February 11, 2015 Newsletter

Dear Friends,

Tangents:

I read a wonderful book on the weekend, The Fault in Our Stars by John Green.  If you haven’t had a chance to read it yet, please do so.  You’ll be profoundly enriched if you do…. I picked it up when I read that Timeawarded it the #1 book of fiction of 2012, but only just got around to reading it this past weekend.

Here’s 3 critics’ assessments:

“Damn near genius . . . The Fault in Our Stars is a love story, one of the most genuine and moving ones in recent American fiction, but it’s also an existential tragedy of tremendous intelligence and courage and sadness.” —Lev Grossman, TIME Magazine

 
“This is a book that breaks your heart—not by wearing it down, but by making it bigger until it bursts.”
—The Atlantic
 
“In its every aspect, this novel is a triumph.”
—Booklist, starred review

Quote from The Fault in Our Stars:

“Sometimes, you read a book and it fills you with this weird evangelical zeal, and you become convinced that the shattered world will never be put back together unless and until all living humans read the book.” 
                                                                                                                                                                                                                                     ― John Green, The Fault in Our Stars

PHOTOS OF THE DAY

Roses are selected for a bouquet ahead of Valentine’s Day in Subachoque. Colombia, the world’s second-largest flower exporter behind the Netherlands, exports about 500 million flowers to the US for Valentine’s Day. John Vizcaino/Reuters

The sun sets over Lake Geneva and the Swiss and French Alps above Montreux, southwestern Switzerland, Wednesday. Laurent Gillieron/Keystone/AP

Market Closes for February 11^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam and Michelle F. Davis

     (Bloomberg) — Canadian stocks rose to the highest since September as consumer and financial companies rallied to offset a drop in Air Canada and raw-material shares.

     Air Canada dropped 10 percent, the most in a year, after fourth-quarter earnings fell short of analysts’ estimates as the weaker Canadian dollar offset cheaper fuel. Ballard Power Systems Inc. soared 64 percent after signing a technology deal with Volkswagen AG and Audi AG. FirstService surged to a record after posting profit and revenue that beat analysts’ estimates.

     The Standard & Poor’s/TSX Composite Index rose 38.98 points, or 0.3 percent, to 15,151.50 at 4 p.m. in Toronto, the highest level since Sept. 19. The benchmark Canadian equity gauge has climbed 3.6 percent this year. Trading volume was 7.9 percent below the 30-day average.

     Kinross Gold Corp. lost 6.7 percent and Barrick Gold Corp. retreated 1.3 percent as raw materials shares sank 0.5 percent as a group. Semafo Inc. dropped 9.5 percent, the most in three months.

     Gold futures slipped 1 percent to the lowest in a month as gains for the U.S. dollar cut demand for the precious metal as an alternative asset.

     Lightstream Resources Ltd. retreated 4 percent as oil fell a second day.

     West Texas Intermediate crude slipped 2.4 percent in New York as rising U.S. crude and fuel inventories added to excess global stockpiles.

     Bellatrix Exploration Ltd. jumped 18 percent after Baupost Group LLC reported an about 11 percent stake in the company in a regulatory filing.

     Air Canada, the nation’s largest airline, dropped 10 percent to pace declines among industrial stocks. The air carrier wasn’t able to reduce costs as much as planned as it spent more on jet maintenance and employee benefits.

     FirstService surged 6.9 percent after posting profit and revenue ahead of analysts’ estimates. The real estate services company also said it will separate into commercial and residential real estate units.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stock-index futures rose, after the Standard & Poor’s 500 Index closed little changed, on speculation that Greece and its euro-area creditors would reach an agreement on a bailout plan.

     S&P 500 futures contracts expiring in March advanced 0.5 percent to 2,074.30 at 5:02 p.m. in New York. The underlying index on Wednesday fell less than one point to 2,068.53 after rallying 1.1 percent a day earlier.

     Euro-area financial ministers are closing in on a statement pledging the goal of an extension of Greece’s rescue agreement with its creditors, according to four euro-area officials.

     Greece entered the Wednesday meeting in Brussels trying to drum up support for a 10 billion-euro ($11.3 billion) bridge plan to stave off a funding crunch and buy time to win an easing in austerity terms, while Germany has maintained Greece must comply with its bailout terms.

     The financial ministers will take up the issue again at a previously scheduled meeting on Feb. 16.

     In regular trading Wednesday, the Nasdaq Composite Index rose 0.3 percent, approaching an almost 15-year high, as Apple Inc. and PepsiCo Inc. rallied. The Dow Jones Industrial Average decreased less than 0.1 percent to 17,862.14. About 6.6 billion shares changed hands on U.S. exchanges today, 3.4 percent below the three-month average.                         

