Month: May 2016

Dear Friends,

Tangents:

Poem

Wordsworth wrote that the poem is a place where emotions can be recollected in tranquility and reproduced for the reader to experience.  A different function could be to provide a more intellectual space where what troubles us can be dispassionately thought through – first by the poet, then by the reader.  As in great philosophical poems, here there is no false consolation.

Elegy Elegy
   By Brian Henry

The dead keep coming back to us
whether we will their return or not:

in our sleep, when we slip to resist,
in books, and in song, when the voice

shuffles forward to call “I’m still alive/
I win the prize/I’m still alive,”

even though he’s not, even though
he knew that his song some day would prove

false, a sometime untrue statement
that no one, not even a ghost,

can retract.  Instead, those of us left
are left to notice, and miss, and hurt.

How thin is the human voice,
it cannot keep even the dead

distant, on the other side of any
thing we would call any thing.

PHOTOS OF THE DAY

People row on Lake Ontario in front of the city skyline at sunrise on a foggy morning in Toronto on Friday. Mark Blinch/The Canadian Press/AP

A falcon feeds its chicks in its nest inside a house window in the Palestinian West Bank city of Nablus on Friday. Abed Omar Qusini/Reuters

Market Closes for May 30^th, 2016

Market Index	Close	Change
Dow Jones	17873.22	Closed
S&P 500	2099.06	Closed
NASDAQ	4933.504	Closed
TSX	14086.67	-18.56
		-0.13%

International Markets

Market Index	Close	Change
NIKKEI	17068.02	+233.18
		+1.39%
HANG SENG	20629.39	+52.62
		+0.26%
SENSEX	26725.60	+72.00
		+0.27%
FTSE 100	6270.79	+5.14
		+0.08%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.352	1.351
CND. 30 Year Bond	1.981	1.985
U.S.    10 Year Bond	1.8510	1.8510
U.S. 30 Year Bond	2.6464	2.6464

Currencies

BOC Close	Today	Previous
Canadian $	0.76629	0.76753
US $	1.30499	1.30288
Euro Rate 1 Euro=		Inverse
Canadian $	1.45367	0.68791
US $	1.11393	0.89772

Commodities

Gold	Close	Previous
London Gold Fix	1216.25	1216.25
Oil	Close	Previous
WTI Crude Future	49.33	49.33

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, retreating from the highest level since August, as commodities producers declined with gold in a light trading day with U.S. and U.K. markets closed for a holiday.

     The S&P/TSX Composite Index fell 0.1 percent to 14,086.67 at 4 p.m. in Toronto, after rallying the most in five weeks last week with a 1.3 percent gain. The index has surged 19 percent since reaching a two-year low on Jan. 20 and is up more than 8 percent this year, the second most after New Zealand among developed-market nations tracked by Bloomberg. Trading volume was 70 percent lower than the 30-day average.

     The recent rally has made Canadian shares expensive relative to their U.S. peers. The S&P/TSX now trades at 21.4 times earnings, about 10 percent higher than the 19.4 times valuation of the S&P 500.

     Global stocks were little changed after a four-day rally. The Bloomberg Dollar Spot Index rose, trading at its highest level since March, after Federal Reserve Chair Janet Yellen’s comments May 27 pointed to a likely interest-rate increase in coming months. Traders have now priced in a 34 percent chance of an interest rate increase in June, and better-than-even odds for July, according to data compiled by Bloomberg.

     In Canada, Bank of Nova Scotia slipped 0.1 percent as a gauge of the nation’s largest lenders ended the day little changed after a five-day rally, trading near the highest level since December 2014. Scotiabank, Canada’s third-largest lender, is set to report second-quarter earnings Tuesday. Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce posted better-than-expected results last week.

     Barrick Gold Corp. and Tahoe Resources Inc. lost more than 0.6 percent as raw-materials producers slipped 0.4 percent as a group. Suncor Energy Inc. rose 0.3 percent after the oil-sands producer restarted operations near Fort McMurray. Operators in the area took offline more than 1 million barrels a day of output as wildfires devastated the region. Enbridge Inc. declined 1.2 percent. Raw-materials and energy producers led declines among four of 10 industries in the S&P/TSX.

     Delphi Energy Corp. plunged 19 percent, the most in more than seven years, after lenders cut the oil and gas producer’s credit facility for the second time since December amid the rout in crude prices.

     Commodities producers, which make up about a third of the S&P/TSX by market capitalization, have fueled the rally in Canadian stocks this year. Resource prices are coming under pressure as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher and commodity prices lower.

     Intertain Group Ltd. climbed 5.1 percent for a second day of gains, trading at the highest level this year, after the online gaming company delayed its annual meeting by as long as three months, to no later than Sept. 23. The postponement gives the company’s special committee more time to complete a strategic review. Intertain will provide an update by the end of June.

US

Closed for Memorial Day
 

Have a wonderful evening everyone.

 

Be magnificent!

It is man’s social nature which distinguishes him from the brute creation.

If it is his privilege  to be independent, it is equally his duty to be inter-dependant.

Only an arrogant man will claim to be independent of everybody else and be self-contained.

Mahatma Gandhi

As ever,
 

Carolann

 

i thank you God for this most amazing day,

for the leaping greenly spirits of trees,

and for the blue dream of sky and for everything

which is natural , which is infinite, which is yes.

                           -e.e. cummings, 1894-1962

 

 

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: Memorial Day on Monday, so US markets are closed.

May 27, 1937 : Golden Gate Bridge opens in San Francisco.

Rachel Carson’s birthday, born May 27, 1907.

Rachel Carson is celebrated the world over as the catalyst of the ecology movement and savior of countless endangered species.  She began her career writing pamphlets for the United States Fish and Wildlife Service.  Educated as a marine biologist, Carson wrote her first book, Under the Sea Wind, from the viewpoint of the main character, the sea.  She addressed the sea again in The Sea Around Us, which spent 81 weeks on the New York Times bestseller list and earned her the National Book Award in 1951 for best nonfiction book.

Her most famous work, Silent Spring, appeared in The New Yorker in three installments beginning June 1962.  It presented the scientific evidence that everything is connected to everything else, and documented the demise of songbirds due to DDT poisoning.  After reading it, President John F. Kennedy appointed a council to examine the use of pesticides.  The chemical industry, unable to discredit her scientific work, attacked Carson personally as a hysterical middle-aged kook, a faddist, and a threat to Americans who needed pesticides to have a quality life.  Though weakened from cancer, she defended her ideas.  The president’s advisory report, issued finally on May 15, 1963, agreed with Carson.  She died the following spring, April 14, 1964.  Time magazine named her among the most 100 influential people of the 20^th century.

Those who dwell, as scientists or laymen,
among the beauties and mysteries of the
earth are never alone or weary of life. –Rachel Carson

PHOTOS OF THE DAY

This cave drawing was discovered by Spanish archaeologists. They say they have discovered an exceptional set of Paleolithic-era cave drawings that could rank among the best in a country that already boasts some of the world’s most important cave art. Chief site archaeologist Diego Garate said Friday that an estimated 70 drawings were found on ledges 300 meters (1,000 feet) underground in the Atxurra cave, Berriatua, in the northern Basque region. Diputacion Floral de Bizkaia/AP

People visit the Vietnam Memorial in Washington on Friday at the start of the Memorial Day weekend. Susan Walsh/AP

Market Closes for May 27^th, 2016

Market Index	Close	Change
Dow Jones	17873.22	+44.93   +0.25%
S&P 500	2099.06	+8.96   +0.43%
NASDAQ	4933.504	+31.738   +0.65%
TSX	14105.23	+56.03
		+0.40%

International Markets

Market Index	Close	Change
NIKKEI	16834.84	+62.38
		+0.37%
HANG SENG	20576.77	+179.66
		+0.88%
SENSEX	26653.60	+286.92
		+1.09%
FTSE 100	6270.79	+5.14
		+0.08%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.351	1.332
CND. 30 Year Bond	1.985	1.983
U.S.    10 Year Bond	1.8510	1.8282
U.S. 30 Year Bond	2.6464	2.6402

Currencies

BOC Close	Today	Previous
Canadian $	0.76753	0.77107
US $	1.30288	1.29689
Euro Rate 1 Euro=		Inverse
Canadian $	1.44777	0.69072
US $	1.11120	0.89992

Commodities

Gold	Close	Previous
London Gold Fix	1216.25	1223.85
Oil	Close	Previous
WTI Crude Future	49.33	49.48

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks capped a third straight weekly advance, rising to the highest level since August, as the nation’s largest lenders extended a rally to a fifth day amid quarterly results and the prospect for higher interest rates in the U.S.

     The S&P/TSX Composite Index rose 0.4 percent to 14,105.23 at 4 p.m. in Toronto, posting a 1.3 percent weekly gain that’s the best in five weeks. The index has surged 19 percent since reaching a two-year low on Jan. 20 and is up more than 8 percent this year, the second most after New Zealand among developed- market nations tracked by Bloomberg.

     The surge has made Canadian shares expensive relative to their U.S. peers. The S&P/TSX now trades at 21.4 times earnings, about 10 percent higher than the 19.4 times valuation of the S&P 500.

     Global stocks rose a fourth day, for the highest close in three weeks. The continued recovery of the U.S. economy would warrant another interest rate increase “in the coming months,” Federal Reserve Chair Janet Yellen said at an event in Massachusetts today. Traders have now priced in a 34 percent chance of an interest rate increase in June, and better-than- even odds for July, according to data compiled by Bloomberg. U.S. markets will be closed on Monday for a holiday.

     In Canada, Royal Bank of Canada and Toronto-Dominion Bank rose at least 0.6 percent as financial services stocks rose with eight of 10 industries in the Canadian equity benchmark. A gauge of the nation’s largest lenders is on a five-day rally, the longest in six weeks, trading at its highest level in more than a year. Toronto-Dominion, Royal Bank of Canada and Canadian Imperial Bank of Commerce reported second-quarter results ahead of expectations Thursday, while Bank of Nova Scotia is scheduled to post its earnings on May 31.

     Valeant Pharmaceuticals International Inc. added 6.3 percent as health-care stocks jumped the most in the S&P/TSX. The drugmaker rejected a takeover bid from Takeda Pharmaceutical Co. and investment firm TPG about six weeks ago, according to a report. The approach was rejected and no talks are currently ongoing, according to people familiar with the situation.

     Cenovus Energy Inc. rose 1.4 percent as energy producers ended the day higher, erasing an earlier loss. Oil trimmed its third weekly advance as futures pared losses to 0.3 percent in New York. Cenovus is considering using some of its C$3.9 billion in cash to buy back debt and expand, according to CEO Brian Ferguson in an interview with David Scanlan on Bloomberg TV Canada.

     Commodities producers, which make up about a third of the S&P/TSX by market capitalization, have fueled the rally in Canadian stocks this year. Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher.

US

By Anna-Louise Jackson and Oliver Renick

     (Bloomberg) — U.S. stocks climbed in light, pre-holiday trading, with the S&P 500 posting the biggest weekly gain since March, amid growing confidence that the economy is strengthening enough to handle higher borrowing costs as early as this summer.

     Equities resumed an advance after barely budging Thursday, lifted by gains in banks and technology companies, which marked their best week since February. Federal Reserve Chair Janet Yellen said in remarks at Harvard University an improving economy would probably warrant another rate increase “in the coming months,” sending the dollar higher and damping commodity producers.

     The S&P 500 rose 0.4 percent to 2,099.06 at 4 p.m. in New York, the highest since April 20. The Dow Jones Industrial Average added 44.93 points, or 0.3 percent, to 17,873.22, while the Nasdaq Composite Index increased 0.7 percent to a five-week high. About 5.6 billion shares traded on U.S. exchanges, the second-lowest this year and 23 percent below the three-month average. U.S. markets will be closed Monday in observance of Memorial Day.

     “Yellen had sent out her crew to telegraph this before today,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “It’s confirmation more than anything — we had all heard from various speakers for a week now that the tone of the FOMC members was not particularly dovish. Yellen comes out today and the writing was on the wall and she etched it in with a pen.”

     A series of speeches by Fed officials and the release of the minutes to their April policy meeting have heightened investor expectations for another tightening move either next month or in July.

     The S&P 500 gained 2.3 percent this week, with stronger- than-forecast housing data helping to boost optimism on the economy. Traders are pricing in a 34 percent chance the Fed will increase rates in June, up from 30 percent before Yellen’s remarks today, and 4 percent early last week. July shows a 58 percent probability of higher borrowing costs, up from 51 percent earlier Friday.

     Leading gains today, Ulta Salon Cosmetics & Fragrance Inc. jumped 9.1 percent to a record after quarterly results beat estimates and the company raised its outlook. Alphabet Inc. rose 1.5 percent to a five-week high after Google won a jury verdict that kills Oracle Corp.’s claim to a $9 billion slice of the search giant’s Android phone business. Verizon Communications Inc. rose on a deal to end a 44-day strike by landline workers.

