Category: Events

Dear Friends,

Tangents:

On June 7, 1840, Edward FitzGerald wrote this letter to Frederick Tennyson:

I read [Bishop Gilbert, d. 1715] Burnet’s History [of his Own Times] – Expede Herculem [We recognize Hercules from his own foot].  Well, say as you will, there is not, and never was, such a country as Old England – never were there such a gentry as the English.  They will be the distinguishing mark and glory of England in history, as the arts were of Greece, and war  of Rome.  I am sure no travel would carry me to any land so beautiful, as the good sense, justice, and liberality of my good countrymen make this.  And I cling the closer to it, because I feel that we are going down the hill, and shall perhaps live ourselves to talk of all this independence as a thing that has been.  To none of which you assent perhaps.  At all events, my paper is done, and it is time to have done with this solemn letter.  I can see you sitting at a window that looks out on the Bay of Naples, and Vesuvius with a faint smoke in the distance: a half-naked man under you cutting up watermelons, etc.

PHOTOS OF THE DAY

A bumblebee lands on a flower in Erfurt, central Germany, on Tuesday. Jens Meyer/AP

An employee of Germany’s biggest retailer, Metro AG, reacts to HI-4, a life-size, humanoid robot, at Metro’s headquarters in Duesseldorf, Germany, on Tuesday. The android, modelled after its Japanese inventor Hiroshi Ishiguro, a professor at Osaka University, is made of a metal skeleton, plastic skull and silicon skin. It can be used as a human substitute for interaction via a tele-operated control system. Wolfgang Rattay/Reuters

Market Closes for June 7^th, 2016

Market Index	Close	Change
Dow Jones	17938.28	+17.95   +0.10%
S&P 500	2112.08	+2.67   +0.13%
NASDAQ	4961.754	-6.959   -0.14%
TSX	14359.88	+83.72
		+0.59%

International Markets

Market Index	Close	Change
NIKKEI	16675.45	+95.42
		+0.58%
HANG SENG	21328.24	+298.02
		+1.42%
SENSEX	27009.67	+232.22
		+0.87%
FTSE 100	6284.53	+11.13
		+0.18%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.219	1.239
CND. 30 Year Bond	1.877	1.884
U.S.    10 Year Bond	1.7143	1.7332
U.S. 30 Year Bond	2.5366	2.5517

Currencies

BOC Close	Today	Previous
Canadian $	0.78350	0.77976
US $	1.27633	1.28245
Euro Rate 1 Euro=		Inverse
Canadian $	1.44879	0.69023
US $	1.13548	0.88068

Commodities

Gold	Close	Previous
London Gold Fix	1241.00	1244.00
Oil	Close	Previous
WTI Crude Future	50.36	49.69

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a fourth day, extending a rally to near 10-month highs, as energy producers advanced with crude to offset a slump in Valeant Pharmaceuticals International Inc.

     The S&P/TSX Composite Index added 0.6 percent to 14,365.61 at 4 p.m. in Toronto, its highest close since Aug. 11. The index is up 21 percent from its Jan. 20 low, after climbing out of a bear market on Friday, amid its longest winning streak in almost eight weeks. Trading volume today was about 2.6 percent higher than the 30-day average.

     The recent rally has added to Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.9 times earnings, about 12 percent higher than the 19.6 times valuation of the S&P 500 Index.

     Canadian equities have been one of the top-performing markets this year, second only to New Zealand among developed nations with a 10 percent advance, a sharp rebound after falling the most in 2015 since the 2008 financial crisis. Raw-materials producers have led the broader rally, soaring 43 percent this year for the best year-to-date performance since 1993.

     Global stocks advanced for a fourth session, with the S&P 500 rising to a 10-month high. The dollar weakened to the lowest in a month after Federal Reserve Chair Janet Yellen said Monday she expects to raise interest rates gradually and held off from specifying any timeframe. Traders are pricing in a 20 percent chance for an increase in July, down from better than 50 percent odds before the U.S. jobs report last week, according to data compiled by Bloomberg.

     In Canada, Baytex Energy Corp. and MEG Energy Corp. climbed more than 12 percent to lead a 2.1 percent gain in energy producers. Crude extended a climb with futures settling above $50 a barrel in New York for the first time in more than 10 months. U.S. government data Wednesday is forecast to show stockpiles dropped for a third week, helping to ease the oil supply glut that’s roiled prices for the past year.

     Penn West Petroleum Ltd. soared 13 percent for a third day of gains. The oil and gas producer has jumped 41 percent in that time, after Bloomberg first reported on Friday Penn West hired Royal Bank of Canada to sell its Dodsland Viking light oil assets in Saskatchewan, according to people familiar with the deal.

     Cott Corp. added 10 percent, to the highest level in more than 10 years, after the water and pop beverage bottler agreed to buy European home and office services business Eden Springs in a 470 million euro ($534 million) deal.

     Valeant sank 15 percent to the lowest level since January 2011, after the drugmaker’s delayed first-quarter earnings were short of analysts’ expectations, and the company slashed forecasts. Earnings for 2016 are now expected to be $6.60 to $7 a share, excluding some items, down from March estimates of $8.50 to $9.50. Revenue in two key categories, dermatology and prescription ophthalmology, slumped by 43 percent and 30 percent, respectively.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks advanced, even after the S&P 500 Index pared much of its gain in the final hour of trading, as rallies in energy producers and airline operators offset slumping health-care and bank shares.

     The benchmark reached a level that was 0.5 percent below its all-time high on Tuesday. Chevron Corp. and Exxon Mobil Corp. added at least 1.5 percent. The Bloomberg U.S. Airlines Index rose the most in two months after JPMorgan Chase & Co. said JetBlue Airways Corp. raised its domestic fares by $3 each way, spurring other flight operators to match in competing markets. Health-care shares led losses as Biogen Inc. slumped 13 percent after an experimental drug for multiple sclerosis failed in a mid-stage trial.

     The S&P 500 added 0.1 percent to 2,112.13 at 4 p.m. in New York, after climbing as much as 0.5 percent. It was still the highest close since July, while volume on U.S. exchanges was 11 percent below the three-month average. The Dow Jones Industrial Average added 17.95 points, or 0.1 percent, to 17,938.28 today, after briefly surpassing the 18,000 level for the first time since April.

     “If you look at U.S. stocks on a global perspective, to be touching or near that high is pretty phenomenal,” Gina Martin Adams, an equity strategist at Wells Fargo Securities LLC, said in a Bloomberg TV interview. “Yet when we look forward, we’re struggling to find that next source of growth. Maybe the drag has passed, but where is the growth going to come from? The result of that is this sideways trading market with very limited risk tolerance on the part of the broad investment community.”

     Stocks rose yesterday after Federal Reserve Chair Janet Yellen said the economy is making progress despite signs of slower jobs growth, making investors more comfortable with the prospects for gradual rate increases. That’s helped fuel gains in commodity prices. Traders have also cut back their bets for a Fed rate increase after last week’s disappointing jobs report. They are now pricing in almost no chance of a boost in June, and the probability for July has dropped to about 20 percent from 53 percent a week ago.

     Energy stocks posted the biggest gains, rising to the highest level since November, as oil advanced before U.S. government data forecast to show crude stockpiles dropped for a third week. All but three stocks in the S&P 500 Energy Index increased.

     The S&P Supercomposite Homebuilding Index also jumped after PulteGroup Inc. said Elliott Management Corp. has taken a stake in the homebuilder. PulteGroup climbed 4.1 percent, while Lennar Corp. and Toll Brothers Inc. also rose.

     LDR Holding Corp. surged 64 percent. Zimmer Biomet Holdings Inc. agreed to buy the medical device company for about $1 billion in cash to add surgical technologies for the treatment of patients with spine disorders. Zimmer slid 1.7 percent.

     Sarepta Therapeutics Inc. soared 23 percent on speculation its experimental muscular dystrophy treatment may have a chance of approval, after U.S. regulators asked the drugmaker for more data.

     United Natural Foods Inc. gained 14 percent after boosting its annual earnings and sales forecasts.

     Meanwhile, Alexion Pharmaceuticals Inc. tumbled 11 percent after its drug for a rare neuromuscular disease didn’t meet its primary goal in a final-stage trial.

     Bank stocks sank with Goldman Sachs Group Inc. posting among the biggest declines in the Dow.

     LendingClub Corp. slumped 7.4 percent after postponing its annual meeting, which was scheduled for Tuesday. The arranger of so-called peer-to-peer loans has been seeking to restore investor confidence after the surprise departure last month of its founder.

 

Have a wonderful evening everyone.

 

Be magnificent!

If the recognized leaders of mankind who have control over the engines of destructions

were wholly to renounce their use, with full knowledge of its implications, permanent peace can be obtained.

This is clearly impossible without the Great Powers of the earth renouncing their imperialistic design.

This again seems impossible without great nations ceasing to believe in soul-destroying competition

and to desire to multiply wants and, therefore, increase their material possessions.

Mahatma Gandhi

As ever,
 

Carolann

 

It is always the simple that produces the marvelous.

                                   -Amelia Barr, 1831-1919

 

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

Dear Friends, 

Tangents:

On June 6, 1944, the D-Day invasion of Europe took place during World War II as Allied forces stormed the beaches of Normandy, France.

1944 – D-DAY: 14,000 Canadian soldiers join in the Normandy landing on Juno Beach.

PHOTOS OF THE DAY

French members of WWII veteran association Les Fleurs de la Memoire, Flowers for Memory, pay their respects to WWII soldiers buried in the Colleville American military cemetery, in Colleville sur Mer, western France, on Monday on the 72nd anniversary of the D-Day landing. D-Day marked the start of a Europe invasion, as many thousands of Allied troops began landing on the beaches of Normandy in northern France in 1944 to start a major offensive against the Nazis. Francois Mori/AP

A specimen of the newly-discovered Australian Peacock spider, Maratus Bubo, shows off his colorful abdomen in this undated picture from Australia released Monday. Jurgen Otto/Handout/Reuters

Market Closes for June 6 , 2016

Market Index	Close	Change
Dow Jones	17920.33	+113.27   +0.64%
S&P 500	2110.13	+82.98   +0.40%
NASDAQ	4968.715	+26.198     +%0.53
TSX	14280.77	+53.99
		+0.38%

International Markets

Market Index	Close	Change
NIKKEI	16580.03	-62.20
		-0.37%
HANG SENG	21030.22	+82.98
		+0.40%
SENSEX	26777.45	-65.58 -0.24
FTSE 100	6273.40	+63.77
		+1.03%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.239	1.183
CND. 30 Year Bond	1.884	1.846
U.S.    10 Year Bond	1.7332	1.7004
U.S. 30 Year Bond	2.5517	2.5141

Currencies

BOC Close	Today	Previous
Canadian $	0.77976	0.77286
US $	1.28245	1.29389
Euro Rate 1 Euro=		Inverse
Canadian $	1.45664	0.68651
US $	1.13588	0.88037

Commodities

Gold	Close	Previous
London Gold Fix	1244.00	1240.50
Oil	Close	Previous
WTI Crude Future	49.69	48.48

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Fresh off capping a four-month rally that returned them to a bull market, Canadian stocks advanced a third day as commodities rose after Federal Reserve Chair Janet Yellen said interest rates will rise gradually without specifying the precise timing.

     The S&P/TSX Composite Index rose 0.4 percent to 14,276.16 at 4 p.m. in Toronto, the highest level since August, rebounding into the close after briefly paring gains in afternoon trading. The index is up 21 percent from its Jan. 20 low, after climbing out of a bear market on Friday. Trading volume today was 3.2 percent less than the 30-day average.

     The recent rally has extended Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.8 times earnings, about 11 percent higher than the 19.5 times valuation of the S&P 500 Index.

     Global stocks advanced a third day after Yellen’s comments acknowledged impediments to U.S. growth while remaining upbeat about the economy’s outlook. Traders are pricing in a 22 percent chance for an increase in July, down from better than 50 percent odds a day ahead of the jobs report, according to data compiled by Bloomberg.

     Commodities entered a bull market, ending a five-year rout as prices from soybeans to zinc rose to help the asset class outperform bonds, currencies and equities in 2016. The Bloomberg Commodity Index, which tracks a basket of 22 resources from crude to soybeans, closed 21 percent above its low on Jan. 20 to meet the common definition of a bull market. Prices remain down about 50 percent from the highest levels seen in 2011.

     In Canada, energy producers climbed 1.6 percent to the highest level in almost a year with all but two companies in the group advancing. Crude closed at a 10-month high in New York, settling at $49.69 a barrel as Abu Dhabi forecast prices could surge as high as $60 a barrel with the global glut shrinking faster than expected.

     First Quantum Minerals Ltd. and Teck Resources Ltd. jumped at least 7.4 percent to lead raw-materials producers higher. Iron ore futures jumped in China while zinc advanced an eighth day, the longest streak since December 2013. Nickel also advanced.

