February 25, 2015 Newsletter

Dear Friends,

Tangents:

Singing

Before the age of the wireless, we all used to sing, all of us, all day long. 
If you walked down the street in Florence in 1350, you would hear every
craftsperson and trader bellowing out songs both secular and divine, folk songs,
courtly love songs, lyrics by Dante  The gloom of the late Puritan age has
killed much of this joyful expression.  But it lingers still, on the building
site or in the garage.  So sing again!  Sing once more, as we used to
in the old days!

 -Dan Kieran and Tom Hodgkinson, The Book of Idle Pleasures

PHOTOS OF THE DAY

Britain’s Prince Harry sits in a hide with wildlife trust patron Conrad Dickinson and photographer Will Nicholls (unseen), as he visits the conservation of red squirrels at Northumberland Wildlife Trust’s red Squirrel Northern England (RSNE) project, at Frankham Woods near Fourstones, northern England on Wednesday. Photo: Jason Friend/Reuters

This photo provided by the Department of Defense US Army White Sands Missile Range shows a NASA Terrier-Black Brant research rocket that launched from White Sands Missile Range, in New Mexico early Wednesday, just beyond the reaches of the earth’s atmosphere. The rocket is carrying an experiment to study ionization in space. Drew Hamilton/AP

Market Closes for February 25^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose the most in two weeks as Hudson’s Bay Co. surged to a record after announcing real- estate joint ventures while banks gained on improving earnings.

     Hudson’s Bay soared a record 20 percent after saying the real-estate deals will enable it to pay down about $1.1 billion in debt. Royal Bank of Canada, the nation’s second-largest lender by assets, advanced 3.8 percent after posting earnings ahead of analysts’ estimates. Centerra Gold Inc. rose 5.6 percent as gold climbed from a seven-week low.

     The Standard & Poor’s/TSX Composite Index rose 63.60 points, or 0.4 percent, to 15,228.57 at 4 p.m. in Toronto. The benchmark Canadian equity gauge has advanced 4.1 percent this year. Trading volume was 17 percent below the 30-day average.

     Six of the 10 main industries in the S&P/TSX advanced. Hudson’s Bay soared to an all-time high, leading consumer discretionary shares to a gain of 1.9 percent as a group.

     The two joint ventures collectively value the real estate portfolio of Hudson’s Bay at C$9.2 billion, the company said on a conference call with analysts. The retailer will pay down C$1.1 billion in debt and plans to use funds to renovate existing stores.                          

     Royal Bank rallied 3.8 percent, the biggest gain since June 2012, after posting record profit on domestic lending and investment banking. The lender raised its dividend 2.7 percent. National Bank of Canada, which also posted better-than-expected earnings, added 3.3 percent.

     Centerra Gold rose 5.6 percent and Iamgold Corp. increased 2.1 percent as gold for April delivery rose to $1,201.50 an ounce in New York, from a seven-week low. First Majestic Silver Corp. gained 4.6 percent as silver advanced.

     Federal Reserve Chair Janet Yellen signaled Tuesday an interest-rate increase wasn’t imminent. She continues testimony to U.S. lawmakers today.

     BlackBerry Ltd. increased 1.6 percent to the highest level in almost a month after the Waterloo, Ontario-based company announced a partnership with Google Inc. to allow the search giant’s suite of mobile productivity tools to run on the smartphone maker’s device management system.

US

By Michelle F. Davis

     (Bloomberg) — U.S. stocks were little changed near all- time highs as declines in Hewlett-Packard Co. and Apple Inc. offset gains among retailers amid corporate earnings.

     Hewlett-Packard tumbled 9.9 percent after saying earnings will be hurt by the rising dollar. Apple lost 2.6 percent as technology shares slumped 0.7 percent. Chesapeake Energy dropped 9.6 percent as earnings fell short of analysts’ projections. Dollar Tree Inc. and TJX Cos. added more than 2.1 percent to pace gains among retailers.

     The Standard & Poor’s 500 Index fell less than 0.1 percent to 2,113.86 at 4 p.m. in New York. The Dow Jones Industrial Average rose 15.38 points, or less than 0.1 percent, to a record 18,224.57. The Nasdaq Composite lost less than 1 point, ending a 10-day rally that brought the gauge to within 1.6 percent of its 2000 record. About 6.2 billion shares changed hands on U.S. exchanges, 9.2 percent below the three-month average.

