June 17, 2015 Newsletter

Dear Friends,

Tangents:

On June 17^th, 1578, Sir Francis Drake, sailing off the coast of north-western California, arrives at Nova Albion and wrote this  in his journal on that day:

In this bay we anchored….The people of the country, having their houses close by the water’s side, showed themselves unto us and sent a present to our general.  When they came unto us they greatly wondered at the things which we brought.  Our general (according to his natural and accustomed humanity) courteously entreated them, and liberally bestowed on them necessary things to cover their nakedness.  Whereupon they supposed us to be gods, and would not be persuaded to the contrary.  The presents which they sent unto our general were feathers, and cauls of net work.

  Their houses are digged round about with earth, and have from the uttermost brims of the circle clefts of wood set upon them, joining close together at the top like a spire steeple, which by reason of that closeness are very warm,  Their bed is the ground with rushes strewed on it and lying about the house; they have the fire in the midst.  The men go naked; the women take bulrushes and comb them after the manner of hemp, and thereof make their loose garments; which, being knit about their middles, hang down about their hips, having also about their shoulders a skin of deer, with the hair upon it.  These women are very obedient and serviceable to their husbands.

And also on this day in 1885, the Statue of Liberty, a gift from the French, arrived in New York Harbor after being shipped across the Atlantic Ocean in 350 pieces packed in more than 200 cases.

PHOTOS OF THE DAY

Racegoers wear top hats during the Royal Ascot horse races on Wednesday in Ascot, England. Eddie Keogh/Livepic/Reuters

Frenchman Frank Samson, who is taking part in an re-enactment of the Battle of Waterloo, poses in front of the Lion’s Mound of Waterloo in Belgium Wednesday. The commemorations for the 200th anniversary of the Battle of Waterloo will take place in Belgium on June 19 and 20. Yves Herman/Reuters

Market Closes for June 17^th, 2015

International Markets

Bonds

Currencies

Commodities

Six words that spell business success:  create concept, communicate concept, sustain momentum. –Yale Hirsch.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell to a two-month low as the nation’s largest lenders tumbled to offset a rebound in gold prices after the U.S. Federal Reserve indicated that the pace of interest-rate increases will be gradual.

     Toronto-Dominion Bank dropped 0.8 percent to pace declines among financial services firms. Alacer Gold Corp. rallied 8.4 percent as gold climbed. Bombardier Inc. extended its two-day slide to 8 percent as the aircraft maker has been shut out of the Paris Air Show so far.

     The Standard & Poor’s/TSX Composite Index fell 20.07 points, or 0.1 percent, to 14,732.98 at 4 p.m. in Toronto. The gauge has advanced 0.7 percent this year, among the worst- performers in developed markets in the world.

     Seven of 10 industries in the S&P/TSX advanced on trading volume 5.7 percent lower than the 30-day average. Royal Bank of Canada, the nation’s largest lender, slipped 0.6 percent as financial services firms decreased 0.5 percent as a group, the most in the S&P/TSX.

     Barrick Gold Corp. climbed 2.6 percent, the most in a month, and Teck Resources Ltd. added 1.5 percent as raw- materials producers rallied 0.8 percent as a group.

     Gold for immediate delivery rose 0.5 percent to $1,188.18 an ounce in New York, erasing an earlier loss.

     Fed policy makers signaled a pickup in the economy is keeping it on track to raise interest rates this year, though subsequent increases are likely to be more gradual than anticipated earlier.

     The Federal Open Market Committee voted to keep the main rate at zero, where it has been since late 2008. New forecasts issued by the committee implied two quarter-point rate rises this year and a shallower pace of increases in 2016.

     Investors are also watching developments in Europe, where Greek Prime Minister Alexis Tsipras said he was ready to take responsibility for rejecting a deal with creditors if the terms are unacceptable. Negotiations are close to a breakdown ahead of a June 18 meeting of euro-area finance ministers in Luxembourg as the next deadline in a saga that opened in 2009.

US

By Jennifer Kaplan and Annelise Alexander

     (Bloomberg) — U.S. stocks climbed after the Federal Reserve said the pace of any interest-rate increases will be gradual as Chair Janet Yellen wants to see more decisive evidence of economic growth.

     TripAdvisor Inc. soared 15 percent on a room-booking deal with Marriott International Inc. Procter & Gamble Co. added 1.2 percent to pace gains in consumer staples companies, while Harley-Davidson Inc. rose 3.6 percent on an expanded stock- buyback plan. FedEx Corp. fell the most in five months after its fourth-quarter profit trailed analysts’ estimates, and energy shares retreated.

