July 15, 2015 Newsletter

Dear Friends,

Tangents:

So many of us travelling this time of year for summer vacation, summer holidays.  I opened a keepsake given to us by the Travel Director on our recent trip to Croatia & Slovenia.  It is a wise message to pass on:

LET’S BE CONSIDERATE!
PROTECT OUR WORLD!

 
USE NOTHING BUT    “ENERGY” !

 
WASTE NOTHING BUT   “TIME” !

 
TAKE NOTHING BUT   “PHOTOS’!

 
LEAVE NOTHING BUT   “FOOT PRINTS”!

 
THE MOST PRECIOUS GIFT WE CAN GIVE TO FUTURE GENERATIONS!

 
BIRTHDAY: Rembrandt, July 15, 1606

Rembrandt was born in Leiden, the Netherlands, on July 15, 1606 – his full name was Rembrandt Harmenszoon van Rijn.  He was the son of a miller.  Despite the fact that he came from modest means, he was able to study art and , by age 22, took his first pupils.  He married Saskia van Ulyenburgh, the cousin of a successful art dealer, in 1634.

Rembrandt’s family life was marked by misfortune.  Between 1635 and 1641 Saskia gave birth to four children, but only the last, Titus, survived.  Saskia died in 1642, at the age of 30.  Hendrickje Stoffels, who became Rembrandt’s housekeeper in 1649, eventually became his wife and was the model for many of his pictures.  Despite Rembrandt’s success as an artist, teacher, and art dealer, his flamboyant living forced him to declare bankruptcy in 1656.  His beloved Hendrickje died in 1663, and his son Titus, in 1668 at only 27 years of age.  Eleven months later, on October4, 1669, Rembrandt died in Amsterdam.

If any of you are travelling to Amsterdam this summer, make sure to stop by Rembrandt’s studio which was made into a very interesting museum.  It’s a highlight in a city of many treasures, and I recommend it to gain an interesting perspective on this giant of a man and the art world.

PHOTOS OF THE DAY

Hindu priests hold traditional oil lamps as they perform evening prayers called ‘Aarti’ on the banks of the river Godavari during the Maha Pushkaralu, a Hindu festival, at Rajahmundry in Andhra Pradesh, India, Wednesday. The religious festival is held once every 144 years. R Narendra/Reuters

Revelers hold up red scarves and candles during the closing ceremony of the San Fermin festival in Pamplona, northern Spain, early Wednesday morning. Thousands of people gathered in front of the city’s town hall to sing the traditional farewell song ‘Pobre de mi’ (‘poor me’). The song is sung by revelers to show their sadness for the end of the festival. Susana Vera/Reuters

Market Closes for July 15^th, 2015

International Markets

Bonds

Currencies

Commodities

If you torture the data long enough, it will confess to anything.
                    -Darrell Huff, 1913-2001 (How to Lie with Statistics, 1954).

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose a fourth day, extending the biggest rally since February, after the Bank of Canada cut its benchmark interest rate for a second time this year due to the impact of slumping oil on the economy.

     Canadian National Railway Co. and Canadian Pacific Railway Ltd. increased more than 1.4 percent to lead industrials stocks higher. Corus Entertainment Inc. tumbled 9 percent after reporting third-quarter earnings and revenue short of analysts’ estimates.

     The Standard & Poor’s/TSX Composite Index rose 62.88 points, or 0.4 percent, to 14,662.28 at 4 p.m. in Toronto. The benchmark equity gauge has gained 2.7 percent in four days, the most since February. The rally has pushed the gauge to a 0.2 percent gain this year.

     “This is going to give a nice boost to stocks,” said Geoffrey Pazzanese, a global equity fund manager at Federated Investors Inc. on the phone from New York. His firm manages $355.8 billion in assets, and exited Canada completely in February. “It will help the domestic economy, the currency might help operationally if you’re selling in U.S. dollars.”

     Canadian Pacific Railway rose 1.4 percent and Canadian National Railway added 2.6 percent as industrials stocks rallied 1.2 percent as a group. Eight of 10 industries increased on trading volume in line with the 30-day average today.

     Alimentation Couche-Tard Inc. climbed 4 percent, extending a record, to lead a 2 percent increase in consumer-staples stocks.

     The threat of a contracting economy prompted Bank of Canada Governor Stephen Poloz to cut his policy interest rate for the second time this year, to 0.5 percent from 0.75 percent.

     The Canadian economy probably “contracted modestly” in the first half, policy makers said, without calling it a recession, which is typically defined as two straight quarters of negative growth.

     Royal Bank of Canada rose 0.5 percent while Canadian Western Bank dropped 3.3 percent. Toronto-Dominion Bank, the second-largest lender, rose 1.1 percent. The lender cut its prime lending rate 10 basis points to 2.75 percent in response to the central bank’s decision.

