February 17, 2015 Newsletter

Dear Friends,

Tangents:

It is Mardi Gras today – Fat Tuesday from the French; also known as Shrove Tuesday  and also known as Pancake Day.  Pancakes are traditionally cooked and eaten on this day before the long period of Lenten fasting begins tomorrow on Ash Wednesday.  And so, it is the last day of the Lent Carnival in France and Lent carnivals all over the world such as Brazil and New Orleans.  In Paris, a fat ox, crowned with a fillet, used to be paraded through the streets.  It was accompanied by mock priests and a band of tin instruments in imitation of a Roman sacrificial procession.

Some towns in England, e.g., Olney, Buckinghamshire and at Westminster School, Pancake Day races and Scrimmages still persist from olden times.

The ingredients in pancakes are symbolic:  eggs, the symbols of creation, flour for the staff of life, salt for wholesomeness and milk for purity.

PHOTOS OF THE DAY

Children compete in a youngsters pancake race in Olney, Buckinghamshire, England, Tuesday. A pancake race has been run in the town since 1445 to mark the start of Lent. Kirsty Wigglesworth/AP

The aurora borealis, or northern lights, shine over Dunstanburgh Castle in Northumberland, England, Tuesday. Owen Humphreys/PA/AP

Market Closes for February 17^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Michelle F. Davis

     (Bloomberg) — Canadian stocks advanced for a sixth session, extending a five-month high, as a rally among consumer shares amid corporate earnings offset a drop in raw-materials companies.

     Restaurant Brands International Inc., owner of the Tim Hortons chain, gained 8.1 percent to a record after same-store sales increased last quarter. Fairfax Financial Holdings Ltd. jumped 7.8 percent after it agreed to buy Brit Plc for $1.88 billion in the latest round of industry consolidation. Goldcorp Inc. fell 3.9 percent as gold slipped for the first time in three sessions.

     The Standard & Poor’s/TSX Composite Index rose 19.80 points, or 0.1 percent, to 15,284.61 at the close in Toronto. The benchmark Canadian equity gauge rose 1.2 percent last week and has climbed 4.5 percent this year. Trading volume was 21 percent below the 30-day average. Canadian equity markets were closed Monday for a holiday.

     Benchmark equity gauges in Europe and the U.S. finished little changed amid ongoing debt discussions between Greece and its creditors. Greece’s government may request an extension of its loan agreement for six months, according to a person familiar with the matter, a step that could ease a standoff with creditors over the country’s future financing.

     Discussions aimed at finding common ground ended on Monday without breaking an impasse. With no deal, the government could run out of money by March and be forced to choose between breaking election promises or abandoning the euro.

     Raw-materials shares led declines in the Toronto index, retreating 2 percent as gold lost 1.5 percent to a six-week low and silver plunged 5.3 percent. The precious metals tumbled on speculation Chinese demand will fall during the Lunar New Year holiday that will close markets for five days starting Wednesday.

     Energy companies slid as West Texas Intermediate for March delivery gained 1.4 percent, paring an earlier loss of more than 3.7 percent.

     Rona Inc. paced gains among consumer shares, advancing 7.8 percent, after the company posted fourth-quarter earnings that beat analysts’ estimates. Consumer-discretionary and consumer- staples shares gained at least 1.2 percent to pace gains in the S&P/TSX.

     Restaurant Brands, the newly formed parent company of Burger King and Tim Hortons, added 8.1 percent to the highest on record after posting a 3 percent same-store sales gain for its burger chain last quarter and 4.1 percent growth at its recently acquired coffee-and-doughnuts business.

     Fairfax Financial Holdings rose the most since 2008 after it agreed to buy specialty U.K. underwriter Brit, becoming the latest firm to strengthen its position amid increasing competition from hedge funds and others to take on insurance risks.

US

By Callie Bost

     (Bloomberg) — The Standard & Poor’s 500 Index reached a record for a second day on speculation that the Greek debt impasse is easing while oil prices erased earlier declines.

     Medtronic Plc rose 3.7 percent after its quarterly profit beat analysts’ estimates, helping lift S&P 500 health-care companies 0.6 percent. West Texas Intermediate crude rallied 1.4 percent, and energy stocks were little changed after earlier losing more than 1 percent.

     The S&P 500 climbed 0.2 percent to 2,100.34 at 4 p.m. in New York. The Dow Jones Industrial Average added 28.23 points, or 0.2 percent, to 18,047.58. The Russell 2000 Index advanced 0.2 percent after reaching a record Friday. About 6.3 billion shares changed hands on U.S. exchanges, 8.4 percent below the three-month average.

