May 22, 2014 Newsletter

Dear Friends,

Tangents:

May 22^nd,1992 – Johnny Carson hosted NBC’s “Tonight Show” for the last time after nearly 30 years in the job.
May 22^nd, 1867 – London England – Queen Victoria gives Royal Assent to the British North America Act; decrees that the Dominion of Canada should come into being on July 1.

We are shaped by our thoughts; we become what we think.  When the mind is pure, joy follows like a shadow that never leaves. –Buddha.

Photos of the day

Britain’s Queen Elizabeth makes a comment about a guide dog at the first garden party of the season at Buckingham Palace, London, May 21.Leon Neal/Reuters

A Domed Land Snail (Zospeum tholussum), is shown in this undated handout photo taken in the Lukina-Trojama cave system in Croatia provided by the International Institute of Species Exploration and the State University of New York (SUNY) College of Environmental Science and Forestry on May 21. The Domed Land Snail is among a list of top 10 new species discovered in 2013, scientists announced. The list, assembled annually since 2008, is intended to draw attention to the fact that researchers continue to discover new species. SUNY College of Environmental Science and Forestry/Reuters

Market Closes for May 22^nd, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Gerrit De Vynck

May 22 (Bloomberg) — Canadian stocks rose for a third day after the biggest banks reported better-than-estimated earnings.

Royal Bank of Canada jumped 1.6 percent and Toronto- Dominion Bank increased 2.6 percent as gains from consumer banking and wealth management boosted profit. Financial companies added 0.9 percent, the biggest increase among 10 industries in the S&P/TSX. Corvus Gold Inc. rose 9.7 percent after saying it had found more gold at its Yellowjacket deposit in Nevada.

The Standard & Poor’s/TSX Composite Index rose 52.43 points, or 0.4 percent, to 14,702.29 at 4 p.m. in Toronto. The gauge has risen for 10 months straight, its longest steak since 1983, and is 0.4 percent below an almost six-year high reached on May 2.

“The earnings did surprise and certainly the market seems to like them,” said John Kinsey, a fund manager at Caldwell Securities Ltd. in Toronto. His firm oversees about C$1 billion ($920 million).

Canadian retail sales decreased 0.1 percent in March, compared with a 0.3 percent increase predicted by economists surveyed by Bloomberg.

The government-owned Canada Mortgage and Housing Corp. said housing starts will slow this year to 181,100 new units. Last year, 187,923 units were built.

Canada’s banks, ranked as the world’s soundest by the World Economic Forum for six straight years, have continued to post profit growth despite a slowdown in domestic consumer lending.

Royal Bank climbed 1.6 percent to C$75.46 after reporting its second-quarter net income gained 15 percent to C$2.2 billion, or C$1.47 a share. Toronto-Dominion gained 2.6 percent to C$53.25. Its profit increased 16 percent to C$1.99 billion, or C$1.04 a share.

Corvus Gold gained 9.7 percent to C$1.25. The Vancouver- based miner said it had extended high grade gold veins at the North Bullfrog Project in Nevada.

Bombardier Inc. lost 1.3 percent to C$3.83, extending a drop of 1.3 percent yesterday after a key customer for its new CSeries jets said it was considering whether to take the planes after a change in airline strategy.

ATS Automation Tooling Systems Inc. advanced 1.4 percent to C$14.82 after reporting fourth-quarter revenue that surpassed analyst estimates.

Sears Canada Inc. slid 4.5 percent to C$14.40 as parent company Sears Holdings Corp., the retailer controlled by billionaire hedge-fund manager Edward Lampert, posted a wider first-quarter loss amid a sales decline that’s stretched into its seventh year.

US
By Callie Bost

May 22 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index to near a record, and small-cap shares rebounded as data showing strength in manufacturing boosted confidence in the global economy.

Best Buy Co. and Williams-Sonoma Inc. added at least 3.4 percent to pace gains among retailers. An index of homebuilders rallied as sales of previously owned U.S. homes rose in April. Hewlett-Packard Co. dropped 2.3 percent as it reported second- quarter sales that fell short of estimates and announced it is cutting more jobs.

The S&P 500 rose 0.2 percent to 1,892.49 at 4 p.m. in New York. The benchmark index came within two points of its all-time high of 1,897.45 reached last week. The Dow Jones Industrial Average climbed 10.02 points, or 0.1 percent, to 16,543.08. The Russell 2000 Index of smaller companies rallied 0.9 percent. About 5.3 billion shares changed hands on U.S. exchanges, 19 percent below the three-month average.

“It’s a grindingly slow, gradualistic uptrend of the U.S. economy,” David Young, founder chief executive officer of Newport Beach, California-based Anfield Capital Management LLC, which manages $100 million, said by phone. “We absolutely, positively must factor in the vast amount of liquidity looking for an interesting home. As a result, ‘sell in May and go away’ has been proven wrong, because where else are you going to go?”

