April 11, 2016 Newsletter

Dear Friends,

Tangents:

April 11, 1945: liberation of Buchenwald

Poem: An elegy is, as Edward Hirsch writes, “a poem of mortal loss and consolation.”  This elegy first records the stray, important thoughts that come when the poet listens to Bach.  Only at the end do we come upon the particular loss, and the consolation of possibility.

Elegy

 -by Ed Smallfield

                                                        Bach.

                                                 A cello

                                                       swells

                                            in the dark.

                                                    Talk

                                                 & spells,

                    those stories the body tells.

                                                        A walk

    between raindrops.  The notes empty.  The notes fill.

           The accidents of somebody’s biography.

A hand        explores        whatever        is too dark to see.

                                                          April

ends & the cellist is dead.                   An orange window.

                                                & I am coming to see you.

                                            -NY Times, April 10, 2016

PHOTOS OF THE DAY

Catherine, Duchess of Cambridge is watched by former Indian cricketer Dilip Vengsarkar as she and Britain’s Prince William play a game of cricket with Indian children, who are beneficiaries of NGOs, at the Oval Maidan in Mumbai, Sunday. Rafiq Maqbool/AP

Canada’s Prime Minister Justin Trudeau sits with members of the Sikh community and government caucus during a Vaisakhi celebration on Parliament Hill in Ottawa, Monday. Adrian Wyld/The Canadian Press/AP

Market Closes for April 11^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a second day, giving back some gains in the final hour of trading, as commodities rallied amid signs of a pick-up in industrial demand in China. Valeant Pharmaceuticals International Inc. extended losses to drag health-care companies lower.

     The Standard & Poor’s/TSX Composite Index rose 0.2 percent to 13,422.76 at 4 p.m. in Toronto, paring an earlier advance of as much as 1 percent. The Canadian benchmark has gained 1.2 percent in two days. The S&P/TSX remains one of the best- performing developed markets in the world this year with a 3.2 percent gain.

     Canadian equities advanced with commodities prices today, as crude traded above $40 a barrel in New York while spot gold advanced to the highest in three weeks. Copper rebounded as the dollar declined a second day. China’s producer prices increased 0.5 percent in March from February, the first gain in more than two years, data showed Monday.

     The resource-dominant S&P/TSX remains tied to commodities prices, as a first-quarter rally fueled by a resurgence in crude and gold prices has stalled to start the second. The Canadian benchmark now trades at 21.3 times earnings, about 15 percent higher than the 18.6 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

     Canadian Pacific Railway Ltd. climbed 2.6 percent to the highest level since Dec. 4, after the railroad operator ended efforts to buy U.S. competitor Norfolk Southern Corp. and the takeover plan backed by investor Bill Ackman drew opposition from customers and U.S. government officials. Norfolk Southern rejected three offers, including one in December that valued the company at $27 billion.

     Whitecap Resources Inc. climbed 8.6 percent to a three- month high, after the oil and natural gas explorer lowered its monthly dividend and doubled its 2016 capital spending guidance to C$148 million.

     Valeant tumbled 7.8 percent for a second day of losses, as declines accelerated through the day. The drugmaker’s board has asked outgoing Chief Executive Officer Michael Pearson to cooperate with a subpoena to appear before a U.S. Senate committee that’s investigating drug pricing. The committee said Friday it intended to start contempt proceedings against Pearson, after he failed to appear at a deposition that week.

     Shares of Valeant have rebounded from a five-year low after winning the support of lenders to waive a default and ease some restrictions on its loan terms last week. Valeant shares remain down almost 90 percent from an August record.

US

By Dani Burger

     (Bloomberg) — U.S. stocks fell, erasing gains in late afternoon trading, as investors braced for what is forecast to be the worst earnings season since the financial crisis.

