April 7, 2015 Newsletter

Dear Friends,

Tangents:

On this day, April 7^th, in 1964, Keith Vaughan wrote in his Journal on the New Generation exhibition at the Whitechapel Gallery, which launched the Pop Art movement:

After all one’s thought and search and effort to make some sort of image which would embody the life of our time, it turns out that all that was really significant were toffee wrappers, liquorice allsorts and ton-up motor bikes.   So one could have saved oneself the trouble.  I understand how the stranded dinosaurs felt when the hard terrain, which for centuries had demanded from them greater weight and effort, suddenly started to get swampy beneath their feet.  Over-armoured and slow-witted they could only subside in frightened bewilderment.  One hoped, I suppose, in the end to hand on to someone who saw further, had more talent, more youth, energy, more time before him, to complete what one had started, or relayed from the past. But not this.  Perhaps it is the iron curtain between the generations, which one had always heard of but thought to apply only to the past, across which no comparisons are valid. –from The Book of Days. 

PHOTOS OF THE DAY
 Visitors take photographs of the painting ‘Liz #6 [Early Colored Liz] 1963,’ by Andy Warhol, during the ‘American Icons’ exhibition at the Grand Palais in Paris Tuesday. The exhibition features images by 20th-century American artists including Warhol and Roy Lichtenstein. Jacques Brinon/AP

President Barack Obama waves with the Easter Bunny on the Truman Balcony during the White House Easter Egg Roll on the South Lawn in Washington Monday. Thousands of children gathered for the annual event which features live music, cooking stations, storytelling and Easter egg rolling. Pablo Martinez Monsivais/AP

Market Closes for April 7, 2015

International Markets

Bonds

Currencies

Commodities

 The most important lesson in investing is humility.

                       -Sir John Templeton, 1912-2008

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a fourth day, for the longest stretch of gains since February, as the nation’s largest lenders advanced and energy producers extended gains with crude reaching a seven-week high.

     Hudson’s Bay Co. surged 5.6 percent after forecasting 2015 sales that exceed estimates. Air Canada rose 1 percent as traffic increased on its routes in March. Bombardier Inc. and SNC-Lavalin Group Inc. climbed at least 1.5 percent to lead industrial shares higher. Royal Bank of Canada added 0.8 percent to pace gains among the lenders.

     The Standard & Poor’s/TSX Composite Index rose 88.19 points, or 0.6 percent, to 15,188.84 at 4 p.m. in Toronto. The equity gauge has advanced 1.9 percent in four days, the longest winning streak since Feb. 17.

     Seven of the 10 main groups in the equities benchmark advanced, with energy shares rising 1.2 percent as a group. Technology shares added 2.2 percent for the best gain. Trading volume was 13 percent higher than the 30-day average today.

     Hudson’s Bay rose to an all-time high. Digital sales at the retailer soared 35 percent in the fourth quarter while same- store sales advanced in both the company’s department store chains as well as its Saks Fifth Avenue unit.

     Ballard Power Systems Inc., which makes and markets hydrogen fuel cells, soared 8.2 percent after the company said its customers successfully demonstrated an electric tram powered by one of its cells at a ceremonial event in China.

     Royal Bank, the nation’s largest lender, increased to the highest since March 2, and Toronto-Dominion Bank increased 0.8 percent as the S&P/TSX Banks Index rallied. The group has surged 2.8 percent in six days, the longest such stretch since December.

US

By Callie Bost and Jennifer Kaplan

     (Bloomberg) — U.S. stocks fell, after two days of gains, amid declines in consumer and utility shares before the release of Federal Reserve meeting minutes Wednesday.

     Equities in the final hour erased gains after the Standard & Poor’s 500 Index climbed as much as 0.4 percent amid corporate deals. FedEx Corp. advanced 2.7 percent after agreeing to buy TNT Express NV for $4.8 billion. Axalta Coating Systems Ltd. rose 9.8 percent after Berkshire Hathaway Inc. agreed to buy 20 million of its shares from affiliates of the Carlyle Group LP.

     The S&P 500 slipped 0.2 percent to 2,076.33 at 4 p.m. in New York. The index hasn’t posted three consecutive days of gains since Feb. 17. The Dow Jones Industrial Average declined 5.43 points, or less than 0.1 percent, to 17,875.42. The Nasdaq Composite Index lost 0.1 percent. About 5.8 billion shares changed hands on U.S. exchanges, 16 percent below the three- month average.

