May 7, 2015 Newsletter

Dear Friends,

Tangents:

On this day 21 years ago, Norway’s famous painting, “The Scream” by Edvard Munch, was recovered nearly three months after it was stolen from a museum in Oslo.

Just back from  an investment conference in New York which was very useful and informative.  New York is as crazy busy, exciting as ever….lots of catching up to do today!

PHOTOS OF THE DAY

Groom Roberto Luna washes the face of Dortmund, third-place finisher in the Kentucky Derby, after a morning jog at Churchill Downs in Louisville, Ky., Thursday. Dortmund, like stablemate American Pharoah, the Kentucky Derby winner, continue to train at Churchill Downs before shipping to Baltimore next week for the Preakness Stakes on May 16th. Garry Jones/AP

A man works out on a punch bag in East Hull Boxing Club, which is being used as a polling station, as people arrive to cast their votes during the British election in Hull, Thursday. Darren Staples/Reuters

Market Closes for May 7^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose from a one-month low, snapping a two-day slide, as Linamar Corp. surged to a record and Bombardier Inc. climbed the most in two years, offsetting losses among energy producers.

     Bombardier added 6.7 percent as the company unveiled plans for an initial offering of its train unit to pay down debt. Linamar advanced 14 percent after reporting better-than-forecast earnings. Gran Tierra Energy Inc. lost 4.5 percent after reporting a first-quarter loss. Penn West Petroleum Ltd. and MEG Energy Corp. retreated more than 5.4 percent to pace declines among oil and gas producers.

     The Standard & Poor’s/TSX Composite Index rose 64.93 points, or 0.4 percent, to 15,088.82 at 4 p.m. in Toronto, rebounding from an April 1 low. The gauge has advanced 3.1 percent this year.

     Linamar rallied to an all-time high as consumer discretionary stocks jumped 1.9 percent as a group, most in the S&P/TSX. Eight of 10 industries in the benchmark equity gauge advanced on trading volume 43 percent higher than the 30-day average.

     Suncor Energy Inc., the nation’s largest oil producer, dropped 1.9 percent for a sixth straight loss, the longest streak since October, and Crescent Point Energy Corp. dropped 2.6 percent as energy stocks fell a third day. The S&P/TSX Energy Index has plunged 4.9 percent in that period.

     The New Democratic Party, led by Rachel Notley, ended a 44- year Progressive Conservative dynasty by winning a majority of districts in elections Tuesday.

     The NDP promises to boost corporate taxes, review the government’s take of energy revenue, scale back advocacy for pipelines and phase out coal power more quickly. U.S. benchmark crude futures also fell for the first time in three days in New York.

US

By Joseph Ciolli

     (Bloomberg) —  U.S. stocks advanced, after the Standard & Poor’s 500 Index fell to its lowest in a month, as Yahoo! Inc. led a rebound in technology shares before Friday’s labor report.

     Alibaba Group Holding Inc. jumped 7.5 percent after reporting a 45 percent increase in quarterly revenue. Yahoo, which owns a stake in Alibaba, added 5.3 percent. Microsoft Corp. climbed after its steepest drop in six weeks. Whole Foods Market Inc. and Keurig Green Mountain Inc. lost at least 9.1 percent after their quarterly reports disappointed investors.

     The S&P 500 added 0.4 percent to 2,088 at 4 p.m. in New York, near its average price during the past 50 days. The Dow Jones Industrial Average gained 82.08 points, or 0.5 percent, to 17,924.06. The Nasdaq Composite Index climbed 0.5 percent. About 7 billion shares traded hands on U.S. exchanges, 7 percent above the three-month average.

     “We’re seeing a rebound off some selling that took place recently,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania. “The next trend will be set by whatever the employment numbers dictate tomorrow.”

     U.S. stocks fell yesterday, dragged lower after Federal Reserve Chair Janet Yellen warned of high equity market valuations and after a private report that showed hiring slowed.

     Stocks bounced back after a two-day selloff that sent the number of equities trading above their 50-day moving average to the lowest level in three months, data compiled by Bloomberg show. At yesterday’s close, 200 members in the S&P 500 traded above the threshold, which is viewed by analysts to gauge a security’s momentum. That’s the lowest reading since Jan. 30.

     Fewer Americans than forecast filed applications for unemployment benefits last week, dropping the average over the past month to the lowest in 15 years. Investors are looking to Friday’s government payroll numbers for clues on the American economy’s strength. Economists forecast a 228,000 rise in April, according to a Bloomberg survey, after a 126,000 gain in March.

