Month: June 2016

Dear Friends,

Tangents:

From this year’s Commencement addresses:

Roanoke College
Michael Rhodin
IBM Watson senior vice president
“A decade ago, I was sitting in the office of the co-CEOs of a company called BlackBerry, the world’s dominant mobile email platform, and a pretty good phone.  It was the day after Apple released something it called the iPhone.  (The BlackBerry CEOs0 explained to me why it would fail.  They missed the point.   They were stuck in their own paradigm.  They failed to see outside the lines.  Today, while iPhone is a leading mobile platform, it is not the only player.  Another group of people from a company called Google looked outside the lines again and released a free operating system called Android to disrupt the smartphone market.  Always remember, when you look outside the lines, you implicitly create new ones, and others will look beyond those.  Never be afraid to challenge your own beliefs and restlessly reinvent your ideas.”

University of Wisconsin
Russell Wilson, Seattle Seahawks quarterback
“I’m here to share some things I’ve learned – things like if you’re dating a woman that’s way out of your league, ask her to marry you.  If you can throw a football 80 yards, for some reason people think that’s pretty cool.  And if you’re playing the New England Patriots in  the Super Bowl and you’ve go 26 seconds left and you’re down by four and it’s second-and-goal on their 1-yard line, try not to throw an interception.  That’s purely, purely hypothetical though, of course.  If my dad were here with us, this is the point where he’d remind us that potential means we just haven’t done it yet.  So I would say good luck, but I don’t believe in good luck.  Go make it happen.  Congratulations to the Class of 2016.  I’m out.”

Meredith College
Ellen Stofan, NASA chief scientist
“Even in my current position, I don’t know all there is to know.  That’s why we keep conducting research and exploring the unknown.  I think a lot of people have the perception that we’re in this era where we’re  at the peak of knowing about the world around us and how it works.  However, I would argue that we know so little, and we’re on the verge of knowing so much – because the more we learn, the more questions we have, the more we seek knowledge.  Just in the last few years, we have discovered about 5,000 candidate planet around other stars.  New worlds to understand – and targets for looking for signs of life.  The world you have in front of you provides a wealth of opportunity – figure out where you fit in, and go for it.”

On this day in 1923, Lou Gehrig makes his major league debut with the New York Yankees.

PHOTOS OF THE DAY

Musician and campaigner Bob Geldof (c.) joins a counter demonstration as a flotilla of fishing vessels campaigning to leave the European Union sails up the river Thames in London on Wednesday. Stefan Wermuth/Reuters

A worker cleans the floor of British artist Wolfgang Buttress’ 17-meter-high, bee-health-inspired ‘The Hive’ aluminum installation in Kew Royal Botanic Gardens, west London, on Wednesday. The installation is fitted with LED lights and a unique sound accompaniment that respond to the real-time activity of bees in a beehive behind the scenes. The sound and light intensities change as the energy levels in the real beehive surge, giving visitors an insight into life inside a bee colony. Matt Dunham/AP

A racegoer takes a photo with his cell phone during Royal Ascot at the Ascot Racecourse in Britain on Wednesday. Andrew Boyers/Reuters

Market Closes for June 15^th, 2016

Market Index	Close	Change
Dow Jones	17640.17	-34.65   -0.20%
S&P 500	2071.50	-3.82   -0.18%
NASDAQ	4834.934	-8.618   -0.18%
TSX	13923.45	+39.22
		+0.28%

International Markets

Market Index	Close	Change
NIKKEI	15919.58	+60.58
		+0.38%
HANG SENG	20467.52	+79.99
		+0.39%
SENSEX	26726.34	+330.63
		+1.25%
FTSE 100	5966.80	+43.27
		+0.73%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.081	1.122
CND. 30 Year Bond	1.759	1.785
U.S.    10 Year Bond	1.5737	1.6198
U.S. 30 Year Bond	2.4087	2.4298

Currencies

BOC Close	Today	Previous
Canadian $	0.77467	0.77728
US $	1.29087	1.28653
Euro Rate 1 Euro=		Inverse
Canadian $	1.45395	0.68778
US $	1.12633	0.88784

Commodities

Gold	Close	Previous
London Gold Fix	1283.30	1287.15
Oil	Close	Previous
WTI Crude Future	48.01	48.49

Market Commentary:

Number of the Day
0.37%
The effective fed funds rate every day in June has been 0.37%, within the Federal Reserve’s 0.25%-0.50% target range.

Canada

By Anna-Louise Jackson

     (Bloomberg) — Canadian stocks gained Wednesday, rebounding from the steepest slump since February, even as their U.S. counterparts succumbed to a late session selloff.

     The S&P/TSX Composite Index maintained gains to advance 0.3 percent to 13,923,45 at 4 p.m. in Toronto, halting a five-day retreat that sent the gauge 3.4 percent lower. A report Wednesday showed manufacturing sales in the country rose more than expected in April. Canadian stocks rose amid the biggest rally in copper prices in three months and broader gains in base metals.

     Following the Federal Reserve’s decision to leave interest rates unchanged, the U.S. stock market erased gains that earlier were poised to be the biggest in three weeks.

     Shares of Canadian raw-materials companies jumped 2.9 percent, leading gains as six of the benchmark’s 10 main industries advanced. Pretium Resources Inc. jumped 8.6 percent to the highest since January 2013, while Semafo Inc. added 7.1 percent to close at levels last seen in March 2012.

     Utilities companies pared earlier gains of as much as 0.8 percent to close little changed. Superior Plus Corp. jumped 2 percent, the most since May 27, while Transalta Corp. fell 1.6 percent.

     Energy companies slipped 0.2 percent after oil fell a fifth day, capping the longest run of declines since February, as the return of Canadian output offset a U.S. crude stockpile drop.

     Shares of consumer-staples companies fell 0.6 percent, dragged down by Alimentation Couche-Tard Inc.’s 0.7 percent decline.

US

By Joseph Ciolli and Oliver Renick

     (Bloomberg) — U.S. stocks erased gains in a late-day collapse after the Federal Reserve held pat on interest rates, with mixed American growth and a sluggish global economy heightening concern the effectiveness of central-bank stimulus has reached its limits.

     Equities seesawed post-meeting and during Fed Chair Janet Yellen’s press conference, maintaining gains before caving in the final minutes, spurred by falling crude-oil prices and tumbling Treasury yields which weighed on financial shares.

     The S&P 500 Index fell 0.2 percent to 2,071.50 at 4 p.m. in New York, erasing a climb of 0.5 percent, and posting a fifth straight drop, the longest since February. The gauge also closed below its average price during the past 50 days, after holding above the level until the closing minutes. The Dow Jones Industrial Average slipped 34.65 points, or 0.2 percent, to 17,640.17. The Nasdaq Composite Index decreased 0.2 percent.

     “The Fed scaling back the indicated pace of rate hikes can be construed as them not seeing requisite strength — there’s a malaise that’s set into the economy,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “Without something to push equities higher, besides low rates, we’re losing steam here. With uncertainty around the British vote later this month, the path of least resistance seems to be down at this point.”

     Equities had been on track to snap a four-day losing streak for most of the day as investors focused on the outcome of the Fed meeting, briefly pushing into the background recent worries about Britain’s potential exit from the European Union.

     Traders said selling pressure built through the afternoon but didn’t hit stocks until after Yellen finished her press conference. One signal was in crude, where New York-traded futures began to decline roughly when the Fed’s statement hit, then kept slipping as Yellen answered questions. Others pointed to an imbalance of orders that often materialize at the end of trading sessions.

     “There are still a lot of people that use the market on open and close to trade, and what happens is there are buy and sell imbalances,” Joe Sowin, head of global equity trading at Dallas, Texas-based Highland Capital Management LP, said by phone. “There was a $1.1 billion sell imbalance, and when you have an interesting move in the S&P down, more people are inclined to sell in the last half hour. It’s kind of a guerrilla warfare signal.”

     Oil fell for a fifth day, capping the longest run of declines since February, with futures dropping 6.3 percent in New York over the last five sessions.

     The central bank today signaled a cautious approach to further raising borrowing costs, with more officials seeing only one rate increase this year compared to the previous forecasting round in March.

     Policy makers reiterated rates are likely to rise at a “gradual” pace. A tightening labor market, signs of rising wages and a pickup in consumer spending have nudged the Fed toward another hike, while a slowing pace of job creation, evidence of lower inflation expectations and persistent risks from outside the U.S. have provided reason for caution.

     Traders trimmed bets on higher rates, pricing in less than 6 percent chance of a rate move in July, down from 18 percent before the Fed statement and 53 percent two weeks ago, before probabilities were doused by weak May payroll gains. The first month with at least even odds for an increase is pushed out beyond February.

     “We’ve had Yellen and other Fed officials speak to us about the strength of the economy since the April meeting, and if you read the release today, they basically pushed the spaghetti around the plate — the strengths and weaknesses in the economy just shifted,” said Anna Rathbun, director of research for CBIZ Inc.’s retirement-plan services unit in Cleveland. “This isn’t good news, this is status quo. So the rate hike not coming means we haven’t gone anywhere, and as an investor, I don’t find that encouraging.”

     Equities have retreated this week as the potential fallout from Britain’s June 23 referendum spooked investors, just days after optimism over low rates and moderate economic growth buoyed the S&P 500 to an almost 11-month high.

     With policy makers depending on data to decide when to act on borrowing costs, a report today showed a rebound in fuel costs pushed up wholesale prices for a second month. Excluding volatile components such as food, energy and trade services, prices declined for the first time in seven months. Other data showed factory production fell more than forecast in May, while manufacturing in the New York region unexpectedly expanded this month, according to a separate measure.

     The S&P 500 had rallied as much as 16 percent from a 22- month low in February to within 0.6 percent of an all-time high last week, with a multimonth advance bolstered as crude oil rebounded from a 12-year low and the economy showed signs of gaining enough traction to handle higher rates. The index is still less than 3 percent from its record set nearly 13 months ago, and has gone the longest without a fresh high outside of a bear market since 1984.

     The CBOE Volatility Index fell 1.8 percent today to 20.14, slipping for a second day after reaching a three-month high. The measure of market turbulence known as the VIX yesterday ended its longest streak of gains since August. About 6.9 billion shares traded hands on U.S. exchanges, in line with the three- month average.

     In Wednesday’s trading, six of the S&P 500’s 10 main industries fell, with utilities and health-care shares sliding at least 0.6 percent. Raw-materials rose 0.4 percent and consumer discretionary shares added 0.3 percent. Financial shares were little changed, nearly wiping out a 1.2 percent rally as a rebound in banks lost momentum amid sliding Treasury yields. Industrials also finished barely changed after rising 0.8 percent.

 

Have  a wonderful evening everyone.

 

Be magnificent!

Every man has an equal right

to the necessities of life,

even as birds and beasts have.

Mahatma Gandhi

As ever,

 

Carolann

 

Dream and give yourself permission to envision a You that you choose to be.

                                                                           -Joy Page, 1924-2008

 

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 NY Times last Sunday, excerpts from some of the commencement speeches given over the past few weeks as thousands of college students graduated are cited, and, for the most part, had  a fairly common theme: Times are Tough, but Take Heart.

University of California, Berkeley
Sheryl Sandberg, COO, Facebook (Ms. Sandberg’s husband died suddenly last year).
“For many months afterward, and at many times since, I was swallowed up in the deep fog of grief – what I think of as the void –an emptiness that fills your heart, your lungs, constricts your ability to think or even to breathe.
Dave’s death changed me in very profound ways.  I learned about the depths of sadness and the brutality of loss.  But I also learned that when life sucks you under, you can kick against the bottom, break the surface, and breathe again.  I learned that in the face of the void – or in the face of any challenge – you can choose joy and meaning.”

University of Pennsylvania
Lin-Manuel Miranda
Creator of Hamilton
“In a year when politicians traffic in anti-immigrant rhetoric, there is also a Broadway musical reminding us that a broke, orphan immigrant  from the West Indies built our financial system.  A story that reminds us that since the beginning of the great unfinished symphony that is our American experiment, time and time again, immigrants get the job done.”

Harvard University
Stephen Spielberg
Filmmaker
“And I want to be clear that your intuition is different from your conscience.  They work in tandem, but here’s the distinction:  Your conscience  shouts, ‘Here’s what you should do,’ while your intuition whispers, ‘Here’s what you could do.’  Listen to that voice that tells you what you could do.  Nothing will define your character more than that.”

Washington University
John Lewis
Congressman and civil rights leader
“On May 20, 1961, the same year that President Barack Obama was born, some of us on the freedom rides, black and white college students, arrived in Montgomery, Ala., at the Greyhound bus station.  We were met by an angry mob.  We were beaten.  We were left bloody.  We were left unconscious, some of us.  And later, we traveled by bus to Mississippi and other parts of the South where we were arrested and jailed.
 We din’t give up.  We didn’t give in.  We didn’t lose faith.  We kept our eyes on the prize.  And as students, as graduates,  you must keep your eyes on the prize.  You have a moral obligation, a mission and a mandate to do your part.  You must play a role, help to redeem the soul of America, help create a beloved America, a beloved world wher no one is left our or left behind because of their race or their class.”

On this day in…

1777 – the Continental Congress adopts the Stars and Stripes as the nation’s flag.

1851 – Province of Canada issues 12 penny Queen Victoria stamp.

1841 – Lord Sydenham opens the Province of Canada’s first Parliament.

1919 – Alcock and Brown leave St. John’s on the first nonstop transatlantic flight.

