Category: Events

Dear Friends,

Tangents:

On March 7, 1875, Francis Kilvert wrote in his diary:
A sudden and blessed change in the weather, a south-west wind, pouring warm rain, and the birds in the garden and orchard singing like mad creatures, the whole air in a charm and tumult of joy and delight.

Mark D. Weinburg wrote a piece in the Wall Street Journal today entitled Appreciating Nancy Reagan (1921-2016).
  He writes “…The last time I saw her was a few months ago.  She was in a wheelchair but looked great.  Her voice was quieter than I remembered, but she was in excellent spirits.  She seemed especially happy to share memories of watching movies at Camp David.  I knew it might be the last time I would see her.
  The Reagans’ relationship initially was a mystery to me.  The first time I heard Ronald Reagan say that he missed Nancy even ‘when she’s just in the next room,’ such devotion seemed way over the tip.
  But it soon became clear that theirs was a rare and lifelong romance…Mrs. Reagan was criticized for what some perceived as her obsession with fashion and fancy clothes.  But as first lady, she felt that she represented America and should always look her best…
  The past dozen years for Mrs. Reagan were difficult.  She had watched the love of her life grow sicker, unable to share the memories of their time together.  And when Ronald Reagan died in 2004, it was not the ‘relief’ to her that many predicted. Sadness never left her.  She gradually lost some of her mobility and her vision began to go.  But she remained sharp, engaged and interested in others – in a kindly way, with little tolerance for mean-spirited remarks.  ‘You never know everything,’  Mrs. Reagan would admonish.  ‘There’s always another side to the story.’

  Mr. Weinberg, special assistant to the president and assistant press secretary in the Reagan White House, is writing a book, “Movie Nights With the Reagans,” forthcoming from Simon & Schuster.

PHOTOS OF THE DAY

Flowers are placed on a sign at The Ronald Reagan Presidential Library in Simi Valley, Calif., Sunday in honor of former First Lady Nancy Reagan, who died at the age of 94. Jonathan Alcorn/Reuters

 

The Northern Lights, or Aurora Borealis, shine over Sycamore Gap at Hadrian’s Wall in Northumberland, northeast England, early Monday. Owen Humphreys/PA/AP

Market Closes for March 7^th, 2016

Market Index	Close	Change
Dow Jones	17073.95	+67.18   +0.40%
S&P 500	2001.76	+1.77   +0.09%
NASDAQ	4708.254	-8.768   -0.19%
TSX	13383.60	+171.10
		+1.29%

International Markets

Market Index	Close	Change
NIKKEI	16911.32	-103.46
		-0.61%
HANG SENG	20159.72	-16.98
		-0.08%
SENSEX	24646.48	+39.49
		+0.16%
FTSE 100	6182.40	-17.03
		-0.27%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.276	1.251
CND. 30 Year Bond	2.075	2.066
U.S.    10 Year Bond	1.9057	1.8723
U.S. 30 Year Bond	2.7057	2.6931

Currencies

BOC Close	Today	Previous
Canadian $	0.75229	0.75091
US $	1.32928	1.33172
Euro Rate 1 Euro=		Inverse
Canadian $	1.46393	0.68309
US $	1.10129	0.90802

Commodities

Gold	Close	Previous
London Gold Fix	1267.90	1277.50
Oil	Close	Previous
WTI Crude Future	37.90	34.57

Market Commentary:

Canada

By Jiayue Huang

     (Bloomberg) — Canadian stocks rose for an eighth day, pushing the winning streak to the longest since 2014, as Brent crude oil topped $40 for the first time this year amid speculation demand from China will rebound as the nation adds to stimulus.

     The Standard & Poor’s/TSX Composite Index rose 171.10 points, or 1.3 percent, to 13,383.60 at 4 p.m. in Toronto, as all 10 main industries advanced. The benchmark equity gauge has gained 5.1 percent in eight days to erase its loss for the year. It’s the best-performing developed market tracked by Bloomberg this year. Trading volume in S&P/TSX shares was 26 percent higher than the 30-day average.

     Canada’s resource-rich index is benefiting from a surge in prices for commodities from oil to copper and iron ore. China’s leaders lowered their goal for economic expansion and said they are planning a record-high budget deficit as they seek to stoke the world’s second-largest economy. Energy and raw-materials stocks account for more than 30 percent of the overall gauge. West Texas Intermediate, the U.S. benchmark for crude, jumped 5.5 percent to settle at almost $38 a barrel.

     Raw-materials producers rose 2.2 percent to the highest level since July. Teck Resources Ltd. added 4.9 percent to the highest since July. Labrador Iron Ore Royalty Corp. surged 5.3 percent to a three-month high after the resource notched its biggest one-day advance on record. Primero Mining Corp. rose 16 percent, the most since November 2014. First Majestic Silver Corp. and OceanaGold Corp. both gained more than 8.5 percent after analysts upgraded the companies’ stocks.

     Energy shares rose 1.8 percent to the highest since Dec. 1. Paramount Resources Ltd. jumped 12 percent, while Encana Corp. added 11 percent.

     Health-care companies gained the most among all sectors, as Concordia Healthcare Corp. surged 8.1 percent, while Valeant Pharmaceuticals International Inc. advanced 6.8 percent.

     Shares in the Canadian gauge trade at more than 21 times earnings, roughly 15 percent more expensive than the valuation of the benchmark U.S. equity index, the Standard & Poor’s 500 Index, data compiled by Bloomberg show.

US

By Oliver Renick

     (Bloomberg) — The Standard & Poor’s 500 Index edged higher, tying its longest rally in more than a year, as commodity producers surged with crude oil to offset declines in technology and consumer shares while investors assessed China’s growth prospects.

     Energy companies in the S&P 500 continued to rise after their best weekly advance since October as crude prices jumped. Exxon Mobil Corp. increased 2.6 percent to a four-month high. Monsanto Co. added 3 percent as the raw-materials group erased 2016 losses. Microsoft Corp. and Apple Inc. slipped at least 1.1 percent to weigh on tech, while Netflix Inc. sank 6 percent. Nike Inc. and Amazon.com Inc. fell more than 2.2 percent.

     The S&P 500 advanced 0.1 percent to 2,001.76 at 4 p.m. in New York, remaining at its highest since Jan. 5 and rising for a fifth day to tie similar winning streaks last October and in December 2014. The gauge closed above its average price during the past 100 days for the second time this year. The Dow Jones Industrial Average rose 67.18 points, or 0.4 percent, to 17,073.95. The Nasdaq 100 Index fell 0.6 percent, while the Russell 2000 Index gained 1.1 percent.

     “The big story again is commodities with oil just continuing to move up and breaking $40 which it hasn’t done in awhile,” Thomas Garcia, head of equity trading at Thornburg Investment Management Inc. in Santa Fe, New Mexico, said by phone. “With the general market not up it seems like that’s leading stocks. You’re definitely going to get some short- covering by people who were short and panicking at this point.”

     China’s leaders failed to announce specific measures to support the world’s second-biggest economy at an ongoing annual legislature meeting, damping speculation of more stimulus. They set an expansion goal of 6.5 percent to 7 percent for 2016, down from last year’s target of around 7 percent, and said they will permit a record-high budget deficit.

     Investors will turn their attention later this week to the European Central Bank’s policy meeting, and Federal Reserve officials will gather for their next two-day meeting on March 15. Traders are pricing in a less than one-in-10 chance the central bank will increase interest rates this month, with the probability rising to 45 percent by June. Odds for a December move are 72 percent.

     Fed Vice Chair Stanley Fischer in remarks today contested the idea that the connection between low unemployment and inflation was broken, and said it may be reasserting itself now. Separately, Fed Governor Lael Brainard said the U.S. economy isn’t immune to global risks and called for careful adjustments to the policy rate to preserve the expansion.

     “We’re likely to see a period of heightened volatility and it’s a very frustrating environment,” said Eric Wiegand, senior portfolio manager at the Private Client Reserve of US Bank in New York. “Expectations surrounding the ECB are going to be at play this week as certainly part of the bounceback we’ve seen over the last number of weeks has been part of the expectation that the ECB, Bank of Japan and – to an extent – the PBOC, would go to extraordinary measures to be accommodative.”

     The S&P 500 closed Friday at its highest since Jan. 5 after rising for a third straight week, the longest such stretch this year. The gauge rallied more than 9 percent after reaching a 22- month low last month, as oil prices stabilized and data has shown the world’s largest economy weathering weaker growth abroad.

     A rout in crude amid concerns that a slowdown in China would spread had helped weigh the benchmark equity index down as much as 11 percent this year on a closing basis, a drop that has since been trimmed to 2.1 percent. Energy and industrial shares last week erased their 2016 losses.

     A Goldman Sachs Group Inc. index of the most-shorted shares has rallied 25 percent since Feb. 11, outperforming the S&P 500 by 15 percentage points, the most over any equivalent stretch in the gauge’s history back to January 2008.

     The Chicago Board Options Exchange Volatility Index rose 2.9 percent Monday to 17.35 after closing Friday near the lowest level this year. The measure of market turbulence known as the VIX fell nearly 15 percent last week. About 9 billion shares traded hands on U.S. exchanges, in line with the average in 2016.

     Six of the S&P 500’s main industries climbed today, with energy up 2.4 percent and raw-materials adding 1.2 percent. Technology companies declined 0.7 percent while consumer staples and discretionary shares lost more than 0.4 percent. Through Friday, discretionary stocks were the second-best performers since the benchmark’s recent low on Feb. 11, rising nearly 12 percent. Tech shares were up almost 10 percent in the period.                      

     Energy producers rose Monday to the highest level since Dec. 4. Murphy Oil Corp. soared more than 10 percent for a fourth day, and advanced for a seventh session amid the longest winning streak since September 2013. The shares are up 56 percent since Fed. 26. Chevron Corp. gained 3.1 percent, extending to its longest rally in four months.

     Brent crude rose above $40 for the first time since December as major producers prepared to meet to discuss a production freeze and U.S. output finally shows signs of declining.

     CF Industries Holdings Inc. increased 6.6 percent to lead raw-materials’ advance as the group rose to the highest level since Dec. 29. Alcoa Inc. gained 4.9 percent, up for the fifth time in six days to its highest this year. Steelmaker Nucor Corp. added 4.2 percent to a six-month high. Iron ore soared the most ever after Chinese policy makers signaled their willingness to buttress economic growth, boosting the outlook for steel consumption in the top user.

     Iron ore miner Cliffs Natural Resources Inc. surged nearly 19 percent to bring its climb in the last six sessions to over the period to 88 percent. Another miner, Tronox Ltd. jumped 21 percent to a four-month high.

     Software companies were the worst performers within the technology group, slipping for a third consecutive session, the most in almost four weeks. Facebook Inc. and Google parent Alphabet Inc. lost at least 2.3 percent. MasterCard Inc. fell 1.9 percent, and Visa Inc. declined 2.7 percent, the most since Feb. 8 after falling below its 50- and 200-day moving averages.

     The Nasdaq Internet Index retreated 1.4 percent, the most in two weeks after rallying 15 percent since Feb. 11. Netflix capped the biggest drop in a month, and Amazon slid for a third day, falling 2.2 percent to drag down the consumer discretionary group. Nike Inc. lost 3.3 percent, the most in four weeks. The New York Times reported the company is caught up in a corruption scandal in Kenya in which Nike has denied any wrongdoing.

 

Have a wonderful evening everyone.

 

Be magnificent!

Variety is the first principle of life.

What makes us formed beings?

Differentiation.

Perfect balance will be destruction.

Swami Vivekananda

As ever, 
 

Carolann

 

Life does not consist mainly of facts and happenings.  It consists mainly of the storm of thoughts

that are forever blowing through one’s mind.

                                                                                   -Mark Twain, 1835-1910

 

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 March 4^th, 1802, Dorothy Wordsworth wrote in her journal:

Since he [Wordsworth, away for a few days] has left me at half-past eleven (it is now two) I have been putting the drawers into order, laid by his clothes which we had thrown here and there and everywhere, filed two months’ newspapers and got my dinner, two boiled eggs and two apple tarts.  I have set Molly on to clear the garden a little, and I myself have helped.  I transplanted some snowdrops – the bees are busy.  William has a nice bright day.  It was hard frost in the night.  The robins are singing sweetly.  Now for my walk.  I will be busy.  I will look well, and be well when he comes back to me.  O the Darling!  Here is one of his bitten apples.  I can hardly find in my heart to throw it into the fire. –from The Book of Days.

Springtime is the land awakening.
The March winds are the morning yawn.

                              -Lewis Grizzard

PHOTOS OF THE DAY

St. Paul’s Cathedral is seen from Henry’s Mound in Richmond Park in west London, Britain, Friday. The vista, ten miles west of St. Paul’s, is one of eight protected views across greater London, and remains unimpeded after several centuries despite the huge growth of skyscrapers and office buildings in the city. Toby Melville/Reuters

A tower belonging to the Abengoa solar plant is seen at the ‘Solucar’ solar park in Sanlucar la Mayor, near the Andalusian capital of Seville, southern Spain, Friday. Marcelo del Pozo/Reuters

Market Closes for March 4^th, 2016

Market Index	Close	Change
Dow Jones	17006.77	+62.87   +0.37%
S&P 500	1999.04	+5.64   +0.28%
NASDAQ	4717.023	+9.601   +0.20%
TSX	13216.48	+92.83
		+0.71%

International Markets

Market Index	Close	Change
NIKKEI	17014.78	+54.62
		+0.32%
HANG SENG	20176.70	+234.94
		+1.18%
SENSEX	24646.48	+39.49
		+0.16%
FTSE 100	6199.43	+68.97
		+1.13%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.251	1.222
CND. 30 Year Bond	2.066	2.034
U.S.    10 Year Bond	1.8723	1.8337
U.S. 30 Year Bond	2.6931	2.6580

Currencies

BOC Close	Today	Previous
Canadian $	0.75091	0.74551
US $	1.33172	1.34137
Euro Rate 1 Euro=		Inverse
Canadian $	1.46562	0.68230
US $	1.10055	0.90864

Commodities

Gold	Close	Previous
London Gold Fix	1277.50	1250.25
Oil	Close	Previous
WTI Crude Future	35.80	34.57

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks continued to rally, extending the longest rally in almost a year to seven days as raw-materials jumped after gold cruised into a bull market.