     Apple extended a record as billionaire activist Carl Icahn raised his anticipated price for the company’s shares. PepsiCo Inc. increased 2.5 percent as profit topped estimates even as currency headwinds eroded sales. Utility companies in the S&P 500 lost 2.4 percent. Energy shares fell 0.7 percent as oil prices declined for a second day.

     “It’s tug of war between some of the macro things, like what’s going to happen with Greece, and decent corporate earnings results in the U.S.,” John Fox, director of research at Fenimore Asset Management in Cobleskill, New York, said in a phone interview. “Those are kind of offsetting one another.”

     Gains in Coca-Cola Co. and General Motors Co. helped spur a rally in stocks Tuesday. The fourth 1 percent rally in seven days pushed the S&P 500 past levels where previous rallies failed and within 25 points of a record.

     U.S. stocks have traded for the last two months in one of the tightest ranges since 2007, marked by a record high of 2,090.57 and Dec. 16 low of 1,972.74. Even as swings in the index become more violent, the gauge has failed to break out, rising above then falling below its 50-day average four times since December.

     The S&P 500 declined 3.1 percent last month as analysts lowered forecasts for corporate profits. Estimates for first- quarter earnings slipped more than 6 percentage points over three months, the biggest decrease in six years, as oil’s plunge triggered revisions for energy companies.

     More than two-thirds of index members have reported results so far, with 77 percent beating profit estimates and 56 percent topping sales projections, data compiled by Bloomberg show.

     Energy stocks in the S&P 500 fell 0.7 percent as a report showed U.S. crude-oil stockpiles and output advanced to the highest level in more than three decades, a sign that a global supply glut will linger.

     Pioneer Natural Resources Co. lost 4 percent after fourth- quarter results were below forecasts. Apache Corp. fell 2.3 percent and Transocean Ltd. retreated 4.1 percent.

     Genworth Financial Inc. rose 6.7 percent to its highest level since early January. Losses at the insurer’s long-term care unit were narrower than some analysts had expected.                            

     Pier 1 tumbled 24 percent, the most since 2009, after cutting its full-year forecast. The operator of more than 1,000 home-decor stores in North America said profit per share in the year ending Feb. 28 will not exceed 83 cents. The average analyst estimate was for $1.

     Rite Aid added 6.6 percent to its highest level since June after agreeing to buy EnvisionRX for about $2 billion in cash and stock. With the purchase, Camp Hill, Pennsylvania-based Rite Aid is shifting toward offering services that help insurers and large employers provide drug coverage.

     Consumer staples in the S&P 500 rose 0.6 percent as PepsiCo shares increased 2.5 percent after the company posted fourth- quarter profit that topped analysts’ estimates even as currency headwinds eroded sales. Oreo cookies maker Mondelez International Inc.’s results also exceeded analysts’ estimates after cutting costs and raising prices, sending shares up 2.6 percent.                       

     Information technology shares in the benchmark gauge gained 0.4 percent. Akamai Technologies Inc. rose 2.7 percent after reporting fourth-quarter earnings that exceeded estimates.

     Apple jumped 2.3 percent to $124.88 as Icahn, who has pushed Apple to return more money to shareholders, raised his anticipated price for the company’s shares after Chief Executive Officer Tim Cook said the company is reviewing its capital- return program and will announce changes in April.

     Utility stocks in the S&P 500 slipped 2.4 percent. The index has fallen 5.3 percent since last Thursday’s close ahead of Friday’s report, which showed the U.S. added more jobs than forecast in January, capping the biggest three-month gain in 17 years. Workers’ earnings also jumped. U.S. 10-year Treasury yields have jumped 10 percent during the same period.

     “With the 10-year Treasury back to 2 percent, that’s good for financial stocks, but it’s bad for stocks people have been buying as income substitutes,” said Fox of Fenimore Asset Management. “It’s all the interest rate trade.”

     All 30 companies in the utilities index declined today, led by NiSource Inc. and CenterPoint Energy Inc. falling more than 3.4 percent. Wisconsin Energy Corp. slid 3 percent after reporting fourth-quarter earnings that fell short of analyst estimates.
 

Have a wonderful evening everyone.

Be magnificent!

A man is a universe in miniature, and the universe, a giant living body;

the cosmos is similar to a large man,

and a man is similar to a small cosmos; so say the Sufis.

Kabir

As ever,

Carolann

Experience is not what happens to you; it’s what you do with what happens to you.

                                                                            -Aldous Huxley,  1894-1963

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

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7