May 13, 2014 Newsletter

Dear Friends,

Tangents:

I usually read Samuel Pepys diary entry each day, an excerpt of which appears in the National Post every morning.  Alas, there was no entry on May 13, 1662.

Samuel Pepys-

From Wikipedia, the free encyclopedia

Samuel Pepys PRS, MP, JP, (/ˈpiːps/;23 February 1633 – 26 May 1703) was an English naval administrator and Member of Parliament who is now most famous for the diary he kept for a decade while still a relatively young man. Although Pepys had no maritime experience, he rose by patronage, hard work and his talent for administration, to be the Chief Secretary to the Admiralty under both King Charles II and subsequently King James II.

His influence and reforms at the Admiralty were important in the early professionalisation of the Royal Navy. The detailed private diary Pepys kept from 1660 until 1669 was first published in the 19th century, and is one of the most important primary sources for the English Restoration period. It provides a combination of personal revelation and eyewitness accounts of great events, such as the Great Plague of London, the Second Dutch Warand the Great Fire of London.

Photos of the day

A bicyclist rides past the ‘Wave’ sculpture on a beautiful spring day along scenic Bayshore Boulevard, in Tampa, Fla. Bayshore’s 4.5-mile sidewalk is said to be the longest continuous sidewalk in the world. AP

Kentucky Derby winner California Chrome lowers his face in front of a fan inside the barn after his morning work out in preparation for the Preakness Stakes at Pimlico Race Course in Baltimore, Md. Tommy Gilligan-USA TODAY

Market Closes for May 13^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Callie Bost and Lu Wang

May 13 (Bloomberg) — Canadian stocks rose for a second day, extending gains after the worst weekly loss since June for the Standard & Poor’s/TSX Composite Index, as Encana Corp. paced advances among energy producers.

Encana jumped 2 percent after reporting first-quarter profits that beat analysts’ estimates. Aurora Oil & Gas Ltd. soared 6.2 percent after Baytex Energy Corp. increased its offer for the company. Pembina Pipeline Corp. climbed 2.1 percent amid an analyst upgrade. Hudson’s Bay Co. declined 3.3 percent as some of its shareholders sold a combined 10 percent stake.

The Standard & Poor’s/TSX Composite Index added 24.87 points, or 0.2 percent, to 14,679.81 at 4 p.m. in Toronto. The equity gauge, which lost 1.6 percent last week, has climbed 7.8 percent this year.

“The big question for investors is the progress in the U.S. economy,” David Baskin, president of Baskin Financial Services in Toronto, said in a phone interview. The firm manages C$650 million ($600 million). “Are we going to see more robust growth in the second quarter? We’re broadly constructive. We still think there are still good quality companies available at reasonable value. We’re buyers rather sellers at this time.”

Retail sales in the U.S. climbed 0.1 percent last month after a revised 1.5 percent surge in March that was the biggest since March 2010, Commerce Department figures showed today. The median forecast of 83 economists surveyed by Bloomberg called for a 0.4 percent advance in April.

Six of 10 main industries in the S&P/TSX advanced. Energy shares climbed 0.5 percent. The group lost 2.6 percent last week, the most since June.

Encana advanced 2 percent to C$25.09. Canada’s largest natural gas producer returned to a first-quarter profit as prices for the heating and power-plant fuel rose.

Aurora jumped 6.2 percent to C$4.26. Baytex raised its bid for the Australian company by 10 cents to A$4.20 a share from an initial offer in February, winning the backing of the target’s two biggest shareholders. Shares of Baytex slipped 0.4 percent to C$45.40.

Pembina Pipeline Corp. climbed 2.1 percent to C$45.48. The distributor of petroleum products was raised to buy from hold at Canaccord Genuity Corp.

Hudson’s Bay dropped 3.3 percent to C$17.50. The company that owns Saks Fifth Avenue and Lord & Taylor said some of its shareholders agreed to sell C$140 million of stock.

USA
By Joseph Ciolli

May 13 (Bloomberg) — The Standard & Poor’s 500 Index was little changed at a record, after briefly topping 1,900 for the first time, as data showed retail sales in March were higher than initially reported.

Keurig Green Mountain Inc. added 7.6 percent after Coca- Cola Co. boosted its stake in the company. Whirlpool Corp. sank 2.8 percent following an analyst downgrade. McKesson Corp. rallied 3.3 percent on better-than-estimated earnings.