     After slipping as much as 3 percent from a four-month high on April 20, the S&P 500 is back within 0.2 percent of that level, boosted by gains this week in technology shares, with Apple Inc. climbing 5.4 percent and Microsoft Corp. adding 3.4 percent. That’s rejuvenated a rally that pushed the benchmark up as much as 15 percent from a February low before stalling last month amid mixed corporate earnings — including disappointing results from those two tech giants — and lukewarm signs of an economic pickup.                         

     A report today showed the economy expanded at a slightly faster pace in the first quarter than previously estimated, though the figures do little to alter views of the third consecutive sluggish start to the year. A separate gauge showed consumer confidence climbed less than forecast in May as Americans were a little less ebullient about the economy’s prospects in the run up to the presidential election.

     “It feels like deja vu to me,” Katie Nixon, chief investment officer of wealth management at Northern Trust Corp., said in an interview with Bloomberg TV. “Last year, we had a weak first quarter followed by a great second quarter, and then we saw weakness into the summer, and there’s no reason to expect anything necessarily different this year.”

     With the reporting season almost at an end, analysts estimate first-quarter earnings declined 7.1 percent, compared with calls for a 10 percent drop as recently as April. They forecast second-quarter income will slide 4.9 percent, while growth is expected to return in the third quarter with a 3 percent increase.

     In Friday’s trading, all of the S&P 500’s 10 main industries rose, with financial shares rising 0.7 percent while technology and health-care companies increased more than 0.5 percent. All 10 groups marked weekly gains for the first time since March. The CBOE Volatility Index fell 2.3 percent to 13.12, an eight-week low. The measure of market turbulence known as the VIX also posted the first weekly decline in three.

     “It’s a long weekend so there’s not a lot of trading, plus the end of the month is coming up here quick,” Jim Davis, regional investment manager for The Private Client Group of U.S. Bank, said by phone. “The employment number next week is the next big step in the path.”

     Ulta Salon Cosmetics best gain in two months boosted consumer discretionary companies in the benchmark, which rose to a two-week high. Viacom Inc. climbed 4 percent, extending its longest rally since November, as controlling shareholder Sumner Redstone may be laying the groundwork to replace the company’s board and Chief Executive Officer Philippe Dauman. Royal Caribbean Cruises Ltd. and Carnival Corp. added at least 2.1 percent, recovering after a two-day selloff in the cruise-line operators.

     Energy producers were little changed as oil prices retreated for a second day after briefly rising above $50 a barrel on Thursday. The commodity trimmed its third weekly advance as Canadian energy producers moved to resume operations after wildfires eased. Chesapeake Energy Corp. and Marathon Oil Corp. lost more than 1.6 percent.

     Among shares moving on corporate news, FEI Co. jumped 14 percent, the steepest since 2011 after agreeing to be bought by Thermo Fisher Scientific Inc. for about $4.2 billion. FEI produces electron microscopes which are used to analyze proteins.

     GameStop Corp. sank 3.9 percent, after losing as much as 7.8 percent. The video-game retailer’s forecast for the current quarter fell short of analysts’ projections, a period that’s typically the slowest for new video-game releases, according to the company.

 

Have a wonderful weekend everyone.

 

Be magnificent!

Until a radical change takes place and we wipe out all nationalities,

all ideologies, all religious division, and establish a global relationship – psychologically and

inwardly first, then organized in the outside world – we shall go on with war.

Krishnamurti

As ever,

 

Carolann

 

There is nothing like music to relieve the soul and uplift it.

                                                    -Mickey Hart, 1943

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:

JAZZ MAGIC

What does New York sound like?  The Bill Charlap Trio answers that question with brio on their swinging, sophisticated new album, Notes From New York.  Pianist Charlap and his talented, longtime cohorts bassist Peter Washington and drummer Kenny Washington work their jazz magic on some undiscovered Broadway show gems and familiar standards and the result is Manhattan nightclub style jazz at its zenith. –CSM Weekly, May 16, 2016

May 26, 1932:  Parliament passed an Act establishing the publicly funded Canadian Radio Broadcasting Commission, the forerunner of the Canadian Broadcasting Corp. of 1936. Before the CRBC most of the programs available to Canadians were from the United States. Good to see that things have really changed. Who can even name an American television program? –from AdvisorAnalyst, 5/26/2016.

PHOTOS OF THE DAY

Orthodox Jews of the Satmar Hasidim dance near a bonfire as they celebrate the Jewish holiday of Lag Ba’Omer which marks the anniversary of the death of Talmudic sage Rabbi Shimon Bar Yochai approximately 1,900 years ago, in the village of Kiryas Joel, New York, on Wednesday. Mike Segar/Reuters

Filmmaker Steven Spielberg smiles as he introduced, while a band plays music from some of his films, before receiving an honorary doctor of arts degree, as Mary Bonauto, a civil rights advocate and honorary doctor of laws recipient laughs during Harvard University commencement exercises on Thursday in Cambridge, Mass. Steven Senne/AP

Market Closes for May 26^th, 2016

Market Index	Close	Change
Dow Jones	17828.29	-23.22   -0.13%
S&P 500	2090.88	+0.34   +0.02%
NASDAQ	4901.766	+6.875   +0.14%
TSX	14069.81	+16.07
		+0.11%

International Markets

Market Index	Close	Change
NIKKEI	16772.46	+15.11
		+0.09%
HANG SENG	20397.11	+29.06
		+0.14%
SENSEX	26366.68	+485.51
		+1.88%
FTSE 100	6265.65	+2.80
		+0.04%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.332	1.386
CND. 30 Year Bond	1.983	2.012
U.S.    10 Year Bond	1.8282	1.8664
U.S. 30 Year Bond	2.6402	2.6634

Currencies

BOC Close	Today	Previous
Canadian $	0.77107	0.76809
US $	1.29689	1.30193
Euro Rate 1 Euro=		Inverse
Canadian $	1.45148	0.68895
US $	1.11910	0.89358

Commodities

Gold	Close	Previous
London Gold Fix	1223.85	1220.60
Oil	Close	Previous
WTI Crude Future	49.48	49.16

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little changed, after a three-day rally that sent shares to the highest level since August, as energy and gold producers slipped while investors weighed earnings from the nation’s largest lenders.

     The S&P/TSX Composite Index lost less than 0.1 percent to 14,049.20 at 4 p.m. in Toronto, after closing above 14,000 points Wednesday for the first time since August. The index has climbed 8 percent this year, the second most after New Zealand among developed-market nations tracked by Bloomberg. The S&P/TSX now trades at 21.4 times earnings, about 10 percent higher than the 19.3 times valuation of the S&P 500.

     U.S. stocks also ended little-changed as mixed data did little to provide clarity on whether the Federal Reserve will raise interest rates as soon as June. Orders for business equipment unexpectedly declined in April while separate data showed jobless claims fell for a second week.

     Canada’s Enbridge Inc. and Peyto Exploration & Development Corp. contributed the most to declines by energy companies. Brent slid, settling at $49.59 a barrel after climbing above $50 in New York for the first time in more than six months as data showed U.S. inventories shrank more than expected.

     Royal Bank of Canada added 1 percent and Toronto-Dominion Bank rose 0.1 percent after the nation’s two largest lenders posted rising profit ahead of analysts’ expectations. Canadian Imperial Bank of Commerce slipped 1 percent, despite raising its dividend on higher profit. Wealth-management earnings at the lender fell 12 percent after CIBC said in December it was selling its stake in American Century Investments.

     A gauge of the nation’s largest lenders is trading near its highest levels in more than a year. Bank of Montreal on Wednesday posted second-quarter profit short of analysts’ estimates, while Bank of Nova Scotia is scheduled to post its earnings on May 31.

     Gold producers lost 0.4 percent. The recent retreat has dented a yearlong rally in raw-materials producers, which have been the best performer in the index with a 34 percent rally.

     Commodities producers make up about a third of the S&P/TSX by market capitalization. Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher. Traders have priced in a 28 percent chance of a June increase, according to data compiled by Bloomberg.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks closed little changed, with the S&P 500 holding near a four-week high, as mixed data offered little clarity on whether the economy is strengthening enough to bear higher interest rates as early as next month.

     Equities struggled to drive higher in light trading as investors stepped back to survey a two-day advance that added nearly 360 points to the Dow Jones Industrial Average and lifted the S&P 500 more than 2 percent in the gauge’s first back-to- back gains in two weeks. Banks and commodity producers were among the biggest losers Thursday after helping to lead this week’s climb.

     The S&P 500 fell less than 0.1 percent to 2,090.10 at 4 p.m. in New York, after trading in the narrowest range in six weeks. The Dow lost 23.22 points, or 0.1 percent, to 17,828.29. The gauge is celebrating its 120th anniversary, with only one of its original 12 constituents — General Electric Co. — still in the index. The Nasdaq Composite Index added 0.1 percent. About 5.8 billion shares traded hands on U.S. exchanges, the second- lowest this year and 21 percent below the three-month average.

     “The market is ahead of itself with this move over the last couple of days in light of the data,” said Phil Orlando, who helps oversee $360 billion as chief equity-market strategist at Federated Investors Inc. in New York. “First quarter earnings were terrible and you’ve got the prospect of a bad Brexit vote a week after the Fed — there’s a whole bunch of stuff that’s right in front of us that could go either way.”

     Reports today showed contracts to purchase previously owned homes climbed last month by the most since October 2010, while orders for business equipment unexpectedly declined in April for a third straight month, indicating American manufacturers continue to pull back. Separate data showed jobless claims fell for a second week.

     Stocks have gained this week as improving economic readings boosted confidence that the nation can withstand higher borrowing costs, while speculation increased that a Federal Reserve rate increase could come as soon as June. Releases on consumer sentiment and gross domestic product are due Friday, along with a speech by Fed Chair Janet Yellen.

     For more on the lead-up to Yellen’s appearance tomorrow, click here.

     Traders now price in a 28 percent chance of a June rate increase, from 4 percent early last week, though down from 34 percent yesterday. Odds for a July move edged down to 51 percent from about 54 percent a day earlier.

     Fed Governor Jerome Powell in remarks today added his voice to calls from other colleagues for a rate boost, as long as the economy continues to improve. Fed Bank of St. Louis President James Bullard earlier said risks associated with disappointing Chinese data aren’t going away, and shouldn’t keep the Fed from pursuing the best monetary policy for the U.S.

     U.S. equities broke out of a torpor this week after seven days of weaving between gains and losses, while the S&P 500 has traded in a roughly 50-point range in May. The stall came following a 15 percent surge from a 22-month low in February through April 20, amid lackluster earnings and economic data. The gauge closed Thursday within 2 percent of the record set a year ago, though it’s near a level where several rallies since then have faded.

     “There are a lot of cross-currents right now,” Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York, said by phone. “Here we are with earnings season winding down, oil keeps progressing higher and we’re bumping up to previous highs in stocks, but we can’t get through that level from late April. There’s a tug-of-war happening and people are waiting for jobs and the Fed.”

     A mixed earnings season is coming to an end, with analysts moderating their predictions for a decline in first-quarter profits to 7.2 percent, from 10 percent as recently as April. They forecast second-quarter income will slide 5.1 percent, worse than the 3.9 percent drop estimated a month ago. Earnings growth is expected to return in the third quarter with a 2.2 percent increase.

     “The reason why the S&P has not gone anywhere since the middle of 2014 is because the next 12 months’ earnings figure has been stuck at $125,” said Anastasia Amoroso, global market strategist for JPMorgan Asset Management, on Bloomberg TV. “If earnings consensus materializes for 2017, it’s $135. That’s what moves us higher. But even then, you’re still looking at a 5 percent upside plus maybe 2 percent dividend. And that’s on a very positive scenario.”

     For more of Amoroso’s commentary on markets, click here.

     In Thursday’s trading, roles reversed among the S&P 500’s 10 main industries with financial companies and raw-material producers lagging. Utilities, phone companies and consumer staples moved to the top after previously bringing up the rear this week. The CBOE Volatility Index fell 3.4 percent to 13.43, a five-week low. The measure of market turbulence known as the VIX is on the way to its first weekly decline in three.

     Raw-materials shares fell the most in a week, halting their longest winning streak since November. Chemical makers lost momentum after data showed orders for capital goods remained weak. Dow Chemical Co., Eastman Chemical Co. and LyondellBasell Industries NV declined at least 1.1 percent. Copper miner Freeport-McMoRan Inc. slid 2.7 percent. West Texas Intermediate crude futures erased gains, closing little changed at $49.48 after climbing as high as $50.21.

     Banks went from the strongest performers Wednesday to one of the worst today as U.S. Treasury yields saw their biggest slide in nearly two weeks, denting optimism that higher rates will buoy lenders’ profits. Citigroup Inc. and Bank of America Corp. sank more than 1.4 percent. In the broader financial segment, CBRE Group Inc. fell 2 percent, and Charles Schwab Corp. decreased 1.6 percent after rising 4.6 percent in the prior two days.

