May 5, 2015 Newsletter

Dear Friends,

Tangents:

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

PHOTOS OF THE DAY

Two women ride their horses over a meadow covered with dandelions near Burggaillenreuth, southern Germany, Tuesday. Nicolas 

Two Canada geese chicks play between daisies in a park in Duesseldorf, Germany, Tuesday. Maja Hitij/dpa/AP

Market Closes for May 5^th, 2015

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

     (Bloomberg) — Canadian stocks fell the most since March amid data showing a record national trade deficit and a global selloff in equities as concern grew that Greece won’t resolve its debt crisis.

     Royal Bank of Canada and Toronto-Dominion Bank, the nation’s largest lenders, retreated at least 0.8 percent as financial stocks slumped. Alimentation Couche-Tard Inc., the convenience store operator, lost 2.7 percent to pace a decline among consumer-staples retailers. Canadian Pacific Railway Ltd. and Canadian National Railway Co., the nation’s largest rail operators, tumbled at least 1.5 percent.

     The Standard & Poor’s/TSX Composite Index fell 193.53 points, or 1.3 percent, to 15,173.94 at 4 p.m. in Toronto, the biggest decline since March 10. Tuesday’s slide trimmed the benchmark Canadian equity gauge’s advanced in 2015 to 3.7 percent.

     The MSCI All-Country World Index fell 0.9 percent, as the U.S. benchmark S&P 500 slumped the most in almost six weeks and the Stoxx Europe 600 Index dropped to an eight-week low.

     Wolfgang Schaeuble, the German Finance Minister, said Greece and its creditors may not be able to complete the work needed for an agreement on financial aid before about 1 billion euros ($1.1 billion) of payments become due to the International Monetary Fund on May 12.

     Canada posted a record trade gap in March as the value of energy exports declined and imports of consumer goods increased. The C$3.02 billion deficit topped the C$2.87 billion record set in July 2012 and exceeded the highest forecast of C$1.33 billion in a Bloomberg economist survey.

     All 10 industries in the S&P/TSX retreated at least 0.5 percent, on trading volume 10 percent higher than the 30-day average today.

     Couche-Tard fell 2.7 percent and Loblaw Cos. lost 1.3 percent as consumer-staples companies declined 1.5 percent as a group. Industrial stocks tumbled 1.9 percent, led by the railroad operators.

     Pacific Rubiales Energy Corp. jumped 18 percent in trading on alternative markets after the company received a takeover approach by Alfa SAB and Harbour Energy Ltd. that values it at about $6 billion including debt, according to people with knowledge of the matter.

US

By Joseph Ciolli and Oliver Renick

     (Bloomberg) — The Standard & Poor’s 500 Index fell the most in more than a month, joining a global decline in equities, as mixed data added to U.S. growth concerns and speculation rose that Greece won’t be able to resolve its debt crisis.

     Apple Inc. lost 2.3 percent, and semiconductors fell 2.2 percent to lead a selloff in technology companies. The Nasdaq Biotechnology Index slid 2 percent as health-care shares dropped. Delta Air Lines Inc. and American Airlines Group Inc. declined more than 3 percent as oil topped $60 a barrel for the first time this year.

     The S&P 500 Index slumped 1.2 percent to 2,089.46 at 4 p.m. in New York, below its average price during the past 50 days. The Nasdaq Composite Index dropped 1.6 percent, and the Russell 2000 Index lost 1.4 percent. About 7.2 billion shares traded hands on U.S. exchanges, 10 percent above the three-month average.

     “There’s a sense of uneasiness permeating through the equity market due to first quarter results, mixed signals of economic health and high valuations,” said Terry Sandven, who helps oversee $126 billion as chief equity strategist at U.S. Bank Wealth Management in Minneapolis. “The U.S. economy is navigating through a soft patch and high valuations are elevating the risk of being wrong, so investor angst and concern remains high.”

     Concern has grown over whether Greece can meet its obligation to pay about $1.1 billion due to the International Monetary Fund by May 12. The Stoxx Europe 600 Index fell to its lowest level in two years.

