Month: September 2012

Dear Friends,

Tangents:

September 12^th, 1940 – The Lascaux Caves in France, with their prehistoric wall paintings, are discovered.

1940 – The Lascaux Caves in France, with their prehistoric wall paintings, are discovered.
And also on this day in…

1880 – H.L. Mencken, critic,  was born.

1888 – Maurice Chevalier was born.

1944 – American troops fight their way into Germany.
1945 – French troops land in Indochina.
1969 – President Richard Nixon orders a resumption in bombing North Vietnam.

An idealist is one who, on noticing  that a rose smells better than a cabbage, concludes that it will also make better soup. –H. L. Mencken

What small act of kindness were you once shown that you will never forget?

photos of the day September 12, 2012

Local residents visit the Shanghai International Lantern Festival in Luxun Park at Hongkou district in Shanghai. According to Chinese tradition, people try to solve puzzles on lanterns, eat Yuanxiao (glutinous rice ball) and enjoy family reunions during the festival.

Carlos Barria/Reuters

Market Closes for September 12^th, 2012:

Market  Index	Close	Change
Dow  Jones	13333.35	+9.99
		+0.07%
S&P 500	1436.56	+3.00
		+0.21%
NASDAQ	3114.31	+9.79
		+0.32%
TSX	12232.62	+12.17
		+0.10%

International Markets

Market  Index	Close	Change
NIKKEI	8959.96	+152.58
		+1.73%
HANG  SENG	20075.39	+217.51
		+1.10%
SENSEX	18000.03	+147.08
		+0.82%
FTSE 100	5782.08	-10.11
		-0.17%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.901	1.855
CND.   30 Year Bond	2.495	2.444
U.S.   10 Year Bond	1.7576	1.7005
U.S.   30 Year Bond	2.9215	2.8529

Currencies

BOC Close	Today	Previous
Canadian $	0.97589	0.97336
US   $	1.02478	1.02736
Euro Rate  1 Euro=		Inverse
Canadian   $	1.25899	0.79429
US  $	1.29010	0.77513

Commodities

Gold	Close	Previous
London Gold   Fix	1731.50	1734.65
Oil	Close	Previous
WTI Crude Future	97.01	97.17
BRENT	115.72	114.54

Market Commentary:

Canada

By Eric Lam

Sept. 12 (Bloomberg) — Canadian stocks rose for a second day as the U.S. Federal Reserve began a two-day meeting amid speculation of another round of economic stimulus and a German court cleared the way for Europe’s bailout fund.

SouthGobi Resources Ltd. gained 0.9 percent after ousting its chief executive officer. North American Palladium gained 5 percent as prices for the metal advanced for an eighth day. Niko Resources Ltd. dropped 33 percent after plugging and abandoning a well in Indonesia. Petrominerales Ltd. lost 14 percent after reporting a decline in production.

The Standard & Poor’s/TSX Composite Index advanced 12.17 points, or 0.1 percent, to 12,232.62 in Toronto, after falling 0.2 percent earlier. The benchmark equity gauge has climbed 2.3 percent this year.

“Everyone’s waiting for the Fed,” said Anil Tahiliani, portfolio manager with McLean & Partners Wealth Management in Calgary. The firm manages about C$1 billion ($1.02 billion).

“If they disappoint the market and don’t actually announce QE3, it could pull back 3 to 5 percent. But I don’t think it will be a major drop off as U.S. economic data remains weak,” he said, referring to a third round of quantitative easing, or government bond purchases.

U.S. Fed Chairman Ben S. Bernanke and the Federal Open Market Committee began two days of meetings today, with almost two-thirds of economists in a Bloomberg survey expecting an announcement tomorrow of another round of bond purchases to stimulate the economy.

In Europe, Germany’s Federal Constitutional Court dismissed motions that sought to block the European Stability Mechanism, while ruling the nation’s 190 billion euro ($245 billion) contribution can’t be increased without legislative approval.

Much of the effort to resolve the crisis hinges on the permanent ESM, which will succeed the temporary European Financial Stability Facility.

Niko Resources, the worst-performing stock on the S&P/TSX this year, tumbled 33 percent to C$9 after the oil and gas exploration company said yesterday its Lebah-1 well in Indonesia has been plugged and abandoned after gas was discovered in only one of a “number of” geological formations.

Petrominerales, a Calgary-based company focused on oil and gas exploration in Colombia and Peru, sank 14 percent to C$8.21 after saying production declined in August. Nathan Piper, equity analyst with RBC Capital Markets, also downgraded the company to sector perform from outperform.

SouthGobi, a coal miner with operations in Mongolia which has lost 63 percent of its value this year, added 0.9 percent to C$2.20 after firing Chief Executive Officer Alexander Molyneux, effective immediately. The move comes eight days after Aluminum Corp. of China Ltd. dropped its C$925 million ($949 million) takeover bid. Molyneux will be replaced by Ross Tromans, who formerly managed coal marketing with Rio Tinto Group.

North American Palladium added 5 percent to C$2.09 as the metal rose.

Agrium Inc. rose 2.1 percent to C$101 after P.J. Juvekar, an analyst with Citi Research, raised the stock to buy from neutral with a new target price of $118 from $104.

“It has more room to run,” Juvekar said, citing increased demand for seeds, nitrogen, crop protection chemicals and services.

US

By Inyoung Hwang

Sept. 12 (Bloomberg) — U.S. stocks rose, with benchmark indexes trading near four-year highs, as a German court cleared the way for Europe’s bailout fund and investors weighed prospects for stimulus measures from the Federal Reserve.

Apple Inc. rallied 1.4 percent, reversing an earlier decline, after introducing the iPhone 5. General Electric Co.

and JPMorgan Chase & Co. added at least 0.8 percent, pacing gains among the biggest companies. PulteGroup Inc. advanced 6 percent as homebuilders rallied. Facebook Inc. climbed 7.7 percent after Chief Executive Officer Mark Zuckerberg said he’s addressing missteps that made it hard to reap the benefits of mobile advertising.

The Standard & Poor’s 500 Index added 0.2 percent to 1,436.56 at 4 p.m. in New York, near a four-year high set last week. The Dow Jones Industrial Average rose 9.99 points, or 0.1 percent, to 13,333.35 today. About 6.2 billion changed hands on U.S. exchanges today, 2.5 percent above the three-month average.

“All eyes are expecting some sort of quantitative easing,” Joseph Tanious, a New York-based strategist at JPMorgan Funds, which oversees $394 billion, said in a telephone interview. “Central bank accommodation has been what’s helped propel this market higher.” He said, “The tail risk is being eliminated in Europe. Getting the ruling from the German Constitutional Court reinforces that we’re stepping in the right direction.”

The Fed began a two-day meeting today amid speculation policy makers will provide more stimulus. The central bank will probably announce a third round of bond purchases tomorrow, according to almost two-thirds of economists in a Bloomberg survey. The central bank will also likely commit to hold interest rates close to zero into 2015, the survey showed.

Chairman Ben S. Bernanke and his colleagues on the Federal Open Market Committee will opt for further quantitative easing to support an economy that grew at less than 2 percent in the second quarter, according to economists. The unemployment rate has remained above 8 percent for 43 consecutive months. Since Aug. 1, the S&P 500 has climbed more than 4 percent amid expectations of further easing by the central bank.

“Bernanke has adopted a very important guideline, and that is if he’s going to be wrong in the next two or three years, it’s because he kept rates too low for too long,” John Manley, who helps oversee about $204 billion as chief equity strategist for Wells Fargo Advantage Funds in New York, said in a telephone interview. “You want to err on the side of the angels, and I think he feels the angels are saying pay low rates in interest at this time.”