     The benchmark equity index has surged 3.7 percent in the past seven sessions, for the longest winning streak since April. The resource-rich gauge has benefited from a rebound in commodities prices from crude to copper and precious metals, while an unexpected expansion in the nation’s economy bolstered consumer equities.

     The Standard & Poor’s/TSX Composite Index rose 0.7 percent to 13,212.50 at 4 p.m. in Toronto. The surge has erased a loss for the year that almost reached 10 percent, leaving the Canadian benchmark and shares in New Zealand as the only markets in the developed world in positive territory.

     Shares in the Canadian gauge trade at almost 21 times earnings, roughly 16 percent more expensive than the valuation of the benchmark U.S. equity index, the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     U.S. stocks ended the day higher as investors weighed a mixed jobs report with a surge in hiring offset by negative wage growth. Canada reports February jobs next week.

     Raw-materials and energy producers rallied as seven of 10 industries advanced. Trading volume was 37 percent higher than the 30-day average.

     B2Gold Corp. and Eldorado Gold Corp. surged at least 6.9 percent to lead gold producers higher. The S&P/TSX Materials Index, the best-performing industry in Canada this year, has soared 30 percent from a January low. Gold jumped this week more than 20 percent since a December low. First Quantum Minerals Ltd. added 5.9 percent to lead base metals higher with copper.

     Canadian Natural Resources Ltd., Canada’s largest heavy- crude producer, added 4.7 percent to extend a six-day rally, leading energy producers higher. Canadian energy stocks have soared 23 percent after reaching a decade low in January, rapidly returning to a bull market as producers cut costs to weather the slide in crude prices over the past year.

     Crude futures posted a third weekly gain, the longest run since May amid signs of lower output in the U.S. and OPEC. Oil remains down about 2 percent this year.

     Valeant Pharmaceuticals International Inc. fell 5.5 percent for a second day of losses, extending a 2013 low. Valeant CEO Mike Pearson said it would be “reasonable to take a few weeks” to re-engage with his company’s operations before hosting an outlook call, Jefferies analyst David Steinberg said in a report. Shares of Valeant have plunged 77 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices.

US

By Inyoung Hwang and Lu Wang

     (Bloomberg) — U.S. stocks rose as Treasuries fell, as investors weighed a surge in hiring that came with negative wage growth, clouding the path of monetary policy. Emerging-market equities posted their best week since December 2011.

     Gains by technology and financial shares offset health-care companies as the Standard & Poor’s 500 Index had a third straight weekly advance. The yield on the 10-year Treasury note climbed to the highest level in a month, as better-than-expected job growth bolstered bets the Federal Reserve will raise interest rates this year. A gauge of emerging-market currencies erased losses for the year, with Brazil’s real jumping after news the federal police raided the house of former President Luiz Inacio Lula da Silva, fueling speculation a change in government is imminent.

     The jobs report adds to a string of data showing that the U.S. economy continues to strengthen, though at a pace not strong enough to force the Fed to raise interest rates at its policy meeting in March. Global equities have recouped more than half of this year’s losses since sinking to a 2 1/2-year low on Feb. 11, as speculation central banks from Asia to Europe stand ready to boost stimulus. China may announce its plans to revive growth at this weekend’s annual meeting of the National People’s Congress.

     “The actual job gains are better than expected, which is good for those who are looking to the economy to continue to elicit positive activity,” Mark Luschini, chief investment strategist in Philadelphia at Janney Montgomery Scott LLC, said by phone. “At the same time, the backup in wage gains suggests that while the labor market improved, it’s far from being tight as to warrant wage inflation, which would draw the Fed from the sidelines.”

          The S&P 500 added 0.3 percent to 1,999.99 at 4 p.m. in New York, after the benchmark surpassed 2,000 during the day, a level it has failed to close above since the start of the year. The index has rallied 9.3 percent from a 22-month low on Feb. 11 and is now lower by 2.2 percent for the year. The Dow Jones Industrial Average also advanced to surpass 17,000.

     “Part of this is technical, with people saying sell into any decent move over 2,000 with resistance between the 2,000 and 2,020 level,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. “June is now also more possible for a rate rise so that’s also gotta be coming into play. You combine that with the rally we had it’s not surprising that sellers came in here.”

     Today’s report showed employers added more workers in February than projected though wages unexpectedly declined. The jobless rate held at 4.9 percent. Bigger wage gains are needed help move inflation closer to the Fed’s goal.

     Futures traders put the odds of the second interest rate hike at 6 percent for the Fed’s March meeting, though projections for later in the year continue to rise, with the September meeting showing a greater than 50 percent likelihood.

     The Stoxx Europe 600 climbed 0.7 percent. The benchmark gauge posted a third weekly gain, amid rallies in miners, carmakers and energy producers.

     The MSCI Emerging Markets Index rose a sixth day, climbing 1.6 percent. The index jumped 7.1 percent this week.

     Brazil’s real jumped and the Ibovespa had its best week since 2008 after entering a bull market yesterday. The police raid of Lula’s home ignited wagers that support will increase to impeach his mentee and successor, President Dilma Rousseff. While markets have been split in the past about whether a Rousseff ouster would be good or bad, many now say it may be the only way out of political quagmire.

     China’s intervention helped the nation’s benchmark index cap its best weekly gain of 2016 before policy makers meet to approve a five-year road map for the economy. The Shanghai Composite Index rose 0.5 percent, extending this week’s gain to 3.9 percent.

     State-backed funds bought primarily bank shares, while some local branches of the securities regulator asked listed companies, mutual funds and brokerages to stabilize the market during the National People’s Congress and the Chinese People’s Political Consultative Conference, said people with direct knowledge of the situation, who asked not to be named because the matter isn’t public.

     Copper jumped 3.6 percent to the highest level in four months on bets for more stimulus in China, the largest consumer of metals. Used in everything from property construction to high-voltage cables and mobile phones, copper is a key indicator for global inflation, helping drive movements in bonds and currency markets.

     Oil had a third weekly gain as the Organization of Petroleum Exporting Countries prepared for a meeting with other major producers on March 20 to renew talks on an output freeze. West Texas Intermediate rose 3.9 percent, to $35.92 a barrel, the highest settlement since Jan. 5.

     U.S. natural gas fell as much as 1.7 percent to $1.611 per million British thermal units, the lowest level since 1998, amid forecasts for mild weather this month.

     The Bloomberg Dollar Spot Index fell 0.4 percent after the payrolls data, after the jobs report showed wages unexpectedly declined last month.

     An index tracking currencies of developing economies advanced 0.8 percent for the fifth day of gains. The measure is now up 1.4 percent for 2016 after wiping out losses this week.

     Ten-year Treasuries note yields rose four basis points to 1.88 percent. Germany’s 10-year bund yield climbed seven basis points to 0.24 percent.

     The risk premium on the Markit CDX North American High Yield Index, a credit-default swaps benchmark tied to the debt of 100 junk-rated companies, fell for a eighth day to the lowest level of the year.

 

Have a wonderful weekend everyone.

 

Be magnificent!

When the poor come to you in great need, begging for food,

do not harden your hearts against them.

Remember that the poor may once have been rich,

and you may one day be poor.

When you see people who are thin for lack of food,

beg them to accept your help;

remember that you may need their friendship in times to come.

Rig Veda

As ever,
 

Carolann

 

Courage is grace under pressure.

   -Ernest Hemingway, 1899-1961

 

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:

The Vancouver Symphony delivered a mesmerizing performance last night under the direction of Maestro Bramwll Tovey.  The first part of the program featured a spellbinding performance of Beethoven’s Symphony No. 7 in A Major, Op. 92
l. Poco sostenuto – Vivace
ll. Allegretto
lll. Presto
lV. Allegro con brio

The second part of the program featured the legendary Itzhak Perlman performing Bruch, Violin Concerto No. 1 in G minor, Op. 26
l. Prelude: Allegro moderato
ll. Adagio
lll. Finale: Allegro energico

For an encore, he performed the theme from Schindler’s List composed by John Williams.  You can watch a version of his performance of Shindler’s List on YouTube.

The Poem
Tenebris Interlucentem

       by James Elroy Flecker

A linnet who had lost her way
Sang on a blackened bough in Hell,
Till all the ghosts remembered well
The trees, the wind, the golden day.

At last they knew that they had died
When they heard music in that land,
And someone there stole forth a hand
To draw a brother to his side.

1911
From Poems that Make Grown Women Cry, edited by Anthony and Ben Holden, Simon & Schuster.

PHOTOS OF THE DAY

Britain’s Queen Elizabeth listens as the National Youth Orchestra of Great Britain performs during her Queen’s Trust visit to the Lister Community School in London, Thursday. Toby Melville/Reuters

Atholl Palace hotel is seen below a snow-covered Ben Vrackie in Pitlochry, Scotland, Wednesday. Russell Cheyne/Reuters

Market Closes for March 3^rd, 2016

Market Index	Close	Change
Dow Jones	16943.90	+44.58   +0.26%
S&P 500	1993.40	+6.95   +0.35%
NASDAQ	4707.422	+4.000   +0.09%
TSX	13123.65	+105.72
		+0.81%

International Markets

Market Index	Close	Change
NIKKEI	16960.16	+213.61
		+1.28%
HANG SENG	19941.76	-61.73
		-0.31%
SENSEX	24606.99	+364.01
		+1.50%
FTSE 100	6130.46	-16.60
		-0.27%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.222	1.249
CND. 30 Year Bond	2.034	2.046
U.S.    10 Year Bond	1.8337	1.8406
U.S. 30 Year Bond	2.6580	2.6845

Currencies

BOC Close	Today	Previous
Canadian $	0.74551	0.74450
US $	1.34137	1.34319
Euro Rate 1 Euro=		Inverse
Canadian $	1.46879	0.68083
US $	1.09499	0.91325

Commodities

Gold	Close	Previous
London Gold Fix	1250.25	1239.20
Oil	Close	Previous
WTI Crude Future	34.57	34.66

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — The Canadian economy’s commodity-heavy tilt has returned to being a boon for the nation’s financial markets.

     The benchmark equity index extended its winning streak to six days, the longest since August, as beaten-down energy and mining shares continued a rebound amid rising resource prices.

     The Standard & Poor’s/TSX Composite Index rose 0.8 percent to 13,123.65 at 4 p.m. in Toronto, pushing the six-day gain to 3 percent. The surge has erased a loss for the year that almost reached 10 percent, leaving the Canadian benchmark and shares in New Zealand as the only markets in the developed world in positive territory.

     Shares in the Canadian benchmark trade at almost 22 times earnings, roughly 20 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     European stocks halted on Thursday their longest winning streak since October, while U.S. shares rose as investors awaited February’s jobs data.

     Canadian energy stocks have been on a tear, soaring 20 percent and outpacing rallies by U.S. and global counterparts since hitting a decade-low in January. The S&P/TSX Energy Index has erased losses in 2016, now up 3 percent for the year, pushing ahead after the group lagged peers last year.

     Raw-materials and energy producers rallied the most in the S&P/TSX as seven of 10 industries advanced. Trading volume was 21 percent higher than the 30-day average. Gold rose to a one- month high as copper extended a rally.

     Canadian Natural Resources Ltd., Canada’s largest heavy- crude producer, surged 9 percent for the biggest gain in more than four years. The energy producer lowered its 2016 capital budget about 22 percent, now targeting spending of C$3.5 billion to C$3.9 billion this year, down from as much as C$5 billion in November. Canadian Natural also reported an 89 percent decline in fourth-quarter profit. Valeant Pharmaceuticals International Inc. fell 4.2 percent to a 2013 low. Valeant’s head of U.S. dermatology products is departing the company, a move the drugmaker said is unrelated to any action taken by an ad hoc board committee probing the company’s dealings with a controversial mail-order pharmacy. Shares of Valeant have plunged 75 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks rose, led by gains in energy shares to extend a three-week rally before Friday’s payrolls report that may provide a clearer picture on the economy’s health and path for interest rates.

     Energy producers in the Standard & Poor’s 500 Index erased 2016 declines as a rally in the group helped equities shake off earlier weakness for a second day. Banks also gained momentum in the afternoon, rising for the fifth time in six days. Health- care and technology shares struggled, with Microsoft Corp. losing 1.1 percent. Kroger Co. sank 7 percent after the grocer forecast slower growth this year.

     The S&P 500 rose 0.4 percent to 1,993.40 at 4 p.m. in New York, erasing a 0.5 percent drop to remain at an eight-week high. The gauge gained for a third straight day for just the second time this year. The Dow Jones Industrial Average advanced 44.58 points, or 0.3 percent, to 16,943.90, and the Nasdaq Composite Index increased 0.1 percent. The Russell 2000 Index of small caps added 1 percent to rise for a third day. About 8.8 billion shares traded hands on U.S. exchanges, in line with the 2016 average.