     Potash Corp. of Saskatchewan Inc. jumped 6.2 percent, the most since February, for a third day of gains. The market is overthinking the implications surrounding the delayed China potash contract, said Scotiabank analyst Ben Isaacson. While there are rumors China will seek a bid price of $180 per metric ton, Isaacson estimates the contract will end up being closer to $210 per metric ton.

     Canadian equities have been one of the top-performing markets this year, second only to New Zealand among developed nations with a 9.7 percent advance, a sharp rebound after falling the most since the 2008 financial crisis in 2015. Raw- materials producers have led the broader rally, soaring 44 percent this year for the best year-to-date performance in three decades.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks advanced, with the S&P 500 Index regaining a seven-month high, as Federal Reserve Chair Janet Yellen signaled the economy is still strengthening enough to withstand gradual increases in borrowing costs despite recent signs of slower job growth.

     Investors moved past the weakest monthly employment gains since 2010 to focus on the beneficiaries of a lower dollar and a bounce in Treasury yields. Banks rebounded from their worst drop in almost two months, while rising crude prices helped Halliburton Co. climb to its highest in nearly a year, and Transocean Ltd. jumped almost 15 percent.

     The S&P 500 gained 0.5 percent to 2,109.41 at 4 p.m. in New York, 1 percent away from a record set a year ago after the gauge flirted with a 10-month high. The Dow Jones Industrial Average added 113.27 points, or 0.6 percent, to 17,920.33, while the Nasdaq Composite Index rose 0.5 percent. The Russell 2000 Index increased 1.1 percent to the highest in six months. About 6.4 billion shares traded hands on U.S. exchanges, 10 percent below the three-month average.

     “The Fed wants to see at least one more employment situation report to see if the latest was an aberration or the beginning of a new trend,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242 billion. “She seems very optimistic and I like that she’s outlining the risk to the outlook, but I don’t see any further clarity as to whether they’re going to hike in July or September.”

     Yellen said in a speech in Philadelphia today that the May employment numbers were “disappointing,” while also pointing to one of the few encouraging elements of the report — the increase in average hourly earnings. The Fed chair said positive forces supporting job growth and higher inflation will still probably outweigh negative developments, calling additional gradual rate increases appropriate without specifying their precise timing.

     Banks were on the mend after dragging equities lower Friday, as Treasury yields recovered from the steepest tumble in 11 months which spurred speculation low rates would continue to weigh on lenders’ profitability. The group reached an almost five-month high Thursday before the weak jobs report dashed rising expectations that the Fed could lift rates as soon as this month.

     Gains in financial shares helped the S&P 500 rebound 15 percent from a 22-month low in February low through last Thursday, when it surpassed the 2,100 level, before slipping 0.3 percent on Friday. The index has failed to keep its gains beyond 2,100 in prior rallies during the past year. Friday’s decline and today’s recovery continued the market’s sideways movement, with the benchmark closing up or down less than 0.5 percent for seven straight days, the longest stretch since November.

     Skepticism resurfaced after the employment data sparked concern over the vitality of U.S. growth as the Fed contemplates raising interest rates further. Traders cut bets for an increase in the next few months, now pricing in a 2 percent chance of a June boost, and about a 22 percent probability it will be in July — down from 22 percent and 55 percent, respectively, before the jobs release. December is the first month with at least even odds of a rate.

     Fed Chair Yellen’s appearance is the last by a central bank official scheduled before the next policy meeting concludes on June 15. Boston Fed President Eric Rosengren said in Helsinki today he expects economic conditions to continue improving, making further rate increases appropriate, although it will be important to see whether a weak employment report for May proves to be an anomaly.

     Atlanta Fed’s Dennis Lockhart on Bloomberg TV added his voice to the argument for a delay, saying the central bank should wait until at least next month to consider raising rates because of a slowing labor market and the British vote on European Union membership.

     “This is the most uninspiring economic cycle we’ve ever seen,” Jonathan Golub, the chief U.S. market strategist at RBC Capital Markets LLC, said in a Bloomberg TV interview. Still, he says he remains bullish on U.S. equities. “This was a weak number but just one weak number. The market’s general view is things are fine.”                      

     In Monday’s trading, eight of the S&P 500’s 10 main industries rose, with energy producers surging 2 percent to a five-week high. Raw-materials, industrial and financial shares advanced at least 0.5 percent. Consumer shares, utilities and phone companies were little changed. A Goldman Sachs Group Inc. basket of the most shorted stocks in the Russell 3000 Index posted the biggest gain in two weeks.

     Despite the equity rally, the CBOE Volatility Index rose 1.3 percent to 13.65. The measure of market turbulence known as the VIX on Friday posted its third weekly increase in the last four.

     Transocean soared to its highest level since March as today’s strongest performer in the energy group and S&P 500. Devon Energy Corp. and Baker Hughes Inc. gained more than 4.5 percent. West Texas Intermediate crude futures rallied 2.2 percent to settle near $50 a barrel on signs a global glut is contracting more quickly than projected.

     Among raw-material producers, CF Industries Holdings Inc. rallied 8.9 percent after CLSA Americas LLC upgraded the shares to buy. Freeport-McMoRan Inc. and Mosaic Co. added at least 4.8 percent. The Bloomberg Commodity Index climbed to the highest since October.

     JPMorgan Chase & Co. and Wells Fargo & Co. rose at least 0.6 percent to give the biggest lift to a group of banks in the benchmark index. Zions Bancorporation rebounded 2.8 percent to erase Friday’s 1.2 percent slide. In the broader financials group, Legg Mason Inc. and State Street Corp. increased at least 2.5 percent.

     Retailers fell for a second day, limiting a rise in consumer discretionary shares. Best Buy Co. dropped 3.2 percent after Chief Executive Officer Hubert Joly sold $12.8 million in stock, cutting his stake in the electronics retailer by 44 percent. Home Depot Inc. and Lowe’s Cos. lost more than 1.9 percent.

     Apartment real-estate investment trusts were the worst performers Monday, with Apartment Investment & Management Co. losing 2.6 percent to fall for a fifth day, the longest since August. UDR Inc. and Equity Residential fell more than 2 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

The noblest moral law is that we should unremittingly work for the good of mankind.

Mahatma Gandhi

As ever,

 

Carolann

 

There are no shortcuts in life – only those we imagine.

                                       -Frank Leahy, 1908-1973

 

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

 

 Dear Friends,

Tangents:

PRIME NUMBERS:

40.8 MILLION:  People worldwide displaced within their own countries by conflict in 2015, a record high.

35,000: Uber drivers to be included in a new guild, the first of its kind, for drivers in New York City.

1,284: Latest batch of exoplanets discovered by NASA’s Kepler space telescope, the largest cache announced to date.  Nine are considered “potentially habitable.”

 50,000: Appraised value (in U$) of what was thought to be a piece of late- 19^th century folk art.  A viewer who saw the appraisal on PBS’s “Antiques Roadshow” set the record straight:  Her friend – now a horse trainer – made the jug, adorned with human faces, as a high school project in th e1970’s.

151 MILLION: Estimated value (in U$) of used clothing shipped to East Africa in 2015.  Five nations, Burundi, Kenya, Rwanda, Tanzania, and Uganda, are considering a ban on such imports to try to revive local manufacturing

PHOTOS OF THE DAY

A woodpecker perches on a tree in a protected area of Bialowieza forest, the last primeval forest in Europe, near Bialowieza village, Poland.Kacper Pempel/Reuters

Moises Vazquez, known as Spider-Moy, rides the subway to work in Mexico City. Vazquez, a computer science teaching assistant at the National Autonomous University of Mexico (UNAM), teaches dressed as superhero Spider-Man. Edgard Garrido/Reuters

Market Closes for June 3^rd, 2016

Market Index	Close	Change
Dow Jones	17799.36	-39.20   -0.22%
S&P 500	2101.29	-3.97   -3.19%
NASDAQ	4940.387	-30.977   -0.62%
TSX	14233.23	+96.24
		+0.68%

International Markets

Market Index	Close	Change
NIKKEI	16642.23	+79.68
		+0.48%
HANG SENG	20947.24	+88.02
		+0.42%
SENSEX	26843.03	-0.11
FTSE 100	6209.63	+24.02
		+0.39%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.183	1.249
CND. 30 Year Bond	1.846	1.895
U.S.    10 Year Bond	1.7004	1.7989
U.S. 30 Year Bond	2.5141	2.5805

Currencies

BOC Close	Today	Previous
Canadian $	0.77286	0.76349
US $	1.29389	1.30978
Euro Rate 1 Euro=		Inverse
Canadian $	1.47071	0.67995
US $	1.13665	0.87977

Commodities

Gold	Close	Previous
London Gold Fix	1240.50	1212.40
Oil	Close	Previous
WTI Crude Future	48.48	49.17

 

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks surged back into a bull market, propelled by a furious rally in commodities producers and elevating the nation’s equity markets to one of the top performers in the world this year.

     The S&P/TSX Composite Index rose 0.6 percent to 14,226.78 Friday, capping a 20 percent rally from a bear-market low of 11,843.11 on Jan. 20. The Canadian equity benchmark has surged 9.4 percent in 2016, the second-most among developed markets tracked by Bloomberg. The index plunged 11 percent last year.

     More than C$370 billion ($286 billion) was added to Canada’s resource-heavy equity market in only four months as crude rallied more than 80 percent over that time, stoking growth in the export-oriented economy, the world’s 11th largest, and easing pressure on the balance sheets of lenders exposed to the sector. New Prime Minister Justin Trudeau unveiled in March a budget laden with deficit spending, adding fiscal stimulus to an accommodative interest-rate policy.

     “We’ve turned the corner on the freefall in oil prices,” said Kash Pashootan, fund manager at First Avenue Advisory of Raymond James Ltd. in Ottawa. His firm manages about C$260 million. “We’re getting back to more of what I call a normal market where companies are trading based on fundamentals and future forecasts, which was impossible before as no one knew when commodities would bottom out.”

     Prices for commodities from copper to oil and gold have rallied from the lowest levels in at least 25 years, nearing bull-market territory amid increasing signs of economic stability in China and growth in the U.S., Canada’s two largest trading partners. The Bloomberg Commodity Index, which tracks returns for 22 raw materials, has surged almost 20 percent from a January low after suffering five straight years of declines through 2015. The gauge still remains about 50 percent below the high reached in 2011.

     Odds of a Federal Reserve rate hike this summer faded after the U.S. reported weak jobs data for May on Friday, torpedoing the U.S. dollar and boosting the price of resources denominated in the currency. The Canadian dollar rallied 0.93 cents, or 1.2 percent to 77.29 U.S. cents at 4:08 p.m.                        

     “These trends are sustainable as long as the dollar stays well-behaved,” said Jurrien Timmer, director of global macro at Fidelity Investment, in an interview in Toronto. “The last couple of years, the market has been very narrow. And what happens with the dollar depends on the Fed.”

     Miners have delivered the biggest individual gains in the index this year, with nine metals producers at the top of the index leading the way with rallies of more than 100 percent. Gold rallied 17 percent in the first quarter, the most since 1986. First Majestic Silver Corp. is the best-performing stock in the index with a 237 percent gain, lifting raw-materials producers to a rally of 43 percent, the best start for the industry in three decades, according to data compiled by Bloomberg.

     Crude’s bounce from a 12-year in low in February has also provided a tailwind to Canada’s stock market. Energy producers have surged 35 percent since the S&P/TSX bear-market low, while banks in the S&P/TSX have surged 17 percent.

     Bank of Nova Scotia, Canadian Imperial Bank of Commerce, and National Bank of Canada have jumped at least 11 percent this year, leading banks higher as concern eases that loans to the oil patch will pose a threat to lenders’ balance sheets.

     “What you see with the Canadian banks is a tug of war between pricing in potential loan losses from energy with the fact dividend yields have been so attractive,” Pashootan said. “We saw earlier in the year dividend yields upwards of 5 percent. That was a turning point.”

     Indicated yield for Scotiabank sits at 4.4 percent, while CIBC and National Bank yield more than 4.7 percent, data compiled by Bloomberg show.

     All told, the broader index trails only New Zealand this year among developed markets, though the S&P/TSX’s rapid rally through the first half of 2016 doesn’t leave much room to grow, said John Stephenson, CEO of Stephenson & Co. Capital Management in Toronto.

     “The TSX will sort of plateau,” he said. Stephenson’s firm manages about C$50 million. “You might get another percentage point or two next month, but it’s looking pretty front-loaded.”                      

     First Avenue’s Pashootan is more optimistic and is on the hunt for energy names to add to his existing holdings including Enbridge Inc. and Keyera Corp. His weighting in commodities has doubled to about 8 percent of his portfolio from 4 percent in 2014.

     “We have conviction in energy so we’ve started to add,” he said. “There’s been a shift from our pessimism of even three months ago to now. Given we’re off the bottom, now is the time you want to start building your positions for where things will be two, three, four or five years from now.”

US

By Jeremy Herron and Inyoung Hwang

     (Bloomberg) — U.S. stocks fell with the dollar, while Treasuries and gold gained after American employers added the fewest jobs in almost six years in May, bolstering the case for the Federal Reserve to leave interests rates lower for longer.