PHOTOS OF THE DAY

Britain’s Prince William and his wife Kate, Duchess of Cambridge, sign a book of condolences for the victims of the shootings at a gay nightclub in Orlando at the US Embassy in London on Tuesday. Philip Toscano/Reuters

Racegoers are decked out for the Royal Ascot horse races at the Ascot Racecourse in Britain on Tuesday. Toby Melville/Reuters

Market Closes for June 14^th, 2016

Market Index	Close	Change
Dow Jones	17674.82	-57.66   -0.33%
S&P 500	2075.32	-3.74   -0.18%
NASDAQ	4843.551	-4.890   -0.10%
TSX	13884.23	-109.65
		-0.78%

International Markets

Market Index	Close	Change
NIKKEI	15859.00	-160.18
		-1.00%
HANG SENG	20387.53	-125.46
		-0.61%
SENSEX	26395.71	-1.06
		—
FTSE 100	5923.53	-121.44
		-2.01%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.122	1.113
CND. 30 Year Bond	1.785	1.788
U.S.    10 Year Bond	1.6198	1.6113
U.S. 30 Year Bond	2.4298	2.4277

Currencies

BOC Close	Today	Previous
Canadian $	0.77728	0.78037
US $	1.28653	1.28145
Euro Rate 1 Euro=		Inverse
Canadian $	1.44207	0.69345
US $	1.12090	0.89214

Commodities

Gold	Close	Previous
London Gold Fix	1287.15	1280.80
Oil	Close	Previous
WTI Crude Future	48.49	48.88

Market Commentary:

Number of the Day
– 0.001%
The yield Tuesday on the 10-year government debt of Germany, the first time it dipped below zero.

Canada

By Dani Burger and Eric Lam

     (Bloomberg) — Canadian stocks slumped a fifth day, the longest losing streak in four months, as riskier assets retreated ahead of key central-bank meetings this week and Britain’s vote on its membership of the European union.

     The S&P/TSX Composite Index tumbled 0.8 percent to 13,884.23 at 4 p.m. in Toronto, extending losses after opening little changed in the morning. The index has lost 3.4 percent over five days, the biggest drop over that stretch of time since Feb. 11.

     Global stocks declined on Tuesday with the MSCI All-Country World Index posting its worst four days since January, as investors grow increasingly cautious on the looming Brexit vote and volatility ahead from U.S. elections and Federal Reserve rate decisions.

     Canadian stocks have gained 6.7 percent this year, lifted by the rebound in commodity-sensitive producers. Raw material and energy producers have gained the most in the index year to date, posting advances of 42 percent and 14 percent respectively. That’s put the S&P/TSX within striking distance of beating New Zealand’s S&P/NZX 50 Index as the top performer in 2016 among developed nations.

     Financial shares and raw-material producers contributed the most to declines on Tuesday. Royal Bank of Canada dropped 1.8 percent. The Bloomberg Commodities Index retreated for the third time in four sessions with base metals producers First Quantum Minerals Ltd. and Teck Resources Ltd. slumping more than 4.1 percent.

     Energy producers slipped 0.6 percent as crude prices in New York dropped. Oil has fallen for four days. Global oil markets will be almost balanced next year as demand continues to rise faster than output, while the current oversupply is much smaller than previously thought, the International Energy Agency said.

     Seven of 10 industries retreated in the S&P/TSX on trading volume 2 percent lower than the 30-day average. Telecommunications and health-care stocks led gains. Telus Corp, the telephone stock, rose 1.6 percent after it said it is buying back as much as 1.58 million shares through private agreements with a third-party seller.

     Valeant Pharmaceuticals International Inc. rose 1.4 percent, ending the day higher after swinging between gains and losses. Valeant is working with advisers at Morgan Stanley as it weighs the sale of dermatology units to reduce debt and raise cash, according to people familiar with the matter. The embattled drugmaker also hosted its annual meeting. Valeant stock remains down more than 90 percent from an August peak.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks retreated for a fourth day, the longest since February, amid growing uncertainty about the U.K.’s future in the European Union and as investors awaited Wednesday’s Federal Reserve announcement.

     Equities staged a late rebound, surging from the day’s lows in the final hour to pare much of the session’s losses that reached as much as 0.7 percent in the S&P 500 Index. Banks dropped on speculation low rates will continue to weigh on earnings, while haven buying boosted the dollar, dragging down raw-material producers. Investors seeking safety gravitated to the high dividend yields offered by utilities and phone companies.

     The S&P 500slipped 0.2 percent to 2,075.32 at 4 p.m. in New York, remaining at a three-week low. The gauge dropped below its average price during the past 50 days, which then became the ceiling on the late-day recovery. The Dow Jones Industrial Average declined 57.66 points, or 0.3 percent, to 17,674.82, after falling as much as 136 points. The Nasdaq Composite Index lost 0.1 percent. About 7.4 billion shares traded hands on U.S. exchanges, 7 percent above the three-month average.

     “It was nice to see a good retail sales number, but folded on top of that you have Brexit, speculation around the Fed and the market still near some highs,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “That’s causing investors to remain cautious. The news cycle has been taken over by what the Fed is going to do.”

     The CBOE Volatility Index fell 2.2 percent Tuesday to 20.50 on the late-day comeback, halting its longest stretch of gains since August. The measure of market turbulence known as the VIX erased a 5.7 percent climb today, after jumping 23 percent Monday, the most this year.

     The bout of selling is occurring just days after the S&P 500 hit its highest in almost 11 months, buoyed by optimism that low rates, steady job gains and modest growth would continue to support rising stock prices. Sentiment has shifted, with the potential fallout from a June 23 vote on Britain’s membership of the EU increasingly unsettling global markets. Britain’s largest-selling newspaper now backs a so-called Brexit, while five polls in the past 24 hours put the “Leave” campaign ahead of “Remain.”

     As policy makers and investors scrutinize data to weigh U.S. growth, a report today showed retail sales rose more than forecast in May, indicating consumer spending will help boost second-quarter growth. A separate gauge showed inflation pressures are building. The costs of goods imported into the U.S. climbed 1.4 percent in May, the biggest gain in four years.

     Although traders are pricing in zero chance of a rate move tomorrow, Chair Janet Yellen’s commentary afterward will be parsed for hints on the trajectory of borrowing costs. At least even odds for a rate increase have been pushed out to February 2017.

     The S&P 500 had rallied as much as 16 percent from a 22- month low in February to within 0.6 percent of an all-time high, before its four-day slide amid growth worries and Brexit anxiety. The benchmark is less than 3 percent from its record set nearly 13 months ago, and has gone the longest without a fresh high outside of a bear market since 1984.

     “Brexit is adding fuel to the fire for risk-averse investors,” said Jasper Lawler, an analyst at CMC Markets Plc in London. “Markets are already worried about slowing global growth and the inability of central-bank policy to stem the decline. Global growth concerns are present because we don’t know where the Fed is on that, but depending on the language they use, this could cause the market to gain again.”

     In Tuesday’s trading, six of the S&P 500’s 10 main industries rose, led by gains of 0.5 percent in phone companies and utilities. Consumer staples added 0.3 percent, while technology, health-care and industrials all edged up less than 0.2 percent. Financial shares dropped 1.5 percent and raw- materials lost 0.8 percent.                       

     Credit-card companies were hammered, leading the slide in financials as Synchrony Financial tumbled 13 percent near a four-month low. The issuer of private-label cards said it was setting aside more money for loan losses. Capital One Financial Corp. fell 6.6 percent, the worst since July, and American Express Co. decreased 4.1 percent to the lowest since April 12.

     Banks in the benchmark declined at least 1 percent for a fourth straight session, sliding to a two-month low. KeyCorp and Citizens Financial Group Inc. slumped at least 3.4 percent. The KBW Bank Index fell to the lowest in nine weeks.

     Freeport-McMoRan sank to a two-month low to pace the drop in raw-materials. Alcoa Inc. retreated 2.4 percent, while Mosaic Co. and Owens-Illinois Inc. fell more than 2.3 percent.

     Airlines were battered for a second day, with a Bloomberg index of U.S. carriers marking its worst back-to-back drop in more than a year. Southwest Airlines Co. slumped 5.4 percent to an almost four-month low, while United Continental Holdings Inc.lost 4.5 percent to its lowest since October 2014.

     Home Depot Inc. and Lowe’s Cos. fell at least 1.8 percent after May retail sales data showed weakness in building materials and garden equipment. Department stores also saw sales declines, sending Nordstrom Inc. and Kohl’s Corp. down at least 2.3 percent.

     Among companies moving on corporate news, Yahoo! Inc. rose 2.6 percent, among the strongest in the S&P 500. Private equity suitors TPG, Advent International Corp. and a partnership of Sycamore Partners and Vector Capital Management are into the final round of bidding for its core internet business, as well as some of its intellectual property and real estate assets, according to people familiar with the matter.

     General Electric Co. added 2 percent, the most in the Dow and steepest in a month. The conglomerate affirmed its 2016 forecast in an analyst presentation, and also said it’s opening a research and development center in Paris to work on software design for industrial applications as part of a push to boost sales from information technology.
 

Have  a wonderful evening everyone.

 

Be magnificent!

I must confess that I do not draw a sharp line

or any distinction between economics and ethics.

Mahatma Gandhi

As ever,

 

Carolann

 

It’s easy to make a buck.  It’s a lot tougher to make a difference.

                                                           -Tom Brokaw, 1940-

 

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:

Fantastic entertainment at last night’s Tony Awards.  As expected, Hamilton cleaned up with 11.  I must say that to date, it’s the best show I’ve ever seen on Broadway – amazing creativity and talent.

Took in the James Taylor concert on the weekend, and he was fantastic – I think he’s better now than at any time in his career.  I know it’s a big tour in 2016, so if you get a chance to see him at any of his other scheduled appearances, it’s truly a great way to spend an evening.  He is also with an amazing band.

On this day in 1900, China’s Boxer Rebellion erupts.

On June 13, in Canada…

1673 – La Salle builds Fort Cataraqui at today’s Kingston, Ontario

1886 – Fire razes Vancouver in 1/2 hr blaze; 1,000 buildings torched, up to 50 die.

1898 – Birth of the Yukon as Royal Assent given to the Yukon Territory Act

Tweet of the Day:
Pound at 8 week low; $6b net short position on pound as speculators ramp up bearish bet. 10 days out
— Sara Eisen @SaraEisen

Number of the Day
50%
The average of the past six polls on whether the U.K. should leave the EU puts each side on 50%, excluding voters who were undecided or didn’t know, according to NatCen Social Research, a nonpartisan social research agency.

PHOTOS OF THE DAY

The cast of ‘Hamilton,’ winners of the 2016 award for best musical, perform at the Tony Awards at the Beacon Theater on Sunday in New York. Evan Agostini/Invision/AP

Children play on an iceberg on the beach in Nuuk, Greenland. Alister Doyle/Reuters

Market Closes for June 13^th, 2016

Market Index	Close	Change
Dow Jones	17732.48	-132.86   -0.74%
S&P 500	2079.06	-17.01   -0.81%
NASDAQ	4848.441	-46.106   -0.94%
TSX	13993.88	-43.66
		-0.31%

International Markets

Market Index	Close	Change
NIKKEI	16019.18	-582.18
		-3.51%
HANG SENG	20512.99	-529.65
		-2.52%
SENSEX	26396.77	-238.98
		-0.90%
FTSE 100	6044.97	-70.79
		-1.16%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.113	1.123
CND. 30 Year Bond	1.788	1.794
U.S.    10 Year Bond	1.6113	1.6421
U.S. 30 Year Bond	2.4277	2.4548

Currencies

BOC Close	Today	Previous
Canadian $	0.78037	0.78375
US $	1.28145	1.27591
Euro Rate 1 Euro=		Inverse
Canadian $	1.44723	0.69097
US $	1.12937	0.88545

Commodities

Gold	Close	Previous
London Gold Fix	1280.80	1275.50
Oil	Close	Previous
WTI Crude Future	48.88	49.07

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a fourth day, the longest stretch of losses in two months, as global markets retreated on rising anxiety the U.K. will vote to exit the European Union.

     The S&P/TSX Composite Index fell 0.3 percent to 13,993.88 at 4 p.m. in Toronto. The index has lost 2.6 percent over four days, the biggest drop over that stretch of time since Feb. 11. Trading volume today was in line with the 30-day average.

     Global stocks sank a third day. The outlook for global growth remains clouded with uncertainty over when the Federal Reserve will raise rates, the coming Brexit vote and potential volatility stemming from the U.S. election.

     In Canada, the big banks declined at least 0.7 percent with Bank of Nova Scotia and Royal Bank of Canada retreating. Gold producers added 0.8 percent as investors flocked to the precious metal as a store of value.

     A volatility index of S&P/TSX 60 options jumped 12 percent to 18.02, the highest in a month. The gauge has soared 48 percent in four sessions, the biggest increase since August. The S&P/TSX 60 Index is a gauge of the 60 largest, most liquid shares in Canada.

     Canadian equities are still up 7.6 percent this year, trailing only New Zealand as the top performer in 2016 among 24 developed nations. It’s a stark contrast to 2015 when the S&P/TSX tumbled by 11 percent as one of the world’s worst equity markets. Raw-materials producers have boosted the broader rally this year, soaring 45 percent for the best year-to-date performance in three decades.

     Canadian shares remain more expensive relative to their U.S. peers. The S&P/TSX now trades at 21.5 times earnings, about 12 percent higher than the 19.2 times valuation of the S&P 500 Index.

     Penn West Petroleum Ltd. jumped 39 percent, the most since 1992, after the oil and gas explorer agreed to sell all of its Saskatchewan assets for C$975 million in cash to Teine Energy Ltd. Including other assets in Alberta, Penn West will raise C$1.1 billion, with the company now expecting to be “comfortably in compliance” with its financial covenants at the end of the second quarter and the remainder of the year.

