in the past week, helping the S&P 500 cut its 2016 decline in half in six trading sessions.

     Oil retreated from a two-week high as Saudi Arabian Oil Minister Ali al-Naimi said the market should set prices in his first speech since an agreement with Russia last week to freeze output. Saudi Arabia won’t cut oil production as other countries would be unlikely to assist in restraining output, leaving the burden of adjusting supply with high-cost producers, the minister said. West Texas Intermediate crude futures fell 4.6 percent.

     Heading into Tuesday’s session, the S&P 500 had rallied 6.4 percent since reaching a 22-month low on Feb. 11, trimming its 2016 decline to less than 5 percent. Concern that weakness in China will damp global growth, and that lenders will suffer as some energy producers struggle to stay solvent amid low oil prices has weighed on equities this year. The main U.S. stocks benchmark closed 9.8 percent below its all-time high reached last May.

     “The global economy is mired in what I would think of as growth purgatory and this week’s economic data is an illustration of that,” said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ U.S. intermediary business. The firm oversees $2 trillion. “Despite the recent rally off of the early February lows, it’s way too early to sound the all-clear.”

     Economic data today were mixed as investors attempt to gauge the strength of U.S. growth, and the potential path for interest rates. A report showed sales of previously owned homes unexpectedly rose in January to the second-highest pace since early 2007. Separate data showed February consumer confidence decreased, while another report indicated home values steadied in the year ended December, putting residential real estate on healthier footing to contribute to the economic expansion.

     The Chicago Board Options Exchange Volatility Index rose 8.3 percent today to 20.98, the largest increase in two weeks. The measure of market turbulence known as the VIX closed yesterday at the lowest since Jan. 5 amid the longest streak of declines in four months.

     Nine of the S&P 500’s 10 main groups declined on Tuesday, with energy and raw-materials the worst performers as they lost at least 2.3 percent. Financial and technology shares dropped 1.8 percent. Utilities and consumer staples were little changed.

     The selloff in oil dragged energy producers to the steepest loss in three weeks, as all 41 members of the benchmark’s group retreated. Cabot Oil & Gas Corp. tumbled 11 percent, the most in four years, after the explorer increased the size of its secondary offering to 44 million shares. Consol Energy Inc. and Range Resources Corp. both fell at least 9 percent.

     Raw-materials companies in the benchmark dropped 2.4 percent, the biggest slide in two weeks. Ecolab Inc. tumbled 7.4 percent, the most since 2011, after the company reported quarterly results that missed analysts’ estimates. Alcoa Inc. decreased 4.3 percent following its strongest one-day advance in nearly seven years.

     Banks had their biggest drop since the S&P 500’s 22-month low on Feb. 11. JPMorgan lost 4.2 percent after saying today at a gathering of analysts and investors that it plans to set aside $1.65 billion to cover impaired loans to energy and mining companies. Its investment bank has also seen revenue from sales and trading fall about 20 percent so far in 2016 from a year earlier.

     Comerica Inc., the strongest performer among lenders during the prior six sessions with a nearly 15 percent climb, fell the most today, down 4.5 percent. Among the broader financials, Goldman Sachs Group Inc. slid 2.6 percent and Morgan Stanley dropped 3.4 percent.

     Western Digital Inc. declined 7.2 percent, the worst among tech shares, after the company said it will buy memory-chipmaker SanDisk Corp. for $15.8 billion in cash and stock. Western is going ahead with the merger without a $3.78 billion infusion from Tsinghua Unisplendour Corp. The Chinese company pulled out of its plan to buy a stake in the computer-storage manufacturer after the deal came under scrutiny by U.S. regulators. SanDisk slipped 1.6 percent.

     Better-than-expected earnings helped propel several stocks higher. Frontier Communications Corp. rose 13 percent, the most since July 2014, while Motorola Solutions Inc. gained 6 percent, the steepest climb since August. Macy’s Inc. rallied 3 percent to levels last seen in November. Texas Roadhouse Inc. surged 13 percent to an all-time high after its profit beat estimates, and the restaurant chain said lower beef prices would help 2016 performance.

     With the earnings season approaching an end, about three- quarters of S&P 500 firms exceeded profit projections, while less than half have topped sales forecasts. Retailers Target Corp., Lowe’s Cos., Kohl’s Corp. and Gap Inc. are due to report this week. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

Have a wonderful evening everyone.

Be magnificent!

Expansion is life; contraction is death.

Love is life, hatred is death.

We began to die the day we began to contract, to hate others

and nothing can prevent our death,

until we come back to life, to expansion.

Swami Vivekananda

As ever,

Carolann

Gray skies are just clouds passing over.

                -Frank Gifford, 1930-2015

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:  Full moon tonight!