     Consumer discretionary shares rose as Dollar Tree Inc.surged 13 percent and Dollar General Corp. jumped 4.6 percent, with both reaching records after their earnings topped estimates. Dollar Tree capped the biggest one-day gain in more than 13 years. PVH Corp. added 4.3 percent, the most since March, as profits at the maker of Calvin Klein and Tommy Hilfiger apparel beat forecasts and it raised the full-year outlook.

     Consumer staples companies gained for a fourth consecutive day. Costco Wholesale Corp. led with a 3.6 percent advance, its strongest climb in nine months after its earnings also exceeded analysts’ predictions. Whole Foods Market Inc. and Kroger Co. increased more than 1.4 percent.

     Technology shares advanced for a third day, erasing earlier losses on the way toward the strongest week since February. HP Inc. rallied 6.9 percent after posting better-than-expected quarterly profits. Facebook Inc. added 1.3 percent, while Yahoo! Inc. rebounded 3.3 percent to pare a 5.2 percent drop Wednesday. Apple Inc. gained for a fifth day after the Financial Times reported a top executive last year raised the prospect of buying Time Warner Inc., the owner of HBO, CNN and Warner Brothers.

     Among other companies moving on corporate news, Signet Jewelers Ltd. dropped nearly 11 percent, the worst since 2011, after quarterly sales comparisons missed estimates and the retailer cut its sales outlook. Abercrombie & Fitch Co. tumbled 16 percent, the most in 18 months, after its sales also trailed predictions.

     Sears Holdings Corp. rose 6.6 percent as it considers options for its Kenmore, Craftsman and DieHard brands, as well as its Sears Home Services repair business, signaling that the retailer may sell more assets to stem widening losses.

 

Have a wonderful evening everyone.

 

Be magnificent! 
 

I am asking whether it is possible for a human being living psychologically in any society to clear  violence from himself inwardly.

If it is, the very process will produce a different way of living in this world.

Krishnamurti

As ever,

 

Carolann

 

Exercise should be regarded as tribute to the heart.

                                 -Gene Tunney, 1898-1978

 

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:

In the Financial Times this past weekend, David Tang offers advice to London’s new mayor, in answer to a question posed by one of his readers; I think there are very good suggestions – see what you think:

Now that Sadiq Khan has become Mayor of London, what advice would you give him?

I would ask him to stand in Piccadilly Circus and explain why half the buses going past are empty. Maybe he should visit Hong Kong where the privately owned buses operating there are always jam-packed with people, making the companies a lot of money. While the new mayor is there, he might also study Hong Kong’s public housing, which accommodates about half the population. As Hong Kong has much less land but almost as many people (7m), perhaps the mayor could learn a trick or two about how to provide affordable housing to so many. Finally, he might also visit Happy Valley, where there is an extraordinary state of the art racecourse that operates at night. This provides great excitement in the community and also brings together the rich and the poor. Whenever there is a night meeting, batteries of lights electrify the atmosphere, while owners, trainers, jockeys, bookies, stable lads and lasses all mingle with anticipation. Such a racecourse built in east London, perhaps near Canary Wharf, the O2 Arena or Stratford, would immediately rejuvenate these areas, which are dead at night. Besides, the British really understand horseracing and it would make London unique in Europe in having night racing at a world-class level.

May 25^th, 1915 – Second Battle of Ypres ends with 105,000 casualties, including hundreds of Canadians, many killed by gas attacks.

PHOTOS OF THE DAY

Plants grow out of jeans hanging on railings of a house in west London, Britain on Wednesday. Toby Melville/Reuters

Blossoming marguerites stand on a meadow in Frankfurt, Germany on Wednesday. Michael Probst/AP

Market Closes for May 25^th, 2016

Market Index	Close	Change
Dow Jones	17851.51	+145.46   +0.82%
S&P 500	2090.54	+14.48   +0.70%
NASDAQ	4894.891	+33.835   +0.70%
TSX	14053.74	+100.89
		+0.72%

International Markets

Market Index	Close	Change
NIKKEI	16757.35	+258.59
		+1.57%
HANG SENG	20368.05	+537.62
		+2.71%
SENSEX	25881.17	+575.70
		+2.27%
FTSE 100	6262.85	+43.59
		+0.70%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.386	1.366
CND. 30 Year Bond	2.012	2.004
U.S.    10 Year Bond	1.8664	1.8629
U.S. 30 Year Bond	2.6634	2.6456

Currencies

BOC Close	Today	Previous
Canadian $	0.76809	0.76176
US $	1.30193	1.31275
Euro Rate 1 Euro=		Inverse
Canadian $	1.45253	0.68845
US $	1.11568	0.89632

Commodities

Gold	Close	Previous
London Gold Fix	1220.60	1236.85
Oil	Close	Previous
WTI Crude Future	49.16	48.17

Market Commentary:

Canada

By Dani Burger

     (Bloomberg) — Canadian stocks rose to the highest level since August, as higher crude prices bolstered the nation’s energy producers and Bank of Montreal’s results added to a rally among lenders.

     The S&P/TSX Composite Index added 0.7 percent to 14,053.74 at 4 p.m. in Toronto, a level last seen on Aug. 18. The gauge hasn’t closed above 14,000 since August. The index has climbed 8.2 percent this year, second most among developed-market nations tracked by Bloomberg.

     Global shares jumped 1 percent today, as European and American financial firms paced gains on growing conviction the Federal Reserve will raise interest rates this summer and Britain will vote to remain in the European Union.

     In Canada, the central bank kept its key interest rate unchanged, signaling the economy will contract this quarter as Alberta wildfires cut oil production. Governor Stephen Poloz held the benchmark interest rate at 0.5 percent, where it’s been since July. Higher U.S. rates weakens the Canadian dollar, making Canada more attractive for foreign investment.

     For more on the Bank of Canada decision, click here.

     Bank of Montreal rose 1.4 percent for a third day of gains that have put the stock at its highest since September 2014. The lender said second-quarter fiscal profit fell 2.6 percent as soured oil-and-gas loans soared and the firm took a restructuring charge. The bank raised its dividend 2.4 percent to 86 cents a share.

     Canadian Western Bank and Bank of Nova Scotia added 1.3 percent as financial firms in the Canadian benchmark climbed to the highest level in nearly a year.

     Six of 10 industries in the S&P/TSX advanced on trading volume in line with the 30-day average. The S&P/TSX now trades at 21.4 times earnings, about 11 percent higher than the 19.3 times valuation of the S&P 500.

     Canadian Natural Resources Ltd. rose 2.1 percent. Energy producers added 1.5 percent, rising a second day. Oil traded above $49 a barrel. All of the Canadian oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart.

     The Bloomberg Commodity Index rebounded from a two-day drop, posting it’s biggest gain in two weeks. That lifted raw- material producers 1.8 percent adding to a year-long rally for the group, which has been the best performer in the index with a rally of more than 30 percent.

     Commodities producers make up about a third of the S&P/TSX by market capitalization Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks posted the strongest two-day rally in nearly three months, as signs of a stronger economy spurred speculation it can withstand higher interest rates.

     Banks in the S&P 500 led Wednesday’s move, reaching their highest level since Jan. 6 amid bets that rising rates will boost profits. Bank of America Corp. and Citigroup Inc. rallied more than 1.6 percent. Energy producers followed oil higher, helped by a retreating dollar that also bolstered gains in raw- materials companies.

     The S&P 500 increased 0.7 percent to 2,090.54 at 4 p.m. in New York, closing at a four-week high after its first back-to- back gains in two weeks. The Dow Jones Industrial Average rose 145.46 points, or 0.8 percent, to 17,851.51, its strongest two- day climb since March 2. The Nasdaq Composite Index added 0.7 percent, closing at the highest in a month. About 7 billion shares traded hands on U.S. exchanges, 4 percent below the three-month average.

     “The market is coming around to the idea that a June or July hike isn’t such a bad thing,” Anwiti Bahuguna, senior portfolio manager at Columbia Threadneedle Investments, said by phone. “There was a mini kind of taper tantrum when the probability of a rate hike jumped, but we’ve had decent housing data and while the data is still mixed, it’s not bad.”

     Hawkish commentary from Federal Reserve officials on the back of last week’s policy-meeting minutes, along with improving economic figures, led to speculation the central bank may increase rates as early as June. Fed Chair Janet Yellen is scheduled to speak on Friday, with her comments following readings on durable goods orders, pending home sales, gross domestic product and consumer sentiment.

     Traders are now pricing in a better than one-in-three chance of a June rate increase, from 4 percent at the start of last week. Bets for a July move have jumped to 55 percent from 19 percent.

     Equities are breaking out of a torpor that’s left markets struggling for direction as investors sought more clarity on the Fed’s rate intentions. The S&P 500 had alternated between daily gains and losses in the prior seven sessions, while trading in a roughly 50-point range in May. A Goldman Sachs Group Inc. basket of most shorted stocks rose for a fourth day. The measure added 5.2 percent over the span, its best such move in five weeks.

     After the main U.S. equity benchmark index surged 15 percent from a 22-month low in February, stocks ran out of steam in late April amid mixed earnings reports and signs of lukewarm growth. With the two-day rally this week, the S&P 500 has climbed back within 2 percent of the record it reached last year.

     The CBOE Volatility Index fell 3.6 percent Wednesday to 13.90, continuing a retreat from a two-month high reached last Thursday. The measure of market turbulence known as the VIX is down 12 percent in two sessions.                         

     Hewlett Packard Enterprise Co. rose 6.8 percent Wednesday, trimming an earlier 14 percent jump, after saying it will spin off and merge its business-services division with Computer Sciences Corp. in a deal valued at $8.5 billion for HPE shareholders. Computer Sciences soared 42 percent, the most ever.

     For a quick wrap of the analyst commentary on the deal, click here.

     As the earnings season winds down, analysts have moderated their predictions for a decline in first-quarter profits to 7.2 percent, from 10 percent as recently as April. They forecast second-quarter income will slide 5.1 percent, worse than the 3.9 percent drop estimated a month ago. Earnings growth is expected to return in the third quarter with a 2.2 percent increase.

     “Everything seems to show people should be more confident,”  said John Plassard, a senior equity-sales trader at Mirabaud Securities in Geneva. “The housing data added to better employment and inflation figures, and it was the third set of data showing the Fed is ready to hike. If they hike, it means the economy is indeed doing better so it wouldn’t leave people disappointed.”

     In today’s session, nine of the S&P 500’s 10 main industries rose, led by financial, energy and raw-materials shares. Financials capped the strongest two-day climb in six weeks and moved closer to wiping out 2016 losses that had reached almost 18 percent. Technology companies erased a year- to-date decline yesterday.

     Raw-materials and energy producers paced gains in the benchmark, rising at least 1.1 percent. Monsanto Co. advanced 2.2 percent as Bayer AG said it’s confident it can overcome regulatory and financing risks related to its takeover bid for the seed company. Freeport-McMoRan Inc. rose 4.9 percent and LyondellBasel Industries Inc. added 2.8 percent as a Bloomberg index of commodities climbed 1.2 percent, the most in two weeks.

     Energy companies rose to a three-week high as crude rallied for a second day to settle above $49 a barrel. A government report showed oil inventories and production declined, easing a glut. Transocean Ltd. soared 9.7 percent, the most in two months, while Southwestern Energy Co. and Chesapeake Energy Corp. gained more than 6.8 percent.

     Wells Fargo & Co. and JPMorgan Chase & Co. gained at least 1.5 percent to give the biggest boost to the financial group. Citigroup and Bank of America both moved to their highest levels in four weeks. Goldman Sachs and Capital One Financial Corp. added 2.3 percent.

     Gains in technology shares picked up in afternoon trading, following the group’s strongest one-day rally in almost three months yesterday. International Business Machines Corp. rose 2.3 percent for its best day since March 1. Apple Inc. extended a four-day climb to 5.8 percent, while Microsoft Corp.’s back-to- back increase was the strongest since Feb. 1.

     Signs of optimism were evident in automakers’ shares, with General Motors Co. adding 1.9 percent amid its longest winning streak in a month. Ford Motor Co. increased 1.7 percent to a three-week high, while motorcycle maker Harley-Davidson Inc. rose 1.6 percent to climb for a fourth day.

     Intuit Inc. weighed on the Nasdaq as the maker of financial software programs fell as much as 5.1 percent before closing down 2.1 percent amid investor worries about slowing new subscriber growth in QuickBooks Online. The shares were up 2.6 percent yesterday ahead of an earnings report in which the company raised its estimate for year-end profits.

     Yahoo! Inc. dropped 5.2 percent, the steepest slide in more than four months. People familiar with the matter said AT&T Inc. made a bid for Yahoo and remains a contender to acquire the company’s core internet business. While Verizon Communications Inc. remains a favorite to acquire Yahoo, it didn’t submit one of the highest first-round bids, two of the people said.

 

Have a wonderful evening everyone.

 

Be magnificent!

An eye for an eye only ends up making the whole world blind.