     Turquoise Hill Resources Ltd. surged 13 percent, the most in three years, after parent Rio Tinto Group was reported to hire Goldman Sachs Group Inc. to help privatize its copper unit. Rio Tinto is seeking to increase its stake in Turquoise Hill while selling the remaining shares in the company to a strategic buyer, according to the Sunday Times, without saying where it got the information.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks dropped, with the S&P 500 Index falling to a three-week low, as investors wavered amid a pair of coming central-bank events and Britain’s vote on European Union membership that have sowed anxiety.

     Equities swung between gains and losses before a retreat accelerated as European stocks closed at their lowest in almost four months. A measure of volatility posted the biggest two-day jump since a selloff last August. Raw-material, industrial and technology shares fell the most, losing more than 1.1 percent. LinkedIn Corp. soared 47 percent after Microsoft Corp. said it’s buying the company in a deal valued at $26.2 billion. Microsoft sank 2.6 percent.

     The S&P 500 fell 0.8 percent to 2,079.06 at 4 p.m. in New York, amid the longest losing streak in a month and the worst three days of losses since Feb. 9. The Dow Jones Industrial Average lost 132.86 points, or 0.7 percent, to 17,732.48. The Nasdaq Composite Index slid 0.9 percent. About 6.7 billion shares traded hands on U.S. exchanges, 4 percent below the three-month average.

     “Concern is lingering about the continued effectiveness of central banks, global growth and worries of deflation,” said Matt Maley, an equity strategist in New York at Miller Tabak & Co LLC. “Everybody’s going to be focused on the Brexit vote, but they have to keep an eye on the other issues as we move forward.”

     As evidence of increasing worry, the CBOE Volatility Index surged 23 percent Monday to 20.97, the most since December and the biggest back-to-back jump since Aug. 24. The measure of market turbulence known as the VIX closed above 20 for the first time since Feb. 29. A preference for safety was also apparent today as U.S. Treasuries extended a rally to a fifth day, the longest since February.

     Recent declines have signaled a shift in sentiment after as much as $3.3 trillion was added to equities since mid-February. Investors are reassessing the rally amid lackluster economic growth and concerns about the potential fallout from a June 23 referendum that will determine Britain’s membershipin the European Union.

     Also keeping investors on edge is the Federal Reserve’s monetary policy review on Wednesday, despite no change predicted for interest rates. Based on Fed funds futures prices, traders don’t see at least even odds for a rate increase until after February. The Bank of Japan also has a policy meeting scheduled this week.

     The S&P 500 rallied as much as 16 percent from a 22-month low in February to approach within 0.6 percent of an all-time, before posting a three-day slide amid simmering growth worries and Brexit anxiety. The index is 2.4 percent from its record set almost 13 months ago, after losing its grip Friday on the 2,100 level, an area where other rallies during the past year have faltered.                     

     “Uncertainties are growing so we have to be very cautious,”  said Leonardo Lara, chief investment officer at FCS Asset Management in Sliema, Malta. His firm manages about 500 million euros ($564 million). “We are concerned about different risks for the global economy — political uncertainties, central banks with no well-defined actions, commodities prices. Investors have more to lose than to win.”

     In Monday’s trading, all of the S&P 500’s 10 main industries declined, with raw-materials, technology and industrial companies falling more than 1.1 percent. Consumer staples, financial and health-care stocks decreased at least 0.7 percent. Utilities were little changed.

     Technology shares in the benchmark slid 1.1 percent, paced by Microsoft’s retreat and a 2.3 percent decrease for Facebook Inc. Short-seller Andrew Left of Citron Research is betting the stock will decline, saying it’s too expensive and will lose market share to competing social media platforms such as Snapchat. Facebook declined to comment. Apple Inc. fell 1.5 percent after Japan’s Nikkei Asian Review reported annual iPhone shipments will fall for the first time since 2007 this year, citing people familiar with the matter.

     Even as the broader technology sector declined, the Solactive Social Media Index rose 3.7 percent, the most since October 2014, as the gauge was boosted by Microsoft’s acquisition of LinkedIn. Twitter Inc. snapped a four-day skid with a 3.8 percent increase.

     Airlines tumbled, dragging industrial shares lower, with a Bloomberg index of U.S. carriers marking the biggest drop in four months. Analysts see lower travel agency sales in the second quarter, in addition to a near-term impact from the mass shooting in Orlando. United Continental Holdings Inc. and American Airlines Group Inc. fell at least 4 percent. The Dow Jones Transportation Average lost 1.1 percent.

     Raw-materials stocks in declined 1.3 percent, led by International Paper Co., which fell 2.8 percent. Dow Chemical Co. and Monsanto Co. lost at least 1.3 percent as the group declined for a third day, the longest losing streak in five weeks.

     Archer-Daniels-Midland Co. led consumer staples companies lower, falling 2.8 percent. Food producers and retailers dropped, with Kroger Co., Kellogg Co. and Whole Foods Market Inc. slipping more than 1.5 percent. Thirty-four of the group’s 36 stocks declined on Monday.

     Energy producers slipped after erasing a 1 percent gain as crude oil faded, closing at a one-week low. Marathon Petroleum Corp. dropped 6.7 percent and Valero Energy Corp. sank 4.5 percent, overshadowing Exxon Mobil Corp.’s 0.7 percent climb, as well as gains of 2 percent in Devon Energy Corp. and Transocean Ltd.

     Among other shares moving, gun makers Smith & Wesson Holding Corp. and Sturm Ruger & Co. rose 6.9 percent and 8.5 percent, respectively, following the massacre at an Orlando, Florida, nightclub Sunday that left 49 people dead. Shares of gun manufacturers typically increase after a mass shooting on speculation that tougher gun-control measures may be enacted, spurring sales before any new measures take effect.

     Symantec Corp. added 5.3 percent, the most in 14 months, as it plans to purchase Blue Coat Systems Inc. for about $4.65 billion in cash, a deal that will add to its cyberdefense technology and fill a high-turnover chief executive officer position.

Have a wonderful evening everyone.

 

Be magnificent!

Economic equality is the master key to nonviolent independence.

Mahatma Gandhi

As ever,

 

Carolann

 

When something bad happens we have three choices. We can let it define us,

we can let it destroy us or we can let it strengthen us.

                                                                   -Frank Langella, 1938-    

 

 

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

Portfolio Manager &

Senior Vice-President

 

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7

Dear Friends,

Tangents:

POINTS OF PROGRESS:

GERMANY:

In a milestone for renewable, the total output of solar, wind, hydropower, and biomass in the country – the world’s fourth-largest economy – hit 90 percent of its required power on May 8^th.  That was during a Sunday morning power-consumption lull; Germany still leans on fossil fuels.  On average, renewable supply 30 percent of the country’s power. –Thinkprogress, Agora Energiewende.

UNITED STATES:

Energy-related Carbon Dioxide emissions fell in 2015 to about 12 % below 2005 levels, after rising in 2013 and in  2014, owing chiefly to changes in the electric power sector – partly from the growth in renewable sources but especially from the decreased use of coal in favor of natural gas. –Energy Information Administration.

N. CALIFORNIA/OREGON COASTS:

Starfish are staging a comeback, after a virus devastated adult populations along the northern West Coast starting in 2013.  The number of juveniles was “higher than we’d seen – as much as 300 times normal,” says Bruce Menge, a marine biologist at Oregon State University.  The high survival rate to the juvenile stage was linked in part to a spike in available food due to the absence of adult sea stars.  Researchers caution that the revival does not indicate that “sea star wasting disease” is over. –Oregon State University.

BRITIAIN:

Ina bid to combat childhood obesity, the Local Government Association, which represents more than 370 local councils, is pressing restaurants to offer water with meal service as an alternative to sugary drinks.  The provision of water as an option is required of licensed restaurants, but an LGA poll  that while 8 of 10 people usually drink tap water at home, only a third do so at restaurants.  A long-delayed childhood obesity strategy in Britain has included more controversial measures, such as a sugar tax.  –The Guardian.

WORLDWIDE:

Most shipping concerns are refusing shark-fin cargo, with 16 of the world’s top 20 shipping companies having agreed not to carry shark fins, according to WWF’s offices in Hong Kong, traditionally a transit hub for the trade.  The practice of finning typically leaves live sharks at the mercy of predators or suffocation.  The global market for shark fins saw a surge beginning in the late 1990s.  but a survey last year showed 70 % of Hong Kong residents have reduced or entirely stopped consuming shark-fin soup. –WWF-Hong Kong, The Standard (Hong Kong).

PHOTOS OF THE DAY

Britain’s Queen Elizabeth arrives for a service of thanksgiving for her 90th birthday at St Paul’s Cathedral in London on Friday. Toby Melville/Reuters

Participants dressed in ancient Japanese costumes take part in a parade at the Imperial Palace during the Sanno Festival in Tokyo on Friday.Toru Hanai/Reuters

Market Closes for June 10^th, 2016

MarketIndex	Close	Change
DowJones	17865.34	-119.85  -0.67%
S&P 500	2096.07	-19.41  -0.92%
NASDAQ	4894.547	-64.069  -1.29%
TSX	14037.54	-202.48
		-1.42%

International Markets

MarketIndex	Close	Change
NIKKEI	16601.36	-67.05
		-0.40%
HANGSENG	21042.64	-255.24
		-1.20%
SENSEX	26635.75	-127.71
		-0.48%
FTSE 100	6115.76	-116.13
		-1.86%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.123	1.182
CND.30 Year Bond	1.794	1.843
U.S.   10 Year Bond	1.6421	1.6764
U.S.30 Year Bond	2.4548	2.4762

Currencies

BOC Close	Today	Previous
Canadian $	0.78375	0.78624
US$	1.27591	1.27187
Euro Rate1 Euro=		Inverse
Canadian $	1.43618	0.69629
US$	1.12561	0.88841

Commodities

Gold	Close	Previous
London GoldFix	1275.50	1263.90
Oil	Close	Previous
WTI Crude Future	49.07	50.56

Market Commentary:

Number of the Day:
0.023%
The low on the 10-year German bund yield Friday, surpassing its all-time low of 0.025% hit on Thursday.
Tweet of the Day
Switzerland can borrow for 50 years at a lower rate than the U.S. can borrow for 1 month. Swiss 50yr yield 0.15% US 1-month yield 0.21%
— Jamie McGeever @ReutersJamie

Canada

By Inyoung Hwang

     (Bloomberg) — Canadian stocks fell a third day, sliding the most in four months, as energy producers tumbled with the price of oil and investors braced for a series of events this month that could renew turbulence in markets.

     The S&P/TSX Composite Index slid 1.4 percent to 14,037.54 at 4 p.m. in Toronto. While the benchmark touched the highest level in 10 months earlier this week, it has fallen 2.3 percent in the last three days. Trading volume today was 11 percent lower than the 30-day average.

     Global stocks also posted the steepest drop since February and bond yields slid to record lows, before next week’s Federal Reserve meeting and Britain’s referendum on European Union membership this month. Canadian shares remain more expensive relative to their U.S. peers, trading at 21.5 times earnings, about 11 percent higher than the 19.4 times valuation of the S&P 500 Index.

     Energy producers contributed the most to declines today, as all 10 industries in the Canadian equity benchmark retreated. Gran Tierra Energy Inc. and Baytex Energy Corp. lost at least 7.4 percent. Crude futures dipped below $50 a barrel in New York as a rising U.S. dollar countered declining crude stockpiles and disruptions from Canada to Nigeria.

     Transcontinental Inc., a Montreal-based commercial printer of flyers, plunged 9.9 percent after posting second-quarter profit that fell short of analysts’ estimates.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks retreated, with the S&P 500 Index falling the most in three weeks, amid caution over tepid global growth and a series of looming events with the potential to spur renewed market turbulence.

     Losses intensified in afternoon trading following fresh poll results favoring an exit in Britain’s European Union referendum, though a rebound in the final minutes pared declines. Energy producers led the slide, capping their worst session in five weeks. Banks sold off for a second day as Treasury yields continued to drop, with Citigroup Inc. and Bank of America Corp. sinking more than 2.4 percent. A measure of equity market volatility posted the biggest jump in five months.

     The S&P 500 fell 0.9 percent to 2,096.07 at 4 p.m. in New York, slipping below 2,100 for the first time in a week, a level where other rallies during the past year have faded. The Dow Jones Industrial Average dropped 119.85 points, or 0.7 percent, to 17,865.34. The Nasdaq Composite Index lost 1.3 percent, the largest decline in two months. About 6.8 billion shares traded hands on U.S. exchanges, 3 percent below the three-month average.

     “With the macroeconomic data mixed and the British referendum, the market continues to struggle with the overall general macro environment not just in the U.S. but globally,” Nadia Lovell, U.S. equity strategist at J.P. Morgan Private Bank in New York, said by phone. “And from a valuations standpoint, there is very little to no earnings growth expected. The market has really rallied from February lows, so people will be in a protect-my-profit mode as no one forgot about how volatile markets were last summer.”

     The CBOE Volatility Index surged 16 percent to 17.03, the biggest climb since January to a three-month high. The measure of market turbulence known as the VIX also marked its largest weekly advance in five months, up 26 percent. A flight from risk was apparent as 10-Year U.S. Treasury yields fell for a fourth day to a three-year low.

     Friday’s retreat wiped out the S&P 500’s weekly gain, leaving the index 0.2 percent lower for the period after reaching on Wednesday its highest in nearly 11 months and coming within 0.6 percent of a record. It signals a shift in sentiment as investors reevaluate a rally that regained momentum in the last three weeks and now faces simmering concerns over the health of the economy, lackluster corporate profits and the effectiveness of central-bank stimulus.

