June 10, 2015 Newsletter

Dear Friends,

Tangents:

This has been around for awhile, but with politics in high gear around the world and election rhetoric starting to heat up, worth another read 🙂 

How to understand the world through “Cow POLITICS”

DEMOCRATIC
You have two cows.
Your neighbor has none
You feel guilty for being successful.
Barbara Streisand sings for you.

REPUBLICANISM
You have two cows.
Your neighbor has none. So?

SOCIALIST
You have two cows.
The government takes one and gives it to your neighbor.
You form a cooperative to tell him how to manage his cow.

COMMUNIST
You have two cows.
The government seizes both and provides you with milk.
You wait in line for hours to get it.  It is expensive and sour.

CAPITALISM, AMERICAN STYLE
You have two cows.
You sell one, buy a bull, and build a herd of cows.

BUREAUCRACY, AMERICAN STYLE
You have two cows.
Under the new farm program the government pays you to shoot one, milk the other, and then pours the milk down the drain.

AMERICAN CORPORATION
You have two cows.
You sell one, lease it back to yourself and do an IPO on the 2nd one.
You force the two cows to produce the milk of four cows. You are surprised when one cow drops dead. You spin an announcement to the analysts stating you have downsized and are reducing expenses.
Your stock goes up.

FRENCH CORPORATION
You have two cows.
You go on strike because you want three cows.
You go to lunch and drink wine.
Life is good.

JAPANESE CORPORATION
You have two cows.
You redesign them so they are one-tenth the size of an ordinary cow and produce twenty times the milk.
They learn to travel on unbelievably crowded trains.
Most are at the top of their class at cow school.

GERMAN CORPORATION
You have two cows.
You engineer them so they are all blond, drink lots of beer, give excellent quality milk, and run a hundred miles an hour.
Unfortunately they also demand 13 weeks of vacation per year.

ITALIAN CORPORATION
You have two cows but you don’t know where they are.
While ambling around, you see a beautiful woman.
You break for lunch.
Life is good.

RUSSIAN CORPORATION
You have two cows.
You have some vodka.
You count them and learn you have five cows.
You have some more vodka.
You count them again and learn you have 42 cows.
The Mafia shows up and takes over however many cows you really have.

TALIBAN CORPORATION
You have all the cows in Afghanistan, which are two.
You don’t milk them because you cannot touch any creature’ private parts.
You get a $40 million grant from the US government to find alternatives to milk production but use the money to buy weapons.

IRAQI CORPORATION
You have two cows.
They go into hiding.
They send radio tapes of their mooing.

POLISH CORPORATION
You have two bulls.
Employees are regularly maimed and killed attempting to milk them.

BELGIAN CORPORATION
You have one cow.
The cow is schizophrenic.
Sometimes the cow thinks he’s French, other times he’s Flemish.
The Flemish cow won’t share with the French cow.
The French cow wants control of the Flemish cow’s milk.
The cow asks permission to be cut in half
The cow dies happy.

FLORIDA CORPORATION
You have a black cow and a brown cow.
Everyone votes for the best looking one.
Some of the people who actually like the brown one best accidentally vote for the black one.
Some people vote for both.
Some people vote for neither.
Some people can’t figure out how to vote at all.
Finally, a bunch of guys from out-of-state tell you which one you think is the  best-looking cow.

PHOTOS OF THE DAY

Students perform a dance as they attend a demonstration march to demand changes in the education system in Santiago, Chile.Catherine Allen/Reuters

A women sells bananas from her bicycle on a road along Hoan Kiem Lake in Hanoi, Vietnam. Ted Anthony/AP

Market Closes for June 10^th, 2015

International Markets

Bonds

Currencies

Commodities

An economist is someone who sees something happen, and then wonders if it would work in theory. –Ronald Reagan.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a second day as commodities producers rallied after the price of oil climbed to the highest level this year while gold and copper led metals higher.

     Trican Well Service Ltd. and Enerplus Corp. increased more than 7 percent to pace gains among energy stocks. Dollarama Inc. jumped 2.7 percent after revenue and earnings topped analysts’ estimates. Hudson’s Bay Co. lost 2.1 percent after reporting a first-quarter loss. Teck Resources Ltd. added 0.4 percent as copper rose the most in five weeks. Sun Life Financial Inc. gained 2.6 percent after analysts at RBC Capital Markets upgraded the stock’s rating.

     The Standard & Poor’s/TSX Composite Index climbed 71.33 points, or 0.5 percent, to 14,889.04 at 4 p.m. in Toronto. The S&P/TSX had fallen 2.7 percent in three days before its current run.

     Eight of 10 industries in the benchmark equity gauge advanced on trading volume 3.8 percent lower than the 30-day average.

     The S&P/TSX Energy Index jumped 1.2 percent, extending its two-day gain to 2.7 percent. West Texas Intermediate crude climbed 2.1 percent in New York after rising 3.4 percent on Tuesday. Suncor Energy Inc. added 1 percent and Cenovus Energy Inc. gained 3 percent.

     HudBay Minerals Inc. advanced 2.9 percent. Aluminum, nickel and tin gained in London.

     Semafo Inc. added 2.6 percent and Torex Gold Resources Inc. rose 3.7 percent as gold futures posted the biggest advance in four weeks.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks rose, with technology and financial shares leading a rebound from the biggest drop in two months, amid optimism that progress is being made in Greece’s debt talks.

