Category: Events

Dear Friends,

Tangents:

On this day in 1873, blue jeans are born when Levi Strauss and Jacob Davis obtained a U.S. patent on the process of putting rivets in men’s work pants.

Off to Seattle to see the last opera of the 2015-2016 season.  Seattle opera is performing The Flying Dutchman.   So looking forward to it.

Happy Victoria Day everyone.  Canadian markets are closed Monday; US markets are open.

PHOTOS OF THE DAY

People pray and hold candles as they walk around the Marble Temple or Wat Benchamabophit during the Buddhist celebration of Vesak in Bangkok, Thailand on Friday. Jorge Silva/Reuters

Britain’s Kate, the Duchess of Cambridge, prepares to sail on a catamaran with sailor Ben Ainslie as she visits Land Rover BAR and the 1851 Trust in Portsmouth on Friday. Peter Nicholls/Reuters

Market Closes for May 20^th, 2016

Market Index	Close	Change
Dow Jones	17500.94	+65.54   +0.38%
S&P 500	2052.32	+12.28   +0.60%
NASDAQ	4769.559	+57.026   +1.21%
TSX	13919.58	+102.26
		+0.74%

International Markets

Market Index	Close	Change
NIKKEI	16736.35	+89.69
		+0.54%
HANG SENG	19852.20	+157.87
		+0.80%
SENSEX	25301.90	-97.82
		-0.39%
FTSE 100	6156.32	+102.97
		+1.70%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.348	1.343
CND. 30 Year Bond	1.989	1.977
U.S.    10 Year Bond	1.8384	1.8417
U.S. 30 Year Bond	2.6286	2.6301

Currencies

BOC Close	Today	Previous
Canadian $	0.76266	0.76356
US $	1.31121	1.30966
Euro Rate 1 Euro=		Inverse
Canadian $	1.47168	0.67949
US $	1.12239	0.89096

Commodities

Gold	Close	Previous
London Gold Fix	1254.20	1246.25
Oil	Close	Previous
WTI Crude Future	47.75	48.16

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, mirroring a rally in global markets, as financial and commodity shares rebounded Friday after coming under pressure this week on renewed speculation the Federal Reserve may raise interest rates as soon as June.

     The benchmark S&P/TSX Composite Index rose 0.7 percent to 13,919.58 at 4 p.m. in Toronto. The gauge rose 1.2 percent in the week after retreating 0.7 percent in the previous two days following minutes from the Fed’s April meeting that spurred traders to increase bets on higher borrowing costs next month.

     Bank of Nova Scotia and Manulife Financial Corp. added at least 0.6 percent Friday to lead financial services companies higher. The nation’s largest lenders are scheduled to report second-quarter earnings next week, starting with Bank of Montreal on May 25.

     Energy producers climbed 0.8 percent, rebounding from a two-day drop. All 10 industries in the S&P/TSX advanced on trading volume 21 percent below the 30-day average at this time of the day. The S&P/TSX now trades at 21.2 times earnings, about 12 percent higher than the 19 times valuation of the S&P 500.

     Crude futures in New York ended the day lower, bringing their weekly gain to 3.3 percent. West Texas Intermediate traded below $48 a barrel. Firefighters successfully defended Suncor Energy Inc. and Syncrude Canada Ltd.’s oil-sands operations and rain brought some relief to the Alberta oil-sands ravaged by wildfires. The respite renews prospects for a restart to operations.

     Data today showed retail sales in Canada fell 1 percent in March, more than economists forecast for the month from February’s record high, led by a drop in automobile sales. A separate report showed Canada’s inflation rate accelerated for the first time in three months in April. Core inflation, excluding volatile products, climbed while economists had forecast it would slow.

     “Smoothing out the volatility leaves sales up a still- strong 5.4 percent year-over-year for all of the first quarter,” Robert Kavcic, a senior economist at BMO Capital Markets, said in a note. “The big picture here is that the underlying firmness in core inflation offsets the generally soft retail results today. That combination reinforces our view that the Bank of Canada will sit tight on the sidelines next week.”

US

By Kelly Gilblom and Jeremy Herron

     (Bloomberg) — Financial markets stabilized after being buffeted this week by speculation the Federal Reserve is moving closer to raising interest rates. U.S. stocks erased a weekly decline, as commodity prices capped a gain, while the yen weakened on reduced demand for haven assets.

     Global shares rebounded from a six-week low, with the S&P 500 Index slightly higher for the year a day from the anniversary of its last record. Treasuries fell, with two-year notes posting their biggest weekly plunge since November. Crude slipped from a seven-month high and sugar traded in New York surged to a 20-month high. The yen dropped against all but two of its 16 major counterparts. Nigeria, Africa’s largest economy, shrank for the first time since 2004.

     Some $900 billion was wiped off the value of global shares over the last three days as traders stepped up bets on a June rate increase in the U.S., spurred by comments from Fed officials, minutes of the last policy meeting and quickening inflation. While the American economy shows signs of being able to weather higher borrowing costs, the outlook for global growth has been worseningand finance chiefs from the Group of Seven nations are meeting in Japan May 20-21 to discuss ways to tackle this.

     “There’s been a little bit of volatility recently and markets are rebounding,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “The Fed minutes surprised people. It seems they’re a little more ready to raise rates in June than people anticipated. When you take a step back the market continues to be grinding sideways.”

     Even after the Fed’s minutes Wednesday sent a strong signal that an increase may come as soon as June, investors see plenty of obstacles, including the referendum on Britain’s EU membership and fading growth in China. The odds of a move next month are 28 percent, up from 4 percent a week ago, Fed Funds futures show. That’s even after New York Fed chief William Dudley touted the prospect of policy tightening at one of the central bank’s next two meetings, while Richmond Fed President Jeffrey Lacker said the case for hiking in June would likely be “very strong.”

     The MSCI All-Country World Index of shares rose 0.7 percent at 4 p.m. in New York, climbing for the first time in four days. In Europe, the Stoxx 600 added 1.2 percent and the S&P 500 rose 0.6 percent.

     The U.S. benchmark climbed 0.3 percent in the past five days, snapping a three-week slide. Technology shares rallied as Applied Materials Inc. jumped after the biggest maker of machinery used to manufacture semiconductors forecast third- quarter sales that may beat analysts’ estimates. Chipmakers jumped the most since January, with Intel Corp. rising 1.8 percent. Wells Fargo & Co. increased 0.8 percent as Treasury yields resumed their advance, bolstering a rebound by banks.

     The MSCI Emerging Markets Index rose 0.4 percent, paring its weekly decline to 1.4 percent. The gauge had its fifth weekly drop in the longest run of losses since August. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.7 percent.

     Crude oil declined 41 cents to settle at $47.75 in New York, capping a weekly advance of about 3.3 percent. Prices were boosted this week as data showed U.S. output slid to the lowest since September 2014 and wildfires in Canada expanded.

     “We’ve got U.S. demand picking up and combining with bullish supply news filtering through the market,” said Jonathan Barratt, the chief investment officer at Ayers Alliance Securities in Sydney. “Unless there is a clear new fundamental reason to buy oil, I think $50 is a hard psychological level to break through.”

     Gold declined a third week, its longest losing streak of the year.

     Soybeans in Chicago had their sixth weekly advance, the longest run of gains since 2013. The U.S. Department of Agriculture estimated last week that global inventories will fall 8.1 percent by the end of September next year.

     The dollar posted its biggest three-week rally since November as traders weighed the possibility of tighter monetary policy in the U.S. The move was also spurred by Bank of Japan Governor Haruhiko Kuroda reiterating that he’s ready to add to stimulus if necessary.

     The Bloomberg Dollar Spot Index, which tracks the U.S. currency versus 10 major counterparts, gained 0.8 percent this week, adding to the 2.3 percent advance in the past two weeks. The dollar rose 0.1 percent to 110.11 yen Friday and was little changed at $1.1218 per euro.

     The pound declined for the first time in five days versus the dollar and slid from a three-month high against the euro. The pound fell 0.8 percent to $1.4495. It stilled gained 0.9 percent this week, the biggest weekly gain since April 29.

     The MSCI Emerging Markets Currency Index rose 0.3 percent, leaving it down 1 percent this week.

     The yield on two-year Treasury notes was little changed at 0.88 percent. The measure has climbed 13 basis points in the week, as traders adjusted bets on the path of interest rates after Federal Reserve officials indicated they’re considering a June increase if economic data remain steady.

     The yield on 10-year notes fell less than one basis point to 1.85 percent, up 15 basis points from a week ago. The yield on similar-maturity German bonds was at 0.16 percent.

     Japan’s 10-year yield fell four basis points to minus 0.12 percent. Overseas investors bought 3.6 trillion yen ($32.7 billion) of the nation’s government bonds in April, the most since August 2007, data showed Friday.

 

Have a terrific weekend everyone.

 

Be magnificent!

 

He who seeks to understand violence belongs to no country, no religion, no political party, no particular system.

What matters to him is the complete understanding of humanity.

According to one school violence is found inside a man;

according to another, it is the result of his social and cultural heritage.

Neither of these viewpoints interests us:

they have no importance; what is important is the way that we are violent,

not the reason for it.

 

Krishnamurti

As ever,
 

Carolann

 

When an old man dies, a library burns down.

                                     -African proverb

 

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:

By the numbers…

75.4 MILLION: Number of Millennials (ages 18-35) in the United States in 2015; they have dethroned the 74.9 million baby boomers as America’s largest age cohort.

197: Countries in which a production of Shakespeare’s Hamlet was performed by London’s Globe Theatre in the past two years, part of a celebration to mark the 400^th anniversary of the Bard’s death.

10,000: “Bonus” (in Norwegian kroner, about US $1,225) given by the government to asylum seekers who agree to leave Norway voluntarily.

Today in History:

On May 19, 1935, T.E. Lawrence, also known as “Lawrence of Arabia,” died in England from injuries sustained in a motorcycle crash.

When Noël Coward saw the premiere of the movie  Lawrence of Arabia, he said afterward that “ if he [Peter O’Toole] had been any prettier, they’d have had to call it Florence of Arabia.”

PHOTOS OF THE DAY

Israel’s Ziv Kalontarov starts in the men’s 100m freestyle preliminary event in the European Aquatics Championships in London on Thursday.Stefan Wermuth/Reuters

Cracked and curled mud covers ground that was once under water at the Lake Mead National Recreation Area, near Las Vegas, on Thursday. Lake Mead’s surface was at its lowest level Wednesday since the reservoir was created. John Locher/AP

Market Closes for May 19^th, 2016

Market Index	Close	Change
Dow Jones	17435.40	-91.22   -0.52%
S&P 500	2040.04	-7.59   -0.37%
NASDAQ	4712.531	-26.588   -0.56%
TSX	13817.32	-8.69
		-0.06%

International Markets

Market Index	Close	Change
NIKKEI	16646.66	+1.97
		+0.01%
HANG SENG	19694.33	-132.08
		-0.67%
SENSEX	25399.72	-304.89
		-1.19%
FTSE 100	6053.35	-112.45
		-1.82%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.343	1.364
CND. 30 Year Bond	1.977	2.006
U.S.    10 Year Bond	1.8417	1.8521
U.S. 30 Year Bond	2.6301	2.6571

Currencies

BOC Close	Today	Previous
Canadian $	0.76356	0.76739
US $	1.30966	1.30312
Euro Rate 1 Euro=		Inverse
Canadian $	1.46716	0.68159
US $	1.12026	0.89265

Commodities

Gold	Close	Previous
London Gold Fix	1246.25	1272.90
Oil	Close	Previous
WTI Crude Future	48.16	48.19

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks ended little changed after an afternoon rally in gold producers nearly wiped out losses among financial and industrial firms.

     The benchmark S&P/TSX Composite Index retreated 0.1 percent to 13,817.32 at 4 p.m. in Toronto. The Canadian benchmark equity gauge has lost 0.7 percent in two days, mirroring a slide in global equities after the Federal Reserve signaled it’s prepared to raise U.S. interest rates as soon as next month.

     Global equities pared losses as the trading day persisted, as a dollar rally evaporated, easing pressure on commodities prices. That helped materials shares climb, while banks slumped 0.5 percent and industrial shares lost 1.1 percent. Seven of 10 industries in the S&P/TSX lost ground on trading volume 4.6 percent lower than the 30-day average,

     Canadian Natural Resources Ltd. and Husky Energy Inc. declined at least 1.5 percent as energy producers fell. Barrick Gold Corp. jumped 3.6 percent as gold producers rebounded from an early loss.

     Investors are scrutinizing data from the world’s largest economy after April Fed meeting minutes released Wednesday showed policymakers said boosting borrowing costs in June was “appropriate” should the U.S. economy continue to improve. That prompted traders to boost the probability of a rate hike next month to 30 percent. A report Thursday showed initial jobless claims in the U.S. dropped last week from a one-year high. 

     Energy and raw-materials industries account for about 32 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging as much as 43 percent for its best year-to-date performance in three decades. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.

     Russel Metals Inc. tumbled 6.5 percent to lead industrials lower after Raymond James lowered its rating for the steel distributor to the equivalent of a hold, from outperform. Russel has rallied 38 percent this year. The stock now has zero buys, four holds and one sell, according to data compiled by Bloomberg.

