July 21, 2015 Newsletter

Dear Friends,

Tangents:

On this day in 1925, John Thomas Scopes is convicted of teaching evolution in violation of Tennessee law ends and is ordered to pay a $100 fine. The verdict is overturned by the Tennessee Supreme Court in 1927.

PRIME NUMBERS:

83.1 MILLION

Millennial-generation Americans (born between 1982 and 2000).  Millennials now make up 25% of the US population; they surpassed baby boomers (75.4 million) in June.

18
Years old, the new voting age in Japan.  It takes effect next year.  Anew amendment lowered the voting age from 20.

2
Shots fired by police in Norway during all of 2014.  No one was injured.  This is a 33 percent decline from 2013, when three shots were fired.

11.61
Average profit (in US dollars) that world airlines make per customer.

                                                         – from CSM, July 20, 2015

Buzz Aldrin walking on the Moon by a leg of the lunar landing module, July, 1969.

On July 21, 1969,  Edwin E. (Buzz) Aldrin, the second man to set foot on the Moon in the Apollo II mission, communicated the following:

  The blue colour of my boot has completely disappeared now into this – still don’t know exactly what colour to describe this other than grayish cocoa colour.  It appears to be covering most of the lighter part of my boot….very fine particles…

  [Later]  The Moon was a very natural and pleasant environment in which to work.  It had many of the advantages of zero gravity, but it was in a sense less lonesome than Zero G, where you always have to pay attention to securing attachment points to give you some means of leverage.  In one-sixth gravity, on the Moon, you had a distinct feeling of being somewhere….As we deployed our experiments on the surface we had to jettison things like lanyards, retaining fasteners, etc., and some of these we tossed away.  The objects would go away with a slow, lazy motion.  If anyone tried to throw a baseball back and forth in that atmosphere he would have difficulty, at first, acclimatizing himself to that slow, lazy trajectory; but I believe he could adapt to it quite readily….

 Odour is very subjective, but to me there was a distinct smell to the lunar material – pungent, like gunpowder or spent cap-pistol caps.  We carted a fair amount of lunar dust back inside the vehicle with us, either on our suits and boots or on the conveyor system we used to get boxes and equipment back inside.  We did notice the odour right away.

PHOTOS OF THE DAY

Artist Alice Anderson poses near one of many of her copper wire installations at the Wellcome Collection Gallery in London, Tuesday. More than 100 sculptures entirely mummified in copper thread are on display at the exhibition, which starts July 22 and lasts through Oct. 18. Frank Augstein/AP

A bee gathers pollen from a sunflower in a field in Munich, Germany, Tuesday. Weather forecasts predict ongoing heat in Europe for the next few days. Matthias Schrader/AP

Market Closes for July 21^st, 2015

International Markets

Bonds

Currencies

Commodities

What’s going on….is the end of Silicon Valley as we know it.  The next big thing ain’t computers….it’s biotechnology. –Larry Ellison  (Oracle CEO, quoted in the Wall Street Journal, April 8, 2003).

Market Commentary:

Canada

By Annelise Alexander

     (Bloomberg) — Canadian stocks fell, following the biggest decline in three weeks, as energy shares gave up an earlier advance to offset a rebound in gold producers.

     Barrick Gold Corp. and Yamana Gold Inc. rose more than 1 percent after a technical indicator showed the metal’s plunge to a five-year low may have been excessive. Raw-materials producers advanced 0.9 percent, the most of 10 industries in the Standard & Poor’s/TSX Composite Index. TransCanada Corp. and Suncor Energy Inc. slipped at least 1.5 percent as energy companies erased a rally of as much as 1.5 percent.

     The benchmark gauge lost 49.31 points, or 0.3 percent, to 14,376.24 at 4 p.m. in Toronto. The index has lost 2.4 percent in the previous two days, sending it toward a six-month low reached July 9.

     The Bloomberg Commodity Index rose 0.2 percent, after falling to a 2002 low on Monday. From oil to copper to sugar, little has escaped the rout in the year’s worst-performing asset class. Gold has fallen 7.1 percent this year amid expectations that the Federal Reserve may raise rates on the back of an improving U.S. economy.

     Bullion for immediate delivery rose 0.4 percent today, while futures slipped 0.3 percent after Monday’s 2.2 percent loss. The metal’s 14-day relative-strength index, a gauge of momentum, fell to 17.3, below the level of 30 that signals to analysts who study charts that prices may rebound. That was the lowest since April 2013, when gold dropped into a bear market.

     An index of gold miners jumped 2.2 percent after plummeting to the lowest since 2001 on Monday. Torex Gold Resources Inc. soared 20 percent and New Gold Inc. rose 3.6 percent.

     Energy producers lost 0.2 percent even as crude climbed from a three-month low. Oil fell below $50 a barrel on Monday for the first time since April on speculation global oversupply will persist.

     West Texas Intermediate increased 0.4 percent today as the dollar slipped for the first time in five days. A weaker dollar bolsters the appeal of commodities priced in the U.S. currency.

     Energy companies have lost 13 percent so far in 2015, the worst performance among 10 industries in the benchmark. Producers of energy and raw materials account for about 30 percent of Canada’s equity benchmark.

US

By Oliver Renick and Callie Bost

     (Bloomberg) —  U.S. stocks declined, with equities sliding the most in two weeks, as quarterly results from IBM Corp. and United Technologies Corp. disappointed investors.

