June 4, 2015 Newsletter

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Balloons bearing messages from young people are released over Tutzing Castle near Lake Starnberg in Germany, in the run-up to the G7 Summit in Schloss Elmau which begins on June 7. The youth initiative Plant-for-the-Planet has called upon the G7 heads of government to support the greatest reforestation project in the history of humankind. Plant-for-the-Planet/AP

A laborer carries a basket of tomatoes on his head while walking along a row of empty wooden boxes in a vegetable wholesale market in Lahore, Pakistan. Mohsin Raza/Reuters

Market Closes for June 4^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, erasing a three-day advance, as crude and gold prices declined amid a standoff in Greek debt talks and speculation OPEC will refrain from cutting its production targets.

     MEG Energy Corp. and Bellatrix Exploration Ltd. dropped more than 4.8 percent as crude slid to a seven-week low. Barrick Gold Corp. lost 2.1 percent as gold retreated. Teck Resources Ltd. and First Quantum Minerals Ltd. tumbled at least 2.9 percent as copper slumped with base metals.

     The Standard & Poor’s/TSX Composite Index fell 135.29 points, or 0.9 percent, to 15,019.39 at 4 p.m. in Toronto. The benchmark equity gauge had risen 0.9 percent in the previous three trading days.

     Raw-materials and energy producers sank at least 1.2 percent. All 10 industries in the S&P/TSX retreated on trading volume 9.1 percent lower than the 30-day average.

     OceanaGold Corp. lost 4.2 percent and Centerra Gold Inc. slipped 5.1 percent. Gold for August delivery tumbled 0.8 percent to settle at $1,175.20 an ounce in New York, a four-week low. Copper dropped to the lowest in six weeks as industrial metals from aluminum to zinc retreated on concern slowing economic growth from China to U.S. will curb demand.

     The Organization of Petroleum Exporting Countries is forecast to keep its output target unchanged on Friday, according to all but one of 34 analysts and traders in a Bloomberg survey last month.

     The International Monetary Fund urged the Federal Reserve to delay raising interest rates until the first half of 2016 as it cut its U.S. growth forecast to 2.5 percent this year.

     Negotiations over Greece’s debt continued, with the country becoming the first to defer a payment to the IMF since the 1980s. The first of four payments was originally due this Friday and totals almost 1.6 billion euros ($1.78 billion) this month. The latest round of talks, between Greek Prime Minister Alexis Tsipras and European Commission President Jean-Claude Juncker, failed to yield a breakthrough.

US

 By Joseph Ciolli

     (Bloomberg) — U.S. stocks declined, with the Standard & Poor’s 500 Index reaching a four-week low, as a slide in oil and metals weighed on commodities producers and Greece asked for a deferral on its debt payments.

     Freeport-McMoRan Inc., DuPont Co. and fertilizer maker Mosaic Co. lost at least 1.7 percent. Chesapeake Energy Corp. dropped 3.8 percent to lead the energy group lower. Verizon Communications Inc. slid 2 percent after an analyst downgrade. Apparel maker L Brands Inc. added 1.2 percent as May sales exceeded estimates. Wynn Resorts Ltd. jumped 7.2 percent on signs of improvement in Macau’s gambling economy.

     The S&P 500 lost 0.9 percent to 2,095.84 at 4 p.m. in New York. The index fell below its average price during the past 50 days, though it’s still within 1.7 percent of its all-time high. The Dow Jones Industrial Average declined 170.69 points, or 0.9 percent, to 17,905.58. The Nasdaq Composite Index retreated 0.8 percent. About 6.3 billion shares traded hands on U.S. exchanges, 2.3 percent below the three-month average.

     “We’ve hit a point where we have conflicting sentiment, and that’s why we’re sitting here and grinding sideways,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. “Stock investors are taking an eyebrow-raised look at the bond market, wondering if they’re missing anything. Plus you always have the Greece situation always lurking around in the background.”

     The S&P 500 has alternated between gains and losses in the past four sessions as it churns in the tightest trading range at this time of year since 2006. The index hasn’t had a 10 percent decline since October 2011, the longest stretch without a drop of that magnitude since a 55-month period ending in October 2007.

     Greece today became the first country to defer a payment to the International Monetary Fund since the 1980s as its game of brinkmanship with creditors goes down to the wire. With Prime Minister Alexis Tsipras getting ready to address parliament on Friday after receiving a list of creditors’ demands, the step underscores the state of the country’s shriveling finances.

     Global bond markets recovered from an earlier selloff, which took the yield on the 10-Year U.S. Treasury to its highest level since October. European Central Bank chief Mario Draghi said yesterday markets should get used to greater volatility while forecasting faster euro-area inflation rates.

     Investors are closely watching economic data for clues on timing of a potential interest rate rise from the Federal Reserve. Fed Bank of St. Louis President James Bullard said Wednesday “markets have appropriately moved back the likely date of policy firming,” amid recent weaker-than-forecast data.

     The IMF said today the Fed should hold off from raising interest rates until the first half of 2016, as the fund cut its U.S. growth forecast for the second time in three months.

     A report today showed jobless claims decreased by 8,000 in the latest week, while the total number of people receiving unemployment insurance payments was the smallest in more than 14 years, signaling the job market remains firm.

     The government’s monthly employment data are due Friday, and economists predict the economy added 225,000 jobs in May, compared with April’s 223,000, with the unemployment rate remaining at 5.4 percent.

     The Chicago Board Options Exchange Volatility Index jumped 7.7 percent Thursday to 14.71, its highest since May 7. The gauge, known as the VIX, last month had its steepest drop since February.

     All of the S&P 500’s 10 main groups slumped Thursday, with raw-material and energy shares dropping the most after the IMF cut its U.S. growth forecast. The materials group hit a six-week low. Chemical maker LyondellBasell Industries NV lost 3.2 percent, its biggest slide since March. Monsanto Co. fell 1.9 percent to its lowest in more than two months.

     Capital goods producers Precision Castparts Corp. and Illinois Tool Works Inc. declined at least 1.7 percent. Boeing Co. and Textron Inc. retreated 1.8 percent.

     Exxon Mobil Corp. slid 0.9 percent near a two-month low as West Texas Intermediate crude fell 2.8 percent. Chesapeake Energy, Transocean Ltd. and Diamond Offshore Drilling Inc. all sank more than 1.8 percent, with energy companies in the S&P 500 dropping for the eighth time in nine sessions.

     Banks in the benchmark index fell for first time in four days as Treasury yields slipped from their highest level in almost eight months. Wells Fargo & Co. retreated 1.4 percent after closing Wednesday at an all-time high, while Bank of America Corp. lost 0.9 percent.

     Transportation companies reversed Wednesday’s gains, with airlines pacing the decline. JetBlue Airways Corp., American Airlines Group Inc. and United Continental Holdings Inc. fell at least 1.6 percent. The Dow Jones Transportation Average decreased 0.9 percent after rallying 1.2 percent Thursday.

     Verizon dropped 2 percent, the most since December, to a nearly three-month low after JPMorgan Chase & Co. downgraded the shares to neutral from overweight.

     T-Mobile US Inc. gained 2.6 percent to a seven-year high after a report that the fourth-largest U.S. wireless company is in talks to merge with Dish Network Corp. Dish jumped 4.9 percent, the most since November.

Have a wonderful evening everyone!

 
Be magnificent!

“Believe you can and you’re halfway there.” –Theodore Roosevelt               

As ever,

Karen

“ Life is not measured by the number of breaths we take, but by the moments that take our breath away.” –Maya Angelou

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