May 5, 2014 Newsletter

Dear Friends,

Tangents:

Looking for find some new books to read?  Times Colonist will be hosting their 17^th annual book drive May 10 & 11^th at the Victoria Curling Club.  The event will run from 9am-5pm on both days!!! Times Colonist estimates there will be over 400,000 of good, quality used books to choose from!  Proceeds from this event will go to the Times Colonist Raise-a-Reader Program which supports adult and youth literacy programs on Vancouver Island.  Hard Covers will be sold for $3, soft covers $2, pocket books $1 and kids books also $1.  Be sure to check out this great fundraiser this weekend!

“A smile is a curve that sets everything straight.” – Phyllis Diller

Photos of the day

A farmer sprays winter barley as a rape seed field is in full blossom in Klein Heere, northern Germany. Julian Stratenschulte/dpa/AP

A surfer climbs onto rocks after a session off the point at Sydney’s South Cronulla Beach, Australia. Despite the sun setting earlier with a southern hemisphere winter approaching, Sydney’s surfers continue to take advantage of mild sea temperatures. Jason Reed/Reuters

Market Closes for May 5^th, 2014

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada
By Gerrit De Vynck

May 5 (Bloomberg) — Canadian stocks fell for the first time in five days amid rising tension in Ukraine and data showing that Chinese manufacturing shrank for a fourth month. Ritchie Bros. Auctioneers Inc. fell 7.5 percent after reporting quarterly revenue that trailed analyst estimates. PNI Digital Media Inc. rose 32 percent after Staples Inc. said it would buy the company at a 32 percent premium.

The Standard & Poor’s/TSX Composite Index fell 68.12 points, or 0.5 percent, to 14,697.03 at 4 p.m. in Toronto, the biggest decline in three weeks. The gauge is up 7.9 percent this year.

Ukraine said four of its soldiers were killed and a helicopter shot down during fighting with pro-Russian separatists in the country’s east. China’s purchasing managers’ index from HSBC Holdings Plc and Markit Economics Ltd. was 48.1 in April, missing an average analyst projection of 48.4.

China is a key export destination for Canadian commodities. Slack demand from that country’s manufacturers can harm Canadian companies from all industries, said Anish Chopra, a fund manager at TD Asset Management Inc.

“You get follow-on effects,” he said by phone from Toronto. “Certainly you’ve got an interrelated economy so it’s going to impact commodity stocks but also to some extent the other areas as well.” Chopra helps manage about C$220 billion ($200 billion) with the firm.

Nine out of 10 industries on the benchmark index fell, led by raw-materials, industrial and technology companies.

Ritchie Bros, which auctions off industrial equipment, fell 7.5 percent to C$25.50. The Burnaby, British Columbia-based company said it earned $17.7 million from operations in the first three months of 2014 compared with $21.6 million for the same period last year.

PNI Digital Media, which makes software for retailers, rose 32 percent to C$1.70. Staples said in a statement it would buy the company for C$1.70 a share, or a net equity value of about C$73.9 million.

BlackBerry Ltd. fell 3 percent to C$8.68. The Canadian smartphone maker said it would sell the majority of its Canadian real estate to Spear Street Capital LLC for C$305 million.

Alaris Royalty Corp. rose 4.9 percent to C$28.13 after posting first-quarter results that beat analyst estimates. The Calgary-based private equity firm reported earnings per share of 41 Canadian cents, while analysts had predicted 33 Canadian cents.

Columbus Gold Corp. fell 12 percent to 41 Canadian cents after saying a contractor hired to check its Montagne D’Or gold property believes another contractor overstated how much gold is in the deposit.

US
By Lu Wang

May 5 (Bloomberg) — U.S. stocks rose, after benchmark indexes climbed to records last week, as an expansion in American service industries offset concern over growth in China and political tensions in Ukraine.

Apple Inc. climbed 1.4 percent to close above $600 for the first time since 2012. Biogen Idec Inc. and Gilead Sciences Inc. jumped at least 2.7 percent as biotechnology shares resumed their recovery from a two-month slide, leading gains in the Standard & Poor’s 500 Index. JPMorgan Chase & Co. declined 2.5 percent after saying a trading slump has deepened, driving financial shares to the biggest retreat among 10 S&P 500 groups. Pfizer Inc. fell 2.6 percent on disappointing sales.

The S&P 500 added 0.2 percent to 1,884.66 at 4 p.m. in New York, rebounding after a drop of 0.8 percent at the start of trading. The Dow Jones Industrial Average rose 17.66 points, or 0.1 percent, to 16,530.55. The Nasdaq Composite Index gained 0.3 percent. About 5 billion shares changed hands on American exchanges, the slowest trading in two weeks.

“We continue to remain choppy, going back and forth,” Joseph Tanious, a global market strategist at JPMorgan Asset Management in Los Angeles, said by phone. His firm oversee $1.6 trillion in client assets. “The market is having a bit of identity crisis right now, searching for a direction. We are seeing opposing forces in the market.”

Investors pulled $2.66 billion last week out of exchange- traded funds that invest in U.S. equities, data compiled by Bloomberg show. Technology-focused ETFs saw withdrawals of $1.5 billion, the most among 12 sectors tracked by Bloomberg. Energy and utility funds attracted the biggest inflows, with deposits each totaling more than $400 million, the data show.

U.S. stocks rose last week, with the Dow average reaching an all-time high, as earnings topped forecasts and the Federal Reserve said it would further trim bond purchases as the economy gains momentum. The S&P 500 added 1 percent, taking its gain this year to 1.8 percent. The benchmark gauge briefly climbed above its highest closing price on May 2, as data showed U.S. payrolls rose the most since 2012.