Stocks rose earlier as Germany’s Federal Constitutional Court dismissed motions that sought to stop the government from contributing to the rescue facility known as the European Stability Mechanism. The legal challenge delayed efforts by Chancellor Angela Merkel and other euro-area policy makers to stem the region’s debt crisis. The judges ruled that parliament must approve any increase of the country’s 190 billion euros ($245 billion) of liabilities.

The S&P 500 briefly extended gains after Bloomberg News reported France is pressing Spain to snub German concerns and request help from the European Union to contain the euro-area financial crisis, according to three people familiar with negotiations.

Telephone, industrial and financial stocks led gains among 10 groups in the S&P 500 today. General Electric added 1.4 percent to $21.89, the highest since October 2008. JPMorgan, the largest U.S. bank by assets, advanced 0.8 percent to $39.92, while property and casualty insurer Travelers Cos. climbed 0.9 percent to a record $67.54.

Apple rose 1.4 percent to $669.79 after falling as much as 0.7 percent. The world’s most valuable company introduced a new version of the iPhone that boasts a bigger screen, faster chip and access to speedier wireless networks, an overhaul aimed at widening its lead over Samsung Electronics Co. and Google Inc.

Coming almost a year after the death of Apple co-founder Steve Jobs, the next iPhone is the first hardware redesign of the product since 2010. Technology stocks rose 0.4 percent as a group.

PulteGroup rallied 6 percent to $15.55 for the second- biggest gain in the S&P 500. Ten of 11 companies in the S&P Supercomposite Homebuilding Index rallied as Credit Suisse Group AG’s August survey of real estate agents showed momentum in prices is continuing and Goldman Sachs Group Inc.’s Hui Shan wrote in a note that housing starts are showing signs of improvement after staying at depressed levels since 2009.

Weyerhaeuser Co.’s Chief Financial Officer Patricia Bedient said at a UBS AG conference that she sees a slow, steady housing recovery.

Facebook, the world’s largest social-networking website, rose 7.7 percent to $20.93 after Zuckerberg said yesterday at the TechCrunch Disrupt conference in San Francisco that the company should generate more revenue from mobile devices than from desktop computers. Shares extended gains after Apple said the iPhone 5 has a built-in application for the social network that enables photo sharing and voice-activated posts.

The remarks helped allay concerns over Facebook’s ability to generate sales from users who increasingly socialize over handheld devices. The stock had plunged 49 percent since the May 17 IPO amid signs of slowing growth and executives’ silence over plans to turn the tide. Zynga Inc. jumped 10 percent to $3.07 after Zuckerberg also said business with the largest maker of social games is strong.

Kohl’s Corp. jumped 3.4 percent to $53.77. Deutsche Bank AG’s Charles P. Grom lifted his rating on the third-largest U.S. department store to buy from hold, citing valuations and improving same-store sales.

The S&P 500 will climb another 2 percent before the benchmark U.S. equities gauge reaches a resistance level near 1,450 to 1,460, according to Bill McNamara, a technical analyst at Charles Stanley & Co. in Joenkoeping, Sweden.

Gains are set to continue as the measure is trading above key short-term moving averages, including the 21-day mean, and has held on to last week’s advance, which pushed it to the highest since 2008, McNamara said.

 

Have a wonderful evening everyone.

Be magnificent!

 

We cross the infinite with every step, and encounter the eternal with every second.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

 

I don’t want to live – I want to love first,

and live incidentally.

-Zelda Fitzgerald, 1900-1948

Letter to F. Scott Fitzgerald, 1919

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

 

Dear Friends,

Tangents:

Sptember 11, 2001: In an unprecedented, highly coordinated attack, terrorists hijack four U.S. passenger airliners, flying two into the World Trade Center towers in New York and one into the Pentagon, killing thousands. The fourth airliner, headed toward Washington likely to strike the White House or Capitol, is crashed just over 100 miles away in Pennsylvania after passengers storm the cockpit and overtake the hijackers.

Ground Zero – March 17, 2012

September 11, 2012:  Someone stops to read names in New Jersey’s memorial to the 749 people from the state lost during the Sept. 11 terrorist attacks on the World Trade Center, as One World Trade Center, now up to 104 floors, looms in the distance across the Hudson River from Jersey City, N.J. Americans paused today to mark the 11th anniversary of the terrorist attacks.

Mel Evans/AP

And also on this day in…

1862 – O. Henry, author, is born.

1885 – D.H. Lawrence is born.
1916 – The “Star Spangled Banner” is sung at the beginning of a baseball game for the first time in Cooperstown, New York.
1962 – Thurgood Marshall is appointed a judge of the 2nd Circuit Court of Appeals.
1965 – The 1st Cavalry Division (Airmobile) arrives in South Vietnam and is stationed at An Khe.
1974 – Haile Selassie I is deposed from the Ethiopian throne.

Sorrow was like the wind.  It came in gusts. – Marjorie Kinnan  Rawlings, 1896-1953

photos of the day September 11, 2012

A young Bavarian herdswoman rests after the return of cattle from summer pastures in the mountains near Bad Hindelang, southern Germany. At the end of the summer season, farmers move their herds down from the Alps to the winter pastures in the valley.

Matthias Schrader/AP

A woman watches a model present a creation from the Rodarte Spring/Summer 2013 collection during New York Fashion Week.

Lucas Jackson/Reuters

Market Closes for September 11^th, 2012:

Market  Index	Close	Change
Dow  Jones	13323.36	+69.07
		+0.52%
S&P 500	1433.56	+4.48
		+0.31%
NASDAQ	3104.53	+.50
		+0.02%
TSX	12220.45	+5.02
		+0.04%

International Markets

Market  Index	Close	Change
NIKKEI	8807.38	-61.99
		-0.70%
HANG  SENG	19857.88	+30.71
		+0.15%
SENSEX	17852.95	+86.17
		+0.49%
FTSE 100	5792.19	-1.01
		-0.02%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.855	1.828
CND.   30 Year Bond	2.444	2.421
U.S.   10 Year Bond	1.7005	1.6541
U.S.   30 Year Bond	2.8529	2.8057

Currencies

BOC Close	Today	Previous
Canadian $	0.97336	0.97718
US   $	1.02736	1.02336
Euro Rate  1 Euro=		Inverse
Canadian   $	1.25104	0.79932
US  $	1.28528	0.77804

Commodities

Gold	Close	Previous
London Gold   Fix	1734.65	1725.40
Oil	Close	Previous
WTI Crude Future	97.17	96.54
BRENT	114.54	114.64

Market Commentary:

Canada

By Eric Lam

Sept. 11 (Bloomberg) — Canadian stocks rose, erasing losses in the final half hour of trading, as gold and oil rose ahead of a U.S. Federal Reserve policy meeting.

Canadian Natural Resources Ltd. added 1.7 percent as crude increased for a fifth day. San Gold Corp. rallied 9.6 percent after gold advanced for the third time in four days. Royal Bank of Canada, the nation’s largest lender, dropped 1.1 percent after reorganizing its five main business units.

The Standard & Poor’s/TSX Composite Index added 5.02 points, or less than 0.1 percent, to 12,220.45 in Toronto, after slipping as much as 0.2 percent earlier. The benchmark equity gauge has advanced 2.2 percent this year.

“Whatever the Fed is expected to do has already been priced in,” said Danielle Park, portfolio manager with Venable Park Investment Counsel Inc. Her firm manages assets of $1 million or more for at least 250 families. “The trouble is how they can surprise. The Fed doesn’t want to just confirm market beliefs at this point. It’s an ineffective tool unless there’s a surprise factor.”

The U.S. Fed’s Open Market Committee is set for two days of meetings that start tomorrow. Fed Chairman Ben S. Bernanke said on Aug. 31 he wouldn’t rule out steps to lower an unemployment rate he described as a “grave concern.”

Park said there is a greater chance the Fed will disappoint investors, and markets will struggle in the coming months as a global recession kicks in.