Mahatma Gandhi

As ever,
 

Carolann

 

Excellence is not a skill.  It is an attitude.

                 -Ralph Marston, 1907-1967

 

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 May 24, 1883, the Brooklyn Bridge, linking Brooklyn and Manhatten, was opened to traffic. 

Soccer introduced to British Columbia – May 24, 1862 

The first documented match of “football” (soccer) in British Columbia was organized by the Royal Engineers stationed at New Westminster. This match preceded the official Laws of the Game in use now, so it was likely very different from the game we’re used to seeing. 

Bob Dylan’s birthday today.

PHOTOS OF THE DAY

Street artist JR poses in front of the Louvre Pyramid in Paris on Tuesday. For his latest bold project, he is creating an eye-tricking installation at the Louvre Museum that makes it seem as if the huge glass pyramid at the heart of the courtyard has disappeared. Francois Mori/AP

A fly sits on a Begonia in a garden display at the Chelsea Flower Show in London on Monday. Toby Melville/Reuters

Market Closes for May 24^th, 2016

Market Index	Close	Change
Dow Jones	17706.05	+213.12   +1.22%
S&P 500	2076.06	+28.02   +1.37%
NASDAQ	4861.055	+95.272   +2.00%
TSX	13952.85	+33.27
		+0.24%

International Markets

Market Index	Close	Change
NIKKEI	16498.76	-155.84
		-0.94%
HANG SENG	19830.43	+21.40
		+0.11%
SENSEX	25305.47	+75.11
		+0.30%
FTSE 100	6219.26	+82.83
		+1.35%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.366	1.348
CND. 30 Year Bond	2.004	1.989
U.S.    10 Year Bond	1.8629	1.8384
U.S. 30 Year Bond	2.6456	2.6286

Currencies

BOC Close	Today	Previous
Canadian $	0.76176	0.76266
US $	1.31275	1.31121
Euro Rate 1 Euro=		Inverse
Canadian $	1.46243	0.68379
US $	1.11402	0.89765

Commodities

Gold	Close	Previous
London Gold Fix	1236.85	1254.20
Oil	Close	Previous
WTI Crude Future	48.17	47.75

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose to the highest level since October, as the nation’s largest lenders joined a global rally in financial shares amid speculation the U.S. central bank is prepared to raise interest rates this summer. Miners plunged with the price of gold.

     The S&P/TSX Composite Index added 0.2 percent to 13,952.85 at 4 p.m. in Toronto, pulling back after briefly climbing above 14,000 index points to reach its highest intraday level since October. The benchmark Canadian equity gauge was closed on Monday for a holiday after rising 1.2 percent last week. The index has climbed 7.3 percent this year, second most among developed-market nations tracked by Bloomberg.

     Global shares jumped 1 percent today, as European and American financial firms paced gains on growing conviction the Federal Reserve will raise interest rates this summer and Britain will vote to remain in the European Union.

     In Canada, Bank of Nova Scotia and Royal Bank of Canada added more than 0.9 percent to lead a 1.2 percent gain among the big banks. The nation’s largest lenders touched the highest levels in a year before Bank of Montreal kicks off the second- quarter earnings scheduleon Wednesday.

     The Bank of Canada is also set for its next policy decision on Wednesday, with the renewed speculation of an interest-rate increase at the Fed lowering the pressure on the central bank to cut its own lending rates to keep the currency competitive for exports. Higher U.S. rates weakens the Canadian dollar, making Canada more attractive for foreign investment.

     Gold producers sank 6.6 percent to offset gains as the metal slumped a fifth day for the longest slide in six months due to Fed speculation. That dented a yearlong rally in raw- materials producers, which have been the best performer in the index with a 32 percent rally.

     Commodities producers make up about a third of the S&P/TSX by market capitalization Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher.

     Suncor Energy Inc. rose 2.6 percent. Energy producers added 0.5 percent, rising a second day. Eight of 10 industries in the S&P/TSX advanced on trading volume 14 percent below the 30-day average. The S&P/TSX now trades at 21.2 times earnings, about 11 percent higher than the 19.2 times valuation of the S&P 500.

     Oil traded above $48 a barrel, posting the first gain in a week. All of the Canadian oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart, including sites connected to operations of Suncor, Syncrude Canada Ltd. and Cnooc Ltd.’s Nexen unit. The wildfires around Fort McMurray, Alberta forced operators to take more than 1 million barrels a day of production offline this month. U.S. data Wednesday is forecast to show crude inventories declined.

US

By Oliver Renick and Joseph Ciolli

     (Bloomberg) — U.S. stocks rose the most in more than two months, as a surge in home sales fueled speculation the economy can withstand higher interest rates amid rising bets the Federal Reserve will tighten policy this summer.

     A gauge of homebuilders jumped the most since January 2014 amid the data, with Toll Brothers Inc. seeing its biggest climb in three years as its quarterly profit also topped estimates. Technology companies soared to their strongest gain in 12 weeks, as Microsoft Corp. and Google parent Alphabet Inc. rose at least 2.2 percent. Banks climbed on expectations for higher rates, with Treasury yields at a three-week high. JPMorgan Chase & Co. and Citigroup Inc. added at least 1.6 percent.

     The S&P 500 gained 1.4 percent to 2,076.06 at 4 p.m. in New York, the steepest climb since March 11, pushing the index to a two-week high. The Dow Jones Industrial Average added 213.12 points, or 1.2 percent, to 17,706.05. The Nasdaq Composite Index increased 2 percent, the most in almost three months. About 7 billion shares traded hands on U.S. exchanges, 4 percent below the three-month average.

     “Maybe investors are realizing that a hike of 25 basis points is not the end of the world,” said Thomas Garcia, head of equity trading at Thornburg Investment Management Inc. in Santa Fe, New Mexico. “Those were nice housing numbers. It seems as though the market is excited that we are still going strong and the Fed can raise rates.”

     A report today showed April new-home sales surged to the highest level in more than eight years, pointing to a robust spring selling season for builders. The median sales price climbed to a record, reflecting a pickup in signed contracts for more expensive properties.

     Traders are now pricing in a better-than-even chance of a rate increase by July, as Fed officials signaled their willingness to make such a move if the economy shows sustained progress. Odds for a June boost rose to 36 percent from 4 percent last Monday. Along with today’s April new-home sales report, investors will further scrutinize releases on consumer sentiment and GDP later this week for signs of further strengthening.

     Tuesday’s rally suggested equities will snap out of a torpor that’s left markets struggling for direction as investors sought clarity on the Fed’s monetary path. The S&P 500 has alternated between daily gains and losses for seven sessions, and hasn’t had a back-to-back climb in two weeks. It traded Monday in the narrowest range since April 15 amid volume on U.S. exchanges that was the lowest in almost two months.

     “People may be coming around on the idea of a rate hike as an indication of economic strength,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “Before there was a sense that higher rates would spell trouble, but the market has had time to digest that.”

     After a rebound of as much as 15 percent from a 22-month low in February, the main U.S. equity benchmark has churned in a range of less than 50 points in May. The rally ran out of steam in late April, after the S&P 500 came within 1.4 percent of a record set just over a year ago, amid mixed earnings reports and lukewarm signs of economic growth.

     Fed meeting minutes last week, as well as more hawkish commentary from policy makers and improving data stoked concern the Fed may move sooner than markets were prepared. Fed Bank of Philadelphia President Patrick Harker late yesterday said two to three rate increases in 2016 were possible, while San Francisco Fed President John Williams said earlier a similar pace sounded “about right.” Fed Chair Janet Yellen is scheduled to speak on Friday.

     In Tuesday’s trading, all of the S&P 500’s 10 main industries rose, with technology, financial, health-care and consumer discretionary companies rallying at least 1.4 percent. The CBOE Volatility Index fell 8.9 percent to 14.42, the most in nearly two months. The measure of market turbulence known as the VIX erased a gain for the month after reaching a two-month high last week.

     “The first weeks of the year were the end of the world, and the story the next eight weeks was that there’s great promise on this Earth,” John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York, said by phone. “Now, if the Fed is raising rates because the economy is doing better, that looks like a good thing and it seems the market is recognizing that. The jump today in new-home sales, it’s a volatile figure, but that’s a big deal.”

     Tech companies led the benchmark gauge with a 2.1 percent jump, the biggest since March 1. Xilinx Corp. added 5.7 percent and Western Digital Corp. climbed 4.5 percent as the best performers. The group is still down 3 percent since touching a 2016 high on April 1, amid corporate earnings from giants including Microsoft and Apple Inc. that missed expectations. Apple rose for a third day to a four-week high, and Intel Corp. gained 2.8 percent, its strongest advance since January.                     

     Financial companies have rallied more than twice as much as the S&P 500 since the Fed minutes last week, extending gains to 3 percent since May 17 with a 1.5 percent rally on Tuesday. Moody’s Corp. and Affiliated Managers Group Inc. each added at least 3.5 percent as all but two stocks in the 91-member index advanced. The KBW Bank Index climbed 1.6 percent.

     A group of insurance companies in the S&P 500 rose to a five-month high on speculation higher interest rates will help lift profits. Principal Financial Group Inc. gained 2.3 percent, while MetLife Inc. and Prudential Financial Inc. increased more than 1.8 percent.

     An S&P index of homebuilders hit a three-week high following the jump in new-home sales and Toll Brothers’ results. KB Home soared 7.5 percent, while PulteGroup Inc. and Lennar Corp. gained more than 3.8 percent. Builders were the strongest performers among consumer discretionary stocks, though other housing-related companies joined the rally. Whirlpool Corp. advanced 4.4 percent, its best this year, while flooring maker Mohawk Industries Inc. added 2.3 percent.

     The health-care group capped the biggest climb since April 6, lifted by a parade of biotechnology companies. Vertex Pharmaceuticals Inc. and Gilead Sciences Inc. increased more than 3.4 percent. The Nasdaq Biotech index advanced 2.3 percent, rising for a third day in its longest winning streak in a month.

     Among other companies moving on corporate news, Best Buy Co. tumbled 7.4 percent, the worst drop in four months, after forecasting second-quarter profit that trailed analysts’ estimates and announcing the departure of Sharon McCollam, who helped revamp the company’s operations and cut costs.

     Norfolk Southern Corp. lost 2.9 percent, its biggest slide since March 8, after the railroad predicted coal volume will be lower than an earlier forecast.
 

Have a wonderful evening everyone.

 

Be magnificent!

Facts are not frightening.

But if you try to avoid them, turn your back and run, then that is frightening.

Krishnamurti

As ever,

 

Carolann

 

When you feel in your gut what you are and then dynamically

pursue it – and don’t back down and don’t give up – then you’re

going to mystify a lot of folks.

                                                      -Bob Dylan, b. 1941

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 in 1873, blue jeans are born when Levi Strauss and Jacob Davis obtained a U.S. patent on the process of putting rivets in men’s work pants.

Off to Seattle to see the last opera of the 2015-2016 season.  Seattle opera is performing The Flying Dutchman.   So looking forward to it.

Happy Victoria Day everyone.  Canadian markets are closed Monday; US markets are open.

PHOTOS OF THE DAY

People pray and hold candles as they walk around the Marble Temple or Wat Benchamabophit during the Buddhist celebration of Vesak in Bangkok, Thailand on Friday. Jorge Silva/Reuters

Britain’s Kate, the Duchess of Cambridge, prepares to sail on a catamaran with sailor Ben Ainslie as she visits Land Rover BAR and the 1851 Trust in Portsmouth on Friday. Peter Nicholls/Reuters

Market Closes for May 20^th, 2016

Market Index	Close	Change
Dow Jones	17500.94	+65.54   +0.38%
S&P 500	2052.32	+12.28   +0.60%
NASDAQ	4769.559	+57.026   +1.21%
TSX	13919.58	+102.26
		+0.74%

International Markets

Market Index	Close	Change
NIKKEI	16736.35	+89.69
		+0.54%
HANG SENG	19852.20	+157.87
		+0.80%
SENSEX	25301.90	-97.82
		-0.39%
FTSE 100	6156.32	+102.97
		+1.70%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.348	1.343
CND. 30 Year Bond	1.989	1.977
U.S.    10 Year Bond	1.8384	1.8417
U.S. 30 Year Bond	2.6286	2.6301

Currencies

BOC Close	Today	Previous
Canadian $	0.76266	0.76356
US $	1.31121	1.30966
Euro Rate 1 Euro=		Inverse
Canadian $	1.47168	0.67949
US $	1.12239	0.89096

Commodities

Gold	Close	Previous
London Gold Fix	1254.20	1246.25
Oil	Close	Previous
WTI Crude Future	47.75	48.16

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, mirroring a rally in global markets, as financial and commodity shares rebounded Friday after coming under pressure this week on renewed speculation the Federal Reserve may raise interest rates as soon as June.

     The benchmark S&P/TSX Composite Index rose 0.7 percent to 13,919.58 at 4 p.m. in Toronto. The gauge rose 1.2 percent in the week after retreating 0.7 percent in the previous two days following minutes from the Fed’s April meeting that spurred traders to increase bets on higher borrowing costs next month.

