April 25, 2016 Newsletter

Dear Friends,

Tangents:

Poem: Selected by Matthew Zapruder

Bernadette Mayer is associated with the so-called New York School – poets whose work tends to explicitly explore the interactions between mundane daily life and the imagination.  Mayer’s poems are often informal and diaristic, and maintain a tensile balance between what Wallace Stevens called “the pressure of the real” and the possibility of an inner life.  Here the poet fails, tragically,, to create a space for herself free of our global worries. – NY Times, April 24, 2016.

Waiting for Dave, Megan and Issa

By Bernadette Mayer

Where am I
It’s supposed to be hot and sunny
But it’s cool and threatening
Threatening to be changeable
There’s a crisis in the banking system
Of Afghanistan, some people think the president
Of Syria is dead and in Japan old people will
Take over the work at the threatened nuclear power
Plants so the jeopardizing of their health
Will matter less, in years I guess, nobody
Has figured out what to do with nuclear waste
In Denmark it’s to be buried and so nobody
In future times will unearth it, the whole
Area will be covered with faux thorns
              Now it is overcast
There’s an ominous wind blowing
Wait, everything’s looking a little brighter
Oh no, it’s darkening.

Matthew Zapruder is the author of four poetry collections, includeing most recently “Sun Bear,”  He teaches poetry at Saint Mary’s College of California and is editor at large at Wave Books.  Bernadette Mayer is a poet whose most recent collection, “Works and Days,” will be published by New Directions in June.

PHOTOS OF THE DAY

Solar Impulse 2 flies over San Francisco, Saturday. The solar-powered airplane, which is attempting to circumnavigate the globe to promote clean energy and the spirit of innovation, arrived from Hawaii after a three-day journey across the Pacific Ocean. Noah Berger/AP

A member of the Gruppo Storico Romano (Roman Historical Group) dressed as a centurion performs at Circus Maximus as they mark the 2769th anniversary of the founding of Rome, Italy, Sunday. Alessandro Bianchi/Reuters

Market Closes for April 25^th, 2016

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a third day, the longest slump in three weeks, as energy producers retreated after crude tumbled from a five-month high amid signs a global glut will persist.

     The benchmark Standard & Poor’s/TSX Composite Index lost 0.6 percent to 13,795.99 at 4 p.m. in Toronto, extending losses during a three-session slide to 0.8 percent. The gauge remains one of the best-performing developed markets in the world this year with a 6 percent gain. Trading volume was 15 percent lower than the 30-day average.

     Encana Corp. and Crescent Point Energy Corp. fell more than 3.1 percent as energy producers retreated 1.4 percent as a group, the most in the S&P/TSX. All but two of the group’s 50 members retreated. Eight of 10 industries in the benchmark Canadian equity gauge declined. Precision Drilling Corp. fell 5.5 percent, the most in a month, after reporting a first- quarter loss.

     Nevsun Resources Ltd. sank 9.8 percent, the most in three years, after agreeing Sunday to buy Reservoir Minerals Inc. in a $365 million cash and stock deal that secures ownership of the Timok copper project in Serbia. Nevsun CEO Cliff Davis said in an interview with Bloomberg he has no intention to sell the Timok project.

     The resource-dominant S&P/TSX remains closely linked to moves in commodities prices, as a rebound in producers has fueled a 17 percent recovery for the S&P/TSX from a low on Jan. 20, after tumbling into a bear market earlier in the month. Raw- materials and energy producers are the two top-performing industries in Canada so far this year, up more than 13 percent.

     The Canadian benchmark now trades at 22 times earnings, about 15 percent higher than the 19.1 times earnings valuation of the Standard & Poor’s 500 Index, according to data compiled by Bloomberg.

     Oil declined 2.5 percent in New York from the highest close in five months. Saudi Arabian Oil Co. will complete an expansion at its Shaybah oil field by the end of May, allowing the world’s largest crude exporter to maintain total capacity at 12 million barrels a day, according to two people with knowledge of the plan. Iran has also increased output by 1 million barrels a day since sanctions were lifted in January, Shana reported.

     Valeant Pharmaceuticals International Inc. lost 1.6 percent, halting a five-day rally. Valeant named Perrigo Co.’s former Chief Executive Officer Joseph Papa as its new CEO and chairman, set to start in early May. He replaces Michael Pearson, who presided over a steep climb and faster fall as the drugmaker has come under scrutiny by lawmakers and regulators over its business practices.

     Bombardier Inc. rose 5.3 percent, to a September high, with the planemaker in negotiations about a deal with a prospective new airline serving the tourist island of Qeshm in southern Iran.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks slipped, with the Standard & Poor’s 500 Index continuing a retreat from a four-month high, before central-bank meetings this week in the U.S. and Japan and as investors awaited earnings reports to gauge corporate health.

     Equities trimmed losses in afternoon trading as consumer shares extended gains. Energy producers in the benchmark — which have led a two-month rally — sank with oil prices after closing Friday at the highest since Dec. 1. Banks declined after reaching a three-month high, and Caterpillar Inc., which was the strongest performer in the Dow Jones Industrial Average this year, dropped 2 percent.

     The S&P 500 fell 0.2 percent to 2,087.79 at 4 p.m. in New York, after losing as much as 0.7 percent. The Dow declined 26.51 points, or 0.2 percent, to 17,977.24, erasing most of an early 150-point drop. The Nasdaq 100 Stock Index was little changed after its steepest drop in two weeks Friday following disappointing results from Microsoft Corp. and Alphabet Inc. About 6 billion shares traded hands on U.S. exchanges, 24 percent below the three-month average.