Stocks rose earlier after Germany’s Federal Constitutional Court said it would issue its ruling on the 500 billion-euro

($640 billion) European Stability Mechanism bailout plan as scheduled tomorrow, without further comment on the bid to delay the case by lawmaker Peter Gauweiler. He argued the court should delay the ruling after the European Central Bank pledged unlimited funds to buy government bonds.

Canadian Natural Resources advanced 1.7 percent to C$32.18 and Crew Energy Inc. added 2.4 percent to C$7.40, its highest level since April. Crude for October delivery gained 0.7 percent to settle at $97.17 a barrel in New York.

San Gold, which has plunged 46 percent this year, increased 9.6 percent to C$1.03, and Aurizon Mines Ltd. rose 1.8 percent to C$4.61. Gold for December delivery added 0.2 percent to settle at $1,734.90 in New York.

Royal Bank declined 1.1 percent to C$55.81 after the bank said Jim Westlake, head of international banking and insurance, will retire at the end of October. Royal Bank will shuffle its five main business divisions, creating a new investor and treasury services unit to serve institutional clients.

Thompson Creek Metals Co. Ltd., a molybdenum miner that is the third-worst performer on the S&P/TSX materials index this year, surged 4.9 percent to C$3.22. The stock has risen 16 percent this month.

Research In Motion Ltd. rose 4 percent to C$7.27 ahead of a presentation tomorrow from Apple Inc., during which the tech giant is expected to introduce the iPhone 5 smartphone. RIM, which plans to launch its own next-generation BlackBerry 10 line of smartphones next year, has steadily lost market share to competitors such as Apple and Samsung Electronics Co.

Bombardier Inc. added 0.9 percent to C$3.57. Shares have fallen 12 percent this year, compared with a 7.9 percent gain in the S&P/TSX Industrials index. Chief Executive Officer Pierre Beaudoin said the upcoming CSeries jet is “still on target”

for its first flight this year. The first delivery will take place a year after the maiden flight, Beaudoin said in a Bloomberg TV interview today in Tianjin, China.

In July, aerospace unit chief Guy Hachey said issues with the jet’s fly-by-wire system, which electronically transmits pilot commands to plane controls, might delay the flight.

US

By Inyoung Hwang

Sept. 11 (Bloomberg) — U.S. stocks rose, after yesterday’s drop in the Standard & Poor’s 500 Index, amid speculation the Federal Reserve will act to stimulate the economy.

Alcoa Inc. and Caterpillar Inc. climbed at least 1.7 percent, pacing gains among the biggest companies. Eight out of 10 groups in the S&P 500 rose. Morgan Stanley jumped 3.9 percent after saying it will purchase the rest of its brokerage joint venture from Citigroup Inc. Ralph Lauren Corp. led declines among luxury goods companies as Burberry Group Plc said profit will be at the lower end of estimates

The S&P 500 added 0.3 percent to 1,433.56 at 4 p.m. in New York. The Dow Jones Industrial Average gained 69.07 points, or

0.5 percent, to 13,323.36 today. Volume for exchange-listed stocks in the U.S. was 5.9 billion shares, or almost in line with the three-month average.

“The market is anticipating that there will be some stimulus move on the part of the Fed,” John Praveen, chief investment strategist at Prudential International Investments Advisers, a unit of Newark, New Jersey-based Prudential Financial Inc., which manages about $960 billion, said by telephone. “The market is grinding higher on liquidity because of what central banks have done and on hopes of further stimulus from the Fed and positive moves from European policy makers.”

The S&P 500 is less than 10 percent from its record closing high after rising 14 percent this year. The equities index is 20 percent above its level on Sept. 15, 2008, the first trading day after Lehman Brothers Holdings Inc. filed the world’s biggest bankruptcy and prompted a 46 percent drop through March 9, 2009.

The benchmark gauge fell 0.6 percent yesterday as concern Greece’s debt crisis will worsen overshadowed speculation that central banks will take steps to support the global economy.

Equities advanced today ahead of a two-day meeting starting tomorrow in which the Federal Open Market Committee will discuss additional measures to stimulate the U.S. economy. Fed Chairman Ben S. Bernanke said on Aug. 31 he wouldn’t rule out steps to lower an unemployment rate he described as a “grave concern.”

A report from the Commerce Department showed that the country’s trade deficit widened in July for the first time in four months as the global economic slowdown reduced demand for American-made goods. The National Federation of Independent Business’s optimism index rose last month to 92.9 from a nine- month low of 91.2 in July, indicating confidence among small businesses in the U.S. climbed in August as more companies anticipated a pickup in hiring and sales.

U.S. equities also rose as Germany’s Federal Constitutional Court said it will issue a ruling tomorrow on whether to allow the country to ratify the 500 billion-euro ($640 billion) European Stability Mechanism. The court rejected an argument by lawmaker Peter Gauweiler that it delay the decision after the European Central Bank pledged unlimited funds last week to buy government bonds.

The S&P 500 climbed to its highest level since 2008 on Sept. 6 as the ECB approved the bond-buying program to lower borrowing costs for the most-indebted euro-area states.

“Everybody is waiting to see what the Fed and German court will do,” Greg Peterson, director of investment research at Ballentine Partners LLC in Waltham, Massachusetts, which has about $4 billion in assets, said by telephone. “Europe keeps on walking up to the cliff and stepping back just enough not to fall off. Ultimately, through small steps, they’ll come to a solution to this crisis that they’re having.”

Alcoa, the largest U.S. producer of aluminum, jumped 3.1 percent to $9.33, its highest level since May. Caterpillar, the world’s biggest maker of construction and mining equipment, rallied 1.7 percent to $88.60. Cliffs Natural Resources Inc., the largest iron-ore producer in the U.S., added 6.4 percent to $41.68.

Energy companies jumped the most in the S&P 500’s 10 groups, rising 0.9 percent, followed by financial and industrial stocks. The Morgan Stanley Cyclical Index rallied 1 percent as investors bought shares of companies most tied to economic growth. The gauge is up 14 percent from its low this year in June.

Morgan Stanley will purchase 14 percent of its brokerage joint venture from Citigroup at a price that values the total unit at $13.5 billion — or about 40 percent less than Citigroup’s earlier estimate. Citigroup expects the sale to result in a $2.9 billion charge in the third quarter.

Morgan Stanley climbed 3.9 percent to $17.25, while Citigroup advanced 2.6 percent to $32.66. Diversified financial companies posted the biggest gain out of 24 groups in the S&P 500, rising 1.7 percent. Bank of America Corp. jumped 5.2 percent to $9.03, the highest since April.

Green Mountain Coffee Roasters Inc. jumped 5.9 percent to $32.16. Luigi Lavazza SpA said in a filing after the market closed yesterday that it increased its stake to 6.8 percent.

Lavazza owned 5 percent of the maker of Keurig brewers and single-serve pods as of Feb. 24, data compiled by Bloomberg show.

Legg Mason Inc., the money manager reeling from 19 straight quarters of client redemptions, jumped 5.4 percent to $26.85.

The Baltimore-based company said today in a statement that Mark R. Fetting will step down as chairman and chief executive officer on Oct. 1, two months before a standstill agreement with activist investor Nelson Peltz expires.

Ralph Lauren lost 2.6 percent to $156.22, while Tiffany & Co. erased 1.2 percent to $62.26. London-based Burberry said full-year profit will be at the lower end of analyst estimates after sales growth slowed. Coach Inc. fell 1.8 percent to $61.48 after Brean Murray Carret & Co. lowered its rating on the largest U.S. luxury handbag maker to hold from buy.

Airline stocks fell, sending the Bloomberg U.S. Airlines Index 1.4 percent lower. Dahlman Rose & Co.’s Helane Becker cut her estimates for third-quarter sales to reflect higher jet-fuel costs and “cautious” expectations for traffic this month. U.S.

Airways Group Inc. lost 3.2 percent to $11.62, while Southwest Airlines Co. slid 2.2 percent to $8.95.

