Index Return Monitor
Transcription
Index Return Monitor
Index Return Monitor June 10, 2015 It’s All Good S&P Price CESI Level BRAD BROWN, CFA INVESTMENT STRATEGY GROUP Bad news is good news. At least, this is the new paradigm we have come to know over the past few months as soft economic data out of the U.S. has generally been cheered by the equity markets. May was another example of this, as the S&P 500 Index rose 1% despite mixed economic readings. While U.S. unemployment and housing continued to improve, consumer sentiment and business prospects began the month on a weak note. U.S. industrial production dropped for a fifth consecutive month as the strong U.S. dollar Stocks Rise Despite Weak Data continued to pressure American exports and S&P 500 as oil producers continued to curtail their Citigroup Economic Surprise Index (CESI) production in response to low oil prices. 2150 60 With the weak data extending beyond 40 the initial soft patch in the first quarter, 2100 20 market watchers have been questioning 0 whether the earlier data was transitory or not. 2050 Such mixed data points would normally -20 worry investors; in the current environment, -40 2000 they have been positively received as many -60 market watchers suggest this will force the 1950 -80 U.S. Federal Reserve (Fed) to maintain the Dec Jan Feb Mar Apr May current zero interest rate policy longer than Source: Bloomberg initially expected – keeping borrowing costs for corporate America and consumers lower for (even) longer. With a June interest rate hike by the Federal Open Markets Committee seemingly off the table, speculation had mounted that September would be the month of choice; now, however, with Q1/2015 U.S. GDP growth recently revised down to -0.7%, some argue that the September meeting may also be too soon for a hike. Across the Atlantic, positive European data is demonstrating how good news can also be good. The current recovery and positive data out of the region have resulted in yields moving higher as German Bunds — the yardstick in European bond markets — fell and the risk-on trade re-emerged. This, in turn, triggered a rise in U.S. yields. U.S. corporate earnings also buoyed U.S. equities in May. While the overall results were not spectacular, they were better than the market had anticipated, helping the S&P 500 recover from the early-month soft patch. In Canada, things were a little different as falling commodity prices dragged the resource-laden S&P/TSX Composite Index lower. So what have we learned about the current market environment? Bad economic data is good and good economic data is also good; while this is clearly not a sustainable trend, it will likely continue until the market has come to a consensus on the timing of the next Fed move and investors get a grasp of all the underlying geopolitical, economic and commodity-related issues currently affecting the flow of the financial markets. In the meantime, we can expect more volatility as investors continue to position themselves for the latter months of the year, when we will likely have some answers to the many questions currently overhanging the markets. Bellwether Indices See Legal Disclaimer and Important Disclosure Footnotes at the end of this report for disclosures, including potential conflicts of interest. S&P/TSX COMPOSITE