     Potash Corp. Of Saskatchewan Inc. climbed 4.1 percent, the most in a month. A potash contract with China is expected in the next couple of weeks, Potash Corp. CEO Jochen Tilk said during the BMO Farm to Market conference in New York. Potash prices have stabilized in the U.S. and the company is seeing improvements in prices, Tilk said.

US

By Anna-Louise Jackson and Joseph Ciolli

     (Bloomberg) — U.S. stocks declined, with the S&P 500 falling to a seven-week low, amid concern that a Federal Reserve interest-rate increase as early as next month could further burden a struggling global economy.

     Equities pared losses in an afternoon comeback as a dollar gauge trimmed its climb. The Fed’s hawkish commentary in meeting minutes yesterday has bolstered dollar gains, pressuring commodity prices as well as multinational companies whose overseas sales may be dented by a stronger U.S. currency. Wal- Mart’s strongest rally in seven years on better-than-estimated earnings offered some support to optimism that the American economy may be sturdy enough to handle higher rates.

     The S&P 500 fell 0.4 percent to 2,040.04 at 4 p.m. in New York, erasing a 2016 gain that had approached 3 percent. The Dow Jones Industrial Average sank 91.22 points, or 0.5 percent, to 17,435.40, and has now gone a year since it last reached an all- time high. The Nasdaq Composite Index slipped 0.6 percent. About 7.2 billion shares traded hands on U.S. exchanges, 3 percent below the three-month average.

     “The weakness is a continuation of yesterday and the threat of higher interest rates, either real or perceived,” said Terry Morris, a senior equity manager who helps oversee about $3.2 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co. “The economy is fragile, and a hike in interest rates could send it over the edge. There’s a fear that if rates do go up, the economy won’t be able to support it.”

     Minutes from the Fed’s April meeting indicated policy makers’ willingness to raise interest rates in June if the economy continues to improve, sending the S&P 500 on Wednesday to its widest intraday swings in three weeks. Some meeting participants expressed concern that markets were ill-prepared for rate boost next month.

     This week’s vault in expectations for higher rates has dealt another blow to sentiment that was already brittle amid slumping corporate earnings. The S&P 500 rallied 15 percent between a February low and a four-month high on April 20, but has slipped 3 percent since then, losing momentum last month amid disappointing results from technology giants Apple Inc. and Microsoft Corp., as well as recent letdowns from a handful of major retailers including Macy’s Inc. and Target Corp.

     “The minutes from the most recent meeting could very well be interpreted as more hawkish and June or July are very much in play,” said Eric Wiegand, senior portfolio manager at the New York-based Private Client Reserve of US Bank, which oversees $128 billion in assets. “The reaction yesterday was somewhat muted and the follow-on shows people are still processing that. The volatility in commodities prices is also a byproduct of those concerns about higher rates.”

     The CBOE Volatility Index climbed 2.4 percent to 16.33, a two-month high. The measure of market turbulence known as the VIX is headed toward a second consecutive weekly gain for the first time since the S&P 500 reached a 22-month low in February.

     In contrast to Thursday’s downdraft, Wal-Mart surged the most since 2008 after better-than-estimated first-quarter results assuaged some fears that the retail industry is mired in a slump. Urban Outfitters Inc. jumped 14 percent after its results topped predictions, and Cisco Systems Inc. rose 3.2 percent, the best since Feb. 11, after its results and forecast topped predictions. Monsanto Co. gained 3.5 percent after an unsolicited acquisition offer from Germany’s Bayer AG.

     With attention riveted on the central bank, New York Fed President William Dudley said Thursday the central bank is moving closer to raising rates at one of its next two meetings and the fact this message is getting through to financial markets is welcome news. Richmond Fed’s Jeffrey Lacker also talked up the prospect for an imminent increase, saying during an interview on Bloomberg Radio that there’s a strong case for raising rates next month.

     Traders now price in a 30 percent chance of higher borrowing costs next month, up from 4 percent at the start of this week. Odds for a July move are 48 percent, while September is the first month with at least an even chance of higher rates.

     Investors “are understandably concerned after the Fed minutes,” said Mike Ingram, a strategist at BGC Partners in London. “Growth isn’t looking great and equities are still going to struggle. It’s important for the Fed to reaffirm the underlying strength of the U.S. economy if it’s really considering a rate hike in June.”

     As policy makers scrutinize data that will guide their rate decisions, a report today showed filings for unemployment benefits declined last week from a more than one-year high, as a plunge in New York returned claims to a level consistent with a firm labor market. A separate measure showed manufacturing activity in the Philadelphia region unexpectedly contracted this month. Also, a gauge of leading indicators last month rose more than economists forecast.

     With the reporting season winding down, analysts estimate first-quarter income at S&P 500’s companies declined 7.4 percent, compared to calls for flat growth earlier this year. So far, 75 percent of those that have reported beat profit estimates, while 54 percent surpassed sales predictions.

     In Thursday’s trading, six of the S&P 500’s 10 main industries fell, led by declines of at least 0.8 percent for health-care, financial and industrial companies. Utilities gained 0.9 percent, springing back from a two-day, 3.6 percent drop, while consumer staples added 0.8 percent.

     Industrial stocks tumbled 1 percent to levels last seen in March. General Electric Co. paced the selloff, falling to a two- month low. Boeing Co. lost 2.2 percent, the most since Feb. 11. Delta Air Lines Inc. and United Continental Holdings Inc. lost at least 1.7 percent in the wake of the crash of an EgyptAir flight.

     Financial companies slipped 0.9 percent, erasing about half of Wednesday’s rally. The S&P 500 REITs Index fell 1 percent to a two-month low. Twenty-two of 24 lenders in the KBW Bank Index sank, led by declines of more than 1.7 percent for Regions Financial Corp. and Citigroup Inc. The gauge yesterday rallied the most in five weeks amid speculation higher rates would lift banks’ profits. Treasury yields fell today after surging by the most since March 1 on Wednesday.

     Technology shares slipped, alternating between gains and losses for a fifth day. Microsoft Corp. was the biggest drag on the group, falling 1 percent. Google parent Alphabet Inc. decreased 0.9 percent and Oracle Corp. lost 1.6 percent to also weigh. More than half of last year’s revenue at both companies came from outside the U.S., making them vulnerable to the stronger dollar.

     Consumer staples bounced after falling to a three-week low yesterday. Wal-Mart’s 9.6 percent surge led the recovery, while Kraft Heinz Co. added 2.2 percent after losing 5.5 percent over the prior two sessions. Kroger Co. and Archer-Daniels-Midland Co. increased at least 1.3 percent.

Have a wonderful evening everyone.

 

Be magnificent!

Nations cohere because there is mutual regard among

individuals composing them.

Some day we must extend the national law

to the universe,

even as we have extended the family law

to form nations – a larger family.

Mahatma Gandhi

As ever,

 

Carolann

 

Nothing is so strong as gentleness and

nothing is so gentle as real strength.

      -Ralph W. Sockman, 1889-1970

 

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 18, 1980, the Mount St. Helens volcano in Washington state exploded.

On May 18, 1819, Lord Byron wrote to John Murray:

“I write to you in haste and at past two in the morning – having besides had an accident.  In going, about an hour and a half ago, to a rendezvous with a Venetian girl (unmarried and the daughter of one of their nobles), I tumbled into the Grand Canal, and not choosing to miss my appointment by the delays of changing, I have been perched in a balcony with my wet clothes on ever since – till this minute that on my return I have slipped into my dressing-gown.  My foot slipped in getting into my gondola to set out (owing to the cursed slippery steps of their palaces) and in I flounced like a carp – and went dripping like a triton to my sea-nymph – and had to scramble up to a grated window…”  -from The Book of Days.

PHOTOS OF THE DAY

A red poppy grows in a grain field near Wildau, eastern Germany, on Wednesday. Patrick Pleul/dpa/AP

Chicks dyed to draw attention are offered for sale at a small poultry market in Jakarta, Indonesia, on Wednesday. Darren Whiteside/Reuters

Market Closes for May 18^th, 2016

Market Index	Close	Change
Dow Jones	17526.62	-3.36   -0.02%
S&P 500	2047.63	+0.42   +0.02%
NASDAQ	4739.121	+23.388   +0.50%
TSX	13826.01	-91.09
		-0.65%

International Markets

Market Index	Close	Change
NIKKEI	16644.69	-8.11
		-0.05%
HANG SENG	19826.41	-292.39
		-1.45%
SENSEX	25704.61	-69.00
		-0.27%
FTSE 100	6165.80	-1.97
		-0.03%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.364	1.317
CND. 30 Year Bond	2.006	1.980
U.S.    10 Year Bond	1.8521	1.7723
U.S. 30 Year Bond	2.6571	2.5994

Currencies

BOC Close	Today	Previous
Canadian $	0.76739	0.77489
US $	1.30312	1.29051
Euro Rate 1 Euro=		Inverse
Canadian $	1.46166	0.68416
US $	1.12166	0.89154

Commodities

Gold	Close	Previous
London Gold Fix	1272.90	1277.00
Oil	Close	Previous
WTI Crude Future	48.19	48.31

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell from a two-week high after the Federal Reserve policy makers indicated that a June interest-rate increase was likely if the economy continued to improve, sparking a rout in resource prices that sank commodities producers.

     The benchmark S&P/TSX Composite Index fell 0.7 percent to 13,826.01 at 4 p.m. in Toronto, with all of the decline coming after Fed meeting minutes signaled higher rates may come sooner than traders and investors had been anticipating. Trading volume jumped 18 percent above the 30-day average.

     A gauge of gold producers sank 7.4 percent, the most since August. Barrick Gold Corp. sank 8.2 percent. First Quantum Minerals Ltd. and Teck Resources Ltd. dropped at least 5.3 percent to lead broader raw-materials producers lower. Cenovus Energy Inc. and Suncor Energy Inc. lost more than 1.8 percent as energy producers fell.

     Copper sank to a three-month low and gold retreated for the first time in four days as the dollar climbed to a seven-week high. If incoming data suggested second-quarter economic growth, labor market conditions continued to strengthen and inflation made further progress toward the central bank’s 2 percent objective, then Fed officials would consider the economic climate “appropriate” for an interest-rate increase in June, according to minutes of the April 26-27 meeting released Wednesday in Washington.

     Traders are now pricing in a 30 percent chance of a Federal Reserve interest-rate hike in June, up from 4 percent on Monday. Economic data Tuesday on housing starts and the cost of living topped forecasts, renewing speculation for higher borrowing costs.

     Energy and raw-materials industries account for about 33 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging as much as 43 percent for its best year-to-date performance in three decades. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.

     Financial shares helped offset losses in resource producers, rising 0.9 percent amid higher bond yields. Royal Bank of Canada added 1.7 percent for the biggest gain in five weeks.

     Valeant Pharmaceuticals International Inc. fell 3.8 percent after a three-day gain. The embattled drugmaker is said to be exploring the sale of some of its smaller cosmetic and pharmaceutical assets to raise cash and reduce debt, according to people familiar with the matter. The stock has slumped almost 90 percent from an August peak amid scrutiny over its business practices.

US

By Anna-Louise Jackson and Oliver Renick

     (Bloomberg) — The S&P 500 closed little changed, with a rally in banks offsetting broader declines paced by consumer shares, as Federal Reserve policy makers signaled a willingness to raise borrowing costs in June if the economy continues to improve.

     Equities favored for generous dividend payouts slid as Treasury yields spiked, while banks rallied the most in a month on the potential for higher interest rates to boost profits. Commodity shares slumped as the dollar soared on the Fed’s hawkish tone. Target Corp. fell the most since 2008 on disappointing results, and Wal-Mart Stores Inc. lost 3 percent to weigh on consumer shares.

     The S&P 500 rose less than 0.1 percent to 2,047.63 at 4 p.m. in New York, after lurching between gains and losses of more than 0.6 percent. The Dow Jones Industrial Average fell 3.36 points to 17,526.62 after jumping more than 100 points just before the Fed minutes. The Nasdaq Composite Index increased 0.5 percent, boosted by gains in Apple Inc. and Qualcomm Inc. About 8 billion shares traded hands on U.S. exchanges, 8 percent above the three-month average.

     “The hawkish commentary out of the Fed has been a bit surprising this week and it does seem the spin out of the minutes is reading a little bit more hawkish than folks were anticipating,” Mark Heppenstall, the Horsham, Pennsylvania-based chief investment officer of Penn Mutual Asset Management, said in a telephone interview. “The unemployment picture still looks reasonably good but other readings on growth domestically and across the globe have been sluggish.”                         

     Minutes from the Fed’s April meeting showed most officials said a rate increase would be appropriate in June if the economy continued to improve, but were divided over whether those conditions were likely to be met in time. Some meeting participants expressed concern that markets were ill-prepared for a June rate hike.

     In its statement last month, the Fed omitted previous language that “global economic and financial developments continue to pose risks,” tacitly nodding to improvement in financial markets. Policy makers also reiterated in April that they will probably raise rates at a gradual pace. Since the conclusion of the Fed’s meeting on April 27, the S&P 500 is down about 2.3 percent.

     Traders are pricing in a 30 percent chance of higher borrowing costs in June, up from 4 percent on Monday and 14 percent just before the Fed minutes. Wagers for a July move jumped to nearly 50 percent from 16 percent last week. September is now the first month with at least even odds of higher rates after such bets had been pushed out to February as recently as a week ago.

