June 11, 2015 Newsletter

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Britain’s Prime Minister David Cameron (l.) welcomes Prince Harry as he arrives to attend the Service of Dedication to inaugurate the Bastion Memorial at the National Memorial Arboretum in Alrewas, England on Thursday. Eddie Keogh/Reuters

Women walk near the glass floor area on the 37th floor of the China Central Television (CCTV) tower on Thursday, next to construction sites in Beijing’s central business district. Jason Lee/Reuters

Market Closes for June 11^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, after two days of gains, as commodities producers retreated with the price of crude and metals.

     Teck Resources Ltd. lost 1.9 percent as copper fell the most since January. Athabasca Oil Corp. slid 4.3 percent as oil declined in New York. Valeant Pharmaceuticals International Inc. increased 2.2 percent after the drugmaker said it will appoint a new chief financial officer.

     The Standard & Poor’s/TSX Composite Index lost 58.16 points, or 0.4 percent, to 14,830.88 at 4 p.m. in Toronto. The loss halted a two-day rally of 1 percent and cut the S&P/TSX’s advance this year to 1.4 percent.

     Seven of 10 industries in the benchmark index TSX retreated on trading volume 16 percent lower than the 30-day average.

     Yamana Gold Inc. lost 4.8 percent and Silver Wheaton Corp. retreated 0.9 percent as raw-materials producers declined 1.5 percent as a group. First Quantum Minerals fell 3.5 percent and Lundin Mining Corp. lost 3.6 percent.

     Trinidad Drilling fell 9.7 percent, the most since 2011, and Suncor Energy Inc. lost 2 percent. Oil fell 1.1 percent in New York after the International Energy Agency said this year’s price rally is under threat as OPEC’s biggest members pump record amounts of crude.

     Trinidad Drilling agreed to acquire CanElson Drilling Inc. in a deal valued at about $505 million, including the assumption of $36 million in CanElson debt. BMO Capital Markets analyst Michael Mazar said he was “struggling” to see the rationale behind the deal as he downgraded the stock to market perform, the equivalent of a hold.

     U.S. retail sales increased 1.2 percent in May, matching the median forecast of economists surveyed by Bloomberg and following a 0.2 percent gain in April. The data show American consumers are ready to spend on more than just automobiles, unlocking months of savings from cheap gasoline. The U.S. is Canada’s largest trading partner.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks rose after data on retail sales and jobs bolstered confidence in the strength of the economy, while investors watched for progress in Greece’s debt negotiations.

     Transportation companies, led by railroads, rallied for a second day. Citrix Systems Inc. climbed 6.7 percent after an activist investor called for an overhaul to the software company. Energy shares retreated as offshore drillers slumped on negative analyst comments. Twitter Inc. jumped as much as 13 percent in late trading after the company said Chief Executive Dick Costolo is stepping down.

     The Standard & Poor’s 500 Index advanced 0.2 percent to 2,108.86 at 4 p.m. in New York, after earlier rising as much as 0.5 percent. The Dow Jones Industrial Average rose 38.97, or 0.2 percent, to 18,039.37. The Nasdaq Composite Index added 0.1 percent.

     “It’s a contest right now between the improving economy and fears about Greece,” said Brad McMillan, chief investment officer of Waltham, Massachusetts-based Commonwealth Financial Network, which oversees $97 billion. “The economy really is improving and the first quarter was not the end of the world, but Greece is the big thing people are watching in the short- term.”

     The International Monetary Fund said its team negotiating with Greece left Brussels after failing to make progress on a debt deal. Meanwhile, European Union President Donald Tusk told Greece Prime Minister Alexis Tsipras to stop maneuvering and decide whether to accept the conditions on financial aid. The S&P 500 jumped 1.2 percent on Wednesday, the most in a month, amid optimism that progress was being made in the talks.

     Greece’s Tsipras has promised Germany and France that he will step up efforts to find a package of reforms and budget fixes before the country’s bailout agreement expires at the end of the month.

