May 1, 2015 Newsletter

Dear Friends,

Tangents:

May Day: May 1^st:  Polydore Virgil says that the Roman youths used to go into the fields and spend the Calends of May in dancing and singing in honor of Flora, a goddess of fruits and flowers.  The English celebrated May Day with games and sports, particularly archery and Morris Dances and the setting up of the Maypole.  In due time Robin Hood and Maid Marian came to preside as Lord and Lady of the May, and by the 16^thcentury May Day was Robin Hood’s day and Robin Hood plays became an integral part of the festivities.  May Day was also formerly the day of the London chimney-sweepers’ festival.

Maypole and May queen:  Dancing around the Maypole on May Day, “going–a-Maying”, electing a May queen and lighting bonfires were all ancient relics of nature worship.  In Cornhill, London, a great shaft or maypole was set up before the church of St. Andrew.  The annual dancing of people under the pole gave the church’s present name of St. Andrew Undershaft.  In the first May morning people went “a-maying” to fetch fresh flowers and branches of hawthorn (hence its name “may”) to d to decorate their houses, and the fairest maid of the locality was crowned “queen of the May.”

The Maypole in the Strand:  This once famous London landmark was erected proba

On this day in 1941, Citizen Kane debuts. The film, considered by many to be the greatest ever made, fails to recoup its costs at the box office.

PHOTOS OF THE DAY

A reveller walks through the streets in the early hours during traditional May Day celebrations in Oxford, Britain, Friday. Dylan Martinez/Reuters

A boy dances with Leicester Morrismen during May Day celebrations at Bradgate Park in Newtown Linford, Britain, Friday. The celebration is a traditional rite thought to be connected to changing seasons and fertility. Darren Staples/Reuters

Fans watch a race before the 141th running of the Kentucky Oaks horse race at Churchill Downs Friday in Louisville, Ky. Jeff Roberson/AP

Market Closes for May 1^st, 2015

International Markets

Bonds

Currencies

Commodities

Have not great merchants, great manufacturers, great inventors done more for the world than preachers and philanthropists.  Can there be any doubt that cheapening the cost of necessities and conveniences of life is the most powerful agent of civilization and progress?

            -Charles Elliott Perkins (Railroad magnate, 1840-1907)

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks rose the most in five weeks as Valeant Pharmaceuticals International Inc. rallied to a record and base metals producers advanced.

     Valeant climbed 3.7 percent for a fourth straight day of gains. First Quantum Minerals Ltd. jumped 5.5 percent as copper posted the biggest weekly advance in 40 months. Canadian Pacific Railway Ltd. added 2.7 percent to snap a four-day drop, pacing gains among industrial shares.

     The Standard & Poor’s/TSX Composite Index rose 115.25 points, or 0.8 percent, to 15,339.77 at 4 p.m. in Toronto, trimming its weekly loss to 0.4 percent. The benchmark Canadian equity gauge advanced 2.2 percent in April.

     Raw-materials stocks rallied 1.8 percent as nine of 10 industries in the S&P/TSX advanced. Trading volume was 13 percent lower than the 30-day average.

     First Quantum climbed 5.5 percent and Lundin Mining Corp. increased 5 percent. Copper has advanced 6.4 percent this week, the most since December 2011. China’s official manufacturing Purchasing Managers’ Index showed a reading of 50.1 in April, matching the gauge for March and above the median forecast in a Bloomberg survey of 50.0, the level that divides expansion and contraction.

     HudBay Minerals Inc. rose 4.9 percent and Labrador Iron Ore Royalty Corp. gained 1.5 percent.

     New Gold inc. dropped 1.2 percent and Semafo Inc. lost 2.2 percent. Gold futures for June delivery lost 0.7 percent in New York to fall to a six-week low amid speculation the Federal Reserve is moving closer to raising interest rates.

     Valeant increased 3.7 percent for a record close. The stock, the third-largest in the S&P/TSX by market capitalization, has jumped 11 percent in four days. The company on April 29 raised its forecast for the year after first-quarter profit topped estimates.

US

By Callie Bost

     (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index paring a weekly loss, as Gilead Sciences Inc. and Expedia Inc. rallied after Thursday’s selloff in biotechnology and small-cap shares.

     The Nasdaq Biotechnology Index rebounded 2.9 percent from a 3.1 percent drop yesterday. Gilead added 4.5 percent as first- quarter profit exceeded projections. Expedia Inc. climbed 7.9 percent, amid quarterly revenue that exceeded estimates, and paced consumer shares as they erased their Thursday decline. LinkedIn Corp. tumbled 19 percent after trimming its annual sales forecast.

     The S&P 500 gained 1.1 percent to 2,108.29 at 4 p.m. in New York, after falling 1 percent Thursday. The index jumped above its average price for the past 50 days. The Russell 2000 rose 0.7 percent after tumbling 2.2 percent yesterday. The Dow Jones Industrial Average climbed 183.54 points, or 1 percent, to 18,024.06 and nearly wiped out yesterday’s retreat.

