February 20, 2015 Newsletter

Dear Friends,

Tangents:

Oscar weekend is upon us.  What a daunting task for the selection committee this year as it was such a terrific year for films and so many brilliant acting performances.  I don’t know how you could choose best picture when the choices are Birdman,  Boyhood, Selma, The Theory of Everything, The Imitation Game, American Sniper, The Grand Budapest Hotel – the only contender I haven’t seen yet is Whiplash.  It is a tough choice between Michael Keaton and Eddie Redmayne for  best actor.

We’re off to LA for the weekend for our annual Oscar watching party…

PHOTOS OF THE DAY

Tourists go down a hill in the Alpine skiing resort of Saalbach Hinterglemm in Austria Friday. Dominic Ebenbichler/Reuters

People throw snowballs after a snowstorm in Amman, Jordan, Friday. Muhammad Hamed/Reuters

Market Closes for February 20^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

     (Bloomberg) — Canadian stocks were little changed after two days of losses, as declines in financial and energy companies offset gains in consumer and health-care shares.

     Fairfax Financial Holdings Ltd. slipped 4.5 percent to pace declines after announcing it will sell shares to finance the purchase of Brit Plc. Royal Bank of Canada and Canadian Imperial Bank of Commerce decreased more than 1.5 percent. Iamgold Corp. and Eldorado Gold Corp. rose at least 1.7 percent.

     The Standard & Poor’s/TSX Composite Index slid 8.09 points, or less than 0.1 percent, to 15,172.24 at 4 p.m. in Toronto. The gauge had a weekly decline of 0.6 percent after two weeks of gains.

     Seven of the 10 main groups in the S&P/TSX advanced today. Financial companies, which account for about one-third of the broader index by weighting, fell 0.6 percent.

     Canadian retail sales fell at the fastest pace in more than four years in December as consumers scaled back holiday gift purchases, a sign the effects of lower crude oil prices are spreading through the world’s 11th largest economy. Canada’s dollar fell after the report.

     A gauge of energy producers decreased 0.6 percent, extending its slide to four days. Secure Energy Services Inc. and Lightstream Resources Ltd. declined more than 4.5 percent.

     The S&P/TSX Gold Index added 0.2 percent, paring a weekly loss for the gauge. Eldorado Gold, Goldcorp Inc. and Barrick Gold Corp. rose more than 0.8 percent.

US

By Michelle F. Davis

     (Bloomberg) — U.S. stocks rose, sending benchmark indexes to records, after European officials reached a deal to extend Greece’s aid for four months.

     The Standard & Poor’s 500 Index climbed 0.6 percent to a record 2,110.30 at 4 p.m. in New York. The Dow Jones Industrial Average added 154.67 points, or 0.9 percent, to 18,140.44, also an all-time high. The Russell 2000 Index reached a record, and the Nasdaq Composite Index rallied 0.6 percent, up for an eighth straight day to its highest level since March 2000.

     “You don’t have that uncertainty hanging over the market as we enter the end of the week,” Bill Schultz, who oversees $1.2 billion as chief investment officer at McQueen, Ball & Associates in Bethlehem, Pennsylvania, said in a phone interview. “It’s a removal of an obstacle in the way of growth and earnings for companies.”

     This is the first time the Dow has closed at a record this year. It’s been 56 days since the Dow’s last all-time high, reached on Dec. 26. When the S&P 500 reached its first record of 2015 last week, it had been 46 days since the previous one.

     The Dow climbed to closing records on 38 days in 2014, and on 52 occasions in 2013 as the index recovered from the financial crisis to top its previous high from October 2007 for the first time.

     The S&P 500 is up 0.6 percent for the holiday-shortened week. It has gained 2.5 percent this year, trailing all but three of the 24 developed markets tracked by Bloomberg.

     Euro-area finance ministers reached an accord that would keep bailout funds flowing to Greece in return for a commitment to meet certain conditions, buying time to work out the detail of longer-term Greek financing.

     Talks in Brussels between officials from the 19 euro-area countries concluded Friday evening with an agreement to extend aid to Greece for four months.

     The breakthrough in the standoff between Greece and its creditors eases the immediate risk of Prime Minister Alexis Tsipras’s government running out of cash as early as next month.

     U.S. manufacturing expanded at a faster pace in February, according to the Markit Economics preliminary index of U.S. manufacturing. The index rose to 54.3 in February from a final reading of 53.9 a month earlier, the London-based group said Friday.

     Analysts have cut profit forecasts for S&P 500 members amid a rout in oil prices and a rising dollar. They predict earnings will drop this quarter, compared with December projections for an increase. Of the 88 percent of S&P 500 companies that have reported earnings this season, 74 beat projections and 56 percent surpassed sales estimates.

     Nine of 10 S&P 500 main groups gained, led by health-care and industrials rising at least 0.9 percent. Health-care companies advanced for an eighth day, the longest streak in four months.

     The Chicago Board Options Exchange Volatility Index fell 6.5 percent to 14.30. The gauge, know as the VIX, fell 15 percent last week and is on track for its biggest monthly decline since July 2010.

     More than 6.2 billion shares changed hands Friday on U.S. exchanges, 9 percent below the three-month average.                      

     Intuit Inc. rallied 6.2 percent to an all-time high after reporting a narrower-than-estimated quarterly loss and revenue that exceeded forecasts.

     Ann Inc. rose 4.8 percent as the owner of the Ann Taylor and Loft women’s clothing stores is exploring a sale and has reached out to potential buyers in recent weeks, including rival retailers, people with knowledge of the matter said.

     Iron Mountain Inc. fell 5.5 percent, the most in more than a year and a half, after the storage and information management company cut its 2015 outlook, in part to reflect the impact of a stronger U.S. dollar.

     Fannie Mae lost 4.9 percent after reporting a sharp profit decline in the fourth quarter due largely to accounting treatment for billions of dollars in tax credits. Investments in derivatives were primarily responsible for about $2.5 billion of losses in the quarter and $4.8 billion for the full year.
 

Have a wonderful weekend!

Be magnificent!

There is an orderliness in the universe, there is an unalterable law governing everything

and every being that exists or lives.

Mahatma Gandhi

As ever,

Carolann

Whatever you do in life, surround yourself with smart people who’ll argue with you.

                                                                             -John Wooden, 1910-2010

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