July 13, 2015 Newsletter

Dear Friends,

Tangents:

I read an article in a recent magazine entitled “Why we need a summer read.”

John Yemma writes: “Are there any more natural companions than summer vacation and summer reading?  Summer vacation is about breaking away from the routine, ignoring the clock, letting a breeze or a wave, a trail or a highway take you somewhere unexpected.  Summer reading works the same way.  Instead of  a work-year’s consumption of articles, books, PDFs, and  7,000 other types of must-read, must-improve, must-survive documents consumed during the work year, summer reading is about willingly giving yourself over to an author to guide you into an unexpected world.  People read for pleasure year-round, but for most of us slow immersion in  a book is possible only when we are free from other obligations.  Slow immersion is what summer vacation and summer reading are all about…No work of literature – and the bar is very high in  a world of Faulkner, Flannery O’Connor, Ralph Ellison, Carson McCullers, Alice Walker, Robert Penn Warren, Truman Capote, Cormac McCarthey, and many more captures the soul of the South as Harper Lee’s masterpiece, ‘To Kill a Mockingbird’ (which is why there is so much anticipation surrounding her new title, ‘Go Set a Watchman’)…A summer read isn’t required reading .  It is necessary reading.  As Atticus told Scout: ‘You never really understand a person until you consider things from his point of view…until you climb into his skin and walk around in it.”

Having just returned from a week of sailing, I had lots of time to read a couple of terrific books.  One that I can recommend is H is for Hawk by Helen Macdonald published this past year.  It is a memoir of coming to terms with the death of her father.

PHOTOS OF THE DAY

Women and girls wear traditional dresses during the annual Mitama Festival at the Yasukuni Shrine in Tokyo, Monday. Over 30,000 lanterns light up the precincts of the shrine, where more than 2.4 million war dead are enshrined, during the four-day festival that lasts from July 13 to 16. Thomas Peter/Reuters

A drummer performs amongst the shadows of models at the Cadet presentation during Men’s Fashion Week in New York, Monday. The four-day event by the Council of Fashion Designers of America is the New York debut of Men’s Fashion Week. Lucas Jackson/Reuters

Market Closes for July 13^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Annelise Alexander

     (Bloomberg) — Canadian stocks capped the biggest two-day rally since February, as global equities rallied amid optimism that Greece clinched a deal with its creditors and will remain in the euro.

     Consumer shares paced gains in Canada’s benchmark stock gauge as all 10 main groups advanced. Northern Property Real Estate Investment Trust jumped 2.8 percent as REITs surged. New Gold Inc. and Teck Resources Ltd. jumped at least 7.6 percent for the biggest gains in the index as materials producers erased earlier losses.

     The Standard & Poor’s/TSX Composite Index jumped 122.15 points, or 0.9 percent, to 14,533.22 at 4 p.m. in Toronto. The benchmark equity has added 1.8 percent in the past two days, the most since Feb. 3, to trim its loss in 2015 to 0.7 percent.

     The S&P 500 rallied 1.1 percent, while the Stoxx Europe 600 Index capped its biggest four-day rally since 2011 after Greece reached a deal with creditors. The nation’s parliament will convene on Wednesday to vote on a bailout package that includes a bank recapitalization, potentially giving the ECB room to ease its liquidity restraints.

     All of the S&P/TSX’s 10 industry groups advanced on trading volume in line with the 30-day average.

     Health-care companies rose 1.5 percent. Concordia Healthcare Corp. jumped 3.7 percent, the highest close since April, after Cantor Fitzgerald LP upgraded the stock to buy.

     Home Capital Group Inc. fell 19 percent, the most since 1996, after preliminary second quarter results missed estimates.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index posting its best three-day rally this year, after Greece reached an agreement with its creditors.

     Technology and consumer shares rose the most, with Google Inc., Microsoft Corp. and Facebook Inc. up at least 2 percent. Netflix Inc. and Amazon.com Inc. surged more than 2.7 percent. MarkWest Energy Partners LP jumped 14 percent as the pipeline unit of refiner Marathon Petroleum Corp. plans to buy MarkWest, the second-biggest U.S. processor of natural gas, for about $15.8 billion. Marathon rose 7.9 percent to a record.

     The S&P 500 added 1.1 percent to 2,099.60 at 4 p.m. in New York, closing near its average price during the past 50 days after the gauge earlier jumped above its 100-day moving average for the first time this month. Dow Jones Industrial Average climbed 217.27 points, or 1.2 percent, to 17,977.68. The Nasdaq Composite Index rose 1.5 percent after its biggest gain since January.

