April 13, 2015 Newsletter

Dear Friends,

Tangents:

We went to Paris last weekend for the Easter holiday.  There are so many good reasons to make it to Paris this year, not least because the Euro is so low.  The Musée Picasso has now reopened in the Marais on Rue de Thorigny, after a five year renovation.   The Bernard Arnault’s spectacular Fondation Louis Vuitton, which opened in October in the Bois de Boulogne offers visitors a viewing heaven with a stash of loans that the FT commented “‘would astonish and enthrall in any world class museum.”   Matisse’s “The Dance”  comes from the Hermitage; works by Barancusi, Kandinsky and Léger are visitors from MOMA.  In the opening room, Edvard Munch’s “The Scream” faces a howling Francis Bacon pope, “Study for Portrait” from Chicago.  A Giocometti “Walking Man” is on show.  Two of Monet’s greatest “Water Lily” canvases hail from the Musée Marmottan Monet and Musée d’Orsay.  The Frank Gehry designed building is in itself, a wonder to behold.

There are many hotel and restaurant rebirths in Paris this year as well.  The Ritz and the Hotel de Crillon will reopen after major renovations.  We stayed at the brand new Peninsula, which is fabulous.  The rooftop restaurant L’Oiseau Blanc is wonderful with a perfect view of the Eiffel Tower.  Guy Savoy’s new restaurant is not open yet but should be opened any day now in a 4300-square-foot space at the top of the Monnaie de Paris, the French Mint.

We had a terrific dinner one night at Le Restaurant, which is situated in the building (now a small hotel, named l’Hotel) in the Latin Quarter where Oscar Wilde spent his last few months and eventually died.  It actually played host to Jorge Luis Borges and Marlon Brnado for a time.  On my way out, I asked the concierge if it is possible to see Oscar Wilde’s room and he said normally yes, but the hotel was fully booked that night.  I asked him if the wall paper had been changed, remembering Oscar Wilde’s famous last words, “This wallpaper and I are fighting a duel to the death. Either it goes or I do.”   He said yes it has, but it’s still pretty wild.

PHOTOS OF THE DAY

Competitors run down the Champs Elysees below the Arc de Triomphe at the start of the 39th Paris Marathon, Sunday. Benoit Tessier/Reuters

A man stands next to the Egyptian Obelisk that stands in the center of the Place de la Concorde, in Paris, Sunday. Thibault Camus/AP

Market Closes for April 13^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Callie Bost

     (Bloomberg) — Canadian stocks slid, breaking a seven-day streak of gains, as materials producers slumped after an unexpected drop in China’s exports fueled concern over the strength of the world’s second-largest economy.

     Labrador Iron Ore Royalty Corp. tumbled 6.1 percent to lead a 1 percent drop in raw-materials producers. Valeant Pharmaceuticals International Inc. climbed 1.1 percent to pace gains among health-care shares. AuRico Gold Inc. surged 8.2 percent on plans to merge with Alamos Gold Inc.

     The Standard & Poor’s/TSX Composite Index fell 4.84 points, or less than 0.1 percent, to 15,383.59 at 4 p.m. in Toronto. The drop today ended the longest rally since June.

     Six of 10 main industries in the S&P/TSX rose. Consumer staples and health-care shares added 0.8 percent for the biggest gains. Trading in the index’s stocks was 20 percent below the 30-day average at the close.

     Materials producers led declines as the S&P/TSX Gold Index slumped 1.6 percent. Torex Gold Resources Inc. dropped 5.5 percent.

     Gold futures declined for the fourth time in five sessions after a rise in the dollar cut demand for the metal as an alternative investment and China’s economy showed signs of slowing.

     AuRico soared, while Alamos jumped 6.6 percent. The deal, which would create a mining company with a market value of about $1.5 billion and operations in Mexico and Canada, is a so-called merger of equals, the Toronto-based companies said Monday in a joint statement.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks fell as General Electric Co. retreated from a six-year high, leading industrial companies lower while investors awaited this week’s corporate earnings reports.

     General Electric Co. slid 3.1 percent, after its biggest rally Friday since 2009. Valero Energy Corp. and Tesoro Corp fell more than 3.8 percent as energy companies dropped. Netflix added 4.4 percent after an analyst upgrade.