     Data earlier showed sales at retailers picked up in May, a sign households are finally willing to put the gains from continued job growth and lower fuel prices to work. Sales increases were broad-based, with auto dealers, clothing and building material stores among the best performers. A separate report showed applications for unemployment benefits remained below 300,000 for a 14th straight week, a sign of labor market strength.

     The S&P 500 had tumbled 2.4 percent from its May record to a two-month low amid concern the Federal Reserve will raise benchmark rates as early as September. The equity gauge 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.

     “For the markets to do better we need good news about the economy,” said Krishna Memani, the New York-based chief investment officer at Oppenheimer Funds Inc. “If the retail sales data was weak, we would have had a problem, but it isn’t. While the data isn’t knocking the cover off the ball, it’s reasonable and a solid recovery.”

     The Chicago Board Options Exchange Volatility Index fell 2.8 percent Thursday to 12.85, a three-week low. The gauge, known as the VIX, is down 9.6 percent since Friday, on track for the biggest weekly drop since April.

     Twitter rose 5.8 percent as of 4:50 p.m. after announcing the management change. Jack Dorsey, a Twitter co-founder, will take Costolo’s place in the interim until the company can find a replacement, Twitter said in a regulatory filing.

     Seven of the S&P 500’s 10 main industries gained for a second day, led by health-care, utility and phone company shares. About 5.8 billion shares traded hands Thursday, 9 percent below the three-month average.

     Railroads led transportation and industrial companies higher, as the Dow Jones Transportation Average climbed for a second day, up 1.1 percent. CSX Corp. rose 2.9 percent, the most in a month, as speculation of a merger with a Canadian railroad continues to swirl. Kansas City Southern gained 2 percent. Among airlines, Hawaiian Holdings Inc. and Alaska Air Group Inc. increased at least 1.7 percent.

     Biogen Inc. and Amgen Inc. advanced more than 1.3 percent to pace a climb in health-care shares. Baxter International climbed 3.4 percent, the drug maker’s biggest increase since November.

     Eli Lilly & Co. added 4.1 percent to a 14-year high, leading the group as it rose for a fifth day. The company has said it plans to release more clinical trial data next month on an experimental Alzheimer’s drug, raising optimism among investors that the details will be encouraging.

     Utilities were up for a second day and posted their biggest move higher in almost a month. Duke Energy Corp., Xcel Energy Inc. and Eversource Energy each added at least 1 percent.

     Citrix Systems Inc. jumped 6.7 percent, the most in the S&P 500 and to an eight-month high. Activist investor Jesse Cohn of Elliot Management Corp. said the company should consider selling two of its units, expand its share buyback and recruit more talented managers.

     Chipmaker Integrated Silicon Solution, Inc. rose 5.4 percent to its highest level since 2000 after Uphill Investment Co. raised its takeover offer.

     An S&P index of homebuilders climbed amid signs consumers are more willing to spend. Toll Brothers Inc. and KB Home gained at least 1 percent. Apparel retailer Gap Inc. added 1.9 percent. Ford Motor Co. rose 1.7 percent, the most in three months, amid strong May auto sales.

     Energy companies slipped as crude prices fell amid concerns about a record pace of production from OPEC’s biggest members. Chesapeake Energy Corp. lost 4.3 percent to its lowest level in more than six years after Oppenheimer & Co. downgraded the shares.

     Transocean Ltd. dropped 5 percent, the most in the S&P 500. Barclays Capital Inc. initiated coverage of offshore drillers with a negative outlook, in part citing low oil prices and an oversupplied rig market. Diamond Offshore Drilling Inc. and Noble Corp. slid more than 3.9 percent.

Have a wonderful evening everyone!

 
Be magnificent!

“You can’t use up creativity.  The more you use, the more you have.” –Maya Angelou

As ever,

Karen 

“It’s not the years in your life that count. It’s the life in your years.” –Abraham Lincoln
 

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