     “The market’s kind of treading water here it seems like waiting for earnings season,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “You have an FOMC minutes on Wednesday so probably just a continued monitoring of a lot of the economic reports to get any sort of clue or indication how soon they might increase rates.”

     Earnings season unofficially kicks off when Alcoa Inc. reports quarterly results after markets close on Wednesday. Profits for S&P 500 companies probably fell 5.8 percent in the first three months of the year, according to analysts’ estimates compiled by Bloomberg. They also project a slump in the next two quarters.

     Last week’s news of the weakest hiring since December 2013 rounded off a quarter in which retail sales and capital goods orders all pointed to a first quarter flop. That leaves JPMorgan Chase & Co. estimating growth was just 0.6 percent.

     The S&P 500 rose 0.7 percent on Monday after Federal Reserve Bank of New York President William C. Dudley said the pace of rate increases may be “shallow” once tightening begins. Fed Bank of Atlanta President Dennis Lockhart said late yesterday he favors putting off a rate rise for the next two meetings.                          

     Minneapolis Fed President Narayana Kocherlakota said Tuesday that policy makers “should be extraordinarily patient about reducing the level of monetary accommodation,” and raising the fed funds rate would be a “mistake” this year.

     Minutes from the Fed’s March meeting, after which it said that economic growth has moderated, are due on Wednesday. Chair Janet Yellen has said she expects to raise rates this year, and that subsequent increases will be gradual.

     “We may find ourselves once again in the strange situation that bad economic news may be interpreted as good because it delays a rate increase,” said Philippe Gijsels, chief strategy officer at BNP Paribas Fortis in Brussels. “Each word by the Fed will be looked at from all sides. The minutes will also be closely looked at, and the same goes for the economic data, as the Fed has indicated that a hike is very data dependent.”

     The Chicago Board Options Exchange Volatility Index rose 0.3 percent to 14.78. The gauge, know as the VIX, slipped 2.7 percent last week.

     Eight of the S&P 500’s 10 main groups fell Tuesday, led by utility, phone and consumer companies. An S&P gauge of homebuilder stocks dropped 2.2 percent, the most in a month, as Toll Brothers Inc. and Lennar Corp. lost more than 2.5 percent.

    General Motors Co. fell 2.5 percent after the Canadian government said it’s selling its remaining shares in the carmaker, a stake worth about $2.7 billion.

     Entergy Corp. and Consolidated Edison Inc. slumped at least 1.5 percent to pace a 1.1 percent drop in the benchmark’s utilities shares.

     Energy and health-care companies were the only two groups to maintain gains for the session. Diamond Offshore Drilling rallied 2.8 percent after rising 5.6 percent Monday for the best two-day advance in more than three months. Oil and gas explorer Range Resources Corp. added 2.9 percent, to its highest since December, leading S&P 500 energy companies’ climb.

     Alexion Pharmaceuticals Inc. and Vertex Pharmaceuticals Inc. gained at least 1.9 percent, leading health-care’s advance. Biogen Inc. rose 1.1 percent while Johnson & Johnson climbed 1 percent.

     FedEx’s climb led transportation stocks higher after four days of declines. Railroad Union Pacific Corp. increased 1.4 percent after a nearly 10 percent drop since March 18.

     American Express Co. lost 1.6 percent after Oppenheimer Holdings Inc. cut its rating to underperform, citing structural headwinds pressuring profitability of the underlying business.                       

     Ventas Inc. retreated 2.5 percent, the most in a month, after rallying 5 percent Monday in its biggest gain in more than three years. The $25 billion health-care real estate investment trust said yesterday it will spin off most of its skilled- nursing facilities and buy Ardent Medical Services Inc. Real- estate companies fell 1.5 percent Tuesday, the most of 24 industry groups in the S&P 500.

     Informatica Corp. rallied 4.3 percent after it agreed to be bought by private-equity firm Permira and Canada Pension Plan Investment Board for about $5.3 billion.

     Clovis Oncology Inc. jumped 8 percent after saying U.S. regulators designated its rucaparib drug as a breakthrough therapy to treat advanced ovarian cancer.

Have a wonderful evening everyone.

Be magnificent!

Fear is man’s greatest enemy,

and it manifests itself in forms as diverse as shame, jealousy, anger, insolence, arrogance…

What causes fear?  Lack of confidence in oneself.

Swami Prajnanpad

As ever,

Carolann

One man with courage is a majority.

    -Thomas Jefferson, 1743-1826

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