June 2, 2015 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

A Rufous-tailed hummingbird, Amazilia tzacatl, flies while approaching its nest on a tree in San Jose. Juan Carlos Ulate/Reuters

A cow stands in the middle of a busy road as auto-rickshaws pass by in Bengaluru, India.

Market Closes for June 2^nd, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a second day as commodities producers advanced and crude gained amid a slump in the dollar.

     Air Canada added 1.3 percent after saying it will cut costs more than previously forecast to increase the airline’s profitability. Sherritt International Corp. surged 6.7 percent as most industrial metals rose. Baytex Energy Corp. and Penn West Petroleum Ltd. advanced at least 3.4 percent as crude prices increased.

     The Standard & Poor’s/TSX Composite Index rose 30.61 points, or 0.2 percent, to 15,104.74 at 4 p.m. in Toronto. The benchmark equity gauge is up 3.2 percent this year.

     First Quantum Minerals Ltd. jumped 5 percent and Teck Resources Ltd. climbed 5.7 percent as raw-materials producers advanced 0.9 percent as a group, the most in the S&P/TSX. Five of 10 industries in the benchmark Canadian equity gauge increased on trading volume 11 percent lower than the 30-day average today.

     Copper rose as the dollar posted the biggest decline since March against a basket of 10 major trading partners, boosting the appeal of raw materials as alternative assets.

     Negotiations over Greece’s debt continued as the first of four payments comes due this Friday to the International Monetary Fund. The payments total almost 1.6 billion euros ($1.78 billion) this month. Greek Prime Minister Alexis Tsipras said his government had submitted a new proposal while officials from the country’s creditors were said to have agreed on what would be a final offer to avoid the country defaulting.

     Air Canada soared 1.3 percent, to the highest level since 2007. Cost savings of 21 percent on each available seat mile are now expected by the end of 2018, higher than the previous target of 15 percent given at the investor day two years ago, Canada’s largest airline said.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks declined, with equities earlier falling to a three-week low, while investors weighed economic data and potential progress in Greece’s debt talks.

     Delta Airlines Inc. dropped 2.6 percent after cutting its forecast on a second-quarter revenue measure. Semiconductors slid as Intel Corp. fell 1.9 percent. Managed-care providers weighed on health-care shares. Energy companies rose along with oil prices, while Freeport-McMoRan Inc. and Alcoa Inc. jumped as the dollar’s biggest slide in more than two months helped boost raw-material companies.

     The Standard & Poor’s 500 Index fell 0.1 percent to 2,109.60 at 4 p.m. in New York, after losing as much as 0.6 percent and bottoming near its average price for the past 50 days. The Dow Jones Industrial Average lost 28.43 points, or less than 0.1 percent, to 18,011.94. The Nasdaq Composite Index slid 0.1 percent.

     The S&P 500 fluctuated Monday between gains and losses before closing higher for the first time in three sessions. The gauge has fallen 1 percent from its May 21 all-time high, trimming its advance in 2015 to 2.5 percent.

     “Yesterday was a microcosm of what we’ve seen for several months now — big intraday swings, only to end up little changed,” said Matt Maley, an equity strategist at Miller Tabak & Co. in Newton, Massachusetts. “The focus is on Friday’s big employment number, and there’s a lot of indecision. If the situation in Greece deteriorates, it leaves a lot of downside potential for the U.S. stock market.”

     European leaders and the head of the International Monetary Fund agreed to step up the intensity of talks over Greece’s fate after a meeting in Berlin on how to prevent the Mediterranean nation defaulting. The Greek government, which said it hasn’t received any draft plan, has submitted its own proposal aimed at breaking the deadlock, according to Prime Minister Alexis Tsipras.

     Greece faces a debt repayment to the IMF on Friday. While the country claims it can make the payment, it’s the smallest of four totaling almost 1.6 billion euros ($1.75 billion) this month.

     Investors also continued to assess economic data for potential clues on on the timing of a Federal Reserve interest- rate increase. Data Monday showed manufacturing expanded more than forecast in May, while consumer purchases unexpectedly stalled in April. In a report today, factory orders slipped more than economists’ forecast.

     Labor market reports on private payrolls growth, jobless claims and the government’s monthly non-farm payrolls data are all due later this week. The economy added 227,000 jobs in May, compared with April’s 223,000, and the unemployment rate will remain at 5.4 percent, economists predict.

     The central bank has indicated that any increase in borrowing costs would be shallow and gradual. Economists forecast the Fed will raise rates in September. Fed Governor Lael Brainard said Tuesday a recent run of weak data casts doubt on the strength of the economy, in a speech that suggested she’s open to a delay in the Fed’s timetable for an interest-rate increase this year.

     The Chicago Board Options Exchange Volatility Index rose 1.9 percent Tuesday to 14.24, after earlier rising as much as 7.7 percent. The gauge, known as the VIX, slipped 4.9 percent in May for its second straight monthly decline. About 5.9 billion shares traded hands on U.S. exchanges, 8.3 percent below the three-month average.

     Five of the S&P 500’s 10 main groups gained, led by raw- material and energy shares. Utilities and health-care fell the most.

     Health-care companies in the benchmark slipped as Vertex Pharmaceuticals Inc., Biogen Inc. and Eli Lilly & Co. declined more than 1.3 percent. Health insurance providers Aetna Inc. and Cigna Corp. slumped at least 1.6 percent.

     Utilities retreated 1.4 percent, the most in a month, as rising U.S. Treasury yields make the group’s high dividend payout less attractive. Xcel Energy Inc. and CMS Energy Corp. fell more than 1.9 percent.

     Semiconductors in the S&P 500 declined for a second session. Intel Corp. fell 1.9 percent a day after agreeing to acquire Altera Corp. for $16.7 billion. The chipmaker has retreated 3.5 percent over the last two days. Avago Technologies Ltd. and Microchip Technology Inc. lost more than 1.6 percent.

     The dollar’s worst drop in more than two months helped lift raw-material shares and companies that earn substantial revenue overseas. A Bloomberg gauge on the U.S. currency fell 1.3 percent. Transocean Ltd. and Diamond Offshore Drilling Inc. added at least 3.7 percent to pace energy’s climb amid oil’s rise. A weaker dollar increases oil’s investment appeal.

     Freeport-McMoRan rallied 5.7 percent, its best gain in seven weeks. Steelmaker Nucor Corp. jumped 3.8 percent, while Alcoa advanced 1.6 percent.

     Boeing Co. climbed 1.4 percent, the best in the Dow, to pace an advance in industrial shares. Kansas City Southern and Caterpillar Inc. rose at least 0.7 percent.

     Apparel maker PVH Corp. jumped 7.1 percent, the biggest in nine months. Quarterly results exceeded analysts’ forecasts, the company boosted its full-year earnings forecast and announced a $500 million three-year stock repurchase program. Ralph Lauren Corp. added 2.9 percent.

     Also among consumer discretionary companies, Priceline Group Inc. rallied 2.5 percent, the most in more than three months, and Dollar General Corp. rose 3 percent, the biggest gain since March 12, after first-quarter profit topped analysts’

estimates, helped by sales of tobacco, candy and health products.

     Zions Bancorp. soared 6.7 percent to the highest level in almost 14 months after a corporate restructuring plan prompted analysts to upgrade its shares. Comerica Inc. and Regions Financial Corp. advanced more than 1.5 percent.

Have a wonderful evening everyone!

Be magnificent!

“You can never cross the ocean until you have the courage to lose sight of the shore”. –Christopher Columbus

As ever,

Karen 

“The mind is everything. What you think you become”.  –Buddha

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Suite 340A, 730 View St.,

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