     The so-called FANG stocks were the biggest drivers of the Nasdaq Composite’s worst decline since April 7, with Facebook Inc., Amazon.com Inc. and Google parent Alphabet Inc. losing more than 1.3 percent. Netflix Inc. sank 3.4 percent.

     Optimism that borrowing costs will remain lower for longer amid modest global growth is waning ahead of a string events in the next two weeks. The Federal Reserve and Bank of Japan meetings next week, followed by the vote on Britain’s EU membership, have the potential to roil markets.

     Remarks on Monday by Federal Reserve Chair Janet Yellen had soothed investors following a disappointing jobs report, as she said the U.S. economy is making progress and indicated policy makers won’t rush to raise interest rates. The employment report prompted traders to cut back the probability for a June rate increase to zero, and only 18 percent in July. At least even odds for a raise fluctuated today between December and January.

     A report today showed confidence among American consumers in June eased from an almost one-year high as favorable views about personal finances were offset by concerns about the economy’s prospects.

     A rebound of as much as 16 percent from the February low brought the valuation of S&P 500 companies to about 17 times estimated earnings, almost 10 percent more than the multiple for MSCI All-Country World Index members. Meanwhile, the U.S. benchmark’s recent approach toward the all-time high has been grinding. Before today, it failed to move more than 0.5 percent up or down for 10 consecutive sessions, the longest such streak since September 2014.

     “The market is not really supported by earnings growth and the relative valuation to other markets makes the U.S. market rather expensive,” said Christian Zogg, head of equity and fixed income at LLB Asset Management in Vaduz, Liechtenstein. “We are at the upper boundary of a trading range, which will not be broken through so quickly.”

     In Friday’s trading, eight of the S&P 500’s 10 main industries declined, with half the groups losing at least 1 percent. Phone companies rallied for a second day amid investors’ preference for more defensive stocks, while consumer staples were little changed.

     Lenders posted the worst two days in five weeks. Wells Fargo & Co. and JPMorgan Chase & Co. slipped at least 1.4 percent. Along with banks, insurers fell for a second day to weigh on financials. American International Group Inc., Prudential Financial Inc. and MetLife Inc. all lost more than 1.5 percent. It’s the first two-day slide for the benchmark’s insurers since May 4.                       

     Energy producers dropped for a third day, sinking 2 percent amid the longest losing streak in two months. West Texas Intermediate crude fell 3 percent, below $50 a barrel, as the dollar gained for a second session. ConocoPhillips and Apache Corp. lost more than 4.1 percent, the steepest for both in more than two months.

     The health-care group was dragged lower by the riskiest part of the industry — biotechnology companies. Celgene Corp. slumped 3 percent, the most in a month, while Gilead Sciences Inc. and Biogen Inc. lost more than 1.5 percent. The Nasdaq Biotechnology Index dropped 2.2 percent.

     Phone companies, the group with the highest dividend yield in the S&P 500, rose 0.8 percent. Verizon Communications Inc. gained 1.4 percent to a two-month high, and AT&T Inc. increased to the highest since May 2008.

     Among companies moving on corporate news, H&R Block Inc. soared almost 13 percent, the best gain in seven years, after reporting better-than-estimated revenue and boosting its quarterly dividend by 10 percent.                        

     Axiall Corp. surged 26 percent after Westlake Chemical Corp. agreed to acquire the vinyl maker for about $2.4 billion to become the second largest North American producer of vinyl products used in pipe, siding and decks. Westlake added 3 percent.

     Mattress Firm Holding Corp. lost 12 percent after cutting its annual forecast, renewing concerns about a slowdown at the bedding provider. Tempur Sealy International Inc. declined 3 percent.

     Urban Outfitters Inc. fell for a sixth day, tumbling 5.8 percent after a warning on sales this quarter renewed concerns about a slowdown at the retail chain. Other retailers were also weak, with Nordstrom Inc. and Kohl’s Corp. sliding 1.7 percent.

 

Have a wonderful weekend everyone.

 

Be magnificent!

That economics is untrue which ignores or disregards moral values.

The extension of the law of nonviolence in the domain of economics means nothing less

than the introduction of moral values as a factor to be considered with regulating international commerce.

Mahatma Gandhi

As ever,

 

Carolann

 

How old would you be if you didn’t know how old you are?

                                           -Satchel Paige, 1906-1982

 

 

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:

ARE YOU BALANCED?

A growing number of doctors, physical therapist and health experts contend that balance is an essential element of fitness – every bit as important as aerobic activity and strength training,  Carolyn Butler writes in Diabetes Forecast magazine.  She cites a simple test of balance suggested by Dr. Marilyn Moffat of New York University:  Placing yourself next to a stable piece of furniture (just in case), stand straight, wearing flat shoes, with your arms folded across your chest.  Raise and bend one leg, start a stopwatch and close your eyes.  Stop timing if your arms uncross, or you tilt sideways or move the leg you are standing on.  The average times:

20 to 49 years old: 24 to 28 seconds on each leg.
50 to 59: 21 seconds.
60 to 69: 10 seconds.
70 to 79: four seconds.
80 and older: most cannot do it (but some can).

The cartoon, Donald Duck, was born on this day in 1934.

Also on this day in…

1534 – Jacques Cartier sails into the river he names the St. Lawrence, on the Saint’s feast day.

1775 – Guy Carleton proclaims martial law; calls out troops to meet American invasion.

1973 – Ron Turcotte rides Secretariat to victory in 105th Belmont Stakes in record time.

PHOTOS OF THE DAY

An aerial performance featuring 100 illuminated drones lands on a barge in front the Sydney Harbor Bridge and Opera House during the Vivid Sydney light festival in Australia on Thursday. Jason Reed/Reuters

A surfer rides on an artificial wave in front of the French embassy (l.) in downtown Vienna on Thursday. The so-called City Wave is open until the end of September. Ronald Zak/AP

Poppies bloom in front of steep vineyards near Escherndorf, southern Germany, on Thursday. Karl-Josef Hildenbrand/dpa/AP

Market Closes for June 9^th, 2016

Market Index	Close	Change
Dow Jones	17895.19	-19.86   -0.11%
S&P 500	2115.48	-3.64   -0.17%
NASDAQ	4958.617	-16.025   -0.32%
TSX	14240.02	-73.08
		-0.51%

International Markets

Market Index	Close	Change
NIKKEI	16668.41	-162.51
		-0.97%
HANG SENG	21297.88	-30.36
		-0.14%
SENSEX	26763.46	-257.20
		-0.95%
FTSE 100	6231.89	-69.63
		-1.10%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.182	1.200
CND. 30 Year Bond	1.843	1.867
U.S.    10 Year Bond	1.6764	1.6988
U.S. 30 Year Bond	2.4762	2.5067

Currencies

BOC Close	Today	Previous
Canadian $	0.78624	0.78776
US $	1.27187	1.26941
Euro Rate 1 Euro=		Inverse
Canadian $	1.43947	0.69470
US $	1.13178	0.88357

Commodities

Gold	Close	Previous
London Gold Fix	1263.90	1263.00
Oil	Close	Previous
WTI Crude Future	50.56	51.23

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a second day, as energy producers retreated with the price of oil amid uncertainty over the course of central bank policy and global growth.

     The S&P/TSX Composite Index fell 0.5 percent to 14,240.02 at 4 p.m. in Toronto, after touching the highest level in 10 months earlier this week. The index is up 20 percent from its Jan. 20 low, after climbing out of a bear market on Friday. Trading volume today was about 13 percent below the 30-day average.

     Global stocks declined on Thursday, with the MSCI All- Country World Index retreating for the first time in six days. U.S. jobless claims unexpectedly fell last week, while the outlook for global growth remains clouded with uncertainty over when exactly the Federal Reserve will raise rates, the coming Brexit vote and potential volatility stemming from the U.S. election.

     Energy producers led declines, as eight of 10 industries in the Canadian equity benchmark retreated. Crescent Point Energy Corp. and Encana Corp. lost at least 1.5 percent. Crude futures dipped below $51 a barrel in New York. Oil has recovered more than 90 percent from a 12-year low in February, driving a resurgence in energy stocks this year.

     Performance Sports Group Ltd. dropped 8.8 percent, for the steepest decline in almost two months. The sports equipment maker is now forecasting an adjusted earnings loss for fiscal 2016, after previously predicting profit of 12 to 14 cents a share.

     BRP Inc. jumped 7.4 percent to the highest level this year. The Ski-Doo snowmobile maker boosted its profit forecast for the year to a range from C$1.79 to C$1.89, after previously seeing between C$1.75 and C$1.85.

     Canadian equities are up 9.5 percent this year, within striking distance of beating New Zealand’s S&P/NZX 50 Index as the top performer in 2016 among 24 developed nations. It’s a stark contrast to 2015 when the S&P/TSX tumbled by 11 percent as one of the world’s worst equity markets. Raw-materials producers have boosted the broader rally this year, soaring 46 percent for the best year-to-date performance in three decades.

    Canadian shares remain more expensive relative to their U.S. peers. The S&P/TSX now trades at 21.8 times earnings, about 11 percent higher than the 19.6 times valuation of the S&P 500 Index.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks edged lower, with the S&P 500 Index slipping from a 10-month high, as investors evaluated the gauge’s run toward a record amid lingering concerns about the impact of lackluster global growth.

     Equities staged an afternoon rebound as raw-material producers and banks trimmed losses, while defensive shares including utilities and phone companies rallied to offset those declines. Lenders and commodity shares closed above their worst levels, even as Treasury yields fell to the lowest since February and the dollar rebounded. Gains in Apple Inc. and Johnson & Johnson’s 1 percent climb to a record also contributed to the late-day recovery.

     The S&P 500 retreated 0.2 percent to 2,115.48 at 4 p.m. in New York, after losing as much as 0.5 percent. The gauge closed closed 0.7 percent from a record. The Dow Jones Industrial Average lost 19.86 points, or 0.1 percent, to 17,985.19. The Nasdaq Composite Index declined 0.3 percent. About 6.1 billion shares traded hands on U.S. exchanges, 13 percent below the three-month average.

     “With the market being priced where it’s at, there’s not a lot of room for air because valuations are so high,” said Jim Davis, regional investment manager at the Private Client Reserve of US Bank, which oversees $128 billion. “I would not be surprised to see it back off a little more in the next week. The market has to navigate some choppy waters between now and mid- July, with the Fed next week and the Brexit vote the following.”

     Crude oil dropped for the first time in four days as the dollar bounced from a one-month low, weighing on energy producers. Raw-material and energy shares have paced equity gains this week amid the currency’s post-payrolls selloff, and the two groups have been pillars in a rebound that’s lifted the S&P 500 more than 15 percent from an almost two-year low in February.

     Optimism that low rates and modest growth are a perfect recipe for stock gains cooled before of a series of events that could set a less bullish tone in financial markets. The looming Federal Reserve meeting, followed by the Brexit vote and U.S. political conventions have the potential to roil markets, and with stocks at multimonth highs, there’s diminished incentive to push prices further.

     Word that billionaire investor George Soros recently oversaw a series of big, bearish investments is also contributing to the tempered mood. A person familiar with the matter said Soros has become more involved in trading at his family office, concerned about the outlook for the global economy and the risk that large market shifts may be at hand.

     A stock rally picked up pace in the past few weeks after losing momentum following a four-month high on April 20. The S&P 500 declined Thursday after three days of gains, the longest in a month, and had climbed in eight of the prior 11 sessions. Still, the index has struggled to hold onto advances beyond the 2,100 level in prior rallies during the past year.                         

     The benchmark has failed to move more than 0.5 percent up or down for 10 consecutive sessions, the longest such streak since September 2014. That’s come amid lighter-than-average volume. Through Thursday, the period of tepid gains and declines saw daily trading average 6.5 billion shares, 12 percent lower than the one-year average and almost 30 percent below the average during a six-week rout that started the year.

     While equities fell last Friday after a disappointing jobs report, support this week has come from Federal Reserve Chair Janet Yellen’s remarks that the U.S. economy is making progress and indications that policy makers won’t rush to raise interest rates. Traders have cut back their bets for a Fed rate increase, now pricing in no chance of a boost in June and only 20 percent probability in July. December is the first month with at least even odds of a rate increase.

     Bolstering Yellen’s belief that the economy will continue to improve, a report today showed first-time jobless claims unexpectedly fell last week and the number of Americans already receiving benefits tumbled to an almost 16-year low, consistent with a healthy labor market.

     “The S&P 500 has had a remarkably steady run over the last three weeks in particular,” said Michael Ingram, a market strategist at BGC Partners in London. “Still, the global economy is not in good shape. And while the last payroll report may be dismissed as an aberration, confidence in the U.S. recovery has clearly been shaken.”

     The CBOE Volatility Index rose 4 percent to 14.64, a two- week high. The measure of market turbulence known as the VIX is headed toward a second straight weekly climb and the fourth in the last five.

     In Thursday’s trading, seven of the S&P 500’s 10 main industries fell. Financial and raw-materials shares lost more than 0.6 percent, trimming early declines of at least 1.1 percent. Utilities rose the most, followed by phone companies and consumer staples, which were buoyed by J.M. Smucker Co.’s 7.9 percent rally to a record. The company’s quarterly results topped analysts’ estimates, helped by pet food and Dunkin’ Donuts-branded coffee pods.

