March 16, 2015 Newsletter

Dear Friends,

Tangents:

Went to the theatre to see The Second Best Exotic Marigold Hotel on the weekend and highly recommend it for a fun evening out.   It’s a feel good movie and the acting by Dev Patel is as superb as the first one.

Judi Dench, Maggie Smith and Bill Nighy were as terrific as the last one.  It’s always good to laugh….

PHOTOS OF THE DAY

London mayor Boris Johnson (l.) plants waterlilies at the Royal Botanic Gardens in Kew, west London, Monday. Stefan Wermuth/Reuters

A litter of piglets thrive at Hancock Shaker Village in Hancock, Mass., Monday. They are the first babies born there this spring. The Village opens April 11 with the Baby Animal Exhibit. Ben Garver/The Berkshire Eagle/AP

Market Closes for March 16^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose the most in five weeks, as Valeant Pharmaceuticals International Inc. climbed to a record on deal news and the nation’s largest lenders led a rally in financials shares.

     Valeant gained 2.5 percent after boosting its offer for Salix Pharmaceuticals Ltd., besting rival Endo International Plc. Alimentation Couche-Tard Inc. increased 2.4 percent after agreeing to buy 21 stores in the U.S. SouthGobi Resources Ltd. rose 3.6 percent after its chief executive officer resigned. Canadian Oil Sands Ltd. and Pacific Rubiales Energy Corp. slumped more than 6.4 percent as oil fell to a six-year low.

     The Standard & Poor’s/TSX Composite Index rose 131.26 points, or 0.9 percent, to 14,862.76 at 4 p.m. in Toronto, the biggest advance since Feb. 3. The S&P/TSX tumbled 1.5 percent last week. It has advanced 1.6 percent in 2015.

     Canadian Pacific Railway climbed 2.4 percent as industrials shares rallied 1.5 percent as a group. All 10 industries in the S&P/TSX rose on trading volume 12 percent below the 30-day average.

     Canadian Pacific advanced after renewing its share buyback program, seeking to repurchase as much as 6 percent of the company’s shares held by public investors.

     Bank of Nova Scotia rallied 1.6 percent and Bank of Montreal added 1.1 percent as the S&P/TSX Banks index jumped 0.9 percent.

     Valeant rose after Salix accepted the drugmaker’s sweetened $11.1 billion takeover offer. Endo dropped its rival bid of $175 a share in cash and stock in the face of Valeant’s $173 a share all-cash offer.

     Salix’s biggest products are for gastrointestinal disorders, including Xifaxan for travelers’ diarrhea. It agreed last month to be acquired by Valeant for about $10 billion in cash.

     Pacific Rubiales tumbled 13 percent and Canadian Oil Sands sank 6.4 percent as West Texas Intermediate oil slumped to the lowest level since March 2009.

     U.S. crude inventories have increased to the highest level since at least 1982, according to the Energy Information Administration, worsening a global supply glut as production continues to rise.

     Barrick Gold Corp. slipped 0.7 percent and Tahoe Resources Inc. lost 8.5 percent as gold futures traded near a three-month low. The U.S. Federal Reserve meets this week to discuss whether the economy has gained enough steam to remove a pledge to be “patient” on raising borrowing costs.

US

By Callie Bost

     (Bloomberg) — The Standard & Poor’s 500 Index rose the most since Feb. 3, amid corporate deals and as investors weighed the timing of interest-rate increases after lower-than-forecast economic data.

     Health-care companies in the S&P 500 Index advanced 2.2 percent as Salix Pharmaceuticals Ltd. accepted a sweetened, $11.1 billion takeover offer from Valeant Pharmaceuticals International Inc. Life Time Fitness Inc. rose 5.2 percent after agreeing to be bought by private equity firms.

     The S&P 500 Index climbed 1.4 percent to 2,081.19 at 4 p.m. in New York, and moved back above its average price for the past 50 days. The Dow Jones Industrial Average added 228.11 points, or 1.3 percent, to 17,977.42. The Nasdaq Composite Index increased 1.2 percent. About 6.3 billion shares changed hands on U.S. exchanges, 8.3 percent below the three-month average.

     “People are thinking it’s not a given that the Fed is going to move toward raising rates any time soon,” Donald Selkin, the chief market strategist at New York-based National Securities, which oversees $3 billion, said by phone. “You’ve seen weaker reports and a drop in bond yields.”

     The yield on 10-year Treasuries earlier fell as much as five basis points to 2.06 percent, the lowest in two weeks.

