April 13, 2016 Newsletter

Dear Friends,

Tangents:

Thomas Jefferson, 3^rd US President born on this day in 1743.
1962: Silent Spring by Rachel Carson is published.

Came across the following and liked it.

Nothing softeneth the Arrogance of our nature like a

Mixture of some Frailities.  It is by them  that we are best told,

That we must not strike too hard upon others

Because we ourselves do so often deserve blows.  They

Pull our Rage by the sleeve and whisper

Gentleness to us in our censures.

                                                                   Edward Frederick Lindley Wood, 1^st Earl of Halifax, 1881-1959

PHOTOS OF THE DAY

Young monks take a break from their studies at Changangkha Lhakhang temple in Thimphu, Bhutan, Wednesday. Cathal McNaughton/Reuters

Munin, an intelligent marine robot, explores the Loch Ness in Scotland, UK on Wednesday. Russell Cheyne/Reuters

Market Closes for April 13^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a fourth day, rallying to the highest since November, as the nation’s largest lenders advanced after the Bank of Canada backed away from cutting interest rates amid signs fiscal policy is boosting growth prospects.

      The Standard & Poor’s/TSX Composite Index rose 0.7 percent to 13,671.35 at 4 p.m. in Toronto, extending a four-day winning streak to 3.1 percent. The S&P/TSX remains one of the best- performing developed markets in the world this year with a 5.1 percent gain.

     The Bank of Canada kept its key interest rate at 0.5 percent, where it’s been since cuts in January and July, in a decision released Wednesday from Ottawa. Gross domestic product will grow 1.7 percent this year instead of the 1.4 percent the central bank expected in January. Faster growth allows Governor Stephen Poloz to back away from his suggestion in January he was inclined to cut rates again.

     Financial services stocks added 1.1 percent, as Bank of Nova Scotia and Royal Bank of Canada added at least 1.4 percent. Eight of 10 industries in the S&P/TSX advanced on trading volume 4 percent less than the 30-day average.

     The resource-dominant S&P/TSX remains tied to commodities prices, as crude and gold prices have found some footing in the second quarter after stumbling at the beginning of April.

     Raw-material producers have been the top-performing industry in Canada this year, rallying 28 percent. Gold prices have soared 17 percent as investors scaled back projections for U.S. rate increases. The Canadian benchmark now trades at 21.7 times earnings, about 15 percent higher than the 18.9 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

     HudBay Minerals Inc. and Labrador Iron Ore Royalty Corp. added at least 2.4 percent as base metals rose with iron ore above $60 a metric ton. China’s exports jumped the most in a year while declines in imports narrowed, adding to evidence the world’s second-largest economy is stabilizing. China is also Canada’s second-biggest trading partner after the U.S.

     Valeant Pharmaceuticals International Inc. rose 3.9 percent, reversing an earlier loss, as the drugmaker’s outgoing Chief Executive Officer Michael Pearson has now agreed to comply with a congressional subpoena to give a deposition before a Senate committee investigating drug pricing, after previously refusing to do so.

     The drugmaker earlier said it will have four fewer days to file its financials before lenders can demand loan repayment after the company received a default notice from some of its bondholders.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks extended gains a second day to reach the highest in four months, buoyed by improving Chinese trade data and better-than-expected results from JPMorgan Chase & Co., the biggest U.S. lender by assets.

     JPMorgan advanced 4.2 percent after reporting first-quarter profit was boosted by pay cuts and trading revenue that declined less than most analysts predicted. Bank of America Corp., Wells Fargo & Co. and Citigroup Inc., scheduled to release results later this week, climbed at least 2.6 percent. Companies that are popular targets by short sellers rallied today, with a Goldman Sachs Group Inc. gauge of the 50 most shorted stocks posting the biggest increase since March 2.

     The Standard & Poor’s 500 Index rose 1 percent to 2,082.42 at 4 p.m. in New York, the highest since Dec. 4. Volume on U.S. exchanges was 8.1 percent higher than the 30-day average. All but five stocks in the 30-member Dow Jones Industrial Average increased, as the measure climbed 1.1 percent to 17,908.28 today. Futures contracts in pre-market trading held onto gains after releases showed U.S. retail sales and wholesale prices unexpectedly slumped last month, stoking speculation the Federal Reserve may slow the pace of further rate increases.

     “While U.S. numbers were a little weak, it’s a strong day overseas and China data was much better than expected,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. “While JPMorgan had a tough quarter, they still beat estimates. If earnings come in better than expected — with expectations so low — if we have even a decent beat, you may see us break out.”

     S&P 500 analysts have been projecting first-quarter profits by companies in the benchmark shrank 10 percent in the first quarter, with bank earnings contracting by 20 percent. That’s fueled concern on the outlook for stocks, with valuations far above their five-year average and the seven-year bull market weeks away from becoming the second-longest in history.

     A report showed China’s exports jumped by the most in a year in March and declines in imports narrowed, helping ease worries about a slowdown in the world’s second-largest economy. U.S. stocks are rebounding a second day, as crude pushed past $42 a barrel yesterday, lifting energy producers to their best one-day gain in almost two months.

     Banks, the worst-performing group so far in 2016, led gains with all 17 stocks in the S&P 500 index rallying. Among lenders that advanced today were People’s United Financial Inc. and Zions Bancorporation, which have short interest out of shares outstanding at 16 percent and 6 percent, respectively, data compiled by Markit Ltd. show.

     Carmakers also advanced. Harley-Davidson Inc. added 4.3 percent after UBS AG said the company’s retail sales in March likely jumped 10 percent because of warm weather. Bearish bets on the motorcycle maker is at 15 percent. Delphi Automotive Plc increased 5.6 percent after announcing a new buyback program and winning a long-running dispute with the U.S. Internal Revenue Service over whether the parts maker should be allowed to call itself British for tax purposes.

     Activision Blizzard Inc. climbed 5 percent after Stifel Nicolaus & Co. raised its price target ton the company to $40 a share from $35, saying its new game “Overwatch” could lead to a record year. The new price forecast is 19 percent higher than the stock’s close yesterday.

     CSX Corp. rose 4.2 percent after the rail transportation company posted quarterly profit in line with analysts’ estimates, as cost cuts helped make up for a drop in coal and oil carloads.

Have a wonderful evening everyone.

Be magnificent!

Our contribution

to the progress of the world must, therefore,

consist in setting our own house in order.

Mahatma Gandhi

As ever,

Carolann

We hold these truths to be self-evident: that all men are created equal;

that they are endowed by their Creator with certain unalienable rights;

that among these are life, liberty and the pursuit of happiness.

                                                       -Thomas Jefferson, 1743-1826

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