On February 22^nd, 1943, Conrad Russell, the 4^th Earl Russell, the British historian and politician [who was a son of philosopher/mathematician, Bertrand Russell], wrote in a letter to his sister Flora:

I once saw a man threshing with a flail and it was near you.  At Shophouse [near Guilford].  Have you ever thought how odd it would have been to have lived in 800 or 1200?  There was then no idea of change or improvement in any form.  You lived in your village and when you died everything was exactly the same as when you were born.  Since about 1480 the world has been in a state of constant change and turmoil.  And the last sixty years have been the worst. –from The Book of Days.

Poem: “A poem should not mean/But be,” wrote the American poet Archibald MacLeish.  In this poem by Larry Levis, the movement from ideas about blossoms to concrete images – “the petals of the magnolia blossom/Flattened by passing traffic” – reflects a transformation in the mind of the speaker.  From that precise seeing, something ineffable arrives. –Natasha Trethewey, NY Times.

Threshold of the Oblivious Blossoming

                          By Larry Levis

 

When I said one blossom desires the air,

Another  the shadows, I was free

Of desires.  Beyond the doorsill the café tables

 

Were empty because it was raining.

The rain was empty as well, & there was no poignancy

 

Left in it when I looked up at it falling, & went on

Sitting inside & waiting for my dealer to show up…

 

And finish my coffee.

 

When I thought of the petals of the magnolia blossom

Flattened by passing traffic to the pavement & the gradual

Discoloration of them, their white like that of communion dresses
 

Becoming gray & a darker gray moment by moment,

When I knew I wanted them to mean nothing
 

And suggest everything, desire rushed back into things,

But not into the blossoms & not into the air.

PHOTOS OF THE DAY Buddhist monks pray during Makha Bucha day at Wat Pan Tao in Chiang Mai, Thailand, on Monday. Makha Bucha Day honors Buddha and his teachings, and falls on the full moon day of the third lunar month. Athit Perawongmetha/Reuters

Black Rock Cottage stands in front of Buchaille Etive Mor in Scotland on Monday. Russell Cheyne/Reuters

Market Closes for February 22, 2016

Market Index	Close	Change
Dow Jones	16620.66	+228.67   +1.40%
S&P 500	1944.19	+26.41 +1.38%
NASDAQ	4570.609	+66.180   +1.47%
TSX	12860.45	+47.05
		+0.37%

International Markets

Market Index	Close	Change
NIKKEI	16111.05	+143.88
		+0.90%
HANG SENG	19464.09	+178.59
		+0.93%
SENSEX	23788.79	+79.64
		+0.34%
FTSE 100	6037.73	+87.50
		+1.47%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.128	1.120
CND. 30 Year Bond	1.925	1.920
U.S.    10 Year Bond	1.7570	1.7449
U.S. 30 Year Bond	2.6086	2.6048

Currencies

BOC Close	Today	Previous
Canadian $	0.72937	0.72624
US $	1.37105	1.37695
Euro Rate 1 Euro=		Inverse
Canadian $	1.51199	0.66138
US $	1.10269	0.90683

Commodities

Gold	Close	Previous
London Gold Fix	1211.00	1231.15
Oil	Close	Previous
WTI Crude Future	31.48	29.64

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks, among the worst-performing developed markets last year, advanced to approach a level that would erase declines for 2016.

     A rebound in crude helped the Standard & Poor’s/TSX Composite Index rise 0.3 percent higher to 12,845.63 at 4 p.m. in Toronto. The gauge gave up some earlier gains of as much as 1.3 percent. The index is 1.3 percent away from wiping out declines for the year after the benchmark gauge tumbled as much as 9 percent to a low in January. Oil recovered on Monday to surpass $31 a barrel amid speculation a production freeze by some OPEC members and Russia could help alleviate a surplus that sent prices plunging.

     The S&P/TSX, which slid into a bear market in January as crude prices collapsed, has outpaced equities across the developed world this year, topping returns from markets in the U.S., U.K. and Germany. The MSCI World Index of developed-nation markets is down 6.3 percent in 2016. Material and energy shares have led the Canada’s gauge since last month.

     West Texas Intermediate oil for March delivery, which expired Monday, climbed $1.84 to settle at $31.48 a barrel on the New York Mercantile Exchange, extending gains after a 0.7 percent advance last week. Saudi Arabia, Russia, Venezuela and Qatar reached a preliminary agreement in Doha last week to freeze output at January levels. New York crude is still down 15 percent this year.

     Iran was “constructive” on the deal struck last week to limit output, although it hasn’t said whether it may join the pact, Russian Energy Minister Alexander Novak told state TV on Saturday.

     Energy producers surged 2.4 percent to lead gains as seven of 10 industries in the S&P/TSX advanced. Penn West Petroleum Ltd. and Crescent Point Energy Corp. rallied at least 5.6 percent. Suncor Energy Inc., the nation’s largest oil producer, added 3.1 percent. The S&P/TSX Energy Index has soared 15 percent from a Jan. 20 low, when the gauge slumped to a 2004 low.