The U.S. stock market is trading in the tightest range in eight years, according to data from Bespoke Investment Group LLC. In the last three months, the difference between the S&P 500’s intraday high and low has been less than 5 percent, the Harrison, New York-based research group said in a report today.

The Markit Economics preliminary index of U.S. manufacturing increased to 56.2 in May from 55.4 a month earlier as output accelerated, the London-based group said today. Readings above 50 for the purchasing managers’ measure indicate expansion and the May figure was the highest in three months. A preliminary purchasing managers’ index in China increased to a five-month high.

Other data showed sales of previously owned U.S. homes rose in April for the first time in four months as the weather warmed, price increases slowed and more properties were put on the market. More Americans than projected filed applications for unemployment benefits last week, showing uneven progress in the labor market.

The S&P 500 climbed 0.8 percent yesterday, erasing the previous day’s declines, as Federal Reserve policy makers said continued stimulus doesn’t risk fueling a jump in the inflation rate. Central bank policy makers said last month the economy is showing signs of picking up and the job market is improving.

The central bank pared its monthly asset buying to $45 billion in April, its fourth straight $10 billion cut, and said further reductions in measured steps are likely.

Three rounds of bond purchases by the Fed have helped send the S&P 500 up as much as 180 percent from a 12-year low in 2009.

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, rose 1 percent to 12.03 today. The gauge closed yesterday at the lowest level since August.

Eight out of 10 S&P 500 industry groups rose today, with health-care and utility companies gaining at least 0.5 percent for the biggest advances. Retailers rose 0.5 percent as a group.

Best Buy rallied 3.4 percent to $26.22. The world’s largest consumer-electronics retailer posted first-quarter profit that topped analysts’ estimates as Chief Executive Officer Hubert Joly continued to trim costs.

Williams-Sonoma climbed 8.2 percent to a record $68.93. The seller of cookware and home furnishings raised its full-year earnings forecast to as much as $3.17 a share, after earlier predicting no more than $3.15. The San Francisco-based company also reported first-quarter profit of 48 cents a share, exceeding the 44-cent analyst projection.

Dollar Tree Inc. jumped 6.6 percent to $53.31 for the biggest gain in the S&P 500. The discount retailer reported first-quarter earnings that beat analysts’ estimates. The company said it expects as much as $2.02 billion in second- quarter revenue, exceeding analysts’ estimates of $2.01 billion for the period.

Consumer stocks are the worst-performing among 10 industries this year, down 3.6 percent as a group, after leading the S&P 500’s gain last year with a 41 percent rally.

Investors have withdrawn $3.9 billion from U.S. exchange- traded funds tracking consumer-discretionary stocks this year, more than any other industry, data compiled by Bloomberg show. The group has slumped 3.6 percent this year, the only one of the 10 main S&P 500 industries that has not advanced.

Hewlett-Packard dropped 2.3 percent to $31.78. The world’s second-biggest personal-computer maker said sales in the second quarter fell 1 percent to $27.3 billion from a year earlier, lower than the $27.4 billion analysts projected for the period. The company said it will eliminate 11,000 to 16,000 positions, on top of 34,000 already announced. Hewlett-Packard had 317,500 employees at the end of October.

Hess Corp. jumped 1.1 percent to $90.29. Marathon Petroleum Corp. agreed to acquire the company’s gasoline stations and retail business for a total of $2.87 billion, expanding its footprint to 23 states from nine.

An S&P index of homebuilders rallied 2.1 percent after the report on existing-home sales. PulteGroup Inc. soared 2.2 percent to $19.22 and D.R. Horton Inc. climbed 2.4 percent to $22.65.

Activision Blizzard Inc. dropped 1.6 percent to $20.53 after saying that Vivendi SA is selling half of its remaining stake in the video-gamer maker in an offering valued at more than $850 million.

JD.com Inc., the Chinese online retailer that handled more than $20 billion of purchases on its website last year, rose in its trading debut. The company gained 10 percent to $20.90 after raising $1.78 billion by selling the shares for $19.

The Russell 2000 has rallied 1.5 percent over two days. The index tumbled as much as 9.3 percent from a record on March 4 amid concern that prices have outrun earnings. Small-caps and Internet shares were among the biggest victims of the market retreat as investors fled last year’s best-performing equities.

The Dow Jones Internet Composite Index increased 0.8 percent today. The gauge is still down 15 percent from a 13-year high reached in March.
Have a wonderful evening everyone.

Be magnificent!

Variety is the first principle of life.

What makes us formed beings?

Differentiation.

Perfect balance will be destruction.

Swami Vivekananda, 1863-1902

As ever,

Carolann

When you feel in your gut what you are and then

dynamically pursue it – don’t back down and don’t

give up – then you’re going to mystify

a lot of folks.

-Bob Dylan, 1941-

Carolann Steinhoff, B.Sc., CFP®, CIM, FCSI

Senior Vice-President &

Senior Investment Advisor

Queensbury Securities Inc.,

St. Andrew’s Square,

Suite 340A, 730 View St.,

Victoria, B.C. V8W 3Y7