     The S&P 500 Index ended the week little changed, while the likelihood for a delayed rate increase sent financial shares lower. The dollar tumbled the most in six months versus the euro, while investors sought the safest government securities, sending the yield on two-year Treasuries to the steepest drop since September and the yield on German 10-year bunds to a record low. The weak greenback sparked a rally in emerging- market assets and commodities.

     “Things are never as bad or as good as they seem,” said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ U.S. intermediary business. The firm oversees $2 trillion. “Fed futures are pricing in a decreasing probability for June and stocks probably don’t mind that scenario all that much. We’re moving away from this risk- on, risk-off formula to one that’s more Fed on, Fed off.”

     The addition of 38,000 jobs last month was less than the most pessimistic of forecasts in a Bloomberg survey, throwing cold water on equity gains that took the S&P 500 within 1.2 percent of its all-time high. Smaller employment gains reduce the odds of a more pronounced upturn economic growth at a time when corporate profits are on a downswing and global markets remain weak. The odds for a Federal Reserve rate increase fell to 27 percent in July, down from 55 percent a day earlier.

     The S&P 500 fell 0.3 percent to 2,099.13 at 4 p.m. in New York, after dropping as much as 1 percent. The index slid back below 2,100 after closing higher than that for the first time since April. The level has capped two prior rallies in the past eight months.

     Utilities and phone stocks rose on Friday as the prospect for lower rates sent investors searching for shares that have large payout ratios. Raw-material shares also climbed, with Newmont Mining Corp. jumping 9.4 percent for the biggest gain in the S&P 500.

     Financial shares trimmed losses to 1.4 percent, after falling as much as 2.4 percent. JPMorgan Chase & Co. and Goldman Sachs Group Inc. sank at least 1.8 percent. Insurers MetLife Inc. and Prudential Financial Inc. fell more than 3.1 percent.

     Canadian stocks surged back into a bull market. The S&P/TSX Composite Index rose 0.6 percent on Friday, capping a 20 percent rally from a low on Jan. 20.

     The Stoxx Europe 600 Index slipped 0.9 percent, extending its first weekly decline in four to 2.4 percent. The MSCI Emerging Markets Index advanced 1.5 percent to a one-month high.

     The Bloomberg Dollar Spot Index, which tracks the currency against 10 major peers, fell 1.5 percent, the steepest decline since Feb. 3. The dollar dropped 1.9 percent to $1.1363 per euro and lost 2.1 percent to 106.58 yen. The Canadian dollar surged.

     The MSCI Emerging Markets Currency Index jumped 1.1 percent, the biggest jump since March.

     The rand jumped 3.4 percent, reversing earlier losses and extending an advance to four days. South Africa’s credit rating was kept unchanged by S&P Global Ratings, giving the nation a reprieve from a junk assessment, even as it warned it could lower the ratings if the economy doesn’t recover.

     The two-year Treasury note yield fell to 0.77 percent, while 10-year yields dropped 10 basis points to 1.7 percent. The gap between yields on five- and 30-year debt, a measure of the yield curve, steepened by the most since March.

     “This was quite shocking — it’s way under expectations,” said Christopher Sullivan, who oversees $2.3 billion as chief investment officer at United Nations Federal Credit Union in New York. The Fed “will postpone a nearby rate hike for sure — maybe they’ll be forced to look beyond the summer.”

     The yield on Germany’s 10-year bund fell five basis points, or 0.05 percentage point, to 0.068 percent, the lowest ever.

     The Bloomberg Commodity Index rose 0.5 percent to a seven- month high. The gauge bottomed this year in January and is less than half a percentage point from a level that would mark a 20 percent advance, meeting the common definition of a bull market.

     Gold in the spot market climbed 2.8 percent to $1,244.29 an ounce. Bullion is coming off of its biggest monthly loss since November after signs of an improving U.S. economy spurred speculation that the Fed could tighten monetary policy as soon as this month.

     Crude futures fell on both sides of the Atlantic after closing above $50 a barrel in London for the first time in seven months. West Texas Intermediate oil slid to $48.62 a barrel. Brent crude slid 0.8 percent to trade at $49.64 a barrel after closing yesterday at $50.04.

     Zinc rose for a seventh day for its longest rising streak in almost two years amid continued speculation of a raw materials shortage, rising with copper and aluminum.

     Sugar rose to the highest in almost two years as heavy rainfall disrupted loadings at ports in Brazil, slowing down the harvest at a time of peak demand.

Have a wonderful weekend everyone.

 

Be magnificent!

Unity is an intellectual concept.

On an emotional level unity is serenity, equality and equilibrium.

Swami Prajnanpad

As ever,

 

Carolann

 

Good enough never is.

  -Debbie Fields, 1956-

 

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

Dear Friends,

Tangents:

On June 2, 1953, Queen Elizabeth II of Britain was crowned in Westminster Abbey, 16 months after the death of her father, King George VI.

James Lees-Milne, Diary, A Mingled Measure, describes the coronation of HM Queen Elizabeth II, 1953:

The weather was damnable.  It rained all day.  The moment the procession started it positively poured, and the troops were soaked.  Yet the procession was magnificent.  The colour and pageantry cannot be described.  Uniforms superb and resplendent.  The most popular figure Queen Salote of Tonga, a vast, brown, smiling bundle with a tall red knitting needle in her hat:  knitting needle having begun as a plume of feathers.  Despite the rain she refused to have the hood of her open carriage drawn, and the people were delighted.  They roared applause.  Extraordinary how the public will take someone in its bosom, especially someone not very exalted who is putting up a good show.  Al along the route they adored her.  Beside her squatted little man in black and a top hat – her husband.  Noël Coward, when asked who he was, said, “Her dinner.” –from The Book of Days.

Also on this day,

1692: Salem witch trials began

1740: Marquis de Sade was born.

PHOTOS OF THE DAY

The ‘Frecce Tricolori’ Italian Air Force acrobatic squad fly over the Vittoriano monument of the Unknown Soldier in Rome on Thursday during the Republic Day parade celebrating the anniversary of the birth of the Italian Republic in 1946. Gregorio Borgia/AP

A resident brings French baguettes to his mother’s flooded house after heavy rainfall in Chalette-sur-Loing Montargis, France, on Wednesday.Christian Hartmann/Reuters

A boy cycles past a wall of mobile phones displayed outside an electronics store in downtown Tokyo on Thursday. The store owner started the display ten years ago. It continues to draw attention from passers by. Shuji Kajiyama/AP

Market Closes for June 2^nd, 2016

Market Index	Close	Change
Dow Jones	17838.56	+48.89   +0.27%
S&P 500	2105.26	+5.93   +0.28%
NASDAQ	4971.363	+19.112   +0.39%
TSX	14136.99	+73.45
		+0.52%

International Markets

Market Index	Close	Change
NIKKEI	16562.55	-393.18
		-2.32%
HANG SENG	20859.22	+98.24
		+0.47%
SENSEX	26843.14	+129.21
		+0.48%
FTSE 100	6185.61	-6.32
		-0.10%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.249	1.307
CND. 30 Year Bond	1.895	1.950
U.S.    10 Year Bond	1.7989	1.8407
U.S. 30 Year Bond	2.5805	2.6210

Currencies

BOC Close	Today	Previous
Canadian $	0.76349	0.76498
US $	1.30978	1.30722
Euro Rate 1 Euro=		Inverse
Canadian $	1.46090	0.68451
US $	1.11538	0.89656

Commodities

Gold	Close	Previous
London Gold Fix	1212.40	1214.50
Oil	Close	Previous
WTI Crude Future	49.17	49.01

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, with the S&P/TSX Composite Index reaching the highest level since August, as oil prices rebounded after a decline in U.S. crude supply offset OPEC producers failing to agree on a new output ceiling.

     The S&P/TSX rose 0.5 percent, to 14,136.99 at 4 p.m. in Toronto after fluctuating in the morning. The index is up 8.7 percent this year, the second most after New Zealand among developed-market nations tracked by Bloomberg. Trading volume on Wednesday was 32 percent lower than the 30-day average.

     The rally has maintained Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.6 times earnings, about 11 percent higher than the 19.5 times valuation of the S&P 500.

     Global equities ended little changed amid the swings in crude prices and concerns about global growth. European Central Bank President Mario Draghi said the full effect of the central bank’s stimulus measures have yet to spur growth, a day after manufacturing data from Japan to the euro zone disappointed. U.S. jobless claims dropped a third week, pushing the Federal Reserve closer to a potential interest-rate increase.

     In Canada, energy producers rose 1 percent to rebound from earlier declines. Oil recovered to close above $49 a barrel in New York, as U.S. stockpiles dropped the third time in four weeks. Brent crude settled at the highest in seven months. A meeting of the Organisation of Petroleum Exporting Countries in Vienna failed to produce a supply accord, leaving production unfettered amid a global supply glut.

     Teck Resources Ltd. and Goldcorp Inc. increased more than 1.1 percent, pacing gains with raw-material producers.

     Concordia Healthcare Corp. tumbled 9.3 percent, the most in two months and the biggest drop in the S&P/TSX today. The stock had surged as much as 11 percent earlier after StreetInsider.com reported today Blackstone Group LP is near an agreement to buy the drugmaker. The shares then plunged, with shares briefly being halted, after the Wall Street Journal reported Blackstone and Carlyle Group were said to walk away from a deal. Health- care stocks were the only group to retreat out of 10 in the S&P/TSX.

     The rally in Canadian equities, fueled by a rebound in commodities prices and financials, sputtered earlier this week amid renewed concerns weak global growth will constrain demand for basic materials, while the prospect of higher U.S. interest rates has sent the dollar higher.

     Federal Reserve Chair Janet Yellen’s comments on May 27 pointed to a likely interest-rate increase in coming months that is dependent on economic improvement. Traders have now priced in a 55 percent chance for an increase in July, according to data compiled by Bloomberg.

US

By Dani Burger

     (Bloomberg) — U.S. stocks rose, with the S&P 500 reaching a seven-month high, amid signs of steady job gains that indicated the economy is strong enough for higher interest rates as early as this summer.

     Equities extended a climb in the final hour of trading as health-care shares rallied to erase losses for the year, while retailers beaten down in May rebounded. Johnson & Johnson paced gains after agreeing to buy closely held Vogue International for about $3.3 billion. Signet Jewelers Ltd. tumbled 6.6 percent after negative comments in a newsletter, and Oracle Corp. sank the most this year after allegations of improper accounting practices.

     The S&P 500 gained 0.3 percent to 2,105.26 at 4 p.m. in New York, the highest since Nov. 3, after erasing earlier losses of as much as 0.5 percent. The gauge closed above 2,100 for the first time since April 20. The Dow Jones Industrial Average added 48.89 points, or 0.3 percent, to 17,838.56. The Nasdaq Composite Index climbed 0.4 percent, extending an advance to seven days, the longest since February 2015. About 6.4 billion shares traded hands on U.S. exchanges, 11 percent below the three-month average.

     “The bears would like the market to go down, but sentiment is too negative already,” Andrew Brenner, head of international fixed income at National Alliance Capital Markets in New York, said by phone. “The bulls would like the market to go up, but there are too many things on the horizon, which is why we’re going sideways. You have a lot of major stuff coming up in the market with investor sentiment extremely negative, and it doesn’t seem to go down.”

     Investors have turned watchful amid a panoply of events, including meetings of the European Central Bank and Organization of Petroleum Exporting Countries in Vienna today, while the government’s monthly payrolls report is due tomorrow. June will also see the U.K. vote on whether to remain in the European Union and a possible interest-rate increase by the Federal Reserve. The benchmark index closed with a move of less than 0.5 percent for a fifth day, the longest stretch since November.

     Data today signaled sustained firming in the labor market, with filings for unemployment benefits declining for a third consecutive week. An earlier report showed companies added 173,000 workers to payrolls in May, in line with economists’ forecasts.

     A late-May flourish fed by optimism that the U.S. economy can shoulder higher rates helped the S&P 500 cap its longest stretch of monthly gains since 2014. The index has made little headway since then, hovering near levels that proved difficult to maintain in previous rallies, while investors await more indications on the vitality of U.S. growth. The benchmark has rebounded 15 percent from its 22-month low in February, closing today 1.2 percent away from a record hit last year.

     Friday’s payrolls release looms large, with the potential for a solid report to further solidify expectations for higher borrowing costs by July. Economists surveyed by Bloomberg forecast employers added 160,000 jobs in May, the same as in April, with the unemployment rate slipping to 4.9 percent.

     Data signaling a stronger American manufacturing on Wednesday was overshadowed by evidence of sluggish global growth. Traders are now pricing in a 53 percent chance the Fed will increase rates in July, while betting there’s a 22 percent probability the central bank will act this month, down from 34 percent last week.

     “There’s so much for which to wait and watch for,” said Daniel Weston, chief investment officer of Aimed Capital in Munich. His firm oversees $30 million. “I don’t think there will be any black swans coming this month, but people will be very wary and take a bit of a defensive view while they wait for things to unfold.”

