April 17, 2014 Newsletter

Dear Friends,

Tangents:

Happy Easter Weekend!

Photos of the day

A volunteer arranges Easter eggs during Holy Thursday at Bachkovo monastery, near Sofia, Bulgaria. Holy Thursday is celebrated three days before the Orthodox Easter and commemorates Jesus Christ’s Last Supper with the Apostles. Stoyan Nenov/Reuters


A girl poses in a sea of tulips at Keukenhof, near Amsterdam, Netherlands. Keukenhof is a showcase of the Dutch floricultural industry, with a special emphasis on flowering bulbs. Peter Dejong/AP

Market Closes for April 17th, 2014

Market  

Index

Close Change
Dow  

Jones

16408.54 -16.31 

 

-0.10%

S&P 500 1866.40 +4.09 

 

+0.22%

NASDAQ 4095.516 +9.291 

 

+0.23%

TSX 14508.24 +61.72 

 

+0.43% 

 

International Markets

Market  

Index

Close Change
NIKKEI 14417.53 -0.15 

 

— 

 

HANG  

SENG

22760.24 +64.23 

 

+0.28% 

 

SENSEX 22628.84 +351.61 

 

+1.58% 

 

FTSE 100 6625.25 +41.08 

 

+0.62% 

 

Bonds

Bonds % Yield Previous % Yield
CND.  

10 Year Bond

2.445 2.392 

 

CND.  

30 Year

Bond

2.948 2.907
U.S.  

10 Year Bond

2.7215 2.6300
U.S.  

30 Year Bond

3.5219 3.4446

Currencies

BOC Close Today Previous
Canadian $ 0.90843 0.90774 

 

US  

$

1.10080 1.10164
Euro Rate  

1 Euro=

Inverse  

Canadian  

$

1.52065 0.65761
US  

$

1.38140 0.72390

Commodities

Gold Close Previous
London Gold  

Fix

1295.17 1302.69
Oil Close Previous  

 

WTI Crude Future 104.30 103.76 

 

BRENT 109.360 109.360 

 

Market Commentary:

Canada
By Eric Lam

April 17 (Bloomberg) — Canadian stocks rose a fourth day, reaching the highest level in almost six years, as energy shares soared on higher crude prices after fewer Americans than forecast filed applications for jobless benefits last week.

Trilogy Energy Corp. and Lightstream Resources Ltd. rose at least 4.8 percent as crude advanced a second day in New York. Barrick Gold Corp. fell 1.9 percent as the metal’s price dropped. Fertilizer maker Potash Corp. of Saskatchewan Inc. slipped after DuPont Co. posted weaker-than-estimated sales and earnings due to North American farmers delaying planting because of winter weather.

The Standard & Poor’s/TSX Composite Index rose 53.87 points, or 0.4 percent, to 14,500.39 at 4 p.m. in Toronto, the highest since June 23, 2008. The equity benchmark climbed 1.7 percent this week for the biggest gain since February. Canadian markets will be closed tomorrow for the Good Friday holiday.

“Energy’s been the superstar,” said Bob Decker, fund manager at Aurion Capital Management Inc. in Toronto. His firm manages about C$6.1 billion ($5.6 billion). “A lot of investors had been underweight energy for a while after a long period of underperformance. Now there’s a lot of chasing going on.”

First-time U.S. jobless claims hovered near the lowest level in almost seven years, increasing 2,000 to 304,000 in the week ended April 12 from a revised 302,000. Economists surveyed by Bloomberg had a median forecast of 315,000.

Trilogy Energy added 4.8 percent to C$31.67 and Lightstream Resources Ltd. rallied 6.7 percent to C$6.77 as the S&P/TSX Energy Index rose 1 percent to extend a three-year high amid five straight days of gains.

Seven of 10 industry groups climbed on trading volume 16 percent higher compared with the 30-day average.

Agnico Eagle Mines Ltd. rallied 1.8 percent to C$31.26 after slumping the most in a year yesterday. Agnico Eagle, along with Yamana Gold Inc., agreed to a C$3.9 billion cash-and-stock deal to acquire Osisko Mining Corp. yesterday. Osisko added 0.8 percent to C$8, to extend a one-year high. Yamana Gold decreased 0.8 percent to C$8.76 for a sixth straight drop, falling to the lowest since January 2009.

Argonaut Gold Inc. retreated 5.9 percent to C$3.80 and Barrick Gold dropped 1.9 percent to C$19.81. Gold for June delivery declined about 1.8 percent this week.

Potash Corp. lost 0.3 percent to C$38.45, snapping a three- day advance. DuPont, the largest U.S. chemical maker by market value, said revenue fell 2.7 percent. The company said last month its earnings would be hurt by the unusually harsh winter as well as Ukraine unrest.