     “It’s great hearing Greece is not going over the deep end,” said Rob Lutts, chief investment officer at Salem, Massachusetts-based Cabot Wealth Management Inc. “What’s good for the rest of the world for now is Greece staying as is and instituting these reforms. Last week’s volatility was all on the back of what’s going on in Greece, as well as in China, and today it’s pretty apparent the path is one of resolution.”

     Greek Prime Minister Alexis Tsipras surrendered to European demands for immediate action to qualify for up to 86 billion euros ($95 billion) of aid he needs to keep his country in the euro area. The Greek parliament has until Wednesday to pass into law key creditor demands including streamlining value-added taxes, broadening the tax base to increase revenue and curbing pension costs.                       

     The S&P 500 ended little changed last week, masking a volatile period accentuated by Greece’s financial crisis and turmoil in China’s equity market. Equities rallied 1.2 percent Friday, the best showing since May 8, recovering on optimism toward a deal between Greece and its creditors, and as stocks in China rebounded. The U.S. benchmark index is 1.5 percent below its record set in May.

     Investors will continue to weigh U.S. economic data this week for clues on when the Federal Reserve may raise interest rates. Reports will include data on retail sales, industrial production, housing starts and consumer sentiment.

     Fed Chair Janet Yellen said Friday she still expects to raise interest rates this year and repeated that the subsequent pace of increases will be gradual. She will deliver her semiannual testimony to Congress on Wednesday and Thursday.

     Corporate profits will also be in focus, with JPMorgan Chase & Co., Wells Fargo & Co. and Intel Corp. among S&P 500 firms reporting results this week. Analysts project earnings for companies in the equity benchmark dropped 6.4 percent in the second-quarter.                         

     The Chicago Board Options Exchange Volatility Index fell 17 percent Monday to 13.90. With Friday’s 16 percent decline, the gauge known as the VIX marked its biggest two-session slide since Jan. 2013. About 6 billion shares traded hands on U.S. exchanges today, 6.5 percent below the three-month average.

     All of the S&P 500’s 10 main groups rallied, with technology shares posting the strongest two-day gain this year, while consumer-discretionary companies had their biggest two-day move in five months.

     An index of 30 retailers in the S&P 500 climbed to an all- time high, bolstered by Netflix and Amazon as both reached records. Home Depot Inc. advanced 1.6 percent to a three-month high, while Priceline Group Inc. increased 2.5 percent. Under Armour Inc. jumped 3.6 percent and Nike Inc. added 1.7 percent as both stocks closed at records.

     Apple Inc. climbed 1.9 percent, while Google and Yahoo! Inc. rallied at least 2.2 percent to help pace technology’s rise. International Business Machines Corp. added 1.5 percent and had its best three-day increase in 2015.

     Applied Materials Inc. gained 2.9 percent, the most since February. David Einhorn said in an investor letter that his Greenlight Capital took a position in the semiconductor equipment manufacturer.

     Banks in the benchmark index rose for a third day, their best such streak this year. Treasury yields also advanced for a third session, and investors speculated that higher interest rates will help boost lenders’ profits. Bank of America Corp. and Citigroup Inc. gained at least 1.8 percent.

     Anacor Pharmaceuticals Inc. soared 56 percent to a record after the company said its experimental dermatitis drug helped patients in a final-stage trial.

     Edwards Lifesciences Corp added 3.4 percent, the most in four months, to reach an all-time high after the company was raised to outperform from sector perform at RBC Capital Markets by equity analyst Glenn Novarro.

     Airline stocks rose for the fifth time in six sessions, as American Airlines Group Inc. and SkyWest Inc. jumped at least 2.8 percent. Jet fuel prices fell 37 percent from a year earlier in the second quarter and are poised to boost margins, according to Bloomberg Intelligence.

     The Global X FTSE Greece 20 exchange-traded fund, a U.S.- listed ETF tracking Greek equities, slid 4.4 percent, reversing an earlier rise of 5.3 percent.

     Managed-care companies extended a slump from recent highs last month. Cigna Corp., Anthem Inc. and Humana Inc. all declined at least 1.1 percent. Aetna Inc. slipped 0.5 percent, and is down about 14 percent since reaching a record on June 25.

Reuters reported late Friday that at least three state attorneys general said they plan to examine Aetna’s proposed merger with Humana.

     Ascena Retail Group Inc. fell 13 percent, the most in more than nine months, after cutting its profit forecast for the year because of slower-than-expected sales at its Justice and Dressbarn stores.
 

Have a wonderful evening everyone.

Be magnificent!

To expect something is to look for something pleasant.

Searching for the pleasurable is a form of denial.

You cannot expect anything, because the expectation is within you,

and what you are waiting for is dependent on external forces.

Swami Prajnanpad

As ever,

Carolann

Most powerful is he who has himself in his own power.

                                  -Seneca, 3 BCE-65 AD

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