     “This week felt like an unwinding of a lot of big trading positions that had been on for months and that had been extremely successful,” said David Heidel, a regional investment director for the private client reserve of U.S. Bank, which oversees about $128 billion of assets. “This is a rebound from the tough days we had earlier this week. People are taking a look at potential bargains.”

     The benchmark index dropped 0.4 percent this week as the Federal Reserve left open the possibility of raising rates in 2015 even after data showed the economy barely grew in the first quarter.                         

     Wednesday’s growth report was among a string of weak numbers stoking concern about the strength of the recovery, as the Fed looks set for its first rate increase since 2006.

     A report today showed manufacturing in April held at the weakest pace in almost two years, while a separate report said consumer confidence increased in April to the second-highest level in more than eight years as Americans grew more upbeat about their financial prospects.

     Analysts have tempered their predictions for a corporate earnings slump, now projecting a first-quarter drop of 0.4 percent, compared with April 17 calls for a 4.3 percent decline.

     The Russell 2000 Index lost 2.6 percent last month as biotech and social-media companies, viewed by some investors as being in bubble territory, led a late April retreat in equities.

     While the S&P 500 returned to an all-time high in April and the Nasdaq Composite Index jumped to its first record since the dot-com bust, this week’s declines have pulled both indexes away from those levels. The S&P 500 is still one of the biggest laggards among developed-market indexes this year.

     “Markets are becoming increasingly tactical and taking profits,” said Michael Ingram, a market strategist at BGC Brokers LP in London. “The very basic issue is that markets want strong growth and zero rates forever. That’s simply not going to happen.”

     Amid the volatility, U.S. equities remain stuck within the tightest range of prices in almost a decade: roughly 125 points in the S&P 500. The peak-to-trough move of 6.3 percent is the smallest at this point of any year since 2006.

     The Chicago Board Options Exchange Volatility Index dropped 13 percent to 12.70 after an 8.7 percent jump yesterday. For the gauge known as the VIX, it’s the biggest retreat since January. About 6.4 billion shares changed hands on U.S. exchanges Friday, 3 percent below the three month average.                       

     Nine of the S&P 500’s 10 main groups rose Friday, with raw- material, technology and consumer discretionary companies rallying the most. Alcoa Inc. jumped 5.4 percent, its biggest gain since October, and Eastman Chemical Co. added 3.3 percent near a five-month high to lead materials. Alcoa was upgraded to buy from hold at Standpoint Research.

     Expedia led gains in consumer shares along with Yum! Brands Inc. and Leggett & Platt Inc. Yum surged 6.9 percent, the biggest gain in more than a year, after after Dan Loeb’s Third Point disclosed a “significant stake” in the restaurant operator, saying its business in China will recover from recent food-safety issues.

     Gilead, Biogen Inc. and Regeneron Pharmaceuticals Inc. paced health-care’s advance, with each rising at least 3 percent. The Nasdaq Biotech index added 2.9 percent, snapping a five-day losing streak during which the gauge dropped 9 percent.

     A Bloomberg gauge of U.S. airlines climbed 3 percent. SkyWest Inc. soared 18 percent after better-than-estimated first-quarter results. JetBlue Airways Corp. and Southwest Airlines Co. rose more than 5 percent.

     Altera Corp. rallied 9.8 percent after Reuters reported that the company could face a hostile takeover bid by Intel Corp. Intel added 2.7 percent and Micron Technology Inc. advanced 3.1 percent. The Philadelphia Stock Exchange Semiconductor Index increased 2.8 percent, its best gain since March 27 when Intel’s initial interest in Altera was first reported.

     Apple Inc. rose 3 percent, ending a three-day losing stretch in which shares fell 5.7 percent.

     LinkedIn lost 19 percent, the sharpest drop since it went public almost four years ago. The professional-networking website delivered quarterly revenue that missed analysts’ estimates for the first time, shaking confidence in a historically stable business plan. The company also trimmed its annual revenue forecast.                      

     First Solar Inc., the biggest U.S. solar-panel maker, slipped 3.9 percent to its lowest level in two months. Quarterly revenue missed estimates, and the company reported its first loss in three years as it prepares to create a new company to operate some of its completed power plants.

     Pump and valve maker Flowserve Corp. dropped 3.2 percent, the most in three months, after first-quarter profit and revenue missed estimates. The company cited broad-based industrial spending declines, notably in oil and gas markets, and the impact of a strengthening dollar.

     Chevron Corp. fell 1.8 percent, the most among three Dow components that declined, after reporting better-than-estimated quarterly earnings. Profit from its refinery business doubled, while earnings from its oil-and gas-producing business posted the worst performance since the second quarter of 2009.
 

Have a wonderful weekend everyone.

Be magnificent!

Live your own life.

That is to say, where you are, as you are, with what you are, and with who you are…

Accept the situation in which you find yourself and try, at the same time, to adapt to it.

You cannot escape from it.

Swami Prajnanpad

As ever,

You can’t win the Kentucky Derby unless you’re on a thoroughbred.

                                                               -Joe Torre, 1940-

Carolann

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