     A report today showed the U.S. trade deficit widened in March to the highest level in more than six years, fueled by a record surge in imports as commercial activity resumed at West Coast ports following a resolution to labor disputes. The jump probably means the U.S. economy contracted in the first quarter when the Commerce Department issues revisions later this month.

     A separate report showed service industries such as real- estate firms and restaurants unexpectedly grew at a faster pace in April as the biggest part of the U.S. economy picked up.

     Investors will look ahead to Friday’s payrolls numbers amid speculation over the timeline for an increase in U.S. interest rates. Concern that the Federal Reserve may soon raise borrowing costs even as economic growth sputters sent equities dropping from records last week, with losses concentrated in biotechnology and social-media shares.

     “This is a market that’s struggled to get out of the gate this year,” said Kevin Caron, a market strategist and portfolio manager who helps oversee $170 billion at Stifel Nicolaus & Co. in Florham Park, New Jersey. “There’s a lot of choppiness — no clear direction. There’s a sense of uncertainty right now, and the market is eventually going to have to look for real growth in the economy, and that’s looking fairly weak.”

     Stocks rebounded for a second day on Monday, helped by a rally in banks, amid optimism over corporate earnings season. Of the 377 S&P 500 companies that have reported results through Monday, 73 percent topped analysts’ estimates for profits, data compiled by Bloomberg show.

     Apple slipped 2.3 percent, its fifth decline in six days, a period during which it’s fallen more than 5.1 percent.

     The Chicago Board Options Exchange Volatility Index climbed 11 percent Tuesday to 14.31, its biggest jump in six weeks. The gauge, know as the VIX, added 3.3 percent last week. All of the S&P 500’s 10 main groups retreated, with eight falling more than 1 percent.

     Leading declines among tech, semiconductor companies dropped for a second day as Micron Technology Inc. and Intel Corp. lost at least 1.6 percent. The Philadelphia Stock Exchange Semiconductor Index retreated 2.2 percent, its biggest drop in six weeks.

     Gilead Sciences Inc. and Vertex Pharmaceuticals Inc. paced the slide in health-care companies, losing more than 2.5 percent. Express Scripts Holding Co. slumped 3.2 percent, the most since December.

     Utilities in the S&P 500 tumbled 2.3 percent, their biggest decline in two months. Sempra Energy decreased 3.2 percent after reporting first-quarter sales that fell short of analyst estimates. Edison International and FirstEnergy Corp. fell more than 2.5 percent.

     Energy companies in the S&P 500 erased earlier gains, even as crude-oil prices climbed to near five-month highs. Advances of more than 3.1 percent in Diamond Offshore Drilling Inc. and Transocean Ltd. were overshadowed by declines of at least 3.1 percent in Pioneer Natural Resources Co., Newfield Exploration Co. and EOG Resources Inc.

     A Bloomberg gauge of U.S. airlines tumbled 3.1 percent amid oil’s rally. American Airlines and United Continental Holdings Inc. sank more than 2.7 percent. The Dow Jones Transportation Average dropped 1.7 percent, the most in six weeks.

     International Paper Co. fell 5.2 percent to its lowest level in six months as rules proposed Tuesday by the IRS would not allow the company to separate its containerboard operations into a tax-advantaged vehicle.

     Salesforce.com Inc. added 1.6 percent, after jumping more than 6 percent as people with knowledge of the matter said Microsoft Corp. is evaluating a bid for the company. Microsoft lost 1.3 percent.

     Mallinckrodt Plc rallied 4.6 percent after quarterly results beat estimates and the drugmaker raised it full-year profit outlook.

     Netflix Inc. advanced 1.9 percent after Bank of America Corp. raised its rating on the company to buy from sell while more than doubling its price forecast.

Have a wonderful evening everyone.

Be magnificent!
 

                “It is not how much we have, but how much we enjoy, that makes happiness.” Charles Spurgeon

As ever,

Karen

“A warm smile is the universal language of kindness.” William Arthur Ward

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