April 14, 2015 Newsletter

Dear Friends,

Tangents:

Just before midnight on this day in 1912, the RMS Titanic hit an iceberg in the North Atlantic, sinking just a few hours later at about 2:20 a.m. on the morning of April 15.

April 14, 1965: Abraham Lincoln was assassinated.

1928: First Webster’s Dictionary was printed.

PHOTOS OF THE DAY

Stars are pictured over the famous Matterhorn mountain, seen from the Riffelberg area, in Zermatt, Switzerland on Monday. Jean-Christophe Bott/AP

Principal Dianne Coplin performs yoga as she works from atop the school dressed as the Cat in the Hat, Tuesday, at Colonel Donald McMonagle Elementary in Mt. Morris Township, Mich. Students at the school read 6,693 books, exceeding their reading month goal of 5,000, resulting in Coplin dressing as the famous Dr. Suess character. Jake May/The Flint Journal/AP

Market Closes for April 14^th, 2015

International Markets

Bonds

Currencies

Commodities

There are two kinds of people who lose money: those who know nothing and those who know everything. –Henry Kaufman, b. 1927.

Market Commentary:

Canada

By Callie Bost

     (Bloomberg) — Canadian stocks were little changed, erasing an earlier decline, as gains among energy companies offset a slump in railroad stocks.

     Shares of energy producers increased 1.4 percent as oil gained for a fourth day. Canadian Pacific Railway Ltd. and Canadian National Railway Co. dropped at least 0.8 percent after Norfolk Southern Corp. reported weaker-than-forecast earnings, heralding a difficult season for railroad profits.

     The Standard & Poor’s/TSX Composite Index rose 5.69 points, or less than 0.1 percent, to 15,389.28 at 4 p.m. in Toronto. The gauge has rallied 3.3 percent in April, posting seven straight days of gains through last week.

     Nine of 10 main industries in the S&P/TSX slid. Health-care stocks dropped 1.1 percent for the biggest loss. Trading in the index’s stocks was 4.4 percent below the 30-day average at the close.

     Canadian Pacific Railway slipped 1.3 percent, while Canadian National Railway sank 0.8 percent. Norfolk Southern, the second-largest railroad in the eastern U.S., said profit last quarter declined, missing analyst estimates.

     Coal shipments for most U.S. railroads fell during the first quarter as lower natural gas prices spurred power plants to switch to the fuel from coal.

     Consumer-discretionary shares slid 0.8 percent. Data released this morning showed sales at U.S. retailers rose less than forecast in March after being depressed by harsh winter weather, signaling consumers are intent on not overextending themselves.

     Energy shares in the S&P/TSX surged 1.4 percent as crude prices rose 2.7 percent. Penn West Petroleum Ltd. jumped 9.3 percent, while Bonavista Energy Corp. added 8.3 percent and Surge Energy Inc. rose 6.7 percent.

     As energy companies, the worst performers in the broader S&P/TSX Composite Index last year, have rebounded 6.5 percent in April and Canadian stocks climb toward an all-time high reached in September, traders are seeking protection.

     Bearish bets for the iShares Standard & Poor’s/TSX 60 Index exchange-traded fund, Canada’s largest ETF by assets, have surged this year to as much as nine times the number of calls.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index near its average price for the past 50 days, as a rally in energy companies overshadowed weaker-than-forecast retail sales.

     Chevron Corp. climbed 2.2 percent as oil rose for a fourth day. JPMorgan Chase & Co. advanced 1.6 percent after quarterly profit beat analysts’ estimates. Norfolk Southern Corp. fell 4.2 percent on lower-than-expected revenue. Semiconductors retreated during regular trading hours, while Intel Corp. rebounded 2.3 percent after the market close.

     The S&P 500 gained 0.2 percent to 2,095.84 at 4 p.m. in New York. The Dow Jones Industrial Average added 59.66 points, or 0.3 percent, to 18,036.70. The Nasdaq Composite Index declined 0.2 percent. About 5.9 billion shares changed hands on U.S. exchanges, 13 percent below the three-month average.

