March 30, 2015 Newsletter

Dear Friends,

Tangents:

Had a terrific time at the car show at the Vancouver Convention Center this past weekend.  Virtually all new 2015 models for every car and SUV you can think of were featured.  Greeting visitors at the entrance was a 1920 model Ford with its high polished wooden frame and matching wooden spoke wheels.   Quite a contrast to the latest electric models from Tesla and BMW!  The BMW electric sports vehicle is beautiful.  The  new Mercedes-Benz AMG GT S evokes the carmaker’s classic 1950s and ‘60s SL models – only built with 21^st-century technology.  The display card describes it as “sporting a feather-weight aluminum space frame paired with a 503-horsepower twin-turbo V8 that hits 60 mph in 3.7 seconds – it’s part beauty, part beast.”  Porsche brought along a Spyder that costs a cool $1 million.  The new  2015 Rolls Royce and latest Bentley models are sublime, if you can say that about engineering and design.  Aston Martin’s latest contribution is the ultimate in elegance and understatement.  However, no one really liked what they did to the Jaguar – the new models are too boxy – much prefer the elegant lines of its ancestors.  Alpha Romeo, Ferrari, Maserati, Lamborghini – all feature incredible designs.  There was a trip down memory lane with Corvettes featured from the 1960’s , every model of every year  (in pristine condition) up to the present.  Ford brought along a robot, bearing a strong resemblance to the Tin man in the Wizard of Oz, and just as articulate, though there was no human being under the metal.  The kids were enthralled and he departed the room with the message, “May the Ford be with You!” 

The big kids were afforded the thrill of getting behind the wheel of a simulated steering wheel and whizzing down a race track as the holographic environs whizzed by.

I smiled when I remembered a display at a museum in Stuttgart that I visited last summer.  It was the remark attributed to a Viennese nobleman who was shown Daimler’s and Maybach’s prototype of what is generally recognized as the world’s first 4-wheeled automobile.  He said, “It’s interesting but I don’t think it’ll replace the horse.’

No trip to the convention center is complete without a visit to Bella Gelateria for what is rated the world’s best gelato.   If you haven’t tried the Dulce Leche flavor yet, you’re missing out – it’s amazing! 

PHOTOS OF THE DAY

A man takes a picture of cherry blossoms in full bloom in Tokyo, Monday. Toru Hanai/Reuters

A rainbow fills the sky during stormy weather near Sehnde in the Hannover region of northern Germany, Sunday. Julian Stratenschulte/dpa/AP

Market Closes for March 30^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose, rebounding from a two- week low, as Catamaran Corp. and Amaya Inc. surged on deal news amid a global rally in equities on bets China will stimulate its economy.

     Catamaran soared 25 percent after agreeing to be acquired by UnitedHealth Group Inc. in a $12.8 billion deal. Amaya added 8.3 percent after agreeing to sell its Cadillac Jack Inc. electronic gaming unit to AGS LLC for C$476 million ($376 million). Teck Resources Ltd. was halted in late trading after the company said it’s not in merger discussions with Antofagasta Plc. The shares had rallied 11 percent during the regular session. Iamgold Corp. lost 6.6 percent as gold slumped the most in three weeks.

     The Standard & Poor’s/TSX Composite Index rose 95.97 points, or 0.7 percent, to 14,908.39 at 4 p.m. in Toronto, snapping a three-day slide. The benchmark equity gauge lost 0.9 percent last week and is down 2.1 percent in March. The guage is headed for a 1.9 percent gain in the quarter.

     Eight of 10 industries in the index rallied Monday on trading volume 21 percent lower than the 30-day average. Catamaran jumped 25 percent to a record as health-care stocks soared 6.4 percent as a group for the biggest advance.

     Canadian stocks joined a global rally with the MSCI All- Country World Index rising 0.7 percent to halt a four-day decline after China took steps to boost the world’s second- largest economy. China is Canada’s second-largest trading partner after the U.S.

     Teck had earlier rallied 11 percent, the biggest increase since May 2009, after people familiar said the Vancouver-based miner and London-based Antofagasta have held early-stage talks to discuss a possible merger.

     In a statement after markets closed, Teck said it is aware of the reports and it is “not in discussions with Antofagasta in relation to any form of transaction.” The company said there are no other corporate developments that would move its share price significantly.

US

By Oliver Renick

     (Bloomberg) — The Dow Jones Industrial Average posted its biggest advance in eight weeks as equities extended quarterly gains amid corporate mergers and optimism central banks will support global growth.

