May 29, 2014 Newsletter

Dear Friends,

Tangents:

May 29, 1453: Constantinople falls to the Turks.

May 29, 1953: On this day in 1953, Edmund Hillary of New Zealand and his sherpa guide, Tenzing Norgay, became the first people to reach the roof of the world, the 29,035-foot summit of the highest mountain in the world, Mount Everest.

Numbers of the Day

$49.4 billion

Valeant Pharmaceuticals’ sweetened bid for Botox-maker Allergan.

1: Rank of the boy’s name Noah and the girl’s name Sophia in their popularity for infants born in the US last year.  Noah displaced Jacob, the most popular for 14 years .  Sophia has been No. 1 for three years.

May 29, 2010 – Philadelphia Phillies pitcher Roy Halladay threw the 20th perfect game in major league history, beating the Florida Marlins 1-0

May 29^th, 1917:  John F. Kennedy, 35^th President of the United States, was born.

We need men who can dream of things that never were.  –John F. Kennedy.

Photos of the day

A woman has her picture taken inside a sculpture as others look for hidden cash around the Mulholland Memorial Fountain after an anonymous millionaire and real estate developer twitted clues to the locations of envelopes stuffed with $20 and $100 dollar bills around the fountain and at nearby statue in Los Angeles, California. The mystery man who has been hiding cash all over the San Francisco area has brought his scavenger hunt money to Los Angeles. According to Los Angeles Police two people found two envelopes one with $250 and the other one with $100. Kevork Djansezian/Reuters

Lightning illuminates the sky over downtown Monterrey, Mexico. Daniel Becerril/Reuters

Market Closes for May 29^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Gerrit De Vynck

May 29 (Bloomberg) — Canadian stocks fell for a third day, sending the benchmark index toward its first monthly slide in 11, as Canadian Imperial Bank of Commerce paced a slump among financial companies.

CIBC fell 1.5 percent after reporting a 65 percent slide in net income. B2Gold Corp. dropped 3 percent to lead materials producers lower, as the price of the precious metal slumped. PrairieSky Royalty Ltd., the former Encana Corp. unit, rose 31 percent on its first day of trading. BlackBerry Inc. gained 6.2 percent after Chief Executive Officer John Chen said the odds of turning around the smartphone maker have improved.

The Standard & Poor’s/TSX Composite Index dropped 49.32 points, or 0.3 percent, to 14,561.64 at 1:56 p.m. in Toronto. The benchmark index is down 0.7 percent in May after rising in each of the past 10 months.

“You look at how well the market has run with no correction and we’re overdue,” said David Cockfield, a fund manager at Northland Wealth Management in Toronto. “I’m not about to rush out and chase stocks in this kind of environment.” He helps manage C$270 million ($250 million) at the firm.

Financial companies fell 0.7 percent as a group as CIBC retreated even as profit beat estimates and the firm raised its dividend. The lender took a C$420 million impairment charge for its Barbados-based bank and C$123 million of loan losses for the Caribbean in the quarter. The bank declined 1.5 percent to C$97.57.

B2Gold decreased 3 percent to C$2.63 as gold reached a 16- week low.

PrairieSky gained 31 percent to C$36.82 from its initial public offering price of C$28. The IPO is the largest for Canada in 14 years. Encana rose 1.1 percent to C$25.23.

Macro Enterprises lost 23 percent to C$4.65 after saying it expects second-quarter revenue will be lower than it was last year.

BlackBerry increased 6.2 percent to C$8.41 after Chen said the chances of turning around the struggling smartphone maker have risen to 80-20. Chen, who was named as BlackBerry’s top executive in November, had previously been placing the recovery odds at 50-50.

“We have a lot of problems, but it’s not dead,” the CEO said yesterday at Re/code’s Code Conference in Rancho Palos Verdes, California. “I am quite positive that we will be able to save the patient.”

US

By Lu Wang

May 29 (Bloomberg) — U.S. stocks rose for the fifth time in six days, driving the Standard & Poor’s 500 Index to a record, after Tyson Foods Inc. offered to buy Hillshire Brands Co. and investors speculated the economy is improving following a contraction in the first quarter.

Hillshire Brands jumped 18 percent after Tyson made a $6.8 billion offer to buy the company, trumping a competing bid from Pilgrim’s Pride Corp. Tyson added 6.1 percent for the biggest gain in the S&P 500. Biogen Idec Inc. climbed 3.6 percent after JPMorgan Chase & Co. raised its recommendation on the biotechnology company. Abercrombie & Fitch Co. jumped 5.8 percent as the clothing retailer posted a smaller-than-estimated quarterly loss.