Moody’s Investors Service, which placed a negative outlook on the U.S.’s Aaa grade in August, said in a statement today that the nation’s rating would likely be cut to Aa1 if negotiations between lawmakers fail to produce policies that reduce the percentage of debt to gross domestic product.

Goldman Sachs Group Inc.’s David Kostin said yesterday a deal to head off automatic tax increases and spending cuts at the start of next year may be “messy” and could hurt stocks.

The so-called fiscal cliff “is unlikely to be resolved in a smooth fashion, and probably will be resolved in a messy way,” Kostin, the New York-based firm’s chief equity strategist, said yesterday at a conference in San Diego sponsored by the Insured Retirement Institute.

The benchmark gauge for U.S. equities slumped within 1 percent of a bear market from April through October last year as S&P stripped the U.S. of its AAA credit rating.

 

Have a wonderful evening everyone.

Be magnificent!

 

The important question for me is,

is the body a source for creating, for realizing yourself,

for realizing what life is all about?  You ask this question

and you go where it takes you and then you ask another question

and then again you follow.  So this understanding of the body, of the unity within the body

and the innumerable areas which it reveals to you is what I call realization.

Chandralekha, 1929-2006

As ever,

Carolann

 

Show me a hero and I will write you a tragedy.

-F. Scott Fitzgerald, 1896-1940

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

 

Dear Friends,

Tangents:

September 10^th, 1981:

Pablo Picasso’s painting Guernica is returned to Spain and installed in Madrid’s Prado Museum. Picasso stated in his will that the painting was not to return to Spain until the Fascists lost power and democracy was restored.

Where and When

 

Painted and initially exhibited in Paris, but refers to events in Guernica, Spain, 1937.

 

And also on this day in…

1897 – First drunk driving arrest.

1929 – Arnold Palmer is born.

1941 – Stephen J. Gould is born.

1977 – The Guillotine is used for the last time in France – At Baumetes Prison in Marseille, France, Hamida Djandoubi, a Tunisian immigrant convicted of murder, becomes the last person executed by guillotine.
1991 – Nirvana’s “Smells Like Teen Spirit” released as a single.

It does no harm just once in a while to acknowledge that he whole country isn’t in flames, that there are people in the country besides politicians, entertainers, and criminals.  –Charles Kuralt, 1934-1997.

photos of the day September 10, 2012

Visitors lay roses over the names of the first responders at the South Pool of the 9/11 Memorial, ahead of the 11-year anniversary of the September 11, 2001 attacks on the World Trade Center at ‘ground zero’ in New York.

Adrees Latif/Reuters

Members of the public release olive ridley turtle hatchlings during an event by the Kuta Beach Sea Turtle Conservation at Kuta Beach, Bali. According to the conservation, more than 20,000 eggs were safely relocated to the hatchery since 2002, 80% of which have been successfully hatched and released to the ocean.

Desmond Ang/Reuters

Market Closes for September 10, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13254.29	-52.35
		-0.39%
S&P 500	1429.08	-8.84
		-0.61%
NASDAQ	3104.02	-32.40
		-1.03%
TSX	12215.43	-52.58
		-0.43%

International Markets

Market  Index	Close	Change
NIKKEI	8869.37	-2.28
		-0.03%
HANG  SENG	19827.17	+25.01
		+0.13%
SENSEX	17766.78	+17.13
		+0.10%
FTSE 100	5793.20	-1.60
		-0.03%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.828	1.855
CND.   30 Year Bond	2.421	2.430
U.S.   10 Year Bond	1.6541	1.6678
U.S.   30 Year Bond	2.8057	2.8261

Currencies

BOC Close	Today	Previous
Canadian $	0.97718	0.97855
US   $	1.02336	1.02192
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24713	0.80184
US  $	1.27632	0.78350

Commodities

Gold	Close	Previous
London Gold   Fix	1725.40	1735.68
Oil	Close	Previous
WTI Crude Future	96.54	96.42
BRENT	114.64	114.20

Market Commentary:

Canada

By Eric Lam

Sept. 10 (Bloomberg) — Canadian stocks fell, sending the benchmark index lower for the first time in four days, as Greece’s struggle to qualify for aid undermined confidence that Europe’s debt crisis is being contained.

Talisman Energy Inc. gained 1.6 percent after the company replaced its chief executive with a member of the board. Nordion Inc. plunged 37 percent after the company said it was unsuccessful in its claim for damages related to the canceled construction of the Maple nuclear facilities. Gold prices fell.

Five stocks fell for every three that rose as the Standard & Poor’s/TSX Composite Index dropped 52.58 points, or 0.4 percent, to 12,215.43 after rising as much as 0.3 percent. old stocks led the decline as eight of 10 major industries ended the day lower. The benchmark equity gauge has advanced 2.2 percent this year.

“What the ECB announced last week took out the tail risk of the euro area disintegrating,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. The firm manages about $4 billion. “I think it’s still probable Greece will exit one way or another, it’s just a matter of the manner of exit. But it’s a different story if we get headlines on Italy or Spain.”

Global stocks soared last week after the European Central Bank approved a bond-buying plan and investors bet U.S. Federal Reserve Chairman Ben S. Bernanke will continue to support economic growth. The Fed starts a two-day policy meeting on Sept. 12.

Greek Prime Minister Antonis Samaras was to meet officials from the nation’s creditors today after failing to secure agreement from coalition partners on spending cuts required for bailout funds. Greece’s Democratic Left leader Fotis Kouvelis, one of Samaras’s governing partners, said that poorer Greeks must be protected from more austerity.

Copper reached a four-month high in New York after weaker Chinese industrial production increased speculation that further steps would be taken to bolster growth in the world’s biggest consumer of the metal. Copper futures for December delivery added 1.2 percent to settle at $3.69 a pound in New York after touching $3.70, the highest since May 10.

Talisman, a Canadian oil and gas producer that has underperformed its peers for the past five years, rose 1.6 percent to C$14.09. The company said it has replaced Chief Executive Officer John Manzoni with board member Hal Kvisle, a former CEO of TransCanada Corp. Manzoni, who took over the Calgary-based company in 2007, will step down immediately.

Talisman has slumped 23 percent during Manzoni’s tenure.

“The board may have been forced to be proactive,” Phil Skolnick, analyst with Canaccord Genuity Corp., wrote in a note.

“Mr. Kvisle was viewed as a very competent CEO and thus the market appeared to like him when he was at TransCanada.”

North American Palladium Ltd. climbed 5.2 percent to C$2.04 as the price of the metal rose. The miner’s stock has slumped 22 percent this year.

Sherritt International Corp., a diversified commodities producer, added 5.4 percent to C$4.68. Sherritt has declined 14 percent this year, compared with a 5.4 percent slump for the S&P/TSX materials index.

Franco-Nevada Corp., a mining royalties company that has soared 31 percent this year, fell 4.4 percent to C$50.90 after Brian MacArthur, an analyst with UBS Investment Research, downgraded the stock to a neutral rating from a buy.

Nordion slipped 37 percent to C$6.64, its biggest decline since 1988, after the medical imaging equipment manufacturer said it lost its case seeking damages from Atomic Energy of Canada Ltd. and suspended its quarterly dividend. The Ottawa- based company had been seeking damages after AECL canceled construction of the Maple nuclear facilities, which Nordion was planning to use as its long-term medical isotope supply.

Alacer Gold Corp. fell 4.7 percent to C$6.35 and Eldorado Gold Corp. retreated 3.8 percent to C$13.83 as gold tumbled for the first time in three sessions. Gold futures for December delivery dropped 0.5 percent to settle at $1,731.80 an ounce in New York.

US

By Inyoung Hwang

Sept. 10 (Bloomberg) — U.S. stocks fell, after the Standard & Poor’s 500 Index rose to the highest level since 2008, as concern over Greece’s debt crisis overshadowed speculation central banks will take action to spur the economy.