     The S&P 500 has lost 1.7 percent from a record on March 2, as a surging dollar stoked concern earnings growth will be lower than investors project. A gauge of the currency versus its major peers retreated, after posting four weeks of gains, before Fed officials start a two-day meeting Tuesday.                          

     Speculation that a strengthening economy is pushing the central bank closer to an interest-rate increase has weighed on U.S. equities, making them among the worst performers in 24 developed markets this year.

     The Fed may remove the pledge to be “patient” with raising interest rates at this week’s meeting, according to predictions by firms including BNP Paribas SA. While the Fed is moving closer to raising rates, central banks in Europe and Asia are taking steps to bolster growth.

     Factory production in the U.S. declined in February for a third consecutive month, a sign cutbacks in manufacturing will hold back economic growth this quarter. An earlier report showed an index of manufacturing in the New York region fell in March.

     Confidence among U.S. homebuilders unexpectedly retreated this month to an eight-month low as prospective buyers were in little rush to shop for properties ahead of the busier spring selling season.                      

     After six years of bull market amid Fed stimulus, volatility is back in U.S. stocks. The S&P 500, which never went more than three days without a gain in 2014, has twice posted five-day losing streaks this year. Daily equity moves exceeding 1 percent have jumped 50 percent from last year and shares slid 3 percent or more over four stretches in the first quarter.

     The Chicago Board Options Exchange Volatility Index slid 2.4 percent to 15.61. The gauge of S&P 500 options prices posted its second consecutive weekly gain March 13.

     Nine of 10 main industries in the S&P 500 advanced. Health- care soared 2.2 percent, and utilities rose 1.7 percent as yields on 10-year U.S. Treasuries fell to the lowest since Feb.27. Industrial shares added more than 1.6 percent.

     UnitedHealth Group Inc. and Merck & Co. jumped at least 1.6 percent, among the biggest gains in the Dow. Procter & Gamble Co. added 2.1 percent after people with knowledge of the matter said the company is exploring a sale or initial public offering of some of its beauty brands in a single deal.                          

     Salix climbed 2 percent. Valeant’s revised $173-a-share offer adds about $1 billion in cash for Salix stockholders. Valeant rose 2.5 percent. The sweetened deal led rival bidder Endo International Plc. to withdraw its offer of $175 a share in cash and stock. Endo increased 2.7 percent.

     Drugmakers developing a new generation of cholesterol treatments surged Monday after releasing data that showed the injections cut the rate of major cardiac events and death as they slashed bad cholesterol.

     Amgen Inc. rose 5.7 percent, the most since October. Sanofi and Regeneron Pharmaceuticals Inc. both climbed at least 3.3 percent, with Regeneron reaching a record.

     Life Time Fitness jumped 5.2 percent. The investor group, which also includes LNK Partners and Life Time’s chief executive officer, Bahram Akradi, will pay $72.10 a share in cash for the Chanhassen, Minnesota-based company, according to a statement Monday. The deal is one of the biggest buyouts of the year.

     Edwards Lifesciences Corp. soared 9.8 percent to a record.  The company’s newer, thinner heart valve had lower death and stroke rates than the company’s older devices, a study found. The valve, Sapien 3, is already available in Europe, and Irvine, California-based Edwards has said it expects U.S. approval early next year.                        

     Energy stocks climbed 1.4 percent, erasing an earlier 0.8 percent decline, led by gains of at least 2.9 percent in EOG Resources Inc. and Noble Energy Inc. Oil futures slumped to the lowest level since March 2009.

     Netflix Inc. lost 3.8 percent, the most in more than two months, after Evercore ISI analyst Ken Sena cut shares to sell from hold, citing increasing competition from existing and emerging content distributors.

     Raw-material companies were the only group to fall as DuPont Co. lost 4.3 percent, the most since October 2012. Bank of America Merrill Lynch analyst Kevin McCarthy cut shares to underperform from buy, in part citing the impact on results from a stronger dollar. Alcoa Inc. and Freeport-McMoran Inc. fell more than 0.9 percent.

Have a wonderful evening everyone.

Be magnificent!

As long as the brain, which is so heavily conditioned, is measuring, “the more,” ‘the better,”

moving psychologically from this to that, it must inevitably bring about a sense of conflict, and this is disorder.

Not only the words more and better, but the feeling, the reaction, of achieving,

gaining – as long as there is this division, duality, there must be conflict.  And out of conflict is disorder.

Krishnamurti

As ever,

Carolann

Never let the fear of striking out get in your way.

                                  -Babe Ruth, 1895-1948

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