February 2, 2015 Newsletter

Dear Friends,

Tangents:

On this day in…1887,

Punxsutawney, Pa., held its first Groundhog Day festival.

In addition to Groundhog Day, the first days of February also mark several other ancient festivals and feast days, such as Candlemas                   and Imbole, all having to do with light, fire, and the coming of spring. 

SPRINGTIME SPLENDOUR

Springtime splendor, springtime sweet,
how soon will it be?
If there’s no shadow at your feet,
it may come suddenly
Springtime splendor, springtime true,
may be on its way
But if all the sky is blue,
winter ’s here to stay.

                         -Don Halley

On this day in 1922, 

The James Joyce novel “Ulysses” was published in Paris on the author’s 40th birthday.

Mistakes are the portals of discovery. –James Joyce.
 
PHOTOS OF THE DAY

Groundhog Club handler Ron Ploucha, (r.), holds Punxsutawney Phil, the weather prognosticating groundhog, as Jeff Lundy, (l.), reads Phil’s weather proclamation of six-more weeks of winter during the 129th celebration of Groundhog Day on Gobbler’s Knob in Punxsutawney, Pa., Monday. Gene J. Puskar/AP

A detail of the Salisbury Magna Carta one of the four original surviving Magna Carta manuscripts that have been brought together by the British Library for the first time, on display at the library during a media preview in London, Monday. The event marks the 800th anniversary of the Magna Carta, which established the timeless principle that no individual, even a monarch, is above the law. Alastair Grant/AP

Market Closes for February 2^nd, 2015    

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose for a third day, to a two-month high, as energy producers extended a rally with the price of crude oil and banks rebounded from a steep drop on Friday.

     Canadian Oil Sands Ltd. soared 20 percent, as energy shares jumped to a one-month high. National Bank of Canada rose 1.8 percent and Bank of Nova Scotia climbed 1.6 percent after financial stocks fell 2 percent on Friday. Bombardier Inc. gained 1.4 percent after Chorus Aviation Inc. signed a firm purchase agreement to buy 13 aircraft.

     The Standard & Poor’s/TSX Composite Index rose 226.99 points, or 1.6 percent, to 14,900.47 at 4 p.m. in Toronto. The benchmark equity gauge advanced 0.3 percent in January.

     Canadian Oil Sands has rallied 46 percent in the past two sessions, pacing gains among energy producers. The group climbed 3.7 percent, the most in the S&P/TSX. Nine of 10 industries advanced on trading volume 2.9 percent below the 30-day average.

     Imperial Oil Ltd., the producer majority owned by Exxon Mobil Corp., added 4.5 percent after the company said it will push ahead with its multi-billion-dollar expansion plans even after the months-long slump in oil.

     Canadian Western Bank, which focuses on businesses in the country’s oil region, surged 7.9 percent, the most since February 2009.

     Crude oil rose to a one-month high as gasoline climbed with a U.S. refinery strike entering a second day. The strike by oil workers at plants accounting for 10 percent of U.S. refining capacity continued Monday in the biggest walkout since 1980.

     First Quantum Minerals Ltd. added 6.3 percent as the price of copper for three-month delivery in London added 0.1 percent to settle at $5,500 a metric ton. The metal tumbled 13 percent in January, the biggest drop in three years.

US

By Oliver Renick

     (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index extending gains in the final 30 minutes of trading, as energy shares rallied after the price of crude oil advanced to a one-month high.

     The S&P 500 rose 1.3 percent to 2,020.85 at 4 p.m. in New York. Buying accelerated after the gauge climbed above its average price for the past 100 days as oil extended gains. The index earlier fell to its lowest level since Dec. 17. The Dow Jones Industrial Average added 196.09 points, or 1.1 percent, to 17,361.04. About 7.6 billion shares changed hands on U.S. exchanges today, 12 percent more than the three-month average.

     “The price of oil went up, boosting oil and energy stocks, which contributed to the market gain this afternoon and pulled up other sectors too,” Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama, said in a phone interview. “If you had to lay the strength at the feet of one item, it’s the fact that oil prices didn’t collapse and in fact moved higher.”

