March 9, 2015 Newsletter

Dear Friends,

Tangents:

On this day in 1959, Barbie made her debut at the American Toy Fair in New York City. Barbie was the first mass-produced doll in America with adult features. Her appearance was modeled after a doll by the name of Lilli, which was based on a German comic strip character.

March 9^th, 1932, Conrad Russell to his sister Diana:

As to parents, some do and some don’t try and teach manners.  I think many are glad for an excuse not to have to say anything in the nature of criticism or a reprimand.  Of course it is only shirking something.  Sir John Horner used to say:  “Shake hands, Katharine, shake hands”, to his daughter [Katharine Asquith] after she was forty if visitors came into the room.  He also never lit a cigarette in his own room without saying to me first, “Do you mind if I smoke?”

…Right up to 1914 it was utterly impossible for two young people to dine at a restaurant together.  When Raymond [Asquith} and Katharine were engaged they used to have breakfast together at an ABC shop.  Except both going to the same ball there was no other way of meeting – at least there would have been the risk of being seen.  That’s twenty-five years ago.  Times have changed. –from The Book of Days.

PHOTOS OF THE DAY

Madeleine Klonoski, 2, sits on her father’s leg at a kite festival in Redondo Beach, Calif., Sunday. Lucy Nicholson/Reuters

A baby polar bear and its mother, ‘Flocke,’ spend time outdoors at the Marineland animal exhibition park in Antibes, southeastern France, Monday. The baby bear was born on Nov. 26, 2014, at the park. Lionel Cironneau/AP

Market Closes for March 9^th, 2015     

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell a second day, dropping to a five-week low, as commodities producers retreated after China reduced imports a second month.

     BlackBerry Ltd. lost 7.4 percent after analysts at Goldman Sachs Group Inc. lowered their rating for the stock. Concordia Healthcare Corp. soared 26 percent after agreeing to buy assets from privately held Covis Pharma Holdings Sarl for $1.2 billion. Suncor Energy Inc. lost 2.6 percent for a fourth straight loss, the longest streak since November.

     The Standard & Poor’s/TSX Composite Index fell 98.01 points, or 0.7 percent, to 14,854.49 at 4 p.m. in Toronto, the lowest close since Jan. 30. The benchmark Canadian equity gauge lost 1.9 percent last week, its worst since Jan. 9, to close at the lowest level since Feb. 2.

     Pacific Rubiales Energy Corp. fell 9.6 percent and Penn West Petroleum Ltd. declined 6.4 percent to pace a 1.9 percent drop in energy producers. Six of the 10 industries in the S&P/TSX retreated on trading volume 19 percent lower than the 30-day average.

     Barrick Gold Corp. and Goldcorp Inc. slumped at least 2.5 percent as raw-materials producers tumbled 1.6 percent. Raw- materials and energy make up about a third of the S&P/TSX.

     Chinese crude imports fell by 2.43 million metric tons in February to 25.6 million tons. The country’s Lunar New Year crimped imports of oil and other commodities including iron ore and copper.

     Concordia surged to a record. The Toronto-based company will buy almost all of the commercial assets of Covis Pharma Sarl and Covis Injectables Sarl to diversify sales and boost margins. The portfolios include 18 branded and generic products.

     Canadian National Railway Co. slipped 1.1 percent after one of its eastbound trains carrying crude oil derailed and caught fire on March 7.

US

By Michelle F. Davis

     (Bloomberg) — U.S. stocks rose amid corporate deals after the Standard & Poor’s 500 Index tumbled the most in two months on Friday.

     Macerich Co. climbed 7 percent after a buyout offer from Simon Property Group Inc. valued at about $22.4 billion, including debt. RTI International Metals Inc. soared 39 percent after Alcoa Inc. agreed to acquire it for about $1.26 billion.

     The S&P 500 advanced 0.4 percent to 2,079.43 at the close in New York, as equities entered the seventh year of a bull run. The Dow Jones Industrial Average added 138.94 points, or 0.8 percent, to 17,995.72. About 6.2 billion shares changed hands on U.S. exchanges, 11 percent below the three-month average.