     “Investors are clearing the decks ahead of tomorrow’s jobs report,” said Alan Gayle, senior strategist for Atlanta-based Ridgeworth Investments, which has about $42.5 billion. “Anything that moves in the direction of the Fed’s game plan of four rate hikes this year will be a real market-mover. A big gain in tomorrow’s jobs report would definitely put a near-term hike back on the table.”

     Investors are watching economic reports as central-bank meetings approach, with the government’s monthly nonfarm payroll figures looming large tomorrow. Data today showed growth in service industries slowed for a fourth straight month in February. A separate gauge showed factory orders in January rose less than expected, while the number of claims for unemployment benefits remained consistent with a steady labor market.

     The S&P 500 has jumped 9 percent from a 22-month low reached in February, though the gains have come amid the weakest volume in 2016, signaling a lack of conviction in the rally. The benchmark has trimmed its 2016 decline to 2.5 percent as banks, consumer and technology companies have bolstered the comeback, and it’s on track for a third straight weekly gain of more than 1.5 percent for the first time since 2009.

     Bridgewater Associates’ Ray Dalio said he expects low returns, slow growth and more volatility in the U.S. in an interview on Bloomberg Television. “I’m not bearish on stocks,” he said from Austin, where he is attending a conference hosted by the University of Texas Management Co. Global stocks will likely return about 4 percent in the long term and the average investor shouldn’t bet against active investors, Dalio said.

     With improvement in recent data, coupled with the rebound in equities, traders have lifted their bets on higher borrowing costs this year. While they’re pricing in a less than one-in-10 chance of a rate increase at the end of the Federal Reserve’s next meeting on March 16, the probability of a boost by June is 35 percent, up from 24 percent a week ago. Odds for a December move stand at nearly 64 percent compared to 36 percent last week.

     As the earnings season draws to a close, about three- quarters of S&P 500 companies have beaten profit projections, while less than half have topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 3.7 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump, and predict profits will drop 8.0 percent in the first quarter.                       

     The Chicago Board Options Exchange Volatility Index fell 2.3 percent Thursday to 16.70, holding at the lowest level since Dec. 29. The measure of market turbulence known as the VIX has dropped 41 percent since reaching a five-month high on Feb. 11.

     Eight of the S&P 500’s 10 main industries rose, led by energy and financial shares. Health-care companies declined 0.4 percent, falling for the first time in three days, while technology stocks were little changed, nearly erasing a morning 0.8 percent slide.

     Energy companies in the S&P 500 increased 1.3 percent, wiping out a loss for the year as crude oil continued to show signs of stabilizing, closing near the highest since Jan. 5. The group extended its three-day rally to 6.1 percent. ConocoPhillips and Apache Corp. paced gains, rising more than 5.6 percent.

     Chesapeake Energy Corp. surged 26 percent and capped the biggest two-day increase in its history after U.S. federal prosecutors rewarded the natural gas driller with immunity from prosecution in an antitrust case against its former CEO Aubrey McClendon.

     Homebuilders were among the best performers Thursday, with an S&P industry index up for the ninth time in 10 sessions, rising 1.6 percent to bring its advance since the February low to 19 percent. Lennar Corp. and D.R. Horton Inc. increased more than 1.9 percent.

     Biotechnology shares were the worst performers within the health-care group, as the Nasdaq Biotechnology Index slid 1.4 percent. Biogen Inc. and Vertex Pharmaceuticals Inc. declined more than 1.8 percent. Large drug makers were also under pressure, with Eli Lilly & Co. losing 1 percent, while Baxalta Inc. fell 1.5 percent.

     Among other companies moving on corporate news, Herbalife Ltd. dropped 7 percent, the most in almost five months after saying it overstated the growth of its customer and distributor base, bringing another headache to a company facing a federal investigation into whether it’s a pyramid scheme.

     Costco Wholesale Corp. slipped 0.8 percent, paring a 3.5 percent retreat, after quarterly earnings trailed analysts’ estimates as higher-income shoppers show signs of curtailing spending. The shares declined for the first time in four days.

 

Have a wonderful evening everyone.

 

Be magnificent!

We must learn to love those who think exactly opposite to us.

We have humanity for the background, but each must have his own individuality and his own thought.

Push the sects forward and forward till each man and woman are sects unto themselves.

We must learn to love the man who differs from us in opinion.

We must learn that differentiation is the life of thought.

We have one common goal,

and that is the perfection of the human soul, the god within us.

Swami Vivekananda

As ever,

 

Carolann

 

I’m more interested in being good than in being famous.

                                             -Annie Liebovitz, 1949-

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:

1729 – Louis XV authorizes new issue of playing card money in New France; not enough printed bills or coinage to pay the troops.

Off to the concert by the legendary Israeli-American violinist Itzhak Perlman at the Orpheum in Vancouver tonight…

PHOTOS OF THE DAY

A woman runs through an artwork created by artist Filippo Minelli, where he let off colorful smoke bombs in Somerset House’s courtyard, in London Wednesday. The piece is a new work in his series ‘Silence/Shapes.’ Photographs of similar performances will be shown at a new street art exhibition, ‘Venturing Beyond: Graffiti and the Everyday Utopias of the Street,’ which opens to the public on March 3. Kirsty Wigglesworth/AP

Singaporean artist Hafiz Osman rides past the skyline in his creation, consisting of a bicycle and a temporary shelter, entitled ‘Cycle House’ during a preview of the i Light Marina Bay sustainable light festival in Singapore Wednesday. Edgar Su/Reuters

 

A mountain hare sits in the snow in the Cairngorm mountains near Glenshee in Scotland Wednesday. Russell Cheyne/Reuters

Market Closes for March 2^nd, 2016

Market Index	Close	Change
Dow Jones	16899.32	+34.24   +0.20%
S&P 500	1986.45	+8.10   +0.41%
NASDAQ	4703.422	+13.827   +0.29%
TSX	13017.93	+35.83
		+0.28%

International Markets

Market Index	Close	Change
NIKKEI	16746.55	+661.04
		+4.11%
HANG SENG	20003.49	+596.03
		+3.07%
SENSEX	24242.98	+463.63
		+1.95%
FTSE 100	6147.06	-5.82
		-0.09%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.249	1.239
CND. 30 Year Bond	2.046	2.034
U.S.    10 Year Bond	1.8406	1.8214
U.S. 30 Year Bond	2.6845	2.6946

Currencies

BOC Close	Today	Previous
Canadian $	0.74450	0.74514
US $	1.34319	1.34203
Euro Rate 1 Euro=		Inverse
Canadian $	1.46007	0.68490
US $	1.08702	0.91995

Commodities

Gold	Close	Previous
London Gold Fix	1239.20	1236.50
Oil	Close	Previous
WTI Crude Future	34.66	34.40

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks staged an afternoon comeback to close higher, erasing a loss for the year that reached 9.9 percent at its trough, as a raw-materials and energy producers rebounded with commodities prices.

     The Standard & Poor’s/TSX Composite Index rose 0.3 percent to 13,017.93 at 4 p.m. in Toronto, reversing losses of 1 percent to cap a five-day rally that is the longest this year. The Canadian benchmark is the only market in the developed world to end Wednesday in positive territory. New Zealand’s index is flat for the year as the two measures vie for the top spot and outpace returns from markets in the U.S., U.K. and Germany.

     “The downdraft was quite overdone given what the fundamentals suggested,” said Craig Fehr, Canada market strategist at Edward Jones, in an interview last week as the S&P/TSX neared positive territory. His firm manages $876 billion. “The short-term rebound we’re seeing is quite warranted. We were getting volatility begetting volatility even when it wasn’t warranted. The rebound in crude has provided a nice floor. The worries have abated a bit.”

     Shares in the Canadian benchmark trade at about 20 times earnings, roughly 14 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     Canadian stocks have shown signs of breaking away from their lock-step relationship to crude oil, outperforming global peers this year after being among the worst performers in 2015. Energy producers rose 1.1 Wednesday as New York crude settled at a two-month high after a government report showed U.S. refineries boosted their use of oil.

     CCL Industries Inc., a packaging and label-maker, jumped 12 percent to a record after agreeing to buy Checkpoint Systems Inc. in a friendly deal worth about C$556 million. Checkpoint makes label products for the retail and apparel industry.

     Base metals producers First Quantum Minerals Ltd. and Teck Resources Ltd. surged at least 19 percent as raw-materials producers soared 3.9 percent as a group. Copper climbed to a three-month high. The industry is the best-performing group in the S&P/TSX this year with a 17 percent advance.

     Valeant Pharmaceuticals International Inc. rose 3.2 percent, snapping a four-day slide to rebound from a 2013 low. Shares of the drugmaker pared losses of as much as 11 percent yesterday after Nomura analyst Shibani Malhotra said Valeant was viewed with more confidence after conversations with the company. Malhotra maintained a buy rating on the stock. Shares of the drugmaker have plunged 74 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices.

     Brookfield Asset Management Inc. and Manulife Financial Corp. slipped at least 1.3 percent to lead financial services stocks lower. Toronto-Dominion Bank and Bank of Nova Scotia each lost 0.3 percent.

     Canadian banks’ exposure to the struggling oil-and gas industry totals C$107 billion when including untapped credit lines with outstanding loans, double the C$50 billion generally highlighted by the big banks in quarterly earnings calls and presentations. The nation’s largest lenders reported mixed first-quarter earnings over the past week, with Royal Bank and Toronto-Dominion bank missing analysts’ estimates.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks advanced, extending their eight- week highs, with banks and energy shares rallying for a second day as improving data bolstered optimism on the economy.

     Equities pressed higher in the final hour of trading after swinging between gains and losses for most of the session. Bank of America Corp. increased 2.1 percent to a one-month high, on top of a 5.4 percent gain yesterday, while Exxon Mobil Co. added 1.8 percent. Monsanto Co. fell the most in more than five years after cutting its profit forecast.

     The Standard & Poor’s 500 Index rose 0.4 percent to 1,986.45 at 4 p.m. in New York, holding at the highest since Jan. 6. The Russell 2000 Index of small caps jumped 1.1 percent. The Dow Jones Industrial Average added 34.24 points, or 0.2 percent, to 16,899.39, and the Nasdaq Composite Index increased 0.3 percent. About 8.3 billion shares traded hands on U.S. exchanges, in line with the three-month average.

     “It was the more cyclical businesses that bounced back today,” said Terry Morris, a senior equity manager who helps oversee about $3.2 billion at Wyomissing, Pennsylvania-based National Penn Investors Trust Co. “The market ended up technically oversold a couple weeks ago, so the market was ripe to snap back, and we saw a continuation of that today. The fact that energy has stabilized has been enough to help the market turn up.”

     A report today showed companies in the U.S. added more workers than forecast to their payrolls, another positive signal on the economy after gauges showing stability at American factories, major carmakers and in the public and private construction industries helped spur a rally yesterday. The improving data has also raised the odds the Federal Reserve will boost borrowing costs this year.

     The S&P 500 has trimmed its 2016 decline to less than 3 percent, from more than 10 percent, amid a recovery from a 22- month low on Feb. 11. Banks, consumer and technology companies have helped boost the comeback. The benchmark is down 6.8 percent from an all-time high reached last May.

     The Chicago Board Options Exchange Volatility Index slipped 3.5 percent Wednesday to 17.09, with the measure of market turbulence known as the VIX dropping to the lowest level since Dec. 29.

     In Tuesday’s votes, Donald Trump and Hillary Clinton solidified their positions in the race to their parties’ presidential nominations. The impact on trading was muddied as global equities rebounded on the U.S. economic data and amid stability in China markets that spurred risk-taking.

     The eighth year of a presidency typically ranks last in terms of equity returns, and the first half of an election year is often even worse. Add everything else that has been weighing on markets in 2016, from China to oil and the Fed, and few money managers see a return to the relative calm that reigned from 2012 to 2015.

     “There will continue to be a lingering concern regarding who the Republican Party will nominate,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey via e-mail. “We expect as the months draw closer to the general election certain sectors performance will improve. Look for a bullish change in sentiment toward the health-care sector as jitters and uncertainty subside.”

     A Fed report today showed the U.S. economy continued to expand across most of the country, while wage growth was described as varying widely, “from flat to strong.” Seven of the Fed’s 12 regional districts characterized the economy as growing “moderately,” at a “modest pace” or “slightly,” according to the central bank’s Beige Book, an economic survey published eight times a year.

     Separately, San Francisco Fed President John Williams said today domestic demand is overwhelming weakness from abroad, and inflation should move back to the central bank’s 2 percent target over the next two years. Traders have raised the odds for rate increases this year, pricing in a 38 percent probability for a June boost in borrowing costs, up from about 26 percent a week ago. Chances for a December move have increased to 65 percent from 42 percent last Wednesday.

     “People were saying for a long time that while the stock market wasn’t doing well, the underlying economy was still doing well,” said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment Research Inc. “We’re seeing proof of that now. It’ll be interesting to see if data continues to improve, and how that affects Fed decision-making. We’re starting to see people talk about an accelerated Fed rate hike schedule.”                      

     Eight of the S&P 500’s 10 main industries increased today, with energy and financial stocks gaining for a second straight day to lead the advance. Raw-material and consumer discretionary companies were the only two groups to decline.

     Energy companies in the benchmark stock index climbed 2.5 percent, the most in two weeks, to extend a two-day increase to 4.7 percent. Crude oil rose 0.8 percent to the highest in almost two months after a government report showed U.S. refineries boosted their use of crude. Marathon Oil Corp. and Devon Energy Corp. advanced more than 11 percent.

     Chesapeake Energy Corp. surged 23 percent, the most in more than seven years. Co-founder Aubrey McClendon, who was ousted three years ago, was killed in a car crash in Oklahoma City Wednesday, police said. His death comes a day after he was charged with rigging bids for oil and natural gas leases.