INDEX S&P 500 INDEX DOW JONES INDUS. AVG NASDAQ COMPOSITE INDEX Price 31-May-15 15,014 2,107 18,011 5,070 1 mo -1.4 1.0 1.0 2.6 Price Performance (% Change) 3 mo 6 mo 12 mo -1.4 1.8 2.8 0.1 1.9 9.6 -0.7 1.0 7.7 2.1 5.8 19.5 YTD 2.6 2.4 1.1 7.1 Source: Bloomberg www.cibcwoodgundy.com Investment Strategy Group Index Return Monitor Canadian & U.S. Yield Curve Steepens Canada & U.S. Yields European Bunds sold off in the month of May triggering a selloff of U.S. treasuries, which pushed yields higher. Nearly all yields moved higher with the exception of the shorter end of the Canadian yield curve. Both the U.S. and Canada saw their respective yield curve steepen during the month. 3-month Canada T-Bills Canada 5yr Notes Canada 10yr Notes Canada 30yr Bonds US US US US 3-month T-Bills 5yr Treasuries 10yr Treasuries 30yr Treasuries 31-May-15 0.61 0.89 1.62 2.21 -1 mo 0.66 0.98 1.58 2.18 Yield as of -3 mo 0.57 0.73 1.30 1.92 -6 mo 0.91 1.38 1.86 2.42 -12 mo 0.93 1.53 2.25 2.78 0.00 1.49 2.12 2.88 0.00 1.43 2.03 2.74 0.01 1.50 1.99 2.59 0.01 1.48 2.16 2.89 0.03 1.54 2.48 3.33 Source: Bloomberg Greenback Strengthens Despite Weaker Economic Data The U.S. dollar gained against both the loonie and the euro in May, despite some weaker-thanexpected U.S. economic data. The two bright spots on the data front were the U.S. housing & unemployment numbers, which continued to improve. The U.S. added 223,000 new jobs in April, which was generally in-line with consensus. Currency Moves Canadian vs. U.S. Dollar Euro vs. Canadian Dollar Euro vs. U.S. Dollar U.S. Dollar vs. Japanese Yen Trade Weighted U.S. Dollar Level 31-May-15 0.8030 1.3686 1.0986 124.1500 96.9070 1 mo -3.0% 1.0% -2.1% 4.0% 2.4% 3 mo 0.5% -2.2% -1.9% 3.8% 1.7% Change 6 mo -8.3% -3.7% -11.8% 4.7% 9.7% 12 mo -12.9% -7.5% -19.4% 22.0% 20.6% YTD -6.7% -2.7% -9.2% 3.6% 7.4% Source: Bloomberg Lumber Rebounds; WTI’s Discount To Brent Narrows Commodities Lumber prices recovered in May after a long period of poor performance. Oil pushed lower and the spread between Brent crude oil and West Texas Intermediate oil narrowed. Gold and silver gained some ground while base metals fell. RJ CRB Commodity Index Gold Spot US$/oz Silver Spot US$/oz Brent Crude Oil West Texas Intermediate Oil NYMEX Natural gas Lumber Copper 3-month Nickel 3-month Aluminum 3-month Zinc 3-month Level 31-May-15 223.18 1190.55 16.75 61.86 60.30 2.64 274.10 2.73 5.72 0.79 0.99 -1 mo 229.49 1184.37 16.15 64.60 60.71 2.75 256.30 2.87 6.33 0.87 1.06 -3 mo 224.08 1213.22 16.60 61.14 55.44 2.73 297.20 2.67 6.39 0.82 0.94 Price as of -6 mo -12 mo 254.37 305.48 1167.41 1249.73 15.46 18.82 74.40 110.40 67.26 92.89 4.09 4.54 327.70 312.30 2.88 3.10 7.38 8.73 0.91 0.83 1.00 0.93 YTD % -2.95 0.48 6.67 7.90 7.18 -8.55 -17.22 -4.52 -16.70 -6.07 0.46 Source: Bloomberg 2 June 10, 2015 Investment Strategy Group Index Return Monitor U.S. Stock Market Outperformance Stronger In C$ Terms Index Returns In Canadian Dollars The U.S. dollar’s strength exacerbated the U.S. equity indices’ outperformance in Canadian dollar terms. The S&P 500’s 1.0% climb last month translated into a 4.2% gain in Canadian dollars, outperforming the TSX by a whopping 560 basis points. S&P/TSX COMPOSITE INDEX S&P 500 INDEX DOW JONES INDUS. AVG. NASDAQ COMPOSITE INDEX BLOOMBERG EUROPEAN 500 MSCI EAFE MSCI WORLD