April 29, 2015 Newsletter

Dear Friends,

Tangents:

April, from A Countrywoman’s Notes by Rosemary Verey:

A regular end-of-April expedition we look forward to going to going to see is the wild Pulsatilla vulgaris.  There they are in their hundreds on a steep west-facing limestone bank, their blue heads hanging down,  To get the best view of them you must walk across the hillside, always looking upward.  The stems are only an inch or two long, which helps, which helps to camouflage the flowers.  One year on our way home we suddenly saw a pair of hoopoes, presumably going to their summer breeding-ground.  Their very distinctive crests make them easily recognizable.  One quickly flew over the hedge into the adjoining field and the other kept immediately in front of our car for a matter of 100 yards or more as we drove slowly along;  it was an afternoon to remember.  The bank of pulsatillas is a site specially protected by the Gloucestershire Trust for Nature Conservation.  Obviously  the plants must not be dug up or picked and the owner of the farm has agreed to keep grazing animals off the site in early spring to allow enough time for the full development of the flowers and seed dispersal.  The Trust does valuable work, with 50 nature reserves and a network of protected sites.  It is also very active in the field of education, with projects for adults and to encourage schoolchildren to become interested in the world about them.

PHOTOS OF THE DAY

Bluebells bloom in the Hallerbos in Halle, Belgium, Wednesday. Bluebells grow in ancient woodlands where they may dominate the understorey to produce carpets of violet–blue flowers. Geert Vanden Wijngaert/AP

Farmworkers are busy in a colorful field of tulips near Schwaneberg, Germany, Wednesday. Jens Wolf/dpa/AP

Market Closes for April 29^th, 2015

International Markets

Bonds

Currencies

Commodities

Of a stock’s move, 31% can be attributed to the general stock market, 12% to the industry influence, 37% to the influence of other groupings, and the remaining 20% is peculiar to the one stock.  –Benjamin F. King, Markets and Industry Factors in Stock Price Behavior, January 1966.

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little-changed for a second day as investors weighed earnings from Open Text Corp. to Valeant Pharmaceuticals International Inc. and the possibility the Federal Reserve would raise interest rates.

     Open Text plunged 6.3 percent as third-quarter sales were hampered by currency effects. Valeant rallied 3.7 percent after the drugmaker increased its earnings estimates for the year. Painted Pony Petroleum Ltd. climbed 6 percent as oil jumped to a four-month high after U.S. stockpiles fell.

     The Standard & Poor’s/TSX Composite Index rose 1.27 points, or less than 0.1 percent, to 15,347.34 at 4 p.m. in Toronto, erasing an earlier loss of as much as 0.7 percent. The benchmark Canadian equity gauge climbed 1.99 points Tuesday and is up 3 percent in April.

     Open Text sank 6.3 percent, as a sixth day of losses left it at an October low. Technology shares in the broader index slumped 2.2 percent as a group, as six of 10 industries retreated on trading volume 4 percent higher than the 30-day average.

     Fed policy makers said they expect the U.S. economy to pick up after data earlier Wednesday showed growth ground to a virtual halt in the first quarter, suggesting the first rate increase since 2006 is still in play some time this year.

     U.S. stocks slipped 0.4 percent, while the dollar pared declines and Treasuries retreated.

     Canadian Energy Services & Technology Corp. jumped 7.4 percent and PrairieSky Royalty Ltd. rose 4.4 percent as energy stocks increased 0.2 percent. U.S. oil prices surged to a four- month high after stockpiles at Cushing, Oklahoma fell for the first time since November.

     Bombardier Inc. climbed 2.1 percent. Chinese locomotive makers CSR Corp. and China CNR Corp. are considering an acquisition of a controlling stake in Bombardier’s train business, said a person familiar with the matter.

US

By Jennifer Kaplan and Lu Wang

     (Bloomberg) — U.S. stocks declined after the economy barely grew in the first quarter and investors weighed the timing for a possible interest-rate increase as the Federal Reserve said part of the weakness was transitory.

     The Standard & Poor’s 500 Index slipped 0.4 percent to 2,106.85 at 4 p.m. in New York, after earlier falling as much as 0.8 percent. The Dow Jones Industrial Average lost 74.61 points, or 0.4 percent, to 18,035.53. The Nasdaq Composite Index retreated 0.6 percent, and the Russell 2000 Index fell 1 percent. About 7.4 billion shares changed hands on U.S. exchanges, 11 percent above the three-month average.

     “It confirms people’s view that the Fed won’t raise interest rates in June – that’s certainly driven home today by GDP growth,” said Kristina Hooper, a U.S. investment strategist at Allianz Global Investors in New York. The firm oversees $499 billion. “But there is still some question mark because the Fed is blaming part of downturn in the first quarter on transitory factors.”

     Fed officials have said they expect to raise rates this year for the first time since 2006 as the economy nears full employment, and that their decision will be guided by the latest data. They had said last month that they would be unlikely to raise rates at their April meeting.