     Fed policy makers are watching hiring data to help determine the timing of raising borrowing costs after economic growth slowed in the first quarter for reasons the central bank called “transitory.” The quarter’s weaker-than-forecast data have stoked concerns that the Fed may soon raise borrowing costs even as the economy slows.

     “The market has been getting mixed-to-negative messages over the last few days,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “The economic numbers have recently been more disappointing than not, so it makes tomorrow’s jobs number even more newsworthy than usual.”

     Analysts have tempered their predictions for a slump in first-quarter corporate profits, while more than two-thirds of companies that have posted earnings so far have beat estimates.

     The Chicago Board Options Exchange Volatility Index fell 0.1 percent to 15.13. The gauge, know as the VIX, is heading toward its biggest weekly gain since January. Nine of the S&P 500’s 10 main groups climbed, led by technology and financial companies.

     Yahoo’s 5.3 percent rally led an increase in technology shares, with the group rising 0.7 percent after a 0.8 percent drop Wednesday. The Internet portal and Alibaba stakeholder posted its best advance since September after Alibaba named a new chief executive and posted a 45 percent increase in revenue.

     Motorola Solutions Inc. added 2.1 percent after Gabelli & Co. and Raymond James Financial Inc. upgraded the shares. Microsoft climbed 0.9 percent after a 2.8 percent retreat yesterday, its biggest slide since March.

     Google Inc. increased 1.3 percent. Leon Cooperman, founder of Omega Advisors, said his hedge fund bought shares of the Internet search giant as he believes the company could take steps to enhance shareholder value.

     Yelp Inc. surged 23 percent, the most since August 2013. A person with knowledge of the matter said the consumer-review website is working with Goldman Sachs Group Inc. to find a buyer.

     Airlines jumped the most in more than three months amid oil’s decline, with a Bloomberg gauge on U.S. carriers up 3.5 percent. United Continental Holdings Inc. rose 5.2 percent, its best advance since February. American Airlines Group Inc. and Delta Air Lines Inc. each gained at least 2.9 percent.

     Real-estate companies were among the best performers in the S&P 500’s financial group, with Essex Property Trust Inc. and Equity Residential rising at least 1.9 percent. Citigroup climbed 1 percent even as an index of bank stocks slid 0.1 percent.

     Carnival Corp. increased 2.4 percent, pacing consumer discretionary shares. The world’s No. 1 cruise company said late Wednesday that it’s planning to base a fifth passenger liner in Shanghai in 2017, adding to a foothold in China’s fast-growing leisure cruise market. Darden Restaurants Inc. and homebuilder Lennar Corp. also added more than 2.3 percent.

     Health-care shares rebounded after two days of declines, with Alexion Pharmaceuticals Inc. up 5.1 percent. The company’s shares tumbled 8 percent Wednesday after it agreed to buy Synageva BioPharma Corp. for $8.4 billion. The Nasdaq Biotechnology Index rose 0.9 percent, gaining  for a second day.                         

     Energy stocks in the S&P 500 lost 1.1 percent, the most in the benchmark as oil had its biggest slump in a month. Transocean Ltd. and Noble Corp. fell more than 3.5 percent, while Diamond Offshore Drilling Inc. and Apache Corp. slid at least 3.3 percent.

     Whole Foods Market Inc. plunged 9.7 percent, the most in a year. The supermarket operator reported revenue and comparable- store sales that trailed analysts’ estimates.

     Keurig Green Mountain Inc., the maker of single-serve coffee machines, dropped 9.2 percent after cutting its annual forecast, hurt by slow sales of its second-generation brewing system.

     Teradata Corp. decreased 7 percent to its lowest level since February after reporting first-quarter earnings that missed consensus analyst estimates.

Have a  wonderful evening everyone.

Be magnificent!

The idea of a duty to understand violence engenders for me

a great vitality and passion for knowledge.

But to transcend this violence, I need not repress it, nor deny it, nor say to myself:

It has become a part of me, I can do nothing about it; or, I wish to reject it.

I must observe it, study it, enter into it intimately,

and for that purpose I need neither condemn it nor justify it.

And yet, it is this that we do.

I would ask you, then, to suspend for an instant your judgments on the subject.

Krishnamurti

As ever,

Carolann

Love yourself first and everything else falls into line.

                                      -Lucille Ball, 1911-1989

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