MSCI EMERGING MARKETS Price Performance % Change 3 mo 6 mo 12 mo -1.4 1.8 2.8 -0.4 11.2 25.8 -1.2 10.2 23.7 1.6 15.4 37.2 -1.0 9.8 6.6 0.2 12.6 11.4 -0.1 11.6 19.1 0.9 9.0 12.2 1 mo -1.4 4.2 4.1 5.8 1.4 2.1 3.2 -1.2 YTD 2.6 9.7 8.3 14.7 12.5 14.7 11.5 12.5 Source: Bloomberg, as of May 31, 2015 Aggressive Growth Mandates Lead Once Again Long-Term Strategic Asset Allocation Investor Profiles (All In C$) Investor profiles with heavier equity weightings outperformed again last month, as investors dismissed weak economic data and resumed risk-on positions. (Global Equity/Cdn. Equity/Bonds/Cash) CAPITAL PRESERVATION (10 / 5 / 65 / 20) INCOME (20 / 15 / 55 / 10) INCOME & GROWTH (30 / 20 / 45 / 5) GROWTH (45 / 25 / 30 / 0) AGGRESSIVE GROWTH (60 / 30 / 10 / 0) 1 mo 0.4 0.6 0.8 1.2 1.6 Performance % Change 3 mo 6 mo 12 mo -1.0 4.1 7.1 -0.9 5.1 8.7 -0.8 6.0 10.1 -0.6 7.3 12.2 -0.4 8.4 13.9 YTD 2.1 3.9 5.3 7.0 8.4 Source: Bloomberg and FTSE TMX Global Debt Capital Markets, as of May 31, 2015 S&P Outperforms Canadian Bonds; TSX Underperforms Asset Class Returns 1 mo The S&P 500 outperformed the TSX on a total return basis, primarily due to weakening commodity prices. Canadian bonds provided investors with marginal gains in the month, with the exception of the long term index. Total Return % Change 3 mo 6 mo 12 mo YTD Index Yield % 31-May-15 2.8 2.0 EQUITIES S&P/TSX Composite Total Return S&P 500 Total Return -1.2 1.3 -0.7 0.6 3.3 3.0 5.8 11.8 3.8 3.2 BONDS FTSE TMX FTSE TMX FTSE TMX FTSE TMX 0.2 -0.1 0.3 0.4 -1.5 -3.4 -1.3 -0.1 3.9 12.4 13.6 9.4 7.1 12.7 7.3 3.3 2.9 4.2 3.3 1.9 Canada Canada Canada Canada Bond Universe Index Long Term Index Mid Term Index Short Term Index Source: Bloomberg and FTSE TMX Global Debt Capital Markets, as of May 31, 2015 3 June 10, 2015 Investment Strategy Group Index Return Monitor Health Care Heads Higher; Base Metals Retreat S&P/TSX Sector Returns Health Care was the best performing sector on the TSX, reclaiming the lead position it enjoyed in March, after giving up the top spot to the energy sector in April. Year to date, the health care sector has gained 66.3%; this is due almost entirely to Valeant Pharmaceuticals’ 83.5% weight in the Canadian health care sector and its 78% year-to-date price return. The base metals sub sector took a step back this month as base metals prices pushed lower. GICS Sectors Consumer Discretionary Consumer Staples Energy - Integrated O&G - O&G Expl. & Prod. - Pipeline Financials - Banks - Insurance - REITs Health Care Industrials Info Technology Materials - Gold - Base Metals - Fertilizer Telecom Services Utilities REIT Returns REIT Index REIT Total Return Index Index Weight Price Index 31-May-15 1 mo Price Performance % Change 3 mo 6 mo 12 mo 6.7 3.6 20.6 4.7 7.3 6.8 34.7 21.4 5.6 2.4 6.1 7.9 2.4 11.0 4.5 1.6 2.7 4.7 2.1 2012.6 3823.4 2643.9 3141.9 2007.5 2577.0 2281.1 2667.5 1179.1 1327.6 3369.5 2274.2 209.4 2083.8 1327.2 5188.4 6262.0 1282.7 1956.4 4.9 1.6 -6.3 -8.2 -6.8 -4.4 -1.7 -2.2 1.3 -5.6 11.4 -3.5 0.2 -0.8 0.3 -9.9 0.8 1.7 -3.2 0.2 -2.1 -0.7 -3.8 0.5 -0.3 -0.9 -0.8 2.2 -6.5 19.5 -7.9 -3.4 -8.1 -9.5 -2.5 -11.9 -1.9 -4.3 9.4 9.6 -1.8 -4.1 -3.6 4.2 -3.8 -7.2 -1.3 -2.4 67.4 -6.3 13.8 6.1 8.7 -2.8 5.3 -0.9 -2.4 27.0 39.8 -20.1 -19.7 -33.8 5.7 4.9 0.3 12.7 -0.7 96.8 6.5 39.3 -4.2 -8.8 -20.8 9.4 5.2 4.1 7.0 1.5 -1.7 -5.1 2.9 -4.4 -0.6 -3.0 0.6 1.3 66.3 -5.7 8.5 5.3 8.6 2.8 2.3 0.6 -0.3 160.3 374.4 -5.6 -5.2 -6.5 -5.3 -2.4 0.4 -0.7 5.0 1.3 3.6 YTD Source: Bloomberg Japan Outpaces Europe; Emerging Markets Lose Ground International Indices Japan’s Nikkei 225 led all other Asian and European indices in May. The index hit a 15-year high and saw 11 straight positive trading sessions in the month — its longest streak in nearly 27 years. Strong economic and corporate data helped boost Japanese equities. Emerging markets were down in May as weaker oil and the strong U.S. dollar weighed on Latin American equities. Bloomberg Euro 500 FTSE Eurotop 100 England FTSE 100 German DAX French CAC 40 MSCI World MSCI EAFE MSCI Emerging Mkts. Japan Nikkei 225 Hong Kong Hang Seng Australia S&P/ASX 200 Taiwan Weighted India Sensex 30 Index Price Index 31-May-15 270 3,170 1 mo 0.5 0.5 Price Performance % Change 3 mo 6 mo 12 mo 1.4 14.0 15.2 1.0 12.4 13.8 YTD 15.6 15.0 6,984 11,414 5,008 1,779 1,899 1,004 20,563 27,424 5,777 9,701 27,828 0.3 -0.4 -0.8 0.1 -1.0 -4.2 5.3 -2.5 -0.2 -1.2 3.0 0.5 0.1 1.1 0.4 0.7 1.4 9.4 10.5 -2.6 0.8 -5.2 6.4 16.4 17.2 4.1 7.0 5.0 17.8 16.2 6.8 4.2 1.2 3.9 14.4 14.1 2.3 3.2 0.0 17.8 14.3 8.7 5.6 -3.0 2.0 14.8 10.8 3.7 -2.9 -2.3 40.5 18.8 5.2 6.9 14.9 Source: Bloomberg 4 June 10, 2015 Investment Strategy Group Index Return Monitor U.S. Small Caps Outperform Small Cap Stocks Versus Large Cap Stocks U.S. equities saw significant gains relative to their Canadian counterparts. While U.S. small caps generated the largest absolute gains, U.S. midcap stocks enjoyed the largest positive outperformance; the S&P 400 Midcap Index outperformed its Canadian counterpart by 320 basis points. CANADA S&P/TSX 60 INDEX S&P/TSX MIDCAP INDEX S&P/TSX SMALLCAP INDEX S&P/TSX VENTURE COMP INDEX U.S. S&P 100 INDEX S&P 500 INDEX RUSSELL 1000 INDEX S&P 400 MIDCAP INDEX S&P 600 SMALLCAP INDEX RUSSELL 2000 INDEX Price Index 31-May-15 1 mo Price Performance % Change 3 mo 6 mo 12 mo 875.0 978.3 600.0 692.5 -1.3 -1.6 0.1 -0.5 -1.7 -0.6 0.3 -2.0 1.4 3.1 2.9 -6.7 4.6 -2.1 -9.9 -29.6 2.4 3.4 3.6 -0.4 926.1 2107.4 1176.7 1524.7 712.9 1246.5 1.1 1.0 1.1 1.6 1.4 2.2 0.1 0.1 0.3 1.2 0.4 1.1 1.1 1.9 2.4 5.7 5.3 6.2 8.6 9.6 9.8 10.6 9.2 9.9 2.0 2.4 2.8 5.0 2.6 3.5 YTD Source: Bloomberg Canadian Value Underperforms All Others Style Indices Growth investing was preferred by investors over the course of the past month, although both investment disciplines generally generated positive returns. The lone negative return came from the Dow Jones Canada Value Index Price Index 31-May-15 1 mo Price Performance % Change 3 mo 6 mo 12 mo GROWTH DJ CANADA GROWTH INDEX S&P BARRA GROWTH INDEX RUSSELL 1000 GROWTH INDX S&P MID 400 BARRA GROWTH S&P 600 BARRA GROWTH INDX RUSSELL 2000 GROWTH INDX 1828.3 1167.6 1011.0 693.9 526.4 772.9 0.1 1.6 1.2 2.5 2.1 3.6 -1.3 0.2 0.4 2.0 1.2 2.3 12.9 3.0 3.9 7.1 8.4 10.1 24.9 12.7 13.0 13.1 12.7 17.0 9.5 4.1 5.2 7.0 5.3 7.0 VALUE DJ CANADA VALUE INDEX S&P BARRA VALUE INDEX RUSSELL 1000 VALUE INDX S&P MID 400 BARRA VALUE S&P 600 BARRA VALUE INDX RUSSELL 2000 VALUE INDX 3258.2 932.4 1032.5 525.5 474.3 1521.7 -2.4 0.4 0.9 0.7 0.7 0.6 -2.3 0.1 0.2 0.3 -0.4 -0.2 -3.7 0.8 0.8 4.0 2.3 2.4 -2.9 6.2 6.5 7.9 5.7 3.0 -1.6 0.5 0.4 2.7 -0.3 -0.1 YTD Source: Bloomberg 5 June 10, 2015 Investment Strategy Group Index