March 10, 2015 Newsletter

Dear Friends,

Tangents:

IPHONE STILL LIFES

If you love to take photos with your smart phone, you’ll be inspired by Minneapolis graphic designer Brock Davis.  He captures simplistic and whimsical still lifes with his iPhone by staging everyday objects (often food and kitchen items) in unexpected ways (think mint leaf positioned as a flame above a match, or a popcorn kernel exploding into a thought bubble of popped corn).  Check it out at http://bit.ly/BDavisArt.  –CSM.

PHOTOS OF THE DAY

A visitor puts on ‘Truth?,’ a pair of goggles that projects the ‘true emotions’ of a person by monitoring the patterns of his or her heartbeat, during a design competition showcase of wearable technology at the Augmented Human International Conference in Singapore Tuesday. The goggles were made by students from Keio University in Japan. The conference runs from March 9 to 11. Edgar Su/Reuters

Spectators look up at a live video feed of President Barack Obama exiting Air Force One upon his arrival at Hartsfield-Jackson Atlanta International Airport while waiting for him to take the stage to speak at Georgia Tech Tuesday in Atlanta. David Goldman/AP

Market Closes for March 10^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell to the lowest since January, briefly erasing 2015 gains, as financial companies and commodities producers dropped with global equities amid a rally in the dollar.

     Toronto-Dominion Bank and Canadian Imperial Bank of Commerce slumped more than 1.9 percent. Labrador Iron Ore Royalty Corp. and First Quantum Minerals Ltd. tumbled at least 6 percent as base metals dropped. Legacy Oil & Gas Inc. and Lightstream Resources Ltd. lost more than 7.7 percent to pace declines among energy stocks.

     The Standard & Poor’s/TSX Composite Index fell 212.73 points, or 1.4 percent, to 14,641.76 at 4 p.m. in Toronto, the lowest close since Jan. 29. The benchmark Canadian equity gauge pared its gain for the year to 0.1 percent.

     Canadian stocks joined a global retreat in equities with the MSCI World Index of developed markets down 1.7 percent, the most in two months. U.S. stocks fell with the S&P 500 erasing gains for 2015 as the dollar strengthened to near a 12-year high versus the euro amid speculation the U.S. Federal Reserve is moving closer to raising interest rates.

     “Right now you have to say what is the tone of the market and why is that tone negative, and it has to do with rates,” said Ian Nakamoto, director of research at MacDougall MacDougall & MacTier Inc. in Toronto. His firm manages about C$5 billion. “Anything that feeds into that mentality is going to cause a market reaction.”

     The S&P/TSX rallied as much as 4.5 percent this year through February as gold producers and health-care stocks led a rebound following a 6.6 percent slide from a September record amid the plunge in crude.

     Raw-materials producers, the second-best performing industry in the benchmark gauge as recently as March 1, have slumped 11 percent since to retrace almost all gains for the year as gold has retreated amid the U.S. dollar rally.

     The U.S. dollar rose against all but two of its 16 major peers, touching $1.0693 per euro, the strongest since April 2003. As central banks around the world including Canada have loosened monetary policy to stimulate the economy, the Fed has inched closer to raising its rates amid improving employment figures.

     Home Capital Group Inc. and IGM Financial Inc. each declined 3.7 percent as financial stocks retreated 1.6 percent as a group. Royal Bank of Canada, the nation’s largest lender, tumbled 1.6 percent.                          

     Nine of 10 industries in the benchmark Canadian equity gauge fell on trading volume 10 percent lower than the 30-day average. Teck Resources Ltd., Canada’s largest diversified miner, dropped 2.7 percent and Capstone Mining Corp. retreated 7.8 percent as raw-materials shares lost 1.9 percent.

     Copper fell 1.7 percent and nickel lost 3.1 percent to lead a decrease in industrial metals as producer prices declined in China. First Quantum Minerals slumped 7 percent.

     Canadian Oil Sands Ltd. dropped 7.2 percent and Lightstream Resources retreated 9 percent. Brent crude dropped for a fifth day, its longest retreat in almost three months, and West Texas Intermediate crude fell 3.4 percent in New York ahead of a U.S.

US

By Stephen Kirkland and Jeremy Herron

     (Bloomberg) — The strongest dollar in nearly 12 years versus the euro and the specter of higher U.S. interest rates fueled a selloff in global equities that sent the Standard & Poor’s 500 Index to its biggest slide since Jan. 5. Oil and copper declined.

     The S&P 500 fell 1.7 percent at 4 p.m. in New York, slipping below its average price for the past 50 days and erasing its gains in 2015. The Dow Jones Industrial Average lost 328 points in its biggest slide since Jan. 5. The Stoxx Europe 600 Index lost 0.9 percent. The euro weakened 1.4 percent to $1.0704 and a gauge of 20 emerging-market currencies fell for a ninth day. Yields on 10-year German securities dropped to a record, as the yield difference between 10-year Treasuries and bunds hit the widest since 1989. U.S. crude slid below $49 a barrel while copper dropped the most since January.

