March 26, 2015 Newsletter

Dear Friends,

Tangents:

On this day in 1979, Israel and Egypt signed a historic peace agreement ending three decades of hostility between the two countries and creating diplomatic and commercial ties. The Camp David Accords laid the groundwork for the treaty, which was signed by the two countries leaders in a ceremony at the White House.

Birthday: Robert Frost, poet, March 26, 1874.

Two roads diverged in a wood, and I – I took the one less traveled by.  And that has made all the difference in the world. –Robert Frost

PHOTOS OF THE DAY

A basenji puppy looks out as he is held by a soldier watching the Household Cavalry Mounted Regiment parade in Hyde Park in London Thursday. 160 horses were paraded accompanied by the mounted Band of the Life Guards and Band of the Blues and Royals. Kirsty Wigglesworth/AP

A teddy bear wearing a shirt with the word ‘flight attendant’ is placed between flowers and candles outside the Germanwings headquarters at the Cologne Bonn airport Wednesday. An Airbus operated by Lufthansa’s Germanwings budget airline crashed in a remote snowy area of the French Alps on Tuesday, killing all 150 on board including 16 schoolchildren. Wolfgang Rattay/Reuters

Market Closes for March 26^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell, after tumbling the most in two weeks yesterday, as Air Canada led declines in transportation shares and banks stumbled a second day.

     Air Canada lost 2.6 percent as oil climbed to the highest in three weeks. Athabasca Oil Corp. increased 2.4 percent. National Bank of Canada fell 1.9 percent as bank shares retreated a second day.

     The Standard & Poor’s/TSX Composite Index fell 59.57 points, or 0.4 percent, to 14,869.80 at 4 p.m. in Toronto, the lowest close since March 16. The benchmark equity gauge fell 1 percent yesterday. Trading volume was 8.1 percent lower than the 30-day average today.

     B2Gold Corp. declined 3.9 percent and Novagold Resources Inc. lost 4.9 percent as raw-materials producers slumped 1.2 percent as a group, a second straight drop. The industry accounts for about 11 percent of the broader exchange.

     National Bank of Canada declined 1.9 percent and Toronto- Dominion Bank retreated 0.5 percent. National Bank agreed yesterday to buy a 21 percent stake in Cote d’Ivoire financial group NSIA Participations, spending a maximum C$116 million on the investment.

     Canadian Oil Sands Ltd. gained 3.6 percent and Canadian Natural Resources Ltd. rose 1.6 percent as about three stocks rose for every two that fell in the S&P/TSX Energy Index.

     Crude futures surged 4.5 percent to $51.43 a barrel in New York. Saudi Arabia led a coalition of 10 Sunni-ruled nations in airstrikes against Shiite Houthi positions after an appeal from Yemen’s president. Yemen is located near the center of the global energy trade.

US

By Joseph Ciolli

     (Bloomberg) — U.S. stocks fell for a fourth day, the longest losing streak since January, as declines in consumer and transportation companies overshadowed a rebound in technology shares.

     American Airlines Group Inc. and Delta Air Lines Inc. lost at least 0.9 percent as oil climbed to a three-week high. International Business Machines Corp., Apple Inc. and Intel Corp. added more than 0.6 percent, even as SanDisk Corp. plunged 18 percent amid a lower first-quarter revenue projection.

     The Standard & Poor’s 500 Index fell 0.2 percent to 2,056.15 at 4 p.m. in New York. The gauge closed below its average price in the past 100 days. The Dow Jones Industrial Average slipped 40.31 points, or 0.2 percent, to 17,678.23. The Nasdaq Composite Index declined 0.3 percent, after its biggest drop in 11 months yesterday.

     “What we’re beginning to see is a lot of investors doubting the resiliency of the market,” Jeff Sica, president and CEO of advisory firm Circle Squared Alternative Investments, which oversees $1.5 billion, said in a phone interview. “They’re much less willing to step up after big selloffs.”

     The S&P 500 is down 2.5 percent this week, and erased its gains for the year, after Friday coming within 0.5 percent of its all-time high. The Nasdaq Composite Index rallied to close within 23 points of its March 2000 record Friday, and then tumbled 3.2 percent through Thursday amid declines in semiconductor and biotechnology shares. It’s on track for its biggest weekly retreat since October.                        