The S&P 500 erased its early decline today after the Institute for Supply Management’s non-manufacturing index rose to 55.2 in April from the prior month’s 53.1. Readings above 50 indicate expansion. The median forecast of 69 economists surveyed by Bloomberg called for 54 in the gauge of services, which account for almost 90 percent of the economy.

Ukraine sought to dislodge separatists from its eastern industrial heartland over the weekend as violence that’s spread to the Black Sea gateway of Odessa threatens to loosen Kiev’s control of the regions. Fighting in the eastern city of Kramatorsk left seven people dead, according to the website Kramatorsk.info. Clashes continued in Odessa yesterday.

China’s manufacturing contracted for a fourth month in April. HSBC Holdings Plc and Markit Economics said today their purchasing managers’ index rose to 48.1. That missed the median estimate of 48.4 and the preliminary reading of 48.3. Numbers below 50 indicate contraction.

“These geopolitical issues become widespread concerns,” Peter Sorrentino, a senior portfolio manager who helps manage about $3.8 billion at Huntington Funds in Cincinnati, said by phone. “Our view has been we’re going to get a transition that in effect we’ll quietly see a correction that takes place on the sector level, but not on the market level. If that doesn’t materialize, the market is very clearly, because of the slowdown we’re seeing in growth, vulnerable here that we could very easily see a correction.”

Walt Disney Co., the world’s largest entertainment company, and Mosaic Co., the biggest U.S.-based potash producer, are among S&P 500 companies reporting results this week. Profit for members of the gauge probably climbed 4.6 percent in the first quarter from the year-earlier period, while sales rose 2.8 percent, according to estimates compiled by Bloomberg.

“Anybody that thinks American business is not doing well should just look at corporate profits,” Warren Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., said at the company’s annual meeting on May 3.

Berkshire’s Class B shares slipped 1.2 percent to $126.61. The company reported a 3.8 percent decline in first-quarter profit as underwriting results dropped at insurance businesses and on reduced earnings from Buffett’s derivatives wagers.

The Chicago Board Options Exchange Volatility Index, a gauge for U.S. stock volatility known as the VIX, rose 2.9 percent to 13.29, for its first gain in six days. The measure has lost 3.1 percent this year.

Utility, health-care and commodity shares climbed at least 0.5 percent for the best performances among S&P 500 main industries. Exxon Mobil Corp. added 0.9 percent to $102.91 while Chevron Corp. increased 0.5 percent to $125.36.

Apple advanced 1.4 percent to $600.96. The stock has jumped 15 percent since April 23, when the company reported a surge in iPhone sales and gave its shareholder payout program a $30 billion boost.

Biotech companies accounted for four of the 10 best performers in the S&P 500 as Biogen, Gilead, Vertex Pharmaceuticals Inc. and Alexion Pharmaceuticals Inc. each climbed at least 2.7 percent.

The Nasdaq Biotechnology Index advanced 1.8 percent, extending its gain from an April low to 8.2 percent. The gauge had tumbled as much as 21 percent from a February peak as investors exited the bull market’s biggest winners.

Monsanto Co. climbed 2.4 percent to $114.85. Larry Robbins, founder of $7.5 billion Glenview Capital Management LLC, told Bloomberg Television’s Stephanie Ruhle at the 19th annual Sohn Investment Conference in New York that he’s amassed a $1 billion position in the seed maker and intends to hold it as a long-term investment as demand for genetically modified foods rises.

Sotheby’s advanced 3.2 percent to $44.80. The auction house agreed to appoint Third Point LLC founder Dan Loeb and two of his candidates to its board of directors, a settlement that ends a bitter proxy fight between the company and its largest shareholder.

PerkinElmer Inc. climbed 3.6 percent, the most in the S&P 500, to $43.95. The provider of equipment for genetic screening and drug research was raised to a buy from neutral at Janney Montgomery Scott LLC.

B/E Aerospace Inc. jumped 9.3 percent to $97.22. The maker of seats for commercial and business jets hired financial and legal advisers to study its options, including a sale, and canceled an investor meeting set for today.

Financial shares in the S&P 500 slumped 0.4 percent. JPMorgan declined 2.5 percent to $54.22. Fixed-income and equities trading revenue will drop about 20 percent from a year earlier at the New York-based company amid “a continued challenging environment and lower client activity levels,” JPMorgan said after the close of trading on May 2 in its quarterly regulatory filing.

Goldman Sachs Group Inc. fell 1.6 percent to $156.35 while Morgan Stanley slipped 2 percent to $30.07.

Pfizer retreated 2.6 percent to $29.96. The drugmaker reported first-quarter sales that missed analyst estimates as demand weakened for Lipitor and Viagra.

Separately, U.K. Business Secretary Vince Cable said yesterday that the U.S. company’s bid for Britain’s AstraZeneca Plc raised questions of “overriding national interest,” as the opposition Labour Party stepped up its opposition to the proposed takeover.

Target Corp. declined 3.5 percent to $59.87. Chief Executive Officer Gregg Steinhafel, dogged by questions over whether the company responded quickly enough to a data breach last year, will step down as chairman, president and CEO.

Tyson Foods Inc. dropped 9.9 percent to $38.44 for the biggest loss in the S&P 500. The largest U.S. meat producer reported a wider operating loss from the international unit for its fiscal second quarter as an outbreak of bird flu affected sales in China.

Have a wonderful evening everyone!

Be magnificent!

“You’ve done it before and you can do it now. See the positive possibilities. Redirect the substantial energy of your frustration and turn it into positive, effective, unstoppable determination.”– Ralph Marston

Amanda Parnham

Assistant to Carolann Steinhoff

Queensbury Securities

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5828