The S&P 500 added less than one point to 1,897.45 at 4 p.m. in New York for a second consecutive record close. The Dow Jones Industrial Average rose 19.97 points, or 0.1 percent, to 16,715.44, extending its all-time high after a fifth straight gain, its longest rally this year.

“We’ve had a stealth rally in the market to this record,” Eric Marshall, a portfolio manager at Hodges Funds in Dallas, said in a phone interview. The firm oversees about $2 billion.  “The fact that we’ve moved up and hit new highs, in spite of some lingering negative sentiment, is a very healthy and positive thing for the market.”

Small-cap stocks slumped today, with the Russell 2000 Index sinking 1.1 percent after yesterday rallying the most in two months. The Nasdaq Composite Index slipped 0.3 percent after having its best day since January. About 5.5 billion shares changed hands on U.S. exchanges, 17 percent below the three- month average.

While the technology-heavy Nasdaq Composite has recovered 3.3 percent from its April low, it remains more than 5 percent below a 13-year high in March as investors have sold some of the bull market’s biggest winners. TripAdvisor Inc. slid 2.8 percent today for the worst performance in the S&P 500 after jumping 5.8 percent yesterday.

Data today showed retail sales climbed 0.1 percent last month after a revised 1.5 percent surge in March that was the biggest since March 2010, Commerce Department figures showed. The median forecast of 83 economists surveyed by Bloomberg called for a 0.4 percent advance.

Consumers were less inclined to ramp up spending again after March saw a release of pent-up demand caused by harsh winter weather.

“We’re still in a nascent recovery,” Chad Morganlander, a fund manager at Stifel Nicolaus & Co., which oversees more than $150 billion, said in a phone interview from Florham Park, New Jersey. “We do believe there will continue to be an underlying improvement in economic trends over the course of this year.  There are other economic numbers that trump this report — it’s not a game-changer.”

Macy’s Inc., Wal-Mart Stores Inc. and Kohl’s Corp. are among 12 companies in the S&P 500 scheduled to disclose results this week, giving investors insight into how retailers performed during the winter months.

About 76 percent of the S&P 500 companies that have released results this earnings season have beaten estimates for profit, while 53 percent have exceeded revenue projections, data compiled by Bloomberg show.

Investors have added $504 million to U.S. equity exchange- traded funds in the past five days and put $1.2 billion in bond ETFs, data compiled by Bloomberg show. Energy stocks saw the most money added among industry ETFs, increasing $301 million during the past week. Technology ETFs saw $808 million in outflows over the same period.

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, fell 0.8 percent to 12.13, the lowest level since August. The gauge has fallen 43 percent since reaching a two-year high on Feb. 3.

Six of the 10 main S&P 500 groups rose today, with energy shares adding 0.2 percent to pace gains. Phone stocks retreated 0.7 percent as a group for the biggest decline.

AT&T Inc. lost 1 percent to $36.20 after people familiar with the matter said the company has held advanced talks to acquire DirecTV for about $50 billion. DirecTV slipped 1.2 percent to $86.08. The company and AT&T have discussed an offer of as much as $100 per share, said the people, who asked not to be identified because the information is private.

Keurig Green Mountain climbed 7.6 percent to $119.07. Coca- Cola increased its stake in the maker of household coffee machines to 16 percent, three months after acquiring a 10 percent holding. Coca-Cola’s wholly owned subsidiary Atlantic Industries now owns 19.5 million shares in Keurig, according to a regulatory filing.

McKesson advanced 3.3 percent to $180. The largest U.S. drug wholesaler said adjusted earnings per share amounted to $2.55 in the fourth quarter of its financial year, more than the $2.39 that analysts had projected. Revenue in the three months through March totaled $38.1 billion, beating the $35.9 billion average estimate.

An S&P index of homebuilders rose for a third day, rallying 0.7 percent. Lennar Corp. increased 1.4 percent to $39.78, while D.R. Horton Inc. climbed 2.2 percent to $23.07.

Whirlpool slid 2.8 percent to $151.55 after Longbow Research LLC cut the company’s rating to neutral from buy.

Elizabeth Arden Inc. tumbled 23 percent, the most since 2009, to $27.50. The maker of Elizabeth Taylor and Britney Spears-branded perfumes reported quarterly revenue that missed analysts’ estimates.

Have a wonderful evening everyone.

Be magnificent!

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

you become one with the whole.

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

Remove the characteristics,

and you no longer have an entity.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

Life itself is the proper binge.

-Julia Child, 1912-2004

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