     Bank of Nova Scotia and Manulife Financial Corp. added at least 0.6 percent Friday to lead financial services companies higher. The nation’s largest lenders are scheduled to report second-quarter earnings next week, starting with Bank of Montreal on May 25.

     Energy producers climbed 0.8 percent, rebounding from a two-day drop. All 10 industries in the S&P/TSX advanced on trading volume 21 percent below the 30-day average at this time of the day. The S&P/TSX now trades at 21.2 times earnings, about 12 percent higher than the 19 times valuation of the S&P 500.

     Crude futures in New York ended the day lower, bringing their weekly gain to 3.3 percent. West Texas Intermediate traded below $48 a barrel. Firefighters successfully defended Suncor Energy Inc. and Syncrude Canada Ltd.’s oil-sands operations and rain brought some relief to the Alberta oil-sands ravaged by wildfires. The respite renews prospects for a restart to operations.

     Data today showed retail sales in Canada fell 1 percent in March, more than economists forecast for the month from February’s record high, led by a drop in automobile sales. A separate report showed Canada’s inflation rate accelerated for the first time in three months in April. Core inflation, excluding volatile products, climbed while economists had forecast it would slow.

     “Smoothing out the volatility leaves sales up a still- strong 5.4 percent year-over-year for all of the first quarter,” Robert Kavcic, a senior economist at BMO Capital Markets, said in a note. “The big picture here is that the underlying firmness in core inflation offsets the generally soft retail results today. That combination reinforces our view that the Bank of Canada will sit tight on the sidelines next week.”

US

By Kelly Gilblom and Jeremy Herron

     (Bloomberg) — Financial markets stabilized after being buffeted this week by speculation the Federal Reserve is moving closer to raising interest rates. U.S. stocks erased a weekly decline, as commodity prices capped a gain, while the yen weakened on reduced demand for haven assets.

     Global shares rebounded from a six-week low, with the S&P 500 Index slightly higher for the year a day from the anniversary of its last record. Treasuries fell, with two-year notes posting their biggest weekly plunge since November. Crude slipped from a seven-month high and sugar traded in New York surged to a 20-month high. The yen dropped against all but two of its 16 major counterparts. Nigeria, Africa’s largest economy, shrank for the first time since 2004.

     Some $900 billion was wiped off the value of global shares over the last three days as traders stepped up bets on a June rate increase in the U.S., spurred by comments from Fed officials, minutes of the last policy meeting and quickening inflation. While the American economy shows signs of being able to weather higher borrowing costs, the outlook for global growth has been worseningand finance chiefs from the Group of Seven nations are meeting in Japan May 20-21 to discuss ways to tackle this.

     “There’s been a little bit of volatility recently and markets are rebounding,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “The Fed minutes surprised people. It seems they’re a little more ready to raise rates in June than people anticipated. When you take a step back the market continues to be grinding sideways.”

     Even after the Fed’s minutes Wednesday sent a strong signal that an increase may come as soon as June, investors see plenty of obstacles, including the referendum on Britain’s EU membership and fading growth in China. The odds of a move next month are 28 percent, up from 4 percent a week ago, Fed Funds futures show. That’s even after New York Fed chief William Dudley touted the prospect of policy tightening at one of the central bank’s next two meetings, while Richmond Fed President Jeffrey Lacker said the case for hiking in June would likely be “very strong.”

     The MSCI All-Country World Index of shares rose 0.7 percent at 4 p.m. in New York, climbing for the first time in four days. In Europe, the Stoxx 600 added 1.2 percent and the S&P 500 rose 0.6 percent.

     The U.S. benchmark climbed 0.3 percent in the past five days, snapping a three-week slide. Technology shares rallied as Applied Materials Inc. jumped after the biggest maker of machinery used to manufacture semiconductors forecast third- quarter sales that may beat analysts’ estimates. Chipmakers jumped the most since January, with Intel Corp. rising 1.8 percent. Wells Fargo & Co. increased 0.8 percent as Treasury yields resumed their advance, bolstering a rebound by banks.

     The MSCI Emerging Markets Index rose 0.4 percent, paring its weekly decline to 1.4 percent. The gauge had its fifth weekly drop in the longest run of losses since August. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.7 percent.

     Crude oil declined 41 cents to settle at $47.75 in New York, capping a weekly advance of about 3.3 percent. Prices were boosted this week as data showed U.S. output slid to the lowest since September 2014 and wildfires in Canada expanded.

     “We’ve got U.S. demand picking up and combining with bullish supply news filtering through the market,” said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney. “Unless there is a clear new fundamental reason to buy oil, I think $50 is a hard psychological level to break through.”

     Gold declined a third week, its longest losing streak of the year.

     Soybeans in Chicago had their sixth weekly advance, the longest run of gains since 2013. The U.S. Department of Agriculture estimated last week that global inventories will fall 8.1 percent by the end of September next year.

     The dollar posted its biggest three-week rally since November as traders weighed the possibility of tighter monetary policy in the U.S. The move was also spurred by Bank of Japan Governor Haruhiko Kuroda reiterating that he’s ready to add to stimulus if necessary.

     The Bloomberg Dollar Spot Index, which tracks the U.S. currency versus 10 major counterparts, gained 0.8 percent this week, adding to the 2.3 percent advance in the past two weeks. The dollar rose 0.1 percent to 110.11 yen Friday and was little changed at $1.1218 per euro.

     The pound declined for the first time in five days versus the dollar and slid from a three-month high against the euro. The pound fell 0.8 percent to $1.4495. It stilled gained 0.9 percent this week, the biggest weekly gain since April 29.

     The MSCI Emerging Markets Currency Index rose 0.3 percent, leaving it down 1 percent this week.

     The yield on two-year Treasury notes was little changed at 0.88 percent. The measure has climbed 13 basis points in the week, as traders adjusted bets on the path of interest rates after Federal Reserve officials indicated they’re considering a June increase if economic data remain steady.

     The yield on 10-year notes fell less than one basis point to 1.85 percent, up 15 basis points from a week ago. The yield on similar-maturity German bonds was at 0.16 percent.

     Japan’s 10-year yield fell four basis points to minus 0.12 percent. Overseas investors bought 3.6 trillion yen ($32.7 billion) of the nation’s government bonds in April, the most since August 2007, data showed Friday.

 

Have a terrific weekend everyone.

 

Be magnificent!

 

He who seeks to understand violence belongs to no country, no religion, no political party, no particular system.

What matters to him is the complete understanding of humanity.

According to one school violence is found inside a man;

according to another, it is the result of his social and cultural heritage.

Neither of these viewpoints interests us:

they have no importance; what is important is the way that we are violent,

not the reason for it.

 

Krishnamurti

As ever,
 

Carolann

 

When an old man dies, a library burns down.

                                     -African proverb

 

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:

By the numbers…

75.4 MILLION: Number of Millennials (ages 18-35) in the United States in 2015; they have dethroned the 74.9 million baby boomers as America’s largest age cohort.

197: Countries in which a production of Shakespeare’s Hamlet was performed by London’s Globe Theatre in the past two years, part of a celebration to mark the 400^th anniversary of the Bard’s death.

10,000: “Bonus” (in Norwegian kroner, about US $1,225) given by the government to asylum seekers who agree to leave Norway voluntarily.

Today in History:

On May 19, 1935, T.E. Lawrence, also known as “Lawrence of Arabia,” died in England from injuries sustained in a motorcycle crash.

When Noël Coward saw the premiere of the movie  Lawrence of Arabia, he said afterward that “ if he [Peter O’Toole] had been any prettier, they’d have had to call it Florence of Arabia.”

PHOTOS OF THE DAY

Israel’s Ziv Kalontarov starts in the men’s 100m freestyle preliminary event in the European Aquatics Championships in London on Thursday.Stefan Wermuth/Reuters

Cracked and curled mud covers ground that was once under water at the Lake Mead National Recreation Area, near Las Vegas, on Thursday. Lake Mead’s surface was at its lowest level Wednesday since the reservoir was created. John Locher/AP

Market Closes for May 19^th, 2016

Market Index	Close	Change
Dow Jones	17435.40	-91.22   -0.52%
S&P 500	2040.04	-7.59   -0.37%
NASDAQ	4712.531	-26.588   -0.56%
TSX	13817.32	-8.69
		-0.06%

International Markets

Market Index	Close	Change
NIKKEI	16646.66	+1.97
		+0.01%
HANG SENG	19694.33	-132.08
		-0.67%
SENSEX	25399.72	-304.89
		-1.19%
FTSE 100	6053.35	-112.45
		-1.82%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.343	1.364
CND. 30 Year Bond	1.977	2.006
U.S.    10 Year Bond	1.8417	1.8521
U.S. 30 Year Bond	2.6301	2.6571

Currencies

BOC Close	Today	Previous
Canadian $	0.76356	0.76739
US $	1.30966	1.30312
Euro Rate 1 Euro=		Inverse
Canadian $	1.46716	0.68159
US $	1.12026	0.89265

Commodities

Gold	Close	Previous
London Gold Fix	1246.25	1272.90
Oil	Close	Previous
WTI Crude Future	48.16	48.19

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks ended little changed after an afternoon rally in gold producers nearly wiped out losses among financial and industrial firms.

     The benchmark S&P/TSX Composite Index retreated 0.1 percent to 13,817.32 at 4 p.m. in Toronto. The Canadian benchmark equity gauge has lost 0.7 percent in two days, mirroring a slide in global equities after the Federal Reserve signaled it’s prepared to raise U.S. interest rates as soon as next month.

     Global equities pared losses as the trading day persisted, as a dollar rally evaporated, easing pressure on commodities prices. That helped materials shares climb, while banks slumped 0.5 percent and industrial shares lost 1.1 percent. Seven of 10 industries in the S&P/TSX lost ground on trading volume 4.6 percent lower than the 30-day average,

     Canadian Natural Resources Ltd. and Husky Energy Inc. declined at least 1.5 percent as energy producers fell. Barrick Gold Corp. jumped 3.6 percent as gold producers rebounded from an early loss.

     Investors are scrutinizing data from the world’s largest economy after April Fed meeting minutes released Wednesday showed policymakers said boosting borrowing costs in June was “appropriate” should the U.S. economy continue to improve. That prompted traders to boost the probability of a rate hike next month to 30 percent. A report Thursday showed initial jobless claims in the U.S. dropped last week from a one-year high. 

     Energy and raw-materials industries account for about 32 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging as much as 43 percent for its best year-to-date performance in three decades. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.

     Russel Metals Inc. tumbled 6.5 percent to lead industrials lower after Raymond James lowered its rating for the steel distributor to the equivalent of a hold, from outperform. Russel has rallied 38 percent this year. The stock now has zero buys, four holds and one sell, according to data compiled by Bloomberg.

     Potash Corp. Of Saskatchewan Inc. climbed 4.1 percent, the most in a month. A potash contract with China is expected in the next couple of weeks, Potash Corp. CEO Jochen Tilk said during the BMO Farm to Market conference in New York. Potash prices have stabilized in the U.S. and the company is seeing improvements in prices, Tilk said.

US

By Anna-Louise Jackson and Joseph Ciolli

     (Bloomberg) — U.S. stocks declined, with the S&P 500 falling to a seven-week low, amid concern that a Federal Reserve interest-rate increase as early as next month could further burden a struggling global economy.

     Equities pared losses in an afternoon comeback as a dollar gauge trimmed its climb. The Fed’s hawkish commentary in meeting minutes yesterday has bolstered dollar gains, pressuring commodity prices as well as multinational companies whose overseas sales may be dented by a stronger U.S. currency. Wal- Mart’s strongest rally in seven years on better-than-estimated earnings offered some support to optimism that the American economy may be sturdy enough to handle higher rates.

     The S&P 500 fell 0.4 percent to 2,040.04 at 4 p.m. in New York, erasing a 2016 gain that had approached 3 percent. The Dow Jones Industrial Average sank 91.22 points, or 0.5 percent, to 17,435.40, and has now gone a year since it last reached an all- time high. The Nasdaq Composite Index slipped 0.6 percent. About 7.2 billion shares traded hands on U.S. exchanges, 3 percent below the three-month average.

     “The weakness is a continuation of yesterday and the threat of higher interest rates, either real or perceived,” said Terry Morris, a senior equity manager who helps oversee about $3.2 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co. “The economy is fragile, and a hike in interest rates could send it over the edge. There’s a fear that if rates do go up, the economy won’t be able to support it.”

     Minutes from the Fed’s April meeting indicated policy makers’ willingness to raise interest rates in June if the economy continues to improve, sending the S&P 500 on Wednesday to its widest intraday swings in three weeks. Some meeting participants expressed concern that markets were ill-prepared for rate boost next month.