     Banks continued to recover from their lowest levels since 2013, with lenders in the S&P 500 up nearly 14 percent since Feb. 11. Citigroup Inc. and Wells Fargo & Co. gained at least 1.7 percent. The KBW Bank Index advanced 1.8 percent to an almost seven-week high.

     The S&P 500 Information Technology Index was little changed after erasing a 0.6 percent drop. EBay Inc. and Skyworks Solutions Inc. lost more than 2 percent. Even as Skyworks declined, an index of semiconductor companies in the benchmark increased 0.5 percent, with Micron Technology Inc.’s 5.5 percent gain.

     Materials shares in the benchmark index dropped 0.4 percent. Monsanto Co. plunged 7.8 percent to a five-month low after the world’s largest seed producer cut its full-year profit forecast. Chief Executive Officer Hugh Grant said the company may have to push back its long-term profit target to early in the next decade amid pressures from weak agricultural markets. Sherwin-Williams Co. and CF Industries Holdings Inc. declined at least 2.6 percent.

     Consumer discretionary companies closed little changed, paring a 0.8 percent slide. Dollar Tree Inc. fell 4 percent after its rating was cut to market perform from strong buy at Raymond James Financial Inc. The company has gained 28 percent since falling to a one-year low in October. Royal Caribbean Cruises Ltd. and AutoNation Inc. slipped more than 1.7 percent. Homebuilders Lennar Corp. and PulteGroup Inc. added at least 2 percent.

 

Have a wonderful evening everyone.

 

Be magnificent!

The golden rule of conduct therefore, is mutual toleration,

seeing that we will never think alike and we shall see the Truth

in fragments and from different angles of vision.

Conscience is not the same thing for all.

While, therefore, it is a good guide for individual conduct,

imposition of that conduct upon all will be an insufferable interference

with everybody’s freedom of conscience.

Mahatma Gandhi

 

As ever,
 

Carolann

 

The measure of life is not its duration, but its donation.

                                            -Peter Marshall, 1926-

 

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:

MARCH:

Pisces & Aries
Birthstone: Aquamarine
Flower: Tulip

The days and nights  approach each other in duration, balancing perfectly at the vernal equinox.  Anything could happen.  Despite the persistent winds, spring is in the air.  “The wind blows where it wants and you can hear the sound of it but you cannot tell where it is coming from and where it is going.  So it is with those who are born of the spirit.”  March is the Martian month.  We feel braced.   There’s warmth in the air.  Nature begins her journey outward into beauty.  Our senses awaken.  Winter’s inwardness, its contraction, begins to turn inside out.  Responding, we begin to flow outward too, to expand.
“March is the month of expectation,” wrote Emily Dickinson.

The month is so called from Mars.  The old Dutch name for it was Lentmaand.  The old Saxon name was hrethmonath, perhaps meaning “rough-month” form its boisterous winds.  This subsequently became lenctenmonath – lengthening month.
March comes in like a lion and goes out like a lamb.

On March 1, 1961, President John F. Kennedy issued an executive order creating the Peace Corps, enlisting men and women for voluntary, unpaid service in developing countries around the world.

 

2010 – Vancouver Olympics end with Canada winning 14 gold medals, the most for any country (host or otherwise) in any Winter Olympics.

PHOTOS OF THE DAY

A woman walks her dog in front of the setting sun near Hannover, northern Germany, Monday evening. Julian Stratenschulte/dpa/AP

A man covered with a plastic bag for protection from the wind and cold fishes through an ice hole in the Finnish Gulf west of St. Petersburg, Russia, Tuesday. Dmitri Lovetsky/AP

Market Closes for March 1^st, 2016

Market Index	Close	Change
Dow Jones	16865.08	+348.58   +2.11%
S&P 500	1974.28	+42.05   +2.18%
NASDAQ	4689.594	+131.644   +2.89%
TSX	12970.38	+110.03
		+0.86%

International Markets

Market Index	Close	Change
NIKKEI	16085.51	+58.75
		+0.37%
HANG SENG	19407.46	+295.53
		+1.55%
SENSEX	23779.35	+777.35
		+3.38%
FTSE 100	6152.88	+55.79
		+0.92%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.239	1.191
CND. 30 Year Bond	2.034	1.975
U.S.    10 Year Bond	1.8214	1.7365
U.S. 30 Year Bond	2.6946	2.6156

Currencies

BOC Close	Today	Previous
Canadian $	0.74514	0.73882
US $	1.34203	1.35352
Euro Rate 1 Euro=		Inverse
Canadian $	1.45858	0.68560
US $	1.08686	0.92008

Commodities

Gold	Close	Previous
London Gold Fix	1236.50	1234.90
Oil	Close	Previous
WTI Crude Future	34.40	33.75

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, with a fourth straight gain pushing the benchmark index to the highest level since Dec. 31, as an unexpected expansion in Canada’s economy last quarter added to optimism that growth is accelerating in America.

     The Standard & Poor’s/TSX Composite Index climbed 1 percent to 12,982.10 at 4 p.m. in Toronto, capping the longest rally in two weeks. The equity gauge has rebounded 7.4 percent from a Feb. 11 low and is 0.2 percent from erasing declines for the year. The index yesterday narrowly avoided a ninth loss in the past 10 months with a 0.3 percent February increase.

     Global stocks rallied and the S&P 500 rebounded from a third monthly loss amid data showing U.S. manufacturing steadied last month. Emerging-market currencies and metals rose on speculation central banks in Asia and Europe will add to stimulus a day after China moved to soften the nation’s economic downturn. The U.S. and China are Canada’s two largest trading partners.

     Canada’s economy unexpectedly rose at a 0.8 percent annualized pace between October and December, Statistics Canada said Tuesday in Ottawa. Economists had forecast output would be flat, according to a Bloomberg survey. The weakened Canadian dollar reduced imports by the most in six years, taking pressure off the central bank to cut interest rates to record lows.

     The S&P/TSX is one of the best-performing markets in the developed world this year, vying with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 14 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     Bank of Nova Scotia, Canada’s third-largest lender by assets, climbed 5.8 percent for the biggest increase in seven years after posting rising first-quarter profit, led by its international-banking business. The lender is the last of the nation’s largest banks to report earnings during this period. Toronto-Dominion Bank and Royal Bank of Canada missed analysts’ estimates, while Bank of Montreal and Canadian Imperial Bank of Commerce beat expectations.

     Maple Leaf Foods Inc. surged 8.1 percent to a record after fourth-quarter earnings and revenue topped the highest estimates among analysts. The food products maker also boosted its dividend.

     Valeant sank 2.3 percent, falling for a fourth day, extending a 2013 low. Shares of the drugmaker pared earlier losses of as much as 11 percent after Nomura analyst Shibani Malhotra said Valeant was viewed with more confidence after conversations with the company. Malhotra maintained a buy rating on the stock.

     Quebec’s securities regulator Autorite des marches financiers earlier said it was “concerned” about allegations made against Valeant and would neither confirm nor deny it was investigating the Laval, Quebec-based company.

     Shares of the drugmaker have plunged 75 percent from an August high amid intense scrutiny from investors and lawmakers over its pricing practices. The stock added to losses yesterday after the company confirmed the U.S. Securities and Exchange Commission is investigating Valeant in a previously undisclosed probe.

US

By Oliver Renick

     (Bloomberg) — The Nasdaq 100 Index powered to its best day in six months as U.S. equities roared into March amid signs that the world’s largest economy remains on firm footing and foreign central banks stand poised to do what’s needed to shore up sluggishness abroad.

     American factories looked set to emerge from a year-long slump, while monthly sales at major carmakers showed consumers stepping up spending a day after China added to stimulus, alleviating anxieties that had sent U.S. shares to the worst start to a year on record. Banks and technology stocks paced gains Tuesday, as companies hardest hit during the rout continued a three-week rebound.

     The S&P 500 climbed 2.4 percent, the most in a month, to 1,978.35 at 4 p.m. in New York, the highest close since Jan. 6 after sliding 0.8 percent on Monday to cap a third straight monthly drop. The gauge has trimmed its 2016 decline to 3.2 percent, down from more than 10 percent. The Nasdaq 100 gained 3.2 percent, the most since Aug. 26. The Dow Jones Industrial Average added 348.58 points, or 2.1 percent, to 16,865.08.

     “This is a big rally without a whole lot having changed,” said Scott Wren, a senior global equity strategist in St. Louis at Wells Fargo Investment Institute. “We opened above the 50-day moving average and that has driven the day, along with some of the economic news as well and oil above $30. It shows you how desperate these equity markets were for some kind of stability.”

     Equities extended an opening advance after a report showed factory activity in February shrank less than forecast, as gains in new orders and production provided signs that the beleaguered industry could soon stabilize. Another report showed spending on all construction projects, private and public, rose 1.5 percent in January, the most since May.

     The S&P 500 entered March lugging its longest stretch of monthly declines since 2011, as equities have been beset this year by worries that China’s slowing economy will hurt growth around the globe, a concern compounded by tumbling commodity prices. That’s led investors to anticipate more support from policy makers, and China’s central bank yesterday cut banks’ reserve requirements, freeing up funds to help spur lending.

     A rebound in oil prices in the final two weeks of February helped the U.S. equity benchmark to recover most of its losses last month, which reached as much as 5.7 percent. The index is now 8.2 percent above a Feb. 11 low, and 7.2 percent off an all- time high reached last May.                          

     The Chicago Board Options Exchange Index, the gauge of options prices known as the VIX, slid 14 percent to 17.70, the biggest one-day drop since Jan. 22 to the lowest level this year. The measure of market turbulence edged up 1.7 percent in February, paring a surge of more than 39 percent during the month. About 8.8 billion shares traded hands on U.S. exchanges, 6 percent above the three-month average.

     Nine of the S&P 500’s 10 main industries increased Tuesday, with financial and technology shares rising more than 3 percent. Seven groups gained more than 1.9 percent. JPMorgan Chase & Co. and Apple Inc. climbed at least 3.9 percent. Within consumer discretionary shares, retailers were strong, with Amazon.com Inc. and Tiffany & Co. more than 4 percent. Ford Motor Co. posted its strongest gain since October 2012 after better-than- expected February sales.

     In the three times this year that the S&P 500 rose more than 2 percent, this is the first instance when a Goldman Sachs Group Inc. index of equities with the highest short interest was up less than the benchmark. During the market’s bounce from Feb. 11 through yesterday, most-shorted shares jumped 13 percent, compared with the S&P 500’s 5.6 percent climb.

     Presidential primaries move into focus today, with more delegates to be awarded than on any other day of the nomination race. Investors are also assessing economic releases to gauge the possible trajectory of interest-rate increases before the Federal Reserve’s next decision on March 16, with the government’s monthly jobs report looming on Friday.

     Before the better-than-forecast data on manufacturing and construction spending, Fed Bank of New York President William C. Dudley said he was less confident in the inflation outlook following recent turbulence in financial markets. Dudley’s views added to officials’ concerns expressed recently about growth and inflation headwinds from abroad.

     Traders are pricing in a 12 percent probability of a rate boost this month, with odds increasing to 50 percent by September and 63 percent in December. That’s up from just 11 percent at the height of last month’s selloff on Feb. 11.

     “The numbers today were pretty decent with manufacturing up from estimates and the construction numbers were pretty good as well, so if inflation keeps moving over the next few months that could be a good thing as we started the year talking about negative rates and deflation,” Mark Kepner, an equity trader at Chatham, New Jersey-based Themis Trading LLC, said by phone. “Financials are also bouncing back after getting beat up and as we get some stability in oil prices, things are looking a little better.”

     Financial companies added 3.5 percent, the biggest gain for the 89-member group in three weeks. Wells Fargo & Co. increased 3.8 percent while Bank of America Corp. and Citigroup Inc. climbed more than 5.3 percent. The KBW Bank Index jumped 4.6 percent to a one-month high.

     Ford surged 4.6 percent and Fiat Chrysler Automobiles NV added 7.2 percent to a five-week high. Their February sales beat analysts’ estimates, thanks to promotions tied to the Presidents Day holiday and continued strong demand for sport utility vehicles and pickups. General Motors Co. lagged, gaining 1.9 percent after a surprise decline in its sales.

     Apple rose the most in more than a month to pace the strongest advance for technology shares since Jan. 29. Facebook Inc. and Microsoft Corp. contributed, increasing at least 2.7 percent. Hard-drive makers Seagate Technology Plc and Western Digital Corp. rallied more than 5.9 percent following management presentations late yesterday at a Morgan Stanley conference.

     Raw-materials producers gained for the fourth time in five days to the highest this year. Providers of building materials were among the strongest performers following the construction spending data, with paint maker Sherwin-Williams Co. rising 3.9 percent to a six-month high, while Martin Marietta Materials Inc. and Vulcan Materials Co. added more than 2.9 percent. Steel company Nucor Corp. gained 4.1 percent to a 2016 high.

 

Have a wonderful evening everyone.

 

Be magnificent!

Differentiation, infinitely contradictory, must remain,

but it is not necessary that we should hate each other;

it is not necessary therefore that we should fight each other.

Swami Vivekananda

As ever,
 

Carolann

 

People won’t have time for you if you are always angry or complaining.

                                                            -Stephen Hawking, 1942-

 

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:

Calendars That Leap

  -by Amanda Foreman, WSJ

Every four years on Feb. 29, we are reminded of one of life’s most puzzling conundrums: Time is both arbitrary and immutable. The “leap” making its appearance this Monday shows that the Western calendar on which we place so much reliance is a conceit—a piece of fiction introduced by Pope Gregory XIII in October 1582.