     “We’ve got to hear from Janet Yellen and she’s scheduled to speak two times before the next meeting,” said Quincy Krosby, a market strategist at Prudential Financial Inc., which oversees about $1.2 trillion. “The market needs to hear decisively whether or not the table will be set for rate hike in June.”

     Equities erased losses in the final minutes of trading Wednesday as banks extended gains. Concerns that borrowing costs could rise sooner than expected, even as global growth languishes, sent stocks lower yesterday, wiping out a rally Monday.

     Only twice since 2009 have bank shares in the S&P 500 outperformed the broader index as much as they did today. Once in February, when Jamie Dimon spent $26.6 million to buy shares of JPMorgan Chase & Co., and the other time was in November 2010, as the Fed prepared guidelines on whether lenders were strong enough to boost dividends and buy back shares after the financial crisis.

     Disappointing earnings from retailers, including Macy’s Inc. and Nordstrom Inc. have helped stoke more volatility lately. As the earnings season draws to a close, analysts have moderated forecasts for a first-quarter profit decline to 7.4 percent, from 10 percent in April. Still, Goldman Sachs Group Inc. downgraded equities to neutral, saying they don’t look attractive unless companies post sustained earnings growth.

     The S&P 500 has fallen for three straight weeks, the longest stretch since January, after a 15 percent rally from a 22-month low in February lost traction amid a tepid earnings season and lukewarm economic data. The benchmark has slipped 2.6 percent from a four-month high reached on April 20, and is less than 4 percent from a record set a year ago.

     “The market’s just a little bit on edge and there’s not a lot of conviction,” said Robert Pavlik, who helps oversee $9.1 billion as chief market strategist at Boston Private Wealth. “We’re seeing some rotation out of the more defensive areas like staples, and I think that relates to yesterday’s inflation concern coming in hotter than expected. That’s leading people to bring the Federal Reserve back on the table for the June meeting.”

     In Wednesday’s trading, the CBOE Volatility Index increased 2.4 percent to 15.95, a two-week high. Among the S&P 500’s 10 main industries, utilities, raw-materials and phone companies retreated at least 1.3 percent. Financial shares jumped 1.9 percent, and technology companies gained 0.5 percent, paring an earlier increase by more than half. AT&T Inc. dropped 1.7 percent, the biggest in four weeks. Copper producer Freeport- McMoRan Inc. sank 8.4 percent.

     Consumer staples slumped for a second day as Hormel Foods Corp. tumbled 8.6 percent, the most since 2008 after narrowing margins sparked concern about the maker of Spam and other supermarket fare. Costco Wholesale Corp. fell 1.6 percent, its fifth decline in six days, while Wal-Mart capped the biggest two-day loss since October.

     Joining Target’s decline within the consumer discretionary group, Nordstrom Inc. fell for a seventh session, the longest losing streak since December. The shares are down 26 percent during the span. Best Buy Co. sank 3.6 percent to a one-month low and Urban Outfitters Inc. lost 3.3 percent before its earnings report.

     Citizens Financial Group Inc. and Huntington Bancshares Inc. jumped at least 5.3 percent to lead gains among banks in the equity benchmark. Bank of America Corp. and JPMorgan Chase added more than 3.8 percent amid speculation higher rates will bolster profits. In the broader financial group, Lincoln National Corp. rose 4.1 percent to a four-month high, while Charles Schwab Corp. and E*Trade Financial Corp. each increased at least 4.9 percent.

     There was a bright spot amid the recent gloom of retailer earnings. Lowe’s Cos. jumped 3 percent to a record after posting a quarterly profit that topped projections. Home Depot Inc.’s results yesterday also exceeded estimates as the home- improvement industry has been largely immune from the malaise, with rising property values encouraging people to spend on their dwellings.

     Apple rose 1.1 percent, on track toward snapping its longest weekly losing streak in 11 months. Chief Executive Tim Cook began his first visit to India Wednesday as the iPhone maker and its competitors are keen to expand in a country with the prospect of a billion new device sales. Qualcomm added 1.5 percent to close at a three-week high, while Micron Technology Inc. rallied 3.9 percent.

Have a wonderful evening everyone.

 

Be magnificent!

Give with faith, and never without faith.

Give with dignity.  Give with humility.  Give with joy.

And give with understanding of the effects of your gift.

Taittiriya Upanishad

As ever,
 

Carolann

 

Life is a succession of moments, to live each one is to succeed.

                                                   -Corita Kent, 1918-1986

 

 

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:

I read a book on the weekend that was amazing.  It is entitled When Breath Becomes air and was written by Paul Kalanithi.  He was a 36 year old neurosurgeon who was diagnosed with lung cancer in his last year of residency and died last year from the disease.  He began writing this book after his diagnosis.  In the foreword written by Abraham Verghese, the reader is advised to “Be ready.  Be seated.  See what courage sounds like.  See how brave it is to reveal yourself in this way.  But above all, see what it is to still live, to profoundly influence the lives of others after you are gone, by your words.  In a world of asynchronous communication, where we are so often buried in our screens, our gaze rooted to the rectangular objects buzzing in our hands, our attention consumed by ephemera, stop and experience this dialogue with my young departed colleague, now ageless and extant in memory.  Listen to Paul.  In the silences between his words, listen to what you have to say back.  Therein lies his message.  I got it.  I hope you experience it, too.  It is a gift.  Let me nott stand between you and Paul.”  Excellent advice.

The Poem:

What is our life?

by Sir Walter Raleigh

What is our life?  A play of passion.
Our mirth the music of division;
Our mothers’ wombs the tiring houses be,
Where we are dressed for this short comedy;
Heaven the judicious sharp spectator is
That sits and marks still who doth act amiss;
Our graves that hide us from the searching sun
Are like drawn curtains when the play is done.
Thus march we playing to our latest rest –
Only we die in earnest, that’s no jest.

From English Renaissance Poetry: A Collection of Shorter Poems, selected by John Williams with an introduction by Robert Pinsky, published by New York Review of Books.

PHOTOS OF THE DAY

Items recovered from a merchant ship in the ancient harbor of Caesarea National Park in Israel are on display Monday. Israel’s Antiquities Authority estimates the items to be about 1,600 years old. Baz Ratner/Reuters

A participant sets off on a penny-farthing bicycle at the start of the The Tweed Run in central London, Britain, Saturday. Hannah McKay/Reuters

Market Closes for May 16^th, 2016

Market Index	Close	Change
Dow Jones	17710.71	+175.39   +1.00%
S&P 500	2066.66	+20.05   +0.98%
NASDAQ	4775.461	+57.785   +1.22%
TSX	13893.49	+144.91
		+1.05%

International Markets

Market Index	Close	Change
NIKKEI	16466.40	+54.19
		+0.33%
HANG SENG	19883.95	+164.66
		+0.84%
SENSEX	25653.23	+163.66
		+0.64%
FTSE 100	6151.40	+12.90
		+0.21%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.313	1.273
CND. 30 Year Bond	1.988	1.950
U.S.    10 Year Bond	1.7533	1.7001
U.S. 30 Year Bond	2.5956	2.5494

Currencies

BOC Close	Today	Previous
Canadian $	0.77542	0.77268
US $	1.28962	1.29420
Euro Rate 1 Euro=		Inverse
Canadian $	1.45955	0.68514
US $	1.13177	0.88357

Commodities

Gold	Close	Previous
London Gold Fix	1285.75	1265.90
Oil	Close	Previous
WTI Crude Future	47.72	46.21

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose to a two-week high, as crude prices jumped to the highest in six months and metals from gold to copper rallied.

     The benchmark S&P/TSX Composite Index rose 1.1 percent to 13,893.49 at 4 p.m. in Toronto, following a 0.3 percent gain last week. Volume today in the benchmark was about 12 percent lower than the 30-day average. The gauge now trades at 21.3 times earnings, about 11 percent higher than the 19.2 times valuation of the S&P 500, data compiled by Bloomberg show.

     Suncor Energy Corp. and Goldcorp Inc. jumped more than 2.6 percent as energy and raw-materials producers climbed at least 1.9 percent to lead gains across nine of 10 industries in the S&P/TSX.

     The commodities industries account for about 32 percent of the broader benchmark by market capitalization and have led gains this year, with the materials group surging 41 percent. That’s helped the S&P/TSX post one of the best performances this year among developed economies, behind only New Zealand out of 24 markets.

     Gains today came as crude futures rose 3.3 in New York to top $47 a barrel as Goldman Sachs Group Inc. said in a report that the market has shifted into a supply deficit earlier than expected following disruptions around the world.

     Gold extended Friday’s gains, pushing its advance this year to 20 percent as investors sought a haven from equity turmoil and the Federal Reserve dialed back expectations for interest rate increases, making the metal more attractive as a store of value. First Quantum Minerals Ltd. and Teck Resources Ltd. rose at least 3.8 percent as iron ore climbed in China as daily steel output jumped to a record in April.

     Valeant Pharmaceuticals International Inc. rose 3.8 percent to reverse earlier losses. Short-seller Andrew Left of Citron Research said he was “long for Valeant” and wouldn’t be surprised if the shares bounce up.

     The embattled drugmaker also announced expanded hospital rebates for two heart drugs at the center of congressional investigations of price hikes. Last week, the New York Times reported major hospital systems in the U.S. weren’t receiving discounts on the drugs Valeant had promised. The stock is down more than 90 percent from an August peak.

     Penn West Petroleum Ltd. plunged 22 percent, the biggest decline since 1992, after the oil producer said it was working with lenders to amend its borrowing limits by the end of the second quarter and is a “going concern” risk if it can’t reach an agreement. Penn West will continue asset sales and look for other sources of capital from investors. The company had C$1.86 billion in long-term debt at the end of the first quarter.

US

By Oliver Renick

     (Bloomberg) — A rally in crude prices boosted energy shares and Apple Inc. jumped after Berkshire Hathaway Inc. disclosed a stake in the iPhone maker, spurring broader gains in U.S. stocks as the S&P 500 rebounded from the longest streak of weekly losses since January.

     With today’s advance, equities continued to churn following a turbulent week that saw the biggest one-day rally in two months promptly wiped out by three straight losing sessions. Commodity shares jumped Monday as crude surged 3.3 percent, while Apple posted the steepest climb since March 1 after three weeks of declines. Anacor Pharmaceuticals soared 57 percent, the most ever, after Pfizer Inc. agreed to buy the drugmaker.

     The S&P 500 rose 1 percent to 2,066.66 at 4 p.m. in New York, after falling for a third straight week. The gauge topped its average price during the past 50 days after closing Friday below the level for the first time since February. The Dow Jones Industrial Average added 175.39 points, or 1 percent, to 17,710.71, its fourth move of at least 175 points in the last five days. The Nasdaq Composite Index increased 1.2 percent, boosted by Apple as well as gains in biotechnology shares.

     “It was a crazy week last week with retail stocks blowing up and then retail sales overall were strong, so there’s a little bit of a bounce back,” Craig Sterling, head of U.S. equity research at Pioneer Investments in Boston, said by phone. “Earnings are over more or less and the market is searching to see what the second half of the year will look like. The price of oil and other commodities seem to be catching a bid so there’s hope there will be improvement in the industrial side of the economy.”

     The CBOE Volatility Index fell 2.4 percent to 14.68, after the measure of market turmoil known as the VIX closed Friday at a one-week high. A Goldman Sachs Group Inc. basket of most shorted shares capped its biggest climb in three weeks. About 6.5 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average.

     The main U.S. equity benchmark slid to a one-month low on Friday as disappointing results from large retailers offset data showing the consumer remains resilient. Amid the market gyrations in the past several sessions, the S&P 500 snapped an 18-day period without a swing of more than 1 percent, the longest stretch of relative calm since December 2014.

     After rallying 15 percent from a February low to a four- month high on April 20, the benchmark has struggled to regain momentum amid mixed earnings releases and lukewarm signs of an economic pickup. Meanwhile, one important support for equity prices during the bull market — corporate stock buybacks — has ebbed. Announced repurchases dropped 38 percent to $244 billion in the last four months, the biggest decline since 2009, data compiled by Birinyi Associates and Bloomberg show.

     Coming amid the worst profit slump since the financial crisis, the buyback slowdown may signal companies are preserving cash as economic and political uncertainty whips up from Europe to China and in the U.S.

     Meanwhile, a spate of deal activity today helped bolster fragile sentiment. In addition to Pfizer’s pact with Anacor, Terex Corp. added 10 percent after Konecranes Oyj agreed to buy one of its businesses. Yahoo! Inc. gained 2.7 percent as people familiar with the matter said Berkshire Chairman Warren Buffett is backing a group bidding for Yahoo’s Internet assets. Tribune Publishing Co. soared 23 percent as Gannett Co. raised the all- cash offer in its hostile takeover bid.

     Memorial Resource Development Corp. pared a 14 percent climb to 3.1 percent at the close amid Range Resources Corp.’s agreement to purchase the oil and natural gas company in an all- stock deal. Gains in Memorial Resource faded as Range Resources tumbled 10 percent to a three-week low.

