April 23, 2015 Newsletter

Dear Friends,

Tangents:

According to tradition, on this day in 1564, English dramatist and poet William Shakespeare was born. While many of his 38 plays have been extensively performed and analyzed, little is known about the details of his life.

In his honor,

Sonnet CXVI

Let me not to the marriage of true minds
Admit impediments.  Love is not love
Which alters when it alteration finds,
Or bends with the remover to remove.
O no! it is an ever fixed mark
That looks on tempests, and is never shaken;
It is the star to every wandering bark,
Whose worths’s unknown, although his height be taken.
Love’s not Time’s fool, though rosy lips and cheeks
Within his bending sickle’s compass come;
Love alters not with his brief hours and weeks,
But bears it out even to the edge of doom.
  If this be error and upon me proved,
  I never writ, nor no man ever loved.

                     -William Shakespeare

PHOTOS OF THE DAY

A dove tries to sit on a monument wall in Echmiadzin, the religious center of the Armenian Church outside the Armenian capital, Yerevan, Thursday. The Armenian Apostolic Church, the country’s dominant religion, held services Thursday to canonize all victims. On Friday, April 24, Armenians will mark the centenary of what historians estimate to be the slaughter of up to 1.5 million Armenians by Ottoman Turks, an event widely viewed by scholars as genocide. Sergei Grits/AP

The Calbuco volcano erupts near Puerto Varas, Chile, Thursday. The volcano erupted Wednesday for the first time in more than 42 years, billowing a huge ash cloud over a sparsely populated, mountainous area in southern Chile, and is considered one of the top three most potentially dangerous among Chile’s 90 active volcanoes. David Cortes Serey/AP

Market Closes for April 23^rd, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks advanced the most in two weeks, halting a two-day slide, as energy and raw-materials producers rallied  with commodities prices.

     Pacific Rubiales Energy Corp. jumped 4.8 percent to lead oil and gas producers as crude rose to a four-month high in New York. Detour Gold Corp. and Fortuna Silver Mines Inc. increased more than 4.7 percent as precious metals advanced. Finning International Inc., which sells equipment from Caterpillar Inc., added 1.2 percent after the U.S. construction equipment maker forecast 2015 profit that topped analysts’ estimates.

     The Standard & Poor’s/TSX Composite Index rose 87.58 points, or 0.6 percent, to 15,392.35 at 4 p.m. in Toronto, the biggest increase since April 9. The benchmark Canadian equity gauge has advanced 5.2 percent this year.

     All 10 main groups in the index rose, with materials producers climbing 2 percent to pace gains. Trading volume was 11 percent lower than the 30-day average today.

     Agnico Eagle Mines Ltd. added 4.3 percent and Detour Gold jumped 6.7 percent. Gold futures recovered from the biggest drop in six weeks as signs of slowing growth spurred demand for haven assets.

     HudBay Minerals Inc. climbed 6.1 percent and Teck Resources Ltd. increased 4.3 percent. Copper rose 0.9 percent in New York.

     Cenovus Energy Inc. rallied 2.3 percent after the company said it has hired bankers to explore a sale or initial offering of some of its oil and natural gas lands in Western Canada.

     Trican Well Service Ltd. added 4.7 percent and Bankers Petroleum Ltd. rose 3.3 percent as West Texas Intermediate crude surged 2.8 percent after Saudi Arabia renewed its aerial assault on Shiite rebels in Yemen, bolstering concerns Middle Eastern oil shipments may be disrupted.

US

By Jeremy Herron

     (Bloomberg) — The Nasdaq Composite climbed to the highest level in 15 years, topping its dot-com-era high, as U.S. stocks shrugged off mixed earnings and disappointing manufacturing data from across the globe. Oil rose to a four-month high.

     The Nasdaq Composite climbed 0.4 percent at 4 p.m. in New York, to close at a record for the first time in 15 years. The Standard & Poor’s 500 Index climbed 0.2 percent, briefly passing its March 2 closing high. The Stoxx Europe 600 Index dropped 0.4 percent. The euro rose on speculation that Greece and its creditors will reach a deal to receive aid payments. Oil jumped 2.8 percent to settle at $57.74 in New York.

     Gains Thursday in Microsoft Inc. and EBay Inc. pushed the Nasdaq past its record, while the S&P 500 climbed to an intraday high as earnings from large companies surpassed estimates even as the strong dollar weighed on overseas sales. Slower expansion in euro-area manufacturing and a decline in Chinese factory data signaled Asian stimulus measures and European Central Bank bond purchases have yet to take hold.

     “The Nasdaq is seeing strength because a lot of these technology companies are doing better,” Randy Warren, who manages more than $100 million at Exton, Pennsylvania-based Warren Financial Service & Associates Inc., said by phone. “Sentiment seems to be really positive. The market seems to be giving Fortune 500 companies a free pass, assuming that the first quarter was bad but we’re going to have an acceleration. If we get that, all is well and everyone is happy.”                         

     Almost two months after surpassing 5,000 on March 2 for the first time in 15 years, the gauge finally exceeded the 5,048.62, a level that was reached on March 10, 2000, and stood for a decade and a half as the dot-com era’s high-water mark. Even with today’s advance, the Nasdaq remains below its intraday high of 5,132.52 and the second-highest intraday level, 5,078.86, both reached in March 15 years ago.

     While the advance has brought the Nasdaq to new highs, valuations are only slightly elevated from the five-year average. The Nasdaq Composite trades at 30 times earnings, versus an average of 27.8 during the past five years. The gauge had a multiple of 190 in March 2000.