     Federal Reserve Bank of Dallas President Richard Fisher said the central bank should begin to raise rates as the labor market improves. While policy makers from Sydney to Wellington, Tokyo, Zurich and Frankfurt are cutting rates and buying government bonds to stimulate growth, the Fed stands out in accepting a higher exchange rate as a sign of economic strength. The dollar has rallied this year versus 14 of 16 major counterparts.

     “A continuation of dollar strength and euro destruction is certainly raising some concerns,” Michael James, a Los Angeles- based managing director of equity trading at Wedbush Securities Inc., said in a phone interview. “How much is a stronger dollar going to impact the bottom lines of U.S. companies? I don’t think there was any one specific event or item that caused this. It has more to do with sentiment and emotion than valuations.”

     Selling in equities was broad based, with all but three of the 24 developed-nation indexes retreating. The MSCI All-Country World Index sank 1.7 percent, the most in two months, while nine shares fell for every one that gained in the benchmark for U.S. stocks.

     The S&P 500 retreated 1.6 percent last week, the most since January, as data showed the jobless rate reached the central bank’s range for what it considers full employment. Policy makers next meet on March 17-18. The index has entered the seventh year of a bull market, pushing valuations near a five- year high. It is lower by less than 0.7 percent in 2015.

     The dollar rose against all but two of its 16 major peers Tuesday, touching $1.0697 per euro, the strongest since April 2003. Mexico’s peso weakened to a record, while the yen touched the lowest in 7 1/2 years. The greenback climbed to parity with Switzerland’s franc for the first time since the Swiss National Bank removed a currency cap against the euro in January.

     “The dollar’s going up so much so fast you wonder what it does to U.S. economic growth down the road, to profitability,” Jim Paulsen, the Minneapolis-based chief investment strategist at Wells Capital Management, which oversees $338 billion, said by telephone. “Fisher made comments — that gives more support around the idea that the Fed window has indeed moved up, which is bringing a more aggressive bid to the dollar and more angst for equity investors.”

     The benchmark 10-year Treasury yield dropped six basis points, or 0.06 percentage point, to 2.13 percent. That follows a five basis-point decline Monday. The 10-year German bund yield slid eight basis points to 0.23 percent.

     The lower rates weighed on bank and insurance stocks, sending financial shares in the S&P 500 down 2.1 percent. JPMorgan Chase & Co. and Goldman Sachs Group Inc. retreated at least 2.5 percent to pace declines.

     All of the 19 industry groups in the Stoxx 600 fell, with five shares declining for every one that advanced, according to data compiled by Bloomberg. Royal Dutch Shell Plc, Total SA and BP Plc dropped more than 2 percent.

     Credit Suisse Group AG added 7.8 percent after naming Prudential Plc’s Tidjane Thiam to replace Brady Dougan as chief executive officer. Prudential fell 3.1 percent.

      The MSCI Emerging Markets Index slid 1.7 percent, falling for an eighth day to erase this year’s advance. Mexico’s peso weakened as much as 1 percent to 15.6271 per dollar as currencies from South Korea to Turkey and Brazil dropped more than 1 percent.

     Hong Kong’s Hang Seng China Enterprise Index slid 1.4 percent and the Shanghai Composite Index slipped 0.5 percent. While Chinese producer prices extended a record stretch of declines to 36 months, consumer prices rose faster than economists forecast in February.

     Energy producers led Russia’s Micex Index down 3.7 percent to a one-month low while the ruble slipped 3 percent as trading resumed in Moscow following a holiday on Monday.

     Oil’s five-day slide in London is the longest run of losses in almost three months. Brent crude settled 3.7 percent lower at $56.39 a barrel, while West Texas Intermediate declined 3.4 percent to $48.29.

     U.S. crude inventories are projected to have increased further from a record high, according to a Bloomberg News survey before an Energy Information Administration report Wednesday. Production of U.S. shale oil will expand at the slowest pace in more than four years in April, the EIA said Monday.

     Copper fell 1.9 percent to settle at $2.624 a pound in New York, after factory-gate deflation deepened in China. Nickel, tin, zinc, lead and aluminum declined in London.

Have a wonderful evening everyone.

Be magnificent!

An animal, a child and an ignoramus are slaves to their desires.

They want to satisfy them immediately, whatever the time, the place or the circumstances…

How can a man be distinguished from them?  Before satisfying his desires, a man takes into account the time,

the place and the circumstances because he is trying to achieve an aim.

Swami Prajnanpad

As ever,

Carolann

If we did all the things we are capable of doing, we would literally astound ourselves.

                                                                        -Thomas Alva Edison, 1847-1931

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