     This week’s vault in expectations for higher rates has dealt another blow to sentiment that was already brittle amid slumping corporate earnings. The S&P 500 rallied 15 percent between a February low and a four-month high on April 20, but has slipped 3 percent since then, losing momentum last month amid disappointing results from technology giants Apple Inc. and Microsoft Corp., as well as recent letdowns from a handful of major retailers including Macy’s Inc. and Target Corp.

     “The minutes from the most recent meeting could very well be interpreted as more hawkish and June or July are very much in play,” said Eric Wiegand, senior portfolio manager at the New York-based Private Client Reserve of US Bank, which oversees $128 billion in assets. “The reaction yesterday was somewhat muted and the follow-on shows people are still processing that. The volatility in commodities prices is also a byproduct of those concerns about higher rates.”

     The CBOE Volatility Index climbed 2.4 percent to 16.33, a two-month high. The measure of market turbulence known as the VIX is headed toward a second consecutive weekly gain for the first time since the S&P 500 reached a 22-month low in February.

     In contrast to Thursday’s downdraft, Wal-Mart surged the most since 2008 after better-than-estimated first-quarter results assuaged some fears that the retail industry is mired in a slump. Urban Outfitters Inc. jumped 14 percent after its results topped predictions, and Cisco Systems Inc. rose 3.2 percent, the best since Feb. 11, after its results and forecast topped predictions. Monsanto Co. gained 3.5 percent after an unsolicited acquisition offer from Germany’s Bayer AG.

     With attention riveted on the central bank, New York Fed President William Dudley said Thursday the central bank is moving closer to raising rates at one of its next two meetings and the fact this message is getting through to financial markets is welcome news. Richmond Fed’s Jeffrey Lacker also talked up the prospect for an imminent increase, saying during an interview on Bloomberg Radio that there’s a strong case for raising rates next month.

     Traders now price in a 30 percent chance of higher borrowing costs next month, up from 4 percent at the start of this week. Odds for a July move are 48 percent, while September is the first month with at least an even chance of higher rates.

     Investors “are understandably concerned after the Fed minutes,” said Mike Ingram, a strategist at BGC Partners in London. “Growth isn’t looking great and equities are still going to struggle. It’s important for the Fed to reaffirm the underlying strength of the U.S. economy if it’s really considering a rate hike in June.”

     As policy makers scrutinize data that will guide their rate decisions, a report today showed filings for unemployment benefits declined last week from a more than one-year high, as a plunge in New York returned claims to a level consistent with a firm labor market. A separate measure showed manufacturing activity in the Philadelphia region unexpectedly contracted this month. Also, a gauge of leading indicators last month rose more than economists forecast.

     With the reporting season winding down, analysts estimate first-quarter income at S&P 500’s companies declined 7.4 percent, compared to calls for flat growth earlier this year. So far, 75 percent of those that have reported beat profit estimates, while 54 percent surpassed sales predictions.

     In Thursday’s trading, six of the S&P 500’s 10 main industries fell, led by declines of at least 0.8 percent for health-care, financial and industrial companies. Utilities gained 0.9 percent, springing back from a two-day, 3.6 percent drop, while consumer staples added 0.8 percent.

     Industrial stocks tumbled 1 percent to levels last seen in March. General Electric Co. paced the selloff, falling to a two- month low. Boeing Co. lost 2.2 percent, the most since Feb. 11. Delta Air Lines Inc. and United Continental Holdings Inc. lost at least 1.7 percent in the wake of the crash of an EgyptAir flight.

     Financial companies slipped 0.9 percent, erasing about half of Wednesday’s rally. The S&P 500 REITs Index fell 1 percent to a two-month low. Twenty-two of 24 lenders in the KBW Bank Index sank, led by declines of more than 1.7 percent for Regions Financial Corp. and Citigroup Inc. The gauge yesterday rallied the most in five weeks amid speculation higher rates would lift banks’ profits. Treasury yields fell today after surging by the most since March 1 on Wednesday.

     Technology shares slipped, alternating between gains and losses for a fifth day. Microsoft Corp. was the biggest drag on the group, falling 1 percent. Google parent Alphabet Inc. decreased 0.9 percent and Oracle Corp. lost 1.6 percent to also weigh. More than half of last year’s revenue at both companies came from outside the U.S., making them vulnerable to the stronger dollar.

     Consumer staples bounced after falling to a three-week low yesterday. Wal-Mart’s 9.6 percent surge led the recovery, while Kraft Heinz Co. added 2.2 percent after losing 5.5 percent over the prior two sessions. Kroger Co. and Archer-Daniels-Midland Co. increased at least 1.3 percent.

Have a wonderful evening everyone.

 

Be magnificent!

Nations cohere because there is mutual regard among

individuals composing them.

Some day we must extend the national law

to the universe,

even as we have extended the family law

to form nations – a larger family.

Mahatma Gandhi

As ever,

 

Carolann

 

Nothing is so strong as gentleness and

nothing is so gentle as real strength.

      -Ralph W. Sockman, 1889-1970

 

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 May 18, 1980, the Mount St. Helens volcano in Washington state exploded.

On May 18, 1819, Lord Byron wrote to John Murray:

“I write to you in haste and at past two in the morning – having besides had an accident.  In going, about an hour and a half ago, to a rendezvous with a Venetian girl (unmarried and the daughter of one of their nobles), I tumbled into the Grand Canal, and not choosing to miss my appointment by the delays of changing, I have been perched in a balcony with my wet clothes on ever since – till this minute that on my return I have slipped into my dressing-gown.  My foot slipped in getting into my gondola to set out (owing to the cursed slippery steps of their palaces) and in I flounced like a carp – and went dripping like a triton to my sea-nymph – and had to scramble up to a grated window…”  -from The Book of Days.

PHOTOS OF THE DAY

A red poppy grows in a grain field near Wildau, eastern Germany, on Wednesday. Patrick Pleul/dpa/AP

Chicks dyed to draw attention are offered for sale at a small poultry market in Jakarta, Indonesia, on Wednesday. Darren Whiteside/Reuters

Market Closes for May 18^th, 2016

Market Index	Close	Change
Dow Jones	17526.62	-3.36   -0.02%
S&P 500	2047.63	+0.42   +0.02%
NASDAQ	4739.121	+23.388   +0.50%
TSX	13826.01	-91.09
		-0.65%

International Markets

Market Index	Close	Change
NIKKEI	16644.69	-8.11
		-0.05%
HANG SENG	19826.41	-292.39
		-1.45%
SENSEX	25704.61	-69.00
		-0.27%
FTSE 100	6165.80	-1.97
		-0.03%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.364	1.317
CND. 30 Year Bond	2.006	1.980
U.S.    10 Year Bond	1.8521	1.7723
U.S. 30 Year Bond	2.6571	2.5994

Currencies

BOC Close	Today	Previous
Canadian $	0.76739	0.77489
US $	1.30312	1.29051
Euro Rate 1 Euro=		Inverse
Canadian $	1.46166	0.68416
US $	1.12166	0.89154

Commodities

Gold	Close	Previous
London Gold Fix	1272.90	1277.00
Oil	Close	Previous
WTI Crude Future	48.19	48.31

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell from a two-week high after the Federal Reserve policy makers indicated that a June interest-rate increase was likely if the economy continued to improve, sparking a rout in resource prices that sank commodities producers.

     The benchmark S&P/TSX Composite Index fell 0.7 percent to 13,826.01 at 4 p.m. in Toronto, with all of the decline coming after Fed meeting minutes signaled higher rates may come sooner than traders and investors had been anticipating. Trading volume jumped 18 percent above the 30-day average.

     A gauge of gold producers sank 7.4 percent, the most since August. Barrick Gold Corp. sank 8.2 percent. First Quantum Minerals Ltd. and Teck Resources Ltd. dropped at least 5.3 percent to lead broader raw-materials producers lower. Cenovus Energy Inc. and Suncor Energy Inc. lost more than 1.8 percent as energy producers fell.

     Copper sank to a three-month low and gold retreated for the first time in four days as the dollar climbed to a seven-week high. If incoming data suggested second-quarter economic growth, labor market conditions continued to strengthen and inflation made further progress toward the central bank’s 2 percent objective, then Fed officials would consider the economic climate “appropriate” for an interest-rate increase in June, according to minutes of the April 26-27 meeting released Wednesday in Washington.

     Traders are now pricing in a 30 percent chance of a Federal Reserve interest-rate hike in June, up from 4 percent on Monday. Economic data Tuesday on housing starts and the cost of living topped forecasts, renewing speculation for higher borrowing costs.

     Energy and raw-materials industries account for about 33 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging as much as 43 percent for its best year-to-date performance in three decades. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.

     Financial shares helped offset losses in resource producers, rising 0.9 percent amid higher bond yields. Royal Bank of Canada added 1.7 percent for the biggest gain in five weeks.

     Valeant Pharmaceuticals International Inc. fell 3.8 percent after a three-day gain. The embattled drugmaker is said to be exploring the sale of some of its smaller cosmetic and pharmaceutical assets to raise cash and reduce debt, according to people familiar with the matter. The stock has slumped almost 90 percent from an August peak amid scrutiny over its business practices.

US

By Anna-Louise Jackson and Oliver Renick

     (Bloomberg) — The S&P 500 closed little changed, with a rally in banks offsetting broader declines paced by consumer shares, as Federal Reserve policy makers signaled a willingness to raise borrowing costs in June if the economy continues to improve.

     Equities favored for generous dividend payouts slid as Treasury yields spiked, while banks rallied the most in a month on the potential for higher interest rates to boost profits. Commodity shares slumped as the dollar soared on the Fed’s hawkish tone. Target Corp. fell the most since 2008 on disappointing results, and Wal-Mart Stores Inc. lost 3 percent to weigh on consumer shares.

     The S&P 500 rose less than 0.1 percent to 2,047.63 at 4 p.m. in New York, after lurching between gains and losses of more than 0.6 percent. The Dow Jones Industrial Average fell 3.36 points to 17,526.62 after jumping more than 100 points just before the Fed minutes. The Nasdaq Composite Index increased 0.5 percent, boosted by gains in Apple Inc. and Qualcomm Inc. About 8 billion shares traded hands on U.S. exchanges, 8 percent above the three-month average.

     “The hawkish commentary out of the Fed has been a bit surprising this week and it does seem the spin out of the minutes is reading a little bit more hawkish than folks were anticipating,” Mark Heppenstall, the Horsham, Pennsylvania-based chief investment officer of Penn Mutual Asset Management, said in a telephone interview. “The unemployment picture still looks reasonably good but other readings on growth domestically and across the globe have been sluggish.”                         

     Minutes from the Fed’s April meeting showed most officials said a rate increase would be appropriate in June if the economy continued to improve, but were divided over whether those conditions were likely to be met in time. Some meeting participants expressed concern that markets were ill-prepared for a June rate hike.

     In its statement last month, the Fed omitted previous language that “global economic and financial developments continue to pose risks,” tacitly nodding to improvement in financial markets. Policy makers also reiterated in April that they will probably raise rates at a gradual pace. Since the conclusion of the Fed’s meeting on April 27, the S&P 500 is down about 2.3 percent.

     Traders are pricing in a 30 percent chance of higher borrowing costs in June, up from 4 percent on Monday and 14 percent just before the Fed minutes. Wagers for a July move jumped to nearly 50 percent from 16 percent last week. September is now the first month with at least even odds of higher rates after such bets had been pushed out to February as recently as a week ago.

     “We’ve got to hear from Janet Yellen and she’s scheduled to speak two times before the next meeting,” said Quincy Krosby, a market strategist at Prudential Financial Inc., which oversees about $1.2 trillion. “The market needs to hear decisively whether or not the table will be set for rate hike in June.”

     Equities erased losses in the final minutes of trading Wednesday as banks extended gains. Concerns that borrowing costs could rise sooner than expected, even as global growth languishes, sent stocks lower yesterday, wiping out a rally Monday.

     Only twice since 2009 have bank shares in the S&P 500 outperformed the broader index as much as they did today. Once in February, when Jamie Dimon spent $26.6 million to buy shares of JPMorgan Chase & Co., and the other time was in November 2010, as the Fed prepared guidelines on whether lenders were strong enough to boost dividends and buy back shares after the financial crisis.

     Disappointing earnings from retailers, including Macy’s Inc. and Nordstrom Inc. have helped stoke more volatility lately. As the earnings season draws to a close, analysts have moderated forecasts for a first-quarter profit decline to 7.4 percent, from 10 percent in April. Still, Goldman Sachs Group Inc. downgraded equities to neutral, saying they don’t look attractive unless companies post sustained earnings growth.

     The S&P 500 has fallen for three straight weeks, the longest stretch since January, after a 15 percent rally from a 22-month low in February lost traction amid a tepid earnings season and lukewarm economic data. The benchmark has slipped 2.6 percent from a four-month high reached on April 20, and is less than 4 percent from a record set a year ago.

