April 10, 2015 Newsletter

Dear Friends, 

Tangents:

APRIL

…On some spring days I imagine I can see the plants growing, especially when the earth smells good.  This morning as I went outside in the sunshine after rain, the familiar smell of the balsam poplars wafted my way.  The delicious resinous scent is strongest as the leaf buds are opening in April.  Another sure sign of spring, and almost merging into summer, is the arrival of the swallows.  As soon as they come we must remember to leave a crack in the garage doors to allow them inside.  They always build in the rafters above the windscreen of my car.  The poets have got it right.  Chaucer chose “Aprille with his schowres swoote” as the  pleasantest month for his Canterbury pilgrims to “go on pilgrimage.”  Spenser describes it as

Garnished with garlands goodly dight

Of all the fairest flowers and freshest buds

Which the earth brings forth. 

I particularly like John Evelyn’s spring advice to his gardener at Sayes Court in 1687: “Never expose your Oranges, Limons, and the like tender Trees whatever seasons flatter, ‘til the Mulberry puts forth its leafe, then bring them boldly out of the Green House.”  Presumably the mulberry waits to put forth its leaf until all danger of frost is over, so the advice should hold good for one’s geraniums and other tender bedding plants.                                        Rosemary Verey, A Countrywoman’s Notes.

PHOTOS OF THE DAY

The four Yorkshire Terriers Bobby, Billy, Benni and Zorro look out of the car of their owner during bright sunshine in Ravensburg, southern Germany, Friday. Felix Kaestle/dpa/AP

A buyer chooses hand decorated Easter eggs at Green Market, in Belgrade, Serbia, on Orthodox Good Friday. Orthodox Serbs celebrate Easter on April 12, according to old Julian calendar, and the ancient tradition of hand decorated eggs is upheld in this Orthodox Easter custom. Darko Vojinovic/AP

Market Closes for April 10, 2015 

International Markets

Bonds

Currencies

Commodities

Any fool can buy.  It is the wise man who knows how to sell. –Albert W. Thomas, b. 1927.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a seventh day, the longest stretch since June, as gold prices advanced for the first time in four days and the economy unexpectedly gained jobs in March.

     Cara Operations Ltd., operator of the Swiss Chalet and Harvey’s food chains, surged 43 percent in its trading debut. Capstone Mining Corp. and Alacer Gold Corp. advanced at least 6.3 percent to pace gains among raw-materials producers. Athabasca Oil Corp. rallied 4 percent as oil capped the longest stretch of weekly gains in a year.

     The Standard & Poor’s/TSX Composite Index climbed 62.12 points, or 0.4 percent, to 15,388.43 at 4 p.m. in Toronto, the highest closing level since Sept. 18. The equity gauge has advanced 3.3 percent over seven days and is up 5.2 percent for the year.

     Goldcorp Inc. increased 2.7 percent and Barrick Gold Corp. rose 2.1 percent as raw-materials producers advanced 1.1 percent. Nine of 10 industries in the benchmark Canadian equity gauge rose on trading volume 12 percent lower than the 30-day average.

     Gold for June delivery increased 0.9 percent to $1,204.60 an ounce on the Comex in New York after holdings in exchange- traded products backed by bullion saw the largest increase in more than six weeks. Silver climbed 1.3 percent. Silver Wheaton Corp. added 2 percent.

     Canada’s economy added 28,700 jobs in March as the jobless rate remained at 6.8 percent, according to data from Statistics Canada. Economists surveyed by Bloomberg had forecasted the jobless rate would rise to 6.9 percent and employment would be unchanged. The gains were powered by services from retailing to transportation and part-time work.

     Cara Operations soared 43 percent to C$32.90 in its first day of trading on the TSX. The food company completed a C$200 million initial offering that priced shares at C$23 today.

     Bombardier Inc. rose 1.5 percent to a two-month high. The company is considering options that include a sale or an initial public offering of its transportation arm as it seeks to offset challenges in its aerospace unit, Reuters reported, citing people familiar with the matter.

US

By Joseph Ciolli

     (Bloomberg) — The Standard & Poor’s 500 Index rallied to within 1 percent of its all-time high after General Electric Co. announced a broad restructuring plan and investors awaited further clues on the strength of corporate profits.

     GE rose the most in six years after saying it plans to exit the majority of its finance business, and it authorized a stock buyback of as much as $50 billion. Health-care companies advanced for a sixth day. Netflix Inc. climbed more than 3.4 percent, while financial stocks lagged as insurance companies slipped.

     The S&P 500 rose 0.5 percent to 2,102.06 at 4 p.m. in New York, and posted back-to-back weekly advances for the first time in almost two months. The Dow Jones Industrial Average added 98.92 points, or 0.6 percent, to 18,057.65. The Nasdaq Composite Index increased 0.4 percent. About 5.6 billion shares changed hands on U.S. exchanges today, 17 percent below the three-month average.