     Apple Inc. declined in late trading after iPhone shipments missed forecasts, and Microsoft Corp. fell following its largest-ever quarterly net loss. International Business Machines Corp. dropped 5.9 percent during regular trading after sales fell for a 13th quarter. United Technologies lost 7 percent after cutting its 2015 profit forecast.

     The Standard & Poor’s 500 Index retreated 0.4 percent to 2,119.21 at 4 p.m. in New York, after earlier coming within three points of an all-time high set in May. The Dow Jones Industrial Average lost 181.12 points, or 1 percent, to 17,919.29, with IBM and United Technologies accounting for 66 percent of the drop. The Nasdaq Composite Index declined 0.2 percent from a record.

     “Right now it’s about earnings, where they’re coming in and what they’re seeing for next quarter, and when the Fed is going to eventually raise rates,” said Thomas Garcia, the head of equity trading at Santa Fe, New Mexico-based Thornburg Investment Management Inc. “If you look at the market valuation, it’s not off the chart, but it is priced for good earnings.”

     The S&P 500 had rallied 4 percent through Monday since a low on July 8, reclaiming almost all of its losses that stemmed from worries over Greece’s debt crisis and China’s market rout. It’s still trailing most developed-market benchmarks this year. The Nasdaq Composite Index closed Monday at its third consecutive all-time high.

     “You have a couple fairly large names that are weak and depressing sentiment,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “You’re also brushing up against the top part of the trading range. A lot of people are looking toward Apple’s earnings to pull us out of this.”

     The benchmark index has been stuck in a 90-point range since the beginning of February, including a span of nine weeks where the measure moved less than 1 percent in either direction. Stocks have tested both ends of the range this month, falling as low as 2,046.68 on July 8 and climbing as high as 2,128.28 on Monday.

     The earnings season is picking up pace, with about a quarter of S&P 500 companies releasing results this week. Analysts project a second-quarter profit drop of 5.3 percent for the gauge’s members, less steep than July 10 estimates for a 6.4 percent decline.                      

     Apple sank 6.9 percent as of 4:44 p.m. as quarterly iPhone shipments and the company’s revenue forecast for the current period missed analysts’ projections, raising questions over whether demand for the device has peaked. Apple slid 1 percent in regular trading.

     Microsoft fell 3.5 percent after hours, with results hurt by a $7.5 billion writedown as the purchase of Nokia’s handset unit failed to rescue the company’s mobile business. Excluding the charge and costs related to job cuts, the software giant’s profit beat analysts’ estimates while revenue was in line. Shares rose 0.8 percent during regular trading.

     Investors will also watch economic reports for clues on when the Federal Reserve will raise rates, with housing and jobless-claims data due later this week.

     The Chicago Board Options Exchange Volatility Index sank 0.2 percent Tuesday to 12.22 after Friday reaching its lowest level since December. The gauge, know as the VIX, tumbled 29 percent last week, the biggest such slide since January. Nine of the S&P 500’s main groups declined, led by phone and industrial companies.

     United Technologies dropped the most since Sept. 2011 after cutting its profit forecast amid weak demand, weighing on the S&P 500’s industrials group. Rockwell Collins Inc. slumped 3.6 percent, its biggest drop in 22 months, while General Dynamics Corp. declined for just the second time in 12 sessions, losing 1.8 percent.

     IBM was the largest drag on technology companies in the benchmark index as its shares fell the most since October. The company’s sales to the so-called BRIC countries fell 35 percent in the second quarter. Xerox Corp. slumped 2.9 percent.

     Verizon Communications Inc. lost 2.4 percent, its biggest decline since December, after quarterly revenue missed analysts’ estimates and the company cut its 2015 sales outlook. AT&T Inc. and CenturyLink Inc. fell more than 0.9 percent as phone companies were the worst-performing group in the the benchmark equity index.

     Commodities pared a rebound from yesterday’s 13-year lows, and raw-material companies lost earlier gains. Energy shares were little changed after an early rally, as oil trimmed its first rise in five sessions.

     Consol Energy Inc. and Halliburton Co. rose at least 2.8 percent, offset by Chesapeake Energy Corp.’s 9.5 percent tumble to a nearly 12-year low after it halted its dividend payout. Consol’s biggest shareholder called on the company to spin off or sell its natural gas operations.

     Miners Freeport-McMoRan Inc. and Newmont Mining Corp. climbed more than 3.1 percent after Monday’s selloff. Barrick Gold Corp. gained 1.2 percent after falling 16 percent to a 25- year low Monday.

     Trucking companies rose, with the Dow Jones Transportation Average reaching a one-month high. C.H. Robinson Worldwide Inc. and Con-way Inc. increased more at least 1.7 percent.

     Thoratec Corp. soared 18 percent, the most in more than five years, to a record. People familiar with the situation said the maker of implants that aid failing hearts is in talks to be acquired by St. Jude Medical Inc. St. Jude added 0.2 percent.

     Harley-Davidson Inc. rallied 5 percent, the biggest gain since October, after its quarterly profit beat analysts’ estimates. The motorcycle maker also affirmed its full-year shipment forecasts.

Have a wonderful evening everyone.

Be magnificent!

Truth has no path, and that is the beauty of truth, it is living.

Krishnamurti

As ever,

Carolann

If fifty million people say a foolish thing, it is still a foolish thing.

                                                -Anatole France, 1844-1924

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