     “The market’s just a little bit on edge and there’s not a lot of conviction,” said Robert Pavlik, who helps oversee $9.1 billion as chief market strategist at Boston Private Wealth. “We’re seeing some rotation out of the more defensive areas like staples, and I think that relates to yesterday’s inflation concern coming in hotter than expected. That’s leading people to bring the Federal Reserve back on the table for the June meeting.”

     In Wednesday’s trading, the CBOE Volatility Index increased 2.4 percent to 15.95, a two-week high. Among the S&P 500’s 10 main industries, utilities, raw-materials and phone companies retreated at least 1.3 percent. Financial shares jumped 1.9 percent, and technology companies gained 0.5 percent, paring an earlier increase by more than half. AT&T Inc. dropped 1.7 percent, the biggest in four weeks. Copper producer Freeport- McMoRan Inc. sank 8.4 percent.

     Consumer staples slumped for a second day as Hormel Foods Corp. tumbled 8.6 percent, the most since 2008 after narrowing margins sparked concern about the maker of Spam and other supermarket fare. Costco Wholesale Corp. fell 1.6 percent, its fifth decline in six days, while Wal-Mart capped the biggest two-day loss since October.

     Joining Target’s decline within the consumer discretionary group, Nordstrom Inc. fell for a seventh session, the longest losing streak since December. The shares are down 26 percent during the span. Best Buy Co. sank 3.6 percent to a one-month low and Urban Outfitters Inc. lost 3.3 percent before its earnings report.

     Citizens Financial Group Inc. and Huntington Bancshares Inc. jumped at least 5.3 percent to lead gains among banks in the equity benchmark. Bank of America Corp. and JPMorgan Chase added more than 3.8 percent amid speculation higher rates will bolster profits. In the broader financial group, Lincoln National Corp. rose 4.1 percent to a four-month high, while Charles Schwab Corp. and E*Trade Financial Corp. each increased at least 4.9 percent.

     There was a bright spot amid the recent gloom of retailer earnings. Lowe’s Cos. jumped 3 percent to a record after posting a quarterly profit that topped projections. Home Depot Inc.’s results yesterday also exceeded estimates as the home- improvement industry has been largely immune from the malaise, with rising property values encouraging people to spend on their dwellings.

     Apple rose 1.1 percent, on track toward snapping its longest weekly losing streak in 11 months. Chief Executive Tim Cook began his first visit to India Wednesday as the iPhone maker and its competitors are keen to expand in a country with the prospect of a billion new device sales. Qualcomm added 1.5 percent to close at a three-week high, while Micron Technology Inc. rallied 3.9 percent.

Have a wonderful evening everyone.

 

Be magnificent!

Give with faith, and never without faith.

Give with dignity.  Give with humility.  Give with joy.

And give with understanding of the effects of your gift.

Taittiriya Upanishad

As ever,
 

Carolann

 

Life is a succession of moments, to live each one is to succeed.

                                                   -Corita Kent, 1918-1986

 

 

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 read a book on the weekend that was amazing.  It is entitled When Breath Becomes air and was written by Paul Kalanithi.  He was a 36 year old neurosurgeon who was diagnosed with lung cancer in his last year of residency and died last year from the disease.  He began writing this book after his diagnosis.  In the foreword written by Abraham Verghese, the reader is advised to “Be ready.  Be seated.  See what courage sounds like.  See how brave it is to reveal yourself in this way.  But above all, see what it is to still live, to profoundly influence the lives of others after you are gone, by your words.  In a world of asynchronous communication, where we are so often buried in our screens, our gaze rooted to the rectangular objects buzzing in our hands, our attention consumed by ephemera, stop and experience this dialogue with my young departed colleague, now ageless and extant in memory.  Listen to Paul.  In the silences between his words, listen to what you have to say back.  Therein lies his message.  I got it.  I hope you experience it, too.  It is a gift.  Let me nott stand between you and Paul.”  Excellent advice.

The Poem:

What is our life?

by Sir Walter Raleigh

What is our life?  A play of passion.
Our mirth the music of division;
Our mothers’ wombs the tiring houses be,
Where we are dressed for this short comedy;
Heaven the judicious sharp spectator is
That sits and marks still who doth act amiss;
Our graves that hide us from the searching sun
Are like drawn curtains when the play is done.
Thus march we playing to our latest rest –
Only we die in earnest, that’s no jest.

From English Renaissance Poetry: A Collection of Shorter Poems, selected by John Williams with an introduction by Robert Pinsky, published by New York Review of Books.

PHOTOS OF THE DAY

Items recovered from a merchant ship in the ancient harbor of Caesarea National Park in Israel are on display Monday. Israel’s Antiquities Authority estimates the items to be about 1,600 years old. Baz Ratner/Reuters

A participant sets off on a penny-farthing bicycle at the start of the The Tweed Run in central London, Britain, Saturday. Hannah McKay/Reuters

Market Closes for May 16^th, 2016

Market Index	Close	Change
Dow Jones	17710.71	+175.39   +1.00%
S&P 500	2066.66	+20.05   +0.98%
NASDAQ	4775.461	+57.785   +1.22%
TSX	13893.49	+144.91
		+1.05%

International Markets

Market Index	Close	Change
NIKKEI	16466.40	+54.19
		+0.33%
HANG SENG	19883.95	+164.66
		+0.84%
SENSEX	25653.23	+163.66
		+0.64%
FTSE 100	6151.40	+12.90
		+0.21%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.313	1.273
CND. 30 Year Bond	1.988	1.950
U.S.    10 Year Bond	1.7533	1.7001
U.S. 30 Year Bond	2.5956	2.5494

Currencies

BOC Close	Today	Previous
Canadian $	0.77542	0.77268
US $	1.28962	1.29420
Euro Rate 1 Euro=		Inverse
Canadian $	1.45955	0.68514
US $	1.13177	0.88357

Commodities

Gold	Close	Previous
London Gold Fix	1285.75	1265.90
Oil	Close	Previous
WTI Crude Future	47.72	46.21

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose to a two-week high, as crude prices jumped to the highest in six months and metals from gold to copper rallied.

     The benchmark S&P/TSX Composite Index rose 1.1 percent to 13,893.49 at 4 p.m. in Toronto, following a 0.3 percent gain last week. Volume today in the benchmark was about 12 percent lower than the 30-day average. The gauge now trades at 21.3 times earnings, about 11 percent higher than the 19.2 times valuation of the S&P 500, data compiled by Bloomberg show.

     Suncor Energy Corp. and Goldcorp Inc. jumped more than 2.6 percent as energy and raw-materials producers climbed at least 1.9 percent to lead gains across nine of 10 industries in the S&P/TSX.

     The commodities industries account for about 32 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging 41 percent. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.

     Gains today came as crude futures rose 3.3 in New York to top $47 a barrel as Goldman Sachs Group Inc. said in a report that the market has shifted into a supply deficit earlier than expected following disruptions around the world.

     Gold extended Friday’s gains, pushing its advance this year to 20 percent as investors sought a haven from equity turmoil and the Federal Reserve dialed back expectations for interest rate increases, making the metal more attractive as a store of value. First Quantum Minerals Ltd. and Teck Resources Ltd. rose at least 3.8 percent as iron ore climbed in China as daily steel output jumped to a record in April.

     Valeant Pharmaceuticals International Inc. rose 3.8 percent to reverse earlier losses. Short-seller Andrew Left of Citron Research said he was “long for Valeant” and wouldn’t be surprised if the shares bounce up.

     The embattled drugmaker also announced expanded hospital rebates for two heart drugs at the center of congressional investigations of price hikes. Last week, the New York Times reported major hospital systems in the U.S. weren’t receiving discounts on the drugs Valeant had promised. The stock is down more than 90 percent from an August peak.

     Penn West Petroleum Ltd. plunged 22 percent, the biggest decline since 1992, after the oil producer said it was working with lenders to amend its borrowing limits by the end of the second quarter and is a “going concern” risk if it can’t reach an agreement. Penn West will continue asset sales and look for other sources of capital from investors. The company had C$1.86 billion in long-term debt at the end of the first quarter.

US

By Oliver Renick

     (Bloomberg) — A rally in crude prices boosted energy shares and Apple Inc. jumped after Berkshire Hathaway Inc. disclosed a stake in the iPhone maker, spurring broader gains in U.S. stocks as the S&P 500 rebounded from the longest streak of weekly losses since January.

     With today’s advance, equities continued to churn following a turbulent week that saw the biggest one-day rally in two months promptly wiped out by three straight losing sessions. Commodity shares jumped Monday as crude surged 3.3 percent, while Apple posted the steepest climb since March 1 after three weeks of declines. Anacor Pharmaceuticals soared 57 percent, the most ever, after Pfizer Inc. agreed to buy the drugmaker.

     The S&P 500 rose 1 percent to 2,066.66 at 4 p.m. in New York, after falling for a third straight week. The gauge topped its average price during the past 50 days after closing Friday below the level for the first time since February. The Dow Jones Industrial Average added 175.39 points, or 1 percent, to 17,710.71, its fourth move of at least 175 points in the last five days. The Nasdaq Composite Index increased 1.2 percent, boosted by Apple as well as gains in biotechnology shares.

     “It was a crazy week last week with retail stocks blowing up and then retail sales overall were strong, so there’s a little bit of a bounce back,” Craig Sterling, head of U.S. equity research at Pioneer Investments in Boston, said by phone. “Earnings are over more or less and the market is searching to see what the second half of the year will look like. The price of oil and other commodities seem to be catching a bid so there’s hope there will be improvement in the industrial side of the economy.”

     The CBOE Volatility Index fell 2.4 percent to 14.68, after the measure of market turmoil known as the VIX closed Friday at a one-week high. A Goldman Sachs Group Inc. basket of most shorted shares capped its biggest climb in three weeks. About 6.5 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average.

     The main U.S. equity benchmark slid to a one-month low on Friday as disappointing results from large retailers offset data showing the consumer remains resilient. Amid the market gyrations in the past several sessions, the S&P 500 snapped an 18-day period without a swing of more than 1 percent, the longest stretch of relative calm since December 2014.

     After rallying 15 percent from a February low to a four- month high on April 20, the benchmark has struggled to regain momentum amid mixed earnings releases and lukewarm signs of an economic pickup. Meanwhile, one important support for equity prices during the bull market — corporate stock buybacks — has ebbed. Announced repurchases dropped 38 percent to $244 billion in the last four months, the biggest decline since 2009, data compiled by Birinyi Associates and Bloomberg show.

     Coming amid the worst profit slump since the financial crisis, the buyback slowdown may signal companies are preserving cash as economic and political uncertainty whips up from Europe to China and in the U.S.

     Meanwhile, a spate of deal activity today helped bolster fragile sentiment. In addition to Pfizer’s pact with Anacor, Terex Corp. added 10 percent after Konecranes Oyj agreed to buy one of its businesses. Yahoo! Inc. gained 2.7 percent as people familiar with the matter said Berkshire Chairman Warren Buffett is backing a group bidding for Yahoo’s Internet assets. Tribune Publishing Co. soared 23 percent as Gannett Co. raised the all- cash offer in its hostile takeover bid.

     Memorial Resource Development Corp. pared a 14 percent climb to 3.1 percent at the close amid Range Resources Corp.’s agreement to purchase the oil and natural gas company in an all- stock deal. Gains in Memorial Resource faded as Range Resources tumbled 10 percent to a three-week low.

     Retailers remain in focus after disappointing results from Macy’s Inc. to Nordstrom Inc. last week sent chain-store shares tumbling. Home Depot Inc., Target Corp., Staples Inc. and Wal- Mart Stores Inc. are due to report in the next few days. As the earnings season draws to a close, analysts estimate income at S&P 500 companies fell 7.4 percent in the first quarter, compared with forecast for flat growth earlier this year.

     Investors will also be assessing data this week for hints on the potential path for interest rates, including readings on housing starts, consumer prices, industrial production and home sales. Minutes from the Federal Reserve’s April meeting are due Wednesday. A report today showed manufacturing activity in the New York region unexpectedly contracted this month, while a separate gauge indicated homebuilder confidence held steady.                        

     In Monday’s trading, all of the S&P 500’s 10 main industries climbed, with energy and raw-material producers up more than 1.5 percent. Technology, industrial and health-care companies rose at least 1.1 percent. Oil rallied to a six-month high as Goldman Sachs said the market moved into a deficit earlier than expected following supply disruptions in Nigeria and an increase in demand.

     Williams Cos. added 6.4 percent to a four-month high, while Marathon Oil Corp. and Devon Energy Corp. advanced at least 3.9 percent. Chevron Corp. reversed a 1.4 percent drop Friday, rising 1.5 percent. Copper miner Freeport-McMoRan Inc. rallied 6.1 percent after dropping 10 percent during the prior two sessions. Cowen & Co. LLC raised its rating on the shares to the equivalent of buy from hold.

     Newmont Mining Corp. increased 4 percent, rising for the fourth time in five days to take its gain during that span to 11 percent. Gold advanced as holdings in exchange-traded funds backed by the metal climbed for a 14th straight day, reaching the highest in more than two years. Raw-material companies, the second-best performers in the index since the February low, alternated between gains and losses for a seventh session, typifying the market’s recent struggle for direction.