Despite the provisional nature of calendars, two real phenomena govern almost all of them: the phases of the moon and the rotations of the sun. Our Mesolithic ancestors were the first people to harness the movements of the cosmos to provide a fixed notion of the past, the present and the future. The oldest known calendar in the world was discovered in a Scottish field in 2013, notched into the earth some 10,000 years ago. Our forebears had created it by shaping 12 specially dug pits around a 164-foot arc to mimic the phases of the moon and track the months.

The design was sophisticated and yet simple enough that it could be modified easily. However, as with the lunar Islamic calendar today, the ancient Scots were constantly having to adjust for the differences between the lunar and solar calendars. To help with realignments, they tied their calibrations to a notch in the ground that marked the rising sun of the midwinter solstice.

Since a solar year is 365 days, five hours and about 49 minutes, every culture and civilization until the global adoption of the Gregorian calendar had to have a method for accommodating the leap days. In ancient times, the Babylonians would add a month at intervals of two and three years. The early Romans had a calendar of only 355 days, which led them to insert an extra month into late February every other year so that religious festivals wouldn’t occur out of season. After Julius Caesar’s reforms in 46 B.C., the Roman year had 12 months, 365 days and a leap year every four years. Even so, the calendar needed resetting every 131 years.

The Mayans made the most ingenious attempt at tackling the accuracy problem. They perfected a system using three corresponding calendars simultaneously. The last of them, the Long Count, measured the universe in life cycles of 7,885 solar years. (Much New Age quackery resulted from the belief that the end of the last cycle on Dec. 21, 2012, signified the end of the world.

Pope Gregory XIII’s calendar was able to prevent Christmas and Easter from creeping forward with a one-time leap forward of 10 days in October 1582. The calendar also used a more-accurate mathematical formula for leap years that excludes from the leap-year calendar any century years unless they’re exactly divisible by 400. But for all its brilliance, the new calendar couldn’t solve the problem that all of history before Oct. 15, 1582, became unmoored from its original dates.

Britain and its colonies stubbornly clung to the old Julian calendar until 1752, when they were also forced to change New Year’s Day from March 25 to Jan. 1.

Among those caught up in the calendar wars was George Washington. He was brought up believing he had been born on Feb. 11, 1731. But by the time he died in 1799, he had not only gained a different birthday but also grown a year younger; the New Year’s Day change had resulted in his birth date moving to Feb. 22, 1732.

Perhaps it’s just as well that his birthday is now celebrated on the uncertain date of the third Monday of every February.

PHOTOS OF THE DAY

A farmer sleeps near cows at the International Agricultural Show in Paris Monday. The show runs from Feb. 27 to March 6.Benoit Tessier/Reuters

A monkey walks on power lines above a busy market in the old quarters of Delhi Monday. Cathal McNaughton/Reuters

Market Closes for February 29^th, 2016

Market Index	Close	Change
Dow Jones	16516.50	-123.47   -0.74%
S&P 500	1932.23	-15.82   -0.81%
NASDAQ	4557.949	-32.523   -0.71%
TSX	12860.35	+62.56
		+0.49%

International Markets

Market Index	Close	Change
NIKKEI	16026.76	-161.65
		-1.00%
HANG SENG	19111.93	-252.22
		-1.30%
SENSEX	23002.00	-152.30
		-0.66%
FTSE 100	6097.09	+1.08
		+0.02%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.191	1.180
CND. 30 Year Bond	1.975	1.960
U.S.    10 Year Bond	1.7365	1.7554
U.S. 30 Year Bond	2.6156	2.6332

Currencies

BOC Close	Today	Previous
Canadian $	0.73882	0.74001
US $	1.35352	1.35115
Euro Rate 1 Euro=		Inverse
Canadian $	1.47330	0.67875
US $	1.08850	0.91870

Commodities

Gold	Close	Previous
London Gold Fix	1234.90	1226.50
Oil	Close	Previous
WTI Crude Future	33.75	32.78

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a third day to halt a three-month slide on February’s final trading day, as advances among commodities producers overshadowed a plunge in Valeant Pharmaceuticals International Inc.

     Shares of the drugmaker, facing intense scrutiny from investors and lawmakers over its pricing practices, plunged 18 percent Monday and widened losses in a flurry of late-afternoon trading after a company spokeswoman confirmed the U.S. Securities and Exchange Commission is investigating Valeant in a previously undisclosed probe. The company has canceled an analyst conference call after it withdrew its guidance and delayed its fourth-quarter results originally scheduled for today.

     The Standard & Poor’s/TSX Composite Index still managed to end the day higher, climbing 0.5 percent to 12,860.35 at 4 p.m. in Toronto to erase February losses. The benchmark equity gauge rebounded 6.4 percent from a Feb. 11 low and is less than 1.2 percent from erasing declines for the year. The index narrowly avoided a ninth loss in the past 10 months with a 0.3 percent February increase.

     “There’s a limit to how much further you can go down,” said John Wilson, Chief Executive Officer of Sprott Inc.’s asset management unit, in a Feb. 26 interview. His firm manages C$8.5 billion ($6.28 billion). “I doubt we’ll be sub $30 a barrel for oil two years from now, and the Canadian dollar’s taken most of the punishment it’s going to take. From a valuation standpoint, there’s certainly more attractive opportunities here in Canada.”

     Global equities fluctuated and the S&P 500 erased a February gain for a third monthly loss, while crude advanced with gold after Group of 20 finance chiefs made only vague commitments to spur growth at a Shanghai meeting. China lowered requirements for the amount of cash its lenders had to lock away in a bid to soften the nation’s economic downturn.

     The S&P/TSX is one of the best-performing markets in the developed world this year, battling with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 16 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show. Canada’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     Raw-materials producers rallied with metals prices. Gold rose for the fourth time in five days for its biggest monthly gain in four years as investors seek a haven from tumbling global equities. The precious metal is this year’s best- performing major asset, its 16 percent gain topping high-yield bonds, Treasuries, currencies and major stock indexes according to data compiled by Bloomberg.

     Canadian raw-materials producers, led by broad gains among gold and base metals producers including Kinross Gold Corp. and copper producer First Quantum Minerals Ltd., surged 18 percent in February to lead the S&P/TSX’s rebound. Consumer staples stocks, led by a 16 percent rally in beverage maker Cott Corp. after posting a surprise profit, have also contributed to gains in the broader benchmark.

     Energy companies increased 1.6 percent Monday, cutting a monthly slide to 1.5 percent. Canadian Natural Resources Ltd. added 3.3 percent and Encana Corp. surged 10 percent to pace gains. Energy and raw-materials producers account for about 29 percent of the broader S&P/TSX.

     Health-care stocks, meanwhile, trailed the 10-industry S&P/TSX with a 23 percent slide in February, as Valeant slumped 29 percent to account for the majority of the losses. Valeant shares sank earlier in the month when it first disclosed it would restate some earnings due to its relationship with a mail- order pharmacy.

US

By Joseph Ciolli

     (Bloomberg) — The Standard & Poor’s 500 Index erased a February gain Monday, despite a rally in crude oil, as a two- week rebound faltered in the month’s lightly traded final session.

     Banks and health-care shares were the biggest drags today, with lenders capping a third monthly decline, losing 6.9 percent in February. JPMorgan Chase & Co. and Wells Fargo & Co. fell at least 2.1 percent to pace Monday’s retreat. Amgen Inc. sank 3.6 percent and Endo International Plc plunged 21 percent as health- care companies had their worst decline in more than two weeks. Energy shares fell 1.2 percent to post the fourth consecutive monthly drop and ninth in the last 10.

     The S&P 500 fell 0.8 percent to 1,932.23 at 4 p.m. in New York, extending its monthly losing streak to three, the longest in more than four years. It closed 0.4 percent lower for February. The Dow Jones Industrial Average lost 123.47 points, or 0.7 percent, to 16,516.50, though it managed to snap a two- month skid. The Nasdaq Composite Index sank 0.7 percent. Crude rose 3 percent. The S&P 500 hasn’t declined on a day when oil climbed that much since Nov. 23.

     “Following a pretty good week, investors might be taking a little pause, perhaps taking some profits,” said Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion. “There has been no upside catalyst today. Typically, the market goes in lockstep with oil, which is up today, but that connection has broken down. It would probably be a positive for stocks if they were to unlock.”

     Afternoon declines accelerated as the S&P 500 fell below its average price during the past 50 days. It closed above that level on Thursday for the first time this year. The index halted a two-day advance on Friday after signs of firming inflation spurred speculation interest rates may rise sooner than previously expected. A bank-fueled rebound of 6.5 percent since Feb. 11 through last week had briefly erased the benchmark’s losses for the month.

     Asian shares retreated today amid disappointment that the Group of 20 finance ministers meeting in Shanghai failed to make firm commitments to bolster the global economy. Concern over growth and a deepening rout in oil sent stocks tumbling earlier this year and stoked speculation of more support from policy makers.

     After the close of trading in Asia, China’s central bank cut the amount of cash the nation’s lenders must hold as reserve, marking a return to more traditional easing after policy makers indicated in recent weeks they would spur growth by guiding interbank markets lower and injecting liquidity through open-market operations.

     While the S&P 500 jumped 1.6 percent in the previous five trading sessions, the gains came amid the weakest volume in 2016, signaling a lack of conviction in the rally after losses of as much as 11 percent this year. The benchmark is down 9.3 percent from an all-time high reached last May. About 8.3 billion shares traded hands on U.S. exchanges Monday, in line with the three-month average.                          

     Investors are also assessing economic releases to gauge the trajectory of rate increases, before the Federal Reserve’s next decision on March 16. Data today showed contracts to purchase previously owned homes unexpectedly dropped in January by the most in two years. A February gauge on manufacturing in the Chicago area today also fell more than forecast. Data on Friday showed the Fed’s preferred measure of inflation rose by the most since October 2014.

     After last week’s batch of reports, traders raised their bets for further Fed rate increases this year, though they tempered a bit today. The probability of a June boost is 30 percent, down from 35 percent Friday. Odds of a December move reached almost 54 percent after slipping to 11 percent at the height of this month’s stock selloff on Feb. 11.

     Meanwhile, options traders aren’t currently pricing in the possibility of a Donald Trump presidential victory, Pravit Chintawongvanich, head derivatives strategist at Macro Risk Advisors, wrote in a note last week. The term structure of at- the-money options for the S&P 500 shows the market is pricing in virtually no event premium for the U.S. presidential election, he observed, meaning that the cost of insuring against a move in equities isn’t particularly elevated.

     The Chicago Board Options Exchange Volatility Index rose 3.7 percent Monday to 20.55. The measure of market turbulence known as the VIX slipped 22 percent over the previous two weeks, closing at the lowest level of 2016 last Thursday, though it finished 1.7 percent higher in February.                        

     Nine of the S&P 500’s 10 main industries declined today, with biotechnology companies dragging health-care shares lower, while energy producers retreated despite gains in crude and banks fell for the first time in three sessions. Utilities rose on the way to a third consecutive monthly increase and the fifth in the last six.

     Endo International Plc tumbled 21 percent, the most in more than 12 years. The company forecast 2016 sales and earnings that missed some analysts’ estimates, while also saying it’s winding down its Astora Women’s Health business and increasing its mesh product liability accrual. The Nasdaq Biotechnology Index dropped 2.7 percent and finished 4.9 percent lower for the month.

     Valeant Pharmaceuticals International Inc. slid 18 percent to a more than three-year low, and extended its two-day decline to 22 percent. The company said it’s under investigation by the U.S. Securities and Exchange Commission in a previously undisclosed probe. It earlier said it’s withdrawing its financial forecast and delaying the release of fourth-quarter results, as Chief Executive Officer Michael Pearson returns to the drugmaker after a hiatus.

     Energy companies in the S&P 500 slipped 1.2 percent even as West Texas Intermediate crude futures rallied 3 percent. Southwestern Energy Co. lost 9.4 percent after being cut to underperform from market perform by Raymond James Financial Inc. The company also had its rating cut by Jefferies Group LLC last week. Chesapeake Energy Corp. and Apache Corp. slipped more than 3 percent.

     SunTrust Banks Inc. and Synchrony Financial were the worst performers among financial shares in the benchmark index, falling more than 3.5 percent. For the month, financial companies fell 3.2 percent, marking a third straight monthly decline, the longest since September 2011.

 

Have a wonderful evening everyone.

 

Be magnificent!

To love is to understand and feel that the other person is different.

Swami Prajnanpad

As ever,

 

Carolann

 

Great spirits have always encountered violent opposition from mediocre minds.

                                                                     -Albert Einstein, 1879-1955

 

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:

Reminder Alert!  Monday is the last day to make RSP contributions that can be used  on your 2015 tax year return.   It is a big tax savings and a meaningful incentive to save for the future.  You can determine your limit for the 2015 tax year by reviewing your Notice of Assessment that you received from CRA after they assessed your 2014 tax year’s filing.  A convenient way to make your contribution if you haven’t already done so, or to top up your contribution room is to do it online.  Simply add Haywood Securities as a payee and, pay as if you were paying a bill but the amount of bill payment is your RSP contribution.  You will be prompted for your account number when you select Haywood and you can find this on any of your RSP statements.  I am reminding you because many people are familiar with March 1^st as the deadline, but because this year is a leap year, the 29^th of February is the deadline.

ARTS ARCHIVE:

The BBC offers an eclectic podcast that explores “pieces of music with a powerful emotional impact” called Soul Music.  New 30-minute podcasts are only added sporadically, but there is a wealth of archives to discover, such as the harrowing stories behind “Strange Fruit,” made famous by Billie Holiday, and the many settings of the much loved 23^rd Psalm.  The podcast is available at http://bit.ly/BBCSoulMusic.