     Royal Bank of Canada and Bank of Nova Scotia dropped at least 1 percent to pace declines with financial stocks. Bank of Montreal and National Bank of Canada are set to report first- quarter earnings Tuesday, kicking off earnings week for the nation’s largest lenders. Royal Bank of Canada follows on Feb. 24.

     Valeant Pharmaceuticals International Inc. slumped 11 percent to fall a third day. Valeant, briefly the largest company in the S&P/TSX by market capitalization last year before the stock plunged amid scrutiny over its pricing practices, extended losses last week after analysts at Wells Fargo Securities initiated coverage with an underperform rating, the equivalent of a sell, on Feb. 19.

US

By Anna-Louise Jackson and Jiayue Huang

     (Bloomberg) — U.S. stocks rallied, with the Standard & Poor’s 500 Index closing at a six-week high, amid broad gains as a surge in oil prices helped lessen concern that a slowdown in global growth is deepening.

     Investors continued to load up on some of the year’s worst performers, with banks up for the fifth time in six days as Wells Fargo & Co. and Bank of America Corp. increased at least 2.2 percent. Copper miner Freeport-McMoran Inc. climbed almost 15 percent and is up 62 percent since Feb. 11. United Technologies Corp. jumped as much as 7.6 percent after CNBC reported the company has held merger talks with Honeywell International Inc.

     The S&P 500 rose 1.4 percent to 1,945.50 at 4 p.m. in New York, the highest since Jan. 6 following its strongest weekly advance since November. The benchmark is less than seven points away from its average price during the past 50 days, after falling below that level on Dec. 30. The Dow Jones Industrial Average climbed 228.67 points, or 1.4 percent, to 16,620.66. The Nasdaq Composite Index gained 1.5 percent to a three-week high.

     “Markets now are at least maybe coming to a recognition that while it’s not going to be a great economic outlook, it’s probably not going to be terrible, either,” said Greg Woodard, a senior analyst and strategist at Fairport, New York-based Manning & Napier Inc., which oversees about $46 billion. ”The wheels of the economy are certainly not falling off in the U.S.”

     Oil rose amid speculation that a production freeze by some OPEC members and Russia could eventually help to abate the surplus. Russia said talks on an output freeze will be done by March 1, while Nigeria said some countries should have production capped at higher levels. West Texas Intermediate crude futures soared 6.2 percent, and briefly rose above $32 a barrel.

     Equities showed little indication Monday of the anxiety over the pace of global growth or the impact of persistently low oil prices that helped drive the S&P 500 to a 22-month low on Feb. 11. Signs that crude prices are stabilizing, and speculation that China’s slowdown isn’t as bad as feared have helped the gauge cut its 2016 decline in half in six trading sessions. Some of the year’s most beaten-down shares — including banks, semiconductor, auto and retailer stocks — have paced the rebound

     Concern that some energy producers will have trouble staying solvent amid low oil prices has put pressure on lenders this year, while investors have also been worried that weakness in China’s economy could spread. The main U.S. equity benchmark is still down 8.7 percent from a May record and has slipped 4.8 percent this year.

     “I think it would be very helpful for oil to stabilize at least,” said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. “It doesn’t necessary have to start climbing back. A rally, even if it’s fairly short, will definitely help to shore up prices in the equity market in the short term.”

     Investors continue to assess economic data to gauge the health of the world’s biggest economy, and the possible trajectory of interest rates. Reports on consumer confidence, home sales, durable goods, economic growth and personal spending are due this week. Data today showed a measure of January manufacturing in the Chicago area improved more than expected.

     With the earnings season approaching an end, about three- quarters of results from S&P 500 firms exceeded profit projections, while less than half have topped sales forecasts. Macy’s Inc., Target Corp., Transocean Ltd. and Apache Corp. are among those reporting this week. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

     The Chicago Board Options Exchange Volatility Index fell 5.6 percent today to 19.38, under 20 for the first time in three weeks. The measure of market turbulence known as the VIX closed at the lowest since Jan. 5 amid the longest streak of declines in four months. About 7.2 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average.

     “This is a continued recovery from the big correction we’ve encountered,” said Eric Green, director of research and senior managing partner at Penn Capital, which has more than $6 billion under management in Philadelphia. “Earnings are coming in a little better than low expectations, valuations in the market have become attractive and sentiment is very, very negative. All those things along with the fact that you’re getting a bounce back in oil prices are contributing to the upside.”

     All of the S&P 500’s 10 main industries rose, with eight gaining more than 1.1 percent. Energy climbed 2.2 percent and closed at a six-week high along with raw-materials and industrials. Consumer staples advanced 0.4 percent to the highest this year.