Return Monitor Long-Term Returns Long-Term Returns (As Of 31-May-15) S&P/TSX Composite (price) S&P/TSX Composite Total Return S&P/TSX Income Trust Total Return Dow Jones Industrial Average Dow Jones Industrial Avg TR S&P 500 S&P 500 Total Return Nasdaq Comp FTSE 100 Index German DAX France CAC 40 Japan Nikkei 225 MSCI World MSCI (EMU) Europe MSCI Emerging Markets MSCI Emerging Markets Total Return MSCI EAFE MSCI EAFE Total Return MSCI Far East 1 yr 2.8 5.8 9.5 7.7 10.3 9.6 11.8 19.5 2.0 14.8 10.8 40.5 3.7 -9.3 -2.3 2.7 -2.9 -0.1 12.8 2 yr 8.9 12.2 7.3 9.2 11.8 13.7 16.0 21.1 3.0 16.9 12.6 22.2 9.9 6.3 -0.2 3.8 5.6 8.8 8.6 Return % 3 yr 9.3 12.6 8.3 13.3 16.1 17.2 19.7 21.5 9.5 22.1 18.4 34.0 14.7 15.6 3.5 8.4 12.5 16.1 13.4 Change (Annualized) 5 yr 10 yr 15 yr 5.0 4.6 3.2 8.1 7.5 5.7 15.1 na na 12.2 5.6 3.6 15.1 8.4 6.2 14.1 5.9 2.7 16.5 8.1 4.7 17.6 9.4 2.6 6.1 3.5 0.6 13.9 9.9 3.2 7.4 2.0 -1.5 16.1 6.2 1.6 10.5 4.5 1.9 5.8 1.4 0.0 1.6 6.2 5.9 5.8 8.8 na 6.8 2.7 1.1 10.4 6.0 na 6.8 3.2 0.2 20 yr 6.3 8.7 na 7.2 na 7.1 na 9.2 na 8.8 na 1.4 5.0 na na na 2.9 na -0.1 Source: Bloomberg, CIBC World Markets Long-Term Returns In Canadian Dollars (As Of 31-May-15) S&P/TSX Composite (price) S&P/TSX Composite Total Return Dow Jones Industrial Average (in C$) Dow Jones Industrial Avg. Tot. Ret. (in C$) S&P 500 (in C$) S&P 500 Total Return (in C$) Russell 2000 (in C$) Nasdaq Comp (in C$) MSCI World (in C$) MSCI EMU Europe (in C$) MSCI Emerging Markets (in C$) MSCI EAFE (in C$) MSCI Far East (in C$) 1 yr 2.8 5.8 23.7 26.6 25.8 28.4 26.2 37.2 19.1 4.1 12.2 11.4 29.5 Return % Change (Annualized) 2 yr 3 yr 5 yr 10 yr 15 yr 8.9 9.3 5.0 4.6 3.3 12.2 12.6 8.1 7.5 5.8 19.6 20.6 16.2 5.5 2.4 22.5 23.6 19.2 8.3 4.9 24.5 24.7 18.2 5.8 1.4 27.1 27.4 20.7 8.0 3.4 23.3 25.4 17.6 7.2 5.3 32.7 29.3 21.8 9.3 1.4 20.5 22.1 14.5 4.5 0.7 16.5 23.0 9.6 1.3 -1.2 9.3 10.1 5.3 6.2 4.5 15.7 19.8 10.7 2.6 -0.2 19.0 20.7 10.7 3.1 -1.0 20 yr 6.3 8.7 6.7 na 6.6 na 7.4 8.7 4.5 na na 2.4 -0.5 Source: Bloomberg, CIBC World Markets, Canadian Dollar-based returns 6 June 10, 2015 Investment Strategy Group Index Return Monitor Disclosures And Disclaimers Companies Mentioned In This Report That Are Covered By CIBC World Markets (Stock prices as of 10-Jun-15) Valeant Pharmaceuticals International (2a, 2e, 2g, 4a, 4b, 7, 9) (VRX-NYSE, US$229.18, Sector Outperformer) Key To Important Disclosure Footnotes: 1 2a 2b 2c 2d 2e 2f 2g 3a 3b 3c 4a 4b 4c 5a 5b 6a 6b 6c 7 8 9 10 11 12 13 14 CIBC World Markets Corp. makes a market in the securities of this company. This company is a client for which a CIBC World Markets company has performed investment banking services in the past 12 months. CIBC World Markets Corp. has managed or co-managed a public offering of securities for this company in the past 12 months. CIBC World Markets Inc. has managed or co-managed a public offering of securities for this company in the past 12 months. CIBC World Markets Corp. has received compensation for investment banking services from this company in the past 12 months. CIBC World Markets Inc. has received compensation for investment banking services from this company in the past 12 months. CIBC World Markets Corp. expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months. CIBC World Markets Inc. expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months. This