     The CBOE Volatility Index fell 4 percent to 13.63, after a two-day climb. The measure of market turbulence known as the VIX dropped 9.6 percent in May, just its second monthly decline in the past seven.

     Health-care shares were the strongest performers Thursday among the S&P 500’s 10 main industries, surging 1.3 percent. The group erased 2016 losses of as much as 12 percent, and extended their longest rally in 15 months. Energy producers slipped the most, followed by technology stocks and utilities. A Goldman Sachs Group Inc. basket of the most shorted shares in the Russell 3000 Index climbed for the eighth time in nine days, rising 7.7 percent during the period.                          

     Aetna Inc. added 4.1 percent, the most in six months. The health insurer plans to sell bonds in as many as eight parts to finance the cash portion of its $37 billion purchase of Humana Inc., which rallied 5.6 percent. The Nasdaq Biotechnology Index increased 1.9 percent to the highest since April 22.

     Consumer discretionary companies advanced, lifted by a bevy of stocks that were hammered last month. L Brands Inc. jumped 4.3 percent after May sales exceeded estimates. The Victoria’s Secret parent tumbled 12 percent in May, the worst month since January 2014 amid concern spurred by weakening department-store sales. Macy’s climbed 4 percent, the most since January, after falling 16 percent last month.

     Exxon Mobil Corp. fell 0.8 percent to pace energy’s slide, even as crude rose to a seven-month high, shrugging off OPEC’s failure to agree on a new output ceiling. Diamond Offshore Drilling Inc. lost 4 percent, falling for the fourth time in five days. Refiner Tesoro Corp. rose 1.8 percent after data showed gasoline and distillate stockpiles dropped more than forecast.

     Oracle dropped 4 percent after a former senior finance manager claimed in a whistle-blower lawsuit she was instructed to add millions of dollars in accruals to cloud service financial reports. Oracle said it’s confident all its accounting is proper and correct. Apple Inc. decreased 0.8 percent after Goldman Sachs cut its price target on the iPhone maker’s shares, citing lower growth expectations for the smartphone industry. The stock fell for a fourth day, the longest losing streak in a month.

     Among shares moving on corporate news, Ciena Corp. rallied 13 percent, the best one-day gain in two years, as quarterly results exceeded estimates and the current period’s revenue outlook beat some analysts’ forecasts.

     Sarepta Therapeutics Inc. plunged 27 percent, after regulators increased patients’ access to experimental drugs such as its unapproved therapy for a deadly muscle disease, which investors took as a signal that the product may not be cleared.

     Conn’s Inc. tumbled 26 percent to the lowest since 2011 after the electronics and appliances retailer unexpectedly posted a quarterly loss and the company named a new chief financial officer.
 

Have a wonderful evening everyone.

 

Be magnificent!

I do not know of any religion apart from human activity.

It provides a moral basis to all other activities which they would otherwise lack,

Reducing life to a maze of “sound and fury signifying nothing.”

Mahatma Gandhi

 

As ever,
 

Carolann

 

In all things, one receives only in accordance with what one has given.

                                                      –Honoré de Balzac, 1799-1850

 

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

Dear Friends,

Tangents:

JUNE

Juno who gives this month its name, walks in golden sandals in the heavy early morning dew.  Life thrusts heavenward, the vegetation thicken, stands of trees become dense blocks of solid green.  Dragonflies sweep over lakes warm enough to swim in; by night, fireflies emulate the stars.  On perfect days, the light is so sweet and unthreatening that we lose ourselves in it without fear.  Trusting ourselves to its warmth, we know to lose ourselves will be to find ourselves.  We sense why some traditions speak of June as the “door of the year,” the gateway to the inner realms of nature.  From the heights, Cosmic Intelligence streams down, irradiating the clouds and surrounding the landscape in golden glory.  Nature is transfigured.  Matter is spiritualized; spirit materialized.  Saturn, Mars and Mercury come together, then drift apart, like cosmic dancers….and end up all in a row, visited by the waxing moon.  –CB

On this day in:

1938: Toronto-born cartoonist Joe Shuster created the Superman comic book.

1967:  Sgt. Pepper’s Lonely Hearts Club Band released.

1968: Helen Keller, who earned a  college degree despite being blind and deaf most of her life,, died in Westport, Connecticut.

1980: CNN debuted.

PHOTOS OF THE DAY

Diners sit at tables suspended from a crane at a height of 40 meters as part of the 10th anniversary of an event known as ‘Dinner in the Sky’ in Brussels, Belgium, on Wednesday. The tables hang in front of the Atomium, a 102-meter-high (335-foot) structure and its nine spheres, that was built for the 1958 Brussels World’s Fair. There are a total of ten tables, accommodating 220 guests, Yves Herman/Reuters

Jerry Wright stacks baskets of blue crabs from Crisfield, Md., at the Maine Avenue Fish Market in Washington on Wednesday. Blue crabs, which thrive in the nearby Chesapeake Bay, are a summertime seafood favorite in the mid-Atlantic region. J. Scott Applewhite/AP

Artists perform during opening day of the Gotthard rail tunnel at the southern portal in Pollegio, Switzerland, on Wednesday. Construction of the 57-kilometer-long tunnel began in 1999. Breakthrough was in 2010. Gabriele Putzu/Keystone/Ti-Press/AP

 

Queen Elizabeth II watches the unveiling of a bronze bust of herself during a visit to the Honourable Artillery Company in London on Wednesday. Chris Jackson/Reuters

Market Closes for June 1^st, 2016

Market Index	Close	Change
Dow Jones	17789.67	+2.47   +0.01%
S&P 500	2098.79	+1.83   +0.09%
NASDAQ	4952.250	+4.195   +0.08%
TSX	14061.45	-4.33
		-0.03%

International Markets

Market Index	Close	Change
NIKKEI	16955.73	-279.25
		-1.62%
HANG SENG	20760.98	-54.11
		-0.26%
SENSEX	26713.93	+45.97
		+0.17%
FTSE 100	6191.93	-38.86
		-0.62%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.307	1.317
CND. 30 Year Bond	1.950	1.958
U.S.    10 Year Bond	1.8407	1.8441
U.S. 30 Year Bond	2.6210	2.6433

Currencies

BOC Close	Today	Previous
Canadian $	0.76498	0.76345
US $	1.30722	1.30985
Euro Rate 1 Euro=		Inverse
Canadian $	1.46278	0.68363
US $	1.11882	0.89380

Commodities

Gold	Close	Previous
London Gold Fix	1214.50	1212.10
Oil	Close	Previous
WTI Crude Future	49.01	49.10

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little-changed, after erasing losses in the final hours of trading, as a selloff in energy producers was offset by a rebound in the nation’s largest lenders.

     The S&P/TSX Composite Index fell 2 points, less than 0.1 percent, to 14,063.69 at 4 p.m. in Toronto, after earlier declining as much as 0.8 percent. The index capped on Tuesday a fourth month of gains, the longest stretch since April 2014. The index has surged 19 percent since reaching a two-year low on Jan. 20 and is up 8.1 percent this year, the second most after New Zealand among developed-market nations tracked by Bloomberg. Trading volume on Wednesday was 20 percent lower than the 30-day average.

     The recent rally has maintained Canadian shares’ more expensive valuation relative to their U.S. peers. The S&P/TSX now trades at 21.4 times earnings, about 10 percent higher than the 19.4 times valuation of the S&P 500.

     Global equities ended little changed as U.S. stocks edged higher after manufacturing data from China, Japan and Europe renewed concern over growth worldwide. The Organisation for Economic Cooperation and Development warned the global economy is slipping into a “low-growth” trap with central banks’ monetary policy losing its effectiveness and governments failing to revive demand in the wake of the 2008 financial crisis. Meanwhile, U.S. manufacturing unexpectedly expanded at a faster pace in May.

     In Canada, National Bank of Canada lost 0.7 percent, clawing back some earlier losses, after second-quarter profit tumbled 48 percent after setting aside more money to cover bad energy loans. Bank of Nova Scotia fell on Monday as profit shrunk, while Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce posted better-than-expected results last week. The S&P/TSX Banks Index ended the day higher, halting a two-day slide.

     Suncor Energy Inc. and Crescent Point Energy Corp. retreated more than 2.1 percent to lead energy producers lower. Crude futures in New York closed near $49 a barrel, as Canadian oil-sands operations affected by the Alberta wildfires began to reopen. OPEC producers are set to meet in Vienna Thursday to discuss the reintroduction of output ceilings. 

     The rally in Canadian equities, fueled by a rebound in commodities prices and financials, is under pressure amid renewed concerns weak global growth will constrain demand for basic materials, while the prospect of higher U.S. interest rates has sent the dollar higher.

     Federal Reserve Chair Janet Yellen’s comments on May 27 pointed to a likely interest-rate increase in coming months that is dependent on economic improvement. Traders have now priced in a 53 percent chance for an increase in July, according to data compiled by Bloomberg.

US

By Dani Burger

     (Bloomberg) — U.S. stocks were little changed, as stronger American factory data contrasted evidence of sluggish global growth while investors braced for the possibility of higher interest rates by this summer.

     Equities rebounded from an early selloff after a report showed manufacturing expanded at a faster pace in May. Gains in health-care and consumer staples shares were offset by losses among phone, technology and consumer discretionary companies. The benchmark index held in an area where stocks have had difficulty adding to previous rallies, and failed to maintain a climb above 2,100 for a second straight day.

     The S&P 500 rose 0.1 percent to 2,099.33 at 4 p.m. in New York, after erasing a 0.6 percent drop. The Dow Jones Industrial Average added 2.47 points to 17,789.67. The Nasdaq Composite Index increased 0.1 percent, advancing for a sixth day, the longest rally since February 2015 with the technology-heavy gauge gaining 3.9 percent during the span. About 6.5 billion shares traded hands on U.S. exchanges, 10 percent below the three-month average.

     The manufacturing data “basically proves that we’re not in a contraction, but we’re continuing to move sideways in a very low growth environment,” James Abate, who helps oversee $1 billion as chief investment officer at Centre Funds in New York, said by phone. “Industrial production numbers have been negative for quite some period of time, and these numbers abate very near-term concerns about an outright recession.”

     A report today showed the Institute for Supply Management’s manufacturing index climbed more than economists forecast in May, helped by an increase in orders that signals U.S. factories are rebounding from an early 2016 slump. Manufacturers also are seeing a pickup in price pressures, with the index of prices paid jumping to the highest level since June 2011.

     For more on the ISM manufacturing data, click here.

     Readings on manufacturing in China and the euro area showed tepid expansion, reminding investors of the risk that overseas weakness could spread to the U.S. economy. Meanwhile, the Organisation for Economic Cooperation and Development cut its forecasts for growth this year in the U.S. and Japan, while warning the global economy is slipping into a self-fulfilling “low-growth trap” where ultra-loose monetary policy risks doing more harm than good.

     The S&P 500 climbed 1.5 percent in May as speculation grew the world’s biggest economy can withstand a Federal Reserve rate increase this summer, and as Apple Inc. lifted technology shares. The climb rejuvenated a rally that had lost momentum after surging 15 percent from a 22-month low in February. The index closed today within 0.2 percent of a four-month high reached in April and is 1.5 percent from a record set a year ago.

     Following the ISM manufacturing gauge, investors look forward to payrolls data due Friday for further clues on prospects for borrowing costs. Fed Chair Janet Yellen said last week an improving economy would probably warrant another rate increase in the coming months, while her colleagues have indicated willingness to act.

     In its Beige Book assessment of regional economic conditions today, the bank said the economy expanded at a modest pace across most of the country since mid-April, causing the labor market to tighten as employers continued adding jobs and nudging wages higher. Its next rate decision is set for June 15.

     Traders have reined in expectations for higher borrowing costs so far this week. They now price in a 52 percent chance of a rate increase by July. The probability of a June boost is 20 percent, down from 34 percent a week ago.

     “Throughout the day, people are starting to think about some of the details behind the manufacturing numbers and looking forward to what’s coming in the next few days with ADP and unemployment,” said Bryce Doty, senior portfolio manager at Sit Investment Associates which oversees $14 billion. “The market is struggling with how to absorb that.”

     In Wednesday’s trading, seven of the S&P 500’s 10 main industries advanced, led by gains in consumer staples shares, health-care and utilities. Phone, technology and consumer discretionary companies were the biggest drags on the index. A Goldman Sachs Group Inc. basket of most shorted shares rose for the seventh time in eight days, climbing 6.7 percent during that period while the S&P 500 added 2.9 percent.

     The CBOE Volatility Index increased 0.1 percent to 14.20. The measure of market turbulence known as the VIX fell 9.6 percent in May.

     General Motors Co. dropped 3.4 percent, the most since Jan.7, and Ford Motor Co. lost 2.8 percent to weigh most on the consumer discretionary group. U.S. auto sales were softer than forecast in May, showing consumer demand for cars is leveling off faster than industry executives predicted. Parts maker BorgWarner Inc. sank 1.4 percent.

     AT&T Inc. declined 1.1 percent, its worst in two weeks, to snap a five-day rally. Verizon Communications Inc. slid 0.9 percent, also halting five days of gains, its longest winning streak in more than two months.