     “I’m a little surprised the market is moving with this level of enthusiasm,” said Mark Luschini, chief investment strategist in Philadelphia at Janney Capital Management LLC, which oversees about $68 billion. “The announcement of the GE share buyback is gargantuan, and with it being a very widely- held position, a share price boost is also boosting investor portfolios and stock indices.”

     The S&P 500 is now less than 1 percent from its all-time high set on March 2. The benchmark index added 1.7 percent this week, and marked three consecutive days of gains for the first time since Feb. 17. The Nasdaq Composite is 1 percent away from its March 2000 high, while the Dow is 1.3 percent from its record set last month.

     BlackRock Inc.’s global chief investment strategist Russ Koesterich predicted in a note to clients that the current six- year bull market won’t end until “sometime between 2016 and 2017.”

     JPMorgan Chase & Co., Johnson & Johnson and Intel Corp. are among S&P 500 members reporting quarterly results next week. Analysts have slashed corporate profit projections, predicting a slump through September. Earnings probably fell 5.6 percent in the first quarter, they estimated.

     Dubravko Lakos-Bujas, the New York-based head of U.S. equity and quantitative strategy at JPMorgan Chase & Co. in a client note Friday lowered the firm’s 2015 earnings-per-share forecast for the S&P 500 to $123 from $127.

     The Chicago Board Options Exchange Volatility Index fell 3.9 percent to 12.58. The gauge, known as the VIX, is down almost 15 percent in the last three days and closed at its lowest level since December.                       

    The VIX closed Thursday more than 10 percent below its 10- day, 50-day and 200-day moving averages. Before March, the gauge of U.S. equity trader anxiety hadn’t fallen that much since July 2013, data compiled by Sundial Capital Research Inc. show. Some of investors’ anxiety has been alleviated as a slew of weaker economic data has signaled the Federal Reserve may have reason to delay raising interest rates beyond this summer.

     Fed Bank of Richmond President Jeffrey Lacker said he continues to favor a first rate increase in June because recent soft readings on the economy will probably prove temporary.

     “Readings on some indicators have been unexpectedly weak in recent weeks, some of which may be attributable to unseasonably adverse weather,” Lacker, who votes on monetary policy this year, said in Sarasota, Florida, on Friday. Minutes released Wednesday from the Fed’s latest meeting showed officials were split on whether they would raise interest rates in June.                         

     GE was the biggest gainer in the S&P 500, surging 11 percent, after authorizing a stock buyback of as much as $50 billion. The company also said it plans to exit the bulk of its lending business, including a $26.5 billion sale of most of its real estate.

     The industrial giant’s stock price reached its highest level since Sept. 2008 as almost 352 million shares traded, the largest daily volume since March 2009. GE contributed 18.55 points, or about 19 percent, of the Dow’s Friday gain.

     A group of industrial companies in the S&P 500 jumped 1.8 percent, led by GE and also gains of more than 1.4 percent for Caterpillar Inc. and Union Pacific Corp. The sector rose 3.3 percent for the week, the biggest increase in the benchmark gauge.

     Consumer discretionary companies advanced for a third day, their longest streak in two months, led by a 4.8 percent increase in Chipotle Mexican Grill Inc. Olive Garden owner Darden Restaurants Inc. and Staples Inc. also climbed more than 1.9 percent.

     AbbVie Inc. and Intuitive Surgical Inc. increased at least 2.7 percent, bolstering health-care shares for a sixth session, the best stretch in three weeks. Bristol-Myers Squibb Co. and Eli Lilly & Co. rose more than 1.8 percent.                         

     Netflix gained 3.4 percent after Citigroup Inc. upgraded the company to buy from neutral, in part citing improvement in recently released content and content line-up for the rest of this year.

     Financial companies in the S&P 500 lagged among the index’s 10 main groups. Morgan Stanley lost 1.1 percent, while Prudential Financial Inc. and MetLife Inc. slid at least 1 percent.

     Citrix Systems dropped 1.3 percent, paring an earlier decline of almost 6 percent. The company was downgraded to market perform from outperform at William Blair & Co. by equity analyst Bhavan Suri after the software maker cut its first- quarter sales and profit guidance.

Have a wonderful weekend everyone.

Be magnificent!

Everyone is a manifestation of the Impersonal, the basis of all being,

and misery consists in thinking of ourselves as different from this Infinite, Impersonal Being,

and liberation consists in knowing our unity with this wonderful Impersonality.

Swami Vivekananda

As ever,

Carolann

While there is life there is hope.

      -Jules Verne, 1828-1905

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7