March 3, 2016 Newsletter

Dear Friends,

Tangents:

The Vancouver Symphony delivered a mesmerizing performance last night under the direction of Maestro Bramwll Tovey.  The first part of the program featured a spellbinding performance of Beethoven’s Symphony No. 7 in A Major, Op. 92
l. Poco sostenuto – Vivace
ll. Allegretto
lll. Presto
lV. Allegro con brio

The second part of the program featured the legendary Itzhak Perlman performing Bruch, Violin Concerto No. 1 in G minor, Op. 26
l. Prelude: Allegro moderato
ll. Adagio
lll. Finale: Allegro energico

For an encore, he performed the theme from Schindler’s List composed by John Williams.  You can watch a version of his performance of Shindler’s List on YouTube.

The Poem
Tenebris Interlucentem

       by James Elroy Flecker

A linnet who had lost her way
Sang on a blackened bough in Hell,
Till all the ghosts remembered well
The trees, the wind, the golden day.

At last they knew that they had died
When they heard music in that land,
And someone there stole forth a hand
To draw a brother to his side.

1911
From Poems that Make Grown Women Cry, edited by Anthony and Ben Holden, Simon & Schuster.

PHOTOS OF THE DAY

Britain’s Queen Elizabeth listens as the National Youth Orchestra of Great Britain performs during her Queen’s Trust visit to the Lister Community School in London, Thursday. Toby Melville/Reuters

Atholl Palace hotel is seen below a snow-covered Ben Vrackie in Pitlochry, Scotland, Wednesday. Russell Cheyne/Reuters

Market Closes for March 3^rd, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — The Canadian economy’s commodity-heavy tilt has returned to being a boon for the nation’s financial markets.

     The benchmark equity index extended its winning streak to six days, the longest since August, as beaten-down energy and mining shares continued a rebound amid rising resource prices.

     The Standard & Poor’s/TSX Composite Index rose 0.8 percent to 13,123.65 at 4 p.m. in Toronto, pushing the six-day gain to 3 percent. The surge has erased a loss for the year that almost reached 10 percent, leaving the Canadian benchmark and shares in New Zealand as the only markets in the developed world in positive territory.

     Shares in the Canadian benchmark trade at almost 22 times earnings, roughly 20 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.

     European stocks halted on Thursday their longest winning streak since October, while U.S. shares rose as investors awaited February’s jobs data.

     Canadian energy stocks have been on a tear, soaring 20 percent and outpacing rallies by U.S. and global counterparts since hitting a decade-low in January. The S&P/TSX Energy Index has erased losses in 2016, now up 3 percent for the year, pushing ahead after the group lagged peers last year.

     Raw-materials and energy producers rallied the most in the S&P/TSX as seven of 10 industries advanced. Trading volume was 21 percent higher than the 30-day average. Gold rose to a one- month high as copper extended a rally.

     Canadian Natural Resources Ltd., Canada’s largest heavy- crude producer, surged 9 percent for the biggest gain in more than four years. The energy producer lowered its 2016 capital budget about 22 percent, now targeting spending of C$3.5 billion to C$3.9 billion this year, down from as much as C$5 billion in November. Canadian Natural also reported an 89 percent decline in fourth-quarter profit. Valeant Pharmaceuticals International Inc. fell 4.2 percent to a 2013 low. Valeant’s head of U.S. dermatology products is departing the company, a move the drugmaker said is unrelated to any action taken by an ad hoc board committee probing the company’s dealings with a controversial mail-order pharmacy. Shares of Valeant have plunged 75 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks rose, led by gains in energy shares to extend a three-week rally before Friday’s payrolls report that may provide a clearer picture on the economy’s health and path for interest rates.

     Energy producers in the Standard & Poor’s 500 Index erased 2016 declines as a rally in the group helped equities shake off earlier weakness for a second day. Banks also gained momentum in the afternoon, rising for the fifth time in six days. Health- care and technology shares struggled, with Microsoft Corp. losing 1.1 percent. Kroger Co. sank 7 percent after the grocer forecast slower growth this year.

     The S&P 500 rose 0.4 percent to 1,993.40 at 4 p.m. in New York, erasing a 0.5 percent drop to remain at an eight-week high. The gauge gained for a third straight day for just the second time this year. The Dow Jones Industrial Average advanced 44.58 points, or 0.3 percent, to 16,943.90, and the Nasdaq Composite Index increased 0.1 percent. The Russell 2000 Index of small caps added 1 percent to rise for a third day. About 8.8 billion shares traded hands on U.S. exchanges, in line with the 2016 average.