     “The market will go as earnings go for the next couple of weeks,” said Terry Morris, a senior equity manager who helps oversee about $2.8 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co. “The market wants to see some sales growth, but we haven’t seen it yet.”

     Sales at U.S. retailers rose less than forecast in March after being depressed by harsh winter weather, signaling consumers are intent on not overextending themselves.

     Purchases increased 0.9 percent, the first gain in four months, after a 0.5 percent drop in February, Commerce Department figures showed. The median forecast of 87 economists surveyed by Bloomberg called for a 1.1 percent advance.                       

     A separate report showed wholesale prices in the U.S.climbed in March for the first time in five months, reflecting higher costs for fuels and motor vehicles.

     A pickup in wholesale costs that filters through to consumers would help reassure Federal Reserve policy makers that inflation will advance toward their goal. At the same time, a rising dollar and limited growth overseas may hamper efforts by American companies to be more aggressive in raising prices.

     Fed Chair Janet Yellen has said that while rates will probably rise this year, any decision depends on economic data. Recent economic releases have missed projections by the most in six years.

     The S&P 500 fell on Monday as General Electric Co. retreated from a six-year high, leading industrial companies lower. Last week, both the S&P 500 and the Dow closed near records.

     Analysts have slashed profit projections, predicting a slump through September amid concern that a stronger dollar and tumbling oil prices are hurting results. Earnings probably fell 5.6 percent in the first quarter, they predict.

     JPMorgan, the biggest U.S. bank, gained 1.6 percent after saying profit climbed 12 percent as first-quarter revenue from trading stocks and bonds increased for the first time since 2010.

     Norfolk Southern Corp., the second-largest railroad in the eastern U.S., tumbled 4.2 percent after first-quarter profit declined and missed analyst estimates amid decreased coal shipments. Union Pacific Corp. slipped 0.3 percent, after earlier losing almost 4 percent.

     The Chicago Board Options Exchange Volatility Index fell 1.9 percent to 13.67. The gauge, known as the VIX, fell 14 percent last week to its lowest level of 2015.

     Seven of the S&P 500’s 10 main groups rose, led by energy and utility shares. Energy companies jumped 1.8 percent to the highest level in more than seven weeks. Apache Corp., Transocean Ltd. and Diamond Offshore Drilling Inc. added at least 3.4 percent. West Texas Intermediate crude gained 2.7 percent.

     Consumer staples increased 0.2 percent, paced by gains in Hershey Co. and PepsiCo Inc. of at least 1 percent. Estee Lauder Cos. and Tyson Foods Inc. added more than 1.7 percent.

     Semiconductor companies led a retreat among tech shares as Intel, Broadcom Corp. and Altera Corp. fell at least 0.8 percent during regular hours. Google lost 1.6 percent as the company could face possible fines and new constraints in the European Union.

     Intel jumped 2.3 percent as of 4:42 p.m. in New York. After the market close, the world’s largest chipmaker gave a forecast for second-quarter sales that was in line with analysts’  estimates, helped by demand for chips that power servers in data centers.

     Laptop production rebounded last month, potentially helping Intel’s sales recover after a slump early in the year led it to slash its first-quarter revenue forecast.

     Wells Fargo & Co. slipped 0.7 percent as first-quarter net income fell 1.1 percent from a year earlier, and net interest margin dropped below 3 percent for the first time since the 1990s.

     “We’re starting to hit the reporting season which is going to be a major driver for the next few weeks,” said Peter Dixon, an economist at Commerzbank AG in London. “The market is not looking for a good set of numbers as demand has been hit by a stronger dollar, but the numbers for financials are expected to be reasonably decent for this quarter.”

Have a wonderful evening everyone.

Be magnificent!

Fear comes from the selfish idea

of cutting one’s self off from the universe.

Swami Vivekananda

As ever,

Carolann

Simplicity is the ultimate sophistication.

         -Leonardo da Vinci, 1452-1519

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