May 28, 2015 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office, I will be writing the newsletter on her behalf.

PHOTOS OF THE DAY

South American tapir Ivana walks with her newly born son at their enclosure at the Zoo in Prague, Czech Republic, Thursday. Petr David Josek/AP

Simone Arrigoni of Italy attempts to set an apnea diving record, while being pushed by a dolphin, in Torvaianica near Rome, Italy, Thursday.Tony Gentile/Reuters

Market Closes for May 28^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks were little-changed, headed for a monthly loss, railways tumbled and investors weighed earnings from the nation’s largest lenders.

     Toronto-Dominion Bank slumped 1.1 percent after net income declined. Canadian Imperial Bank of Commerce added 0.6 percent after raising its dividend. Canadian Pacific Railway Ltd. lost 4.1 percent as North American rail traffic declined.

     The Standard & Poor’s/TSX Composite Index fell 3.49 points, or less than 0.1 percent, to 15,106.98 at 4 p.m. in Toronto, paring an earlier slide of 0.7 percent in afternoon trading. The benchmark Canadian equity gauge has dropped 0.8 percent in May, trimming its gain for the year to 3.2 percent.

     Five of 10 industries in the S&P/TSX slipped on trading volume 16 percent lower than the 30-day average. Industrial companies dropped the most, tumbling 1.7 percent as a group.

     Canadian Pacific Railway sank 4.1 percent, the most since January, and Canadian National Railway Co. declined 1.7 percent. Total rail traffic in North America decreased 3 percent in the week ended May 23, according to a report from Talon Custer and Lee Klaskow, Bloomberg Intelligence analysts.

     Valeant Pharmaceuticals International Inc., the nation’s largest drugmaker, surged as much as 3.4 percent to a market capitalization of C$104.3 billion. That briefly put the company ahead of Toronto-Dominion’s C$104.1 billion valuation and into second place on the TSX.

     The two companies closed at near-identical valuations, with Toronto-Dominion clinging to a C$17 million lead. The lender dropped 1.1 percent after fiscal second-quarter profit fell 6.5 percent as the lender took a C$228 million ($183 million) restructuring charge.

     Royal Bank, the biggest company on the TSX, rose 0.2 percent. The nation’s largest lender said fiscal second-quarter profit rose 14 percent on gains in investment banking. Wealth management earnings fell 3 percent after taking C$29 million of restructuring costs and provisions tied to exiting some international markets.

US

By Jeremy Herron and Stephen Kirkland

     (Bloomberg) — U.S. stocks slipped from near records before data Friday on economic growth, while the dollar ended little changed after a Japanese official warned against the rapid depreciation of the yen. European equities fell as concern mounted that Greece may not reach a deal with creditors.

     The Standard & Poor’s 500 Index lost 0.1 percent at 4 p.m. in New York, trimming a loss of 0.5 percent in afternoon trading. The gauge has advanced 1.7 percent in May. The Bloomberg Dollar Spot Index was little changed, with the greenback near a 12-year high versus the yen. The Stoxx Europe 600 Index dropped 0.5 percent, while the Shanghai Composite Index’s 6.5 percent slide was its worst since January. Natural gas tumbled the most since March.

     The yen’s drop in recent days was “rough,” and the government will continue to carefully monitor movements in the currency, Finance Minister Taro Aso said at a Group of Seven meeting in Dresden. The Bloomberg dollar gauge has rallied 2.8 percent since May 18 on signs the Federal Reserve is preparing to raise interest rates this year. A report Friday may show the U.S. economy contracted in the first quarter.

     “When we take a look at it it’s kind of the same movie we’ve seen over and over again,” Karyn Cavanaugh, the New York- based senior market strategist at Voya Investment Management LLC, said in a phone interview. Voya oversees $215 billion. “We’re worried about what’s going on with the Fed, we’re worried about what’s going on with Greece. Then there’s always the strong dollar.”

     The S&P 500 closed 0.3 percent off its record on Wednesday, rebounding from the biggest drop for U.S. stocks in three weeks after Greece said it was nearing a deal on debt relief.

     The crisis roiled markets again Thursday after French and German delegates at the Group of Seven meeting pushed back against the claims that an agreement was near. The concern that Greece may not win more aid before a loan payment due next week sent European stocks lower.

     “We can expect sentiment to swing back and forth until we really get to crunch time on Greece, and I don’t think we’ll get a deal until the very last day,” Allan von Mehren, chief analyst at Danske Bank A/S, said by phone from Copenhagen. “Markets will be quite volatile as everyone tries to read the signals.”

     Failure to reach a deal may drive yields higher on other euro-area government bonds, the European Central Bank said. The yield on 10-year Greek bonds was little changed, while Spain’s 10-year bond yield rose three basis points to 1.84 percent and Portugal’s climbed five basis points to 2.54 percent.

     The dollar was little changed after rising seven of the previous eight sessions as growing speculation the U.S. will raise interest rates widened the policy divergence with Japan.

     Data Thursday strengthened the case for higher interest rates after economic growth slowed in the first quarter. More Americans than forecast signed contracts to purchase previously owned U.S. homes in April, indicating a pickup in the housing market. The jobless claims report comes as data over the last week from housing starts to leading indicators have topped forecasts.

     Treasury seven-year notes rallied after a $29 billion auction of the securities as investors were attracted by the highest auction yield since December. Ten-year Treasury yields slipped were little changed at 2.13 percent.

     The MSCI Emerging Markets Index lost 0.9 percent, with a fourth day of losses leaving the guage at the lowest level since April 7. Brazil’s equity benchmark declined as lenders slid after data showed faster-than-forecast inflation. Qatar’s benchmark tumbled the most this year as the country’s soccer World Cup plans came under scrutiny.

     A gauge of developing-nation currencies slid for a ninth day, the longest streak of declines in more than two months.

     Oil rose after crude stockpiles dropped a fourth week and gasoline inventories slipped to the lowest level this year. West Texas Intermediate crude added 0.3 percent to settle at $57.68 a barrel in New York, while Brent added 0.8 percent to end at $62.58 a barrel in London.

     U.S. natural gas futures tumbled 5 percent to settle at a four-week low after U.S. inventories rose faster than predicted last week.

Have a wonderful evening everyone.

Be magnificent!

“Strength does not come from physical capacity. It comes from an indomitable will.”

Mahatma Gandhi

As ever,

Karen

“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”

John Quincy Adams

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