     Energy producers shook off declines, advancing 0.2 percent after crude erased losses as OPEC ministers arrive in Vienna for talks on production. Apache Corp. and Hess Corp. fell more than 1.6 percent, with those declines offset by gains of at least 1.9 percent in Valero Energy Corp. and Marathon Petroleum Corp.

     Health-care shares extended a rally to a sixth session, the longest since last July, led by gains in biotechnology companies. Endo International Plc and Mylan NV added more than 2.5 percent. Allergan Plc increased 2.8 percent, a day after Carl Icahn said he’s taken a “large position” in the company. Allergan also said regulators approved one of its products for use in lip augmentation and facial wrinkles.

     The consumer staples group advanced to a two-week high, led today by a 4.9 percent jump in Whole Foods Market Inc. Credit Suisse Group AG upgraded the supermarket chain to the equivalent of buy from hold, saying the current share price is attractive. Costco Wholesale Corp. rose 2.5 percent after Goldman Sachs Group Inc. raised its rating on the shares to buy from neutral. The stock reached an eight-month low two weeks ago.

     Among shares moving on corporate news, Under Armour Inc. fell 3.9 percent to a four-month low after cutting its outlook, citing the demise of one of its largest customers, the Sports Authority Inc.

     Equity Residential tumbled 4.1 percent to the lowest since October 2014. The apartment owner said new leases in New York and San Francisco are falling short of revenue expectations.

     Michael Kors Holdings Ltd. rallied 6.6 percent, the most in nearly four months, as its forecast exceeded analysts’ estimates, helped by a new lineup of handbags and the prospect of a deeper push into Asia.

 

Have a wonderful evening everyone.

 

Be magnificent!

Do you live and work in the world?

Always act according to the highest moral standards, both in private and in public.

Always be honest in word and deed, both in private and in public.

Master your emotions and control your senses, both in private and in public.

Be calm and patient, both in private and in public.

Take every opportunity to serve others, both in private and in public.

Be kind and gentle to your children, both in private and in public.

Taittiriya Upanishad

 

As ever,
 

Carolann

 

The family is one of nature’s masterpieces.

              -George Santayana, 1863-1952

 

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

Dear Friends,

Tangents:

Poem

Wordsworth wrote that the poem is a place where emotions can be recollected in tranquility and reproduced for the reader to experience.  A different function could be to provide a more intellectual space where what troubles us can be dispassionately thought through – first by the poet, then by the reader.  As in great philosophical poems, here there is no false consolation.

Elegy Elegy
   By Brian Henry

The dead keep coming back to us
whether we will their return or not:

in our sleep, when we slip to resist,
in books, and in song, when the voice

shuffles forward to call “I’m still alive/
I win the prize/I’m still alive,”

even though he’s not, even though
he knew that his song some day would prove

false, a sometime untrue statement
that no one, not even a ghost,

can retract.  Instead, those of us left
are left to notice, and miss, and hurt.

How thin is the human voice,
it cannot keep even the dead

distant, on the other side of any
thing we would call any thing.

PHOTOS OF THE DAY

People row on Lake Ontario in front of the city skyline at sunrise on a foggy morning in Toronto on Friday. Mark Blinch/The Canadian Press/AP

A falcon feeds its chicks in its nest inside a house window in the Palestinian West Bank city of Nablus on Friday. Abed Omar Qusini/Reuters

Market Closes for May 30^th, 2016

Market Index	Close	Change
Dow Jones	17873.22	Closed
S&P 500	2099.06	Closed
NASDAQ	4933.504	Closed
TSX	14086.67	-18.56
		-0.13%

International Markets

Market Index	Close	Change
NIKKEI	17068.02	+233.18
		+1.39%
HANG SENG	20629.39	+52.62
		+0.26%
SENSEX	26725.60	+72.00
		+0.27%
FTSE 100	6270.79	+5.14
		+0.08%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.352	1.351
CND. 30 Year Bond	1.981	1.985
U.S.    10 Year Bond	1.8510	1.8510
U.S. 30 Year Bond	2.6464	2.6464

Currencies

BOC Close	Today	Previous
Canadian $	0.76629	0.76753
US $	1.30499	1.30288
Euro Rate 1 Euro=		Inverse
Canadian $	1.45367	0.68791
US $	1.11393	0.89772

Commodities

Gold	Close	Previous
London Gold Fix	1216.25	1216.25
Oil	Close	Previous
WTI Crude Future	49.33	49.33

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, retreating from the highest level since August, as commodities producers declined with gold in a light trading day with U.S. and U.K. markets closed for a holiday.

     The S&P/TSX Composite Index fell 0.1 percent to 14,086.67 at 4 p.m. in Toronto, after rallying the most in five weeks last week with a 1.3 percent gain. The index has surged 19 percent since reaching a two-year low on Jan. 20 and is up more than 8 percent this year, the second most after New Zealand among developed-market nations tracked by Bloomberg. Trading volume was 70 percent lower than the 30-day average.

     The recent rally has made Canadian shares expensive relative to their U.S. peers. The S&P/TSX now trades at 21.4 times earnings, about 10 percent higher than the 19.4 times valuation of the S&P 500.

     Global stocks were little changed after a four-day rally. The Bloomberg Dollar Spot Index rose, trading at its highest level since March, after Federal Reserve Chair Janet Yellen’s comments May 27 pointed to a likely interest-rate increase in coming months. Traders have now priced in a 34 percent chance of an interest rate increase in June, and better-than-even odds for July, according to data compiled by Bloomberg.

     In Canada, Bank of Nova Scotia slipped 0.1 percent as a gauge of the nation’s largest lenders ended the day little changed after a five-day rally, trading near the highest level since December 2014. Scotiabank, Canada’s third-largest lender, is set to report second-quarter earnings Tuesday. Royal Bank of Canada, Toronto-Dominion Bank and Canadian Imperial Bank of Commerce posted better-than-expected results last week.

     Barrick Gold Corp. and Tahoe Resources Inc. lost more than 0.6 percent as raw-materials producers slipped 0.4 percent as a group. Suncor Energy Inc. rose 0.3 percent after the oil-sands producer restarted operations near Fort McMurray. Operators in the area took offline more than 1 million barrels a day of output as wildfires devastated the region. Enbridge Inc. declined 1.2 percent. Raw-materials and energy producers led declines among four of 10 industries in the S&P/TSX.

     Delphi Energy Corp. plunged 19 percent, the most in more than seven years, after lenders cut the oil and gas producer’s credit facility for the second time since December amid the rout in crude prices.

     Commodities producers, which make up about a third of the S&P/TSX by market capitalization, have fueled the rally in Canadian stocks this year. Resource prices are coming under pressure as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher and commodity prices lower.

     Intertain Group Ltd. climbed 5.1 percent for a second day of gains, trading at the highest level this year, after the online gaming company delayed its annual meeting by as long as three months, to no later than Sept. 23. The postponement gives the company’s special committee more time to complete a strategic review. Intertain will provide an update by the end of June.

US

Closed for Memorial Day
 

Have a wonderful evening everyone.

 

Be magnificent!

It is man’s social nature which distinguishes him from the brute creation.

If it is his privilege  to be independent, it is equally his duty to be inter-dependant.

Only an arrogant man will claim to be independent of everybody else and be self-contained.

Mahatma Gandhi

As ever,
 

Carolann

 

i thank you God for this most amazing day,

for the leaping greenly spirits of trees,

and for the blue dream of sky and for everything

which is natural , which is infinite, which is yes.

                           -e.e. cummings, 1894-1962

 

 

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

Dear Friends,

Tangents: Memorial Day on Monday, so US markets are closed.

May 27, 1937 : Golden Gate Bridge opens in San Francisco.

Rachel Carson’s birthday, born May 27, 1907.

Rachel Carson is celebrated the world over as the catalyst of the ecology movement and savior of countless endangered species.  She began her career writing pamphlets for the United States Fish and Wildlife Service.  Educated as a marine biologist, Carson wrote her first book, Under the Sea Wind, from the viewpoint of the main character, the sea.  She addressed the sea again in The Sea Around Us, which spent 81 weeks on the New York Times bestseller list and earned her the National Book Award in 1951 for best nonfiction book.

Her most famous work, Silent Spring, appeared in The New Yorker in three installments beginning June 1962.  It presented the scientific evidence that everything is connected to everything else, and documented the demise of songbirds due to DDT poisoning.  After reading it, President John F. Kennedy appointed a council to examine the use of pesticides.  The chemical industry, unable to discredit her scientific work, attacked Carson personally as a hysterical middle-aged kook, a faddist, and a threat to Americans who needed pesticides to have a quality life.  Though weakened from cancer, she defended her ideas.  The president’s advisory report, issued finally on May 15, 1963, agreed with Carson.  She died the following spring, April 14, 1964.  Time magazine named her among the most 100 influential people of the 20^th century.

Those who dwell, as scientists or laymen,
among the beauties and mysteries of the
earth are never alone or weary of life. –Rachel Carson

PHOTOS OF THE DAY

This cave drawing was discovered by Spanish archaeologists. They say they have discovered an exceptional set of Paleolithic-era cave drawings that could rank among the best in a country that already boasts some of the world’s most important cave art. Chief site archaeologist Diego Garate said Friday that an estimated 70 drawings were found on ledges 300 meters (1,000 feet) underground in the Atxurra cave, Berriatua, in the northern Basque region. Diputacion Floral de Bizkaia/AP

People visit the Vietnam Memorial in Washington on Friday at the start of the Memorial Day weekend. Susan Walsh/AP

Market Closes for May 27^th, 2016

Market Index	Close	Change
Dow Jones	17873.22	+44.93   +0.25%
S&P 500	2099.06	+8.96   +0.43%
NASDAQ	4933.504	+31.738   +0.65%
TSX	14105.23	+56.03
		+0.40%

International Markets

Market Index	Close	Change
NIKKEI	16834.84	+62.38
		+0.37%
HANG SENG	20576.77	+179.66
		+0.88%
SENSEX	26653.60	+286.92
		+1.09%
FTSE 100	6270.79	+5.14
		+0.08%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.351	1.332
CND. 30 Year Bond	1.985	1.983
U.S.    10 Year Bond	1.8510	1.8282
U.S. 30 Year Bond	2.6464	2.6402

Currencies

BOC Close	Today	Previous
Canadian $	0.76753	0.77107
US $	1.30288	1.29689
Euro Rate 1 Euro=		Inverse
Canadian $	1.44777	0.69072
US $	1.11120	0.89992

Commodities

Gold	Close	Previous
London Gold Fix	1216.25	1223.85
Oil	Close	Previous
WTI Crude Future	49.33	49.48

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks capped a third straight weekly advance, rising to the highest level since August, as the nation’s largest lenders extended a rally to a fifth day amid quarterly results and the prospect for higher interest rates in the U.S.

     The S&P/TSX Composite Index rose 0.4 percent to 14,105.23 at 4 p.m. in Toronto, posting a 1.3 percent weekly gain that’s the best in five weeks. The index has surged 19 percent since reaching a two-year low on Jan. 20 and is up more than 8 percent this year, the second most after New Zealand among developed- market nations tracked by Bloomberg.

     The surge has made Canadian shares expensive relative to their U.S. peers. The S&P/TSX now trades at 21.4 times earnings, about 10 percent higher than the 19.4 times valuation of the S&P 500.

     Global stocks rose a fourth day, for the highest close in three weeks. The continued recovery of the U.S. economy would warrant another interest rate increase “in the coming months,” Federal Reserve Chair Janet Yellen said at an event in Massachusetts today. Traders have now priced in a 34 percent chance of an interest rate increase in June, and better-than- even odds for July, according to data compiled by Bloomberg. U.S. markets will be closed on Monday for a holiday.

     In Canada, Royal Bank of Canada and Toronto-Dominion Bank rose at least 0.6 percent as financial services stocks rose with eight of 10 industries in the Canadian equity benchmark. A gauge of the nation’s largest lenders is on a five-day rally, the longest in six weeks, trading at its highest level in more than a year. Toronto-Dominion, Royal Bank of Canada and Canadian Imperial Bank of Commerce reported second-quarter results ahead of expectations Thursday, while Bank of Nova Scotia is scheduled to post its earnings on May 31.

     Valeant Pharmaceuticals International Inc. added 6.3 percent as health-care stocks jumped the most in the S&P/TSX. The drugmaker rejected a takeover bid from Takeda Pharmaceutical Co. and investment firm TPG about six weeks ago, according to a report. The approach was rejected and no talks are currently ongoing, according to people familiar with the situation.

     Cenovus Energy Inc. rose 1.4 percent as energy producers ended the day higher, erasing an earlier loss. Oil trimmed its third weekly advance as futures pared losses to 0.3 percent in New York. Cenovus is considering using some of its C$3.9 billion in cash to buy back debt and expand, according to CEO Brian Ferguson in an interview with David Scanlan on Bloomberg TV Canada.

     Commodities producers, which make up about a third of the S&P/TSX by market capitalization, have fueled the rally in Canadian stocks this year. Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher.

