May 19, 2015 Newsletter

Dear Friends,

Tangents:

On this day in 1536, Anne Boleyn, the second wife of King Henry VIII and mother of Queen Elizabeth I, was beheaded in London on charges of adultery, incest, witchcraft and conspiracy against the king.

Also on this day, in 1936, Gone with the Wind was published.

And Dorothy Wordsworth wrote in her Journal on May 19^th, 1800:

Sauntered a good deal in the garden, bound carpets, mended old clothes.  Read Timon of Athens.  Dried linen.  Molly weeded the turnips, John stuck the peas.  We had not much sunshine or wind, but no rain till about seven o’clock, when we had a slight shower just after I had set out upon my walk.  I did not return but walked up into the Black Quarter [Easedale].  I sauntered a long time among the rocks above the church….I strolled on, gathered mosses etc.   the quietness and still seclusion of the valley affected me even to producing the deepest melancholy.  I forced myself from it.

Rosemary Verey wrote:  “An amusing and interesting discussion arose yesterday when I asked a group of Americans from California what struck them most about our countryside.  “Its greenness” was their immediate answer.  The hedgerows and trees have changed now from brown to green.  When you stop to consider, green is the predominant colour of our countryside and when huge fields of the strident yellow oil-seed rape make a sheet of bright colour, you wonder if you like it.  I do.  I know it is only momentary and it lightens the landscape from dawn to dusk, and even by moonlight.  Counting these fields is an occupying game for children when they are making a long journey from one side of England to the other.  Travelling between East Anglia and Gloustershire, the wife of one of my farming neighbors said her children stopped counting when they reached 250.  “Why does no one develop paler yellow or even white rape flowers/”  one American lady asked.  We discussed how pretty the fields would look – just like an enormous spring garden planted with white honesty and yellow tulips. –from A Countrywoman’s Notes.

PHOTOS OF THE DAY

Britain’s Prince Charles (c.) talks with Bridget Barry, Burren BEO trust, and Dr Brendan Dunford, Burren Farming for Conservation Program’s Project Manager, during a visit to the Burren in County Clare, Ireland, Tuesday. Prince Charles visited the Burren, an ancient and dramatic stony outcrop famed for its rare plant life, biodiversity and archaeology, on the first day of his four-day visit to the Republic of Ireland and Northern Ireland.Peter Morrison/AP

A man walks a student to school in the rain in Boulder, Colo., Tuesday. Colorado braced for a spring storm with unseasonably heavy rains and several inches of snow expected in the high country. Brennan Linsley/AP

Market Closes for May 19^th, 2015

International Markets

Bonds

Currencies

Commodities

No finance, no romance.  –Lyle Lovett

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little changed after two days of gains, as an advance among health-care stocks offset a slump in energy producers after oil slid to a three-week low.

     Turquoise Hill Resources Ltd. rose 5 percent after Mongolia and parent Rio Tinto Group settled a dispute over the Oyu Tolgoi copper and gold mine. Valeant Pharmaceuticals International Inc. increased 3.3 percent to pace gains among health stocks. Penn West Petroleum Ltd. and Painted Pony Petroleum Ltd. fell more than 7.3 percent as crude slid a fifth day in New York.

     The Standard & Poor’s/TSX Composite Index rose 12.90 points, or 0.1 percent, to 15,121.02 at 4 p.m. in Toronto. Canadian markets were closed Monday for the Victoria Day holiday.

     Six of 10 industries in the S&P/TSX retreated on trading volume 5.4 percent lower than the 30-day average today. Valeant and ProMetic Life Sciences Inc. jumped as health-care companies gained 3 percent as a group.

     ProMetic increased 4.2 percent, to an almost three-week high, after the company agreed to a 15-year manufacturing pact with Emergent BioSolutions Inc. The deal gives ProMetic access to Emergent’s biopharmaceuticals facility in Winnipeg.

     Imperial Metals Corp. tumbled 6.3 percent after its top shareholder agreed to provide additional funds to the copper miner after a delay to the start of production.

     Penn West Petroleum retreated 9.5 percent as energy companies dropped 1.4 percent as a group.

     West Texas Intermediate crude for June delivery fell 3.7 percent to $57.26 a barrel in New York, the lowest since April 28, as the dollar strengthened and Goldman Sachs Group Inc. said a continuing surplus would send prices back to $45 a barrel by October.

US

By Callie Bost and Joseph Ciolli

     (Bloomberg) — U.S. stocks closed little changed, with the Standard & Poor’s 500 Index slipping from a record, after data showing housing starts surged to a seven-year high bolstered speculation the Federal Reserve may raise interest rates this year.

     Wal-Mart Stores Inc. slumped 4.4 percent after quarterly results missed estimates, while Urban Outfitters Inc. tumbled 15 percent after profit and sales were short of analysts’ projections. Energy shares slid with oil prices. Yahoo! Inc. fell 7.6 percent, leading technology shares lower. Take-Two Interactive Software Inc. jumped 18 percent after its results beat forecasts.