The S&P 500 added 0.5 percent to 1,920.03 at 4 p.m. in New York. The gauge fell 0.1 percent from a record yesterday. The Dow Jones Industrial Average gained 65.56 points, or 0.4 percent, to 16,698.74. The Nasdaq 100 Index increased 0.6 percent to the highest level since September 2000.

“No matter what that GDP number was, the underlying backdrop is that the data is improving,” Sam Turner, a fund manager with Richmond, Virginia-based Riverfront Investment Group LLC, said in a phone interview. His firm oversees $4.6 billion. “We had two months there where small caps, higher momentum names really took it on the chin. Now they’re oversold and start to see some recovery.”

Today’s gain helped the Nasdaq 100 recoup all its 7.5 percent loss since early March. The Russell 2000 Index of small companies added 0.3 percent, extending its rebound from a low on May 15 to 4 percent.

The S&P 500 has rallied 5.8 percent since a selloff in small-cap and Internet shares spread to the broader market and dragged the benchmark index to a two-month low in April. The gauge has advanced 184 percent from its bear-market low in March 2009.

About 5.1 billion shares changed hands on U.S. exchanges today, 19 percent below the three-month average.

The U.S. economy contracted for the first time in three years from January through March as companies added to inventories at a slower pace and curtailed investment. Gross domestic product fell at a 1 percent annualized rate in the first quarter, a bigger decline than projected, after a previously reported 0.1 percent gain, the Commerce Department said.

A pickup in receipts at retailers, stronger manufacturing and faster job growth indicate the first-quarter setback will prove temporary as pent-up demand is unleashed. Federal Reserve policy makers said at their April meeting that the economy has strengthened after adverse weather took its toll.

“The next couple of quarters are going to be a lot stronger,” said Philip Orlando, the New York-based chief equity-market strategist at Federated Investors Inc., said by phone. He helps oversee around $400 billion. “The market ought to be able to read through this and begin to price in better economic growth.”

Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the labor market continues to strengthen. Jobless claims fell by 27,000 to 300,000 in the week ended May 24, a government report showed.

The Chicago Board Options Exchange Volatility Index slipped 0.6 percent to 11.61 today. It is about 3 points from a record low.

Nine of the 10 main S&P 500 groups advanced, with producers of consumer staples and raw materials gaining at least 0.8 percent to pace increases.

Hillshire added 18 percent to $52.76. Tyson is offering $50 a share, representing a deal premium of 35 percent, the company said. Tyson is looking to expand further into branded, value- added packaged foods that have wider margins and more stable earnings. Tyson advanced 6.1 percent to $43.25.

Biogen Idec climbed 3.6 percent to $319.85. The biotechnology company was raised to overweight from neutral by JPMorgan analysts. Biogen has an “impressive” number of drugs in later stages of development and JPMorgan’s survey of doctors suggested the potential of increased use of the multiple sclerosis drug Tecfidera, analyst Geoff Meacham wrote in a note.

Abercrombie & Fitch jumped 5.8 percent to $37.14. New styles of shorts and crop tops slowed its sales decline. Chief Executive Officer Mike Jeffries has been working to revive Abercrombie’s appeal among teenage shoppers who’ve strayed from the chain in favor of fast-fashion purveyors such as Forever 21 and Hennes & Mauritz AB.

Palo Alto Networks Inc. climbed 5.3 percent to $73.17. The company posted third-quarter adjusted earnings per share of 11 cents, compared with the 10 cents analysts had estimated. It reported revenue of $150.7 million, topping the $146.2-million analyst forecast.

Twitter Inc. gained 0.7 percent to $34 as Cantor Fitzgerald LP raised the stock to a buy from hold. The operator of the social-networking site surged 11 percent yesterday, reversing a two-week slide amid a rout in technology stocks.

Tilly’s Inc. slumped 17 percent to $8.77 after giving a profit projection that missed estimates. The retailer forecast second-quarter profit of 3 cents to 7 cents a share, trailing the 13 cents analysts had projected.

Have a wonderful evening everyone.

Be magnificent!

I believe in the absolute oneness of God, and therefore, humanity.

What though we have many bodies?  We have but one soul.

The rays of sun are many through refraction.

But they have the same source.

I cannot, therefore, detach myself from the wickedest soul

nor may I be denied identity with the most virtuous.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Success is liking yourself, liking what you do,

and liking how you do it.

-Maya Angelou, 1928-1914

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