June 22, 2016 Newsletter

Dear Friends,

Tangents:

The Arts, News:

FRENCH ART COMES TO YOUR BROWSER
Paris Musées, a group of museums including the National Museum of Modern Art in  Paris and the Carnavalet Museum, recently made many works available for viewing online.  Browse at your leisure or take a “tour,” which groups together pieces from different museums based on various themes.   Check it out at http://parismuseescollections.paris.fr.

NEW DRAMA FROM JULIAN FELLOWES
“Downton Abbey” creator Julian Fellowes has written another period drama for TV.  Julian Fellowes Presents Doctor Thorne tells the story of Mary Thorne, an impoverished young woman who is raised by her uncle.  It’s streaming on Amazon Prime.

WATCHING THE PARTY
One-man-band Andy Shauf is The pride of Regina, Saskatchewan.  The party is his engaging new album, and it is aptly named….Comparisons to Elliott Smith and harry Nilsson are fair, but late-period Brian Wilson also comes to mind.

SARAH JAROSZ
Texan teenager Sarah Jarosz, three years since graduating with honors from the New England Conservatory, has released her fourth record Undercurrent, which boasts rich contrasts, with a song about heart-break,House of Mercy giving way to the summery love song Green Lights in which Jarosz’s voice floats, feather-like, over breezy acoustic sounds.

                                       -from “Staff Picks,” CSM, June 13, 2016.

On June 22, 1940, during World War II, Adolf Hitler gained a stunning victory as France was forced to sign an armistice eight days after German forces overran Paris. Go to article »

1813 – Laura Secord Warns British of an American Attack
1976 – House of Commons votes to abolish the death penalty with a six-vote majority.

THE SIMPLE LIFE

missing somebody……..call
wanna meet up…………invite
wanna be understood…explain
have a question…………ask
don’t like something…..say it nicely
like something…………..declare it
want something…………ask for it
stressed……………………let go
love someone…………….say it

PHOTOS OF THE DAY

A ‘Vote Remain’ banner being towed by an aircraft is seen behind the London Eye in London, Britain on Wednesday. Toby Melville/Reuters

A Belgium fan wears a model of the Atomium on his head in Nice, France on Wednesday. Wolfgang Rattay/Reuters

Market Closes for June 22^nd, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

NUMBER OF THE DAY
140

The approximate number of media companies and celebrities Facebook has signed contracts with to create videos for its nascent live-streaming service. The social network has agreed to make payments to video creators totaling more than $50 million.

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little-changed for a second day, with a drop in oil prices offsetting a rally in gold producers, as investors speculated on the outcome of the U.K. referendum on European Union membership Thursday.

     The S&P/TSX Composite Index fell 0.1 percent to 14,003.81 at 4 p.m. in Toronto. The index has climbed 0.7 percent this week, poised to halt a two-week slide. The gauge is almost half a percentage point ahead of New Zealand as the top-performing developed market in the world with a 7.6 percent gain for the year, according to data compiled by Bloomberg.

     Global stocks advanced a fourth day, the longest winning streak in nearly two weeks with bookmakers’ odds now implying about a 28 percent chance Britons will vote to leave the EU. The pound touched the highest in five months before paring gains and the U.K. benchmark FTSE 100 Index has erased its losses for the month.

     “It goes without saying that we would get a huge relief rally with a ‘Remain’ vote,” David Rosenberg, Toronto-based chief economist and strategist at Gluskin Sheff & Associates Inc., said in a report to clients Wednesday. “And given how much optimism has been priced in over the past few days, a likely equally severe selloff in risk assets if the Brits do decide to leave the EU.”

     In Canada, shares of companies most exposed to the European market including Brookfield Asset Management Inc., CGI Group Inc. and Great-West Lifeco Inc. have jumped 1.4 percent so far this week, outperforming the broader S&P/TSX, according to data compiled by Bloomberg. The group of 19 stocks still trails peers in the benchmark with a 3.1 percent gain for the year.  

     Canadian retailers meanwhile are off to their best start since 2010 as retail sales jumped 0.9 percent in April on a rebound at gas stations and building-material stores to recover all the losses from a revised drop in March, according to data from Statistics Canada. Sales so far in the year are up 5.3 percent. Canadian Tire Corp. added 0.3 percent.

     Energy producers dropped 1 percent, offsetting a 1.3 percent rally in raw-materials producers as five of 10 industries in the S&P/TSX declined. Canadian Pacific Railway Ltd. added 2.9 percent after the stock was raised to a strong buy at Raymond James.

     Canadian Natural Resources Ltd. and Encana Corp. dropped more than 2 percent. Oil declined for a second day in New York as government data showed crude stockpiles dropped less than expected while imports increased.     Canadian shares remain more expensive relative to their U.S. peers. The S&P/TSX now trades at 21.5 times earnings, about 11 percent higher than the 19.3 times valuation of the S&P 500 Index.

     Raw-materials and energy producers have fueled the rebound in Canadian equities this year as the S&P/TSX stormed back into a bull market earlier this month to halt a brief bear market of less than five months. Commodities prices have bounced back led by gains in gold and a 90 percent rally in crude from the lowest levels in 12 years back in February. A gauge of raw-materials producers is up 43 percent to lead the S&P/TSX.