     The Standard & Poor’s 500 Index declined 0.5 percent to 2,092.43 at 4 p.m. in New York. The Nasdaq Composite Index slipped 0.2 percent, erasing an earlier gain that took it above 5,000 for the first time in three weeks. The Dow Jones Industrial Average lost 80.61 points, or 0.5 percent, to 17,977.04.  About 5.5 billion shares changed hands on U.S. exchanges today, 19 percent below the three-month average.

     “There’s a lack of economic numbers today, so investors are gearing up for earnings season,” said Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP. “It remains to be seen if good economic numbers and positive earnings reports will fuel things in a positive vein over the short-term.”

     The Nasdaq Composite climbed earlier Monday to within 25 points of its record. Last month the index closed above 5,000 three times, its first forays past that level since March 2000. It stalled on March 20 within seven points of its dot-com-era record, before dropping 2.5 percent to the end of the month. It has rebounded about 2 percent in April after posting its ninth consecutive quarterly gain, its longest streak ever.                    

     The Dow traded Friday within 1.3 percent of a record hit in March, while the S&P 500 pulled within 1 percent of its all-time high. With valuations near their highest level in more than five years, investors are looking to corporate profits for further clues on the strength of the U.S. bull market that hasn’t seen a 10 percent correction since 2011.

     JPMorgan Chase & Co., Johnson & Johnson and Intel Corp. are among the 36 S&P 500 members reporting financial results this week. Analysts have slashed their profit projections, predicting a slump through September amid concern that a stronger dollar and tumbling oil prices are hurting results.  Earnings probably fell 5.6 percent in the first quarter, they predict.

     “We know this earnings season is not going to look good,” said Allan von Mehren, chief analyst at Danske Bank A/S in Copenhagen. “The first quarter’s economic slowdown and stronger dollar has definitely put pressure on profits. The question now will be whether expectations have been lowered enough.”                         

     Investors are also trying to gauge when the Federal Reserve will raise interest rates, with recent economic releases missing projections by the most in six years. March reports are due this week on retail sales, industrial production and housing starts.

     Fed Chair Janet Yellen has said that while rates will probably rise this year, any decision depends on economic data. Fed members next meet on April 28-29 to discuss monetary policy.

     The Chicago Board Options Exchange Volatility Index rose 11 percent Monday, the most in more than two weeks, to 13.94. The gauge, known as the VIX, fell 14 percent last week to its lowest level of 2015.

     GE slipped 3.1 percent, the most in more than a year, to lead industrial companies down 1.1 percent. GE reached a more than six-year high Friday amid an 11 percent rally driven by the company’s plan to buy back as much as $50 billion in stock and sell most of its lending business. Union Pacific Corp. and Lockheed Martin Corp. slipped at least 1.6 percent.                         

     Energy shares retreated 0.8 percent, even as oil prices increased, and utilities lost 1 percent as nine of the S&P 500’s 10 main groups declined.

     Netflix led gains in Internet companies, up 4.4 percent after UBS AG analyst Douglas Mitchelson raised shares to buy from neutral. Facebook Inc. rose 1.2 percent, while Priceline Group Inc. advanced 0.9 percent.

     Financial shares in the S&P 500 rose 0.3 percent, led by Genworth Financial Inc.’s 2.7 percent climb. JPMorgan Chase & Co. was the Dow’s best performer, up 0.6 percent before its earnings report Tuesday. Huntington Bancshares Inc. paced gains in S&P 500 banks, rising 2.1 percent.

     JetBlue Airways Corp. climbed 4.2 percent after saying after the close on Friday that a measure of passenger revenue per available seat mile increased by 8 percent year-over-year for March.

Have a wonderful evening everyone.

Be magnificent!

When a man begins to have a vision larger than his own truth,

when he realizes that it is much larger than it at first seemed, he begins to become conscious of his moral nature.

His perspective on life necessarily changes, and his will takes the place of his desires.

So comes about the conflict between our inferior self and our superior self,

between our desires and our will, between our greed for objects that appeal to our senses

and the purpose that comes from the bottom of our heart.

Rabindranath Tagore.

As ever,

Carolann

There are no passengers on Spaceship Earth.  We are all crew.

                                        –Marshall McLuhan, 1911-1980

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