February 19, 2015 Newsletter

Dear Friends,

Tangents:

Lunar New Year begins today :)!

Chinese New Year is an important Chinese festival celebrated at the turn of the Chinese Calender. In China, it is also known as the Spring Festival, the literal translation of the modern Chinese name.

Chinese New Year celebrations traditionally run from Chinese New Year’s Eve, the last day of the last month of the Chinese calendar, to the Lantern Festival on the 15th day of the first month. That makes the festival the longest in the Chinese calendar. 

2015 is the year of the Goat or Sheep. This year’s animal according to the Chinese zodiac is yang, in Mandarin. The English translation is goat, sheep, or ram. 

Also….

On this day in 1970, antiwar activists called the Chicago Seven were sentenced after being found guilty of inciting a riot at the August 1968 Democratic National Convention in Chicago. The trial drew a lot of attention as the group used the court as a platform to attack President Nixon, the Vietnam War, racism and oppression.

Photos of the Day

Dragon dancers get on an escalator after a performance inside a shopping mall Thursday in Bangkok, Thailand. Chinese people are celebrating the arrival of the Lunar New Year, the Year of the Sheep. Sakchai Lalit/AP

Two polar bear cubs follow their mother as they venture outside their enclosures for the first time since they were born at Ouwehands Zoo in Rhenen, Netherlands, Thursday. Their father now lives at the Yorkshire Wildlife Park in England. Peter Dejong/AP

Market Closes for February 19^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a second day, to a one- week low, as Goldcorp Inc. slumped the most in more than three months on disappointing earnings and energy shares retreated with the price of oil.

     Goldcorp dropped 7.8 percent after a $2.3 billion writedown on a mine led to a quarterly loss. Energy shares slid 0.4 percent as U.S. crude tumbled after a report showed inventories surged a sixth week. Barrick Gold Corp. jumped 5.4 percent on its plan to cut debt by $3 billion. SNC Lavalin Group Inc. slumped 7.1 percent after being charged with attempted bribery and fraud related to projects in Libya.

     The Standard & Poor’s/TSX Composite Index fell 32.42 points, or 0.2 percent, to 15,180.33 at 4 p.m. in Toronto, the lowest close since Feb. 11. The benchmark gauge has gained 3.7 percent this year. Trading volume today was 20 percent below the 30-day average.

     MEG Energy Corp. sank 4.8 percent and Crescent Point Energy Corp. declined 3.8 percent as energy producers retreated for a third day. Crude futures in New York sank 1.9 percent to settle at $51.16 a barrel after earlier touching $49.15.

     Canadian Western Bank, a regional lender based in oil-rich Alberta, slumped 2.5 percent for a third straight decline. The stock has lost 4.7 percent this week.

     SNC Lavalin slumped 7.1 percent, the most since November. The Montreal-based company, the largest construction and engineering firm in Canada, vowed to “vigorously defend itself,” saying that the case involves former employees who left “long ago.”

     Bombardier Inc. fell 2.4 percent before trading was halted. The struggling manufacturer of jets and trains will raise about C$750 million ($600 million) by selling stock, fulfilling a pledge made last week when it unveiled cost overruns on its CSeries family of jets.

     Barrick Gold jumped 5.4 percent. The world’s largest producer intends to sell two mines in an effort to cut debt by $3 billion. Barrick reported a fourth-quarter loss of $2.85 billion, compared with a loss of $2.83 billion a year ago.

US

By Callie Bost

     (Bloomberg) — The Nasdaq Composite Index rose for a seventh straight day, the longest winning streak in a year, as Priceline Group Inc. led a rally in Internet stocks.

     Priceline climbed 8.5 percent after posting better-than- estimated fourth-quarter earnings. Wal-Mart Stores Inc. lost 3.2 percent after saying wage increases and other spending initiatives will boost expenses. Energy companies in the Standard & Poor’s 500 Index slipped 0.8 percent, after earlier falling 2.5 percent, as crude trimmed losses.

     The Nasdaq Composite climbed 0.4 percent to 4,924.7 at 4 p.m. in New York, the highest level since March 2000. The S&P 500 fell 0.1 percent to 2,097.45. The Dow Jones Industrial Average declined 44.08 points, or 0.2 percent, to 17,985.77. About 6 billion shares changed hands on U.S. exchanges, 13 percent below the three-month average.

     “Markets are either making new highs or going to pre-2008 highs,” Paul Zemsky, the head of multi-asset strategies at Voya Investment Management LLC, which oversees $213 billion, said by phone from New York. “The backdrop is still pretty good for equities and people are still climbing the wall of worry. With interest rates low around the world, you’re not going to find many other places with better returns.”

     The Nasdaq Composite has soared 4.2 percent in seven days. It is now 2.5 percent away from an all-time high reached in March 2000, which preceded a 78 percent drop in the shares.