     “We’ve had a great run and we’re still up around the new highs,” Matt Kaufler, the Rochester, New York-based portfolio manager of Federated’s Clover Value Fund, said by telephone. “It’s not uncommon to take a brief pause.”

     Stocks rallied on Tuesday after Federal Reserve Chair Janet Yellen said in testimony before the Senate Banking Committee that inflation and wage growth remain too low for the central bank to raise rates at its next meeting. She signaled that a change in the Fed’s guidance on interest rates won’t lock it into a timetable for tightening.

     Yellen repeated that stance before lawmakers a second day.

     The S&P 500 rose last week as minutes from the central bank’s latest meeting showed some policy makers argued for keeping rates low for longer amid risks facing the economy.                         

     Data Wednesday showed new homes in the U.S. sold at a faster pace than forecast in January, a sign of stabilization in the housing industry.

     “Momentum is still there, you have support from central banks, and the U.S. economy is looking pretty decent,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “Markets interpreted Yellen to be a little more to the softer side. It’s been a rapid rally this month, so maybe we’ll rise a bit more steadily from here.”

     The S&P 500 has gained 6 percent in February, poised for the best monthly performance since October 2011, while the Dow has added 6.2 percent. Both climbed to records yesterday. The Nasdaq Composite has rallied 7.2 percent, buoyed by gains in Apple, which has the biggest weighting in the index.                        

     The Chicago Board Options Exchange Volatility Index rose 1.1 percent to 13.84. The gauge, known as the VIX, is on track for its worst month ever.

     Five of 10 main groups in the S&P 500 fell. Utilities shares lost 1.6 percent, and technology companies slipped 0.7 percent.

     Hewlett-Packard slumped 9.9 percent after forecasting quarterly and full-year profit that trailed estimates, saying a rising U.S. dollar will hurt results as the computer maker prepares to split in two.

     The shares maintained losses after people with knowledge of the matter said Hewlett-Packard is in talks to acquire Aruba Networks Inc., a maker of wireless-network infrastructure used by hotels, universities and shopping malls.

     Apple slid 2.6 percent. BlackBerry Ltd. announced a partnership with Google Inc. to allow the search giant’s suite of mobile productivity tools to run on the smartphone maker’s device management system. BlackBerry added 2.3 percent while Google gained 1.5 percent.

     Chesapeake Energy lost 9.6 percent as earnings fell short of analysts’ projections.

     The earnings season is drawing to a close, with more than 90 percent having already reported. Of those, 74 percent beat profit projections and 56 percent topped sales estimates.

     Analysts predict profit at S&P 500 companies will drop 4.5 percent in the current quarter after a 4.3 percent increase in the final three months of 2014, data compiled by Bloomberg show.

     Lumber Liquidators Holdings Inc. plunged 26 percent, the most since 2011, after Chief Executive Officer Robert Lynch said “60 Minutes” will feature the retailer in an unfavorable light.

     The company also disclosed that the U.S. Department of Justice may file criminal charges stemming from an inquiry that began in 2013 for a violation of import laws.

     Consumer-discretionary shares increased 0.8 percent for the best performance.

     Dollar Tree and TJX added at least 2.1 percent after fourth-quarter earnings topped analysts’ estimates. Macy’s Inc. jumped 2.4 percent, rebounding after a drop of 3.2 percent on Tuesday.

     McDonald’s Corp. jumped 3.9 percent, the most in the Dow, to the highest level since July 18.

     Newfield Exploration Co. jumped 14 percent, the most in six years, after the energy company said it sees production increasing by 18 percent in 2015.

Have a wonderful evening everyone.

Be magnificent!

Man must understand that when he cuts himself off from all stimulating and purifying contact with infinity,

and no longer relies on it for his subsistence and his health, he risks madness;

he tears himself asunder, and divorces himself from his very substance.

Rabindranath Tagore

As ever,
 

Carolann

To know what you know and what you do not know, that is true knowledge.

                                                                     -Confucius, 551-479 BC

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