     Retailers remain in focus after disappointing results from Macy’s Inc. to Nordstrom Inc. last week sent chain-store shares tumbling. Home Depot Inc., Target Corp., Staples Inc. and Wal- Mart Stores Inc. are due to report in the next few days. As the earnings season draws to a close, analysts estimate income at S&P 500 companies fell 7.4 percent in the first quarter, compared with forecast for flat growth earlier this year.

     Investors will also be assessing data this week for hints on the potential path for interest rates, including readings on housing starts, consumer prices, industrial production and home sales. Minutes from the Federal Reserve’s April meeting are due Wednesday. A report today showed manufacturing activity in the New York region unexpectedly contracted this month, while a separate gauge indicated homebuilder confidence held steady.                        

     In Monday’s trading, all of the S&P 500’s 10 main industries climbed, with energy and raw-material producers up more than 1.5 percent. Technology, industrial and health-care companies rose at least 1.1 percent. Oil rallied to a six-month high as Goldman Sachs said the market moved into a deficit earlier than expected following supply disruptions in Nigeria and an increase in demand.

     Williams Cos. added 6.4 percent to a four-month high, while Marathon Oil Corp. and Devon Energy Corp. advanced at least 3.9 percent. Chevron Corp. reversed a 1.4 percent drop Friday, rising 1.5 percent. Copper miner Freeport-McMoRan Inc. rallied 6.1 percent after dropping 10 percent during the prior two sessions. Cowen & Co. LLC raised its rating on the shares to the equivalent of buy from hold.

     Newmont Mining Corp. increased 4 percent, rising for the fourth time in five days to take its gain during that span to 11 percent. Gold advanced as holdings in exchange-traded funds backed by the metal climbed for a 14th straight day, reaching the highest in more than two years. Raw-material companies, the second-best performers in the index since the February low, alternated between gains and losses for a seventh session, typifying the market’s recent struggle for direction.

     Intel Corp. joined Apple to hoist the technology group, advancing 1.6 percent to its steepest increase since March 18. Nvidia Corp. added 3 percent on top of its post-earnings rally Friday, which was the biggest one-day jump in seven years. Semiconductor companies had their best session in a month, while Apple rebounded after its longest stretch of weekly losses since last June.

     Gains among consumer shares were muted relative to other industries as Macy’s and Michael Kors Holdings Ltd. retreated again after their worst weekly slides since at least November. Whirlpool Corp. slipped after data showed U.S. shipments of major home appliances fell 10.1 percent in April from a year earlier. Dollar Tree Inc. and Lowe’s Cos. added more than 2.6 percent to help overshadow those declines. Home Depot marked its strongest gain in two months before its earnings report tomorrow.

 

Have a wonderful evening everyone.

 

Be magnificent!

I cannot imagine anything nobler or more national than that for, say, one hour in a day,

we should all do the labor that the poor must do,

and thus identify ourselves with them and through them with all mankind.

Mahatma Gandhi

As ever,

 

Carolann

 

When the going gets tough, the tough get going.

                      -Joseph P. Kennedy, 1888-1969

 

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:

Friday the 13^th:

Thirteen was regarded as an unlucky number even among the Romans, who held it as a sign of death and destruction.  The origin of the idea that sitting down 13 at a table is unlucky is said to be that, at a banquet in Valhalla, Loki (the god of strife and spirit of evil in Norse mythology) once intruded, making 13 guests, and Balder (the Scandinavian god of light, noted for his handsomeness and gentle nature) was slain.  The superstition was confirmed in Christian countries by the Last Supper of Christ and the 12 Apostles.  In the Middle Ages, witch covens were believed always to have 13 members.

On May 13^th, 1940, Winston Churchill made his first speech to the House of Commons after becoming Prime Minister.

I say to the House as I said to Ministers who have joined this government, I have nothing to offer but blood, toil, tears  and sweat.   We have before us an ordeal of the most grievous kind.  We have before us many, many months of struggle and suffering.

  You ask, what is our policy?  I say it is to wage war by land, sea and air.  War with all our might and with all the strength God has given us, and to wage war against a monstrous tyranny never surpassed in the dark and lamentable catalogue of human crime.  That is our policy.

  You ask, what is our aim?  I can answer in one word.  It is victory.  Victory at all costs – victory in spite of all terrors – victory,  however long and hard the road may be, for without victory there is no survival.

  Let that be realized.  No survival for the British Empire, no survival for all that the British Empire has stood for, no survival for the urge, the impulse of the ages, that mankind shall move forward toward his goal.

  I take up my task in buoyancy and hope.  I feel sure that our cause will not be suffered to fail among men.

  I feel entitled at this juncture, at this time, to claim the aid of all and to say, “Come then, let us go forward together with our united strength.”

PHOTOS OF THE DAY

Participants attend the ‘Victorian Picnic’ in fancy costumes during the Wave Gothic Festival (WGT) in Leipzig, Germany on Friday. Approximately 20,000 goths and other dark subculture fans are expected to attend the world’s largest gothic and ‘dark’ culture festival. Jens Meyer/AP

Surrounded by relatives and neighbors in Verbania, Italy on Friday, Emma Morano celebrated becoming the oldest person in the world at age 115. Not only that, but she is believed to be the last surviving person in the world who was born in the 1800s, coming into the world on Nov. 29, 1899.Antonino Di Marco/ANSA/AP

Market Closes for May 13^th, 2016

Market Index	Close	Change
Dow Jones	17535.32	-185.18   -1.05%
S&P 500	2046.61	-17.50   -0.85%
NASDAQ	4717.676	-19.659   -0.41%
TSX	13748.58	-39.22
		-0.28%

International Markets

Market Index	Close	Change
NIKKEI	16412.21	-234.13
		-1.41%
HANG SENG	19719.29	-196.17
		-0.99%
SENSEX	25489.57	-300.65
		-1.17%
FTSE 100	6138.50	+34.31
		+0.56%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.273	1.317
CND. 30 Year Bond	1.950	1.985
U.S.    10 Year Bond	1.7001	1.7516
U.S. 30 Year Bond	2.5494	2.5983

Currencies

BOC Close	Today	Previous
Canadian $	0.77268	0.77861
US $	1.29420	1.28434
Euro Rate 1 Euro=		Inverse
Canadian $	1.46329	0.68339
US $	1.13065	0.88445

Commodities

Gold	Close	Previous
London Gold Fix	1265.90	1279.25
Oil	Close	Previous
WTI Crude Future	46.21	46.70

Market Commentary:
NUMBER OF THE DAY
$1 billion 

Apple’s investment in Didi Chuxing, China’s $25 billion homegrown competitor to Uber. In China’s fast-growing market for ride-sharing,     

Didi and UberChina are locked in a fierce battle to attract riders and investors.

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, clawing back a weekly gain, as financial shares and energy producers declined with the price of crude, after U.S. retail data jumped the most in a year and spurred bets on higher interest rates.

     The benchmark S&P/TSX Composite Index lost 0.3 percent to 13,748.58 at 4 p.m. in Toronto, paring a weekly gain to 0.3 percent. Volume today in the benchmark was 9.9 percent lower than the 30-day average. The gauge now trades at 20.8 times earnings, about 9.5 percent higher than the 19 times valuation of the S&P 500, data compiled by Bloomberg show.

     U.S. consumer purchases jumped 1.3 percent in April, the most since March 2015, providing the Federal Reserve with more confidence that higher interest rates won’t disrupt growth. The U.S. is Canada’s largest trading partner.

     Crude futures dropped 1.1 percent in New York to $46.21. Investors weighed the return of output from Canadian oil-sands producers after the Alberta wildfires against supply reductions from the U.S. to Nigeria. Militant attacks have cut output in Nigeria to the lowest in 20 years.

     Investors also weighed disappointing earnings results. Financial services stocks slipped 0.5 percent, led by a 0.9 percent decrease in Manulife Financial Corp. Onex Corp., Canada’s largest buyout firm, tumbled 5.4 percent, the most since 2011, after reporting a wider first-quarter loss than analysts had forecast.

     Hudson’s Bay Co. sank 7 percent to a record low after reporting same-store sales results for its first quarter, ahead of full financial results on June 9. Eliminating foreign exchange swings, same-store sales decreased 1 percent, including a 5.7 percent drop at its Saks Fifth Avenue unit.

     Meanwhile Kinross Gold Corp. and Eldorado Gold Corp. maintained gains as raw-materials producers advanced.

     Concordia Healthcare Corp. surged 15 percent after the drugmaker confirmed it is working with Greenhill & Co. considering strategic options for the company. Concordia earlier reported first-quarter earnings short of estimates. The stock has slumped 40 percent this year, among the worst-performing in the S&P/TSX this year.

     Canadian Tire Corp. lost 2.9 percent after analysts at Credit Suisse Group AG lowered their rating for the stock to the equivalent of a sell, as the stock has become expensive. The retailer has jumped 19 percent this year, trading at a record Thursday after posting first-quarter earnings ahead of expectations.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks fell, with the S&P 500 marking the longest weekly losing streak in four months, amid lackluster results from large retailers while data signaling consumers remain healthy added to the case for higher interest rates.

     Despite signs of vitality among consumers, companies that rely on their willingness to spend were among the biggest losers Friday as Nordstrom Inc. and J.C. Penney Co. added to a list of disappointing results and outlooks from department stores this week. Losses among banks accelerated in afternoon trading while energy producers retreated as crude prices fell for the first time in four days.

     The S&P 500 dropped 0.9 percent to 2,046.61 at 4 p.m. in New York, closing at a one-month low with a third straight weekly loss. Declines gathered pace in afternoon trading as the gauge slipped below its average price during the past 50 days. The Dow Jones Industrial Average lost 185.18 points, or 1.1 percent, to 17,535.32, a seven-week low. The Nasdaq Composite Index dropped 0.4 percent. About 6.6 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average.

     “You’d think the retail numbers would prevent the market from going lower like in the last couple weeks,” Mark Kepner, an equity strategist at Chatham, New Jersey-based Themis Trading LLC, said by phone. “But there are some other issues with the market right now. Every time we get up to 2,100 there’s resistance, and overall the earnings aren’t great and that’s a factor as well.”

     A report today showed sales at retailers in April saw the biggest gain since March 2015, contrasting with weak quarterly results this week from major chains including Macy’s Inc. and Kohl’s Corp. Nordstrom tumbled 13 percent, the most in the S&P 500 Friday, after cutting its annual forecast. Wal-Mart Stores Inc. lost 2.9 percent to lead declines in the Dow. Amazon.com Inc. slipped 1.1 percent to fall for the first time in six days.

     A rally that sent the S&P 500 up as much as 15 percent has been struggling to regain momentum since reaching a four-month high on April 20, amid mixed earnings and lukewarm signs of an economic pickup. This week was marked by the benchmark surging the most in two months on Tuesday as commodities rebounded, only to slide by the most in a month Wednesday after disappointing results from Walt Disney Co. and Macy’s spurred a broader selloff.

     Weaker-than-forecast quarterly reports at tech giants including Apple Inc., Microsoft Corp. and Google parent Alphabet Inc. have been among the obstacles for equities. As the earnings season winds down, analysts estimate income at S&P 500 companies fell 7.4 percent in the first quarter compared with forecast for flat growth earlier this year. Of those that have announced results so far, about 74 percent beat profit forecasts, and 54 percent exceeded sales expectations.

     Along with the retail sales report, investors are scouring other data for clues on the economy’s health and possible trajectory of interest rates. A measure today showed consumer confidence jumped in May to the highest level in almost a year, while another report said wholesale prices rose in April for the first time in three months. A separate gauge showed growth in business inventories continues to outpace that of sales.

     Two Federal Reserve presidents, Boston’s Eric Rosengren and Kansas City’s Esther George, yesterday made separate but similar cases for a rate increase, arguing that the central bank risks stoking an asset bubble by delaying action for too long. Still, traders are pricing in only a 4 percent chance the Fed will act in June. December is the first month with at least even odds of higher borrowing costs.

     In Friday’s trading, all of the S&P 500’s 10 main industries fell, with six groups sinking more than 1 percent. Consumer staples, energy, financial and industrial companies lost at least 1.2 percent. The CBOE Volatility Index increased 4.4 percent to 15.04, a one-week high. The measure of market turbulence known as the VIX trimmed its May decline to 4.2 percent from more than 13 percent earlier this week.

     Transportation companies were among the worst performers in the industrial group, with the Dow Jones Transportation Average capping the biggest weekly slide since January. Ryder System Inc. fell the most in two months, while railroads Norfolk Southern Corp. and Kansas City Southern dropped at least 2.4 percent. Caterpillar Inc. lost 2.3 percent and extended a weekly losing streak to four, the most since September.

     Banks in the benchmark tumbled to the lowest level in month. Wells Fargo & Co. and Citigroup Inc. dropped at least 1.9 percent. The KBW Bank Index fell 1.6 percent. Among other financials, real-estate companies extended the steepest weekly decline since February, led by mall and shopping-center owners. Macerich Co. and Simon Property Group Inc. sank more than 2.7 percent.

     Among energy producers, Transocean Ltd. and Southwestern Energy Co. fell the most, down more than 4.4 percent. Chevron Corp. slumped 1.4 percent. Crude pared a weekly gain as investors weighed the return of output from Canadian producers against supply reductions from the U.S. to Nigeria.