     The S&P 500 Index declined 0.1 percent to 2,127.83 at 4 p.m. in New York, snapping a three-session string of all-time highs. The Dow Jones Industrial Average rose 13.51 points, or 0.1 percent, to 18,312.39, a record for a second day. The Nasdaq Composite Index lost 0.2 percent. About 6.2 billion shares changed hands on U.S. exchanges, 4 percent below the three-month average.

     “When we get stronger news, we get concern about rising interest rates,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania. “We’re back to the guessing  game of what happens with rates and whether economic data will be strong enough for the Fed to act.”

     A report today showed new residential construction surged in April to the highest level since November 2007, while more permits, a proxy for future construction, were issued than at any time since June 2008.

     An improving labor market and mortgage costs close to multi-year lows are reviving residential construction, a sign that the weakness in early 2015 was probably due to harsh winter weather.

     That supports the Federal Reserve’s view that a slowdown in first-quarter economic growth was likely temporary, as policy makers debate the timing of raising interest rates. Minutes from the Federal Reserve’s April meeting will be released tomorrow.

     U.S. equities rose to all-time highs Monday, helped by merger activity, an advance in Apple Inc. and higher bond yields that sent banks rallying.

     “You saw that housing starts report, which was nice and solid,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. “It’s nice to see U.S. economic data beating, given how bad of a run we’ve seen with macro data. I thought that would be enough of a kick to keep us going in the follow-through, but crude oil is down a little bit which is curbing risk-taking a little.”

     The Chicago Board Options Exchange Volatility Index rose 0.9 percent to 12.85, after a 2.8 percent gain on Monday. The gauge, know as the VIX, fell 3.7 percent last week for its first weekly decline in three weeks.

     Seven of the S&P 500’s 10 main groups declined Tuesday, led by energy. Financial shares in the benchmark index advanced for a second day to a 2015 high, as Treasury yields extended their climb after stronger-than-forecast housing data. Wells Fargo & Co., BB&T Corp. and Huntington Bancshares Inc. added at least 1.1 percent. Wells Fargo reached an all-time high, while Huntington hit its highest level since Sept. 2008.

     An S&P gauge of homebuilders rose 0.9 percent to the highest since April after the better-than-forecast housing starts. The index rose for a fourth day, its longest streak since January. KB Home jumped 2.4 percent, while Ryland Group Inc. and D.R. Horton Inc. added at least 1.1 percent.

     With signs of better economic growth in the housing data and a drop in oil prices, companies that stand to benefit from healthier consumer spending got a lift. Royal Caribbean Cruises Ltd. rose 1.8 percent, bringing its May gain to 13 percent, the best month since July 2013. Olive Garden chain owner Darden Restaurants Inc. advanced 1.7 percent.

     Merck & Co. added 0.9 percent amid an advance in health- care shares, which also rose for a fourth day. Pfizer Inc. climbed 0.7 percent. Endo International Plc rebounded 2.8 percent after losing 5.4 percent Monday on its Par Pharmaceutical Holdings Inc. buyout. Hospital operators HCA Holdings Inc. and Tenet Healthcare Corp. increased more than 1.7 percent, with HCA posting a third straight record close.

     Energy companies in the S&P 500 dropped 1.2 percent to a one-month low, as crude oil declined 3.7 percent. Chevron Corp. lost 1.5 percent, while Diamond Offshore Drilling Inc. and Transocean Ltd. retreated more than 4.9 percent.

     Raw-material shares fell for a second day as the dollar’s best two-day gain since De. 2011 reduces the appeal of commodities priced in the U.S. currency. Freeport-McMoRan Inc. lost 3.8 percent, after falling 3.1 percent Monday, while steelmaker Nucor Corp. slipped 2.2 percent.

     Technology shares slid, led by a slump in Yahoo. The stock lost 7.6 percent on reports that the U.S. Internal Revenue Service is considering a rule change that might complicate efforts to exit a stake in Alibaba Group Holding Ltd. Alibaba rose 1.3 percent.

     Take-Two Interactive soared 18 percent, the most since Feb. 2008, as the video game maker’s quarterly results benefited from sales of the latest edition of Grand Theft Auto as well as Evolve, a shooter game released Feb. 10.                        

    TJX Companies Inc. jumped 2.9 percent, its biggest gain since February. The off-price apparel and home fashion retailer boosted its full-year profit and sales growth forecasts.

     Wal-Mart dropped 4.4 percent, the most in three years, to a six-month low after first-quarter U.S. sales grew more slowly than projected and currency fluctuations ate into profit.

     Urban Outfitters tumbled 15 percent, the most since January 2012, to a four-month low after the apparel retailer’s first- quarter profit and sales missed analysts’ forecasts.

     MBIA Inc. sank 8.4 percent, the biggest decline in more than two years. Warburg Pincus LLC, the largest holder of MBIA’s stock, said it will reduce its stake by more than half.

Have a wonderful evening everyone.

Be magnificent!

It is only when we give complete attention to a problem,

and solve it immediately – never carrying it over to the next day,

the next minute – that there is solitude.

To have inward solitude and space is very important

because it implies freedom to be, to go, to function, to fly.

Krishnamurti

As ever,

Carolann

Love is the only force capable of transforming an enemy into friend.

                                           -Martin Luther King, Jr., 1929-1968

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Senior Portfolio Manager &

Senior Vice-President

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7