     Among the biggest companies tracked by the Nasdaq 100 Index, the top 10 best performers since 2013, including Netflix Inc. and Facebook Inc., are valued at an average 66 times profit. The Nasdaq 100 rose 0.4 percent Thursday, yet remains almost 5 percent below its March 27, 2000 record.

     “It’s been 15 years, so it’s not your father’s Nasdaq anymore,” John Manley, who helps oversee about $233 billion as chief equity strategist for Wells Fargo Funds Management in New York, said by telephone. “It’s not nearly as expensive as it was back then.”                        

     The Composite’s record fell on a day that provided a mixed picture for investors looking to earnings for clues on the strength of corporate America. Of the S&P 500 members that have released results this earnings season, 76 percent beat profit projections, while just 50 percent topped sales estimates.

     Microsoft reported results that trumped estimates as cloud revenue soared, sending its shares higher by 3.2 percent in late trading. Google Inc., Amazon.com Inc. and Starbucks Corp. rose at least 3.4 percent as of 4:55 p.m. in New York after disclosing financial results.

     Facebook Inc. slid 2.6 percent in the regular session after missing revenue estimates for the first time since 2012. Caterpillar Inc. gained 0.1 percent as its 2015 forecast topped analysts’ estimates. Freeport-McMoRan Inc. slid 2.4 percent after reporting its first loss since the global financial crisis. 3M Co., the maker of Post-it notes and Scotch tape, fell 3 percent after earnings trailed projections. EBay jumped 3.8 percent after saying profit growth was recovering amid cost cuts.

     “Underlying revenues remain disappointing as they’re not helped by the ever stronger U.S. dollar,” said Lex Van Dam, a fund manager at Hampstead Capital LLP in London. “The rest of the world is doing its best to provide liquidity but consumer demand remains disappointing. The stock market is reflecting a lack of investment alternatives as opposed to a booming economy.”

     Data showed purchases of new U.S. homes slumped more than forecast in March from a seven-year high, a sign progress in the industry will be halting.  Applications for unemployment benefits held below 300,000 for the seventh straight week, pointing to a rebound in payrolls after hiring eased last month.

     PulteGroup Inc. sank 7.9 percent to lead an S&P index of homebuilders lower by 4.3 percent, the most since January. The third-largest U.S. homebuilder slid the most in almost two years after reporting profit that missed analyst estimates.

     Treasuries halted a three-day decline as signs economic growth is slowing in China and Europe boosted demand for the safest assets. The benchmark U.S. 10-year yield fell two basis points to 1.95 percent.                       

     A Purchasing Managers Index for manufacturing and services in the euro area fell to 53.5 from 54 in March, London-based Markit Economics said Thursday. While the reading remains well above the 50-point mark that divides expansion from contraction, it is below the 54.4 forecast by economists in a Bloomberg survey.

     “This serves as a gentle reminder that although Draghi is pumping money into the economy, it will take a bit of time to feed through,” said Ben Kumar, who helps oversee about $12 billion at Seven Investment Management in London. “Earnings expectations had gone a bit far — consumers have not had enough time to feel the recovery and drive corporate profits.”

     Germany’s DAX Index and France’s CAC 40 Index slid more than 0.6 percent as similar data from those countries also disappointed. They were some of the biggest decliners among western-European markets on Thursday.

     A gauge of technology stocks fell the most among 19 industry groups, with Ericsson sliding 10 percent after reporting worse-than-forecast profitability. The index had closed at its highest level since 2002 on Wednesday.                          

     Developing-market stocks rose for a third day as Taiwan’s shares surged the most since 2013 amid speculation officials will broaden access to China’s capital markets. The MSCI Emerging Markets Index advanced 0.8 percent, as the Taiex Index rallied 1.9 percent.

     The Hang Seng China Enterprises Index, a gauge of mainland shares listed in Hong Kong, fell 1.3 percent while the Shanghai Composite Index closed 0.4 percent higher.

     China’s so-called flash purchasing managers index from HSBC Holdings Plc and Markit Economics dropped to 49.2 for April, the lowest since April last year, underscoring a slowdown that prompted China’s central bank to cut banks’ reserve requirements by the most since 2008.

     Economists had predicted the manufacturing purchasing managers’ index would come in at 49.6 for April, matching March’s reading. Levels below 50 signal contraction.

     “The fundamental economy is not improving” in China, said Helen Lau, a metals and mining analyst at Argonaut Securities Ltd. in Hong Kong. “It is a little worrying. We’re close to the bottom. Before that happens, the government should continue with stimulus until there is a rebound.”

     Brazil’s real ended a two-day gain after the country’s state-run oil producer Petroleo Brasileiro SA said a corruption scandal cost $2.1 billion.

     Aluminum fell as much as 1.7 percent, the most in two months, on concern more exports from China of products made from the metal will exacerbate a global glut.

     Crude climbed to a four-month high in New York after Saudi Arabia renewed its aerial assault on Shiite rebels in Yemen, bolstering concerns that Middle Eastern oil shipments may be disrupted.

Have a wonderful evening everyone.

Be magnificent!

The question of whether or not there is a God or truth or reality, or whatever you like to call it,

can never be answered by books, by priests, philosophers or saviors.

Nobody and nothing can answer the question

but you yourself and that is why you must know yourself.

Immaturity lies only in total ignorance of self.

To understand yourself is the beginning of wisdom.

Krishnamurti

As ever,

Carolann

There is no substitute for hard work.

          -Thomas Edison, 1847-1931

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