Intel Corp. lost 3.8 percent after Morgan Stanley cut its earnings forecasts and Nomura Holdings Inc. said estimates for the largest chipmaker’s profit next year may fall further. Apple Inc. dropped 2.6 percent as technology shares tumbled 1.3 percent, the most among 10 S&P 500 groups. International Paper Co. slid 4.2 percent after Deutsche Bank AG cut its rating.

The S&P 500 fell 0.6 percent to 1,429.08 at 4 p.m. in New York. The Dow Jones Industrial Average slid 52.35 points, or 0.4 percent, to 13,254.29. The Nasdaq Composite Index lost 1 percent to 3,104.02. About 5.6 billion shares traded hands on U.S.

exchanges, 7.3 percent below the three-month average, while the Chicago Board Options Exchange Volatility Index, known as the VIX, rose 13 percent, the biggest jump in seven weeks, to 16.28.

“Europe will continue kicking the can down the road and there’s no quick solution,” Walter “Bucky” Hellwig, who helps manage $17 billion at BB&T Wealth Management in Birmingham, Alabama, said in a telephone interview. “Macro numbers have been very unimpressive, but there’s this aspect of expansionary monetary policy decisions that have been driving prices higher.” He said, “The market will turn on what the Federal Reserve does this week.”

The S&P 500 climbed last week to a four-year high after the European Central Bank approved a bond-buying plan and investors bet Fed Chairman Ben S. Bernanke will continue to support economic growth. The equities index is 20 percent above its level on Sept. 15, 2008, the first trading day after Lehman Brothers Holdings Inc. filed the world’s biggest bankruptcy and prompted a 46 percent drop through March 9, 2009. The gauge is less than 10 percent from its record closing high after rising 14 percent this year.

Bets on further stimulus measures have increased as data last week showed payrolls rose less than projected and the unemployment rate was unexpectedly driven down by Americans leaving the labor force. On Aug. 31, Bernanke cited his concern about the jobless rate and said the central bank will provide additional stimulus as needed to promote a stronger recovery.

The Fed’s Open Market Committee meets this week and will release a statement on Sept. 13.

Stocks declined earlier today as Greek Prime Minister Antonis Samaras was meeting officials from the nation’s creditors after failing to secure agreement from coalition partners on spending cuts. Greece’s Democratic Left leader Fotis Kouvelis, whose party is one of the three in the coalition government, said that no decision had been made on the cuts required to obtain further aid for the country’s bailout, and that poorer citizens must be protected from austerity measures.

Germany’s Federal Constitutional Court is due to rule on the country’s participation in the European Stability Mechanism, a permanent 500 billion-euro fund that offers loans to member states and may buy their bonds to lower borrowing costs.

“The euro zone is a problem that is so difficult to solve, we’re going to continue to live with it for many months or even longer,” Stanley Nabi, who helps oversee more than $11 billion as vice chairman of New York-based Silvercrest Asset Management Group, said in a telephone interview. “Who is going to step in and finance Greece here? We can’t continue to throw good money after bad. This is not a temporary situation.”

In Asia, a report showed imports into China slid 2.6 percent in August from a year earlier, the nation’s customs bureau said. Economists in a Bloomberg survey had forecast growth of 3.5 percent. Exports rose 2.7 percent, slower than estimated. Industrial production increased 8.9 percent, the National Bureau of Statistics said yesterday.

“We could be much closer to the tipping point for more policy action as the slowdown in the external sector — if it were to persist — may bring more pressure on employment,”

Morgan Stanley wrote in a report today.

Technology, financial and industrial companies posted the biggest losses today out of 10 groups in the S&P 500, erasing at least 0.7 percent. Bank of America Corp. sank 2.5 percent to $8.58. Boeing Co. dropped 2.5 percent to $71.08. Apple tumbled 2.6 percent to $662.74.

Intel lost 3.8 percent to $23.26 for the biggest drop in the Dow. Morgan Stanley reduced its third-quarter revenue and earnings projections, saying the company faces margin erosion ahead. Estimates for the Santa Clara, California-based company have further downside risk due to headwinds facing notebook shipments and decelerating demand in China, according to Nomura’s Romit Shah. Intel slashed its third-quarter sales forecast last week.

International Paper dropped 4.2 percent to $34.79. Deutsche Bank’s Mark Wilde cut his recommendation on the world’s largest paper and pulp producer and other containerboard makers, saying price increases are “not a done deal.” He cited the Institute for Supply Management’s manufacturing report for August that was below 50, which is the dividing line between expansion and contraction.

American International Group Inc. retreated 2 percent to $33.30. The U.S. Treasury is offering to sell $18 billion of shares in a transaction that may cut taxpayers’ stake in the firm to below 50 percent for the first time since its 2008 bailout. The insurer plans to buy back as much as $5 billion of the shares and Citigroup Inc., Deutsche Bank AG, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are managing the sale, the Treasury said yesterday in a statement.

Titan Machinery Inc. plunged 23 percent to $19.41. The owner of agricultural and equipment stores reduced its forecast for 2012 earnings. It estimates profit to be no more than $2.30 a share, compared with an earlier prediction of at least $2.55 a share. The company also reported second-quarter earnings of 25 cents a share, missing the average analyst estimate of 43 cents.

Plains Exploration & Production Co. sank 11 percent to $36.09. The oil company said it agreed to buy BP Plc’s interests in certain deepwater Gulf of Mexico oil and natural-gas assets for $5.55 billion. The assets have production equivalent to 59,500 barrels of oil a day.

Michael Kors Holdings Ltd. declined 4.5 percent to $53.50.

The high-fashion retailer said last week after markets closed that some of its investors will sell 20 million shares in a so- called secondary sale.

Telephone stocks posted the only gain among 10 S&P 500 group. Verizon Communications Inc. added 0.8 percent to $44.06.

Sprint Nextel Corp., the third-largest U.S. wireless carrier, rose 2.4 percent to $5.15. Mike McCormack, a Nomura analyst in New York, raised his recommendation on Sprint to buy from neutral in a report today, citing cost savings from the company’s network-improvement plan. He now expects Sprint’s shares to reach $7 over the next 12 months, up from a previous target of $2.50.

Hewlett-Packard Co. jumped 0.8 percent to $17.43. The world’s largest personal-computer maker expanded the total job cuts under its reorganization plan announced in May to 29,000, more than it had originally disclosed.

The S&P 500 will surge through the end of 2013 to a record 1,615 as an improvement in capital investment and industrial production boost earnings, Citigroup Inc. strategists led by Tobias Levkovich wrote in a report dated Sept. 7. Gamco Investors Inc.’s Howard Ward also said U.S. stocks may rally to record highs in the next four months as consumers increase spending and help drive up corporate earnings.

“The key message to investors is get in stocks,” Ward, a fund manager who helps oversee $35.6 billion at Gamco in Rye, New York, said in a television interview on “Bloomberg Surveillance” with Tom Keene and Sara Eisen. “It’s not too late. If we can avoid a fiscal cliff-driven, recession-type of hit, we’re going to have a new high in stocks in the next three to four months.”

A deal by U.S. lawmakers to head off automatic tax increases and spending cuts at the start of next year may be “messy” and could hurt stocks, Goldman Sachs Group Inc.’s chief U.S. equity strategist David Kostin said. The automatic spending cuts totaling about $1.2 trillion would be carried out beginning Jan. 2 unless lawmakers reach a deal to cancel or modify them.

The so-called fiscal cliff “is unlikely to be resolved in a smooth fashion, and probably will be resolved in a messy way,” Kostin said today at a conference in San Diego sponsored by the Insured Retirement Institute.

 

Have a wonderful evening everyone.

Be magnificent!

 

Self is not something as opposed to something else,

it is sunya: we are also all things;

the self represented in all forms, good or bad,

not exclusively or exhaustively in any.