     United Technologies posted its steepest jump in more than four years on the CNBC report of merger talks with Honeywell, which erased an earlier climb of more than 4 percent. According to regulatory filings analyzed by Bloomberg, nine Honeywell insiders sold 37 percent of their holdings in the past six months.

     Transportation companies also helped push industrials higher, with FedEx Corp. adding 4.3 percent, the most since June 2014. The Dow Jones Transportation Average closed at a 2016 high, paring its decline this year to 1.2 percent after losing as much as 12 percent.

     A group of airline stocks rose 3.7 percent to a six-week high amid the longest rally since September, led today by Delta Air Lines Inc.’s 4.5 percent gain. Carriers climbed even as crude prices rose, amid speculation that higher fuel costs could remove the temptation to increase capacity.

     All but one company in the 27-member raw-materials group rose, as Freeport-McMoran climbed to the highest since Dec. 1. Similarly, Alcoa Inc. added more than 13 percent, the most in almost seven years.

     Chesapeake Energy Corp. soared 20 percent, the most in seven years and best Monday among oil and gas producers in the benchmark index. A financial blog said the shale gas driller may be ripe for acquisition. The volatile shares rose for a fifth day, up about 50 percent after losing more than 52 percent over the preceding seven sessions. Newfield Exploration Co. and Marathon Oil Corp. gained at least 9.8 percent.

     Consumer discretionary companies increased 1.9 percent to a three-week high, led by rallies of more than 4.6 percent for VF Corp. and Amazon.com Inc. Ford Motor Co. gained 3.8 percent, the most in five months. Meanwhile, Expedia Inc. slumped 1.6 percent and TripAdvisor Inc. lost 0.5 percent after an analyst at Stifel Nicolaus & Co. downgraded the stocks to sell from hold.

     Sysco Corp. slumped 4.9 percent, the most since August 2013, on news it agreed to buy food-service distributor Brakes Group from private equity firm Bain Capital in a $3.1 billion deal. Food-maker Kellogg Co. and Whole Foods Market Inc. slid at least 2.2 percent.

     Lumber Liquidators Holdings Inc. sank nearly 20 percent, the biggest drop in six months, after U.S. regulators said some of the retailer’s laminate flooring has a three times greater risk of causing cancer than previously stated.

 

Have a wonderful evening everyone.

 

Be  magnificent!

Each one has a special nature peculiar to himself which he must follow

and through which he will find his way to freedom.

Swami Vivekananda

As ever,

 

Carolann

 

Experience is simply the name we give our mistakes.

                                      -Oscar Wilde, 1854-1900

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

 

Dear Friends,

Tangents:

On Feb. 19, 1945, during World War II, some 30,000 United States Marines landed on the Western Pacific island of Iwo Jima, where they encountered ferocious resistance from Japanese forces. The Americans took control of the strategically important island after a month-long battle.

And….

1996 – Birth of the Toonie – Royal Canadian Mint puts $2 bimetallic Polar Bear into circulation.

The writer, Amy Tan was born on this day in 1952:

You see what power is – holding someone else’s fear in your hand and showing it to them. –Amy Tan.

PHOTOS OF THE DAYDaniel Andre Tande of Norway in action during Ski Jumping HS130 World Cup competition at the Lahti Ski Games, the Pre-World Championships, in Lahti, Finland, Friday. Martti Kainulainen/ Lehtikuva/AP

A surfer drops in on a large wave at Praia do Norte in Nazare, Portugal, Friday. The Praia do Norte beach has become a famous beach for big waves surfers around the world since Hawaiian surfer Garrett McNamara got a world record for the largest wave surfed in 2011. Rafael Marchante/Reuters

Market Closes for February 19, 2016

Market Index	Close	Change
Dow Jones	16391.99	-21.44   -0.13%
S&P 500	1917.78	-0.05
NASDAQ	4504.430	+16.893   +0.38%
TSX	12813.40	-117.96
		-0.91%

International Markets

Market Index	Close	Change
NIKKEI	15967.17	-229.63
		-1.42%
HANG SENG	23709.15	-77.58
		-0.40%
SENSEX	23709.15	+59.93
		+0.25%
FTSE 100	5950.23	-21.72
		-0.36%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.120	1.113
CND. 30 Year Bond	1.920	1.914
U.S.    10 Year Bond	1.7449	1.7396
U.S. 30 Year Bond	2.6048	2.6086

Currencies

BOC Close	Today	Previous
Canadian $	0.72624	0.72818
US $	1.37695	1.37329
Euro Rate 1 Euro=		Inverse
Canadian $	1.53282	0.65239
US $	1.11320	0.89831

Commodities

Gold	Close	Previous
London Gold Fix	1231.15	1210.10
Oil	Close	Previous
WTI Crude Future	29.64	30.77

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, snapping a four-day rally, as crude dropped below $30 a barrel and retail sales tumbled the most in more than five years.