     “We’ve had a pretty sizable rally here,” Randy Frederick, managing director of trading and derivatives at Charles Schwab Corp., said by phone. His firm oversees $2.45 trillion in client assets. “Oil prices were heading lower earlier and now they’ve turned around. The developments in Greece are big, but I’d say this is more oil.”

     Greece’s government may request an extension of its loan agreement for six months, according to a person familiar with the matter, a step that could ease a standoff with creditors over the country’s future financing.

     Discussions aimed at finding common ground between Greece and its creditors ended on Monday without breaking an impasse. With no deal, the government could run out of money by March and be forced to choose between breaking election promises or abandoning the euro.

     The S&P 500 rose to an all-time high last week as technology shares rallied and oil rebounded to end stocks’ longest dip since 2013. Signs of easing tension between Greece and European leaders also helped push U.S. equities higher.                         

     Crude prices jumped 1.4 percent after earlier falling 3.7 percent. Noble Corp. rose 5.1 percent, after an earlier 1.5 percent drop, and Diamond Offshore Drilling Inc. added 4.9 percent, erasing a 2.9 percent retreat.

     “One day oil goes up $1 and risk assets rally, the next day oil goes down $1 and risk assets sell off,” Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management LLC, which oversees about $68 billion in assets, said by phone. “I suspect this will be the case until the market can figure out that supply has corrected to demand levels.”

     Utility companies in the benchmark index fell 0.1 percent Tuesday after earlier rising 0.9 percent. The group fell in five of the prior six sessions and is down 7 percent in February.   Economic data Tuesday showed manufacturing in the New York area grew at a slower pace in February. The Federal Reserve Bank of New York’s general economic index fell to 7.78, below economist estimates for a level of 8. Positive readings signal expansion in New York, northern New Jersey and southern Connecticut.

     The route for stocks this year has been uneven — the S&P 500 has rallied 5.3 percent in February, heading for the best monthly performance since October 2011, after losing 3.1 percent in January for its worst month in a year. That evens out to a 2 percent gain for 2015, trailing most developed markets.

     The Chicago Board Options Exchange Volatility Index climbed 7.6 percent to 15.8. The gauge, known as the VIX, fell 15 percent last week.

     The S&P 500 has gone more than three years without a retreat of 10 percent or more, known as a correction. Still, a strong dollar and a plunge in oil prices that threaten investment and earnings growth have tested the resilience of investors as the bull market nears its seventh year.

     Earnings for S&P 500 companies rose 4.2 percent last quarter, and will probably drop in the next two periods, according to analysts’ forecasts compiled by Bloomberg. More than three-quarters of the S&P 500 companies have reported results for the final three months of 2014, with 76 percent beating profit estimates, data compiled by Bloomberg show.

     Wal-Mart Stores Inc., Noble Energy Inc., and Discovery Communications Inc. are among companies releasing financial results this week.

     Waste Management Inc. jumped 5.2 percent to the highest level since 1999. The company reported fourth-quarter adjusted earnings that beat analysts’ expectations and forecast a higher- than-estimated adjusted profit this year.

     Medtronic climbed 3.7 percent, leading health-care stocks higher. The world’s biggest maker of heart-rhythm devices reported profit that beat analysts’ estimates, buoyed by the introduction of new products. Tenet Healthcare Corp. advanced 2.3 percent, and Biogen Idec Inc. added 1.6 percent.

     Goodyear Tire & Rubber Co. rose 2.7 percent after its fourth-quarter profit exceeded forecasts.                      

     Starwood Hotels & Resorts Worldwide Inc. added 2.7 percent after the owner of the Sheraton and W brands said Chief Executive Officer Frits van Paasschen resigned by mutual consent with the board of directors.

     Cablevision Systems Corp. dropped 4.1 percent for the biggest decline in the S&P 500. UBS Securities LLC analyst John Hodulik downgraded the shares to sell from neutral, citing concerns about the potential for more aggressive competition from Verizon Communications Inc., and lower odds that the company will get acquired.
 

Have a wonderful evening everyone.

Be magnificent!

Beauty lies in the total abandonment of the observer and the observed,

and there can be self-abandonment only when there is total austerity.

There is no ladder to climb; there is only the first step

and the first step is the everlasting step.

Krishnamurti

As ever,
 
 

Discipline is the bridge between goals and accomplishment.

                                            -John Rohn, 1930-2009

Carolann

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