-Ramchandra Gandhi, 1937-2007

As ever,

Carolann

 

The first human who hurled an insult instead of a stone

was the founder of civilization.

-Sigmund Freud, 1856-1939

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

 

Dear Friends,

 

Tangents:

Interesting observation:

“As outdoor lightning becomes increasingly prominent, our night skies are gradually turning from black to red,” blogs Amy Shira Teitel for Discover magazine.  “This discovery came from a team of scientists led by Christopher Kyba from the Freie Universitaet and the Leibnitz Institute for Freshwater Ecology and Inland Fisheries.  The scientists were tracking the effects of cloud cover on light pollution when they realized the colour of night is changing.  Their report, entitled Red is the New Black, was just published in the journal Monthly Notices of the Royal Astronomical Society….It’s well known that the daytime sky is blue because the atmosphere scatters shorter blue wavelengths of light more than long red wavelengths.  Similarly, the team found that the shorter wavelengths of artificial light are scattered more easily on clear nights.  But with cloud cover, the long-wavelength red light that is usually sent out into space on clear nights is scattered back down to Earth.  The result is that cloudy nights in urban areas have a reddish glow.”

And on this day in…

1533 – Queen Elizabeth l was born.

1860 – Grandma Moses was born.

1876 – The James-Younger gang botches an attempt to rob the First National Bank of Northfield, Minnesota.
1888 – An incubator is used for the first time on a premature infant.
1912 – French aviator Roland Garros sets an altitude record of 13,200 feet.
1916 – The U.S. Congress passes the Workman’s Compensation Act.

1936 – Buddy Holly was born.
1940 – Germany’s blitz against London begins during the Battle of Britain.
1954 – Integration of public schools begins in Washington D.C. and Maryland.
photos of the day September 9, 2012

A Bavarian herdsman in traditional dress awaits the start of the cattle drive in Pfronten, Germany, Saturday. About 500 cattle around Pfronten returned to the valley after spending the summer months in the mountains.

Matthias Schrader/AP

A giant balloon floats past the Belgian Parliament during the Balloon Day Parade in central Brussels, Saturday. Giant figures representing well-known comic strip and Belgian characters are parading along the downtown boulevards, as part of the “Belgium Comic Strip Festival”.

Yves Herman/Reuters

Market Closes for September 7, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13306.64	+14.64
		+0.11%
S&P 500	1437.92	+5.80
		+0.41%
NASDAQ	3136.42	+0.61
		+0.02%
TSX	12268.01	+128.28
		+1.06%

International Markets

Market  Index	Close	Change
NIKKEI	8871.65	+191.08
		+2.20%
HANG  SENG	19802.16	+592.86
		+3.09%
SENSEX	17683.73	+337.46
		+1.95%
FTSE 100	5794.80	+17.46
		+0.30%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.855	1.839
CND.   30 Year Bond	2.430	2.398
U.S.   10 Year Bond	1.6678	1.6781
U.S.   30 Year Bond	2.8261	2.7987

Currencies

BOC Close	Today	Previous
Canadian $	0.97855	0.98277
US   $	1.02192	1.01753
Euro Rate  1 Euro=		Inverse
Canadian   $	1.25417	0.79734
US  $	1.28166	0.78024

Commodities

Gold	Close	Previous
London Gold   Fix	1735.68	1700.50
Oil	Close	Previous
WTI Crude Future	96.42	95.53
BRENT	114.20	112.80

Market Commentary:

Canada

By Eric Lam

Sept. 7 (Bloomberg) — Canadian stocks rose, sending the benchmark index to its biggest weekly advance of the year, as the nation added more jobs than forecast while slower-than- estimated U.S. employment growth boosted speculation the Federal Reserve will inject stimulus into the economy.

Bankers Petroleum Ltd. surged 14 percent after the company said it submitted a bid for Albpetrol, a state-owned Albanian energy company, for an undisclosed amount. Lululemon Athletica Inc. soared 12 percent after boosting its 2012 forecast.

Research In Motion Ltd. added 6.2 percent after U.S. carrier Verizon Wireless said it will carry the upcoming BlackBerry 10 smartphones. Barrick Gold Corp. and Goldcorp Inc. each added 2.6 percent as the metal jumped to a six-month high.

The S&P/TSX gained 128.28 points, or 1.1 percent, to 12,268.01. The benchmark gauge rose 2.7 percent this week, the most since December 2011.

“Given the weak jobs numbers out of the U.S. we have some further evidence the probability of QE3 is moving higher,”

Philip Petursson, managing director in the portfolio advisory group at Manulife Asset Management Ltd., said from Toronto, referring to another round of bond purchases, or quantitative easing, by the Fed. Petursson’s firm manages about $218 billion.

“That is being reflected in gold and reflected in the TSX as a result of gold.”

The U.S. economy added 96,000 workers last month following a revised 141,000 rise in July that was smaller than initially estimated, Labor Department figures showed today in Washington.

Unemployment fell to 8.1 percent as more Americans left the workforce and hourly earnings were unchanged.

The figures increased speculation that Fed policy makers will expand record monetary stimulus next week after Fed Chairman Ben S. Bernanke called unemployment a “grave concern.”

Canada’s employment rose by 34,300 following the July decrease of 30,400, Statistics Canada said today in Ottawa, and the jobless rate was unchanged at 7.3 percent. Prime Minister Stephen Harper said in an interview with Bloomberg in Vancouver yesterday there will be “sluggish” growth for an extended period in much of the global economy.

Mining shares advanced to lead gains on the S&P/TSX as copper rallied after China approved new infrastructure projects.

The plans include 2,018 kilometers (1,254 miles) of roads as well as construction of nine sewage-treatment plants, five port and warehouse projects, and two waterway upgrades, according to statements on the website of the National Development and Reform Commission yesterday. The construction projects suggest the government is stepping up stimulus efforts to revive economic growth.

First Quantum Minerals Ltd. soared 9.8 percent to C$21.92 after the copper miner announced it has acquired a 19 percent stake in Empire Mining Corp. through a private placement. Copper futures rose to a 16-week high, gaining 3.7 percent to settle at $3.65 a pound in New York.

Teck Resources Ltd., Canada’s largest diversified miner, increased 9.2 percent to C$29.51 for its biggest gain in a year.

Barrick Gold added 2.6 percent to C$39.27 and Goldcorp jumped 2.6 percent to C$42.06. Gold futures for December delivery climbed 2 percent to settle at $1,740.50 an ounce in New York.

Bankers Petroleum added 14 percent to C$3.04 after the oil and gas company, which is developing the Patos-Marinza oil field in Albania, said today it has submitted a bid for Albpetrol.

Bankers Petroleum did not disclose the amount of its bid for the state-owned Albanian company, but said if successful it will pay for it through a combination of cash on hand and debt.

Shares of the company have slumped 32 percent this year, compared with a 1.2 percent decline in the S&P/TSX Composite Energy Sector Index.

RIM gained 6.2 percent to C$7.02 after Verizon said it will carry the upcoming BlackBerry 10 line of smartphones, which will go on sale next year. RIM, whose shares are down 53 percent this year, is counting on BB10 to get it back in the game with Apple Inc. and Google Inc.’s more popular platforms after U.S. and Canadian consumers dumped BlackBerry models in favor of devices like the touch-screen iPhone.

Lululemon, the Canadian yoga-wear retailer whose shares have climbed 59 percent this year, jumped 12 percent to C$75.50 after boosting its revenue and profit forecast on soaring sales.

The Vancouver-based company estimates sales will rise to as much as $1.36 billion and profit to as high as $1.81 a share this year. That would top analysts’ estimates of $1.35 billion in sales and $1.64 a share.