     Wal-Mart was one of the heaviest drag on the staples group as it posted the worst week in seven months. PepsiCo Inc. slid 1.8 percent, the steepest in more than two months, after a regulatory filing showed Nelson Peltz’s Trian Fund Management LP eliminated its stake in the beverage-and-snack giant. Costco Wholesale Corp. fell for a third day, losing 1.5 percent. In the broader retailer group, Target Corp. and Dollar Tree Inc. sank at least 2.2 percent.

     In the consumer discretionary segment, Nordstrom fell the most, while Michael Kors Holdings Ltd. declined 4.3 percent amid its longest streak in almost 10 months. Tiffany & Co. and Urban Outfitters Inc. lost more than 2.9 percent.

     Nvidia Corp. rose 15 percent, the most in more than seven years, to an all-time high. The biggest maker of graphics chips used in high-end gaming computers, predicted sales that may top analysts’ estimates, signaling game players continue enthusiastically to seek the latest technology.
 

Have a wonderful weekend everyone.

 

Be magnificent!

Whenever I see an erring man, I say to myself I have also erred;

when I see a lustful man I say to myself, so was I once;

and in this way I feel kinship with everyone in the world

and feel that I cannot be happy without the humblest of us being happy.

Mahatma Gandhi

As ever,
 

Carolann

 

Laughter is an instant vacation.

     -Milton Berle, 1908-2002

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:

Israel was established 68 years ago today.

Anne Frank was born on this day in 1929.

Florence Nightingale was born on this day in 1820.

Kate Hepburn was born on this day in 1907.

And because Edward Lear, the limericist was born on this day in 1812, it is LIMERICK DAY.

There was a Young Lady whose eyes,
Were unique as to colour and size.
When she opened them wide,
People all turned aside,
And started away in surprise.
                   -Edward Lear

Also on this day, in 1932, the body of Charles Lindbergh’s baby is found in Hopewell N.J., a short distance from the Lindbergh residence. Charles Augustus Lindbergh, Jr. was kidnapped from the family’s home more than two months earlier. The crime and subsequent trial captured the world’s attention.

PHOTOS OF THE DAY

Solar Impulse 2, a solar powered airplane piloted by Swiss adventurer Bertrand Piccard, takes off from Phoenix Goodyear Airport on Thursday. Solar Impulse 2 took off from Arizona at 10:05 AM UTC, 12:05 PM CET, 3:05 AM local time for a journey that is expected to last 17 hours and 50 minutes until landing in Tulsa, Oklahoma. Jean Revillard/SI2/Reuters

A girl watches as Israeli Air Force CH-53 helicopters fly over the Mediterranean Sea during an aerial show as part of the celebrations for Israel’s Independence Day marking the 68th anniversary of the creation of the state in Tel Aviv, Israel on Thursday. Baz Ratner/Reuters

Market Closes for May 12^th, 2016

Market Index	Close	Change
Dow Jones	17720.50	+9.38   +0.05%
S&P 500	2064.11	-0.35   -0.02%
NASDAQ	4737.336	-23.352   -0.49%
TSX	13787.80	-0.41
		—

International Markets

Market Index	Close	Change
NIKKEI	16646.34	+67.33
		+0.41%
HANG SENG	19915.46	-139.83
		-0.70%
SENSEX	25790.22	+193.20
		+0.75%
FTSE 100	6104.19	-58.30
		-0.95%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.317	1.299
CND. 30 Year Bond	1.985	1.964
U.S.    10 Year Bond	1.7516	1.7315
U.S. 30 Year Bond	2.5983	2.5762

Currencies

BOC Close	Today	Previous
Canadian $	0.77861	0.77860
US $	1.28434	1.28436
Euro Rate 1 Euro=		Inverse
Canadian $	1.46090	0.68451
US $	1.13747	0.87914

Commodities

Gold	Close	Previous
London Gold Fix	1279.25	1276.85
Oil	Close	Previous
WTI Crude Future	46.70	46.23

Market Commentary:

QUOTE OF THE DAY

“We’re, frankly, scratching our heads”

Macy’s Chief Financial Officer Karen Hoguet on the country’s largest department-store chain reporting its worst quarterly sales since the recession. With saving rates high, wages growing and employment data steady, Macy’s executives were at a loss to explain why consumers weren’t spending in its stores. 

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks ended the day flat, as a retreat by natural-resource producers was offset by gains in energy after crude settled at a six-month high. Oil rebounded amid signs of a reduction in global supply while Canadian oil- sands production is coming back online.

     The benchmark S&P/TSX Composite Index lost less than an index point to 13,787.80 at 4 p.m. in Toronto, erasing an earlier advance of as much as 0.7 percent. Four of 10 industries in the S&P/TSX declined. Volume was 4.9 percent lower than the 30-day average. The gauge now trades at 20.9 times earnings, about 9.3 percent higher than the 19.2 times valuation of the S&P 500, data compiled by Bloomberg show.

     Crescent Point Energy Corp. jumped 4.9 percent for a third day of gains. The company reported a first-quarter loss narrower than analysts had forecast. Energy producers ended higher after swinging between gains and losses.

     Oil futures in New York swung between gains and losses, adding 47 cents to settle at $46.70 a barrel for a six-month high. Nigeria said militants have curbed the country’s oil output by about 30 percent, while Canadian oil-sands producers are starting the process of resuming operations after wildfires around Fort McMurray in Alberta disrupted production in the past week.

     Raw-materials producers slumped 1.8 percent, the second- most in the S&P/TSX. Barrick Gold Corp. lost 1.9 percent while First Quantum Minerals Ltd. retreated 5.3 percent to lead base- metals producers lower. Gold futures fell as the dollar rose after trading little changed against a basket of 10 currencies. The greenback strengthened against the yen amid speculation of further monetary easing by the Bank of Japan.

     Goldcorp Inc. tumbled 3.9 percent after agreeing to buy Kaminak Gold Corp. in a share-swap deal worth C$520 million ($406 million). The purchase price values Kaminak at a 40 percent premium to its 20-day average, and will involve Goldcorp issuing about 21.6 million shares.

     Health-care stocks lagged the most as Valeant Pharmaceuticals International Inc. dropped 5.6 percent. The stock has slumped 30 percent during a seven-day slide, the longest losing streak for the embattled drugmaker in almost two years. 

     Valeant’s new CEO Joseph Papa was criticized by the leader who took over his previous company. As well, most U.S. hospitals are not receiving promised discounts of as much as 30 percent for two heart medications that have seen steep price increases, despite Valeant pledging to Congress to do so, the New York Times reported.

US

By Dani Burger

     (Bloomberg) — U.S. stocks closed little changed in a whipsaw session, as rising oil prices bolstered an afternoon rebound while a selloff in Apple Inc. was offset by gains in Monsanto Co.

     Apple fell to a 22-month low after a report fueled speculation iPhone sales continue to slump. Monsanto jumped 8.4 percent as people familiar with the matter said Bayer AG is exploring a potential bid for its U.S. competitor. Kohl’s Corp. sank 9.2 percent after its earnings and sales results missed predictions, adding to worry that consumers haven’t loosened spending habits even as economists forecast that a government report Friday will show the biggest gain in retail sales in 11 months.

     The S&P 500 fell less than 0.1 percent to 2,064.11 at 4 p.m. in New York, after swinging between gains and losses. The worst of the days declines halted at the index’s average price during the past 50 days. The Dow Jones Industrial Average rose 9.38 points, or 0.1 percent, to 17,720.50, after losing nearly 86 points. The Nasdaq Composite Index lost 0.5 percent amid Apple’s slump. About 7.1 billion shares traded hands on U.S. exchanges, 5 percent below the three-month average.

     “The markets have expended a lot of energy to stay flat,”  said Eric Wiegand, senior portfolio manager at the Private Client Reserve of U.S. Bank in New York, which oversees $125 billion. “It really is like trying to tread water in a very choppy environment. We’re seeing a lot of rotation beneath the surface. We’re not surprised by volatility. Not just some downside volatility like yesterday, but the potential for upside price movements as well.”

     A roller-coaster week continued as equities struggled to regain upward momentum that has remained elusive since the S&P 500 reached a four-month high three weeks ago. The benchmark rallied the most in two months on Tuesday amid a rebound in commodities, only to dive yesterday after disappointing results from Walt Disney Co. and Macy’s Inc. battered consumer shares and sparked a broader selloff.

     With Apple souring sentiment in the tech group, semiconductor shares fell to a two-month low. Micron Technology Inc. and Skyworks Solutions Inc. dropped at least 4.5 percent, while Intel Corp. fell 1 percent. Elsewhere, Allergan Plc and Gilead Sciences Inc. lost at least 1.3 percent to pace a slide in health-care. The Nasdaq Biotechnology Index sank 1.7 percent, bringing its two-day retreat to 4.7 percent.

     Stocks have churned after the S&P 500 last month reached the highest level since Dec. 1 and came within 1.4 percent of a record set a year ago. The gauge surged as much as 15 percent from a 22-month low in February as crude rebounded, weakness in China showed signs of stabilizing and central bankers signaled they’ll maintain efforts to boost growth. Since the recent high on April 20, the benchmark has ambled in 70-point range as tepid earnings and economic data cooled investors’ risk appetite.

     A report today showed applications for unemployment benefits unexpectedly increased to the highest level since February 2015, signaling a more modest recovery lies ahead as companies adjust headcounts after a first-quarter slowdown in demand. The government’s retail sales data due on Friday are forecast to show a rebound for April after unexpectedly declining in March. Readings on consumer sentiment, producer prices and business inventories are also scheduled for release tomorrow.

     Weaker-than-predicted monthly payrolls figures last week helped push back expectations for Federal Reserve rate increases, with traders pricing in only a 4 percent chance the central bank will act in June. December is now the first month with at least even odds of higher borrowing costs.

     Boston Fed President Eric Rosengren sounded a hawkish note today, saying recent data warrant continued gradual rate increases and policy makers could risk stoking a bubble in the commercial real estate market if they delay action for too long.

     With the earnings season drawing to a close, analysts estimate income at S&P 500 companies fell 7.4 percent in the first quarter. Among the 90 percent members that have announced results so far this season, 75 percent beat profit forecasts, and 54 percent exceeded sales expectations.

     “Part of what’s helping the market is that investor expectations on earnings are generally not so high,” said Frances Hudson, a global thematic strategist at Standard Life Investments in Edinburgh. “Retail sales will be an important indicator tomorrow, as the U.S. consumer has been stalwart to the economy.”

     The CBOE Volatility Index fell 1.9 percent Thursday to 14.41, wiping out a climb of as much as 5 percent. The measure of market turbulence known as the VIX is down 8 percent this month after rising 13 percent in April.

     In Thursday’s trading, seven of the S&P 500’s 10 main industries advanced, with phone, raw-material and consumer staples companies rising at least 0.4 percent. Health-care shares lost 0.6 percent, while the technology group slipped 0.4 percent after falling as much as 1.1 percent.

     Monsanto’s strongest rally since August boosted the raw materials group. The potential takeover by German competitor Bayer looks to extend a record-setting pace for consolidation in the chemical sector, as low crop prices drive mega-deals in agriculture. Sealed Air Corp. gained 2.5 percent after Goldman Sachs Group Inc. rated the shares a buy.

     Industrial stocks fell for the third time in four days, with airlines weighing the most. The Dow Jones Transportation Average marked the biggest back-to-back decline since Jan. 8, with air carriers pummeled for a second day. JetBlue Airways Corp. and United Continental Holdings Inc. slid more than 4.4 percent, while a Bloomberg index of U.S. airlines dropped to a three-month low.

Have a wonderful evening everyone.

 

Be magnificent!

Where we suffer we have made it into a personal affair.

We shut out all the suffering of mankind.

Krishnamurti

As ever,

 

Carolann

 

Well done is better than well said.

 -Benjamin Franklin, 1706-1790

 

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:

WE ARE THE DECISIVE ELEMENT

I have come to the frightening conclusion that I am the decisive element.
It is my personal  approach that creates the climate.
It is my daily mood that makes the weather.
I possess tremendous power to make life miserable or joyous.
I can be a tool of torture or an instrument of inspiration.
I can humiliate or humor, hurt or heal.
In all situations, it is my response that decides whether a crises is escalated or de-escalated, and a
person is humanized or dehumanized…

                 -Johann Wolfgang von Goethe, 1749-1832

AWAKENING GATHA/ Deena Metzger
Waking in the morning
Time smiles in my hand.
This dawn
Lasts all day.

PHOTOS OF THE DAY

A couple holding a baby pose for a selfie on a breakwater on the edge of the Mediterranean Sea in Barcelona, Spain on Tuesday. Emilio Morenatti/AP

Guests attend a garden party at Buckingham Palace in London on Tuesday. Every summer, the Queen hosts at least three such parties that are attended by people from all walks of life. Garden parties have been held at the palace since the 1860s, when Queen Victoria instituted what were known as ‘breakfasts,’ though they took place in the afternoon. John Stillwell/AP

Market Closes for May 10^th, 2016

Market Index	Close	Change
Dow Jones	17928.35	+222.44   +1.26%
S&P 500	2084.39	+25.70   +1.25%
NASDAQ	4809.879	+59.670   +1.26%
TSX	13775.19	+211.35
		+1.56%

International Markets

Market Index	Close	Change
NIKKEI	16565.19	+349.16
		+2.15%
HANG SENG	20242.68	+85.87
		+0.43%
SENSEX	25772.53	+83.67
		+0.33%
FTSE 100	6156.65	+41.84
		+0.68%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.315	1.317
CND. 30 Year Bond	1.964	1.968
U.S.    10 Year Bond	1.7613	1.7507
U.S. 30 Year Bond	2.6122	2.6083

Currencies

BOC Close	Today	Previous
Canadian $	0.77461	0.77148
US $	1.29097	1.29620
Euro Rate 1 Euro=		Inverse
Canadian $	1.46840	0.68101
US $	1.13744	0.87917

Commodities

Gold	Close	Previous
London Gold Fix	1262.80	1265.25
Oil	Close	Previous
WTI Crude Future	44.66	43.44

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks climbed the most since February, rebounding from a month low, as the nation’s largest lenders and natural resource producers rose following reports oil-sands producers will restart production after wildfires that engulfed northern Alberta moved away from their facilities.

