March 1, 2016 Newsletter

Dear Friends,

Tangents:

MARCH:

Pisces & Aries
Birthstone: Aquamarine
Flower: Tulip

The days and nights  approach each other in duration, balancing perfectly at the vernal equinox.  Anything could happen.  Despite the persistent winds, spring is in the air.  “The wind blows where it wants and you can hear the sound of it but you cannot tell where it is coming from and where it is going.  So it is with those who are born of the spirit.”  March is the Martian month.  We feel braced.   There’s warmth in the air.  Nature begins her journey outward into beauty.  Our senses awaken.  Winter’s inwardness, its contraction, begins to turn inside out.  Responding, we begin to flow outward too, to expand.
“March is the month of expectation,” wrote Emily Dickinson.

The month is so called from Mars.  The old Dutch name for it was Lentmaand.  The old Saxon name was hrethmonath, perhaps meaning “rough-month” form its boisterous winds.  This subsequently became lenctenmonath – lengthening month.
March comes in like a lion and goes out like a lamb.

On March 1, 1961, President John F. Kennedy issued an executive order creating the Peace Corps, enlisting men and women for voluntary, unpaid service in developing countries around the world.

2010 – Vancouver Olympics end with Canada winning 14 gold medals, the most for any country (host or otherwise) in any Winter Olympics.

PHOTOS OF THE DAY

A woman walks her dog in front of the setting sun near Hannover, northern Germany, Monday evening. Julian Stratenschulte/dpa/AP

A man covered with a plastic bag for protection from the wind and cold fishes through an ice hole in the Finnish Gulf west of St. Petersburg, Russia, Tuesday. Dmitri Lovetsky/AP

Market Closes for March 1^st, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, with a fourth straight gain pushing the benchmark index to the highest level since Dec. 31, as an unexpected expansion in Canada’s economy last quarter added to optimism that growth is accelerating in America.

     The Standard & Poor’s/TSX Composite Index climbed 1 percent to 12,982.10 at 4 p.m. in Toronto, capping the longest rally in two weeks. The equity gauge has rebounded 7.4 percent from a Feb. 11 low and is 0.2 percent from erasing declines for the year. The index yesterday narrowly avoided a ninth loss in the past 10 months with a 0.3 percent February increase.

     Global stocks rallied and the S&P 500 rebounded from a third monthly loss amid data showing U.S. manufacturing steadied last month. Emerging-market currencies and metals rose on speculation central banks in Asia and Europe will add to stimulus a day after China moved to soften the nation’s economic downturn. The U.S. and China are Canada’s two largest trading partners.

     Canada’s economy unexpectedly rose at a 0.8 percent annualized pace between October and December, Statistics Canada said Tuesday in Ottawa. Economists had forecast output would be flat, according to a Bloomberg survey. The weakened Canadian dollar reduced imports by the most in six years, taking pressure off the central bank to cut interest rates to record lows.

     The S&P/TSX is one of the best-performing markets in the developed world this year, vying with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 14 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     Bank of Nova Scotia, Canada’s third-largest lender by assets, climbed 5.8 percent for the biggest increase in seven years after posting rising first-quarter profit, led by its international-banking business. The lender is the last of the nation’s largest banks to report earnings during this period. Toronto-Dominion Bank and Royal Bank of Canada missed analysts’ estimates, while Bank of Montreal and Canadian Imperial Bank of Commerce beat expectations.

     Maple Leaf Foods Inc. surged 8.1 percent to a record after fourth-quarter earnings and revenue topped the highest estimates among analysts. The food products maker also boosted its dividend.

     Valeant sank 2.3 percent, falling for a fourth day, extending a 2013 low. Shares of the drugmaker pared earlier losses of as much as 11 percent after Nomura analyst Shibani Malhotra said Valeant was viewed with more confidence after conversations with the company. Malhotra maintained a buy rating on the stock.

     Quebec’s securities regulator Autorite des marches financiers earlier said it was “concerned” about allegations made against Valeant and would neither confirm nor deny it was investigating the Laval, Quebec-based company.

     Shares of the drugmaker have plunged 75 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices. The stock added to losses yesterday after the company confirmed the U.S. Securities and Exchange Commission is investigating Valeant in a previously undisclosed probe.

US

By Oliver Renick

     (Bloomberg) — The Nasdaq 100 Index powered to its best day in six months as U.S. equities roared into March amid signs that the world’s largest economy remains on firm footing and foreign central banks stand poised to do what’s needed to shore up sluggishness abroad.

     American factories looked set to emerge from a year-long slump, while monthly sales at major carmakers showed consumers stepping up spending a day after China added to stimulus, alleviating anxieties that had sent U.S. shares to the worst start to a year on record. Banks and technology stocks paced gains Tuesday, as companies hardest hit during the rout continued a three-week rebound.

     The S&P 500 climbed 2.4 percent, the most in a month, to 1,978.35 at 4 p.m. in New York, the highest close since Jan. 6 after sliding 0.8 percent on Monday to cap a third straight monthly drop. The gauge has trimmed its 2016 decline to 3.2 percent, down from more than 10 percent. The Nasdaq 100 gained 3.2 percent, the most since Aug. 26. The Dow Jones Industrial Average added 348.58 points, or 2.1 percent, to 16,865.08.

