May 28, 2014 Newsletter

Dear Friends,

Tangents:

May 28^th, 1934 – Annette, Emilie (d1954), Yvonne, Cecile and Marie (d1970) Dionne quintuplets, were born on this day to Oliva and Elzire Dionne at Corbeil, Ontario, near North Bay in 1934. The Dionnes were the first surviving quints in history; each weighed less than two pounds and together they weighed only 10 lbs in total a week after birth. Allan Roy Dafoe 1883-1943, the doctor who delivered the babies, also became a celebrity, when he arranged to make them wards of the Ontario government, under his supervision, in a virtual theme park called Quintland, across from the parents’ home. Over 3 million people – up to 6,000 a day – came to watch them play behind a one-way screen, and they endorsed hundreds of products ranging from Quaker Oats to corn syrup, before they were returned to their parents in 1943 after a long custody battle. Their family reunion was bitter.  The sisters started a suit against the Ontario government for a portion of their trust fund, but recently settled for $3 million.

May 28^th, 1998 – Dr. Susan Terebey discovered a planet outside of our solar system with the use of photos taken by the Hubble Space Telescope.

May 28^th,1999 – In Milan, Italy, Leonardo de Vinci’s “The Last Supper” was put back on display after more than 20 years of restoration work.

Number of the Day

$37 billion

The amount the U.S. spent last year on cancer drugs, up 19% in five years and more than any other category, according to the IMS Institute for Healthcare Informatics, a unit of IMS Health. –from the Wall Street Journal, May 28^th, 2014.

On this day in 1957, baseball owners voted unanimously to move the Brooklyn Dodgers and the New York Giants to Los Angeles and San Francisco, respectively. -By Steven Russolillo, WSJ.

The way a young man spends his evenings is a part of that thin area between success and failure. –Robert R. Young, U.S. financier and railroad tycoon, 1897-1958.

Photos of the day

Etonians wear flower-laden boaters on The Fourth of June Day in honor of George III’s birthday at Eton college in Eton, southern England. Eddie Keogh/Reuters

New York Yankees shortstop Derek Jeter (2) bats against the St. Louis Cardinals during the fourth inning at Busch Stadium. Jeff Curry/USA TODAY/AP

Members of Nepal mountaineers association participate in a candle light vigil on the eve of the anniversary of the conquest of Mount Everest as they remember the climbers who died in the April 18 avalanche in Katmandu, Nepal. Tenzing Norgay and Edmund Hillary reached the summit of Everest on May 29, 1953. Since then thousands of people have reached the 8,850-meter (29,035-foot) peak. Niranjan Shrestha/AP

Market Closes for May 28^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Gerrit De Vynck

May 28 (Bloomberg) — Canadian stocks decreased for a second day as Valeant Pharmaceuticals International Inc. slid and gold prices declined.

Valeant lost 2.1 percent after raising its unsolicited offer for Allergan Inc. to about $49.4 billion. DragonWave Inc. rallied 13 percent after it signed an agreement to supply an Internet service provider in India with hardware. Bellatrix Exploration Ltd. fell 6.5 percent after saying it would sell 25.7 million new shares.

The Standard & Poor’s/TSX Composite Index dropped 47.06 points, or 0.3 percent, to 14,610.96 at 4 p.m. in Toronto. The benchmark index slipped 0.4 percent yesterday, and is fewer than 500 points below an all-time high.

“Gold prices and the materials sector have been pretty weak over the last couple months and a lot of that has to do with some better-than-expected economic data,” said Youssef Zohny, portfolio manager at Stenner Investment Partners of Richardson GMP Ltd. in Vancouver.

Gold futures reached a 15-week low, paring some of the gains won this year. The metal had its best first-quarter showing since 2008 as investors looked for a safe investment among weak economic numbers and the crisis in Ukraine.

“There’s been kind of a spring rebound in some of the economic numbers and that’s been weighing on gold prices,” Zohny said. Richardson GMP manages about C$26 billion ($24 billion).

Pretium Resources Inc. and Fortuna Silver Mines Inc. led losses among materials companies, falling 5 percent each.

Valeant fell 2.1 percent to C$138.11. The drugmaker increased its hostile bid for Allergan and sold rights to some of its skin-care products for about $1.4 billion to Nestle SA.

DragonWave increased 13 percent to C$1.53. The Ottawa-based company said it is selling “several thousand” of its Internet links to the Indian service provider. DragonWave said earlier this month it had opened a service center in Delhi.

Bellatrix lost 6.5 percent to C$9.55 after saying it would sell 25.7 million shares for C$9.75 each. The company said it would use net proceeds from the offering to cut down debt.