     The S&P 500 fell more than 3.3 percent on two separate occasions in January, only to recover its full loss within a week both times. The benchmark equity gauge slipped 3.6 percent in early March and came within 10 points of reclaiming that level before this week’s four-day selloff.

     That marks the S&P 500’s longest string of consecutive decreases since Jan. 15. It’s the fourth time in 2015 the index has fallen three straight days or more. The gauge saw just 10 such streaks in all of 2014. The S&P 500 has gone 27 days without posting back-to-back gains, the longest stretch since 1994.

     U.S. equities have struggled to reach new highs amid weaker-than-forecast economic data. A report yesterday showed durable-goods orders unexpectedly fell in February, following data last week that showed factory production fell and housing starts slowed.  Jobless claims Thursday fell by 9,000 to 282,000 in the seven days ended March 21, the lowest level since mid- February.

     Many of Wednesday’s biggest decliners reversed course and rallied today, particularly those in the technology sector. Apple Inc. and Intel Corp., two of the three worst performers in the Dow yesterday, rebounded more than 0.6 percent.

     Micron Technology Inc. and IBM rose more than 0.3 percent, after earlier climbing at least 1.3 percent, after dropping more than 2.3 percent Wednesday.

     “A lot of people use these opportunities to get into large-cap tech companies, which look appealing from both a value and growth combination viewpoint,” Kevin Divney, chief investment officer at Beaconcrest Capital Management LLC, said in a phone interview. “At the same time, the lower-quality stocks are still getting hit.”                       

     Energy companies in the S&P 500 jumped as much as 1.2 percent early as Saudi Arabia, the world’s biggest oil producer, led air strikes against Yemen on Thursday after the latter’s government collapsed. Shares erased the advance to end down 0.2 percent, even as oil prices posted their best five-day winning streak in six years.

     The Chicago Board Options Exchange Volatility Index rose 2.3 percent to 15.80, adding to its biggest weekly advance since January. The gauge, known as the VIX, fell 19 percent last week.

     Eight of the S&P 500’s 10 main groups fell, led by utility and consumer shares. Raw materials and technology gained. About 7 billion shares changed hands on U.S. exchanges today, 3.2 percent above the three-month average.

     Staples Inc. slid 3.2 percent, while Best Buy Co. and Macy’s Inc. decreased more than 2.2 percent. Retail stocks in the index fell 1 percent, extending a two-day loss to 2.5 percent, the most since January.

     Lumber Liquidators Holdings Inc. slipped 6.2 percent amid an investigation by federal regulators after “60 Minutes” reported earlier this month that it sold flooring with high levels of formaldehyde.

     Union Pacific Corp. and American Airlines paced a drop in industrial companies, falling more than 1.4 percent. Union Pacific extended its retreat to a sixth day, the longest losing streak since August. The Dow Jones Transportation Average is heading for its worst week since October, down 5.1 percent.

     The Philadelphia Stock Exchange Semiconductor Index dropped 1.4 percent after yesterday’s biggest decline since October. The gauge has lost 7.6 percent this week, after reaching a 14-year high on March 2.

     SanDisk slid 18 percent on Thursday, its worst drop since February 2009. The company is seeing lower demand for its chips, which are sold directly to consumers in the form of memory cards and to makers of mobile phones and tablets.

     Alcoa Inc. unofficially kicks off the earnings season when it reports quarterly results on April 8, and profits for S&P 500 companies are forecast to decline for the first time since 2009. Companies will see a contraction of 5.6 percent for the three- month period, according to economist estimates compiled by Bloomberg. Earnings growth forecasts for the quarter were positive as recently as January, the data show.

     Stocks are also entering a stretch of the year when companies customarily suspend share repurchases before reporting quarterly results, according to Goldman Sachs Group Inc. While the data isn’t conclusive, owning stocks during those periods has generated a return that trails the market average over the past two years, according to data compiled by Bloomberg.

     Technology stocks could have the most to lose in the absence of buybacks. Computer and software makers repurchased more shares than any other industry in 2014 at $122 billion, according to data compiled by Barclays.

Have a wonderful evening everyone.

Be magnificent!

As an individual, a specific entity, you have physical, mental, and nervous limits, among others.

If you know your own limits and try to stay within these limits,

you are free.

Swami Prajnanpad

As ever,

Carolann

It is a funny thing about life: if you refuse to accept anything but the best,

you very often get it.                       -W. Somerset Maugham, 1874-1965                                       

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