     Chevron Corp., Exxon Mobil Corp. and JPMorgan Chase & Co. added more than 2.3 percent as oil companies and banks rallied. Catamaran Corp. jumped 24 percent after UnitedHealth Group Inc. agreed to buy it. Horizon Pharma Plc rose 18 percent after saying it will acquire Hyperion Therapeutics Inc. A Standard & Poor’s index of homebuilders climbed after pending home sales in February rose more than forecast.

     The Dow climbed 263.65 points, or 1.5 percent, to 17,976.31 at 4 p.m. in New York, its best gain since Feb. 3. The S&P 500 Index advanced 1.2 percent to 2,086.24, headed for its longest streak of quarterly increases since 1998. With a 0.2 percent increase on Friday, the index completed its first back-to-back gain after 28 days, the longest drought since 1994. The Nasdaq Composite Index rose 1.2 percent.

     “There was the China central bank comment about stimulus overnight, the economic news this morning was a little bit mixed, and it seems people are putting cash to work thinking maybe earnings are going to come in better than expected,” Larry Peruzzi, the Boston-based director of international trading at Cabrera Capital Markets LLC, said by phone. “The biggest thing in today’s market is there’s no huge negative.”                          

     Federal Reserve Chair Janet Yellen said Friday that the central bank will probably raise rates this year, with subsequent increases taking place gradually, without following a predictable path. China’s central bank chief said the government can do more to support growth in the world’s second-largest economy.

     First-quarter profits for S&P 500 companies are forecast to decline for the first time since 2009. Companies will see a contraction of 5.8 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.

     Consumer purchases rose less than projected in February, indicating the biggest part of the U.S. economy will find it hard to sustain momentum after the best quarter since 2006. Adjusted for inflation, spending declined for the first time in almost a year. Incomes climbed 0.4 percent in February for a second month, propelled by a jump in dividends.                           

     A separate report showed more Americans than forecast signed contracts to purchase previously owned homes in February, indicating a pickup in the housing market ahead of the spring selling season. The index of pending sales increased to the highest since June 2013. An S&P gauge of homebuilder stocks added 1.5 percent to its highest since June 2007.

     The U.S. economy grew at a slower pace in the fourth quarter than economists had estimated, a Commerce Department update showed on Friday.

     Other reports this week may show the Institute for Supply Management’s manufacturing gauge slipped in March, while payrolls rose at a slower pace.

     All ten primary groups in the S&P 500 advanced Monday, after the benchmark last week fell the most since January, extending a monthly loss. About 5.8 billion shares traded hands on U.S. exchanges, about 14 percent below the three-month average.

     Energy and financial companies paced today’s rally, rising at least 1.4 percent. Newfield Exploration Co., Exxon Mobil and Phillips 66 gained at least 2.4 percent. JPMorgan Chase and Travelers Cos. climbed at least 2.3 percent to bolster the financial group.                        

     The Chicago Board Options Exchange Volatility Index fell 3.7 percent to 14.51. The gauge, know as the VIX, jumped 16 percent last week, the most since January.

     Catamaran jumped 24 percent after UnitedHealth’s OptumRx agreed to buy the provider of pharmacy benefit management services for about $12.8 billion. PBM competitor Express Scripts Holding Co. added 3.7 percent, the most in more than three months. UnitedHealth advanced 2.5 percent to a record.

     Horizon Pharma climbed 18 percent to an all-time high after agreeing to buy Hyperion Therapeutics for $1.1 billion to gain drugs to treat rare metabolic diseases. Hyperion added 7.6 percent.

     Teva Pharmaceutical increased 0.9 percent after agreeing to buy Auspex Pharmaceuticals Inc. for about $3.5 billion in cash to gain drugs that curb tics and other movement disorders. Teva will begin a tender offer of $101 a share for Auspex, which rallied 42 percent.

     DreamWorks Animation SKG Inc. rose 6.6 percent to its highest since November after its “Home” film delivered $54 million in opening-weekend ticket sales, beating projections.

     Analog Devices Inc. jumped 10 percent, the most since May 2009, after analysts at Barclays Plc upgraded the stock to overweight from equalweight and set a target price of $70, 10 percent above where shares now trade.

     Altera Corp. lost 3.5 percent after soaring 28 percent Friday following a report that Intel Corp. was in talks to buy the company. Morgan Stanley analyst Joseph Moore downgraded Altera to equalweight from overweight, while Macquarie Research analyst Deepon Nag cut shares to neutral from outperform. Intel slipped 1.7 percent, one of two Dow components that fell.
 

Have a wonderful evening everyone.

Be magnificent!

Freedom is a state of mind – not freedom from something.

Krishnamurti

As ever,

Carolann

Life is like riding a bicycle.  You don’t fall off unless you stop peddling.

                                                      -Claude D. Pepper,1900-1989

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