     Banks in the benchmark were the biggest drag on financial stocks as the group alternated between daily gains and losses for the sixth session. Lenders fell to a two-week low, with KeyCorp and Comerica Inc. among the biggest decliners, losing more than 1.9 percent. Elsewhere in financials, asset managers Legg Mason Inc. and Affiliated Managers Group Inc. slid at least 2.5 percent.

     Raw-materials producers fell from an almost 11-month high, halting the group’s longest winning streak since October. Freeport-McMoRan Inc. slid 5.9 percent, while fertilizer makers CF Industries Holdings Inc. and Mosaic Co. dropped 4.2 percent and 1.8 percent, respectively.

     Utilities advanced 0.9 percent, extending an all-time high as falling Treasury yields made the group’s relatively generous dividend payout more attractive. Ameren Corporation added 2.4 percent while Consolidated Edison Inc. and PG&E Corp. gained 1.5 percent. Utilities have the best year-to-date performance among the S&P 500’s main industries, rising 16 percent.

     While most of the benchmark’s energy companies retreated, some natural gas producers rallied to help trim the group’s losses as the commodity surged to a nine-month high after a smaller-than-estimated supply gain signaled production declines. Cabot Oil & Gas Corp., Southwestern Energy Co. and Range Resources Corp. all gained at least 3.4 percent.

     Among shares moving on corporate news, Restoration Hardware Holdings Inc. tumbled 21 percent to an all-time low after the upscale furniture chain posted a surprise loss and cut its annual forecast.

 

Have a wonderful evening everyone.

 

Be magnificent!

Non-possession is allied to non-stealing.

Mahatma Gandhi

As ever,

 

Carolann

 

Say oh wise man how you have come to such knowledge?  Because I was never

ashamed to confess my ignorance and ask others.

                                                 -Johann Gottfried Von Herder, 1744-1803

 

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:

JUNE:

That wonderful garden raconteur, Canon Ellacombe, always full of sound advice and country common sense, must have been enjoying a good lunch with a bowl of scented roses on his dining-table on the day in June 1871 when he wrote:  “Is there any other month in the year that can show such a delightful triplet as we have now – roses, strawberries and green peas?”  We all have our own June specialty without which we would feel something was missing.  My broad beans have been in advance of the peas this year and thanks to the Mediterranean weather the early potatoes and strawberries were a treat before May was out.  As for roses, the first sweetly-scented blooms have been Souvenir de la Malmaison and Zéphirine Drouhin.  This is the season when it is most difficult to go away even for a night – there is so much to be done at home.  But when we do manage to get away there are always rewards.  Driving from home through to the eastern counties in late May it seemed as though England was a land of white lilacs and pink and white May trees; every front garden and hedgerow were heavy with blossom.  The fields of oil-seed rape glowed like brightest sunshine.  At home I wake to the cuckoo, the milking machine or a particularly noisy aeroplane which sounds as though it is coming right into the house most mornings at 4 a.m.  When we were staying in Dorset I thought I was dreaming when peacocks calling to each other disturbed my sleep.  I remembered Ruskin’s thought “that the most beautiful things in the world are the most useless; peacocks and lilies for instant.”  I don’t necessarily agree with the sentiment but so far have managed to stand out against the introduction to our garden – they may be beautiful but are also destructive.  Lilies are a different matter. –from A COUNTRYWOMAN’S NOTES, Rosemary Verey.

PHOTOS OF THE DAY

Sean D. Tucker flies in the two-seat Oracle Extra airplane over downtown Chicago on Wednesday. Tucker will perform before the start of of the America’s Cup World Series sailing race on Saturday and Sunday. Kiichiro Sato/AP

Emergency workers look at a large sinkhole in Ottawa, Ontario, Canada, on Wednesday. Chris Wattie/Reuters

Market Closes for June 8^th, 2016

Market Index	Close	Change
Dow Jones	18005.05	+66.77   +0.37%
S&P 500	2118.72	+6.59   +0.31%
NASDAQ	4974.641	+12.887   +0.26%
TSX	14311.33	-54.28
		-0.38%

International Markets

Market Index	Close	Change
NIKKEI	16830.92	+155.47
		+0.93%
HANG SENG	21297.88	-30.36
		-0.14%
SENSEX	27020.66	+10.99
		+0.04%
FTSE 100	6301.52	+16.99
		+0.27%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.200	1.219
CND. 30 Year Bond	1.867	1.877
U.S.    10 Year Bond	1.6988	1.7143
U.S. 30 Year Bond	2.5067	2.5366

Currencies

BOC Close	Today	Previous
Canadian $	0.78776	0.78350
US $	1.26941	1.27633
Euro Rate 1 Euro=		Inverse
Canadian $	1.44666	0.69125
US $	1.13962	0.87748

Commodities

Gold	Close	Previous
London Gold Fix	1263.00	1241.00
Oil	Close	Previous
WTI Crude Future	51.23	50.36

Market Commentary:

Tweet of the Day

The Bank of England was founded 322 years ago. Its benchmark debt has never yielded as little as on June 7, 2016.
— Dennis K. Berman @dkberman

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, after a four-day advance that propelled the S&P/TSX Composite Index into a bull market, as falling health-care and energy companies overshadowed gains in raw-material producers.

     The S&P/TSX fell 0.4 percent to 14,313.10 at 4 p.m. in Toronto, reversing an earlier gain of as much as 0.6 percent, briefly eclipsing New Zealand as the world’s top-performing developed equity market this year. The index is up 21 percent from its Jan. 20 low, trading near the highest level in 10 months after climbing out of a bear market on Friday. Trading volume today was about 16 percent higher than the 30-day average.

     “When you look at the fundamentals, there are very few screaming opportunities so you get tweaks,” said Kevin Headland, senior investment strategist at Manulife Investments in Toronto. Manulife’s asset management unit manages about $325 billion. “The rally year-to-date has been all commodities. For Canada, I don’t think we’ll double returns from here but if we see some positive news out of oil prices, there might be more room to run.”

     Canadian equities are neck-and-neck with New Zealand’s S&P/NZX 50 Index as the top performers in 2016 among 24 developed nations with about a 10 percent advance each. This is a stark contrast to 2015 when the S&P/TSX tumbled by 11 percent as one of the world’s worst equity markets. Raw-materials producers have boosted the broader rally this year, soaring 46 percent for the best year-to-date performance in three decades.

     Commodities prices returned to a bull market this week, ending a five-year rout. Raw-material prices and resource-rich emerging markets broadly benefit when the dollar weakens, with prices denominated in the currency. The Bloomberg Dollar Index is trading at the lowest level in a month after May U.S. jobs data disappointed and Federal Reserve Chair Janet Yellen’s recent comments suggest a rate increase this summer is less likely.

     The recent rally has magnified Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.9 times earnings, about 12 percent higher than the 19.6 times valuation of the S&P 500 Index.

     Valeant Pharmaceuticals International Inc. dropped a fifth day and was the biggest drag on Canadian health-care stocks. The embattled drugmaker slashed earnings and revenue forecasts Tuesday after posting delayed first-quarter earnings short of analysts’ estimates.

     Concordia Healthcare Corp. lost 3.5 percent. The stock has plunged more than 23 percent over five days after potential acquirers Blackstone Group and Carlyle Group walked away from the drugmaker, according to people familiar with the matter. The company said June 2 it is continuing to pursue strategic alternatives.

     Suncor Energy Inc. dropped 2.8 percent for the steepest drop in a month. The Calgary-based oil-sands producer said it would sell about C$2.5 billion ($2 billion) in shares to cut debt and help fund acquisitions.

     The S&P/TSX Energy Index fell today, even as crude extended gains to settle above $51 a barrel in New York. Industry data showed U.S. crude supplies declined, reducing a glut.

     Raw-materials producers jumped 1.4 percent. Barrick Gold Corp. and Kinross Gold Corp. climbed more than 1.5 percent. Gold rose, pushing its advance for the year to 19 percent in the best start since 1979 as the dollar weakened, while silver reached the highest level since May 17.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks climbed, with the S&P 500 Index edging closer to a record, bolstered by speculation borrowing costs will remain lower for longer amid moderate growth.

     Companies that benefit from a sagging dollar were the strongest performers, with raw-material and industrial companies leading gains. Caterpillar Inc. increased 1.7 percent, extending its longest winning streak in two months, and copper miner Freeport-McMoRan Inc. added 3 percent. Energy producers erased an early rally, even as oil climbed to a 10-month high.

     The S&P 500 rose 0.3 percent to 2,119.12 at 4 p.m. in New York, the highest since July 21, 2015 and 0.6 percent from a record. The Dow Jones Industrial Average added 66.77 points, or 0.4 percent, to 18,005.05, a six-week high. The Nasdaq Composite Index increased 0.3 percent. About 6.5 billion shares traded hands on U.S. exchanges, 8 percent below the three-month average.

     “No matter what you throw at this market, it keeps wanting to go higher,” said Walter Todd, who oversees about $1.1 billion as chief investment officer for Greenwood Capital Associates LLC in South Carolina. “Sentiment, as has been well documented, is pretty bad and the market tends to inflict the most pain on the most people. And the most people it seems are underweight the market or out of the market.”

     Federal Reserve Chair Janet Yellen’s remarks this week that the U.S. economy is making progress and indications that policy makers won’t prematurely raise interest rates have helped support stocks. Traders have cut back their bets for a Fed rate increase, now pricing in no chance of a boost in June, with the probability for July down to 18 percent from 53 percent a week ago.

     Energy producers in the benchmark index slipped from the highest level since November, after their strongest back-to-back gains in three months. Advances in commodity-related shares have helped drive the S&P 500’s 16 percent rebound from a 22-month low in February as crude recovered from a 12-year nadir. Raw- material companies climbed for a sixth day, the longest since October, as a gauge on the dollar extended declines to a one- month low.

     The rally has been reinvigorated after losing momentum following the S&P 500’s four-month high on April 20. The index has climbed in eight of 11 sessions, racking up nearly all of this year’s 3.7 percent gain in the last two weeks. About 70 percent of stocks on the New York Stock Exchange closed Tuesday above their average prices during the past 200 days, the most since July 2014.                      

     Meanwhile, the main U.S. equity benchmark’s recent climb has been grinding, with the S&P 500 moving no more than 0.5 percent in either direction for a ninth straight day, the longest stretch since 2014.

     The weakest monthly job gains since 2010 were a source of hesitation for investors last week, prompting the only setback for equities in the past six sessions. Further indications on the health of the economy are sparse this week, with data on U.S. wholesale inventories and consumer sentiment scheduled for tomorrow and Friday, respectively. A report from China today indicated exports are stabilizing, while the World Bank cut its 2016 global growth forecast.

     In Wednesday’s trading, S&P 500 industrials, raw-materials, utilities and consumer staples shares rose the most. Phone companies fell for the second time in three days, and energy stocks retreated. A Goldman Sachs Group Inc. basket of the most shorted shares in the Russell 3000 Index climbed for the eighth time in nine sessions and headed toward a fourth weekly gain.

     The CBOE Volatility Index rose 0.2 percent to 14.08. The measure of market turbulence known as the VIX was on pace for a second straight weekly climb and a fourth in the last five.

     Railroads were standouts in the industrial group, with Union Pacific Corp. rallying for a fifth day, the longest in eight months, while Norfolk Southern Corp. and CSX Corp. gained more than 2 percent. In remarks at a Deutsche Bank AG conference, CSX’s chief financial officer said he sees a “positive pricing environment,” and strength in the U.S. consumer.                      

     Raw-materials in the benchmark returned to the highest in almost 11 months, after first reaching the level in late April. Steel company Nucor Corp. gained 2.8 percent to an 18-month high, and PPG Industries Inc. increased 3 percent, the best since March 1.

     Health-care companies rebounded, led by UnitedHealth Group Inc.’s 2.5 percent rally, its strongest since April 20. The shares climbed to a record after the company raised its dividend by 25 percent. Centene Corp. and Cigna Corp. rose more than 1.7 percent, while hospital operator HCA Holdings Inc. advanced 2.2 percent.

     Valero Energy Corp. and Devon Energy Corp. fell at least 2.2 percent to weigh on energy shares. The group wiped out an early 1 percent rally, despite West Texas Intermediate crude futures rising 1.7 percent to settled above $51 a barrel. The sector also produced the S&P 500’s best and worst performers today, with Chesapeake Energy Corp. rising 6.4 percent and Southwestern Energy Co. sliding 7.2 percent.

     “There’s definitely reason for the market to take a breather in conjunction with the notion that we’re near all-time highs,” said Frank Cappelleri, executive director at Instinet LLC. “Treading water at these levels to be honest would be pretty constructive.”

Have a wonderful evening everyone.

 

Be magnificent!

It is this desire to express himself that leads him to search for riches and power.

But he must understand that to accumulate material wealth is not to find this fulfillment.

What brings him back to himself is the interior light, and not exterior objects.

Rabindranath Tagore

 

As ever,

 

Carolann

 

There is just one life for each of us: our own.

                        -Euripides, 480 BC-406 BC

 

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 June 7, 1840, Edward FitzGerald wrote this letter to Frederick Tennyson:

I read [Bishop Gilbert, d. 1715] Burnet’s History [of his Own Times] – Expede Herculem [We recognize Hercules from his own foot].  Well, say as you will, there is not, and never was, such a country as Old England – never were there such a gentry as the English.  They will be the distinguishing mark and glory of England in history, as the arts were of Greece, and war  of Rome.  I am sure no travel would carry me to any land so beautiful, as the good sense, justice, and liberality of my good countrymen make this.  And I cling the closer to it, because I feel that we are going down the hill, and shall perhaps live ourselves to talk of all this independence as a thing that has been.  To none of which you assent perhaps.  At all events, my paper is done, and it is time to have done with this solemn letter.  I can see you sitting at a window that looks out on the Bay of Naples, and Vesuvius with a faint smoke in the distance: a half-naked man under you cutting up watermelons, etc.