February 28, 2016, 5:30 PM OSCAR NIGHT

PHOTOS OF THE DAY

Oscar statues are painted outside the entrance to the Dolby Theater as preparations continue for the 88th Academy Awards in Hollywood, Los Angeles, Calif., Thursday. The Oscars will be presented Feb. 28. Lucy Nicholson/Reuters

Runners wearing full solid-colored bodysuits take part in a marathon in Tel Aviv, Israel, Friday. Amir Cohen/Reuters

Market Closes for February 26, 2016

Market Index	Close	Change
Dow Jones	16639.97	-57.32 -0.34%
S&P 500	1948.05	-3.65 -0.19%
NASDAQ	4590.473	+8.268 +0.18%
TSX	12797.79	+44.19
		+0.35%

International Markets

Market Index	Close	Change
NIKKEI	16188.41	+48.07
		+0.30%
HANG SENG	19364.15	+475.40
		+2.52%
SENSEX	22976.00	+178.30
		%0.78
FTSE 100	6096.01	+83.20
		+1.38%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.180	1.145
CND. 30 Year Bond	1.960	1.938
U.S.    10 Year Bond	1.7554	1.7157
U.S. 30 Year Bond	2.6332	2.5941

Currencies

BOC Close	Today	Previous
Canadian $	0.74011	0.73845
US $	1.35115	1.35419
Euro Rate 1 Euro=		Inverse
Canadian $	1.47702	0.67704
US $	1.09315	0.91478

Commodities

Gold	Close	Previous
London Gold Fix	1226.50	1236.00
Oil	Close	Previous
WTI Crude Future	32.78	32.17

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks advanced a second day, briefly erasing a monthly loss, as crude oil capped its biggest weekly gain since August to boost energy producers and consumer shares advanced with Magna International Inc. amid data showing faster-than-forecast growth in the U.S.

     The Standard & Poor’s/TSX Composite Index rose 0.4 percent to 12,798.45 at 4 p.m. in Toronto. The benchmark equity gauge has rebounded 5.9 percent from a Feb. 11 low and is less than 2 percent from reversing losses for the year. The index is down 0.2 percent in February, seeking to avoid a ninth loss in the past 10 months.

     Global equities were little changed Friday as a rally fizzled in afternoon trading. Gains came earlier after China signaled it has room for additional stimulus, while optimism over the U.S. economy tempered as signs of firming inflation fueled speculation interest rates may rise sooner than expected. The two nations are Canada’s largest trading partners. The country’s resource-rich index has benefited from a surge in the price of gold and crude’s rebound from a 12-year low.

     The S&P/TSX is one of the best-performing markets in the developed world this year, battling with New Zealand for the top spot and outpacing returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 20 times earnings, roughly 13 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show.

     Raw-materials producers, led by broad gains among gold and base metals producers from Kinross Gold Corp. to Teck Resources Ltd., have surged 16 percent in February to lead the S&P/TSX’s rebound. Consumer staples stocks, led by a 15 percent rally in beverage maker Cott Corp. after posting a surprise profit, have also contributed to gains in the broader benchmark.

     Health-care stocks meanwhile trail the 10-industry S&P/TSX with a 13 percent retreat, as Valeant Pharmaceuticals International Inc. slumped 14 percent in February after disclosing it will restate some earnings due to its relationship with a mail-order pharmacy.

     Energy companies advanced 1.3 percent Friday, cutting a monthly slide to 3.1 percent. Oil in New York jumped 11 percent for the week, the most since August. Cenovus Energy Inc. and Husky Energy Inc. each gained 4.5 percent to pace gains.

     Bombardier Inc. lost 1.9 percent as the aircraft maker’s troubled C Series program was dealt another blow after one of its largest customers, Republic Airways Holdings Inc., filed for creditor protection in New York Thursday.

     Magna, the autoparts maker, jumped 7.3 percent for the biggest gain in more than four years after fourth-quarter sales beat estimates. The company also raised its dividend. Goldcorp plunged 13 percent, the most since October 2014, after the world’s third most valuable gold producer posted a surprise quarterly loss on asset writedowns.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks slipped, while still posting a second-straight weekly gain, with optimism on the economy tempered after signs of firming inflation fueled speculation interest rates may rise sooner than previously expected.

     Equities struggled to add to gains Friday after a nearly 7 percent run-up in the two weeks since the Standard & Poor’s 500 Index reached a 22-month low. Higher growth and inflation readings helped spur a stronger dollar, sending some companies with significant overseas business lower. Consumer staples fell, with Coca-Cola Co. losing 2.3 percent. Raw-materials producers rallied on easing growth concerns, with Freeport-McMoRan Inc. rising 4.4 percent as copper surged.

     The S&P 500 fell 0.2 percent to 1,948.05 at 4 p.m. in New York, after rising as much as 0.6 percent. The gauge held above its average price during the past 50 days after climbing through that level yesterday for the first time this year. The Dow Jones Industrial Average lost 57.32 points, or 0.3 percent, to 16,639.97, and the Nasdaq Composite Index increased 0.2 percent.

     “There hasn’t been a lot of conviction,” said Michael Block, chief equity strategist at Rhino Trading Partners LLC in New York. “It tells me we’re going to be stuck in a range here. We’re up on oil stability, China talk from the PBOC and GDP wasn’t a complete disaster with PCE a little better,” he said referring to the personal consumption expenditures gauge.

     A report today showed the Federal Reserve’s preferred measure of inflation rose by the most since October 2014, illustrating the challenge for U.S. central bankers as they consider tighter monetary policy amid feeble global markets. Also, consumer purchases climbed in January by the most in eight months, while a separate report showed the U.S. economy unexpectedly expanded at a faster pace in the fourth quarter than initially estimated.

     Following the data, traders raised their bets for further Fed rate increases this year. The probability of a June boost rose to 35 percent from less than 24 percent yesterday, while odds of a December move reached 52 percent from 36 percent. Chances for a December hike had slipped to 11 percent at the height of this month’s stock selloff on Feb. 11.

     “Inflation is definitely something that the Fed is looking at and it looks like it is ticking up,” said Thomas Garcia, head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc. “The problem is that we have economies that are not doing so hot. What you don’t want is inflation with an economy that is slowing down.”

     Stocks in Asia and Europe rose after China’s central bank said it sees room for monetary easing, and Group of 20 finance chiefs discussed stimulus efforts. Concern about the impact of China’s slowdown on global growth and a related rout in commodity prices have helped push the S&P 500 down as much as 11 percent this year on a closing basis to its lowest level since 2014.

     The global market turmoil that began the year is heavy on investors’ minds as the G-20 meets. A lack of agreement this weekend on fiscal or monetary initiatives from the group risks disappointing investors who have urged some coordinated action to address stock declines and weak prospects for growth.

     The S&P 500 rose 1.6 percent this week, extending a rebound from its the lowest level since April 2014, as banks and technology shares paced gains and oil showed signs of stabilizing. The gauge has erased a monthly loss of as much as 5.7 percent and cut its 2016 slide by more than half. It rose to a seven-week high yesterday.

     Even as stocks rebounded in the past two weeks, participation has slackened. Daily volume on U.S. exchanges since Feb. 11 was 8.1 billion shares, 13 percent lower than the average volume of 9.3 billion for the year up until then. An average 7.6 billion shares a day changed hands this week. About 7.9 billion shares traded today, 4 percent below the three-month average.

     The Chicago Board Options Exchange Volatility Index rose 3.7 percent to 19.81 Friday. The measure of market turbulence known as the VIX is down about 2 percent this month after erasing a climb of more than 39 percent.

     Six of the S&P 500’s 10 main groups declined, with utilities tumbling 2.7 percent, the biggest drop in three months as rising bond yields made the group’s dividend payout look less attractive. Consumer staples had the steepest slide in five weeks amid speculation their profits could be hurt by a stronger dollar. Raw-material, financial and energy companies rose the most.

     While higher bond yields weighed on utilities, they were a boon for banks as investors bet rising rates would help profits. Lenders in the benchmark rose for a second day, with Bank of America Corp. up 3.1 percent to a three-week high. Citigroup Inc. added 2.3 percent.

     Alcoholic beverage maker Brown-Forman Corp., which generated more than half its sales last year outside the U.S., fell 3.2 percent. PepsiCo. Inc. and Wal-Mart Stores Inc. lost at least 2.2 percent, with Pepsi capping its worst drop this year.

     Within raw-materials, Freeport-McMoRan rose for the first time in four days, and is headed toward its best monthly gain ever, up more nearly 62 percent. Fertilizer makers Mosaic Co. and CF Industries Holdings Inc. increased more than 5.4 percent.                        

     Among shares moving on corporate news, Kraft Heinz Co. rose 3.8 percent after its quarterly earnings topped estimates, helped by growth of condiment sales. J.C. Penney Co. rallied 15 percent, the biggest increase in more than a year, after its profit also exceeded estimates and the retailer forecast an even rosier 2016.

     Weight Watchers International Inc. tumbled 29 percent, the most in a year. A high-profile partnership with Oprah Winfrey failed to reverse the company’s financial decline as it posted a surprise fourth-quarter loss.

     With the earnings season drawing to a close, analysts’ predictions for fourth-quarter profits have improved. They estimate a 3.7 percent drop at S&P 500 companies, from Jan. 15 calls for a 7 percent slump. About three-quarters of firms in the benchmark have beat profit projections, while less than half topped sales forecasts.

 

Have a wonderful weekend everyone.

 

Be magnificent!

One person is not another person.

What is he, the?  He is unique.

Swami Prajnanpad

As ever,

 

Carolann

 

It wasn’t raining when Noah built the ark.

                        -Warren Buffett, 1930-

 

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 just finished reading a book that I highly recommend to everyone.  It is entitled The Lucky Years –How to Thrive in the Brave New World of Health.  Its author is David B. Angus, M.D. (Simon & Shuster, 2016).  Dr. Angus is an oncologist (he was on Steve Job’s team) and shares many valuable insights into living your best and ensuring a long and healthy life.  Many of the remarkable insights that have been gleaned since the human genome was elucidated in 2003 are revealed as well as therapies that exist as a result and what the future holds.  I cannot recommend it highly enough for everyone, no matter what age.

PHOTOS OF THE DAY

Men dressed as ancient Roman soldiers walk in front of the Brandenburg Gate in Berlin Thursday on their way to a photo session promoting the exhibition ‘Nero.’ The exhibition about the life of Emperor Nero will run in the town of Trier from May 15 until Oct. 16. Fabrizio Bensch/Reuters

A man looks at a Cadillac CT6 displayed inside a fish tank during an event promoting the car’s environmental-friendly features in Shanghai, China, Thursday. China Daily/Reuters

Market Closes for February 25, 2016

Market Index	Close	Change
Dow Jones	16697.29	+212.30 +1.29%
S&P 500	1951.70	+21.90 +1.13%
NASDAQ	4582.207	+39.601 +0.87%
TSX	12753.60	+13.33
		+0.10%

International Markets

Market Index	Close	Change
NIKKEI	16140.34	+224.55
		+1.41%
HANG SENG	18888.75	-303.71
		-1.58%
SENSEX	22976.00	-112.93
		-0.49%
FTSE 100	6012.81	+145.63
		+2.48%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.145	1.151
CND. 30 Year Bond	1.938	1.939
U.S.    10 Year Bond	1.7157	1.7501
U.S. 30 Year Bond	2.5941	2.6079

Currencies

BOC Close	Today	Previous
Canadian $	0.73845	0.72950
US $	1.35419	1.37080
Euro Rate 1 Euro=		Inverse
Canadian $	1.49228	0.67012
US $	1.10195	0.90748

Commodities

Gold	Close	Previous
London Gold Fix	1236.00	1250.75
Oil	Close	Previous
WTI Crude Future	32.17	30.40

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks wiped out a loss in afternoon trading, as oil producers pared declines and better- than-expected earnings from Canadian Imperial Bank of Commerce helped buttress a rally in financial shares.

     The Standard & Poor’s/TSX Composite Index rose 0.1 percent to 12,753.60 at 4 p.m. in Toronto, reversing a loss of as much as 0.8 percent. The advance pushed the benchmark gauge’s rise since Feb. 11 to 5.5 percent and pared its February decline to 0.5 percent. The index is attempting to avoid a ninth loss in the past 10 months.

     The S&P/TSX remains among the best-performing markets in the developed world this year, trailing New Zealand and topping returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 19.5 times earnings, roughly 11 percent more expensive than the valuation of the Standard & Poor’s 500 Index, data compiled by Bloomberg show.

     CIBC added 2.6 percent after posting higher profit driven by retail and business banking. The lender also raised its dividend. Toronto-Dominion Bank added 1.4 percent after saying fiscal first-quarter profit rose 7.9 percent on gains in its Canadian and U.S. retail businesses. The lender also raised its quarterly dividend by 7.8 percent to 55 cents a share.

     Among 20 S&P/TSX companies to report earnings today, CCL Industries advanced 6.5 percent to a month high after beating expectations, while grocery store owner Loblaw Cos. lost 0.5 percent as earnings missed.

     Energy companies pared losses as oil rebounded. The S&P/TSX Energy Index erased most of its declines after data showed inventories of gasoline dropped for the first time in 15 weeks. Stockpiles fell 2.24 million barrels last week, according to an Energy Information Administration report yesterday. The decline coincided with a gain in crude stockpiles to the highest level since 1930.