     A run of disappointing economic data has cast doubt on how quickly the Fed can meet its goals for full employment and stable prices.

     “Economic growth slowed during the winter months, in part reflecting transitory factors,” the Federal Open Market Committee said in a statement Wednesday. “The pace of job gains moderated,” it said, and “underutilization of labor resources was little changed.”

     An earlier report showed growth almost ground to a halt in the first quarter, held back by severe winter weather and slumping business spending and exports.

     Gross domestic product, the volume of all goods and services produced, rose at a 0.2 percent annualized rate after advancing 2.2 percent the prior quarter. The median forecast of 86 economists surveyed by Bloomberg called for a 1 percent gain.

     “If they had taken out the word ’transitory,’ you probably would have had the equity market turn positive,” said Quincy Krosby, a market strategist at Prudential Financial Inc., in Newark, New Jersey. Prudential oversees more than $1 trillion in assets. “Just having that in there shows the Fed does believe it was, in fact, transitory i.e. we are going to be pushing into a rebound soon.”

     The S&P 500 has risen 1.9 percent this month, rebounding from a drop in March, after earnings from companies including Merck & Co. and Microsoft Corp. beat analysts’ estimates. About 74 percent of the S&P 500 companies that have reported earnings this season have beaten analysts’ profit projections, while 48 percent topped sales estimates.

     The Chicago Board Options Exchange Volatility Index climbed 7.9 percent, the most in two weeks, to 13.39. The gauge, known as the VIX, fell more than 11 percent last week.

     Seven of 10 main industries in the S&P 500 declined, with health-care and consumer staples shares dropping 0.8 percent.

     Humana Inc. slumped 7.2 percent, leading the losses among health-care stocks, after the company’s earnings trailed predictions. Cigna Corp. and UnitedHealth Group Inc. each lost more than 3.3 percent. Cigarette makers Reynolds American Inc. and Altria Group Inc. fell at least 2.9 percent, their biggest slide in almost two months, to pace the drop in consumer shares.

     Airlines were among the worst performers in the session amid a jump in oil prices. A Bloomberg gauge of U.S. carriers fell 3.1 percent. Spirit Airlines Inc. retreated 9.3 percent, while American Airlines Group Inc. and United Continental Holdings Inc. lost more than 2.5 percent.

     An S&P measure on homebuilders slid 1.3 percent, near a three-month low, even as a report on pending sales of previously owned homes showed a pickup in activity. Toll Brothers Inc. and DR Horton Inc. declined at least 1.7 percent.

     U.S. Steel Corp. sank 12 percent, its biggest drop since 2011, after reporting a surprise first-quarter loss and cutting its full-year earnings forecast after a flood of imports prompted the nation’s second-largest producer of the metal to idle capacity.

     Wynn Resorts Ltd. lost 17 percent to its lowest level in 29 months after quarterly profit missed projections amid a sharp drop in betting in Macau, and the casino company cut its dividend by two-thirds.

     Buffalo Wild Wings Inc. plunged 13 percent, the most in nine months and the biggest drag today on the Russell 2000, after higher chicken-wing costs squeezed profit in the first quarter.

     Twitter Inc. slid 8.9 percent, after tumbling 18 percent Tuesday on the early release of its results. It’s the worst two- day drop since the micro-blogging site went public in Nov. 2013.

First-quarter revenue fell short of estimates and Twitter cut its sales forecast as the company struggles to attract more users and advertisers.

     Energy companies rose 0.7 percent as oil gained after a government report showed crude inventories at the biggest U.S. oil hub fell for the first time in 21 weeks. Transocean Ltd. and Consol Energy Inc. paced the advance, rising at least 6.4 percent. Noble Corp and Diamond Offshore Drilling Inc. each climbed more than 2.7 percent.

     Genworth Financial Inc. jumped 12 percent, the most in more than three years, after the company’s chief executive said he’s willing to sell the entire insurer, though he’ll continue with a plan to seek buyers for individual units.

     Mondelez International Inc. increased 5.2 percent to a four-month high. The maker of Oreo cookies and Ritz crackers posted first-quarter profit and sales that exceeded analyst projections after cutting costs and raising product prices.

     GoPro Inc. rallied 13 percent as results topped forecasts, helped in part by overseas sales that rose to about half of the company’s revenue.

     Starwood Hotels & Resorts Worldwide Inc. climbed 8.3 percent to an all-time high after saying it’s exploring steps to increase shareholder value and hired Lazard as an adviser.

Have a wonderful evening everyone.

Be magnificent!

Man has accepted conflict as an innate part of daily existence

because he has accepted competition, jealousy, greed, acquisitiveness and aggression

as a natural way of life.

Krishnamurti

As ever,

Carolann

Sweet April showers do spring May flowers.

                  -Thomas Tusser, 1524-1580

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