     “The market is at an important juncture — this is the third time in the last 15 to 18 months that we’ve been near record levels in major indexes,” said Matt Maley, an equity strategist at Miller Tabak & Co. LLC. “Earnings are going to be the big focus this week. Nobody’s really looking for anything surprising out of the Fed. People will be closely watching the BOJ meeting on Thursday.”

     More than a third of the companies in the main U.S. equity index report results this week, including Apple Inc., Amazon.com Inc. and Boeing Co. Investors will also be on the lookout for shifts in rate guidance after the Federal Reserve’s policy decision Wednesday, while most economists predict monetary stimulus will be stepped up by the Bank of Japan.

     Equities have lost momentum in the last four sessions as corporate results failed to provide fresh impetus for investors to send the S&P 500 higher. The benchmark rallied as much as 15 percent from a 22-month low in February, boosted by a recovery in oil prices and signs of improvement in China. The gauge last week briefly climbed within 1 percent of a record set in May, before closing today 2 percent away from that level.

     Still, analysts have lowered first-quarter earnings estimates since the start of the year, when they forecast flat growth for S&P 500 companies. They now call for a profit decline of 9.2 percent. More than 130 companies have reported results so far, of which 81 percent beat earnings projections and 60 percent topped sales predictions.

     As policy makers assess data to inform their decisions on rates, a report today showed purchases of new homes unexpectedly declined in March for a third month, reflecting the weakest pace of demand in the West since July 2014. Traders are pricing in zero chance the Fed will raise rates at its meeting on Wednesday, with November now the first month with at least even odds for a boost.

     “We’re seeing a bit of an improvement in tone as the day goes along,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “A good outlook is the most important part of any company announcement, and it’s what keeps the market moving higher. The likes of Apple and Amazon are set to announce, and their earnings will be very telling.”

     Six of the S&P 500’s 10 main industries declined Monday, with energy, raw-material and industrial companies falling more than 0.6 percent, paring declines after losing at least 1 percent. Financial firms sank 0.3 percent, cutting losses by more than half. Consumer staples shares rose for a second day, increasing 0.7 percent.

     The Chicago Board Options Exchange Volatility Index climbed 6.5 percent to 14.08. The measure of market turbulence known as the VIX erased an April decline, putting it on track for a fifth monthly advance in six after holding near the lowest since August last week.

     Energy companies in the S&P 500 decreased 1.1 percent, after falling as much as 1.8 percent. Cabot Oil & Gas Corp. and Transocean Ltd. losing at least 4.1 percent. The price of crude oil declined 2.5 percent. The resource has surged 65 percent since falling to an almost 13-year low on Feb. 11. The S&P 500 Energy Index has rallied almost 22 percent since then.

     The S&P 500 Financials Index slipped 0.3 percent as 15 of 17 companies in an index of bank stocks fell. Bank of America Corp. slid 1 percent, while Citigroup Inc. and JPMorgan Chase & Co. decreased 0.6 percent. In the broader financials group, asset managers Affiliated Managers Group Inc. and Legg Mason Inc. slumped at least 1.4 percent.

     Transportation companies paced declines among the industrials group in the benchmark. Union Pacific Corp. and Kansas City Southern lost at least 1.3 percent, falling from their highest levels since October. American Airlines Group Inc. and United Continental Holdings Inc. fell more than 2.7 percent. The Dow Jones Transportation Average lost 1.2 percent.

     Drug companies dragged down the health-care group as Perrigo Co. plunged 18 percent, the most in seven years, after cutting its earnings outlook. Chief Executive Officer Joseph Papa is also leaving to take the helm at Valeant Pharmaceuticals International Inc. Endo International Plc lost 12 percent, after a 29 percent surge last week. Mylan NV sank 6.8 percent. The Nasdaq Biotechnology Index retreated 0.9 percent, down for the first time in four sessions.

     Technology shares fell for a third day, equaling the longest losing streak since Feb. 9 amid Xerox Corp.’s largest drop since 2009. The stock tumbled 13 percent after earnings missed estimates and the company cut some full-year forecasts, underlining the challenges it faces ahead of a planned company split. Visa Inc. extended losses in a three-day decline to 3.7 percent. Apple sank for the sixth time in seven sessions, losing 6.3 percent during the span before its earnings report after markets close tomorrow.

     Grocer Kroger Co. added 3.3 percent, the strongest climb in two months, and meat producer Tyson Foods Inc. gained 1.6 percent to boost consumer staples stocks. The group is rebounding from the biggest back-to-back drop this year, sparked by an underwhelming quarterly report from Coca-Cola Co.

     Among shares moving on corporate news, Gannett Co., publisher of USA Today, added 6.5 percent after making an $815 million unsolicited bid for Tribune Publishing Co., seeking to add the Los Angeles Times and the Chicago Tribune to its newspaper portfolio. Tribune surged 53 percent, as Gannett offered a 63 percent premium to the company’s closing price on April 22.

     Time Warner Cable Inc. increased 4.1 percent, the most in 11 months, after its takeover by Charter Communications Inc. won antitrust approval. The deal would create the No. 2 U.S. cable provider, after agreeing to measures intended to protect distribution of online video. Consumer discretionary shares were little changed as Netflix Inc. retreated 2.4 percent to an almost two-month low.

Have a wonderful evening everyone.

Be magnificent!

We know now that toleration is not sufficient toward another religion; we must accept it.

Thus it is not a question of subtraction, it is a question of addition.

The truth is the result of all these different sides added together.

Each religion represents on side, the fullness being the addition of all these.

Swami Vivekananda

As ever,

Carolann

The best way to pay for a lovely moment is to enjoy it.

                                        -Richard Bach, b. 1936

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