PHOTOS OF THE DAY

A bumblebee lands on a flower in Erfurt, central Germany, on Tuesday. Jens Meyer/AP

An employee of Germany’s biggest retailer, Metro AG, reacts to HI-4, a life-size, humanoid robot, at Metro’s headquarters in Duesseldorf, Germany, on Tuesday. The android, modelled after its Japanese inventor Hiroshi Ishiguro, a professor at Osaka University, is made of a metal skeleton, plastic skull and silicon skin. It can be used as a human substitute for interaction via a tele-operated control system. Wolfgang Rattay/Reuters

Market Closes for June 7^th, 2016

Market Index	Close	Change
Dow Jones	17938.28	+17.95   +0.10%
S&P 500	2112.08	+2.67   +0.13%
NASDAQ	4961.754	-6.959   -0.14%
TSX	14359.88	+83.72
		+0.59%

International Markets

Market Index	Close	Change
NIKKEI	16675.45	+95.42
		+0.58%
HANG SENG	21328.24	+298.02
		+1.42%
SENSEX	27009.67	+232.22
		+0.87%
FTSE 100	6284.53	+11.13
		+0.18%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.219	1.239
CND. 30 Year Bond	1.877	1.884
U.S.    10 Year Bond	1.7143	1.7332
U.S. 30 Year Bond	2.5366	2.5517

Currencies

BOC Close	Today	Previous
Canadian $	0.78350	0.77976
US $	1.27633	1.28245
Euro Rate 1 Euro=		Inverse
Canadian $	1.44879	0.69023
US $	1.13548	0.88068

Commodities

Gold	Close	Previous
London Gold Fix	1241.00	1244.00
Oil	Close	Previous
WTI Crude Future	50.36	49.69

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a fourth day, extending a rally to near 10-month highs, as energy producers advanced with crude to offset a slump in Valeant Pharmaceuticals International Inc.

     The S&P/TSX Composite Index added 0.6 percent to 14,365.61 at 4 p.m. in Toronto, its highest close since Aug. 11. The index is up 21 percent from its Jan. 20 low, after climbing out of a bear market on Friday, amid its longest winning streak in almost eight weeks. Trading volume today was about 2.6 percent higher than the 30-day average.

     The recent rally has added to Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.9 times earnings, about 12 percent higher than the 19.6 times valuation of the S&P 500 Index.

     Canadian equities have been one of the top-performing markets this year, second only to New Zealand among developed nations with a 10 percent advance, a sharp rebound after falling the most in 2015 since the 2008 financial crisis. Raw-materials producers have led the broader rally, soaring 43 percent this year for the best year-to-date performance since 1993.

     Global stocks advanced for a fourth session, with the S&P 500 rising to a 10-month high. The dollar weakened to the lowest in a month after Federal Reserve Chair Janet Yellen said Monday she expects to raise interest rates gradually and held off from specifying any timeframe. Traders are pricing in a 20 percent chance for an increase in July, down from better than 50 percent odds before the U.S. jobs report last week, according to data compiled by Bloomberg.

     In Canada, Baytex Energy Corp. and MEG Energy Corp. climbed more than 12 percent to lead a 2.1 percent gain in energy producers. Crude extended a climb with futures settling above $50 a barrel in New York for the first time in more than 10 months. U.S. government data Wednesday is forecast to show stockpiles dropped for a third week, helping to ease the oil supply glut that’s roiled prices for the past year.

     Penn West Petroleum Ltd. soared 13 percent for a third day of gains. The oil and gas producer has jumped 41 percent in that time, after Bloomberg first reported on Friday Penn West hired Royal Bank of Canada to sell its Dodsland Viking light oil assets in Saskatchewan, according to people familiar with the deal.

     Cott Corp. added 10 percent, to the highest level in more than 10 years, after the water and pop beverage bottler agreed to buy European home and office services business Eden Springs in a 470 million euro ($534 million) deal.

     Valeant sank 15 percent to the lowest level since January 2011, after the drugmaker’s delayed first-quarter earnings were short of analysts’ expectations, and the company slashed forecasts. Earnings for 2016 are now expected to be $6.60 to $7 a share, excluding some items, down from March estimates of $8.50 to $9.50. Revenue in two key categories, dermatology and prescription ophthalmology, slumped by 43 percent and 30 percent, respectively.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks advanced, even after the S&P 500 Index pared much of its gain in the final hour of trading, as rallies in energy producers and airline operators offset slumping health-care and bank shares.

     The benchmark reached a level that was 0.5 percent below its all-time high on Tuesday. Chevron Corp. and Exxon Mobil Corp. added at least 1.5 percent. The Bloomberg U.S. Airlines Index rose the most in two months after JPMorgan Chase & Co. said JetBlue Airways Corp. raised its domestic fares by $3 each way, spurring other flight operators to match in competing markets. Health-care shares led losses as Biogen Inc. slumped 13 percent after an experimental drug for multiple sclerosis failed in a mid-stage trial.

     The S&P 500 added 0.1 percent to 2,112.13 at 4 p.m. in New York, after climbing as much as 0.5 percent. It was still the highest close since July, while volume on U.S. exchanges was 11 percent below the three-month average. The Dow Jones Industrial Average added 17.95 points, or 0.1 percent, to 17,938.28 today, after briefly surpassing the 18,000 level for the first time since April.

     “If you look at U.S. stocks on a global perspective, to be touching or near that high is pretty phenomenal,” Gina Martin Adams, an equity strategist at Wells Fargo Securities LLC, said in a Bloomberg TV interview. “Yet when we look forward, we’re struggling to find that next source of growth. Maybe the drag has passed, but where is the growth going to come from? The result of that is this sideways trading market with very limited risk tolerance on the part of the broad investment community.”

     Stocks rose yesterday after Federal Reserve Chair Janet Yellen said the economy is making progress despite signs of slower jobs growth, making investors more comfortable with the prospects for gradual rate increases. That’s helped fuel gains in commodity prices. Traders have also cut back their bets for a Fed rate increase after last week’s disappointing jobs report. They are now pricing in almost no chance of a boost in June, and the probability for July has dropped to about 20 percent from 53 percent a week ago.

     Energy stocks posted the biggest gains, rising to the highest level since November, as oil advanced before U.S. government data forecast to show crude stockpiles dropped for a third week. All but three stocks in the S&P 500 Energy Index increased.

     The S&P Supercomposite Homebuilding Index also jumped after PulteGroup Inc. said Elliott Management Corp. has taken a stake in the homebuilder. PulteGroup climbed 4.1 percent, while Lennar Corp. and Toll Brothers Inc. also rose.

     LDR Holding Corp. surged 64 percent. Zimmer Biomet Holdings Inc. agreed to buy the medical device company for about $1 billion in cash to add surgical technologies for the treatment of patients with spine disorders. Zimmer slid 1.7 percent.

     Sarepta Therapeutics Inc. soared 23 percent on speculation its experimental muscular dystrophy treatment may have a chance of approval, after U.S. regulators asked the drugmaker for more data.

     United Natural Foods Inc. gained 14 percent after boosting its annual earnings and sales forecasts.

     Meanwhile, Alexion Pharmaceuticals Inc. tumbled 11 percent after its drug for a rare neuromuscular disease didn’t meet its primary goal in a final-stage trial.

     Bank stocks sank with Goldman Sachs Group Inc. posting among the biggest declines in the Dow.

     LendingClub Corp. slumped 7.4 percent after postponing its annual meeting, which was scheduled for Tuesday. The arranger of so-called peer-to-peer loans has been seeking to restore investor confidence after the surprise departure last month of its founder.

 

Have a wonderful evening everyone.

 

Be magnificent!

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

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

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

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

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

Mahatma Gandhi

As ever,
 

Carolann

 

It is always the simple that produces the marvelous.

                                   -Amelia Barr, 1831-1919

 

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 June 6, 1944, the D-Day invasion of Europe took place during World War II as Allied forces stormed the beaches of Normandy, France.

1944 – D-DAY: 14,000 Canadian soldiers join in the Normandy landing on Juno Beach.

PHOTOS OF THE DAY

French members of WWII veteran association Les Fleurs de la Memoire, Flowers for Memory, pay their respects to WWII soldiers buried in the Colleville American military cemetery, in Colleville sur Mer, western France, on Monday on the 72nd anniversary of the D-Day landing. D-Day marked the start of a Europe invasion, as many thousands of Allied troops began landing on the beaches of Normandy in northern France in 1944 to start a major offensive against the Nazis. Francois Mori/AP

A specimen of the newly-discovered Australian Peacock spider, Maratus Bubo, shows off his colorful abdomen in this undated picture from Australia released Monday. Jurgen Otto/Handout/Reuters

Market Closes for June 6 , 2016

Market Index	Close	Change
Dow Jones	17920.33	+113.27   +0.64%
S&P 500	2110.13	+82.98   +0.40%
NASDAQ	4968.715	+26.198     +%0.53
TSX	14280.77	+53.99
		+0.38%

International Markets

Market Index	Close	Change
NIKKEI	16580.03	-62.20
		-0.37%
HANG SENG	21030.22	+82.98
		+0.40%
SENSEX	26777.45	-65.58 -0.24
FTSE 100	6273.40	+63.77
		+1.03%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.239	1.183
CND. 30 Year Bond	1.884	1.846
U.S.    10 Year Bond	1.7332	1.7004
U.S. 30 Year Bond	2.5517	2.5141

Currencies

BOC Close	Today	Previous
Canadian $	0.77976	0.77286
US $	1.28245	1.29389
Euro Rate 1 Euro=		Inverse
Canadian $	1.45664	0.68651
US $	1.13588	0.88037

Commodities

Gold	Close	Previous
London Gold Fix	1244.00	1240.50
Oil	Close	Previous
WTI Crude Future	49.69	48.48

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Fresh off capping a four-month rally that returned them to a bull market, Canadian stocks advanced a third day as commodities rose after Federal Reserve Chair Janet Yellen said interest rates will rise gradually without specifying the precise timing.

     The S&P/TSX Composite Index rose 0.4 percent to 14,276.16 at 4 p.m. in Toronto, the highest level since August, rebounding into the close after briefly paring gains in afternoon trading. The index is up 21 percent from its Jan. 20 low, after climbing out of a bear market on Friday. Trading volume today was 3.2 percent less than the 30-day average.

     The recent rally has extended Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.8 times earnings, about 11 percent higher than the 19.5 times valuation of the S&P 500 Index.

     Global stocks advanced a third day after Yellen’s comments acknowledged impediments to U.S. growth while remaining upbeat about the economy’s outlook. Traders are pricing in a 22 percent chance for an increase in July, down from better than 50 percent odds a day ahead of the jobs report, according to data compiled by Bloomberg.

     Commodities entered a bull market, ending a five-year rout as prices from soybeans to zinc rose to help the asset class outperform bonds, currencies and equities in 2016. The Bloomberg Commodity Index, which tracks a basket of 22 resources from crude to soybeans, closed 21 percent above its low on Jan. 20 to meet the common definition of a bull market. Prices remain down about 50 percent from the highest levels seen in 2011.

     In Canada, energy producers climbed 1.6 percent to the highest level in almost a year with all but two companies in the group advancing. Crude closed at a 10-month high in New York, settling at $49.69 a barrel as Abu Dhabi forecast prices could surge as high as $60 a barrel with the global glut shrinking faster than expected.

     First Quantum Minerals Ltd. and Teck Resources Ltd. jumped at least 7.4 percent to lead raw-materials producers higher. Iron ore futures jumped in China while zinc advanced an eighth day, the longest streak since December 2013. Nickel also advanced.

     Potash Corp. of Saskatchewan Inc. jumped 6.2 percent, the most since February, for a third day of gains. The market is overthinking the implications surrounding the delayed China potash contract, said Scotiabank analyst Ben Isaacson. While there are rumors China will seek a bid price of $180 per metric ton, Isaacson estimates the contract will end up being closer to $210 per metric ton.

     Canadian equities have been one of the top-performing markets this year, second only to New Zealand among developed nations with a 9.7 percent advance, a sharp rebound after falling the most since the 2008 financial crisis in 2015. Raw- materials producers have led the broader rally, soaring 44 percent this year for the best year-to-date performance in three decades.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks advanced, with the S&P 500 Index regaining a seven-month high, as Federal Reserve Chair Janet Yellen signaled the economy is still strengthening enough to withstand gradual increases in borrowing costs despite recent signs of slower job growth.

     Investors moved past the weakest monthly employment gains since 2010 to focus on the beneficiaries of a lower dollar and a bounce in Treasury yields. Banks rebounded from their worst drop in almost two months, while rising crude prices helped Halliburton Co. climb to its highest in nearly a year, and Transocean Ltd. jumped almost 15 percent.

     The S&P 500 gained 0.5 percent to 2,109.41 at 4 p.m. in New York, 1 percent away from a record set a year ago after the gauge flirted with a 10-month high. The Dow Jones Industrial Average added 113.27 points, or 0.6 percent, to 17,920.33, while the Nasdaq Composite Index rose 0.5 percent. The Russell 2000 Index increased 1.1 percent to the highest in six months. About 6.4 billion shares traded hands on U.S. exchanges, 10 percent below the three-month average.

     “The Fed wants to see at least one more employment situation report to see if the latest was an aberration or the beginning of a new trend,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242 billion. “She seems very optimistic and I like that she’s outlining the risk to the outlook, but I don’t see any further clarity as to whether they’re going to hike in July or September.”