US
By Lu Wang and Callie Bost

April 17 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to its best week since July, as earnings from General Electric Co. and Morgan Stanley beat estimates and concern eased that the Ukraine crisis may worsen.

GE climbed 1.7 percent after results beat forecasts. Morgan Stanley added 2.9 percent as a gain in trading revenue helped profit top estimates. Google Inc. and International Business Machines Corp. slid at least 3.3 percent as sales trailed projections.

The S&P 500 rose 0.1 percent to 1,864.85 at 4 p.m. in New York, extending its gain for the week to 2.7 percent. The Dow Jones Industrial Average fell 16.31 points, or 0.1 percent, to to 16,408.54. IBM, which accounts for 7.4 percent of the Dow, took 41 points off the index’s total today. About 6.2 billion shares changed hands on U.S. exchanges, 8.6 percent below the three-month average. The U.S. equity markets are closed tomorrow for a holiday.

“Any deceleration of the conflict will be a relief for the market,” Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co., said in a phone interview. “Combine the ease of the tension between Russia and Ukraine and generally a positive tone of earnings, the result is an upward drifting market.”

Equities turned higher after four-way talks on the crisis in Ukraine ended with an accord aimed at taking the first steps toward de-escalating the conflict after President Vladimir Putin said he hopes he won’t have to send troops.

Talks in Geneva today between Russian Foreign Minister Sergei Lavrov, his Ukrainian counterpart, Andriy Deshchytsia, U.S. Secretary of State John Kerry and Catherine Ashton, the European Union’s foreign-policy chief, went on for more than six hours, longer than scheduled.

The S&P 500 rose each day this week to erase its decline for the year. The gauge sank 2.7 percent last week, the most since 2012.

Twenty-five companies in the S&P 500 report earnings today. Profit per share for the index’s constituents probably increased 0.7 percent in the first quarter, according to analyst estimates compiled by Bloomberg. Analysts projected growth of 6.6 percent at the start of the year.

“The market, with the sell-off and some downward revisions to estimates, maybe set itself for better reactions to earnings than it might have been the case earlier,” Gerry Paul, chief investment officer of U.S. value equities at AllianceBernstein LP in New York, said by phone. The firm oversees $454 billion. “Broadly, what we’re going to learn from earnings is that we’re pretty march on the trajectory of what the market expect it to be on.”

Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the labor market continues to strengthen. Jobless claims increased by 2,000 to 304,000 in the week ended April 12 from a revised 302,000 the prior period that was the lowest since September 2007, a Labor Department report showed.

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, fell 5.8 percent to 13.36. The measure has lost 22 percent this week, the most since January 2013.

Seven of 10 S&P 500 industries gained as energy and industrial companies each advanced 0.8 percent advance for the best performance.

GE rallied 1.7 percent to $26.56. The company posted first- quarter earnings that beat analysts’ estimates, buoyed by expanding margins in the industrial businesses that make products such as jet engines.

Morgan Stanley added 2.9 percent to $30.76. First-quarter net income rose to 74 cents a share from 48 cents a year earlier, the bank said. Excluding an accounting gain tied to the firm’s own debt, profit from continuing operations was 68 cents a share, topping the 60-cent average estimate of analysts surveyed by Bloomberg.

The Philadelphia Semiconductor Index climbed 1.9 percent, the biggest gain in a month. Micron Technology Inc., the largest U.S. maker of memory chips, added 6.4 percent to $23.91.

SanDisk Corp. jumped 9.4 percent to $82.99 for the biggest rally in the S&P 500. The maker of flash memory for mobile devices boosted its forecast for gross margin this year to between 47 percent and 49 percent. That’s up from its previous guidance range of between 45 percent to 48 percent and compares with analysts’ estimates that call for 47.4 percent.

Google’s Class C shares fell 3.7 percent to $536.10. The owner of the largest search engine said revenue, excluding sales passed on to partners, totaled $12.2 billion in the first quarter. That missed a projection by analysts for $12.3 billion.

IBM dropped 3.3 percent to $190.01. The company said first- quarter revenue fell 3.9 percent from a year earlier to $22.5 billion. That missed the average estimate of analysts that called for $22.9 billion.

UnitedHealth Group Inc. sank 3.1 percent to $75.78 for its worst day since October. The biggest U.S. health insurer said first-quarter profit fell 7.8 percent. It has derived growth from Medicare and has the biggest program among publicly traded insurers, with 3 million enrollees. In April, the government implemented a second round of cuts to Medicare Advantage.

 

Have a wonderful weekend everyone.

 

Be  magnificent!


The true source of rights is duty.

If we discharge our duties, rights will not be far to seek.

Mahatma Gandhi, 1869-1948


As ever,

 

Carolann

 

Passion, though a bad regulator, is a powerful spring.

-Ralph Waldo Emerson, 1803-1882


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

Senior Vice-President &

Senior Investment Advisor


Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7