     While the Nasdaq has been rallying, the S&P 500 has barely budged from its record level. The benchmark index has closed within four points of 2,100 for four consecutive days, reaching its highest level of 2,100.34 on Feb. 17.

     The S&P 500 also stalled at a record level in August, when it ended within four points of 2,000 for eight trading sessions before hitting a new all-time high of 2,007.71 Sept. 5.

     Equities pared earlier losses Thursday on speculation that Greece will reach an agreement on debt negotiations. Germany is leaving the door open to an agreement on Greece’s bailout funding as officials prepare their negotiating positions going into a meeting of finance ministers in Brussels Friday.

     Germany regards a proposal submitted by Greece to fellow euro-region governments as a basis for negotiations and doesn’t necessarily see a need for Greece to submit a fresh draft, according to a German government official who asked not to be named because the discussions are private.

     The S&P 500 erased a loss Wednesday on speculation that the Federal Reserve will keep rates lower for longer. Minutes from the Fed’s latest meeting showed some policy makers argued for keeping rates low for longer amid risks facing the economy.

     The Federal Open Market Committee pointed to a strengthening dollar, international flash points from Greece to Ukraine, and slow wage growth as weakening the case for the first rate rise since 2006, according to a record of the Jan. 27-28 meeting.

     The FOMC said after its last meeting it “can be patient” as it considers when to raise the benchmark interest rate, even as it described the labor market as “strong.” A report the following week showed payrolls rose more than forecast in January to cap the strongest three-month gain in 17 years.

    Fewer Americans than forecast filed applications for unemployment benefits last week, showing the labor market is making progress. Jobless claims fell by 21,000 to 283,000 in the week ended Feb. 14, from 304,000 in the prior period, a Labor Department report showed Thursday in Washington.

     The Conference Board’s index of leading economic indicators, a measure of the outlook for the next three to six months, climbed 0.2 percent in January, the New York-based group said Thursday. The median forecast of 49 economists surveyed by Bloomberg called for a 0.3 percent advance.

     The Chicago Board Options Exchange Volatility Index fell 1 percent to 15.29. The gauge of S&P 500 options prices known as the VIX fell 15 percent last week.

     Six of 10 main S&P 500 industries fell, with utilities sliding 1.1 percent as 10-year U.S. Treasury yields increased. Technology shares led gains, rallying 0.4 percent.

     Priceline climbed 8.5 percent, its biggest gain since September 2014, after the largest U.S. online travel agent reported quarterly revenue and profit that topped analysts’ estimates, buoyed by increased international bookings through its websites. Rival TripAdvisor Inc. rose 3.6 percent to its highest level since October, while Expedia Inc. rallied 2.4 percent to a two-month high.

     Facebook Inc. jumped 3.5 percent and Twitter Inc. advanced 1.8 percent, fueling a 1.6 percent rise in the Dow Jones Internet Composite Index.

     Airlines added to Wednesday’s gains on oil’s decline, led by Delta Air Lines Inc.’s 1.4 percent rise. American Airlines Group Inc. added 1 percent and JetBlue Airways Corp. advanced 1.1 percent.

     Oil prices fell 1.9 percent, paring declines of as much as 5.7 percent after a weekly government report showed U.S. crude inventories increased less than was reported by an industry group. The report showed stockpiles in the world’s biggest consumer still expanded to a record level.

     Energy companies in the S&P 500 lost 0.8 percent after dropping 1.5 percent Wednesday. The group had added 3.5 percent over the three sessions prior to Wednesday’s decline.

     EOG Resources Inc. fell 1.6 percent after the fastest- growing oil producer in the U.S.’s fourth-quarter profit missed estimates. The company plans to slash spending 40 percent and drill half the wells it did in 2014.

     Transocean Ltd. slid 2 percent as analysts said the owner of the world’s largest fleet of offshore rigs will have to do more than slash its dividend by 80 percent to weather the oil price crash.

     Wal-Mart fell 3.2 percent to its lowest close in two months after the retail giant said wage increases and spending on e- commerce initiatives will pressure operating income this year. Fourth-quarter profit exceeded analysts forecasts.

     Earnings for S&P 500 companies will probably drop in the next two quarters after a 4.2 percent increase in the last three months of 2014, according to analysts’ forecasts compiled by Bloomberg. More than 80 percent of S&P 500 companies have reported results for the final quarter of 2014, with 75 percent beating profit estimates, while 57 percent topped sales projections, data compiled by Bloomberg show.

Have a wonderful evening everyone.

Be magnificent!

Man has lost his inner perspective, he measures his greatness by his size

and not by his vital attachment to the infinite; he judges his activity by his own movement

and not by the serenity of perfection, not by the peace that exists in the starry vault,

in the rhythmic dance of incessant creation.

Rabindranath Tagore

As ever,

Carolann

I think a hero is any person really intent on making this a better place for all people.

                                                                             -Maya Angelou, 1928-2014

Carolann Steinhoff, B.Sc., CFP®, CIM, CIWM

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7