     Valeant Pharmaceuticals International Inc. slipped 0.6 percent. Chief Executive Mike Pearson, who has been on medical leave with severe pneumonia, is recovering, a spokeswoman said Thursday, although he remains sidelined from the job. Former Chief Financial Officer Howard Schiller is still acting as interim CEO, the company said.

     Semafo Inc. climbed 9.6 percent, to a September 2014 high, after posting a feasibility study for its Natougou gold project in Burkina Faso. During the first three years, average annual production will be more than 226,000 ounces, according to a statement today.

US

By Anna-Louise Jackson, Jiayue Huang and Dani Burger

     (Bloomberg) — Gains in bank and technology shares helped send the Standard & Poor’s 500 Index to a seven-week high, amid optimism on the economy after data indicated weakness in manufacturing may be easing while crude oil showed further signs of stabilizing.

     Lenders resumed their role as rally leaders, rising for the first time in three days after bolstering the equity rebound last week, with Bank of America Corp. up 1.6 percent. Microsoft Corp. and Intel Corp. added 1.4 percent to boost tech. Energy producers erased declines as crude wiped out losses. United Technologies Corp. stretched its increase this week to 11 percent amid talk of a possible merger with Honeywell International Inc.

     The S&P 500 climbed 1.1 percent to 1,951.70 at 4 p.m. in New York, with the gauge erasing its February decline to advance 0.6 percent for the month. The Dow Jones Industrial Average added 212.30 points, or 1.3 percent, to 16,697.29. The Nasdaq Composite Index increased 0.9 percent. About 7.3 billion shares traded hands on U.S. exchanges, 11 percent below the three-month average.

     “We got some good news this morning from jobless claims and durable goods orders that came in noticeably stronger than expected,” Alan Gayle, senior strategist for Atlanta-based Ridgeworth Investments, which has about $42.5 billion in assets, said by phone. “We had some encouraging macro news that gave the markets the impetus to move higher, particularly on the back of yesterday’s close. After a tough down market, there’s some budding optimism that the worst is perhaps over.”

     The main U.S. equity benchmark eliminated this month’s slide after losing as much as 6.7 percent at the close on Feb. 11. The S&P 500 continued its rebound from a nearly two-year low and has cut its 2016 drop by more than half. The index also topped its average price during the past 50 days for the first time this year, after last closing above the technical level on Dec. 29.

     U.S. equities broke higher in the early afternoon after struggling for direction throughout the morning amid conflicting signals abroad. China’s stocks tumbled the most in a month as surging money-market rates signaled tighter liquidity. Meanwhile, European shares rallied, pace by Lloyds Banking Group Plc, with the Stoxx Europe 600 Index rising 2 percent. Concern that a slowdown of the Chinese economy is deepening, compounded by falling commodity prices led by crude, has roiled equity markets since August.

     Tumbling oil prices, tighter credit conditions and a flatter yield curve spurred Wells Fargo Securities LLC strategist Gina Martin Adams to lower her S&P 500 target to 2,100, down from a previous call of 2,245. “Stocks will move higher over the next 12 months, but perhaps not as robustly as we forecast in early December,” Martin Adams wrote in a research note to clients Thursday. “There is likely also a lid on multiples given deteriorating credit quality.”

     While the S&P 500’s valuation of 16.3 times the forecast earnings of its members is above the 15 times average of the past five years, the measure is down 6.8 percent since the start of the year. The gauge remains more expensive than developed markets in Europe, where the Stoxx 600 Index trades for 14.6 times estimated earnings.

     Investors are scrutinizing economic data to gauge growth in the world’s largest economy, and a report today showed orders for U.S. capital goods rebounded in January by the most since June 2014. Orders for all durable goods rose 4.9 percent, the most since March. Separate data showed the number of Americans filing applications for unemployment benefits rose last week from a three-month low, in part reflecting the typical swings during holiday periods.

     “The data on durable goods will help assuage fears that a recession is lurking,” Quincy M. Krosby, a market strategist at Prudential Financial Inc., which oversees about $1.2 trillion, said by phone from Newark, New Jersey. “If we can get some more data releases showing some less bad data or stabilization it may help push us higher. The market is craving that right now.”

     With the earnings season wrapping up, about three-quarters of S&P 500 firms have exceeded profit projections, while less than half topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

     The Chicago Board Options Exchange Volatility Index fell 7.8 percent to 19.11 Thursday. The measure of market turbulence known as the VIX erased a 9 percent intraday jump yesterday, and is now down 5.4 percent this month after rising more than 39 percent as of Feb. 11.

     All of the S&P 500’s 10 main groups rose, with financial, tech, health-care and raw-materials shares up at least 1.2 percent. Energy stocks were little changed after reversing a drop of at least 1.9 percent for a second day.

     JPMorgan Chase & Co. and Citigroup Inc. added more than 1.3 percent to help drive banks higher. Zions Bancorporation rebounded 2.7 percent after a two-day tumble of 6.9 percent, the best performer today among lenders in the S&P 500. In the broader financial group, Morgan Stanley gained 3.9 percent and Goldman Sachs Group Inc. rose 1.9 percent, its third advance in four days.

     Salesforce.com’s 11 percent rally led the benchmark gauge and was the strongest among technology companies. The shares rose the most since April after the software company issued a forecast that easily topped estimates, giving investors another sign that the cloud-computing pioneer will be able to weather economic headwinds. Adobe Systems Inc. increased 3.9 percent, the most in a month.

     Raw-material companies surged 1.3 percent, with fertilizer maker CF Industries Holdings Inc. rising the most, up 4.4 percent. DuPont Co. and Dow Chemical Co. both added at least 1.9 percent.

     Defensive companies also gained traction, as consumer staples shares rallied to the highest ever and utilities rose for a fourth straight day, sending the group to its highest level in more than a year. Within staples, Campbell Soup Co. increased 3.5 percent to a record after reaffirming its full- year profit outlook.

     Energy producers erased losses on crude’s second-straight reversal. Newfield Exploration Co. rallied 4.2 percent after a better-than-estimated quarterly profit. Ensco Plc fell 4.8 percent to a 20-year low after the company slashed its quarterly dividend yesterday. The stock has slid nearly 10 percent in three sessions.

 

Have a wonderful evening everyone.

 

Be magnificent!

When you see that everything is different, that everything is unique,

you become one with the whole.

This is because you no longer judge, compare, or attribute particular characteristics.

Remove the characteristics,

and you no longer have an entity.

Swami Prajnanpad

As ever

Carolann

 

To live a creative life, we must lose our fear of being wrong.

                                -Joseph Chilton Pearce, 1926-

 

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 this day:

1955    Apple computer co-founder Steve Jobs was born in San Francisco.

1981    Buckingham Palace announced the engagement of Britain’s Prince Charles to Lady Diana Spencer.

1999    Lauryn Hill won five Grammys for her debut solo album, “The Miseducation of Lauryn Hill.”

2008    Cuba’s parliament named Raul Castro president, ending nearly 50 years of rule by his brother Fidel.

1663 – Louis XIV makes New France a Royal Colony of France; first law courts established.

PHOTOS OF THE DAY

A woman walks in the rain with an umbrella through Times Square in New York Wednesday. Shannon Stapleton/Reuters

Men play accordions during a folk performance just off Red Square in Moscow, Wednesday. Alexander Zemlianichenko/AP

Market Closes for February 24, 2016

Market Index	Close	Change
Dow Jones	16484.99	+53.21   +0.32%
S&P 500	1929.80	+8.53 +0.44%
NASDAQ	4542.605	+39.022   +0.87%
TSX	12740.27	-23.17
		-0.18%

International Markets

Market Index	Close	Change
NIKKEI	15915.79	-136.26
		-0.85%
HANG SENG	19192.45	-222.33
		-1.15%
SENSEX	23088.93	-321.25
		-1.37%
FTSE 100	5867.18	-95.13
		-1.60%

Bonds

Bonds	% Yield	Previous  % Yield
CND. 10 Year Bond	1.151	1.123
CND. 30 Year Bond	1.939	1.916
U.S.    10 Year Bond	1.7501	1.7225
U.S. 30 Year Bond	2.6079	2.5789

Currencies

BOC Close	Today	Previous
Canadian $	0.72950	0.72487
US $	1.37080	1.37955
Euro Rate 1 Euro=		Inverse
Canadian $	1.50918	0.66269
US $	1.10102	0.90825

Commodities

Gold	Close	Previous
London Gold Fix	1250.75	1221.35
Oil	Close	Previous
WTI Crude Future	30.40	30.07

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a second day, paring losses in afternoon trading as energy producers led by Encana Corp. rebounded with crude, offsetting a decline by lenders as investors weighed earnings from Royal Bank of Canada.

     The Standard & Poor’s/TSX Composite Index slipped 0.2 percent to 12,740.27 at 4 p.m. in Toronto, largely reversing a loss of as much as 2 percent. The benchmark gauge has lost 0.6 percent in February, headed for a fourth monthly decline, as volatility returned to global markets after a respite last week. Global-growth concerns have resurfaced as investors look to whether lenders will suffer as some energy producers struggle amid low oil prices.

     The S&P/TSX remains among the best-performing markets in the developed world this year, trailing New Zealand and topping returns from markets in the U.S., U.K. and Germany. Shares in the Canadian benchmark trade at about 19.5 times earnings, about 1.1 times more expensive than the valuation of S&P 500 shares, according to data compiled by Bloomberg.

     A jump in gold due to demand for havens has caused raw- material stocks to be the best-performing group in the S&P/TSX in 2016. Still, energy companies have weighed on returns, as oil trades near the lowest levels in 12 years.

     Financial services stocks sank the most on Wednesday, as five of 10 industries in the S&P/TSX retreated.

     Royal Bank of Canada slumped 2.6 percent, the biggest decline in a month, on first-quarter profit that fell short of analysts’ estimates as earnings from insurance and capital markets fell. The lender set aside more money for soured energy loans amid crude’s slide. RBC is the third to report results this week, followed by Toronto-Dominion Bank and Canadian Imperial Bank of Commerce tomorrow.

     West Texas Intermediate, the U.S. benchmark for crude, rose 0.9 percent to settle at $32.15 a barrel, reversing losses as cheap gasoline boosted U.S. demand and sent inventories lower, according to government data. Supplies fell 2.24 million barrels to 256.5 million. Prices dropped earlier after oil ministers from Iran and Saudi Arabia signaled on Tuesday they’re not willing to curtail production.

     Encana Corp. soared a record 23 percent as the energy producer cut its annual budget, lowered the dividend and announced another 20 percent reduction in its workforce as it reported a fourth straight quarterly loss, amid tumbling oil and natural gas prices. Shares had tumbled 41 percent this year before the announcement.

US

By Anna-Louise Jackson and Jiayue Huang

     (Bloomberg) — Technology and commodity companies paced a rebound in U.S. stocks, with a turnaround in crude-oil prices sparking broader buying that erased declines of as much as 1.7 percent in benchmark indexes.

     The Nasdaq Composite Index rallied 0.9 percent to 4,542.61 at 4 p.m. in New York, boosted by gains in Apple Inc. and Facebook Inc. The Russell 2000 Index surged 1 percent after an early 1.5 percent slide. The Standard & Poor’s 500 Index added 0.4 percent to 1,929.80, after the gauge lost as much as 1.6 percent. The Dow Jones Industrial Average climbed 53.21 points, or 0.3 percent, to 16,484.99. About 8.2 billion shares traded hands on U.S. exchanges, in line with the three-month average.

     “Oil turned positive and that helped accelerate a move higher for equities,” said Kevin Kelly, the New York-based chief investment officer at Recon Capital Partners. “I think everybody’s trying to get a firm footing on where this market’s going to trade. Volatility keeps going up and down, same with intraday moves in the market, it’s really something that’s not new.”

     West Texas Intermediate crude futures erased a 4 percent drop, eventually settling 0.9 percent higher, to help instigate the comeback in equities. Today was the second time this year that the S&P 500 erased an intraday loss of more than 1.5 percent. After such a reversal occurred on Feb. 3, the index fell 3.2 percent over the following week.

     Early on today, it looked as if equities were headed for a second steep selloff at the beckoning of crude. A recent rebound in U.S. stocks had faltered Tuesday as global-growth concerns resurfaced, after the S&P 500 had cut its 2016 declines by more than half over six sessions.

     Wednesday’s gains helped the S&P 500 cut its February decline to 0.5 percent from as much as 6.7 percent on Feb. 11. The index is still heading for a third straight monthly drop which would be the longest stretch in more than four years. Concern that China’s slowdown will hurt global growth, and that lenders will suffer as some energy producers struggle to stay solvent amid low oil prices, has weighed on equities this year, dragging the U.S. benchmark 9.4 percent below its all-time high reached last May.

     Equity strategists at Goldman Sachs Group Inc. said in a note yesterday the recent bounce reflects positioning and short covering rather than greater confidence in fundamentals. While valuations have fallen, they still remain relatively high by historical comparisons and would need to be cheaper for stocks to move meaningfully higher, the strategists wrote.

     In a more bullish view, Canaccord Genuity Inc. equity strategist Tony Dwyer reiterated his S&P 500 target of 2,175 by the end of 2016. “We remain overweight Financials, Info Tech and Consumer Discretionary sectors, and would underweight Utilities and Telecom Services,” Dwyer wrote in a note to clients. “Although we fully expect some further tumultuous activity over the coming few days/weeks, we continue to emphasize the intermediate-term opportunity rather than near-term risk from current levels.”                         

     Investors are keeping watch on economic data for signs that slowing abroad, particularly in China, is seeping into the U.S. A report today showed purchases of new homes dropped more than forecast in January as contract signings slumped in the western U.S. by the most since May 2010.