     The benchmark S&P/TSX Composite Index jumped 1.6 percent to 13,775.19 at 4 p.m. in Toronto, for the steepest gain in almost three months. The gauge now trades at 20.9 times earnings, about 8 percent higher than the 19.4 times valuation of the S&P 500, data compiled by Bloomberg show. Volume was in line with the 30- day average.

     Energy producers climbed 2.3 percent as a group, the biggest contributor to gains in the S&P/TSX. Suncor Energy Inc. and Canadian Natural Resources Ltd. added more than 3.1 percent. Crude futures bounced back from a two-week low, trading above $44 a barrel in New York. 

     Producers including Suncor, Syncrude Canada Ltd. and Royal Dutch Shell Plc took an estimated 1 million barrels a day offline over the past week due to the wildfires surrounding Fort McMurray in Alberta. The companies are now seeking to bring workers back and start up plants. Canadian officials said Monday rain and cooler temperatures were helping firefighters battle the flames, which still cover an area the size of New York City.

     Canadian oil and gas companies are leading a drop in investment plans for a second year, with spending by companies and governments on non-residential construction, machinery and equipment to fall 4.4 percent in 2016, according to Statistics Canada. Capital spending in the mining, quarrying and oil and gas industry will drop 23 percent this year.

     Royal Bank of Canada and Bank of Nova Scotia added at least 1 percent as financial services stocks increased as a group. Industrial shares also rallied, pacing gains with railway operators Canadian National Railway Co. and Canadian Pacific Railway Ltd. Raw-materials producers soared 3 percent as a group, as industrial metals rebounded after posting the biggest selloff in two months.

     Intertape Polymer Group Inc. sank 7.6 percent, the most since August, after first-quarter revenue that trailed analysts’ estimates were blamed on the South Carolina flood. The flood resulted in about $5 million worth of lost sales of masking tape and stencil products, the company said.

     Badger Daylighting Ltd.ended 0.2 percent higher. Shares tumbled as much as 9.2 percent after posting first-quarter earnings that fell short of analysts’ expectations. Cash flow from operations plunged 36 percent from year-ago levels amid lower revenue and gross profit. The excavating company also raised its dividend.

US

By Dani Burger

     (Bloomberg) — The bearish sentiment that hit traders in the past two weeks eased amid a bounce in commodities, with U.S. stocks rising the most in two months to join in equity market gains from Japan to Europe.

     Energy producers, industrial shares, banks and Amazon.com Inc. were among the strongest contributors to a rally that jolted equities out of a recent torpor. The online retail giant climbed 3.4 percent to an all-time high after an analyst boosted their price target on the shares to $1,000. The Bloomberg Commodity Index rebounded from the biggest drop in six weeks, bolstering sentiment toward raw-material companies. After the markets closed, Walt Disney Co. fell as its earnings missed estimates.

     The S&P 500 jumped 1.3 percent to 2,084.39 at 4 p.m. in New York, the most since March 11. The gauge ended an 18-session streak without a 1 percent move in either direction, the longest period of calm since 2014. It was a third day of gains in a recovery from the first back-to-back weekly drop since February. The Dow Jones Industrial Average added 222.44 points, or 1.3 percent, to 17,928.35, the biggest increase in eight weeks. The Nasdaq Composite Index also advanced 1.3 percent.

     “Some of the same factors driving commodities are driving global growth and equities in general,” said Greg Woodard, a senior analyst and strategist at Fairport, New York-based Manning & Napier Inc., which oversees about $46 billion. “If they feel better about growth in China, in emerging markets and global growth, they feel more positive about equities and commodities. The commodity space is really a barometer as opposed to driving equities.”

     After sliding 2.5 percent from its April high through last Thursday, the S&P 500 began a rebound on Friday as worse-than- estimated payrolls data spurred speculation the Federal Reserve will adopt a slower pace in tightening monetary policy. Traders are pricing in only a 6 percent chance of higher interest rates in June, compared with 20 percent in April. The first month with at least even odds of an increase has been pushed back to February 2017.

     The main U.S. equity benchmark jumped 15 percent from its February low through April 20, when it reached a four-month high and came within 1.4 percent of the record set last year. The index has struggled since to extend gains amid lackluster corporate results, particularly from technology giants such as Apple Inc. and Microsoft Corp., as well as subdued economic indicators that damped investor appetite for risky assets.

     As the earnings season draws to a close, analysts have moderated their predictions for a decline in first-quarter profits to 7.4 percent, from 9.5 percent at the start of April. So far, about 75 percent of the firms that have released results beat profit estimates, and 55 percent exceeded sales projections. Walt Disney tumbled 6.2 percent as of 4:42 p.m. after its results missed analysts’ estimates as earnings at the company’s ABC TV network and consumer-products division declined.                        

     Along with earnings, investors continue to scrutinize data for clues on the health of the economy and the path for interest rates. A report today showed signs the labor market remained solid in the first quarter, as job openings rose more than projected in March to the second-highest in data back to 2000.

     The CBOE Volatility Index fell 6.5 percent Tuesday to 13.63, slipping for a fourth day to a two-week low. The measure of market turbulence known as the VIX is down 13 percent so far this month, after a 13 percent climb in April. About 6.7 billion shares traded hands on U.S. exchanges, 12 percent below the three-month average.

     Meanwhile, Tuesday’s trading was an about-face from yesterday’s session as commodity sensitive sectors led gains among the S&P 500’s 10 main groups. Energy and raw-material producers climbed as much as 1.8 percent as oil rose 2.8 percent from a two-week low, amid concern supplies from two of Africa’s largest crude reserves could be disrupted. Hess Corp. and Devon Energy Corp. advanced more than 4.9 percent, while services giant Schlumberger Ltd. added 2.1 percent.

     Financial companies also recovered from yesterday’s losses, advancing 1.4 percent as a group. Leucadia National Corp. gained 5.9 percent, the most in more than four years, after agreeing to acquire ITG Investment Research. JPMorgan Chase & Co. and Bank of America Corp. rose at least 1.3 percent, while the KBW Bank Index had its strongest climb since April 13. Goldman Sachs Group Inc. increased 2.5 percent, the steepest in almost three weeks.                         

     Amazon climbed for a third day after Sanford C. Bernstein & Co Inc. analyst Carlos Kirjner lifted his price target on the shares to a street-high $1,000 from $770, citing profit margins that are likely to expand faster in the next two years. The stock has surged 46 percent in three months, the biggest contributor to the S&P 500’s rebound from a 22-month low.

     Boeing Co. climbed 2 percent, one of the Dow’s biggest gainers today. The planemaker is scheduled to meet with analysts tomorrow, and is in the midst of defending its rainmaker 737 jet as its competition grows. With its fate tied closely to the prospects for commodities, Caterpillar Inc. flipped from worst in the Dow yesterday to second-best today, rising 2.4 percent.

     Among other industrial stocks, Dun & Bradstreet Corp. gained 7 percent to a nine-month high after it reported earnings yesterday that beat analysts’ estimates. Railroads Union Pacific Corp. and Norfolk Southern Corp. increased more than 1.7 percent. As a group, industrial shares in the S&P 500 rose 1.7 percent, the most since March 17.

     International Flavors & Fragrances Inc. led gains among raw-materials companies, surging 5.3 percent to a record after its quarterly sales and earnings exceeded predictions. Dow Chemical Co. increased 1.4 percent and Freeport-McMoRan Inc. rose 3.2 percent after an 11 percent slide on Monday.                      

     Technology companies advanced for a fourth day, the longest streak of gains in seven weeks. Microsoft Corp. and Google parent Alphabet Inc. each added at least 1.4 percent. Akamai Technologies Inc. and Western Digital Corp. topped the group, rising more than 3.6 percent.

     Health-care shares were near the bottom of the S&P 500’s 10 main industries, though still closed with the best two-day gain in a month. Allergan Plc rose 5.3 percent as the maker of the anti-wrinkle injection Botox plans to buy back as much as $10 billion in stock after completing the $40 billion sale of its generics business to Teva Pharmaceutical Industries Ltd. The company also reported earnings that beat analysts’ projections.

     Pfizer Inc. was one of two Dow components to decline, closing little changed after falling as much as 1 percent. Zoetis Inc. slipped 2 percent after people familiar with the matter said Pershing Square Holdings Ltd., the publicly traded security of Bill Ackman’s activist hedge fund, is selling part of its stake in health-care company.

     Gap Inc. was the biggest loser in the S&P 500, falling almost 12 percent after the apparel chain posted disappointing results. The shares sank to the lowest since January 2012. Kohl’s Corp., Urban Outfitters Inc. and Macy’s Inc. each lost more than 1.5 percent. Macy’s is scheduled to report results tomorrow.

     HCP Inc. and Welltower Inc. fell more than 2.2 percent as the health-care REITs slipped following Genesis Healthcare Inc.’s earnings miss. Genesis tumbled 24 percent to a two-month low after the company also cut its 2016 profit outlook below analysts’ estimates.

Have a wonderful evening everyone.

 

Be magnificent!

Nonviolence is not a cloistered virtue to be practiced

by the individual for peace and final salvation,

but it is a rule of conduct for society,

if it is to live consistently with human dignity

and make progress towards the attainment of peace

for which it has been yearning for ages past.

Mahatma Gandhi

As ever,

 

Carolann

 

Doubt kills more dreams than failure ever will.

                              -Suzy Kassem, b. 1975

 

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 – Selected by Matthew Zapruder, NY Times, 5/8/2016

Along with the epic and the dramatic play, the lyric was one of the earliest forms of poetry: a song of personal emotion, sung by a single voice to the accompaniment of a strummed instrument, a lyre.  For a long time the lyre itself has been implied, but the best lyric poems still sound like songs.

Vall de Núria

By Rowan Ricardo Phillips

The white rose.  The celestial silence.
The lake of light. The bed-like inner thigh
Of empyrean buttermilk and gold,
Call it what you will, it wakes me tonight.
Heaven reheavens.  And the mind’s prelude
To the touch of your lips on my forehead,
On my neck, our drowned echoes celloing
In the dark like flames drawn on the ocean,
Is not the mind’s prelude but its heaven.
How somewhere not in Spain there’s a mountain
Borrowing your name, my soul is its snow,
And so in the summer I am nothing,
When all I want to do is lay my head
Down, lay my head down on the naked slope
Of your chest and listen there for my heart.

Matthew Zupruder is the author of four collections of poetry, most recently “Sun Bear.”  He teaches at Saint Mary’s College of California and is the editor at large at Wave Books.  Rowan Ricardo Phillips is the winner of a Whiting Award.  His second collection f poetry, “Heaven,” was published by Farrar, Straus & Giroux last year.

PHOTOS OF THE DAY

An American flag is silhouetted as the planet Mercury is seen, lower left quadrant, transiting across the face of the sun in Las Vegas, Nevada on Monday. Mercury passes between Earth and the sun only about 13 times a century, with the previous transit taking place in 2006. David Becker/Reuters

‘Maya’ girl Irene Garcia Sieteiglesias sits at an altar during “Las Mayas” festivity in Madrid, Spain on Sunday. ‘Las Mayas’ festival is held annually at the beginning of May to celebrate the awakening of nature in Spring. Susana Vera/Reuters

Market Closes for May 9^th, 2016

MarketIndex	Close	Change
DowJones	17705.91	-34.72  -0.20%
S&P 500	2058.69	+1.55  +0.08%
NASDAQ	4750.211	+14.056  +0.30%
TSX	13563.84	-137.63
		-1.00%

International Markets

MarketIndex	Close	Change
NIKKEI	16216.03	+109.31
		+0.68%
HANGSENG	20156.81	+46.94
		+0.23%
SENSEX	25688.86	+460.36
		+1.82%
FTSE 100	6114.81	-10.89
		-0.18%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.317	1.357
CND.30 Year Bond	1.968	1.990
U.S.   10 Year Bond	1.7507	1.7789
U.S.30 Year Bond	2.6083	2.6276

Currencies

BOC Close	Today	Previous
Canadian $	0.77148	0.77453
US$	1.29620	1.29110
Euro Rate1 Euro=		Inverse
Canadian $	1.44532	0.67782
US$	1.13819	0.87859

Commodities

Gold	Close	Previous
London GoldFix	1265.25	1289.00
Oil	Close	Previous
WTI Crude Future	43.44	44.66

Market Commentary:

Canada

By Oliver Renick

     (Bloomberg) — Canadian stocks slid, extending last week’s retreat, as commodity prices fell and wildfires raging through Alberta appeared set to move away from one of the country’s oil- producing regions.