US

By Jeremy Herron

     (Bloomberg) — U.S. stocks snapped the longest rally since January as Greek lawmakers debated a new bailout package amid protests outside parliament. Treasuries rose as the Federal Reserve indicated interest rates won’t be increased rapidly this year, and Canada’s dollar led commodity currencies lower.

     The Standard & Poor’s 500 Index was down 0.1 percent by 4 p.m. in New York after trading little changed for most of Wednesday following a 3 percent rally the past four days. Yields on 10-year Treasury notes fell five basis points to 2.35 percent. The loonie tumbled to its weakest level since 2009 after the Bank of Canada cut benchmark rates, fueling a selloff in currencies from New Zealand to South Africa. Crude oil slid.

     Riot police fired tear gas to disperse crowds gathered across the road from the Greek parliament, where lawmakers are weighing the austerity measures demanded in return for fresh aid. Fed Chair Janet Yellen reiterated in her congressional testimony that the bank remains on track to raise rates this year, though the pace of any increases will be gradual.

     “A rate hike has been baked into prices for some time already,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion, said by phone. “She has to consider what’s going on with the turmoil in Europe, and deflationary pressures are still formidable. Going forward, earnings will be important.”

     The Bloomberg Commodity Index lost 0.9 percent Wednesday, as a strengthening dollar damped demand for assets from precious metals to oil. West Texas Intermediate crude sank 3.1 percent to $51.41 a barrel after an increase in oil inventories at the Cushing, Oklahoma hub.                     
     
     The loonie slid 1.5 percent after Canada cut rates for the second time this year, a move of support for the economy which is laboring under the retreat in commodities. The Aussie slumped 1 percent, while the South African rand was down 0.8 percent. A drop in milk powder prices at a fortnightly dairy auction hit the kiwi, with the currency extending losses at its weakest level since 2010 before inflation data Thursday.

     The S&P 500 had been rallying along with global stocks after Greece’s prime minister agreed to the bailout deal and China appeared to stabilize its stock-market rout. The Shanghai Composite Index fell 3 percent Wednesday in a second day of losses, reinvigorating concerns after better-than-expected economic growth data failed to boost investor confidence.

     U.S. equities traded moderately higher earlier in the session as results from Bank of America Corp. and U.S. Bancorp boosted financial shares. Celgene Corp. jumped 7 percent after raising its profit forecast and agreeing to acquire Receptos Inc. for $7.2 billion. Energy shares led declines amid oil’s drop.

     Netflix Inc. surged about 10 percent in extended trading after the company said growth in international audiences boosted subscriptions to its Internet TV service. Netflix has been the best performer in the S&P 500 this year. Intel Corp. added 3.2 percent as the biggest maker of semiconductors predicted third- quarter sales that may exceed analysts’ predictions.

     The S&P 500 turned negative in afternoon trading after footage of the Greek protests emerged. The demonstrations show the challenge faced by Prime Minister Alexis Tsipras in convincing a country whose economy has shrunk by a quarter in the last five years to accept further spending cuts.

     “If you take how far we’ve come in the last three days, throw a riot on TV and toss in the fact that it appears that Greek parliament is still debating this package — that’s enough to hit the market late in the afternoon on a quiet day,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee.

     Equities investors largely ignored Yellen’s testimony, as it tracked closely with comments she made July 10, while bond traders jumped on to her reiteration that rate increases this year will be gradual.

     Fed funds futures showed a 37 percent chance the central bank will boost its benchmark rate in September, up from 31 percent on Tuesday. Futures are pricing in 70 percent chance of a hike by December, up from 66 percent, according to data compiled by Bloomberg.

     “The market in the last two months has begun to embrace the view that the pace will matter more than the liftoff,” said George Goncalves, the head of interest-rate strategy at Nomura Holdings Inc., one of the 22 primary dealers that trade directly with the Fed. “Earlier in the year, the market wasn’t buying into the concept.”                        

     The Bloomberg Dollar Spot Index, a gauge of the greenback against 10 major peers, climbed 0.5 percent, with the dollar adding 0.5 percent to $1.0950 per euro.

     Stocks in Europe advanced for a sixth day as gains in mining shares pushed the Stoxx Europe 600 Index to its longest winning streak since February.

     Gold futures capped a fifth straight decline, with contracts for August delivery down 0.5 percent to $1,147.40 an ounce. The metal has lost 3.1 percent this year and is trading near a three-month low. Zinc climbed to a one-month high amid signs of tighter global supplies and faster-than-expected economic growth in China, the world’s biggest user.

Have a wonderful evening everyone.

Be magnificent!

Such awareness is like living with a snake in a room;

you watch its every movement, you are very, very sensitive to the slightest sound it makes.

Such a state of attention is total energy;

in such awareness the totality of yourself is revealed in an instant.

Krishnamurti

As ever,

Carolann

Traveling makes a man wiser, but less happy.

                    -Thomas Jefferson1743-1826

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

Senior Portfolio Manager &

Senior Vice-President

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7