     Yellen said in a speech in Philadelphia today that the May employment numbers were “disappointing,” while also pointing to one of the few encouraging elements of the report — the increase in average hourly earnings. The Fed chair said positive forces supporting job growth and higher inflation will still probably outweigh negative developments, calling additional gradual rate increases appropriate without specifying their precise timing.

     Banks were on the mend after dragging equities lower Friday, as Treasury yields recovered from the steepest tumble in 11 months which spurred speculation low rates would continue to weigh on lenders’ profitability. The group reached an almost five-month high Thursday before the weak jobs report dashed rising expectations that the Fed could lift rates as soon as this month.

     Gains in financial shares helped the S&P 500 rebound 15 percent from a 22-month low in February low through last Thursday, when it surpassed the 2,100 level, before slipping 0.3 percent on Friday. The index has failed to keep its gains beyond 2,100 in prior rallies during the past year. Friday’s decline and today’s recovery continued the market’s sideways movement, with the benchmark closing up or down less than 0.5 percent for seven straight days, the longest stretch since November.

     Skepticism resurfaced after the employment data sparked concern over the vitality of U.S. growth as the Fed contemplates raising interest rates further. Traders cut bets for an increase in the next few months, now pricing in a 2 percent chance of a June boost, and about a 22 percent probability it will be in July — down from 22 percent and 55 percent, respectively, before the jobs release. December is the first month with at least even odds of a rate.

     Fed Chair Yellen’s appearance is the last by a central bank official scheduled before the next policy meeting concludes on June 15. Boston Fed President Eric Rosengren said in Helsinki today he expects economic conditions to continue improving, making further rate increases appropriate, although it will be important to see whether a weak employment report for May proves to be an anomaly.

     Atlanta Fed’s Dennis Lockhart on Bloomberg TV added his voice to the argument for a delay, saying the central bank should wait until at least next month to consider raising rates because of a slowing labor market and the British vote on European Union membership.

     “This is the most uninspiring economic cycle we’ve ever seen,” Jonathan Golub, the chief U.S. market strategist at RBC Capital Markets LLC, said in a Bloomberg TV interview. Still, he says he remains bullish on U.S. equities. “This was a weak number but just one weak number. The market’s general view is things are fine.”                      

     In Monday’s trading, eight of the S&P 500’s 10 main industries rose, with energy producers surging 2 percent to a five-week high. Raw-materials, industrial and financial shares advanced at least 0.5 percent. Consumer shares, utilities and phone companies were little changed. A Goldman Sachs Group Inc. basket of the most shorted stocks in the Russell 3000 Index posted the biggest gain in two weeks.

     Despite the equity rally, the CBOE Volatility Index rose 1.3 percent to 13.65. The measure of market turbulence known as the VIX on Friday posted its third weekly increase in the last four.

     Transocean soared to its highest level since March as today’s strongest performer in the energy group and S&P 500. Devon Energy Corp. and Baker Hughes Inc. gained more than 4.5 percent. West Texas Intermediate crude futures rallied 2.2 percent to settle near $50 a barrel on signs a global glut is contracting more quickly than projected.

     Among raw-material producers, CF Industries Holdings Inc. rallied 8.9 percent after CLSA Americas LLC upgraded the shares to buy. Freeport-McMoRan Inc. and Mosaic Co. added at least 4.8 percent. The Bloomberg Commodity Index climbed to the highest since October.

     JPMorgan Chase & Co. and Wells Fargo & Co. rose at least 0.6 percent to give the biggest lift to a group of banks in the benchmark index. Zions Bancorporation rebounded 2.8 percent to erase Friday’s 1.2 percent slide. In the broader financials group, Legg Mason Inc. and State Street Corp. increased at least 2.5 percent.

     Retailers fell for a second day, limiting a rise in consumer discretionary shares. Best Buy Co. dropped 3.2 percent after Chief Executive Officer Hubert Joly sold $12.8 million in stock, cutting his stake in the electronics retailer by 44 percent. Home Depot Inc. and Lowe’s Cos. lost more than 1.9 percent.

     Apartment real-estate investment trusts were the worst performers Monday, with Apartment Investment & Management Co. losing 2.6 percent to fall for a fifth day, the longest since August. UDR Inc. and Equity Residential fell more than 2 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

The noblest moral law is that we should unremittingly work for the good of mankind.

Mahatma Gandhi

As ever,

 

Carolann

 

There are no shortcuts in life – only those we imagine.

                                       -Frank Leahy, 1908-1973

 

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:

PRIME NUMBERS:

40.8 MILLION:  People worldwide displaced within their own countries by conflict in 2015, a record high.

35,000: Uber drivers to be included in a new guild, the first of its kind, for drivers in New York City.

1,284: Latest batch of exoplanets discovered by NASA’s Kepler space telescope, the largest cache announced to date.  Nine are considered “potentially habitable.”

 50,000: Appraised value (in U$) of what was thought to be a piece of late- 19^th century folk art.  A viewer who saw the appraisal on PBS’s “Antiques Roadshow” set the record straight:  Her friend – now a horse trainer – made the jug, adorned with human faces, as a high school project in th e1970’s.

151 MILLION: Estimated value (in U$) of used clothing shipped to East Africa in 2015.  Five nations, Burundi, Kenya, Rwanda, Tanzania, and Uganda, are considering a ban on such imports to try to revive local manufacturing

PHOTOS OF THE DAY

A woodpecker perches on a tree in a protected area of Bialowieza forest, the last primeval forest in Europe, near Bialowieza village, Poland.Kacper Pempel/Reuters

Moises Vazquez, known as Spider-Moy, rides the subway to work in Mexico City. Vazquez, a computer science teaching assistant at the National Autonomous University of Mexico (UNAM), teaches dressed as superhero Spider-Man. Edgard Garrido/Reuters

Market Closes for June 3^rd, 2016

Market Index	Close	Change
Dow Jones	17799.36	-39.20   -0.22%
S&P 500	2101.29	-3.97   -3.19%
NASDAQ	4940.387	-30.977   -0.62%
TSX	14233.23	+96.24
		+0.68%

International Markets

Market Index	Close	Change
NIKKEI	16642.23	+79.68
		+0.48%
HANG SENG	20947.24	+88.02
		+0.42%
SENSEX	26843.03	-0.11
FTSE 100	6209.63	+24.02
		+0.39%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.183	1.249
CND. 30 Year Bond	1.846	1.895
U.S.    10 Year Bond	1.7004	1.7989
U.S. 30 Year Bond	2.5141	2.5805

Currencies

BOC Close	Today	Previous
Canadian $	0.77286	0.76349
US $	1.29389	1.30978
Euro Rate 1 Euro=		Inverse
Canadian $	1.47071	0.67995
US $	1.13665	0.87977

Commodities

Gold	Close	Previous
London Gold Fix	1240.50	1212.40
Oil	Close	Previous
WTI Crude Future	48.48	49.17

 

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks surged back into a bull market, propelled by a furious rally in commodities producers and elevating the nation’s equity markets to one of the top performers in the world this year.

     The S&P/TSX Composite Index rose 0.6 percent to 14,226.78 Friday, capping a 20 percent rally from a bear-market low of 11,843.11 on Jan. 20. The Canadian equity benchmark has surged 9.4 percent in 2016, the second-most among developed markets tracked by Bloomberg. The index plunged 11 percent last year.

     More than C$370 billion ($286 billion) was added to Canada’s resource-heavy equity market in only four months as crude rallied more than 80 percent over that time, stoking growth in the export-oriented economy, the world’s 11th largest, and easing pressure on the balance sheets of lenders exposed to the sector. New Prime Minister Justin Trudeau unveiled in March a budget laden with deficit spending, adding fiscal stimulus to an accommodative interest-rate policy.

     “We’ve turned the corner on the freefall in oil prices,” said Kash Pashootan, fund manager at First Avenue Advisory of Raymond James Ltd. in Ottawa. His firm manages about C$260 million. “We’re getting back to more of what I call a normal market where companies are trading based on fundamentals and future forecasts, which was impossible before as no one knew when commodities would bottom out.”

     Prices for commodities from copper to oil and gold have rallied from the lowest levels in at least 25 years, nearing bull-market territory amid increasing signs of economic stability in China and growth in the U.S., Canada’s two largest trading partners. The Bloomberg Commodity Index, which tracks returns for 22 raw materials, has surged almost 20 percent from a January low after suffering five straight years of declines through 2015. The gauge still remains about 50 percent below the high reached in 2011.

     Odds of a Federal Reserve rate hike this summer faded after the U.S. reported weak jobs data for May on Friday, torpedoing the U.S. dollar and boosting the price of resources denominated in the currency. The Canadian dollar rallied 0.93 cents, or 1.2 percent to 77.29 U.S. cents at 4:08 p.m.                        

     “These trends are sustainable as long as the dollar stays well-behaved,” said Jurrien Timmer, director of global macro at Fidelity Investment, in an interview in Toronto. “The last couple of years, the market has been very narrow. And what happens with the dollar depends on the Fed.”

     Miners have delivered the biggest individual gains in the index this year, with nine metals producers at the top of the index leading the way with rallies of more than 100 percent. Gold rallied 17 percent in the first quarter, the most since 1986. First Majestic Silver Corp. is the best-performing stock in the index with a 237 percent gain, lifting raw-materials producers to a rally of 43 percent, the best start for the industry in three decades, according to data compiled by Bloomberg.

     Crude’s bounce from a 12-year in low in February has also provided a tailwind to Canada’s stock market. Energy producers have surged 35 percent since the S&P/TSX bear-market low, while banks in the S&P/TSX have surged 17 percent.

     Bank of Nova Scotia, Canadian Imperial Bank of Commerce, and National Bank of Canada have jumped at least 11 percent this year, leading banks higher as concern eases that loans to the oil patch will pose a threat to lenders’ balance sheets.

     “What you see with the Canadian banks is a tug of war between pricing in potential loan losses from energy with the fact dividend yields have been so attractive,” Pashootan said. “We saw earlier in the year dividend yields upwards of 5 percent. That was a turning point.”

     Indicated yield for Scotiabank sits at 4.4 percent, while CIBC and National Bank yield more than 4.7 percent, data compiled by Bloomberg show.

     All told, the broader index trails only New Zealand this year among developed markets, though the S&P/TSX’s rapid rally through the first half of 2016 doesn’t leave much room to grow, said John Stephenson, CEO of Stephenson & Co. Capital Management in Toronto.

     “The TSX will sort of plateau,” he said. Stephenson’s firm manages about C$50 million. “You might get another percentage point or two next month, but it’s looking pretty front-loaded.”                      

     First Avenue’s Pashootan is more optimistic and is on the hunt for energy names to add to his existing holdings including Enbridge Inc. and Keyera Corp. His weighting in commodities has doubled to about 8 percent of his portfolio from 4 percent in 2014.

     “We have conviction in energy so we’ve started to add,” he said. “There’s been a shift from our pessimism of even three months ago to now. Given we’re off the bottom, now is the time you want to start building your positions for where things will be two, three, four or five years from now.”

US

By Jeremy Herron and Inyoung Hwang

     (Bloomberg) — U.S. stocks fell with the dollar, while Treasuries and gold gained after American employers added the fewest jobs in almost six years in May, bolstering the case for the Federal Reserve to leave interests rates lower for longer.

     The S&P 500 Index ended the week little changed, while the likelihood for a delayed rate increase sent financial shares lower. The dollar tumbled the most in six months versus the euro, while investors sought the safest government securities, sending the yield on two-year Treasuries to the steepest drop since September and the yield on German 10-year bunds to a record low. The weak greenback sparked a rally in emerging- market assets and commodities.

     “Things are never as bad or as good as they seem,” said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ U.S. intermediary business. The firm oversees $2 trillion. “Fed futures are pricing in a decreasing probability for June and stocks probably don’t mind that scenario all that much. We’re moving away from this risk- on, risk-off formula to one that’s more Fed on, Fed off.”

     The addition of 38,000 jobs last month was less than the most pessimistic of forecasts in a Bloomberg survey, throwing cold water on equity gains that took the S&P 500 within 1.2 percent of its all-time high. Smaller employment gains reduce the odds of a more pronounced upturn economic growth at a time when corporate profits are on a downswing and global markets remain weak. The odds for a Federal Reserve rate increase fell to 27 percent in July, down from 55 percent a day earlier.

     The S&P 500 fell 0.3 percent to 2,099.13 at 4 p.m. in New York, after dropping as much as 1 percent. The index slid back below 2,100 after closing higher than that for the first time since April. The level has capped two prior rallies in the past eight months.

     Utilities and phone stocks rose on Friday as the prospect for lower rates sent investors searching for shares that have large payout ratios. Raw-material shares also climbed, with Newmont Mining Corp. jumping 9.4 percent for the biggest gain in the S&P 500.

     Financial shares trimmed losses to 1.4 percent, after falling as much as 2.4 percent. JPMorgan Chase & Co. and Goldman Sachs Group Inc. sank at least 1.8 percent. Insurers MetLife Inc. and Prudential Financial Inc. fell more than 3.1 percent.

     Canadian stocks surged back into a bull market. The S&P/TSX Composite Index rose 0.6 percent on Friday, capping a 20 percent rally from a low on Jan. 20.

     The Stoxx Europe 600 Index slipped 0.9 percent, extending its first weekly decline in four to 2.4 percent. The MSCI Emerging Markets Index advanced 1.5 percent to a one-month high.

     The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 1.5 percent, the steepest decline since Feb. 3. The dollar dropped 1.9 percent to $1.1363 per euro and lost 2.1 percent to 106.58 yen. The Canadian dollar surged.