     “The big question is whether the U.S. economy is going into a recession and the jury is still out on that, in my view,” said Charlie Bilello, director of research at New York-based Pension Partners. “The fact that that question is out there is going to lead to continued volatility and volatility’s going to be on the upside and on the downside.”                          

     The Chicago Board Options Exchange Volatility Index fell 1.2 percent Wednesday to 20.72, reversing a 9 percent morning jump. The measure of market turbulence known as the VIX yesterday halted six days of declines, the longest since November.

     Nine of the S&P 500’s 10 main groups advanced, with raw- materials, energy and technology shares rising at least 0.8 percent after wiping out declines of more than 1.4 percent. Financial shares slipped 0.2 percent as banks fell for a second day.

     Owens-Illinois Inc. and Sealed Air Corp. rallied more than 3.3 percent to lead gains among raw-materials companies. Alcoa Inc. bounced 2.7 percent after losing 4.3 percent yesterday and as much as 3.3 percent this morning.

     A midday reversal in oil prices helped to stabilize energy stocks. Chesapeake Energy Corp. surged 23 percent, the most in seven years, on a pledge to lower its debt load. Refiners Valero Energy Corp. and Tesoro Corp. gained more than 4.5 percent after a report showed gasoline supplies fell. Transocean Ltd. lost 4 percent to its lowest level ever after the company got an early termination from Esso Exploration Angola Limited for a drilling contract.

     Apple, Facebook and Intel Corp. advanced at least 1.3 percent to help push the tech group higher. Semiconductors were the strongest performers, led by First Solar Inc.’s rally, while Microchip Technology Inc. added 3.4 percent.

     Zions Bancorporation and Regions Financial Corp. were the biggest losers among lenders in the benchmark, falling at least 1.9 percent. Zions capped its biggest two-day drop this year.  Wells Fargo & Co. slipped 1 percent.

     Auto stocks, which rallied 10 percent in the six sessions through Monday, fell for a second day. Ford Motor Co. declined 2.7 percent while General Motors Co. decreased 1.8 percent. Morgan Stanley analyst Adam Jonas said in a note their profits are more at risk in a recession than the automakers have estimated.

     Better-than-expected earnings buoyed shares of several companies. Target Corp. surged 4 percent, to its highest level since November, while First Solar added 12 percent, the most since August, after the company posted profit that doubled analysts’ expectations.

     With the earnings season wrapping up, about three-quarters of S&P 500 firms have exceeded profit projections, while less than half topped sales forecasts. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

Have a wonderful evening everyone.

 

Be magnificent!

If you do not think he is different, he is unique, he exists in his own right,

there cannot be any relationship.

Swami Prajnanpad

As ever,

Carolann

 

The science of today is the technology of tomorrow.

                                 -Edward Teller, 1908-2003

 

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:

1909: Silver Dart makes aviation history

On Feb. 23, 1909, engineer J.A.D. McCurdy piloted the first powered airplane flight by a British subject in the British Empire – and made Canadian history.

On Feb. 23, 1954, the first mass inoculation of children against polio with the Salk vaccine began in Pittsburgh.

PHOTOS OF THE DAY

A full moon rises over the Statue of Liberty seen from the Port Liberte neighborhood of Jersey City, N.J., Monday. Julio Cortez/AP

A man plays hockey on Lake Ontario at sunset in Kingston, Canada, Monday. Lars Hagberg/The Canadian Press/AP

A fisherman prepares to cast his line standing in the surf as a full moon rises at Mollymook Beach, located south of Sydney, Australia, Tuesday. David Gray/Reuters

Market Closes for February 23, 2016

MarketIndex	Close	Change
DowJones	16431.78	-188.88  -1.14%
S&P 500	1921.27	-24.23-1.25%
NASDAQ	4503.582	-67.025  -1.47%
TSX	12763.44	-82.19
		-0.64%

International Markets

MarketIndex	Close	Change
NIKKEI	16052.05	-59.00
		-0.37%
HANGSENG	19414.78	-49.31
		-0.25%
SENSEX	23410.18	-378.61
		-1.59%
FTSE 100	5962.31	-75.42
		-1.25%

Bonds

Bonds	% Yield	Previous  % Yield
CND.10 Year Bond	1.123	1.128
CND.30 Year Bond	1.916	1.925
U.S.   10 Year Bond	1.7225	1.7570
U.S.30 Year Bond	2.5789	2.6086

Currencies

BOC Close	Today	Previous
Canadian $	0.72487	0.72937
US$	1.37955	1.37105
Euro Rate1 Euro=		Inverse
Canadian $	1.52839	0.65429
US$	1.10137	0.90796

Commodities

Gold	Close	Previous
London GoldFix	1221.35	1211.00
Oil	Close	Previous
WTI Crude Future	30.07	31.48

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks erased their gains and ended lower as a selloff in energy companies overshadowed a rebound in Valeant Pharmaceuticals International Inc.

     The Standard & Poor’s/TSX Composite Index lost 0.6 percent to 12,763.44 at 4 p.m. in Toronto. The benchmark gauge rallied as much as 0.9 percent before a rout in crude led to plunging energy stocks.

     The S&P/TSX has outpaced equities across the developed world this year, topping returns from markets in the U.S., U.K. and Germany and is less than 2 percent away from wiping out declines for the year. The MSCI World Index of developed-nation markets is down 7.4 percent in 2016. While raw-material stocks have performed the best in the Canadian equity index this year, the resource-rich gauge has been whipsawed by swings in oil and commodity prices.

     Energy producers sank 2.7 percent as five of 10 industries in the S&P/TSX retreated on trading volume 8.4 percent lower than the 30-day average. Shares in the benchmark gauge currently trade at almost 20 times earnings, about 1.1 times more expensive than S&P 500 shares, according to data compiled by Bloomberg.

     Oil fell 4.6 percent in New York, slipping from a two-week high. Saudi Arabian Oil Minister Ali al-Naimi, speaking at the IHS CERAWeek oil conference in Houston, said his country isn’t cutting output. Saudi Arabia agreed with Russia last week to freeze output on the condition other major producers, notably Iran and Iraq, follow suit.

     Iran’s oil minister earlier called the proposal “ridiculous” as it puts unrealistic demands on the country, according to the ministry’s news agency Shana. Saudi Arabia, Russia, Venezuela and Qatar reached a preliminary agreement in Doha last week to freeze output at January levels. Oil is still down about 14 percent this year.

     Valeant Pharmaceuticals International Inc. rebounded 5 percent for the first increase in four days. The company had tumbled 20 percent during its three-day slide. Valeant will restate some of its past earnings after a board committee reviewed the drugmaker’s relationship with mail-order pharmacy Philidor. Valeant didn’t rule out further disclosures. The company plans to hold a call to discuss fourth-quarter results on Feb. 29.

     Valeant, briefly the largest company in the S&P/TSX by market capitalization last year before the stock plunged amid scrutiny over its pricing practices, slumped last week after analysts at Wells Fargo Securities initiated coverage with an underperform rating, the equivalent of a sell, on Feb. 19.

     Bank of Montreal slipped 0.2 percent, erasing a gain after reporting first-quarter earnings that were ahead of analysts’ estimates Tuesday. Profit was boosted by contributions from its purchase of General Electric Co.’s transportation-finance business. It’s among the first of the nation’s largest lenders to report results this week. National Bank of Canada lost 2.3 percent as profit declined after writing off C$164 million on its investment in Maple Financial Group Inc.

US

By Anna-Louise Jackson and Jiayue Huang

     (Bloomberg) — U.S. stocks declined from six-week highs, paced by banks as the recent rally’s strongest performers lost momentum while investors assessed global growth prospects amid renewed concern that China will remain a drag.

     Lenders, which have buttressed the latest rebound in equities, fell Tuesday with JPMorgan Chase & Co. and Citigroup Inc. losing at least 3.2 percent. Freeport-McMoRan Inc. declined 8.7 percent and Chevron Corp. sank 4.4 percent as a rout in crude oil weighed on commodity shares. Apple Inc. and Microsoft Corp. fell more than 2.2 percent, dragging down the technology group.

     The Standard & Poor’s 500 Index fell 1.3 percent to 1,921.27 at 4 p.m. in New York, a day after surging 1.5 percent to the highest since Jan. 6. The Dow Jones Industrial Average slid 188.88 points, or 1.1 percent, to 16,431.78. The Nasdaq Composite Index lost 1.5 percent. About 7.1 billion shares traded hands on U.S. exchanges, 13 percent below the three-month average.

     “Things started to go downhill a little bit last night after the PBOC decided to allow the yuan to depreciate relative to the dollar,” said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242 billion. “We need to get a bit more clarity from Fed officials as far as how they’re viewing China to get a better handle on what the global growth outlook looks like and also what the future path of U.S. interest rates looks like.”

     A global stock rally stumbled today after the People’s Bank of China lowered its daily reference rate for the yuan by the most in six weeks, reigniting concerns over the health of the world’s second-biggest economy. This anxiety had eased in the past week, helping the S&P 500 cut its 2016 decline in half in six trading sessions.

     Oil retreated from a two-week high as Saudi Arabian Oil Minister Ali al-Naimi said the market should set prices in his first speech since an agreement with Russia last week to freeze output. Saudi Arabia won’t cut oil production as other countries would be unlikely to assist in restraining output, leaving the burden of adjusting supply with high-cost producers, the minister said. West Texas Intermediate crude futures fell 4.6 percent.

     Heading into Tuesday’s session, the S&P 500 had rallied 6.4 percent since reaching a 22-month low on Feb. 11, trimming its 2016 decline to less than 5 percent. Concern that weakness in China will damp global growth, and that lenders will suffer as some energy producers struggle to stay solvent amid low oil prices has weighed on equities this year. The main U.S. stocks benchmark closed 9.8 percent below its all-time high reached last May.

     “The global economy is mired in what I would think of as growth purgatory and this week’s economic data is an illustration of that,” said Michael Arone, the Boston-based chief investment strategist at State Street Global Advisors’ U.S. intermediary business. The firm oversees $2 trillion. “Despite the recent rally off of the early February lows, it’s way too early to sound the all-clear.”

     Economic data today were mixed as investors attempt to gauge the strength of U.S. growth, and the potential path for interest rates. A report showed sales of previously owned homes unexpectedly rose in January to the second-highest pace since early 2007. Separate data showed February consumer confidence decreased, while another report indicated home values steadied in the year ended December, putting residential real estate on healthier footing to contribute to the economic expansion.

     The Chicago Board Options Exchange Volatility Index rose 8.3 percent today to 20.98, the largest increase in two weeks. The measure of market turbulence known as the VIX closed yesterday at the lowest since Jan. 5 amid the longest streak of declines in four months.

     Nine of the S&P 500’s 10 main groups declined on Tuesday, with energy and raw-materials the worst performers as they lost at least 2.3 percent. Financial and technology shares dropped 1.8 percent. Utilities and consumer staples were little changed.

     The selloff in oil dragged energy producers to the steepest loss in three weeks, as all 41 members of the benchmark’s group retreated. Cabot Oil & Gas Corp. tumbled 11 percent, the most in four years, after the explorer increased the size of its secondary offering to 44 million shares. Consol Energy Inc. and Range Resources Corp. both fell at least 9 percent.

     Raw-materials companies in the benchmark dropped 2.4 percent, the biggest slide in two weeks. Ecolab Inc. tumbled 7.4 percent, the most since 2011, after the company reported quarterly results that missed analysts’ estimates. Alcoa Inc. decreased 4.3 percent following its strongest one-day advance in nearly seven years.

     Banks had their biggest drop since the S&P 500’s 22-month low on Feb. 11. JPMorgan lost 4.2 percent after saying today at a gathering of analysts and investors that it plans to set aside $1.65 billion to cover impaired loans to energy and mining companies. Its investment bank has also seen revenue from sales and trading fall about 20 percent so far in 2016 from a year earlier.

     Comerica Inc., the strongest performer among lenders during the prior six sessions with a nearly 15 percent climb, fell the most today, down 4.5 percent. Among the broader financials, Goldman Sachs Group Inc. slid 2.6 percent and Morgan Stanley dropped 3.4 percent.

     Western Digital Inc. declined 7.2 percent, the worst among tech shares, after the company said it will buy memory-chipmaker SanDisk Corp. for $15.8 billion in cash and stock. Western is going ahead with the merger without a $3.78 billion infusion from Tsinghua Unisplendour Corp. The Chinese company pulled out of its plan to buy a stake in the computer-storage manufacturer after the deal came under scrutiny by U.S. regulators. SanDisk slipped 1.6 percent.

     Better-than-expected earnings helped propel several stocks higher. Frontier Communications Corp. rose 13 percent, the most since July 2014, while Motorola Solutions Inc. gained 6 percent, the steepest climb since August. Macy’s Inc. rallied 3 percent to levels last seen in November. Texas Roadhouse Inc. surged 13 percent to an all-time high after its profit beat estimates, and the restaurant chain said lower beef prices would help 2016 performance.

     With the earnings season approaching an end, about three- quarters of S&P 500 firms exceeded profit projections, while less than half have topped sales forecasts. Retailers Target Corp., Lowe’s Cos., Kohl’s Corp. and Gap Inc. are due to report this week. Analysts estimate earnings at S&P 500 companies fell 4.2 percent in the fourth quarter, compared with Jan. 15 predictions for a 7 percent slump.

Have a wonderful evening everyone.

Be magnificent!

Expansion is life; contraction is death.

Love is life, hatred is death.

We began to die the day we began to contract, to hate others

and nothing can prevent our death,

until we come back to life, to expansion.

Swami Vivekananda

As ever,

Carolann

Gray skies are just clouds passing over.

                -Frank Gifford, 1930-2015

 

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