     The benchmark S&P/TSX Composite Index lost 1 percent to 13,563.84 at 4 p.m. in Toronto, falling for the first time in three sessions. The gauge now trades at 20.6 times earnings, about 7.9 percent higher than the S&P 500’s 19.1 times earnings valuation, data compiled by Bloomberg show. Volume in the measure was about 7 percent lower than the 30-day average at closing time.

     The Bloomberg Commodity Index dropped for the fifth time in six sessions. All but seven companies in the S&P/TSX raw- materials index slid on Monday. Teck Resources Ltd. and First Quantum Minerals Ltd. led losses, slumping more than 11 percent.

     Gold producers also fell with the precious metal, which lost 2.1 percent to $1,266.60 an ounce in New York, the biggest loss since Feb. 16. Yamana Gold Inc. sank 7.3 percent, while Barrick Gold Corp. lost 5.5 percent, the most in six weeks.

     Crude oil fell 2.7 percent to a two-week low, as shifting winds moved wildfires away from oil-sands facilities in Alberta, reducing concern that production cuts would make a substantial dent in U.S. oil stockpiles. Suncor Energy Inc. dropped 1.8 percent, and Encana Corp. sank 4.1 percent to a one-month low.

     Consumer discretionary stocks led gains in the S&P/TSX with advances of at least 3.8 percent in Performance Sports Group Ltd and Dorel Industries.

     Temple Hotels Inc. tumbled 15 percent, the most in seven years. The shares had surged 56 percent in the three prior sessions amid the wildfires in Alberta. The company has nine properties in the Ft. McMurray area, with insurance coverage for loss of revenue.

     Valeant Pharmaceuticals International Inc. fell 5.2 percent to weigh on the health-care group, with the stock dropping for the sixth time in seven days. The embattled drugmaker reiterated its revenue and earnings estimates for the first quarter, saying it expects to submit its regulatory filing by June 10, ahead of a July 31 deadline in its debt agreement.

US

By Dani Burger

     (Bloomberg) — The S&P 500 closed little changed as a rally in health-care shares was offset by declines among commodity producers, while investors awaited a final batch of earnings reports and further clues on prospects for the economy.

     Health-care stocks jumped after their worst two weeks since February, while energy producers slid for a second day amid lower crude prices. Weaker metals prices sent other commodity shares lower. Freeport-McMoRan Inc. dropped 11 percent as copper sank and the company agreed to sell one of its mines. LendingClub Corp. tumbled 35 percent after its chief executive resigned as an internal review found abuses tied to the sale of loans.

     The S&P 500 rose 0.1 percent to 2,058.69 at 4 p.m. in New York, after its first back-to-back weekly losses since February. The Dow Jones Industrial Average lost 34.72 points, or 0.2 percent, to 17,705.91. The Nasdaq Composite Index increased 0.3 percent, buoyed by drug developers, to mark its first two-day climb since April 13. About 6.8 billion shares traded hands on U.S. exchanges, 11 percent below the three-month average.

     “What’s helping right now on the upside is consumer discretionary, staples and health,” said Brian Frank, portfolio manager at Frank Capital Partners LLC. “It’s the old bifurcated market story, with energy and materials down while the rest of the market is up. Metals are under a lot of pressure right now, with stockpiles up significantly.”

     The weakness in commodity shares showed evidence of simmering pessimism on the pace of global growth. Chinese trade figures released during the weekend showed exports fell in dollar terms in April and imports dropped for the 18th month in a row. Crude fell 2.7 percent as shifting winds moved wildfires away from oil-sands facilities in Alberta, Canada, reducing concern that production cuts would make a substantial dent in U.S. stockpiles.

     The main U.S. equity benchmark snapped a three-day decline on Friday after worse-than-estimated payrolls data stoked speculation the Federal Reserve will adopt a slower pace in tightening monetary policy. Traders are pricing in only a 4 percent chance of higher borrowing costs in June, compared with 20 percent a month ago.

     Still, influential bond investors warn not to count out the Fed. Bill Gross, former manager of the biggest bond fund, said policy makers may act at their next meeting in June. Mohamed El- Erian, chief economic adviser at Allianz SE, said the Fed may move twice this year. Mark Kiesel at Pacific Investment Management Co. and New York Fed President William Dudley echoed the comments.

     The S&P 500 has slipped about 2 percent since its April 20 peak, putting a brake on a 15 percent rise from the index’s 22- month low in February. Tepid first-quarter corporate results, particularly from technology giants such as Apple Inc. and Microsoft Corp., as well as subdued economic indicators damped investor appetite for risky assets after the gauge approached its all-time high set last May. The benchmark on Monday held within a 10-point band, the narrowest range in three weeks.

     Analysts have moderated their predictions for a declinein first-quarter earnings to 7.4 percent, from 9.5 percent at the start of April. According to one measure of corporate optimism, companies that forecast profit will exceed analyst estimates just outnumbered those that warn earnings will trail projections. A pause in the drumbeat of bad news on earnings would be welcome by bulls who’ve watched stock swings widen and rallies die as share prices approached record levels reached 12 months ago.

     Traders will also parse economic releases for clues on U.S. growth prospects, including data on retail sales and jobless claims later this week. Chicago Fed President Charles Evans said in a panel discussion in London today that the U.S. central bank is “just being careful” by pausing in its campaign to raise rates, and that borrowing costs should increase later in the year if economic fundamentals remain sound.

     “We’re starting to see with Friday’s payrolls that the Fed will not raise rates in June, so at least that risk is gone,” said Jasper Lawler, a London-based market analyst at CMC Markets Plc. “Investors will be looking toward retail sales this week for further indications.”

     Health-care companies were the best performers among the S&P 500’s 10 main industries, capping the strongest daily advance in more than a month. Generic drugmakers pushed the group higher, after Teva Pharmaceutical Industries Ltd. said falling prices of generic drugs would start to stabilize.

     Teva gained 5.1 percent, the most since October, while Mylan NV and Perrigo Co. added at least 1.5 percent. Allergan Plc, whose generic business Teva plans to acquire by June, climbed 6 percent for its biggest increase in six months. The Nasdaq Biotechnology Index rallied 2.5 percent, the most since April 21 after dropping more than 11 percent in the subsequent two weeks. Celgene Corp. and Biogen Inc. each added at least 2.1 percent.

     Krispy Kreme Doughnuts Inc. surged to its best performance in nearly five years after JAB Holdings announced it would buy the doughnut maker in a $1.35 billion transaction. The $21 a share offer is 25 percent higher than Krispy Kreme’s average closing level in the past 20 trading sessions.

     Grocer Kroger Co. added 3.7 percent, the best in almost three months, while Hormel Foods Corp. rose 3.1 percent to lead the advance among consumer staples. The group reached a one- month high and Wal-Mart Stores Inc. climbed for a fourth day, the longest winning streak in more than two months. Chipotle Mexican Grill Inc. and Darden Restaurants Inc. increased at least 3.1 percent to lead gains among discretionary stocks.

     The energy and raw-material groups sank the most as crude and metals dropped to reverse Friday’s advance. Energy producers fell 1.3 percent, cutting early losses by almost half. Diamond Offshore Drilling Inc. and Transocean Ltd. lost more than 6.4 percent, while Chevron Corp. declined 1.5 percent.

     Freeport-McMoRan saw the steepest slide among raw-materials companies, falling 11 percent, and is now down 25 percent since April ended. The copper producer said Monday it agreed to sell its Democratic Republic of Congo mine in an attempt to reduce debt racked up in the commodities boom. Imports of copper by China slumped in April from a record the previous month after swelling stockpiles in the top user discouraged purchases.

     The Bloomberg Commodity Index had its largest drop in six weeks, helping to drag mining machinery maker Caterpillar Inc. to a two-month low. Newmont Mining Corp. sank 6.7 percent, after a 5.5 percent jump in the prior two sessions, as gold fell for the fifth time in six days. Alcoa Inc. dropped 5.8 percent to a one-month low, taking its May retreat to 15 percent. The shares had surged nearly 17 percent in April.

     The CBOE Volatility Index fell 1 percent to 14.57. The measure of market turbulence known as the VIX slipped 6.2 percent last week, its third drop in the last four.

 

Have a wonderful evening everyone.

 

Be magnificent!

 

Nonviolence and cowardice go ill together.

I can imagine a fully armed man to be at heart a  coward.

Possession of arms implies an element of fear, if not cowardice.

But true nonviolence is impossible without the possession of unadultereated fearlessness.

Mahatma Gandhi

 

As ever,

 

Carolann

 

 

Storms make the oak grow deeper roots.

              -George Herbert, 1875-1957

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: HAPPY MOTHER’S DAY WEEKEND!

Just returned from the Sohn Investment Conference in NYC and, as always, it was terrific – great investment ideas proposed by every speaker – and, as to be expected, many contradictory ones.   Most of the attendees presented after suffering terrible returns in 2015.  Pershing Square’s Bill Ackman, who presented the bullish case for Valeant last year (and now is working to salvage a multi billion dollar investment in the drugmaker and recover from his worst year as a fund manager) did not present this year, but was in attendance – in fact he sat in the row directly in front of me.  The group was pretty equally weighted with bulls and bears, in fact several money managers gave one short and one long recommendation.  This year’s lineup was as impressive as it usually is every year.  Whenever a political opinion was given, the belief is that Trump is going to win the Presidency.  Billionaire Stanley Druckenmiller gave a scathing rant on the Federal Reserve, which he claims is using low interest rates to ease borrowing costs and smooth over growing problems in the global economy, namely unproductive investment, particularly in China, an engine of global demand.  Hedge fund guru Zachary Schreiber thinks Saudi Arabia is in trouble and thinks shorting the Saudi Rial is a good bet.  The US dollar will get stronger he believes.  Chamath Palihapitiya, a  refugee to Canada from then war torn Sri Lanka, made his way to Silicon Valley after college and made his fortune at the investment fund he founded; he thinks that Amazon is undervalued and that it could be worth  a $3  trillion valuation.

Squeezed some of the arts in after meetings.  I was lucky enough to get to the theatre one night to see the highly acclaimed drama, Hamilton.  It  is the story of Alexander Hamilton, a penniless Caribbean immigrant who rose to be the U.S.’s first Treasury secretary.  The show has already won a Grammy for best musical theatre album, and multiple Drama Desk awards in 2015, a Pulitzer and appears destined to sweep the Tony’s this year.

It was simply stunning, possibly the best theatre I’ve ever seen.  A pleasant surprise was to see Marissa Mayer seated in the seat behind me.

PHOTOS OF THE DAY

Four dancers from The Australian Ballet dressed in white swan tutus pose for photos on a floating barge in Penrith Lake in Sydney on Friday. The ballet announced today it will perform on an open air stage on the lake in November. Rob Griffith/AP

Members of the Prizma Ensemble, wearing solid-colored bodysuits, take part in the 6th Jane’s Walk, a movement of free, citizen-led walking tours inspired by American urban planner Jane Jacobs, in Jerusalem on Friday. Baz Ratner/Reuters

 

A horse gets a bath after a morning workout at Churchill Downs Friday in Louisville, Ky. The 142nd running of the Kentucky Derby is scheduled for Saturday. Charlie Riedel/AP

Market Closes for May 6^th, 2016

Market Index	Close	Change
Dow Jones	17740.63	+79.92   +0.45%
S&P 500	2057.14	+6.51   +0.32%
NASDAQ	4736.156	+19.062   +0.40%
TSX	13701.47	+69.46
		+0.51%

International Markets

Market Index	Close	Change
NIKKEI	16106.72	-40.66
		-0.25%
HANG SENG	20109.87	-339.95
		-1.66%
SENSEX	25228.50	-33.71
		-0.13%
FTSE 100	6125.70	+8.45
		+0.14%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.357	1.355
CND. 30 Year Bond	1.990	1.987
U.S.    10 Year Bond	1.7789	1.7383
U.S. 30 Year Bond	2.6276	2.5952

Currencies

BOC Close	Today	Previous
Canadian $	0.77453	0.77798
US $	1.29110	1.28531
Euro Rate 1 Euro=		Inverse
Canadian $	1.47263	0.67906
US $	1.14060	0.87673

Commodities

Gold	Close	Previous
London Gold Fix	1289.00	1280.25
Oil	Close	Previous
WTI Crude Future	44.66	44.32

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, paring the first weekly loss in a month, as gold producers jumped after the U.S. added the fewest jobs in seven months and Canada unexpectedly lost jobs due to cutbacks linked to the struggling energy industry.

     The benchmark S&P/TSX Composite Index climbed 0.5 percent to 13,701.47 at 4 p.m. in Toronto, paring its weekly loss to 1.8 percent. The gauge now trades at 20.8 times earnings, about 8.6 percent higher than the 19.1 times earnings valuation of the S&P 500, data compiled by Bloomberg show.

     Canada’s employment declined by 2,100 positions in April, keeping the unemployment rate at 7.1 percent, a reversal from expectations of a 1,000 job increase and a jobless rate of 7.2 percent, according to a survey of economists. The surprise loss in jobs follows a 40,600 gain in March. U.S. employers added 160,000 workers in the month, the fewest in seven months as the jobless rate held steady.