US

By Anna-Louise Jackson and Oliver Renick

     (Bloomberg) — U.S. stocks climbed in light, pre-holiday trading, with the S&P 500 posting the biggest weekly gain since March, amid growing confidence that the economy is strengthening enough to handle higher borrowing costs as early as this summer.

     Equities resumed an advance after barely budging Thursday, lifted by gains in banks and technology companies, which marked their best week since February. Federal Reserve Chair Janet Yellen said in remarks at Harvard University an improving economy would probably warrant another rate increase “in the coming months,” sending the dollar higher and damping commodity producers.

     The S&P 500 rose 0.4 percent to 2,099.06 at 4 p.m. in New York, the highest since April 20. The Dow Jones Industrial Average added 44.93 points, or 0.3 percent, to 17,873.22, while the Nasdaq Composite Index increased 0.7 percent to a five-week high. About 5.6 billion shares traded on U.S. exchanges, the second-lowest this year and 23 percent below the three-month average. U.S. markets will be closed Monday in observance of Memorial Day.

     “Yellen had sent out her crew to telegraph this before today,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “It’s confirmation more than anything — we had all heard from various speakers for a week now that the tone of the FOMC members was not particularly dovish. Yellen comes out today and the writing was on the wall and she etched it in with a pen.”

     A series of speeches by Fed officials and the release of the minutes to their April policy meeting have heightened investor expectations for another tightening move either next month or in July.

     The S&P 500 gained 2.3 percent this week, with stronger- than-forecast housing data helping to boost optimism on the economy. Traders are pricing in a 34 percent chance the Fed will increase rates in June, up from 30 percent before Yellen’s remarks today, and 4 percent early last week. July shows a 58 percent probability of higher borrowing costs, up from 51 percent earlier Friday.

     Leading gains today, Ulta Salon Cosmetics & Fragrance Inc. jumped 9.1 percent to a record after quarterly results beat estimates and the company raised its outlook. Alphabet Inc. rose 1.5 percent to a five-week high after Google won a jury verdict that kills Oracle Corp.’s claim to a $9 billion slice of the search giant’s Android phone business. Verizon Communications Inc. rose on a deal to end a 44-day strike by landline workers.

     After slipping as much as 3 percent from a four-month high on April 20, the S&P 500 is back within 0.2 percent of that level, boosted by gains this week in technology shares, with Apple Inc. climbing 5.4 percent and Microsoft Corp. adding 3.4 percent. That’s rejuvenated a rally that pushed the benchmark up as much as 15 percent from a February low before stalling last month amid mixed corporate earnings — including disappointing results from those two tech giants — and lukewarm signs of an economic pickup.                         

     A report today showed the economy expanded at a slightly faster pace in the first quarter than previously estimated, though the figures do little to alter views of the third consecutive sluggish start to the year. A separate gauge showed consumer confidence climbed less than forecast in May as Americans were a little less ebullient about the economy’s prospects in the run up to the presidential election.

     “It feels like deja vu to me,” Katie Nixon, chief investment officer of wealth management at Northern Trust Corp., said in an interview with Bloomberg TV. “Last year, we had a weak first quarter followed by a great second quarter, and then we saw weakness into the summer, and there’s no reason to expect anything necessarily different this year.”

     With the reporting season almost at an end, analysts estimate first-quarter earnings declined 7.1 percent, compared with calls for a 10 percent drop as recently as April. They forecast second-quarter income will slide 4.9 percent, while growth is expected to return in the third quarter with a 3 percent increase.

     In Friday’s trading, all of the S&P 500’s 10 main industries rose, with financial shares rising 0.7 percent while technology and health-care companies increased more than 0.5 percent. All 10 groups marked weekly gains for the first time since March. The CBOE Volatility Index fell 2.3 percent to 13.12, an eight-week low. The measure of market turbulence known as the VIX also posted the first weekly decline in three.

     “It’s a long weekend so there’s not a lot of trading, plus the end of the month is coming up here quick,” Jim Davis, regional investment manager for The Private Client Group of U.S. Bank, said by phone. “The employment number next week is the next big step in the path.”

     Ulta Salon Cosmetics best gain in two months boosted consumer discretionary companies in the benchmark, which rose to a two-week high. Viacom Inc. climbed 4 percent, extending its longest rally since November, as controlling shareholder Sumner Redstone may be laying the groundwork to replace the company’s board and Chief Executive Officer Philippe Dauman. Royal Caribbean Cruises Ltd. and Carnival Corp. added at least 2.1 percent, recovering after a two-day selloff in the cruise-line operators.

     Energy producers were little changed as oil prices retreated for a second day after briefly rising above $50 a barrel on Thursday. The commodity trimmed its third weekly advance as Canadian energy producers moved to resume operations after wildfires eased. Chesapeake Energy Corp. and Marathon Oil Corp. lost more than 1.6 percent.

     Among shares moving on corporate news, FEI Co. jumped 14 percent, the steepest since 2011 after agreeing to be bought by Thermo Fisher Scientific Inc. for about $4.2 billion. FEI produces electron microscopes which are used to analyze proteins.

     GameStop Corp. sank 3.9 percent, after losing as much as 7.8 percent. The video-game retailer’s forecast for the current quarter fell short of analysts’ projections, a period that’s typically the slowest for new video-game releases, according to the company.

 

Have a wonderful weekend everyone.

 

Be magnificent!

Until a radical change takes place and we wipe out all nationalities,

all ideologies, all religious division, and establish a global relationship – psychologically and

inwardly first, then organized in the outside world – we shall go on with war.

Krishnamurti

As ever,

 

Carolann

 

There is nothing like music to relieve the soul and uplift it.

                                                    -Mickey Hart, 1943

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

Dear Friends,

Tangents:

JAZZ MAGIC

What does New York sound like?  The Bill Charlap Trio answers that question with brio on their swinging, sophisticated new album, Notes From New York.  Pianist Charlap and his talented, longtime cohorts bassist Peter Washington and drummer Kenny Washington work their jazz magic on some undiscovered Broadway show gems and familiar standards and the result is Manhattan nightclub style jazz at its zenith. –CSM Weekly, May 16, 2016

May 26, 1932:  Parliament passed an Act establishing the publicly funded Canadian Radio Broadcasting Commission, the forerunner of the Canadian Broadcasting Corp. of 1936. Before the CRBC most of the programs available to Canadians were from the United States. Good to see that things have really changed. Who can even name an American television program? –from AdvisorAnalyst, 5/26/2016.

PHOTOS OF THE DAY

Orthodox Jews of the Satmar Hasidim dance near a bonfire as they celebrate the Jewish holiday of Lag Ba’Omer which marks the anniversary of the death of Talmudic sage Rabbi Shimon Bar Yochai approximately 1,900 years ago, in the village of Kiryas Joel, New York, on Wednesday. Mike Segar/Reuters

Filmmaker Steven Spielberg smiles as he introduced, while a band plays music from some of his films, before receiving an honorary doctor of arts degree, as Mary Bonauto, a civil rights advocate and honorary doctor of laws recipient laughs during Harvard University commencement exercises on Thursday in Cambridge, Mass. Steven Senne/AP

Market Closes for May 26^th, 2016

Market Index	Close	Change
Dow Jones	17828.29	-23.22   -0.13%
S&P 500	2090.88	+0.34   +0.02%
NASDAQ	4901.766	+6.875   +0.14%
TSX	14069.81	+16.07
		+0.11%

International Markets

Market Index	Close	Change
NIKKEI	16772.46	+15.11
		+0.09%
HANG SENG	20397.11	+29.06
		+0.14%
SENSEX	26366.68	+485.51
		+1.88%
FTSE 100	6265.65	+2.80
		+0.04%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.332	1.386
CND. 30 Year Bond	1.983	2.012
U.S.    10 Year Bond	1.8282	1.8664
U.S. 30 Year Bond	2.6402	2.6634

Currencies

BOC Close	Today	Previous
Canadian $	0.77107	0.76809
US $	1.29689	1.30193
Euro Rate 1 Euro=		Inverse
Canadian $	1.45148	0.68895
US $	1.11910	0.89358

Commodities

Gold	Close	Previous
London Gold Fix	1223.85	1220.60
Oil	Close	Previous
WTI Crude Future	49.48	49.16

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little changed, after a three-day rally that sent shares to the highest level since August, as energy and gold producers slipped while investors weighed earnings from the nation’s largest lenders.

     The S&P/TSX Composite Index lost less than 0.1 percent to 14,049.20 at 4 p.m. in Toronto, after closing above 14,000 points Wednesday for the first time since August. The index has climbed 8 percent this year, the second most after New Zealand among developed-market nations tracked by Bloomberg. The S&P/TSX now trades at 21.4 times earnings, about 10 percent higher than the 19.3 times valuation of the S&P 500.

     U.S. stocks also ended little-changed as mixed data did little to provide clarity on whether the Federal Reserve will raise interest rates as soon as June. Orders for business equipment unexpectedly declined in April while separate data showed jobless claims fell for a second week.

     Canada’s Enbridge Inc. and Peyto Exploration & Development Corp. contributed the most to declines by energy companies. Brent slid, settling at $49.59 a barrel after climbing above $50 in New York for the first time in more than six months as data showed U.S. inventories shrank more than expected.

     Royal Bank of Canada added 1 percent and Toronto-Dominion Bank rose 0.1 percent after the nation’s two largest lenders posted rising profit ahead of analysts’ expectations. Canadian Imperial Bank of Commerce slipped 1 percent, despite raising its dividend on higher profit. Wealth-management earnings at the lender fell 12 percent after CIBC said in December it was selling its stake in American Century Investments.

     A gauge of the nation’s largest lenders is trading near its highest levels in more than a year. Bank of Montreal on Wednesday posted second-quarter profit short of analysts’ estimates, while Bank of Nova Scotia is scheduled to post its earnings on May 31.

     Gold producers lost 0.4 percent. The recent retreat has dented a yearlong rally in raw-materials producers, which have been the best performer in the index with a 34 percent rally.

     Commodities producers make up about a third of the S&P/TSX by market capitalization. Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher. Traders have priced in a 28 percent chance of a June increase, according to data compiled by Bloomberg.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks closed little changed, with the S&P 500 holding near a four-week high, as mixed data offered little clarity on whether the economy is strengthening enough to bear higher interest rates as early as next month.

     Equities struggled to drive higher in light trading as investors stepped back to survey a two-day advance that added nearly 360 points to the Dow Jones Industrial Average and lifted the S&P 500 more than 2 percent in the gauge’s first back-to- back gains in two weeks. Banks and commodity producers were among the biggest losers Thursday after helping to lead this week’s climb.

     The S&P 500 fell less than 0.1 percent to 2,090.10 at 4 p.m. in New York, after trading in the narrowest range in six weeks. The Dow lost 23.22 points, or 0.1 percent, to 17,828.29. The gauge is celebrating its 120th anniversary, with only one of its original 12 constituents — General Electric Co. — still in the index. The Nasdaq Composite Index added 0.1 percent. About 5.8 billion shares traded hands on U.S. exchanges, the second- lowest this year and 21 percent below the three-month average.

     “The market is ahead of itself with this move over the last couple of days in light of the data,” said Phil Orlando, who helps oversee $360 billion as chief equity-market strategist at Federated Investors Inc. in New York. “First quarter earnings were terrible and you’ve got the prospect of a bad Brexit vote a week after the Fed — there’s a whole bunch of stuff that’s right in front of us that could go either way.”

     Reports today showed contracts to purchase previously owned homes climbed last month by the most since October 2010, while orders for business equipment unexpectedly declined in April for a third straight month, indicating American manufacturers continue to pull back. Separate data showed jobless claims fell for a second week.

     Stocks have gained this week as improving economic readings boosted confidence that the nation can withstand higher borrowing costs, while speculation increased that a Federal Reserve rate increase could come as soon as June. Releases on consumer sentiment and gross domestic product are due Friday, along with a speech by Fed Chair Janet Yellen.

     For more on the lead-up to Yellen’s appearance tomorrow, click here.

     Traders now price in a 28 percent chance of a June rate increase, from 4 percent early last week, though down from 34 percent yesterday. Odds for a July move edged down to 51 percent from about 54 percent a day earlier.

     Fed Governor Jerome Powell in remarks today added his voice to calls from other colleagues for a rate boost, as long as the economy continues to improve. Fed Bank of St. Louis President James Bullard earlier said risks associated with disappointing Chinese data aren’t going away, and shouldn’t keep the Fed from pursuing the best monetary policy for the U.S.

     U.S. equities broke out of a torpor this week after seven days of weaving between gains and losses, while the S&P 500 has traded in a roughly 50-point range in May. The stall came following a 15 percent surge from a 22-month low in February through April 20, amid lackluster earnings and economic data. The gauge closed Thursday within 2 percent of the record set a year ago, though it’s near a level where several rallies since then have faded.

     “There are a lot of cross-currents right now,” Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York, said by phone. “Here we are with earnings season winding down, oil keeps progressing higher and we’re bumping up to previous highs in stocks, but we can’t get through that level from late April. There’s a tug-of-war happening and people are waiting for jobs and the Fed.”