     The Standard & Poor’s 500 Index rose 0.2 percent to 2,100.44 at 4 p.m. in New York, after rising as much as 0.5 percent. The Dow Jones Industrial Average added 31.26 points, or 0.2 percent, to 17,935.74. The Nasdaq Composite Index advanced 0.2 percent. About 6.2 billion shares changed hands on U.S. exchanges, 1.6 percent below the three-month average.

     “It looks like there’s a shallower rate hike path for 2016 and 2017,” said John Canally, chief economic strategist at LPL Financial Corp. “That should be supportive of risk assets.”

     Fed officials maintained their forecast for the benchmark interest rate at the end of 2015, while lowering it for next year. Policy makers predicted the rate will rise to 0.625 percent this year, according to their median estimate. That implies two quarter-point increases. Next year, they expect the rate to climb to 1.625 percent, lower than a March forecast of 1.875 percent.

     A rebound in job growth is giving Fed officials reason to look beyond a first-quarter economic slowdown as they consider when to tighten policy. At the same time, inflation remains below their target, and central bankers say the timing of a rate increase depends on how economic data unfold.

     Recent data from retail sales to wage growth have been improving, though a report Tuesday indicated builders began work on fewer houses in May following a surge the prior month. That followed a disappointing factory report on Monday that pushed stocks lower.

     “We are sort of in a Goldilocks economy where we don’t have to rush to make any drastic moves,” said Myles Clouston, senior director of Nasdaq Advisory Services. “The Fed has the luxury to take their time and be thoughtful given that the economy is showing signs of improvement on multiple fronts. Things seem to be moving smoothly.”                        

     The S&P 500 has more than tripled from its March 2009 low, buoyed by three rounds of stimulus from the Fed. The index is down 1.4 percent from an all-time high reached last month.

     During her post-statement press conference, Yellen said Greece and its creditors are faced with difficult decisions, and turmoil from a failure to reach a deal could have spillover effects on the U.S.

     Greece remains deadlocked in talks with creditors and needs to seal a deal before the euro area’s bailout expires on June 30, or risk missing payments on its debt of about 313 billion euros ($352 billion). Negotiations between Greece and its creditors are close to breakdown as finance ministers prepare to meet in Luxembourg on Thursday.

     The Chicago Board Options Exchange Volatility Index fell 2.1 percent Wednesday to 14.50. The gauge, known as the VIX, fell 3.8 percent yesterday, retreating from an 11-week high.                        

     Eight of the S&P 500’s 10 main groups rose, led by utility companies, which posted their best gain in a month, and consumer shares. Gas and electricity provider NiSource Inc. jumped 3.7 percent to an all-time high as shares of its pipeline spinoff started preliminary trading. Sempra Energy and CenterPoint Energy Inc. climbed more than 1.5 percent.

     TripAdvisor shares soared 15 percent, the most in four months, to lead consumer discretionary shares higher. The company announced a partnership with Marriott International that will let users of the travel-planning website book rooms at the chain’s hotels.

     Harley-Davidson rallied 3.8 percent, the most since January, after boosting its share-buyback authorization by 15 million shares. Nordstrom Inc. gained 2.4 percent, its biggest climb in four months.

     Reynolds American Inc. and Procter & Gamble climbed more than 1.2 percent, leading an advance among consumer staples companies as a Bloomberg gauge on the dollar fell to a one-month low. A weaker dollar helps make their products more competitive overseas.                        

     AbbVie Inc. climbed 1.5 percent after Piper Jaffray Ltd. rated the shares overweight. Kythera Biopharmaceuticals Inc. soared 22 percent to a record after Botox maker Allergan Plc agreed to buy the company for $2.1 billion. The Nasdaq Biotechnology Index added 0.6 percent.

     FedEx fell 3 percent to weigh on the transportation group. The operator of the world’s largest cargo airline posted a fourth-quarter profit that trailed analysts’ estimates, crimped by currency fluctuations and lower fuel surcharges. The Dow Jones Transportation Average slipped 0.4 percent, down for a fourth consecutive day, the longest stretch in two months.

     Energy companies reversed early gains, falling with oil after a government report showed crude stockpiles at Cushing, Oklahoma, the delivery point for West Texas Intermediate crude traded in New York, rose for the first time since April and U.S. refineries unexpectedly cut operating rates. Chesapeake Energy Corp. lost 3.5 percent, while Pioneer Natural Resources Co. and Apache Corp. slid more than 2.3 percent.

Have a wonderful evening everyone.

Be magnificent!

We would rather cling to the known than face the unknown-

the known being our house, our furniture, our family,

our character, our work, our knowledge, our fame, our loneliness, our gods –

that little thing that moves around incessantly within itself,

with its own limited embittered existence.

Krishnamurti

As ever,

Carolann

Age does not matter if the matter does not age.

                 -Carlos Pena Romulo, 1898-1985

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