     The Standard & Poor’s/TSX Composite Index dropped 0.9 percent to 12,813.42 at 4 p.m. in Toronto, trimming a climb this week to 3.5 percent. Canada’s benchmark equity gauge remains the best-performing developed market in the world in 2016 with a 1.5 percent decline, after being among the worst in the past year. The S&P/TSX slid into a bear market last month as crude prices collapsed due to a global supply glut.

     Car dealership operator AutoCanada Inc. dropped 1.9 percent while auto-parts makers Linamar Corp. and Martinrea International Inc. retreated at least 2 percent to lead consumer discretionary stocks lower as eight of 10 industries in the S&P/TSX declined.

     Canadian retail sales fell 2.2 percent in December, the fastest since 2010, with the decline exceeding all 20 forecasts in a Bloomberg News survey. Motor vehicle and parts sales fell 3.9 percent, including a 6.7 percent drop in a category that includes snowmobiles.

     Encana Corp. tumbled 11 percent as energy producers fell 1.3 percent for a second day of losses. New York crude returned to levels below $30 a barrel. U.S. crude supplies expanded to the highest level in more than eight decades, according to government data Thursday.

     Encana, along with Cenovus Energy Inc., had its debt ratings lowered to junk by Moody’s Investors Service as the prolonged price rout has sapped cash flows. Cenovus lost 2.9 percent.

     Valeant Pharmaceuticals International Inc. sank 9.6 percent, the biggest decline this year. David Maris, analyst at Wells Fargo Securities, said there are many “unanswered questions” about the company’s strategic direction and forecast as he initiated coverage of the stock with an underperform, the equivalent of a sell.

     Valeant, briefly the largest company in the S&P/TSX by market capitalization last year, has slumped 66 percent from an August high amid intense scrutiny from investors and lawmakers surrounding its pricing practices.

     Dream Office REIT surged 13 percent, the most since 2008, after saying yesterday it plans to sell about C$1.2 billion in assets in the next three years, and it cut its annualized distribution by 33 percent. The stock was also raised to an “action list buy” from “buy” at TD Securities.

US

By Anna-Louise Jackson and Jiayue Huang

     (Bloomberg) — U.S. stocks closed little changed to finish the strongest weekly advance since November, with gains in technology and consumer shares offsetting declines among commodity producers amid a drop in crude oil.

     Equities battled back from an opening selloff sparked by the slide in crude, erasing declines by late morning, though struggling to advance all day. Applied Materials Inc.’s 7.1 percent surge buoyed technology shares after it predicted sales this quarter that may beat analysts’ estimates. Amazon.com Inc. reversed losses, climbing 1.9 percent to help lead consumer shares higher. Boeing Co. fell for the first time in five days, losing 2.1 percent.

     The Standard & Poor’s 500 Index lost less than 0.1 percent to 1,917.78 at 4 p.m. in New York, slipping for a second day while still gaining 2.8 percent for the week. The Nasdaq Composite Index, rose 0.4 percent, wiping out an early drop of as much as 0.7 percent. The Dow Jones Industrial Average fell 21.44 points, or 0.1 percent, to 16,391.99. About 7.6 billion shares traded hands on U.S. exchanges, 7 percent below the three-month average.

     “We got overextended to the downside last week, we’ve had a pretty decent bounce off of those oversold levels and now we’re at an overbought condition,” said Michael James, managing director of equity trading at Wedbush Securities Inc. in Los Angeles. “I’m not surprised to see a pullback yesterday and a continued pullback today.”

     Investors were able to mostly shrug off oil’s biggest drop in a week, with the impact not spreading deeply beyond energy and raw-materials shares, offering further evidence that once- tight market correlations were easing.

     West Texas Intermediate crude futures fell for the first time in three days, down 3.7 percent and below $30 a barrel in New York after U.S. crude stockpiles rose to the highest in more than eight decades.

     “The oil situation is really just a supply issue,” said Rob Lutts, president of Massachusetts-based Cabot Wealth Management Inc. “The demand for energy is still relatively robust globally. I think investors maybe start focusing on that and pulling away from the concept that low oil prices mean global trouble everywhere.”                        

     Equities had rallied in near-vertical fashion for three sessions, sending the the S&P 500 up more than 5 percent after the gauge last week reached the lowest level since April 2014, and the Nasdaq Composite Index came within 1 percent of reaching a bear market. The rebound was led by the year’s most beaten- down sectors, including banks, technology and retailer shares.

     The S&P 500 has cut its 2016 decline nearly in half, though it’s still down 10 percent from a May record and 6.2 percent this year amid signs of weakness in the global economy and falling commodity prices.

     Investors have been scrutinizing economic data for any signs that slower growth abroad, particularly in China, is spreading. A report today showed the cost of living in the U.S. excluding food and fuel increased in January by the most in more than four years, reflecting broad-based gains that signal companies may be getting some pricing power. Total prices were little changed, depressed by the continued plunge in energy costs.                          

