April 14, 2016 Newsletter

Dear Friends,

Tangents:

On April 14, 1865, President Lincoln was shot and mortally wounded by John Wilkes Booth while attending the comedy “Our American Cousin” at Ford’s Theater in Washington, D.C. He died the next day.

Number of the Day

73

The Golden State Warriors beat the Memphis Grizzlies in the last game of the NBA’s regular season for their 73rd win, surpassing the previous record set by the Bulls and establishing themselves as maybe the best NBA team ever.

PHOTOS OF THE DAY

Swiss land art artist Daniel Dunkel builds a cairn on the shore of Lake Leman in Lutry, near Lausanne, Switzerland, Thursday. Denis Balibouse/Reuters

British Parkour expert Tim Shieff performs a hand-stand in front of the House of Commons, as he launches Jungle Book inspired Parkour masterclasses on London’s Southbank, Thursday. Joel Ryan/Invision/AP

Market Closes for April 14^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks ended little changed, halting a four-day rally, as the Standard & Poor’s/TSX Composite Index traded near a five-month high.

     The benchmark equity gauge fell less than 0.1 percent to 13,668.29 at 4 p.m. in Toronto, following a four-day winning streak that pushed the index 3.1 percent higher. The S&P/TSX remains one of the best-performing developed markets in the world this year with a 5.1 percent gain.

     West Texas Intermediate crude slipped ahead of a key meeting this weekend between OPEC producers on a potential output freeze. The International Energy Agency predicted in a report global oil markets will “move close to balance” in the second half of the year. Oil prices have rebounded from 12-year lows in the past two months.

     The resource-dominant S&P/TSX remains tied to commodities prices, as a rebound in resource producers through the first quarter has fueled a 15 percent resurgence for the S&P/TSX from a 2013 low on Jan. 20. The Canadian benchmark now trades at 21.7 times earnings, about 15 percent higher than the 19 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

     Gold producers sank 2.7 percent as spot prices of the precious metal retreated a third day. Demand for bullion as a haven has slowed as stock markets rallied and growth indicators suggested China’s economy was stabilizing. Raw-material producers remain the top-performing industry in Canada this year, rallying 24 percent. 

     Fertilizer producer Agrium Inc. tumbled 5.3 percent to a 2014 low after Bank of Nova Scotia analyst Ben Isaacson dropped Agrium from his focus list due to its valuation. Isaacson now has a sector outperform rating for Agrium, or buy, albeit with less conviction due to lower nitrogen prices and a weaker agricultural outlook beyond 2016, according to a note.

     Shaw Communications Inc. fell 3.2 percent, the most since January, after reporting second-quarter earnings. Barclays Capital Analyst Phillip Huang said in a note Shaw will need years of investments to grow its recently acquired Wind Mobile asset, adding to a long list of investment priorities that will constrain the company’s ability to raise its dividend in the foreseeable future.

US

By Dani Burger

     (Bloomberg) — U.S. stocks ended little changed on Thursday, with the Standard & Poor’s 500 Index near a four-month high and the Dow Jones Industrial Average edging to the highest since July, as investors assessed earnings releases and data showing the labor market is improving with little pickup in inflation.

     Banks advanced, with Bank of America Corp. advancing a fifth day after saying it sees more room for cost cuts. Airline operators jumped along with Delta Air Lines Inc., which posted quarterly earnings that beat projections. Technology shares retreated as Seagate Technology Plc plummeted 20 percent after reporting preliminary revenue that trailed estimates.

     The S&P 500 added less than 0.1 percent to 2,082.78 at 4 p.m. in New York, after reaching the highest level since Dec. 4 yesterday. Financial shares and commodity producers have led the benchmark gauge to a 1.7 percent advance so far this week, after the measure faltered last week amid skepticism central banks’ efforts to shore up growth will fail to be effective. The Dow Jones Industrial Average increased by 18 points to 17,926.43 on Thursday, the highest since July 20. The index is 2.1 percent below its record.

     While the rally that lifted the S&P 500 since February is regaining momentum, skepticism still prevails, with valuations far above their five-year average and the seven-year bull market weeks away from becoming the second-longest in history. Some investors also attribute the rebound to short squeezes, with a Goldman Sachs Group Inc. gauge of the 50 most-shorted stocks posting its biggest two-day jump in almost two months.

     “It’s time for the market to earn the rally we’ve had over the last seven or six weeks, in terms of an actual earnings picture,” said Michael Mussio, managing director of FBB Capital Partners, which oversees $850 million.“We’re back to waiting and seeing. The market definitely seems like it’s priced in for some type of upside surprise, but we’ll have to see.”

     Analysts have slashed profit estimates for S&P 500 members this year, now projecting net income fell 10 percent in the first quarter. Investors are also tracking economic releases. Stock futures climbed in pre-market trading after data showed initial jobless claims fell to match the lowest level since 1973 and the cost of living excluding food and fuel rose less than forecast in March.

     Futures also extended gains after Federal Reserve Bank of Atlanta President Dennis Lockhart said today on Bloomberg Television that inflation is still lagging the central bank’s target and a patient approach to policy “makes sense.” After comments by Fed Reserve Chair Janet Yellen reaffirmed officials won’t rush to raise interest rates, traders are pricing in zero possibility of a raise at the end of April, with December now the first month with even odds of higher borrowing costs.

     Semiconductors and technology hardware companies were the worst performing groups. Western Digital Corp., a rival of Seagate, sank 6.7 percent, while chipmaker Micron Technology Inc. slid 4.4 percent after saying it plans to sell $1 billion in notes. Intel Corp. the world’s biggest semiconductor maker, dropped 1 percent.

     Delta, American Airlines Group Inc., and United Continental Holdings Inc. added more than 0.9 percent to make up some of the biggest winners in the S&P 500 today.

     Valeant Pharmaceuticals International Inc. wiped out losses briefly in late afternoon trading, after Legg Mason Inc.’s Bill Miller said at an investor meeting Thursday that he’s buying shares, betting that the price of the embattled drugmaker could double. Shares ended the day 2.2 percent lower.

     Chipotle Mexican Grill Inc. climbed 2.6 percent after JPMorgan Chase & Co. raised its rating on the stock to the equivalent of a buy.

     SunEdison Inc. soared 58 percent after saying it found no misstatements in its financial statements.

Have a wonderful evening everyone.

Be magnificent!

Though they may take various roads, all are on the way.

Swami Vivekananda

As ever,

Carolann

The megalomaniac differs from the narcissist by the fact that he wishes to be

powerful rather than charming, and seeks to be feared rather than loved.  To

this type belong many lunatics and most of the great men of history.

                                                     -Bertrand Russell, 1872-1970

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