     “The Monday morning news is typically deal related,” Richard Sichel, chief investment officer at Philadelphia Trust Co., which oversees $2 billion, said in a telephone interview. “Two or three today that are somewhat noteworthy. That’s always encouraging — that companies are finding value in other companies. There’s a little better feeling about the world and Europe as far as economic growth and stability.”

     Concern the Federal Reserve may start raising interest rates this year amid a strengthening economy has dragged equities lower. The S&P 500 fell 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 S&P 500 is up 1 percent this year, after rallying 11 percent in 2014 and 30 percent in 2013. The benchmark measure is trailing all but two of 24 developed markets this year, data compiled by Bloomberg show.

     The index has more than tripled from its bear-market low on March 9, 2009, buoyed by three rounds of Federal Reserve bond- buying and low interest rates. The gauge hasn’t had a 10 percent drop since 2011, posting more than 50 closes at all-time highs in the past year.

     The current run, lasting almost 2,200 days, is about two months away from overtaking the 1974-1980 bull market as the third-longest since 1929. After the S&P 500, Dow Jones Industrial Average and Russell 2000 Index all hit records on March 2, and the Nasdaq Composite Index climbed above 5,000 for the first time since 2000.

     At 18.6 times earnings, the S&P 500’s valuation is near a five-year high and compares with an average of 16.9 since 1936, data compiled by Bloomberg and S&P Dow Jones Indices show.

     Warnings that stocks are in a bubble and that breadth is narrowing are signs that the thing that really kills bull markets, euphoria, has yet to surface, Laszlo Birinyi,  the president of Birinyi Associates Inc. in Westport, Connecticut, said in a phone interview.

     “We still see continuous negativity,” Birinyi said. “A lot of people have missed and they’ve been wrong. It’s hard to one day turn around and say ‘I was wrong.’ Ultimately, the market continues to surprise on the upside.”

     Reports this week may show an improvement in U.S. retail sales, consumer sentiment and industrial production, and a drop in jobless claims, economists forecast.

     Eight of the S&P 500’s 10 main groups advanced, led by industrial and health care companies.

     The Chicago Board Options Exchange Volatility Index lost 0.9 percent to 15.06. The gauge, know as the VIX, rose 14 percent last week, its biggest jump in five weeks.

     Macerich climbed 7 percent after Simon Property, the largest U.S. mall owner, offered to buy the company in a cash- and-stock transaction valued at about $22.4 billion, including debt. Simon slid less than 0.1 percent.                      

     RTI International soared 39 percent to its highest level since July 2011 after Alcoa agreed to buy the company in an all- stock transaction valued at about $1.26 billion. Alcoa fell 5.4 percent to its lowest since June.

     It’s the third aerospace-related deal announced by Alcoa in less than nine months, an area where it sees growth potential outpacing other aluminum-using sectors such as cars and construction.

     Aerospace and defense stocks in the S&P 500 added 1.2 percent, led by gains of at least 1.5 percent in Raytheon Co. and United Technologies Corp.

     General Motors Co. rose 3 percent after announcing a $5 billion share buyback program on Monday. Activist investor Harry J. Wilson will give up his request for a board seat after reaching an agreement with the automaker.

     Whiting Petroleum Corp. jumped 11 percent as people familiar with the matter said the oil producer has hired a bank to pursue a potential sale.

     Apple Inc. climbed 0.4 percent, paring an earlier advance of as much as 2.4 percent, after the company presented new products and services at an event in San Francisco, including a smartwatch and an exclusive Apple TV partnership with Time Warner Inc.’s cable channel HBO for its stand-alone service.

Have a wonderful evening everyone.

Be magnificent!

Man falls from the pursuit of the ideal of plain living and high thinking

the moment he wants to multiply his daily wants.  Man’s happiness really lies in contentment.

Mahatma Ghandhi

As ever,

Carolann

The words “I am…” are potent words: be careful what you hitch them to.  The thing you’re claiming

has a way of reaching back and claiming you.    

                                                                -A.L. Kitselman, 1914-1980

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