April 22, 2014 Newsletter

Dear Friends,

Tangents:

Today is Earth Day.  Est. 1970.  To celebrate, cook dinner with organic foods and share with family or friends.  Reflect on the beauty of our home – the awakening of nature at this wonderful season of spring, with the little birds singing for food in the morning, spring flowers in bloom, the first buds appearing on plants that will bloom in summer…

We went to Napa for the Easter weekend and enjoyed the beauty of the captivating landscape with its rolling hills and endless vineyards.   Of the wineries we toured, the highlight was Shramsberg winery in Calistoga.  You must schedule a tour ahead of time, so if you are planning a trip to San Francisco or specifically the wine country in the future, I highly recommend the tour of this winery.  The story  of its origins and evolution is a charming one.  It is famous for its sparkling wines.  The bottles are stored in caves that were dug into the mountain and the tour takes you through the caves.  Its wines catapulted to fame in 1972 when President Nixon brought cases of the sparkling wine with him to China for gifts for his host and every US president since, including Obama, serves their wines a state dinners and White House celebrations.   We had a tasting of five vintages and they were all superb.

Photos of the day

Tulips bloom in front of the Capitol in Washington. J. David Ake/AP

Bianca Cortinas stands wrapped in plastic six pack rings during a demonstration to mark Earth Day in Manhattan in New York City. Mike Segar/Reuters

Market Closes for April 22^nd, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Gerrit De Vynck

April 22 (Bloomberg) — Canadian stocks rose, after the benchmark index snapped a four-day rally yesterday, as Valeant Pharmaceuticals International Inc. jumped after offering to buy Allergan Inc. for $45.7 billion.

Valeant rose 7.7 percent in Toronto trading after offering to merge with Allergan, the maker of the Botox wrinkle treatment. Rogers Communications Inc., Canada’s biggest wireless operator, fell 3.6 percent after missing analyst estimates for first-quarter earnings and subscriber numbers.

The Standard & Poor’s/TSX Index rose 62.29 points, or 0.4 percent, to 14,555.97 at 4 p.m. in Toronto. The gauge has risen 6.9 percent this year.

Valeant’s valuation will jump a lot higher if the deal is finalized, said Brian Huen, managing partner at Red Sky Capital Management in Toronto. “There’s still a lot of timeline uncertainties, regulatory uncertainties and whether or not they can get the deal across the finish line, that’s holding the stock back,” he said by phone. Huen helps manage about C$225 million ($203 million).

Valeant rose 7.7 percent to C$149.38 on the Toronto exchange. The Laval, Quebec-based company will pay Allergan investors $48.30 in cash and 0.83 percent in Valeant stock for each share they own, Valeant said in a statement yesterday. Pershing Square Capital Management LP, the fund run by Bill Ackman and Allergan’s largest shareholder with a 9.7 percent stake, supports the offer, Valeant said.

Mining companies rose as Barrick Gold Corp. rebounded 1.8 percent to C$19.37 after falling 3.9 percent yesterday as talks for a merger with Newmont Mining Corp. were said to break down.

TransCanada Corp. gained 1.3 percent to C$50.04. The builder of the proposed Keystone XL pipeline fell 3.7 percent yesterday after the timeline for the project’s approval was pushed back.

“Yesterday’s news certainly got people nervous and people are going to be reluctant to get back in the name until more clarity can be provided,” said Huen.

Rogers fell 3.6 percent to C$42.71 as subscriber growth missed analyst estimates and average revenue per customer fell 5 percent from the same period last year, according to a statement.

Sandstorm Gold Ltd. fell 3.5 percent to C$5.78 after saying it would buy Sandstorm Metals & Energy Ltd. at a 43 percent premium to the company’s April 21 closing price. National Bank Financial cut its rating on the stock from the equivalent of a buy to the equivalent of a hold.

Canadian Pacific Railway Ltd. rose 5.3 percent to C$172.62 after the company reported first-quarter profit that beat analysts estimates. The company has been reducing expenses by firing employees and cutting benefits.

Points International Ltd. rose 6.4 percent to C$27 after buying Accruity, which owns travel booking website PointsHound.com.

US
By Joseph Ciolli

April 22 (Bloomberg) — U.S. stocks rose a sixth day, with the Standard & Poor’s 500 Index capping its longest rally since September, as health-care shares surged amid a $45.7 billion bid for Allergan Inc. and earnings from Netflix Inc. to Harley- Davidson Inc. topped estimates.

Allergan surged 15 percent after Valeant Pharmaceuticals International Inc. offered to merge with the maker of the Botox wrinkle treatment. Netflix soared 7 percent after saying it expects to increase prices for new customers. Harley-Davidson Inc. added 6.4 percent after its earnings release.