     “Investors are clearing the decks ahead of tomorrow’s jobs report,” said Alan Gayle, senior strategist for Atlanta-based Ridgeworth Investments, which has about $42.5 billion. “Anything that moves in the direction of the Fed’s game plan of four rate hikes this year will be a real market-mover. A big gain in tomorrow’s jobs report would definitely put a near-term hike back on the table.”

     Investors are watching economic reports as central-bank meetings approach, with the government’s monthly nonfarm payroll figures looming large tomorrow. Data today showed growth in service industries slowed for a fourth straight month in February. A separate gauge showed factory orders in January rose less than expected, while the number of claims for unemployment benefits remained consistent with a steady labor market.

     The S&P 500 has jumped 9 percent from a 22-month low reached in February, though the gains have come amid the weakest volume in 2016, signaling a lack of conviction in the rally. The benchmark has trimmed its 2016 decline to 2.5 percent as banks, consumer and technology companies have bolstered the comeback, and it’s on track for a third straight weekly gain of more than 1.5 percent for the first time since 2009.

     Bridgewater Associates’ Ray Dalio said he expects low returns, slow growth and more volatility in the U.S. in an interview on Bloomberg Television. “I’m not bearish on stocks,” he said from Austin, where he is attending a conference hosted by the University of Texas Management Co. Global stocks will likely return about 4 percent in the long term and the average investor shouldn’t bet against active investors, Dalio said.

     With improvement in recent data, coupled with the rebound in equities, traders have lifted their bets on higher borrowing costs this year. While they’re pricing in a less than one-in-10 chance of a rate increase at the end of the Federal Reserve’s next meeting on March 16, the probability of a boost by June is 35 percent, up from 24 percent a week ago. Odds for a December move stand at nearly 64 percent compared to 36 percent last week.

     As the earnings season draws to a close, about three- quarters of S&P 500 companies have beaten profit projections, while less than half have topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 3.7 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump, and predict profits will drop 8.0 percent in the first quarter.                       

     The Chicago Board Options Exchange Volatility Index fell 2.3 percent Thursday to 16.70, holding at the lowest level since Dec. 29. The measure of market turbulence known as the VIX has dropped 41 percent since reaching a five-month high on Feb. 11.

     Eight of the S&P 500’s 10 main industries rose, led by energy and financial shares. Health-care companies declined 0.4 percent, falling for the first time in three days, while technology stocks were little changed, nearly erasing a morning 0.8 percent slide.

     Energy companies in the S&P 500 increased 1.3 percent, wiping out a loss for the year as crude oil continued to show signs of stabilizing, closing near the highest since Jan. 5. The group extended its three-day rally to 6.1 percent. ConocoPhillips and Apache Corp. paced gains, rising more than 5.6 percent.

     Chesapeake Energy Corp. surged 26 percent and capped the biggest two-day increase in its history after U.S. federal prosecutors rewarded the natural gas driller with immunity from prosecution in an antitrust case against its former CEO Aubrey McClendon.

     Homebuilders were among the best performers Thursday, with an S&P industry index up for the ninth time in 10 sessions, rising 1.6 percent to bring its advance since the February low to 19 percent. Lennar Corp. and D.R. Horton Inc. increased more than 1.9 percent.

     Biotechnology shares were the worst performers within the health-care group, as the Nasdaq Biotechnology Index slid 1.4 percent. Biogen Inc. and Vertex Pharmaceuticals Inc. declined more than 1.8 percent. Large drug makers were also under pressure, with Eli Lilly & Co. losing 1 percent, while Baxalta Inc. fell 1.5 percent.

     Among other companies moving on corporate news, Herbalife Ltd. dropped 7 percent, the most in almost five months after saying it overstated the growth of its customer and distributor base, bringing another headache to a company facing a federal investigation into whether it’s a pyramid scheme.

     Costco Wholesale Corp. slipped 0.8 percent, paring a 3.5 percent retreat, after quarterly earnings trailed analysts’ estimates as higher-income shoppers show signs of curtailing spending. The shares declined for the first time in four days.

Have a wonderful evening everyone.

Be magnificent!

We must learn to love those who think exactly opposite to us.

We have humanity for the background, but each must have his own individuality and his own thought.

Push the sects forward and forward till each man and woman are sects unto themselves.

We must learn to love the man who differs from us in opinion.

We must learn that differentiation is the life of thought.

We have one common goal,

and that is the perfection of the human soul, the god within us.

Swami Vivekananda

As ever,

Carolann

I’m more interested in being good than in being famous.

                                             -Annie Liebovitz, 1949-

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