US

By Rita Nazareth

Sept. 7 (Bloomberg) — U.S. stocks rose for the week, sending the Standard & Poor’s 500 Index to the highest since 2008, amid bets the Federal Reserve will stimulate the economy and as the European Central Bank announced a bond-buying plan.

Bank of America Corp. and JPMorgan Chase & Co. climbed at least 5.8 percent for the week, following a surge in European lenders. Newmont Mining Corp., the largest U.S. gold producer, jumped 2 percent as the metal rose to a six-month high.

Amazon.com Inc. added 4.4 percent after introducing a new line of Kindle e-readers and tablets. Facebook Inc. rallied 5.1 percent after Chief Executive Officer Mark Zuckerberg said he won’t start selling his holdings for at least a year.

The S&P 500 added 2.2 percent to 1,437.92, snapping a two- week decline, in its biggest rally since June. It rose within 10 percent of its all-time high in October 2007. The Dow Jones Industrial Average gained 215.80, or 1.6 percent, to 13,306.64, its highest level since December 2007.

“It’s turned into a central bank put,” Ryan Larson, Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., said in a phone interview. His firm oversees $250 billion in assets. “Europe continues to move in the right step. In the U.S., there was no relief to Bernanke’s ‘grave concern’ about unemployment. The market is sensing that this will increase the odds if not force the Fed’s hands to announce some kind of additional policy easing.”

Bets on further stimulus measures grew as data showed payrolls rose less than projected and the unemployment rate was unexpectedly driven down by Americans leaving the labor force.

On Aug. 31, Fed Chairman Ben S. Bernanke cited his concern about the jobless rate and said the central bank will provide additional stimulus as needed to promote a stronger recovery.

The Fed’s Open Market Committee meets in the coming week and will release a statement on Sept. 13.

American equities also joined a global rally as ECB President Mario Draghi announced an unlimited bond-buying program. Draghi said the ECB will have a “fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability in the euro area.”

“It looks like the European Union is going to survive at least for a while,” said Byron Wien, vice chairman of the advisory services unit of Blackstone Group LP, the world’s biggest private-equity firm. He spoke in a Sept. 6 phone interview from New York. “Mario Draghi looks like he’s serious about doing whatever it takes to provide liquidity.”

All 10 groups in the S&P 500 rallied during the holiday- shortened week as commodity and financial shares had the biggest gains, adding at least 3.5 percent. The Morgan Stanley Cyclical Index of companies most-tied to the economy advanced 3.6 percent. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, tumbled 18 percent, the most since June, to 14.38.

The KBW Bank Index of 24 stocks gained 4.4 percent. The Financial Select Sector SPDR Fund, an exchange-traded fund, climbed 3.4 percent. Bank of America added 10 percent, the biggest gain in the Dow, to $8.80. JPMorgan increased 5.8 percent to $39.30. Morgan Stanley rallied 14 percent to $17.08.

SunTrust Banks Inc. jumped 9.3 percent to $27.50. The eighth-largest U.S. lender by deposits announced plans to liquidate its stake in Coca-Cola Co. to help cover costs of restructuring bad loans.

Hartford Financial Services Group Inc. rose 8.6 percent to $19.47. The insurer agreed to sell its retirement-plans business for $400 million to Massachusetts Mutual Life Insurance Co.

Gold producers rallied as the metal topped $1,700 an ounce on speculation that the Fed will provide further stimulus measures, lifting demand for gold as an inflation hedge. Newmont Mining added 2 percent to $51.69. Freeport-McMoRan Copper & Gold Inc., the biggest publicly traded copper producer, rose 9.2 percent to $39.43.

Amazon.com increased 4.4 percent to a record $259.14. Chief Executive Officer Jeff Bezos is retooling the company’s tablets as consumers face a widening array of choices, including new entries from Google Inc. and Microsoft Corp. At stake is a piece of a market that may reach $66.4 billion this year, according to research firm DisplaySearch.

Facebook jumped 5.1 percent to $18.98. Zuckerberg has yet to adopt a share sale plan, the Menlo Park, California-based company said in a filing with the U.S. Securities and Exchange Commission. The shares had been marking record lows since the first share sale lockup for insiders expired in August amid concern that businesses are spending less to advertise on the world’s largest social-networking website.

Apple Inc. climbed 2.3 percent to a record $680.44 after the company sent out invitations to a Sept. 12 product event in San Francisco, where it is expected to unveil a new iPhone with a larger screen and thinner body. The shares have risen more than sevenfold since Apple co-founder Steve Jobs introduced the first iPhone in January 2007.

The company is considering introducing an online service to stream music based on users’ tastes, according to two people with knowledge of the plans.

Navistar International Corp. rallied 13 percent to $24.76.

The maker of International brand trucks reported third-quarter results that topped analysts’ estimates. Lewis Campbell, who became interim chief executive officer after Dan Ustian was ousted amid an inquiry from regulators, said he expects “significant improvements” in the next 12 to 18 months.

Walgreen Co. slumped 2.3 percent to $34.94 after posting fiscal fourth-quarter revenue that trailed estimates. Walgreen has lost customers this year to CVS Caremark Corp. and Wal-Mart Stores Inc. after its agreement to provide prescriptions for Express Scripts Inc. customers expired.

Kraft Foods Inc., the foodmaker that will split into two companies next month, fell 3.7 percent to $39.99 after Chief Financial Officer David Brearton told investors that 2012 and 2013 profit may be lower than expected.

VeriFone Systems Inc. tumbled 6.5 percent to $32.48 after the maker of credit-card terminals reported third-quarter sales that fell short of analysts’ estimates, citing unfavorable currency swings, competition in Europe and a fire in Brazil.

 

Have a wonderful weekend everyone.

Be magnificent!

 

I have always fought not to project but to be myself.

To retain my own scale, which is a dot, but a vibrating dot, a pulsating dot that is what I’d like to be.

I would like to remain that pulsating dot

which can reach out to the whole world, to the universe.

Chandralekha, 1929-2006

As ever,

 

Carolann

 

Turns out if you never lie, there’s always

someone mad at you.

-Scott Westerfeld, 1953-

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

 

 

Dear Friends,

Tangents:

I attended a conference in Vancouver today on the current aspects and future trends of Canada-Asia business.  It hosted some of Canada’s most influential policy makers and executives, including chief executives from the energy, mining, baking and technology industries; it also hosted Asian executives and policy makers who provided their perspectives.  The conference was opened by Stephen Harper who offered his insights on Canada’s economic relationship with Asia and his government’s priorities ahead of the APEC summit of leaders in Russia.  Business leaders in attendance included Jacynthe Côté, CEO of Rio Tinto Alcan, Mike McAllister, President Encana, Ian Telfer, Chairman of Goldcorp, Sean Yang, President of Huawei Technologies, Wenran Jiang, Director, Canada-China Energy & Environment, Howard Eng, President & CEO, Greater Toronto Airports authority (GTAA), and several other titans of industry.  Bottom line from most: we have to decrease our dependence on our largest customer, the USA, and expand trade with many other countries or we will be left behind economically speaking.  We need to be a more competitive and innovative and productive country.  Our exports have halved in recent years while Australia’s have doubled.   If you are interested in more information I took away from this conference, please let me know and I’ll be happy to share.  All in all, an interesting day, but now I have to go see what’s up at the Democratic National Convention in Charlotte….And thank you Mr. Draghi for today’s markets!

And on this day in…

1915 – First tank produced.

1920 – First radio broadcast of a prizefight.

1928 – Robert Pirsig was born.
1936 – Aviator Beryl Markham flies the first east-to-west solo flight across the Atlantic Ocean.
1937 – The Soviet Union accuses Italy of torpedoing two Russian ships in the Mediterranean.
1941 – Germany announces that all Jews living in the country will have to begin wearing a Star of David.