     A mixed earnings season is coming to an end, with analysts moderating their predictions for a decline in first-quarter profits to 7.2 percent, from 10 percent as recently as April. They forecast second-quarter income will slide 5.1 percent, worse than the 3.9 percent drop estimated a month ago. Earnings growth is expected to return in the third quarter with a 2.2 percent increase.

     “The reason why the S&P has not gone anywhere since the middle of 2014 is because the next 12 months’ earnings figure has been stuck at $125,” said Anastasia Amoroso, global market strategist for JPMorgan Asset Management, on Bloomberg TV. “If earnings consensus materializes for 2017, it’s $135. That’s what moves us higher. But even then, you’re still looking at a 5 percent upside plus maybe 2 percent dividend. And that’s on a very positive scenario.”

     For more of Amoroso’s commentary on markets, click here.

     In Thursday’s trading, roles reversed among the S&P 500’s 10 main industries with financial companies and raw-material producers lagging. Utilities, phone companies and consumer staples moved to the top after previously bringing up the rear this week. The CBOE Volatility Index fell 3.4 percent to 13.43, a five-week low. The measure of market turbulence known as the VIX is on the way to its first weekly decline in three.

     Raw-materials shares fell the most in a week, halting their longest winning streak since November. Chemical makers lost momentum after data showed orders for capital goods remained weak. Dow Chemical Co., Eastman Chemical Co. and LyondellBasell Industries NV declined at least 1.1 percent. Copper miner Freeport-McMoRan Inc. slid 2.7 percent. West Texas Intermediate crude futures erased gains, closing little changed at $49.48 after climbing as high as $50.21.

     Banks went from the strongest performers Wednesday to one of the worst today as U.S. Treasury yields saw their biggest slide in nearly two weeks, denting optimism that higher rates will buoy lenders’ profits. Citigroup Inc. and Bank of America Corp. sank more than 1.4 percent. In the broader financial segment, CBRE Group Inc. fell 2 percent, and Charles Schwab Corp. decreased 1.6 percent after rising 4.6 percent in the prior two days.

     Consumer discretionary shares rose as Dollar Tree Inc.surged 13 percent and Dollar General Corp. jumped 4.6 percent, with both reaching records after their earnings topped estimates. Dollar Tree capped the biggest one-day gain in more than 13 years. PVH Corp. added 4.3 percent, the most since March, as profits at the maker of Calvin Klein and Tommy Hilfiger apparel beat forecasts and it raised the full-year outlook.

     Consumer staples companies gained for a fourth consecutive day. Costco Wholesale Corp. led with a 3.6 percent advance, its strongest climb in nine months after its earnings also exceeded analysts’ predictions. Whole Foods Market Inc. and Kroger Co. increased more than 1.4 percent.

     Technology shares advanced for a third day, erasing earlier losses on the way toward the strongest week since February. HP Inc. rallied 6.9 percent after posting better-than-expected quarterly profits. Facebook Inc. added 1.3 percent, while Yahoo! Inc. rebounded 3.3 percent to pare a 5.2 percent drop Wednesday. Apple Inc. gained for a fifth day after the Financial Times reported a top executive last year raised the prospect of buying Time Warner Inc., the owner of HBO, CNN and Warner Brothers.

     Among other companies moving on corporate news, Signet Jewelers Ltd. dropped nearly 11 percent, the worst since 2011, after quarterly sales comparisons missed estimates and the retailer cut its sales outlook. Abercrombie & Fitch Co. tumbled 16 percent, the most in 18 months, after its sales also trailed predictions.

     Sears Holdings Corp. rose 6.6 percent as it considers options for its Kenmore, Craftsman and DieHard brands, as well as its Sears Home Services repair business, signaling that the retailer may sell more assets to stem widening losses.

 

Have a wonderful evening everyone.

 

Be magnificent! 
 

I am asking whether it is possible for a human being living psychologically in any society to clear  violence from himself inwardly.

If it is, the very process will produce a different way of living in this world.

Krishnamurti

As ever,

 

Carolann

 

Exercise should be regarded as tribute to the heart.

                                 -Gene Tunney, 1898-1978

 

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

Dear Friends,

Tangents:

In the Financial Times this past weekend, David Tang offers advice to London’s new mayor, in answer to a question posed by one of his readers; I think there are very good suggestions – see what you think:

Now that Sadiq Khan has become Mayor of London, what advice would you give him?

I would ask him to stand in Piccadilly Circus and explain why half the buses going past are empty. Maybe he should visit Hong Kong where the privately owned buses operating there are always jam-packed with people, making the companies a lot of money. While the new mayor is there, he might also study Hong Kong’s public housing, which accommodates about half the population. As Hong Kong has much less land but almost as many people (7m), perhaps the mayor could learn a trick or two about how to provide affordable housing to so many. Finally, he might also visit Happy Valley, where there is an extraordinary state of the art racecourse that operates at night. This provides great excitement in the community and also brings together the rich and the poor. Whenever there is a night meeting, batteries of lights electrify the atmosphere, while owners, trainers, jockeys, bookies, stable lads and lasses all mingle with anticipation. Such a racecourse built in east London, perhaps near Canary Wharf, the O2 Arena or Stratford, would immediately rejuvenate these areas, which are dead at night. Besides, the British really understand horseracing and it would make London unique in Europe in having night racing at a world-class level.

May 25^th, 1915 – Second Battle of Ypres ends with 105,000 casualties, including hundreds of Canadians, many killed by gas attacks.

PHOTOS OF THE DAY

Plants grow out of jeans hanging on railings of a house in west London, Britain on Wednesday. Toby Melville/Reuters

Blossoming marguerites stand on a meadow in Frankfurt, Germany on Wednesday. Michael Probst/AP

Market Closes for May 25^th, 2016

Market Index	Close	Change
Dow Jones	17851.51	+145.46   +0.82%
S&P 500	2090.54	+14.48   +0.70%
NASDAQ	4894.891	+33.835   +0.70%
TSX	14053.74	+100.89
		+0.72%

International Markets

Market Index	Close	Change
NIKKEI	16757.35	+258.59
		+1.57%
HANG SENG	20368.05	+537.62
		+2.71%
SENSEX	25881.17	+575.70
		+2.27%
FTSE 100	6262.85	+43.59
		+0.70%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.386	1.366
CND. 30 Year Bond	2.012	2.004
U.S.    10 Year Bond	1.8664	1.8629
U.S. 30 Year Bond	2.6634	2.6456

Currencies

BOC Close	Today	Previous
Canadian $	0.76809	0.76176
US $	1.30193	1.31275
Euro Rate 1 Euro=		Inverse
Canadian $	1.45253	0.68845
US $	1.11568	0.89632

Commodities

Gold	Close	Previous
London Gold Fix	1220.60	1236.85
Oil	Close	Previous
WTI Crude Future	49.16	48.17

Market Commentary:

Canada

By Dani Burger

     (Bloomberg) — Canadian stocks rose to the highest level since August, as higher crude prices bolstered the nation’s energy producers and Bank of Montreal’s results added to a rally among lenders.

     The S&P/TSX Composite Index added 0.7 percent to 14,053.74 at 4 p.m. in Toronto, a level last seen on Aug. 18. The gauge hasn’t closed above 14,000 since August. The index has climbed 8.2 percent this year, second most among developed-market nations tracked by Bloomberg.

     Global shares jumped 1 percent today, as European and American financial firms paced gains on growing conviction the Federal Reserve will raise interest rates this summer and Britain will vote to remain in the European Union.

     In Canada, the central bank kept its key interest rate unchanged, signaling the economy will contract this quarter as Alberta wildfires cut oil production. Governor Stephen Poloz held the benchmark interest rate at 0.5 percent, where it’s been since July. Higher U.S. rates weakens the Canadian dollar, making Canada more attractive for foreign investment.

     For more on the Bank of Canada decision, click here.

     Bank of Montreal rose 1.4 percent for a third day of gains that have put the stock at its highest since September 2014. The lender said second-quarter fiscal profit fell 2.6 percent as soured oil-and-gas loans soared and the firm took a restructuring charge. The bank raised its dividend 2.4 percent to 86 cents a share.

     Canadian Western Bank and Bank of Nova Scotia added 1.3 percent as financial firms in the Canadian benchmark climbed to the highest level in nearly a year.

     Six of 10 industries in the S&P/TSX advanced on trading volume in line with the 30-day average. The S&P/TSX now trades at 21.4 times earnings, about 11 percent higher than the 19.3 times valuation of the S&P 500.

     Canadian Natural Resources Ltd. rose 2.1 percent. Energy producers added 1.5 percent, rising a second day. Oil traded above $49 a barrel. All of the Canadian oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart.

     The Bloomberg Commodity Index rebounded from a two-day drop, posting it’s biggest gain in two weeks. That lifted raw- material producers 1.8 percent adding to a year-long rally for the group, which has been the best performer in the index with a rally of more than 30 percent.

     Commodities producers make up about a third of the S&P/TSX by market capitalization Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks posted the strongest two-day rally in nearly three months, as signs of a stronger economy spurred speculation it can withstand higher interest rates.

     Banks in the S&P 500 led Wednesday’s move, reaching their highest level since Jan. 6 amid bets that rising rates will boost profits. Bank of America Corp. and Citigroup Inc. rallied more than 1.6 percent. Energy producers followed oil higher, helped by a retreating dollar that also bolstered gains in raw- materials companies.

     The S&P 500 increased 0.7 percent to 2,090.54 at 4 p.m. in New York, closing at a four-week high after its first back-to- back gains in two weeks. The Dow Jones Industrial Average rose 145.46 points, or 0.8 percent, to 17,851.51, its strongest two- day climb since March 2. The Nasdaq Composite Index added 0.7 percent, closing at the highest in a month. About 7 billion shares traded hands on U.S. exchanges, 4 percent below the three-month average.

     “The market is coming around to the idea that a June or July hike isn’t such a bad thing,” Anwiti Bahuguna, senior portfolio manager at Columbia Threadneedle Investments, said by phone. “There was a mini kind of taper tantrum when the probability of a rate hike jumped, but we’ve had decent housing data and while the data is still mixed, it’s not bad.”

     Hawkish commentary from Federal Reserve officials on the back of last week’s policy-meeting minutes, along with improving economic figures, led to speculation the central bank may increase rates as early as June. Fed Chair Janet Yellen is scheduled to speak on Friday, with her comments following readings on durable goods orders, pending home sales, gross domestic product and consumer sentiment.

     Traders are now pricing in a better than one-in-three chance of a June rate increase, from 4 percent at the start of last week. Bets for a July move have jumped to 55 percent from 19 percent.

     Equities are breaking out of a torpor that’s left markets struggling for direction as investors sought more clarity on the Fed’s rate intentions. The S&P 500 had alternated between daily gains and losses in the prior seven sessions, while trading in a roughly 50-point range in May. A Goldman Sachs Group Inc. basket of most shorted stocks rose for a fourth day. The measure added 5.2 percent over the span, its best such move in five weeks.

     After the main U.S. equity benchmark index surged 15 percent from a 22-month low in February, stocks ran out of steam in late April amid mixed earnings reports and signs of lukewarm growth. With the two-day rally this week, the S&P 500 has climbed back within 2 percent of the record it reached last year.

     The CBOE Volatility Index fell 3.6 percent Wednesday to 13.90, continuing a retreat from a two-month high reached last Thursday. The measure of market turbulence known as the VIX is down 12 percent in two sessions.                         

     Hewlett Packard Enterprise Co. rose 6.8 percent Wednesday, trimming an earlier 14 percent jump, after saying it will spin off and merge its business-services division with Computer Sciences Corp. in a deal valued at $8.5 billion for HPE shareholders. Computer Sciences soared 42 percent, the most ever.

     For a quick wrap of the analyst commentary on the deal, click here.

     As the earnings season winds down, analysts have moderated their predictions for a decline in first-quarter profits to 7.2 percent, from 10 percent as recently as April. They forecast second-quarter income will slide 5.1 percent, worse than the 3.9 percent drop estimated a month ago. Earnings growth is expected to return in the third quarter with a 2.2 percent increase.

     “Everything seems to show people should be more confident,”  said John Plassard, a senior equity-sales trader at Mirabaud Securities in Geneva. “The housing data added to better employment and inflation figures, and it was the third set of data showing the Fed is ready to hike. If they hike, it means the economy is indeed doing better so it wouldn’t leave people disappointed.”

     In today’s session, nine of the S&P 500’s 10 main industries rose, led by financial, energy and raw-materials shares. Financials capped the strongest two-day climb in six weeks and moved closer to wiping out 2016 losses that had reached almost 18 percent. Technology companies erased a year- to-date decline yesterday.

     Raw-materials and energy producers paced gains in the benchmark, rising at least 1.1 percent. Monsanto Co. advanced 2.2 percent as Bayer AG said it’s confident it can overcome regulatory and financing risks related to its takeover bid for the seed company. Freeport-McMoRan Inc. rose 4.9 percent and LyondellBasel Industries Inc. added 2.8 percent as a Bloomberg index of commodities climbed 1.2 percent, the most in two weeks.