     Oil rose to a one-month high on speculation some investors bought contracts to close out bearish bets amid a falling rig count. Gasoline climbed as a refinery strike entered a second day. Crude has fallen more than 50 percent since a June high amid a global supply glut.

     Energy shares in the S&P 500 led gains, surging 3 percent for the biggest advance in two weeks. Exxon Mobil Corp. and Chevron Corp. jumped at least 2.5 percent. Phone shares added 2.4 percent as a group, with Verizon Communications Inc. climbing 2.8 percent, the most since Feb. 20, 2014.

     The S&P 500 fell 2.8 percent last week, extending the worst monthly loss in a year, as weaker-than-forecast economic growth outweighed a rally in energy shares and the highest consumer confidence reading in 11 years, amid continuing concern in Europe over the new Greek government’s challenge to an austerity program. The index lost 3.1 percent for the month, the worst performance since January 2014.

     Data Monday showed factories expanded in January at the weakest pace in a year as orders cooled, a sign weakness in overseas markets is restraining U.S. manufacturing. The Institute for Supply Management’s index dropped to 53.5 from 55.1 in December, the report from the Tempe, Arizona-based group showed Monday. The median forecast in a Bloomberg survey of 74 economists called for a decline to 54.5. Readings greater than 50 signal growth.

     The plunge in oil prices is limiting sales at manufacturers such as Caterpillar Inc. while slower growth from Europe to China and the strengthening dollar represent another hurdle for American exports.

     A separate report Monday consumer spending fell in December as households took a breather from the break-neck pace of buying that characterized the fourth quarter.                        

     Data last week showed the U.S. economy expanded at a slower pace than forecast in the fourth quarter as cooling business investment, a slump in government outlays and a widening trade gap took some of the luster off the biggest gain in consumer spending in almost nine years.

     The Federal Reserve upgraded its assessment of the U.S.economy in a Jan. 28 statement, and noted labor market conditions have improved further, “with strong job gains and a lower unemployment rate.”

     That view suggests the Fed remains on track for a mid-year interest rate hike, and Friday’s January nonfarm payrolls report may further solidify that view. Economists forecast 232,000 jobs were added last month, compared with 252,000 in December.

     Nine S&P 500 members reported financial results on Monday. About 78 percent of the companies that posted earnings this season have beaten analyst estimates, while 55 percent have topped sales projections, data compiled by Bloomberg show.                         

     “The bottom line is it all comes down to company earnings and growth is on the positive side,” Karyn Cavanaugh, the New York-based senior market strategist at Voya Investment Management LLC, said by phone. Voya oversees $215 billion. “There are a lot of worries out there and the market gets a bit wobbly, but earnings guide the way.”

     All of the 10 main industries in the S&P 500 advanced at least 0.4 percent, while all but one of the 30 stocks in the Dow average advanced. Financial and industrial shares in the broader gauge jumped more than 1.5 percent.

     Exxon Mobil advanced after reporting a steep drop in fourth-quarter profit on lower prices and declining production as the rout in oil ushered in an era of frugality for an industry that reaped $3.2 trillion in sales last year.

     Denbury Resources Inc. added 12 percent for the biggest gain in the S&P 500, while Chesapeake Energy Corp. climbed 7 percent.

     First Solar Inc. and SunEdison Inc. jumped at least 6.7 percent. President Barack Obama’s 2016 budget calls for continued tax breaks for wind and solar energy.
 

Have a wonderful evening everyone.

Be magnificent!

Nature if forever giving us chance after chance at what we call rebirth and death,

and we, in our folly, in our fear of death, fail to understand that which represents a new journey,

a new page on which to write, and thus to believe in a new beginning for ourselves…

The truth is that my body has come to existence, and that it will cease to exist.  I am eternal.

Rev. Parthasarathi Rajagopalachari

As ever,

Carolann

We die only once, and for such a long time.

                                -Moliere, 1622-1673

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