US

By Bailey Lipschultz and Camila Russo

     (Bloomberg) — U.S. stocks slipped amid fragile sentiment, as traders weighed the probability of the U.K. voting to remain in the European Union a day before the referendum.

     Equities lost momentum following back-to-back gains as polls released today quelled recent optimism Britain will stay in the EU. Tesla Motors Inc. sank the most in two years after offering to buy SolarCity Corp, and McDonald’s Corp. fell to a three-month low on an analyst downgrade of the stock. Energy producers slipped with oil, falling for the first time in four sessions, while the health-care group advanced as biotechnology shares rebounded.

     The S&P 500 Index declined 0.2 percent to 2,085.45 at 4 p.m. in New York, after erasing a 0.5 percent gain. The Dow Jones Industrial Average lost 48.90 points, or 0.3 percent, to 17,780.83, wiping out a 90-point climb. A gauge of volatility jumped the most since Brexit concerns escalated more than a week ago. The Nasdaq Composite Index fell 0.2 percent. About 6.3 billion shares traded hands on U.S. exchanges, 9 percent below the three-month average.

     “The markets at the moment are held hostage to the prospects of the U.K. leaving,” said Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which manages $54 billion. “With the vote happening tomorrow, I suspect that there will be some delicate positioning in anticipation of it, but nothing particularly dramatic. I can’t envision a scenario where the markets will rally significantly. If the referendum ends up leaning toward a Brexit, those holding riskier assets would be caught.”

     The CBOE Volatility Index jumped almost 15 percent Wednesday to 21.17, erasing an early 3.5 percent drop amid renewed anxiety before Britain’s EU vote. It was the gauge’s biggest climb since a two-day, 43 percent climb almost two weeks ago. The measure of market turbulence known as the VIX is up 49 percent in June and headed toward its biggest monthly climb since a record surge in August.

     The S&P 500 fell from its highest since June 10, closing Wednesday 2.1 percent below a record set 13 months ago. After worries that the U.K. would secede spurred the gauge’s worst weekly retreat since April, polls showing the “Remain” camp gaining ground boosted shares in the prior two days. Still, it looks too close to call. While Oddschecker data show betting companies see only a roughly one-in-four chance of Britain leaving the EU, polls have been split on the outcome.

     In addition to the looming vote, concern that central-bank efforts are losing their potency, valuations stuck above the three-year average and successive quarters of declining profits weighed on stocks after the S&P 500 two weeks ago came within 0.6 percent of its all-time high. Federal Reserve Chair Janet Yellen finished two days of testimony to lawmakers after yesterday signaling a cautious and uncertain view of the economy.

     The International Monetary Fund cut its forecast for U.S.growth this year, urging the Fed to lean toward modestly overshooting its inflation target in considering whether the economy can handle higher interest rates. A report today eased some worries, as sales of previously owned homes climbed in May to the highest level in more than nine years, indicating demand for residential real estate remains robust.

     The Fed last week scaled back its projections for the pace of future interest-rate increases amid concerns about slower job gains and the U.K.’s potential EU exit. Traders have reduced their wagers on higher borrowing costs, pricing in less than even odds of a move at least until February 2017.

     “Volumes in the U.S. are pretty thin as everybody is waiting for the vote before doing anything major,” said John Plassard, a senior equity-sales trader at Mirabaud Securities in Geneva. “There might also be some short covering right before the vote as nobody would want to be short if remain wins.”

     Among the S&P 500’s 10 main industries, energy companies lost 0.6 percent, with crude sliding after U.S. government data showed stockpiles declined less than expected last week amid a jump in imports. Utilities, technology and industrial stocks also fell at least 0.3 percent. Health-care was the top performer as the group alternated between daily gains and losses for a seventh session.

     Drug developer Regeneron Pharmaceuticals Inc. rose 2 percent, ending a four-day losing streak and 10 declines in the prior 11 sessions. Celgene Corp. and Bristol-Myers Squibb Co. added more than 1.4 percent. Health-care had been the S&P 500’s worst-performing group since the benchmark hit an almost 10- month high two weeks ago. The Nasdaq Biotechnology Index rose for the second time in three days, up 0.7 percent after ending on Monday its worst losing streak since 1996.

     Marathon Oil Corp. and Anadarko Petroleum Corp. fell at least 2 percent, while Chevron Corp. lost 0.9 percent to pace declines in energy. Wednesday’s retreat halted the group’s longest winning streak in two months.

     Adobe Systems Inc. sank 5.7 percent, the most since February, to weigh on technology shares. The software company forecast revenue in the current quarter that may miss analysts’ estimates, signaling slowing momentum for its cloud-based products. HP Inc. tumbled 5.4 percent after lowering its free cash flow outlook as it reinvests proceeds from asset divestitures back into its printing business.

     FedEx Inc.’s 4.5 percent drop was the biggest drag on industrials in the benchmark. The world’s largest cargo airline fell the most in 10 months after disappointing investors by not providing more specifics on how the $4.8 billion acquisition of Dutch shipping company TNT Express will affect earnings.
 

Have a wonderful evening everyone.

Be magnificent!

It is quite proper to resist and attack a system but,

to resist and attack its author is tantamount to resisting and attacking oneself.

For we are all tarred with the same brush.

Mahatma Gandhi

As ever,

Carolann

Be kind, for everyone you meet is fighting a harder battle.

                                   -Plato, c.428 BCE-c. 348 BCE

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