     All 10 of the Standard & Poor’s 500 Index’s main industries climbed, with tech and financial companies up more than 1.4 percent. Intel Corp. and Microsoft Corp. added at least 1.8 percent. Citigroup Inc. and JPMorgan Chase & Co. gained more than 1.6 percent as financial shares hit a 2015 high. Energy and health-care advanced more than 1.1 percent.

     The Standard & Poor’s 500 Index added 1.2 percent to 2,105.20 at 4:00 p.m. in New York, the biggest jump in a month. The gauge rose above its average prices for both the past 50 and 100 days. The Dow Jones Industrial Average advanced 236.36 points, or 1.3 percent, to 18,000.40 as all 30 members gained. The Nasdaq Composite Index climbed 1.3 percent.

     “The Germans have officially blinked and off we go,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “U.S. data has been better in general, but more people are coming around to the fact the Fed is seeing all this volatility in the bond market and is afraid to raise rates, there isn’t too much tumult, oil has stabilized and so we move on.”

     Optimism toward a potential Greek deal with its creditors rose as people familiar with Germany’s position said Chancellor Angela Merkel’s government may be satisfied with Greece committing to at least one economic reform sought by creditors to open the door to bailout funds. The European Central Bank was also said to have raised the level of emergency cash available to Greek banks.

     The S&P 500 fell on Monday to a two-month low before edging higher yesterday. The index had tumbled 2.4 percent from its May record amid concern the Federal Reserve will raise interest rates as early as September.

     The benchmark this year has traded in its tightest weekly range since the mid-’90s, signaling investor uncertainty as to whether the economic recovery is strong enough to withstand a rate increase. Reports on retail sales and jobless claims Thursday may offer further clues.

     “Incoming data will provide more evidence week by week that the world economy is not in a fragile state as some suspected in the first quarter,” said William Hobbs, head of investment strategy at Barclays Plc’s wealth-management unit in London. “Data seems to be pointing a bit upwards and that may be suggesting to some that revenue prospects for the U.S. corporate sector may get better than what was priced in.”

     Economists see an almost 40 percent chance the Fed will delay raising rates beyond September if labor gains weaken or inflation fails to move higher, a Bloomberg News survey showed.

     The Chicago Board Options Exchange Volatility Index fell 8.6 percent Wednesday to 13.22. The gauge, known as the VIX, posted its biggest two-day drop since May 8 after losing 5.4 percent Tuesday. About 6.5 billion shares traded hands on U.S. exchanges, 1.3 percent above the three-month average.

     Intel jumped 1.8 percent to pace gains among chipmakers, rising for the first time in the eight sessions since announcing its acquisition of Altera Corp. Integrated Silicon Solutions Inc. agreed to merger terms with Cypress Semiconductor Corp., which rose 4.3 percent.

     Analog Devices Inc. and Skyworks Solutions Inc. climbed at least 3 percent. Qorvo Inc. added 3.1 percent as it is set to join the S&P 500 after Thursday’s close. Also bolstering the tech sector Wednesday, Apple Inc. increased 1.2 percent, while Facebook Inc. and International Business Machines Corp. climbed more than 1.8 percent.

     Banks added to Tuesday’s gains as the yield on the U.S. 10- Year Treasury hit its highest since September. Higher yields help banks’ profitability in lending. Citigroup and Bank of America Corp. climbed more than 1.6 percent, with Citi closing at its highest level in more than six years.

     Insurance companies rose the most among 24 industry groups in the S&P 500, as they also benefit from higher bond yields. Insurers’ 2.2 percent gain was the strongest in four months, and sent the group to its highest in seven years. Prudential Financial Inc., American International Group Inc. and MetLife Inc. all added at least 2.8 percent. AIG hit its highest level since Oct. 2008.

     Energy shares had their strongest increase in a month, up 1.2 percent as oil futures hit a 2015 high. Chevron Corp. rallied 1.4 percent, while Halliburton Co. and Devon Energy Corp. gained at least 2.1 percent.                       

     Amazon.com Inc. and Walt Disney Co. rose more than 1.2 percent, while Netflix Inc. climbed 3.7 percent to lead the rally in consumer discretionary shares. Netflix reached a fresh record after investors approved a proposal that paves the way for a stock split, and a deal was announced offering the video service in Marriott Hotels.

     Sears Holdings Corp. lost 12 percent, extending a four-day slide to a four-month low. Shares have fallen 26 percent since June 3, hurt by concerns that selling a chunk of its stores will leave less value for investors.

     H&R Block Inc. fell 5.2 percent, the most in the S&P 500 and the shares’ biggest drop in eight months. Credit Suisse downgraded the biggest U.S. tax preparer to neutral from outperform. The shares rose 2.3 percent yesterday after the company posted a third-straight year of higher revenue.

Have a wonderful evening everyone.

Be magnificent!

What is change?

One form appears, and another disappears.

Can we say that the butterfly used to be a caterpillar?

A substance in the caterpillar takes on the form of the butterfly.

Swami Prajnanpad

As ever,

Carolann

No one can make you feel inferior without your consent.

                                 -Eleanor Roosevelt, 1884-1962

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