National Bank of Canada dropped 2.5 percent to C$46.86 after second-quarter revenue missed analyst estimates. The Montreal-based company said it increased its quarterly dividend to 48 Canadian cents from 46 Canadian cents.

Midway Gold Corp. gained 8.3 percent to C$1.05 after the miner increased its resource estimate at its Gold Rock project in Nevada.

US
By Lu Wang

May 28 (Bloomberg) — U.S. stocks fell, after a four-day rally lifted the Standard & Poor’s 500 Index to a record, as losses among retailers overshadowed gains in phone shares and utilities before a report tomorrow that may show the economy contracted in the first quarter.

Dollar General Corp. and Lowe’s Cos. slipped more than 2.2 percent after analysts cut their ratings on the shares. Allergan Inc. dropped 5.4 percent as Valeant Pharmaceuticals International Inc. raised its unsolicited offer to about $49.4 billion. Toll Brothers Inc., the largest U.S. luxury-home builder, gained 2.1 percent after reporting that profit more than doubled. Twitter Inc. jumped 11 percent, the biggest increase in a month, after Nomura Holdings Inc. raised its recommendation on the stock.

The S&P 500 dropped 0.1 percent to 1,909.78 at 4 p.m. in New York. The Dow Jones Industrial Average retreated 42.32 points, or 0.3 percent, to 16,633.18.

“After hitting a high, the market is taking a little bit of a breather,” Michelle Clayman, chief investment officer at New Amsterdam Partners in New York, which manages $1.6 billion, said in a phone interview. “The fundamentals of the U.S. market still look decent.”

Phone companies and utilities added at least 0.4 percent for the two biggest gains among the 10 main industries in the S&P 500. The equities gauge is trading at 16.2 times the projected earnings of its members, compared with a five-year average of 14.3, according to data compiled by Bloomberg News.

A report by the Commerce Department tomorrow may show the U.S. economy contracted 0.5 percent in the first quarter, following a preliminary estimate of 0.1 percent annualized growth, according to economists surveyed by Bloomberg News. GDP rose at a 2.6 percent annualized pace in the previous period. Economists forecast growth of 3.5 percent during the second quarter.

“People are focusing on the GDP number tomorrow,” John Traynor, chief investment officer of People’s United Bank Wealth Management in Bridgeport, Connecticut, said in a phone interview. His firm oversees $5.2 billion. “There are two camps of investors. They seem to fall down on the side of, ‘Is the economy at a point where it reaches a self-sustaining path?’”

Dollar General, an owner of discount stores, declined 3 percent to $54.60 as Deutsche Bank AG lowered the stock’s rating to hold from buy. Lowe’s fell 2.2 percent to $46.71. Canaccord Genuity Corp. analysts told clients to sell shares of the home improvement retailer.

Allergan, the maker of the Botox anti-wrinkle drug, dropped 5.4 percent to $156.12. Valeant added more cash to the bid in an effort to win backing from the target and its investors. As part of its defense, Allergan yesterday criticized Valeant’s management practices and operations, saying it believes the Canadian company’s organic sales growth is overstated.

Toll Brothers climbed 2.1 percent to $36.38. The home builder has continued raising prices and boosting sales in the costlier New York and California markets.

Twitter jumped 11 percent to $33.77. Nomura raised its rating on the shares to buy from neutral. The operator of the social-networking site has tumbled 50 percent this year amid a rout in technology stocks.

3D Systems Corp. declined 11 percent to $50.44 after saying it will sell 5.95 million new shares for $317 million. The maker of printers that create three-dimensional objects will use the proceeds to fund acquisitions and as working capital.

Stryker Corp. climbed 2.8 percent to $82.64 after a Financial Times report that the company is preparing a takeover offer for Smith & Nephew Plc. The seller of orthopedic devices has retained investment bankers and is working on putting together financing for a takeover offer, the newspaper reported, citing people familiar with the matter. Stryker said it doesn’t intend to make an offer for Smith & Nephew.

Low volatility and interest rates that are holding in tight ranges have resulted in an “abnormal” trading market, Goldman Sachs Group Inc. President Gary Cohn said. The Chicago Board Options Exchange Volatility Index climbed 1.5 percent to 11.68 today. It is about 3 points from a record low.

“The environment for all the firms is quite difficult right now,” Cohn said today at an investor conference in New York. “What drives activity in our business is volatility. If markets never move or don’t move, our clients really don’t need to transact.”

Have a wonderful evening everyone.

Be magnificent!

Meditation can take place when you are sitting in a bus,

or walking in the woods full of light and shadows,

or listening to the singing of the birds,

or looking at the face of your wife or child.

Krishnamurti, 1895-1986

As ever,

Carolann

Always work hard on something uncomfortably exciting.

–Larry Page, 1973-

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