company is a client for which a CIBC World Markets company has performed non-investment banking, securities-related services in the past 12 months. CIBC World Markets Corp. has received compensation for non-investment banking, securities-related services from this company in the past 12 months. CIBC World Markets Inc. has received compensation for non-investment banking, securities-related services from this company in the past 12 months. This company is a client for which a CIBC World Markets company has performed non-investment banking, non-securities-related services in the past 12 months. CIBC World Markets Corp. has received compensation for non-investment banking, non-securities-related services from this company in the past 12 months. CIBC World Markets Inc. has received compensation for non-investment banking, non-securities-related services from this company in the past 12 months. The CIBC World Markets Corp. analyst(s) who covers this company also has a long position in its common equity securities. A member of the household of a CIBC World Markets Corp. research analyst who covers this company has a long position in the common equity securities of this company. The CIBC World Markets Inc. fundamental analyst(s) who covers this company also has a long position in its common equity securities. A member of the household of a CIBC World Markets Inc. fundamental research analyst who covers this company has a long position in the common equity securities of this company. One or more members of Investment Strategy Group who was involved in the preparation of this report, and/or a member of their household(s), has a long position in the common equity securities of this company. CIBC World Markets Corp., CIBC World Markets Inc., and their affiliates, in the aggregate, beneficially own 1% or more of a class of equity securities issued by this company. A partner, director or officer of CIBC World Markets Inc. or any analyst involved in the preparation of this research report has provided services to this company for remuneration in the past 12 months. A senior executive member or director of Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC World Markets Corp., or a member of his/her household is an officer, director or advisory board member of this company or one of its subsidiaries. Canadian Imperial Bank of Commerce ("CIBC"), the parent company to CIBC World Markets Inc. and CIBC World Markets Corp., has a significant credit relationship with this company. The equity securities of this company are restricted voting shares. The equity securities of this company are subordinate voting shares. The equity securities of this company are non-voting shares. The equity securities of this company are limited voting shares. CIBC World Markets Research Rating System Abbreviation Stock Ratings SO SP SU NR R Sector Weightings** O M U NA Rating Description Sector Outperformer Sector Performer Sector Underperformer Not Rated Restricted Stock is expected to outperform the sector during the next 12-18 months. Stock is expected to perform in line with the sector during the next 12-18 months. Stock is expected to underperform the sector during the next 12-18 months. CIBC does not maintain an investment recommendation on the stock. CIBC World Markets is