     Following the data, traders increased the probability for another Fed rate increase this year. Odds of June boost in borrowing costs rose to 24 percent from 17 percent yesterday, and less than 6 percent a week ago. Chances for a December move climbed to 44 percent, up from 37 percent on Thursday.

     The Chicago Board Options Exchange Volatility Index fell 5.1 percent Friday to 20.53, down for fifth day, the longest stretch in more than four months. The measure of market turbulence known as the VIX has cut its February climb to less than 2 percent from a high of more than 39 percent on Feb. 11.

     Six of the S&P 500’s 10 main groups fell, with raw-material companies slumping 1.1 percent, while energy shares slipped 0.4 percent, trimming an earlier 2.2 percent retreat. Consumer discretionary and technology shares rose as much as 0.3 percent. Financial, health-care and industrials were little changed.

     Energy stocks extended a two-day loss to 2.1 percent on the selloff in crude. Southwestern Energy Co. tumbled 17 percent, its biggest decline in seven years. Murphy Oil Corp. fell 9.7 percent, on pace for its lowest since 2002, while Devon Energy Corp. extended a four-day rout of nearly 15 percent.

     Consumer discretionary shares rose, with travel-related companies Carnival Corp. and Priceline Group Inc. advancing more than 2.3 percent. Nordstrom Inc. slumped 6.7 percent, on track for the most in three months, after holiday results missed analysts’ estimates and the retailer gave a weak earnings forecast.                      

     Applied Materials was the biggest gainer among the tech group, capping its steepest climb since May 2014 and lifting other semiconductor companies amid its outlook. Lam Research Corp. and Qorvo Inc. added at least 2.9 percent. Outside of chips, Autodesk Inc. and Activision Blizzard Inc. climbed more than 4.5 percent.

     Real-estate companies were the strongest performers within the financial group, extending gains to a fifth day, the longest since November. Public Storage, Extra Space Storage Inc. and Essex Property Trust Inc. advanced more than 1.9 percent.

     An index of U.S. airlines increased to a one-month high as oil prices fell. United Continental Holdings Inc. rose 3.6 percent, up for a fifth day, the most in almost eight months.

     With the earnings season drawing to an end, about three- quarters of results from S&P 500 companies exceeded profit projections, while less than half have topped sales forecasts.Analysts estimate earnings at companies in the benchmark fell 4.5 percent in the fourth quarter and will continue to contract in the following two periods.

 

Have a wonderful weekend everyone.

 

Be magnificent!

You are unique as you are here and now.

You are never the same.  You will never be the same again.  You have never before  been what you are now.

You will never be it again.

Swami Prajnanpad

As ever,

Carolann

 

You have to dream before your dreams can come true.

                            -A.P.J. Abdul Kalam, 1931-2015

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

Points of Progress:

Worldwide:

An iconic doll just got real.

US based toymaker Mattel in late January unveiled a new suite of body types – petite, tall, and curvy – for its ubiquitous Barbie, responding to a long-running and often heated cultural conversation, chiefly in  the United States, about whether the dimensions of the original doll promoted unrealistic expectations about women’s body types.  Global sales had been slipping.  Mattel introduced new skin tones and hair textures last year. – Time

Germany: 

A superhighway for bicycles is getting attention in the land of the Autobahn.  A three-mile stretch of the Radschnellweg, about 13 feet wide and lighted, opened to great fanfare.  Expansion is planned: The system, which uses old rail routes, could cover more than 60 miles and connect several cities and four universities in northwest Germany’s Ruhr district.  It could reduce congestion by 50,000 vehicles, according to one study. –Ecowatch

PHOTOS OF THE DAY

People from the Karamojong tribe wait in line to vote during the presidential elections in a village near the town of Kaabong in the Karamoja region of Uganda Thursday. Ugandans are voting on whether to give Yoweri Museveni, in power for three decades, another term in office. Goran Tomasevic/Reuters

Australian dog trainer and former surfing champion Chris de Aboitiz rides a wave with his dogs Millie (l.) and Rama off Sydney’s Palm Beach Thursday. He is using the discipline of surfing as a way of teaching owners to build healthy relationships with man’s best friend. Jason Reed/Reuters

Market Closes for February 18^th, 2016

MarketIndex	Close	Change
DowJones	16413.43	-40.40  -0.25%
S&P 500	1917.83	-8.99  -0.47%
NASDAQ	4487.539	-46.525  -1.03%
TSX	12931.36	+64.20
		+0.50%

International Markets

MarketIndex	Close	Change
NIKKEI	16196.80	+360.44
		+2.28%
HANGSENG	19363.08	+438.51
		+2.32%
SENSEX	23649.22	+267.35
		+1.14%
FTSE 100	5971.95	-58.37
		-0.97%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.113	1.179
CND.30 Year Bond	1.914	1.974
U.S.   10 Year Bond	1.7396	1.8190
U.S.30 Year Bond	2.6086	2.6875