     “This is a big rally without a whole lot having changed,” said Scott Wren, a senior global equity strategist in St. Louis at Wells Fargo Investment Institute. “We opened above the 50-day moving average and that has driven the day, along with some of the economic news as well and oil above $30. It shows you how desperate these equity markets were for some kind of stability.”

     Equities extended an opening advance after a report showed factory activity in February shrank less than forecast, as gains in new orders and production provided signs that the beleaguered industry could soon stabilize. Another report showed spending on all construction projects, private and public, rose 1.5 percent in January, the most since May.

     The S&P 500 entered March lugging its longest stretch of monthly declines since 2011, as equities have been beset this year by worries that China’s slowing economy will hurt growth around the globe, a concern compounded by tumbling commodity prices. That’s led investors to anticipate more support from policy makers, and China’s central bank yesterday cut banks’ reserve requirements, freeing up funds to help spur lending.

     A rebound in oil prices in the final two weeks of February helped the U.S. equity benchmark to recover most of its losses last month, which reached as much as 5.7 percent. The index is now 8.2 percent above a Feb. 11 low, and 7.2 percent off an all- time high reached last May.                          

     The Chicago Board Options Exchange Index, the gauge of options prices known as the VIX, slid 14 percent to 17.70, the biggest one-day drop since Jan. 22 to the lowest level this year. The measure of market turbulence edged up 1.7 percent in February, paring a surge of more than 39 percent during the month. About 8.8 billion shares traded hands on U.S. exchanges, 6 percent above the three-month average.

     Nine of the S&P 500’s 10 main industries increased Tuesday, with financial and technology shares rising more than 3 percent. Seven groups gained more than 1.9 percent. JPMorgan Chase & Co. and Apple Inc. climbed at least 3.9 percent. Within consumer discretionary shares, retailers were strong, with Amazon.com Inc. and Tiffany & Co. more than 4 percent. Ford Motor Co. posted its strongest gain since October 2012 after better-than- expected February sales.

     In the three times this year that the S&P 500 rose more than 2 percent, this is the first instance when a Goldman Sachs Group Inc. index of equities with the highest short interest was up less than the benchmark. During the market’s bounce from Feb. 11 through yesterday, most-shorted shares jumped 13 percent, compared with the S&P 500’s 5.6 percent climb.

     Presidential primaries move into focus today, with more delegates to be awarded than on any other day of the nomination race. Investors are also assessing economic releases to gauge the possible trajectory of interest-rate increases before the Federal Reserve’s next decision on March 16, with the government’s monthly jobs report looming on Friday.

     Before the better-than-forecast data on manufacturing and construction spending, Fed Bank of New York President William C. Dudley said he was less confident in the inflation outlook following recent turbulence in financial markets. Dudley’s views added to officials’ concerns expressed recently about growth and inflation headwinds from abroad.

     Traders are pricing in a 12 percent probability of a rate boost this month, with odds increasing to 50 percent by September and 63 percent in December. That’s up from just 11 percent at the height of last month’s selloff on Feb. 11.

     “The numbers today were pretty decent with manufacturing up from estimates and the construction numbers were pretty good as well, so if inflation keeps moving over the next few months that could be a good thing as we started the year talking about negative rates and deflation,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. “Financials are also bouncing back after getting beat up and as we get some stability in oil prices, things are looking a little better.”

     Financial companies added 3.5 percent, the biggest gain for the 89-member group in three weeks. Wells Fargo & Co. increased 3.8 percent while Bank of America Corp. and Citigroup Inc. climbed more than 5.3 percent. The KBW Bank Index jumped 4.6 percent to a one-month high.

     Ford surged 4.6 percent and Fiat Chrysler Automobiles NV added 7.2 percent to a five-week high. Their February sales beat analysts’ estimates, thanks to promotions tied to the Presidents Day holiday and continued strong demand for sport utility vehicles and pickups. General Motors Co. lagged, gaining 1.9 percent after a surprise decline in its sales.

     Apple rose the most in more than a month to pace the strongest advance for technology shares since Jan. 29. Facebook Inc. and Microsoft Corp. contributed, increasing at least 2.7 percent. Hard-drive makers Seagate Technology Plc and Western Digital Corp. rallied more than 5.9 percent following management presentations late yesterday at a Morgan Stanley conference.

     Raw-materials producers gained for the fourth time in five days to the highest this year. Providers of building materials were among the strongest performers following the construction spending data, with paint maker Sherwin-Williams Co. rising 3.9 percent to a six-month high, while Martin Marietta Materials Inc. and Vulcan Materials Co. added more than 2.9 percent. Steel company Nucor Corp. gained 4.1 percent to a 2016 high.

Have a wonderful evening everyone.

Be magnificent!

Differentiation, infinitely contradictory, must remain,

but it is not necessary that we should hate each other;

it is not necessary therefore that we should fight each other.

Swami Vivekananda

As ever,
 

Carolann

People won’t have time for you if you are always angry or complaining.

                                                            -Stephen Hawking, 1942-

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Portfolio Manager &

Senior Vice-President

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7