     The MSCI Emerging Markets Currency Index jumped 1.1 percent, the biggest jump since March.

     The rand jumped 3.4 percent, reversing earlier losses and extending an advance to four days. South Africa’s credit rating was kept unchanged by S&P Global Ratings, giving the nation a reprieve from a junk assessment, even as it warned it could lower the ratings if the economy doesn’t recover.

     The two-year Treasury note yield fell to 0.77 percent, while 10-year yields dropped 10 basis points to 1.7 percent. The gap between yields on five- and 30-year debt, a measure of the yield curve, steepened by the most since March.

     “This was quite shocking — it’s way under expectations,” said Christopher Sullivan, who oversees $2.3 billion as chief investment officer at United Nations Federal Credit Union in New York. The Fed “will postpone a nearby rate hike for sure — maybe they’ll be forced to look beyond the summer.”

     The yield on Germany’s 10-year bund fell five basis points, or 0.05 percentage point, to 0.068 percent, the lowest ever.

     The Bloomberg Commodity Index rose 0.5 percent to a seven- month high. The gauge bottomed this year in January and is less than half a percentage point from a level that would mark a 20 percent advance, meeting the common definition of a bull market.

     Gold in the spot market climbed 2.8 percent to $1,244.29 an ounce. Bullion is coming off of its biggest monthly loss since November after signs of an improving U.S. economy spurred speculation that the Fed could tighten monetary policy as soon as this month.

     Crude futures fell on both sides of the Atlantic after closing above $50 a barrel in London for the first time in seven months. West Texas Intermediate oil slid to $48.62 a barrel. Brent crude slid 0.8 percent to trade at $49.64 a barrel after closing yesterday at $50.04.

     Zinc rose for a seventh day for its longest rising streak in almost two years amid continued speculation of a raw materials shortage, rising with copper and aluminum.

     Sugar rose to the highest in almost two years as heavy rainfall disrupted loadings at ports in Brazil, slowing down the harvest at a time of peak demand.

Have a wonderful weekend everyone.

 

Be magnificent!

Unity is an intellectual concept.

On an emotional level unity is serenity, equality and equilibrium.

Swami Prajnanpad

As ever,

 

Carolann

 

Good enough never is.

  -Debbie Fields, 1956-

 

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 June 2, 1953, Queen Elizabeth II of Britain was crowned in Westminster Abbey, 16 months after the death of her father, King George VI.

James Lees-Milne, Diary, A Mingled Measure, describes the coronation of HM Queen Elizabeth II, 1953:

The weather was damnable.  It rained all day.  The moment the procession started it positively poured, and the troops were soaked.  Yet the procession was magnificent.  The colour and pageantry cannot be described.  Uniforms superb and resplendent.  The most popular figure Queen Salote of Tonga, a vast, brown, smiling bundle with a tall red knitting needle in her hat:  knitting needle having begun as a plume of feathers.  Despite the rain she refused to have the hood of her open carriage drawn, and the people were delighted.  They roared applause.  Extraordinary how the public will take someone in its bosom, especially someone not very exalted who is putting up a good show.  Al along the route they adored her.  Beside her squatted little man in black and a top hat – her husband.  Noël Coward, when asked who he was, said, “Her dinner.” –from The Book of Days.

Also on this day,

1692: Salem witch trials began

1740: Marquis de Sade was born.

PHOTOS OF THE DAY

The ‘Frecce Tricolori’ Italian Air Force acrobatic squad fly over the Vittoriano monument of the Unknown Soldier in Rome on Thursday during the Republic Day parade celebrating the anniversary of the birth of the Italian Republic in 1946. Gregorio Borgia/AP

A resident brings French baguettes to his mother’s flooded house after heavy rainfall in Chalette-sur-Loing Montargis, France, on Wednesday.Christian Hartmann/Reuters

A boy cycles past a wall of mobile phones displayed outside an electronics store in downtown Tokyo on Thursday. The store owner started the display ten years ago. It continues to draw attention from passers by. Shuji Kajiyama/AP

Market Closes for June 2^nd, 2016

Market Index	Close	Change
Dow Jones	17838.56	+48.89   +0.27%
S&P 500	2105.26	+5.93   +0.28%
NASDAQ	4971.363	+19.112   +0.39%
TSX	14136.99	+73.45
		+0.52%

International Markets

Market Index	Close	Change
NIKKEI	16562.55	-393.18
		-2.32%
HANG SENG	20859.22	+98.24
		+0.47%
SENSEX	26843.14	+129.21
		+0.48%
FTSE 100	6185.61	-6.32
		-0.10%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.249	1.307
CND. 30 Year Bond	1.895	1.950
U.S.    10 Year Bond	1.7989	1.8407
U.S. 30 Year Bond	2.5805	2.6210

Currencies

BOC Close	Today	Previous
Canadian $	0.76349	0.76498
US $	1.30978	1.30722
Euro Rate 1 Euro=		Inverse
Canadian $	1.46090	0.68451
US $	1.11538	0.89656

Commodities

Gold	Close	Previous
London Gold Fix	1212.40	1214.50
Oil	Close	Previous
WTI Crude Future	49.17	49.01

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, with the S&P/TSX Composite Index reaching the highest level since August, as oil prices rebounded after a decline in U.S. crude supply offset OPEC producers failing to agree on a new output ceiling.

     The S&P/TSX rose 0.5 percent, to 14,136.99 at 4 p.m. in Toronto after fluctuating in the morning. The index is up 8.7 percent this year, the second most after New Zealand among developed-market nations tracked by Bloomberg. Trading volume on Wednesday was 32 percent lower than the 30-day average.

     The rally has maintained Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.6 times earnings, about 11 percent higher than the 19.5 times valuation of the S&P 500.

     Global equities ended little changed amid the swings in crude prices and concerns about global growth. European Central Bank President Mario Draghi said the full effect of the central bank’s stimulus measures have yet to spur growth, a day after manufacturing data from Japan to the euro zone disappointed. U.S. jobless claims dropped a third week, pushing the Federal Reserve closer to a potential interest-rate increase.

     In Canada, energy producers rose 1 percent to rebound from earlier declines. Oil recovered to close above $49 a barrel in New York, as U.S. stockpiles dropped the third time in four weeks. Brent crude settled at the highest in seven months. A meeting of the Organisation of Petroleum Exporting Countries in Vienna failed to produce a supply accord, leaving production unfettered amid a global supply glut.

     Teck Resources Ltd. and Goldcorp Inc. increased more than 1.1 percent, pacing gains with raw-material producers.

     Concordia Healthcare Corp. tumbled 9.3 percent, the most in two months and the biggest drop in the S&P/TSX today. The stock had surged as much as 11 percent earlier after StreetInsider.com reported today Blackstone Group LP is near an agreement to buy the drugmaker. The shares then plunged, with shares briefly being halted, after the Wall Street Journal reported Blackstone and Carlyle Group were said to walk away from a deal. Health- care stocks were the only group to retreat out of 10 in the S&P/TSX.

     The rally in Canadian equities, fueled by a rebound in commodities prices and financials, sputtered earlier this week amid renewed concerns weak global growth will constrain demand for basic materials, while the prospect of higher U.S. interest rates has sent the dollar higher.

     Federal Reserve Chair Janet Yellen’s comments on May 27 pointed to a likely interest-rate increase in coming months that is dependent on economic improvement. Traders have now priced in a 55 percent chance for an increase in July, according to data compiled by Bloomberg.

US

By Dani Burger

     (Bloomberg) — U.S. stocks rose, with the S&P 500 reaching a seven-month high, amid signs of steady job gains that indicated the economy is strong enough for higher interest rates as early as this summer.

     Equities extended a climb in the final hour of trading as health-care shares rallied to erase losses for the year, while retailers beaten down in May rebounded. Johnson & Johnson paced gains after agreeing to buy closely held Vogue International for about $3.3 billion. Signet Jewelers Ltd. tumbled 6.6 percent after negative comments in a newsletter, and Oracle Corp. sank the most this year after allegations of improper accounting practices.

     The S&P 500 gained 0.3 percent to 2,105.26 at 4 p.m. in New York, the highest since Nov. 3, after erasing earlier losses of as much as 0.5 percent. The gauge closed above 2,100 for the first time since April 20. The Dow Jones Industrial Average added 48.89 points, or 0.3 percent, to 17,838.56. The Nasdaq Composite Index climbed 0.4 percent, extending an advance to seven days, the longest since February 2015. About 6.4 billion shares traded hands on U.S. exchanges, 11 percent below the three-month average.

     “The bears would like the market to go down, but sentiment is too negative already,” Andrew Brenner, head of international fixed income at National Alliance Capital Markets in New York, said by phone. “The bulls would like the market to go up, but there are too many things on the horizon, which is why we’re going sideways. You have a lot of major stuff coming up in the market with investor sentiment extremely negative, and it doesn’t seem to go down.”

     Investors have turned watchful amid a panoply of events, including meetings of the European Central Bank and Organization of Petroleum Exporting Countries in Vienna today, while the government’s monthly payrolls report is due tomorrow. June will also see the U.K. vote on whether to remain in the European Union and a possible interest-rate increase by the Federal Reserve. The benchmark index closed with a move of less than 0.5 percent for a fifth day, the longest stretch since November.

     Data today signaled sustained firming in the labor market, with filings for unemployment benefits declining for a third consecutive week. An earlier report showed companies added 173,000 workers to payrolls in May, in line with economists’ forecasts.

     A late-May flourish fed by optimism that the U.S. economy can shoulder higher rates helped the S&P 500 cap its longest stretch of monthly gains since 2014. The index has made little headway since then, hovering near levels that proved difficult to maintain in previous rallies, while investors await more indications on the vitality of U.S. growth. The benchmark has rebounded 15 percent from its 22-month low in February, closing today 1.2 percent away from a record hit last year.

     Friday’s payrolls release looms large, with the potential for a solid report to further solidify expectations for higher borrowing costs by July. Economists surveyed by Bloomberg forecast employers added 160,000 jobs in May, the same as in April, with the unemployment rate slipping to 4.9 percent.

     Data signaling a stronger American manufacturing on Wednesday was overshadowed by evidence of sluggish global growth. Traders are now pricing in a 53 percent chance the Fed will increase rates in July, while betting there’s a 22 percent probability the central bank will act this month, down from 34 percent last week.

     “There’s so much for which to wait and watch for,” said Daniel Weston, chief investment officer of Aimed Capital in Munich. His firm oversees $30 million. “I don’t think there will be any black swans coming this month, but people will be very wary and take a bit of a defensive view while they wait for things to unfold.”

     The CBOE Volatility Index fell 4 percent to 13.63, after a two-day climb. The measure of market turbulence known as the VIX dropped 9.6 percent in May, just its second monthly decline in the past seven.

     Health-care shares were the strongest performers Thursday among the S&P 500’s 10 main industries, surging 1.3 percent. The group erased 2016 losses of as much as 12 percent, and extended their longest rally in 15 months. Energy producers slipped the most, followed by technology stocks and utilities. A Goldman Sachs Group Inc. basket of the most shorted shares in the Russell 3000 Index climbed for the eighth time in nine days, rising 7.7 percent during the period.                          

     Aetna Inc. added 4.1 percent, the most in six months. The health insurer plans to sell bonds in as many as eight parts to finance the cash portion of its $37 billion purchase of Humana Inc., which rallied 5.6 percent. The Nasdaq Biotechnology Index increased 1.9 percent to the highest since April 22.

     Consumer discretionary companies advanced, lifted by a bevy of stocks that were hammered last month. L Brands Inc. jumped 4.3 percent after May sales exceeded estimates. The Victoria’s Secret parent tumbled 12 percent in May, the worst month since January 2014 amid concern spurred by weakening department-store sales. Macy’s climbed 4 percent, the most since January, after falling 16 percent last month.

     Exxon Mobil Corp. fell 0.8 percent to pace energy’s slide, even as crude rose to a seven-month high, shrugging off OPEC’s failure to agree on a new output ceiling. Diamond Offshore Drilling Inc. lost 4 percent, falling for the fourth time in five days. Refiner Tesoro Corp. rose 1.8 percent after data showed gasoline and distillate stockpiles dropped more than forecast.

     Oracle dropped 4 percent after a former senior finance manager claimed in a whistle-blower lawsuit she was instructed to add millions of dollars in accruals to cloud service financial reports. Oracle said it’s confident all its accounting is proper and correct. Apple Inc. decreased 0.8 percent after Goldman Sachs cut its price target on the iPhone maker’s shares, citing lower growth expectations for the smartphone industry. The stock fell for a fourth day, the longest losing streak in a month.

     Among shares moving on corporate news, Ciena Corp. rallied 13 percent, the best one-day gain in two years, as quarterly results exceeded estimates and the current period’s revenue outlook beat some analysts’ forecasts.

     Sarepta Therapeutics Inc. plunged 27 percent, after regulators increased patients’ access to experimental drugs such as its unapproved therapy for a deadly muscle disease, which investors took as a signal that the product may not be cleared.

     Conn’s Inc. tumbled 26 percent to the lowest since 2011 after the electronics and appliances retailer unexpectedly posted a quarterly loss and the company named a new chief financial officer.
 

Have a wonderful evening everyone.

 

Be magnificent!

I do not know of any religion apart from human activity.

It provides a moral basis to all other activities which they would otherwise lack,

Reducing life to a maze of “sound and fury signifying nothing.”

Mahatma Gandhi

 

As ever,
 

Carolann

 

In all things, one receives only in accordance with what one has given.

                                                      –Honoré de Balzac, 1799-1850

 

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