April 15, 2016 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

Buyers purchase flowers at a FloraHolland warehouse in Rijnsburg, the Netherlands, Friday. Warehouses are not normally tourist stops, but the century-old Royal FloraHolland depot outside of Amsterdam where millions of flowers are distributed every day is an exception. Yves Herman/Reuters

Foreign tourists watch sea turtles released at the Kuta beach on the Indonesian island of Bali, Thursday. Bali police released thirty one turtles which they seized last week from illegal poachers. Firdia Lisnawati/AP

Market Closes for April 14^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a second day, paring a weekly gain, as crude tumbled the most in two weeks ahead of a long-awaited meeting of suppliers in Doha to discuss an output freeze.

     The benchmark Standard & Poor’s/TSX Composite Index equity gauge fell 0.2 percent to 13,637.20 at 4 p.m. in Toronto, paring a weekly gain to 1.8 percent. The S&P/TSX remains one of the best-performing developed markets in the world this year with a 4.8 percent gain.

     West Texas Intermediate crude slipped a third day ahead of a key meeting this weekend on a potential output freeze. Futures dropped 2.8 percent to settle at $40.36 a barrel, the biggest drop since April 4 and reducing their gain for the week to 1.6 percent. There is a “positive feeling” among producers that an agreement may be reached at the meeting April 17 to restore stability, according to Qatar.

     The International Energy Agency yesterday 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.

     Energy producers in the S&P/TSX retreated the most Friday, with a 1.7 percent decline. Canadian Natural Resources Ltd. and Crescent Point Energy Corp. fell more than 2.2 percent. Health- care shares advanced to offset the declines on trading volume 17 percent lower than the 30-day average.

     Bombardier Inc. added 1.9 percent to an October high, with the aircraft manufacturer said to be near an agreement to sell as many as 75 C Series jetliners to Delta Air Lines Inc., according to a person familiar with the talks. The deal would be the largest to date for the struggling program.

     Trading volume for Bombardier stock was almost four times the three-month average today after the company was said to reject an initial investment proposal from the Canadian government with the two sides still far apart on a deal, according to people familiar with the talks.

     The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, as a rebound in producers through the first quarter has fueled a 15 percent recovery 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.

     Mitel Networks Corp. plunged 9.6 percent, the most since August, after the communications company agreed to buy Polycom Inc. in a $1.96-billion deal in cash and stock. The deal represents an 11 percent premium compared with Polycom’s close on Thursday.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks fell on the final day of a week in which the Standard & Poor’s 500 Index reached the highest level in four months, as technology shares joined energy producers in a decline.

     The S&P 500 dropped 0.1 percent to 2,080.73 at 4 p.m. in New York, with the gauge posting a weekly advance of 1.6 percent. The Dow Jones Industrial Average declined 29 points, or 0.2 percent, to 17,897.46 on Friday.

     Equities extended defines in the afternoon as Apple Inc. dropped 2 percent after slower-than-expected sales of the iPhone 6S and 6S Plus prompted the company to reduce its orders, the Nikkei Asian Review reported, citing unidentified suppliers. Technology stocks fell as Apple suppliers including Broadcom Ltd., Qorvo Inc., Knowles Corp. and NXP Semiconductors NV also declined on the report. Energy companies halted a three-day gain as crude retreated before major suppliers meet in Doha this weekend to discuss an output freeze.

     “We’ve had a nice week. We’re starting to see more week-to- week trading over the past few months and on Fridays, people take off some risk before the weekend,” said Joe “JJ” Kinahan, chief strategist at TD Ameritrade Holding Corp. “The nice thing about earnings so far is that CEOs have not struck a negative tone and that was one of the fears, especially given what we’ve seen in the last two quarters.”

     Financial firms have led the rise in American equities this week, with the S&P 500 closing near its highest level since Dec. 4. JPMorgan Chase & Co. and Bank of America Corp. climbed after announcing reductions in first-quarter expenses that beat analysts’ estimates. Citigroup declined 0.1 after reporting first-quarter profit that topped projections. 

     Analysts have slashed profit estimates for S&P 500 members since January, and they’re now projecting a 10 percentdecline in net income for the first quarter. Investors are also watching economic releases, after comments by Fed Chair Janet Yellen reaffirmed officials won’t rush to raise interest rates. Traders are pricing in zero chance of a raise at the end of April, with December now the first month with even odds of higher borrowing costs.

     Index futures fluctuated after a report showed factory output unexpectedly declined last month by the most since February 2015, while separate data revealed manufacturing in the New York region expanded this month. Equities remained little changed after consumer confidence unexpectedly fell in April to the weakest level in seven months

     The S&P 500 has rebounded 14 percent since its February low, putting the seven-year bull market weeks away from becoming the second-longest in history. Some investors attribute the gains to short squeezes, with a Goldman Sachs Group Inc. gauge of the 50 most-shorted stocks near its highest level of the year.

     Among stocks moving on corporate news, Cablevision Systems Corp. advanced 1.9 after the New York Post reported the deal with Altice NV is nearing New York City approval, citing someone close with the matter.

     Regions Financial Corp. climbed 3.1 percent after reporting first-quarter profit that exceeded analysts’ estimates by 1 cent.

     Ariad Pharmaceuticals Inc. added 4.6 percent after saying a study of its medicine brigatinib for some lung cancers showed one year survival rates of 100 percent.

     Fannie Mae fell 14 percent, paring a weekly jump of 29 percent, while Freddie Mac dropped 12 percent, while posting a rally this week of 26 percent. The mortgage giants had a federal appellate review today. Fairholme Funds and Perry Capital LLC have challenged the lawfulness of the so-called “net worth sweep”.

Have a wonderful weekend everyone.

Be magnificent!

“Life’s most persistent and urgent question is, ‘What are you doing for others?” Martin Luther King, Jr.

As ever,

Karen

 “It is no use saying, ‘We are doing our best.’ You have got to succeed in doing what is necessary.” Winston Churchill

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