restricted*** from rating the stock. Overweight Market Weight Underweight None Sector Sector Sector Sector is expected to outperform the broader market averages. is expected to equal the performance of the broader market averages. is expected to underperform the broader market averages. rating is not applicable. **Broader market averages refer to the S&P 500 in the U.S. and the S&P/TSX Composite in Canada. "Speculative" indicates that an investment in this security involves a high amount of risk due to volatility and/or liquidity issues. ***Restricted due to a potential conflict of interest. "CC" indicates Commencement of Coverage. The analyst named started covering the security on the date specified. 7 June 10, 2015 Investment Strategy Group Index Return Monitor This report is issued and approved for distribution to clients in Canada by registered representatives of CIBC Wood Gundy, a division of CIBC World Markets Inc., a subsidiary of CIBC, Member of the Canadian Investor Protection Fund and Member of the Investment Industry Regulatory Organization of Canada, and by its affiliates via their registered representatives. This report is not authorized for distribution in the United States. This document and any of the products and information contained herein are not intended for the use of private investors in the United Kingdom. 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CIBC Wood Gundy suggests that, prior to making an investment decision with respect to any security recommended in this report; the recipient should contact one of our client advisers in the recipient’s jurisdiction to discuss the recipient’s particular circumstances. Non-client recipients of this report should consult with an independent financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. CIBC Wood Gundy will not treat non-client recipients as its clients by virtue of their receiving this report. Past performance is not a guarantee of future results, and no representation or warranty, express or implied, is made regarding future performance of any security mentioned in this report. Information, opinions and statistical data contained in this report were obtained or derived from sources believed to be reliable, but CIBC Wood Gundy does not represent that any such information, opinion or statistical data is accurate or complete (with the exception of information contained in the Important Disclosures section of this report provided by CIBC World Markets or individual research analysts), and they should not be relied upon as such. All estimates, opinions and recommendations expressed herein constitute judgments as of the date of this report and are subject to change without notice. Nothing in this report constitutes legal, accounting or tax advice. Since the levels and bases of taxation can change, any reference in this report to the impact of taxation should not be construed as offering tax advice on the tax consequences of investments. As with any investment having potential tax implications, clients should consult with their own independent tax adviser. © 2015 CIBC World Markets Inc. All rights reserved. Unauthorized use, distribution, duplication or disclosure without the prior written permission of CIBC World Markets is prohibited by law and may result in prosecution. 8 June 10, 2015