The S&P 500 added 0.4 percent to 1,879.55 at 4 p.m. in New York, and earlier rose to within six points of its all-time high. The Dow Jones Industrial Average climbed 65.12 points, or 0.4 percent, to 16,514.37. About 5.9 billion shares changed hands on U.S. exchanges today, 15 percent below the three-month average.

“Sentiment had gotten too negative, and some decent earnings reports have started helping the market,” Michael James, a Los Angeles-based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “That, combined with the positive deal talk and chatter in health care, gives a better tone to the market overall and certainly some support.”

The S&P 500 jumped 3.5 percent in the past six days and is now 0.6 percent below its record reached April 2. The index has added 1.7 percent in 2014. The Dow average is at its highest level since April 3.

Health-care stocks paced gains in the S&P 500 today with a 1 percent advance, as a flurry of deal activity boosted the sector. The Nasdaq Biotechnology Index rallied 3.2 percent as all but three of its 121 members advanced.

Allergan jumped 15 percent to $163.65. Valeant proposed to buy the maker of the Botox wrinkle treatment for about $152.89 a share in the Canadian company’s plan to become one of the world’s largest drugmakers. Valeant’s U.S.-listed shares climbed 7.5 percent to $135.41.

The bid comes as Novartis AG agreed to buy GlaxoSmithKline Plc’s cancer drugs as part of a series of deals among major pharmaceuticals makers. Separate reports said Pfizer Inc., the world’s largest drugmaker, and AstraZeneca Plc had held talks that fizzled.

Vertex Pharmaceuticals Inc., Regeneron Pharmaceuticals Inc. and Alexion Pharmaceuticals Inc. each rose at least 2.6 percent.

Intuitive Surgical Inc. also contributed to health-care gains, as the stock climbed 2.7 percent to $422.33. The company received regulatory clearance for a version of its da Vinci surgical system. The advance halted an 11-day losing streak that erased nearly a quarter of the stock’s value.

Thirty companies in the equities benchmark disclosed results today, while a further 121 members report before the end of the week. Profit for the index’s constituents probably increased 0.7 percent in the first quarter, analysts forecast.  They had predicted a 0.9 percent decrease as recently as April 11.

Netflix rallied 7 percent to $372.90. The company behind the drama “House of Cards” said that it plans to charge new customers $1 to $2 a month more for its online video service. Netflix currently offers unlimited Web streaming for $7.99 a month. Netflix also reported first-quarter profit and subscriber growth that beat analysts’ forecasts.

Harley-Davidson jumped 6.4 percent to $71.87, the highest since January 2007. The maker of Road King motorbikes reported first-quarter earnings of $1.21 a share, beating the average analyst projection of $1.08. Sales also exceeded projections.

Comcast Corp. advanced 1.9 percent to $50.83 as the largest U.S. cable company said increased numbers of video subscribers helped it post first-quarter profit of 68 cents a share, excluding some items. That beat the 64 cents that analysts had estimated. Comcast also reported revenue of $17.4 billion.  Analysts had predicted $17 billion.

McDonald’s Corp. dropped 0.4 percent to $99.32. The hamburger chain posted falling sales at its established U.S. locations and first-quarter profit that trailed analysts’ estimates.

Pentair Ltd. slid 6.9 percent to $74.95 for the steepest drop in the S&P 500. The provider of water systems reported first-quarter revenue below analysts’ estimates and forecast revenue in the current period that was less than predicted.

Zions Bancorporation slipped 2 percent to $29.62. The bank, which failed the Federal Reserve’s annual stress test, reported first-quarter earnings of 31 cents a share yesterday, missing the average analyst forecast of 42 cents. The company was cut to equalweight from overweight today by Evercore Partners Inc.

Eight of the 10 main industries in the S&P 500 advanced today. Consumer-discretionary shares gained 0.8 percent, led by Harley-Davidson and Netflix.

The Dow Jones Transportation Index rallied 0.6 percent for a sixth straight gain that left the gauge at an all-time high.  United Continental Holdings Inc. jumped 4.6 percent and Delta Air Lines added 3 percent as oil futures slumped the most in three months.

Facebook Inc. climbed 2.9 percent to $63.03. Credit Suisse raised its rating on the company to outperform from neutral, and increased its price estimate on the shares by 34 percent to $87.  The brokerage said Facebook will increase its average revenue per user in the medium to long term through new products. The company reports earnings tomorrow.

Have a wonderful evening everyone.

Be magnificent!

It is in the very heart of our activity that we search for our goal.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

The ultimate inspiration is the deadline.

-Nolan Bushnell, 1943-

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