     Intel Corp. joined Apple to hoist the technology group, advancing 1.6 percent to its steepest increase since March 18. Nvidia Corp. added 3 percent on top of its post-earnings rally Friday, which was the biggest one-day jump in seven years. Semiconductor companies had their best session in a month, while Apple rebounded after its longest stretch of weekly losses since last June.

     Gains among consumer shares were muted relative to other industries as Macy’s and Michael Kors Holdings Ltd. retreated again after their worst weekly slides since at least November. Whirlpool Corp. slipped after data showed U.S. shipments of major home appliances fell 10.1 percent in April from a year earlier. Dollar Tree Inc. and Lowe’s Cos. added more than 2.6 percent to help overshadow those declines. Home Depot marked its strongest gain in two months before its earnings report tomorrow.

 

Have a wonderful evening everyone.

 

Be magnificent!

I cannot imagine anything nobler or more national than that for, say, one hour in a day,

we should all do the labor that the poor must do,

and thus identify ourselves with them and through them with all mankind.

Mahatma Gandhi

As ever,

 

Carolann

 

When the going gets tough, the tough get going.

                      -Joseph P. Kennedy, 1888-1969

 

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:

Friday the 13^th:

Thirteen was regarded as an unlucky number even among the Romans, who held it as a sign of death and destruction.  The origin of the idea that sitting down 13 at a table is unlucky is said to be that, at a banquet in Valhalla, Loki (the god of strife and spirit of evil in Norse mythology) once intruded, making 13 guests, and Balder (the Scandinavian god of light, noted for his handsomeness and gentle nature) was slain.  The superstition was confirmed in Christian countries by the Last Supper of Christ and the 12 Apostles.  In the Middle Ages, witch covens were believed always to have 13 members.

On May 13^th, 1940, Winston Churchill made his first speech to the House of Commons after becoming Prime Minister.

I say to the House as I said to Ministers who have joined this government, I have nothing to offer but blood, toil, tears  and sweat.   We have before us an ordeal of the most grievous kind.  We have before us many, many months of struggle and suffering.

  You ask, what is our policy?  I say it is to wage war by land, sea and air.  War with all our might and with all the strength God has given us, and to wage war against a monstrous tyranny never surpassed in the dark and lamentable catalogue of human crime.  That is our policy.

  You ask, what is our aim?  I can answer in one word.  It is victory.  Victory at all costs – victory in spite of all terrors – victory,  however long and hard the road may be, for without victory there is no survival.

  Let that be realized.  No survival for the British Empire, no survival for all that the British Empire has stood for, no survival for the urge, the impulse of the ages, that mankind shall move forward toward his goal.

  I take up my task in buoyancy and hope.  I feel sure that our cause will not be suffered to fail among men.

  I feel entitled at this juncture, at this time, to claim the aid of all and to say, “Come then, let us go forward together with our united strength.”

PHOTOS OF THE DAY

Participants attend the ‘Victorian Picnic’ in fancy costumes during the Wave Gothic Festival (WGT) in Leipzig, Germany on Friday. Approximately 20,000 goths and other dark subculture fans are expected to attend the world’s largest gothic and ‘dark’ culture festival. Jens Meyer/AP

Surrounded by relatives and neighbors in Verbania, Italy on Friday, Emma Morano celebrated becoming the oldest person in the world at age 115. Not only that, but she is believed to be the last surviving person in the world who was born in the 1800s, coming into the world on Nov. 29, 1899.Antonino Di Marco/ANSA/AP

Market Closes for May 13^th, 2016

Market Index	Close	Change
Dow Jones	17535.32	-185.18   -1.05%
S&P 500	2046.61	-17.50   -0.85%
NASDAQ	4717.676	-19.659   -0.41%
TSX	13748.58	-39.22
		-0.28%

International Markets

Market Index	Close	Change
NIKKEI	16412.21	-234.13
		-1.41%
HANG SENG	19719.29	-196.17
		-0.99%
SENSEX	25489.57	-300.65
		-1.17%
FTSE 100	6138.50	+34.31
		+0.56%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.273	1.317
CND. 30 Year Bond	1.950	1.985
U.S.    10 Year Bond	1.7001	1.7516
U.S. 30 Year Bond	2.5494	2.5983

Currencies

BOC Close	Today	Previous
Canadian $	0.77268	0.77861
US $	1.29420	1.28434
Euro Rate 1 Euro=		Inverse
Canadian $	1.46329	0.68339
US $	1.13065	0.88445

Commodities

Gold	Close	Previous
London Gold Fix	1265.90	1279.25
Oil	Close	Previous
WTI Crude Future	46.21	46.70

Market Commentary:
NUMBER OF THE DAY
$1 billion 

Apple’s investment in Didi Chuxing, China’s $25 billion homegrown competitor to Uber. In China’s fast-growing market for ride-sharing,     

Didi and UberChina are locked in a fierce battle to attract riders and investors.

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, clawing back a weekly gain, as financial shares and energy producers declined with the price of crude, after U.S. retail data jumped the most in a year and spurred bets on higher interest rates.

     The benchmark S&P/TSX Composite Index lost 0.3 percent to 13,748.58 at 4 p.m. in Toronto, paring a weekly gain to 0.3 percent. Volume today in the benchmark was 9.9 percent lower than the 30-day average. The gauge now trades at 20.8 times earnings, about 9.5 percent higher than the 19 times valuation of the S&P 500, data compiled by Bloomberg show.

     U.S. consumer purchases jumped 1.3 percent in April, the most since March 2015, providing the Federal Reserve with more confidence that higher interest rates won’t disrupt growth. The U.S. is Canada’s largest trading partner.

     Crude futures dropped 1.1 percent in New York to $46.21. Investors weighed the return of output from Canadian oil-sands producers after the Alberta wildfires against supply reductions from the U.S. to Nigeria. Militant attacks have cut output in Nigeria to the lowest in 20 years.

     Investors also weighed disappointing earnings results. Financial services stocks slipped 0.5 percent, led by a 0.9 percent decrease in Manulife Financial Corp. Onex Corp., Canada’s largest buyout firm, tumbled 5.4 percent, the most since 2011, after reporting a wider first-quarter loss than analysts had forecast.

     Hudson’s Bay Co. sank 7 percent to a record low after reporting same-store sales results for its first quarter, ahead of full financial results on June 9. Eliminating foreign exchange swings, same-store sales decreased 1 percent, including a 5.7 percent drop at its Saks Fifth Avenue unit.

     Meanwhile Kinross Gold Corp. and Eldorado Gold Corp. maintained gains as raw-materials producers advanced.

     Concordia Healthcare Corp. surged 15 percent after the drugmaker confirmed it is working with Greenhill & Co. considering strategic options for the company. Concordia earlier reported first-quarter earnings short of estimates. The stock has slumped 40 percent this year, among the worst-performing in the S&P/TSX this year.

     Canadian Tire Corp. lost 2.9 percent after analysts at Credit Suisse Group AG lowered their rating for the stock to the equivalent of a sell, as the stock has become expensive. The retailer has jumped 19 percent this year, trading at a record Thursday after posting first-quarter earnings ahead of expectations.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks fell, with the S&P 500 marking the longest weekly losing streak in four months, amid lackluster results from large retailers while data signaling consumers remain healthy added to the case for higher interest rates.

     Despite signs of vitality among consumers, companies that rely on their willingness to spend were among the biggest losers Friday as Nordstrom Inc. and J.C. Penney Co. added to a list of disappointing results and outlooks from department stores this week. Losses among banks accelerated in afternoon trading while energy producers retreated as crude prices fell for the first time in four days.

     The S&P 500 dropped 0.9 percent to 2,046.61 at 4 p.m. in New York, closing at a one-month low with a third straight weekly loss. Declines gathered pace in afternoon trading as the gauge slipped below its average price during the past 50 days. The Dow Jones Industrial Average lost 185.18 points, or 1.1 percent, to 17,535.32, a seven-week low. The Nasdaq Composite Index dropped 0.4 percent. About 6.6 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average.

     “You’d think the retail numbers would prevent the market from going lower like in the last couple weeks,” Mark Kepner, an equity strategist at Chatham, New Jersey-based Themis Trading LLC, said by phone. “But there are some other issues with the market right now. Every time we get up to 2,100 there’s resistance, and overall the earnings aren’t great and that’s a factor as well.”

     A report today showed sales at retailers in April saw the biggest gain since March 2015, contrasting with weak quarterly results this week from major chains including Macy’s Inc. and Kohl’s Corp. Nordstrom tumbled 13 percent, the most in the S&P 500 Friday, after cutting its annual forecast. Wal-Mart Stores Inc. lost 2.9 percent to lead declines in the Dow. Amazon.com Inc. slipped 1.1 percent to fall for the first time in six days.

     A rally that sent the S&P 500 up as much as 15 percent has been struggling to regain momentum since reaching a four-month high on April 20, amid mixed earnings and lukewarm signs of an economic pickup. This week was marked by the benchmark surging the most in two months on Tuesday as commodities rebounded, only to slide by the most in a month Wednesday after disappointing results from Walt Disney Co. and Macy’s spurred a broader selloff.

     Weaker-than-forecast quarterly reports at tech giants including Apple Inc., Microsoft Corp. and Google parent Alphabet Inc. have been among the obstacles for equities. As the earnings season winds down, analysts estimate income at S&P 500 companies fell 7.4 percent in the first quarter compared with forecast for flat growth earlier this year. Of those that have announced results so far, about 74 percent beat profit forecasts, and 54 percent exceeded sales expectations.

     Along with the retail sales report, investors are scouring other data for clues on the economy’s health and possible trajectory of interest rates. A measure today showed consumer confidence jumped in May to the highest level in almost a year, while another report said wholesale prices rose in April for the first time in three months. A separate gauge showed growth in business inventories continues to outpace that of sales.

     Two Federal Reserve presidents, Boston’s Eric Rosengren and Kansas City’s Esther George, yesterday made separate but similar cases for a rate increase, arguing that the central bank risks stoking an asset bubble by delaying action for too long. Still, traders are pricing in only a 4 percent chance the Fed will act in June. December is the first month with at least even odds of higher borrowing costs.

     In Friday’s trading, all of the S&P 500’s 10 main industries fell, with six groups sinking more than 1 percent. Consumer staples, energy, financial and industrial companies lost at least 1.2 percent. The CBOE Volatility Index increased 4.4 percent to 15.04, a one-week high. The measure of market turbulence known as the VIX trimmed its May decline to 4.2 percent from more than 13 percent earlier this week.

     Transportation companies were among the worst performers in the industrial group, with the Dow Jones Transportation Average capping the biggest weekly slide since January. Ryder System Inc. fell the most in two months, while railroads Norfolk Southern Corp. and Kansas City Southern dropped at least 2.4 percent. Caterpillar Inc. lost 2.3 percent and extended a weekly losing streak to four, the most since September.

     Banks in the benchmark tumbled to the lowest level in month. Wells Fargo & Co. and Citigroup Inc. dropped at least 1.9 percent. The KBW Bank Index fell 1.6 percent. Among other financials, real-estate companies extended the steepest weekly decline since February, led by mall and shopping-center owners. Macerich Co. and Simon Property Group Inc. sank more than 2.7 percent.

     Among energy producers, Transocean Ltd. and Southwestern Energy Co. fell the most, down more than 4.4 percent. Chevron Corp. slumped 1.4 percent. Crude pared a weekly gain as investors weighed the return of output from Canadian producers against supply reductions from the U.S. to Nigeria.

     Wal-Mart was one of the heaviest drag on the staples group as it posted the worst week in seven months. PepsiCo Inc. slid 1.8 percent, the steepest in more than two months, after a regulatory filing showed Nelson Peltz’s Trian Fund Management LP eliminated its stake in the beverage-and-snack giant. Costco Wholesale Corp. fell for a third day, losing 1.5 percent. In the broader retailer group, Target Corp. and Dollar Tree Inc. sank at least 2.2 percent.

     In the consumer discretionary segment, Nordstrom fell the most, while Michael Kors Holdings Ltd. declined 4.3 percent amid its longest streak in almost 10 months. Tiffany & Co. and Urban Outfitters Inc. lost more than 2.9 percent.

     Nvidia Corp. rose 15 percent, the most in more than seven years, to an all-time high. The biggest maker of graphics chips used in high-end gaming computers, predicted sales that may top analysts’ estimates, signaling game players continue enthusiastically to seek the latest technology.
 

Have a wonderful weekend everyone.

 

Be magnificent!

Whenever I see an erring man, I say to myself I have also erred;

when I see a lustful man I say to myself, so was I once;

and in this way I feel kinship with everyone in the world

and feel that I cannot be happy without the humblest of us being happy.

Mahatma Gandhi

As ever,
 

Carolann

 

Laughter is an instant vacation.

     -Milton Berle, 1908-2002

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