     “While not good news, the moderation in employment in April is far from surprising after the big gain in the prior month,” Doug Porter, chief economist at BMO Financial Group, said in a report, referring to the Canadian labor market data.

     Porter also cut his estimate for Canada’s second-quarter economic growth to zero from 1.5 percent “amid the severe disruptions to oil production due to the Fort McMurray wildfires”. The figure is a placeholder until further information on the impact of the disaster is known, he also said.

     Barrick Gold Corp. and Kinross Gold Corp. rallied more than 3.6 percent to lead raw-materials producers higher.

     Gold prices jumped after the jobs data release, with the disappointing numbers increasing speculation the Federal Reserve will delay raising interest rates. Traders are now pricing in a 8 percent probability of an interest rate hike at the Fed’s June meeting, down from 10 percent before the payrolls data.

     Crude rose 34 cents to settle at $44.66 a barrel in New York, paring its first weekly decline in more than a month. The wildfires ravaging Fort McMurray, Canada’s oil hub in northern Alberta, has rapidly spread to an area almost the size of Hong Kong, forcing more than 80,000 residents to flee and disrupting oil-sands operations in the region.

     Health-care stocks slid with Valeant Pharmaceuticals International Inc. Valeant announced Thursday a committee to oversee the pricing of its drugs after coming under scrutiny for its business practices.

     National Bank of Canada slumped 1.2 percent for a seventh straight loss, its longest slump since December. The lender said Thursday it will set aside C$195 million ($152 million) to cover soured oil-and-gas loans in the second quarter, the second bank to provide an early warning ahead of earnings results later this month.

US

By Anna-Louise Jackson

     (Bloomberg) — U.S. stocks advanced to halt a three-day drop, after the smallest jobs gain in seven months fueled speculation the Federal Reserve will look to raise interest rates gradually.

     The S&P 500 added 0.3 percent to 2,057.14 at 4 p.m. in New York, after falling as much as 0.6 percent. The Dow Jones Industrial Average added 79.92 points to 17,740.63. The S&P 500, which posted its first back-to-back weekly drop since February, climbed higher in afternoon trading after dipping briefly below its 50-day moving average of 2,045.06.

     The Labor Department report today showed American employers added 160,000 workers in April, trailing the 200,000 jobs economists estimated and lower than the revised 208,000 gain in March. The jobless rate, projected to ease, stayed at 5 percent, while wage growth accelerated. 

     The data adds to speculation the Fed will stick with a slower pace in tightening monetary policy. While traders were pricing in a 10 percent chance of higher borrowing costs next month before the jobs report, the odds fell to just 2 percent after. February 2017 is now the first month with an even probability of an increase.

     “The first reaction by the market is people are taking June off the table,” said John Canally, chief economic strategist at LPL Financial in Boston, which oversees about $460 billion. “This report wasn’t a disaster. It wasn’t booming, but it wasn’t awful either. The focus now turns to China with the data coming out over the weekend and next week. The global growth story will either be confirmed or denied.”

     The S&P 500 has retreated 2.2 percent since its high on April 20, halting a rebound that lifted it as much as 15 percent from a February low. Concerns over lackluster corporate earnings and signs of tepid economic growth have provided little incentive for further gains in risky assets.

     “The number this morning was not a good number, coming in well below expectations — but on the other side of it, there’s the question of what it means for policy,” said Kevin Caron, a Florham Park, New Jersey-based market strategist and portfolio manager who helps oversee $180 billion at Stifel Nicolaus & Co. “There’s a push and pull between the real economy and the stimulus response to these changes, and those two things tend to negate one another.”

     Investors are also watching the tail end of the earnings season, with more than 85 percent of S&P 500 companies having already announced. While about 76 percent of the firms that have reported so far beat profit forecasts and 54 percent exceeded sales expectations, analysts are still projecting a 7.4 percent decline in first-quarter earnings.

     Activision Blizzard Inc. jumped 8.5 percent after posting first quarter earnings and sales that topped estimates and boosting its outlook for 2016. Herbalife Ltd. surged 9.1 percent after saying it’s in late-stage talks to resolve a Federal Trade Commission probe into whether the nutrition company is a pyramid scheme.

     Carmakers and raw-material producers advanced, after Morgan Stanley boosted its recommendation on General Motors Co. and a weaker dollar fueled gains in metals prices, sending shares of Freeport-McMoran Inc. higher.

     Last year’s momentum stocks added the most to today’s gains, with Amazon.com Inc., Facebook Inc. and Google’s Alphabet Inc. all advancing. Meanwhile, Apple Inc. fell to its lowest level since June 2014.

     Health-care shares slumped, with Endo International Plc slumping as much as 42 percent after the drugmaker cut its full- year earnings forecast to well below analysts’ predictions in the face of increasing competition.

     Square Inc. plunged 22 percent on concerns about financing for its small-business customer-loan program. GoPro Inc. slid 2.3 percent after saying it sees “modest” growth in the second quarter. Valeant Pharmaceuticals International Inc. dropped 13 percent after saying it’s creating a committee to oversee drug pricing as the company seeks to rest its strategy.

 

Have a wonderful weekend everyone.

 

Be magnificent!

Nonviolence is the law of our species,

just as violence is the law of the beasts.

In the savage man, the spirit is not awake;

he does not know the other law as he knows that of physical force.

Human dignity demands that one refer to a superior law,

which implements the force of the spirit.

Mahatma Gandhi

As ever,

 

Carolann

 

 

People don’t like to follow pessimists.

                    -Bob Iger, b. 1951

 

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:

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

PHOTOS OF THE DAY

A woman walks past street art in Beirut, Lebanon, on Wednesday. Graffiti artists have been trying to engage disillusioned youth in a debate about the country’s latest wave of political turmoil. Hassan Ammar/AP

 

A Bangladeshi street vendor sells coconut on a street in Dhaka, Bangladesh, on Wednesday. A.M. Ahad/AP

Market Closes for May 5^th, 2016

Market Index	Close	Change
Dow Jones	17660.65	+9.39   +0.05%
S&P 500	2049.33	-1.79   -0.09%
NASDAQ	4717.094	-8.546   -0.18%
TSX	13630.42	-1.58
		-0.01%

International Markets

Market Index	Close	Change
NIKKEI	16147.38	-518.67
		-3.11%
HANG SENG	20449.82	-76.01
		-0.37%
SENSEX	25262.21	+160.48
		+0.64%
FTSE 100	6117.25	+5.23
		+0.09%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.355	1.402
CND. 30 Year Bond	1.987	2.032
U.S.    10 Year Bond	1.7383	1.7717
U.S. 30 Year Bond	2.5952	2.6322

Currencies

BOC Close	Today	Previous
Canadian $	0.77798	0.77674
US $	1.28531	1.28744
Euro Rate 1 Euro=		Inverse
Canadian $	1.46572	0.68226
US $	1.14036	0.87691

Commodities

Gold	Close	Previous
London Gold Fix	1280.25	1283.00
Oil	Close	Previous
WTI Crude Future	44.32	43.78

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canada stocks ended the day where they began, after swinging between gains and losses, as gold miners advanced with the price of the metal while energy producers slipped as a rally in crude faded.

     The benchmark S&P/TSX Composite Index ended at 13,632.01 at 4 p.m. in Toronto, after rising as much as 0.9 percent and falling 0.4 percent. The gauge now trades at 20.7 times earnings, about 8.8 percent higher than the 19.1 times earnings valuation of the S&P 500 Index, data compiled by Bloomberg show. Trading volume was 6.3 percent higher than the 30-day average.

     Six of 10 industries in the S&P/TSX retreated, led by financial services stocks and energy producers. Suncor Energy Inc. retreated 3 percent. Yamana Gold Inc. and Kinross Gold Corp. added at least 4.4 percent as raw-materials producers climbed 1.1 percent as a group.

     National Bank of Canada dropped 0.8 percent, sliding to a month low, after the lender said it will set aside C$195 million ($152 million) to cover soured oil-and-gas loans in the second quarter, joining Canadian Western Bank in providing early warning of rising credit losses tied to energy after the rout in crude prices. National has lost 6.7 percent during a six-day slide, the longest since December. The lender is set to report results June 1.

     Crude futures rose 1.2 percent in New York for a second day of gains, paring an earlier advance. The spreading wildfire in Fort McMurray in northern Alberta has given oil prices a lift as producers have reduced production and opened work camps to fleeing residents. More than 1 million barrels a day of oil sands production capacity may be affected by the blaze, according to company statements and data published in Alberta’s Spring Oil Sands Quarterly.

     The resource-dominant S&P/TSX has stumbled to start the month of May, after a rally of more than 40 percent in the first four months of the year. A rebound in global equities has slowed amid the uncertain outlook for growth and speculation higher interest rates in the U.S. will boost the dollar’s value.

     Manulife, the nation’s largest life insurer, added 1.1 percent as first-quarter profit surged 45 percent after benefiting from interest rate movements and record insurance sales in Asia. Adjusted earnings of 44 cents a share came in ahead of the 43-cent average of analysts surveyed by Bloomberg.

US

By Jeremy Herron and Anna-Louise Jackson

     (Bloomberg) — A rally in crude oil faded and U.S. stocks slipped for a third day, leaving the S&P 500 Index at a three- week low as investors awaited Friday’s jobs report for clues on the strength of the world’s largest economy. Emerging-market shares fell and the dollar strengthened.

     The S&P 500 has fallen 2.5 percent since April 20 amid rising concern global economies haven’t responded to central- bank stimulus. Emerging-market shares dropped to the lowest in seven weeks, and Turkish 10-year bond yields topped 9.5 percent as the prime minister said he was stepping down. Crude advanced as wildfires disrupted production in Canada. Treasuries rose a fourth day, with economists lowering predictions for how high the central bank will be able to lift interest rates.

     Global equities continued their slow slide from recent highs, with a 10-week rally faltering as investors gauge prospects for higher U.S. interest rates amid persistent signs of tepid to slowing growth in major economies. While Fed officials signaled in recent days that rates could rise as soon as June, futures traders assign only a 10 percent probability for such a move as recent data indicated the U.S. economy remains sluggish. The dollar’s rebound from the lowest level in a year weighed on commodities.

     “Sentiment is more negative than I would’ve thought after such a strong rally off that February low,” said Charlie Bilello, director of research at New York-based Pension Partners LLC. “This is a normal kind of digestive period or consolidation after a strong move and ahead of the jobs report tomorrow.” 

     The S&P 500 fell less than 0.1 percent at 4 p.m. in New York. A rally that sent the index up as much as 15 percent from February lost steam after reaching a four-month high on April 20, amid lackluster earnings and lukewarm signs of an economic pickup.

     Retailers slid after L Brands Inc. posted preliminary first-quarter profit that trailed estimates. Utility and telephone stocks retreated, as investors capitulated from a recent preference for companies less tied to growth. Tesla Motors Inc. slumped after UBS Group AG described the electric- car maker’s new production goals as “too optimistic.”

     “There’s still a very cautious feeling to markets,” said William Hobbs, who helps oversee about $150 billion as head of investment strategy at the wealth-management unit of Barclays Plc in London. “The world is growing and is likely to grow a bit quicker as we go through the year and inflation returning and that’s simply not priced in at these levels.”

     The Stoxx Europe 600 climbed 0.3 percent, for the first gain in five days. Trading volume was 16 percent lower than the 30-day average amid holidays in markets including Switzerland, Denmark, Sweden and Finland.

     Emerging-market stocks sank 0.7 percent, with the MSCI Emerging Market Index dropping for a fifth day in the longest slump since December.

     U.S. Treasuries due in a decade rosefor a fourth day. The benchmark 10-year note yield fell three basis points to 1.74 percent, the lowest level in two weeks. Traders are awaiting further insight into the state of the labor market from the monthly payrolls report on Friday.

     Turkish bonds fell, sending 10-year yields to a one-month high, after Prime Minister Ahmet Davutoglu lost a power struggle with President Recep Tayyip Erdogan.

     Currencies of nations that export all kinds of commodities benefited from a jump in oil prices following news of a drop in U.S. production. Australia’s currency vied with its Canadian counterpart to lead gains. The Bloomberg Commodity Index rose for the first time in four days.

     A gauge of the dollar versus 10 major peers extended its advance from its lowest level in a year, capping its biggest three-day rise in six months. The greenback has been supported this week as two regional Fed presidents said that a rate increase should be considered at the central bank’s June gathering.

     West Texas Intermediate crude climbed for a second day, rising 1.2 percent to settle at $44.74 a barrel. Fires in Canada may affect more than 1 million barrels a day of capacity, according to company statements and data published in Alberta’s Spring Oil Sands Quarterly. Brent crude climbed 3.7 percent to $46.26.

     U.S. oil production dropped by 113,000 barrels a day to 8.83 million a day last week, the lowest level since September 2014, data showed Wednesday.

     Gold futures fell for a third straight day, the longest slump in five weeks, as the dollar’s strength damped demand for the metal. Bullion for June delivery slipped 0.2 percent to settle at $1,272.30 an ounce in New York.

 

Have a wonderful evening everyone.

 

Be magnificent!
 

“There is only one happiness in this life, to love and be loved.” George Sand

As ever,

 

Karen
 

“Great works are performed not by strength but by perseverance.” Samuel Johnson

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7