     The Standard & Poor’s 500 Index fell 0.3 percent to 2,041.99 at 4 p.m. in New York, wiping out an advance of as much as 0.8 percent, after the steepest decline last week in two months. Financial shares, the worst performing group in the S&P 500 in 2016, gained, with JPMorgan Chase & Co. and Goldman Sachs Group Inc. climbing. Signs of a pick-up in Chinese industrial demand pushed raw-material producers higher, while health-care and consumer-staples companies weighed on the index.

     “The market lacks enough conviction to move stocks in any one direction for any one amount of time long enough for investors to sink their teeth into and rack up performance,” John Stoltzfus, the New York-based chief market strategist at Oppenheimer & Co., said by phone. “There is an increased amount of skepticism and concern, mostly around earnings season. It boils down to a market that has to climb a wall of worry and has to earn its gains.”

     Alcoa Inc. unofficially kicked off the reporting season today, reporting after the close first-quarter profit of 7 cents a share, which exceeded analysts’ estimates by 5 cents. Sales were $4.95 billion, falling short of the $5.2 billion that was projected. Shares retreated 0.4 percent in late trading. 

     As investors await fresh cues from corporate America, analysts are projecting first-quarter profits will contract 10 percent —  compared with calls for flat earnings growth at the start of the year — including a 20 percent drop for banks. Still, for the first time in eight months, the pace at which they are cutting their estimates is slowing.

     While S&P 500 companies have historically exceeded earnings forecasts, sales have fallen short of projections in the past two periods. JPMorgan Chase, Bank of America Corp. and Citigroup Inc. are all scheduled to release results this week.

     Following a tumultuous start to the year in which the S&P 500 tumble as much as 11 percent, U.S. equities are now almost unchanged on optimism that central bank support will be enough to support growth. Still, reasons for additional gains have grown thin, with valuations far above their five-year average and the seven-year bull market weeks away from becoming the second-longest in history. 

     After comments by Federal Reserve Chair Janet Yellen and minutes from the March meeting this month reaffirmed officials won’t rush to raise interest rates, traders are pricing in zero chances of a raise in April. The first month with at least even odds for a boost has been pushed to February 2017.

     Among stocks moving on corporate news, Chesapeake Energy Corp. jumped 20 percent after saying it has amended a $4 billion secured revolving credit facility agreement with its bank syndicate group that matures in 2019.

     Yahoo! Inc. added 1.1 percent after a person familiar with the matter said the publisher of Britain’s Daily Mail newspaper is interested in buying the company’s media and news properties. Daily Mail has spoken with a half dozen U.S.-based private- equity firms and a bid would only be made in conjunction with a partner, according to the report.

     Biotechnology companies slumped, with the Nasdaq Biotechnology Index dropping a third day. Endo International Plc sank 8 percent, while Insys Therapeutics Inc. plunged 19 percent. The latter posted preliminary revenue from its Subsys drug that trailed estimates, saying scrutiny around opioid addiction may have caused reluctance by health-care providers in writing prescriptions.

     Hertz Global Holdings Inc., a popular hedge-fund holding, slid 11 percent after saying U.S. car rental revenue in 2016 will be flat to down by 1.5 percent, after previously projecting an increase of at least 1.5 percent. Avis Budget Group Inc. also declined, losing 8.1 percent.

     Under Armour Inc.’s Class A shares sank 5.5 percent after Morgan Stanley cut its price target on the retailer to $32 a share, or 27 percent below the stock’s close on Friday. The bank said revenue growth, especially in women’s, has slowed, which will lead to a future quarterly sales miss.

     National Oilwell Varco Inc. tumbled 6.2 percent after reporting first-quarter sales dropped by about 20 percent to $2.16 billion from the prior quarter. The preliminary figure also fell short of analysts’ estimates, which called for revenue of $2.38 billion.

Have a wonderful evening everyone.

Be magnificent!

When there is space between you and the object you are observing

you well know there is no love, and without love, however hard you try to reform the world

or bring about a new social order or however much you talk about improvements,

you will only create agony.

So it is up to you.

Krishnamurti

As ever,

Carolann

Leaders inspire themselves and

others to do, be, give and become

more than they ever thought

possible.

              -Tony Robbins, b. 1960

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