Currencies

BOC Close	Today	Previous
Canadian $	0.72818	0.73156
US$	1.37329	1.36694
Euro Rate1 Euro=		Inverse
Canadian $	1.52572	0.65543
US$	1.11100	0.90009

Commodities

Gold	Close	Previous
London GoldFix	1210.10	1209.50
Oil	Close	Previous
WTI Crude Future	30.77	30.66

Market Commentary:

Canada

By Jiayue Huang

     (Bloomberg) — Canadian stocks rose, sending the nation’s benchmark to the precipice of erasing declines for the year, as a rally in gold boosted miners of the precious metal.

     The Standard & Poor’s/TSX Composite Index rose 0.5 percent to 12,931.36 at 4:00 p.m. in Toronto, capping a four-day gain that’s lifted the benchmark to its highest level this year.

     The index has pared losses for the year to 0.6 percent, making it the best-performing developed market out of 24 benchmarks tracked by Bloomberg, after it was among the worst in 2015. While the resource-rich gauge has been whipsawed by swings in oil and commodity prices, a rebound in those sectors has lifted the measure from a low last month. Investors are also monitoring corporate results, with some 20 companies in the index reporting results on Thursday.

     Gold prices shot up 1.8 percent higher today, as investors sought havens amid signs the global glut in crude may continue. Twenty out of 21 members in a gauge of S&P/TSX gold miners advanced, as the measure jumped the most since October.

     Barrick Gold Corp. gained 6.8 percent to its highest level since September 2014, after posting better-than-expected earnings and saying it intends to cut at least $2 billion debt this year. Kinross Gold Corp. added 8.1 percent, even after becoming the latest miner to have its credit rating cut to junk. Standard & Poor’s on Thursday lowered its rating to BB+ from BBB-.

     Meanwhile, copper miner First Quantum Minerals Ltd. tumbled 11 percent. The stock was cut by BMO Capital Markets and Canaccord Genuity to the equivalent of a hold, following the stock’s 67 percent rally in the last three days.

     Consumer staples and discretionary companies also rose. Cott Corp., a beverage maker, jumped 7.3 percent after unexpectedly posting a fourth-quarter profit of 3 cents a share. Analysts had estimated a loss of 2 cents.

     Canadian Tire Corp. rallied 7.8 percent to its highest price since Dec. 7, after announcing a share buyback of up to 6 million Class A shares.

     Utility shares also advanced. Fortis Inc. added 1.3 percent after the company posted quarterly earnings that beat analysts’ estimate.

     Industrial companies were little changed. Finning International Inc. slumped 1.9 percent, after earlier tumbling as much as 9.3 percent, following the company’s disappointing quarterly results and announcement of a cut of between 400 and 500 jobs. Bombardier Inc. climbed 2.8 percent after Credit Suisse Group AG raised the troubled aircraft maker to the equivalent of a buy rating.

     Energy companies fell the most among the 10 main sectors in S&P/TSX composite, as West Texas Intermediate, the U.S. benchmark for oil, pared gains to close below $31 a barrel after a reporting showing U.S. crude inventories rose to an 86-year high. Encana Corp. sank 9 percent.

US

By Dani Burger

     (Bloomberg) — U.S. stocks declined following the Standard & Poor’s 500 Index’s strongest three-day advance in almost six months, as banks, technology and consumer shares lost momentum after bolstering the rally.

     Wal-Mart Stores Inc. fell 3 percent after lowering its annual sales forecast. JPMorgan Chase & Co. and Citigroup Inc. lost more than 1.6 percent as banks declined for the first time in four sessions. Energy producers sank despite higher crude prices. International Business Machines Corp. rose 5 percent after agreeing to purchase Truven Health Analytics for $2.6 billion.

     The S&P 500 slipped 0.5 percent to 1,917.83 at 4 p.m. in New York, halting a rally after the benchmark on Wednesday capped its first three-day gain of the year. The Dow Jones Industrial Average lost 40.40 points, or 0.3 percent, to 16,413.43. The Nasdaq Composite Index fell 1 percent as Apple Inc. and Google parent Alphabet Inc. sank more than 1.9 percent. The gauge had surged 6.3 percent in the prior three days after falling last week to within 1 percent of a bear market.

     “The U.S. is not heading toward a recession, but everyone is worried where growth is going to come from and will earnings come close to analysts’ estimates,” said Bob Phillips, co- founder and managing principal at Indianapolis-based Spectrum Management Group Inc. “Until we get through the first quarter and see some earnings releases, we likely will be in a tight trading range.”