     Energy companies rose to a three-week high as crude rallied for a second day to settle above $49 a barrel. A government report showed oil inventories and production declined, easing a glut. Transocean Ltd. soared 9.7 percent, the most in two months, while Southwestern Energy Co. and Chesapeake Energy Corp. gained more than 6.8 percent.

     Wells Fargo & Co. and JPMorgan Chase & Co. gained at least 1.5 percent to give the biggest boost to the financial group. Citigroup and Bank of America both moved to their highest levels in four weeks. Goldman Sachs and Capital One Financial Corp. added 2.3 percent.

     Gains in technology shares picked up in afternoon trading, following the group’s strongest one-day rally in almost three months yesterday. International Business Machines Corp. rose 2.3 percent for its best day since March 1. Apple Inc. extended a four-day climb to 5.8 percent, while Microsoft Corp.’s back-to- back increase was the strongest since Feb. 1.

     Signs of optimism were evident in automakers’ shares, with General Motors Co. adding 1.9 percent amid its longest winning streak in a month. Ford Motor Co. increased 1.7 percent to a three-week high, while motorcycle maker Harley-Davidson Inc. rose 1.6 percent to climb for a fourth day.

     Intuit Inc. weighed on the Nasdaq as the maker of financial software programs fell as much as 5.1 percent before closing down 2.1 percent amid investor worries about slowing new subscriber growth in QuickBooks Online. The shares were up 2.6 percent yesterday ahead of an earnings report in which the company raised its estimate for year-end profits.

     Yahoo! Inc. dropped 5.2 percent, the steepest slide in more than four months. People familiar with the matter said AT&T Inc. made a bid for Yahoo and remains a contender to acquire the company’s core internet business. While Verizon Communications Inc. remains a favorite to acquire Yahoo, it didn’t submit one of the highest first-round bids, two of the people said.

 

Have a wonderful evening everyone.

 

Be magnificent!

An eye for an eye only ends up making the whole world blind.

Mahatma Gandhi

As ever,
 

Carolann

 

Excellence is not a skill.  It is an attitude.

                 -Ralph Marston, 1907-1967

 

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

Dear Friends,

Tangents:

On May 24, 1883, the Brooklyn Bridge, linking Brooklyn and Manhatten, was opened to traffic. 

Soccer introduced to British Columbia – May 24, 1862 

The first documented match of “football” (soccer) in British Columbia was organized by the Royal Engineers stationed at New Westminster. This match preceded the official Laws of the Game in use now, so it was likely very different from the game we’re used to seeing. 

Bob Dylan’s birthday today.

PHOTOS OF THE DAY

Street artist JR poses in front of the Louvre Pyramid in Paris on Tuesday. For his latest bold project, he is creating an eye-tricking installation at the Louvre Museum that makes it seem as if the huge glass pyramid at the heart of the courtyard has disappeared. Francois Mori/AP

A fly sits on a Begonia in a garden display at the Chelsea Flower Show in London on Monday. Toby Melville/Reuters

Market Closes for May 24^th, 2016

Market Index	Close	Change
Dow Jones	17706.05	+213.12   +1.22%
S&P 500	2076.06	+28.02   +1.37%
NASDAQ	4861.055	+95.272   +2.00%
TSX	13952.85	+33.27
		+0.24%

International Markets

Market Index	Close	Change
NIKKEI	16498.76	-155.84
		-0.94%
HANG SENG	19830.43	+21.40
		+0.11%
SENSEX	25305.47	+75.11
		+0.30%
FTSE 100	6219.26	+82.83
		+1.35%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.366	1.348
CND. 30 Year Bond	2.004	1.989
U.S.    10 Year Bond	1.8629	1.8384
U.S. 30 Year Bond	2.6456	2.6286

Currencies

BOC Close	Today	Previous
Canadian $	0.76176	0.76266
US $	1.31275	1.31121
Euro Rate 1 Euro=		Inverse
Canadian $	1.46243	0.68379
US $	1.11402	0.89765

Commodities

Gold	Close	Previous
London Gold Fix	1236.85	1254.20
Oil	Close	Previous
WTI Crude Future	48.17	47.75

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose to the highest level since October, as the nation’s largest lenders joined a global rally in financial shares amid speculation the U.S. central bank is prepared to raise interest rates this summer. Miners plunged with the price of gold.

     The S&P/TSX Composite Index added 0.2 percent to 13,952.85 at 4 p.m. in Toronto, pulling back after briefly climbing above 14,000 index points to reach its highest intraday level since October. The benchmark Canadian equity gauge was closed on Monday for a holiday after rising 1.2 percent last week. The index has climbed 7.3 percent this year, second most among developed-market nations tracked by Bloomberg.

     Global shares jumped 1 percent today, as European and American financial firms paced gains on growing conviction the Federal Reserve will raise interest rates this summer and Britain will vote to remain in the European Union.

     In Canada, Bank of Nova Scotia and Royal Bank of Canada added more than 0.9 percent to lead a 1.2 percent gain among the big banks. The nation’s largest lenders touched the highest levels in a year before Bank of Montreal kicks off the second- quarter earnings scheduleon Wednesday.

     The Bank of Canada is also set for its next policy decision on Wednesday, with the renewed speculation of an interest-rate increase at the Fed lowering the pressure on the central bank to cut its own lending rates to keep the currency competitive for exports. Higher U.S. rates weakens the Canadian dollar, making Canada more attractive for foreign investment.

     Gold producers sank 6.6 percent to offset gains as the metal slumped a fifth day for the longest slide in six months due to Fed speculation. That dented a yearlong rally in raw- materials producers, which have been the best performer in the index with a 32 percent rally.

     Commodities producers make up about a third of the S&P/TSX by market capitalization Resource prices came under pressure last week as the Fed’s April meeting minutes increased speculation an interest-rate hike could come as soon as June, driving the dollar higher.

     Suncor Energy Inc. rose 2.6 percent. Energy producers added 0.5 percent, rising a second day. Eight of 10 industries in the S&P/TSX advanced on trading volume 14 percent below the 30-day average. The S&P/TSX now trades at 21.2 times earnings, about 11 percent higher than the 19.2 times valuation of the S&P 500.

     Oil traded above $48 a barrel, posting the first gain in a week. All of the Canadian oil-sands facilities that workers fled last week as a wildfire spread are being allowed to prepare for restart, including sites connected to operations of Suncor, Syncrude Canada Ltd. and Cnooc Ltd.’s Nexen unit. The wildfires around Fort McMurray, Alberta forced operators to take more than 1 million barrels a day of production offline this month. U.S. data Wednesday is forecast to show crude inventories declined.

US

By Oliver Renick and Joseph Ciolli

     (Bloomberg) — U.S. stocks rose the most in more than two months, as a surge in home sales fueled speculation the economy can withstand higher interest rates amid rising bets the Federal Reserve will tighten policy this summer.

     A gauge of homebuilders jumped the most since January 2014 amid the data, with Toll Brothers Inc. seeing its biggest climb in three years as its quarterly profit also topped estimates. Technology companies soared to their strongest gain in 12 weeks, as Microsoft Corp. and Google parent Alphabet Inc. rose at least 2.2 percent. Banks climbed on expectations for higher rates, with Treasury yields at a three-week high. JPMorgan Chase & Co. and Citigroup Inc. added at least 1.6 percent.

     The S&P 500 gained 1.4 percent to 2,076.06 at 4 p.m. in New York, the steepest climb since March 11, pushing the index to a two-week high. The Dow Jones Industrial Average added 213.12 points, or 1.2 percent, to 17,706.05. The Nasdaq Composite Index increased 2 percent, the most in almost three months. About 7 billion shares traded hands on U.S. exchanges, 4 percent below the three-month average.

     “Maybe investors are realizing that a hike of 25 basis points is not the end of the world,” said Thomas Garcia, head of equity trading at Thornburg Investment Management Inc. in Santa Fe, New Mexico. “Those were nice housing numbers. It seems as though the market is excited that we are still going strong and the Fed can raise rates.”

     A report today showed April new-home sales surged to the highest level in more than eight years, pointing to a robust spring selling season for builders. The median sales price climbed to a record, reflecting a pickup in signed contracts for more expensive properties.

     Traders are now pricing in a better-than-even chance of a rate increase by July, as Fed officials signaled their willingness to make such a move if the economy shows sustained progress. Odds for a June boost rose to 36 percent from 4 percent last Monday. Along with today’s April new-home sales report, investors will further scrutinize releases on consumer sentiment and GDP later this week for signs of further strengthening.

     Tuesday’s rally suggested equities will snap out of a torpor that’s left markets struggling for direction as investors sought clarity on the Fed’s monetary path. The S&P 500 has alternated between daily gains and losses for seven sessions, and hasn’t had a back-to-back climb in two weeks. It traded Monday in the narrowest range since April 15 amid volume on U.S. exchanges that was the lowest in almost two months.

     “People may be coming around on the idea of a rate hike as an indication of economic strength,” said Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates Inc. in Bethlehem, Pennsylvania. “Before there was a sense that higher rates would spell trouble, but the market has had time to digest that.”

     After a rebound of as much as 15 percent from a 22-month low in February, the main U.S. equity benchmark has churned in a range of less than 50 points in May. The rally ran out of steam in late April, after the S&P 500 came within 1.4 percent of a record set just over a year ago, amid mixed earnings reports and lukewarm signs of economic growth.

     Fed meeting minutes last week, as well as more hawkish commentary from policy makers and improving data stoked concern the Fed may move sooner than markets were prepared. Fed Bank of Philadelphia President Patrick Harker late yesterday said two to three rate increases in 2016 were possible, while San Francisco Fed President John Williams said earlier a similar pace sounded “about right.” Fed Chair Janet Yellen is scheduled to speak on Friday.

     In Tuesday’s trading, all of the S&P 500’s 10 main industries rose, with technology, financial, health-care and consumer discretionary companies rallying at least 1.4 percent. The CBOE Volatility Index fell 8.9 percent to 14.42, the most in nearly two months. The measure of market turbulence known as the VIX erased a gain for the month after reaching a two-month high last week.

     “The first weeks of the year were the end of the world, and the story the next eight weeks was that there’s great promise on this Earth,” John Stoltzfus, chief market strategist at Oppenheimer & Co. in New York, said by phone. “Now, if the Fed is raising rates because the economy is doing better, that looks like a good thing and it seems the market is recognizing that. The jump today in new-home sales, it’s a volatile figure, but that’s a big deal.”

     Tech companies led the benchmark gauge with a 2.1 percent jump, the biggest since March 1. Xilinx Corp. added 5.7 percent and Western Digital Corp. climbed 4.5 percent as the best performers. The group is still down 3 percent since touching a 2016 high on April 1, amid corporate earnings from giants including Microsoft and Apple Inc. that missed expectations. Apple rose for a third day to a four-week high, and Intel Corp. gained 2.8 percent, its strongest advance since January.                     

     Financial companies have rallied more than twice as much as the S&P 500 since the Fed minutes last week, extending gains to 3 percent since May 17 with a 1.5 percent rally on Tuesday. Moody’s Corp. and Affiliated Managers Group Inc. each added at least 3.5 percent as all but two stocks in the 91-member index advanced. The KBW Bank Index climbed 1.6 percent.

     A group of insurance companies in the S&P 500 rose to a five-month high on speculation higher interest rates will help lift profits. Principal Financial Group Inc. gained 2.3 percent, while MetLife Inc. and Prudential Financial Inc. increased more than 1.8 percent.

     An S&P index of homebuilders hit a three-week high following the jump in new-home sales and Toll Brothers’ results. KB Home soared 7.5 percent, while PulteGroup Inc. and Lennar Corp. gained more than 3.8 percent. Builders were the strongest performers among consumer discretionary stocks, though other housing-related companies joined the rally. Whirlpool Corp. advanced 4.4 percent, its best this year, while flooring maker Mohawk Industries Inc. added 2.3 percent.

     The health-care group capped the biggest climb since April 6, lifted by a parade of biotechnology companies. Vertex Pharmaceuticals Inc. and Gilead Sciences Inc. increased more than 3.4 percent. The Nasdaq Biotech index advanced 2.3 percent, rising for a third day in its longest winning streak in a month.

     Among other companies moving on corporate news, Best Buy Co. tumbled 7.4 percent, the worst drop in four months, after forecasting second-quarter profit that trailed analysts’ estimates and announcing the departure of Sharon McCollam, who helped revamp the company’s operations and cut costs.

     Norfolk Southern Corp. lost 2.9 percent, its biggest slide since March 8, after the railroad predicted coal volume will be lower than an earlier forecast.
 

Have a wonderful evening everyone.

 

Be magnificent!

Facts are not frightening.

But if you try to avoid them, turn your back and run, then that is frightening.

Krishnamurti

As ever,

 

Carolann

 

When you feel in your gut what you are and then dynamically

pursue it – and don’t back down and don’t give up – then you’re

going to mystify a lot of folks.

                                                      -Bob Dylan, b. 1941

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