     Equities lost momentum Thursday after recent gains that have come just as fast as the losses that sent the S&P 500 to its worst start to any year. Almost half of 2016’s decline was erased in the prior three sessions as the most beaten-down industries, including banks, technology and retailer shares, led a comeback. The benchmark is still down 10 percent from its May record, and has lost 6.2 percent this year amid signs of weakness in the global economy and falling commodity prices.

     One notable point: the lockstep moves that have paralyzed investors during the recent rout are beginning to ease. Thirty- day correlations between the S&P 500 and 10 other asset classes including oil and global stock markets have fallen in the past two weeks, data compiled by Bloomberg show. As recently as the beginning of this month, equity gauges around the world were moving broadly in tandem — in several cases by the most in seven years.

     With Federal Reserve members expressing concern over the economy, investors are increasingly scrutinizing reports for signs of any damping in growth. Data today showed the number of Americans filing for unemployment benefits unexpectedly declined last week to a three-month low. A separate report showed an index of leading indicators decreased in January for a second month.

     In a speech Wednesday, Fed Bank of St. Louis President James Bullard said recent market turmoil that’s contributed to a further decline in investors’ expectations for inflation has given the central bank scope to delay interest-rate increases. San Francisco Fed President John Williams said today his outlook hasn’t changed despite the upheaval, and repeated that he expects the Fed to gradually normalize policy.

     The earnings season is drawing to an end and has provided little relief for equities. While about three-quarters of results from S&P 500 companies exceeded profit projections, less than half have topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 4.5 percent in the fourth quarter and will continue to contract in the following two periods.

     The Chicago Board Options Exchange Volatility Index fell 3 percent Thursday to 21.64. The measure of market turbulence known as the VIX has shaved its February climb to about 7 percent, down from 39 percent a week ago as the S&P 500 surged more than 5 percent. About 8.5 billion shares traded hands on U.S. exchanges, 4 percent above the three-month average.

     “I would expect a little pullback after three straight days of gains, especially since growth has done particularly well, it may give people some pause and some profit taking,” said Mariann Montagne, who helps oversee $870 million as senior investment analyst at Gradient Investments Group.                       

     Eight of the 10 main S&P 500 industry groups fell, led by energy and health-care shares. Financial, technology and consumer discretionary stocks each lost at least 0.6 percent. Utilities rose 1.6 percent, the most in almost three weeks, while phone companies added 1.1 percent.

     Financial companies in the benchmark fell, led by lenders which lost 1.7 percent to hand back some of their best three-day rally in five years. Bank of America Corp. and Regions Financial Corp. declined at least 2.5 percent.

     Energy producers slipped after the strongest rally since October, even as oil settled higher. The commodity traded below earlier levels after a government report showed U.S. crude inventories advanced to an 86-year high as imports surged. Anadarko Petroleum Corp. and Newfield Exploration Co. fell more than 8.5 percent. Anadarko had rallied almost 14 percent in the previous three trading days.

     Marathon Oil Corp. sank 6.5 percent after reporting a fourth straight quarterly loss. The Houston-based explorer also plans to cut spending by more than half, and it reduced its production outlook.                        

     In an about-face from their 3.2 percent three-day gain through Wednesday, consumer staples sank, dragged lower amid the fallout from Wal-Mart’s disappointing forecast. Grocery chain Kroger Co. fell 3.5 percent, while Hormel Foods Corp dropped 3.6 percent. Wal-Mart sank the most in four months after closing yesterday as the Dow’s second-best performer so far this year.

     Among discretionary shares, Netflix Inc. dropped 4.5 percent after a 9.7 percent gain in the previous three sessions. Amazon.com Inc. declined 1.7 percent, halting a five-day advance which was the longest since October.

     IBM was the Dow’s strongest performer today, surging to its biggest gain since July 2011. The Truven deal expands its health-related data services, with the company providing cloud- based data management and analytics to more than 8,500 health- care clients, including hospitals, insurers and government agencies, the companies said in a statement.

     Among companies reporting earnings, Perrigo Co. Plc plunged 10 percent to its lowest level since May 2014. The drugmaker’s fourth-quarter earnings missed analyst estimates and said it would abandon some lower growth consumer brands. Perrigo’s tumble was the biggest drag on the health-care group. Allergan Plc and Biogen Inc. lost more than 1.8 percent, while the Nasdaq Biotechnology Index decreased 2.6 percent.

     Nvidia Corp. jumped 8.6 percent, the most since November, after the biggest maker of graphics chips used in high-end gaming computers predicted sales that may exceed analysts’ estimates.

Have a wonderful evening everyone.

Be magnificent!

For you, now, meditation involves establishing within yourself

the reality of these two unavoidable rules – difference and change.

Try as hard as possible to convince yourself

that these two rules can neither be changed nor avoided.

Swami Prajnanpad

As ever,

 

Carolann

 

Painting is silent poetry, and poetry is painting that speaks.

                                               -Plutarch, 45 AD-120 AD

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7