1947 – Jane Curtin was born.
1953 – The last American and Korean prisoners are exchanged in Operation Big Switch, the last official act of the Korean War.
1976 – A Soviet pilot lands his MIG-25 in Tokyo and asks for political asylum in the United States.
1988 – Lee Roy Young becomes the first African-American Texas Ranger in the force’s 165-year history.
photos of the day September 6, 2012

President of European Central Bank Mario Draghi listens to questions as the Euro logo is reflected in his glasses during a news conference in Frankfurt.

Michael Probst/AP

Related

A child walks in front of the pumpkin sculpture ‘King Thrushbeard’ during the preparations of the autumn exhibition ‘Fantastical fairy-tale world’ at the horticultural exhibition ‘EGA’ (Erfurt Garden Construction Exhibition) in Erfurt, central Germany.

Jens Meyer/AP

Market Closes for September 6, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13292.00	+244.52
		+1.87%
S&P 500	1432.12	+28.68
		+2.04%
NASDAQ	3135.81	+66.55
		+2.17%
TSX	12139.73	+149.59
		+1.25%

International Markets

Market  Index	Close	Change
NIKKEI	8680.57	+0.75
		+0.01%
HANG  SENG	19209.30	+64.23
		+0.34%
SENSEX	17346.27	+32.93
		0.19%
FTSE 100	5777.34	+119.48
		+2.11%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.839	1.755
CND.   30 Year Bond	2.398	2.326
U.S.   10 Year Bond	1.6781	1.5960
U.S.   30 Year Bond	2.7987	2.7071

Currencies

BOC Close	Today	Previous
Canadian $	0.98277	0.99034
US   $	1.01753	1.00975
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24135	0.80557
US  $	1.26311	0.79170

Commodities

Gold	Close	Previous
London Gold   Fix	1700.50	1693.20
Oil	Close	Previous
WTI Crude Future	95.53	95.36
BRENT	112.80	113.97

Market Commentary:

Canada

By Eric Lam and Rita Nazareth

Sept. 6 (Bloomberg) — Canadian stocks rose, pushing the Standard & Poor’s/TSX Composite Index to its highest level since May, after the European Central Bank agreed to an unlimited bond-purchase program and American jobless claims declined.

ShawCor Ltd., which provides coatings and other services to the pipeline industry, surged 20 percent as the company is considering selling itself. Inmet Mining Corp., the Canadian developer of a $6.2 billion copper and gold mine in Panama, rose 3.5 percent after offering to buy Petaquilla Minerals Ltd. for about C$112 million ($113 million). Trican Well Service Ltd., which provides drilling services for the energy industry, added 4.1 percent after being raised at Raymond James Financial Inc.

The S&P/TSX gained 149.59 points, or 1.3 percent, to 12,139.73 in Toronto, its highest level since May 2. The benchmark index has risen 7.6 percent from its low for the year on May 18, and is up 1.5 percent for 2012.

“It’s a very good day,” John Kinsey, a portfolio manager with Caldwell Securities in Toronto, said in a phone interview.

His firm manages about C$1 billion. “The ECB is taking a step forward. They’ve been kind of wishy-washy. The market really needs to have something positive that you can say: ’Well, OK, now they are maybe getting serious.’”

Canadian stocks joined a global rally amid expectations that the ECB plan will help tame Europe’s debt crisis and reduce chances of a euro breakup. The program “will enable us to address severe distortions in government bond markets which originate from, in particular, unfounded fears on the part of investors of the reversibility of the euro,” ECB President Mario Draghi said in Frankfurt after the central bank held its benchmark rate at a record low of 0.75 percent.

Data showing that fewer Americans than forecast filed applications for unemployment benefits last week also helped fuel a rally in stocks as the Standard & Poor’s 500 Index climbed above the highest closing level since 2008. U.S. payrolls probably grew at a slower pace in August and unemployment exceeded 8 percent for a 43rd month, highlighting why Federal Reserve Chairman Ben S. Bernanke said the lack of jobs is a “grave concern” for policy makers, economists said before a report tomorrow.

Nine out of 10 industries on the S&P/TSX rose today as energy, mining and bank stocks contributed the most to the gains. Suncor Energy Inc., Canada’s largest energy company by market value, climbed 1.6 percent to C$31.85.

ShawCor surged 20 percent to C$42.20, highest since the shares began trading in November 1988. Chairman Virginia Shaw told the board she is prepared to sell her shares as part of a sale of the company, the Toronto-based company said in a statement yesterday. Shaw is the controlling shareholder through a holding company, Shawcor said.

Inmet Mining gained 3.5 percent to C$45.77. Each Petaquilla shareholder will get C$0.48 or 0.0109 of an Inmet share, Toronto-based Inmet said yesterday in a statement. That’s 37 percent more than Petaquilla’s closing price in Toronto yesterday. Petaquilla soared 66 percent to 58 cents.

Trican Well Service increased 4.1 percent to C$12.29 after the shares were raised to market perform from underperform at Raymond James by equity analyst Andrew Bradford. The 12-month share-price estimate is C$14.

Major Drilling Group International Inc. rallied 12 percent to C$10.20, its biggest gain in three years after reporting record revenue for the first quarter and raising its dividend.

Major Drilling shares have plunged 34 percent this year.

US

By Lu Wang

Sept. 6 (Bloomberg) — The Standard & Poor’s 500 Index climbed to its highest level since 2008 as the European Central Bank announced specifics of its bond-buying plan and data boosted optimism in the American economy.

JPMorgan Chase & Co., Bank of America Corp. and Cisco Systems Inc. jumped at least 4.2 percent, leading gains in the Dow Jones Industrial Average. All 10 S&P 500 groups increased as Alcoa Inc. and Owens-Illinois Inc. climbed more than 2.8 percent to pace advances among raw-material shares. Chipmaker SanDisk Corp. rallied 8.4 percent after OCZ Technology Group Inc. blamed a shortage of certain flash-memory components for lower-than- estimated sales.

The S&P 500 climbed 2 percent, the most since June, to 1,432.12 at 4 p.m. in New York. The Dow added 244.52 points, or 1.9 percent, to 13,292, its highest level since December 2007.

The Nasdaq-100 Index climbed 2.3 percent to almost a 12-year peak. More than five shares rose for each that declined on U.S. exchanges, with volume at 7.1 billion shares, or 18 percent above the three-month average.

“We are in a period where we are peeling away the onion little by little, all the uncertainties, what’s going to happen in Europe and what’s going to happen here,” Dan Veru, chief investment officer at Palisade Capital Management LLC in Fort Lee, New Jersey, said in a phone interview. His firm oversees $3.5 billion. “I think Draghi is serious about putting Europe on the positive path.”

Draghi said policy makers agreed to an unlimited bond- purchase program as they try to regain control of interest rates in the euro area. He said the ECB will have a “fully effective backstop to avoid destructive scenarios with potentially severe challenges for price stability.” The bond plan is the most ambitious yet in the central bank’s fight to save the euro after nearly three years of turmoil.

Service industries in the U.S. expanded in August at a faster pace than forecast, according to the Institute for Supply Management’s non-manufacturing index. Claims for unemployment benefits fell to the lowest level in a month and American companies added more workers than forecast, separate reports showed today before the Labor Department payrolls data tomorrow.

The government’s employment report may show overall hiring climbed by 130,000 jobs in August while the jobless rate remained at 8.3 percent for a second month, according to the median forecasts by economists in a Bloomberg survey. The unemployment rate has stayed above 8 percent since February 2009.

“The market was looking for signs that the ECB and some part of the European Union would basically stimulate in Europe and guarantee the sovereign debt,” David Pearl, who oversees $24 billion as co-chief investment officer at New York-based Epoch Investment Partners, said in a phone interview. “Draghi pretty much gave what the market was looking for. The U.S. data is at least moving positively and we’re in a recovery.”

Today’s rally helped the S&P 500 break out of a 19-point trading range for the index’s close since Aug. 7. The gauge spent the past four weeks hovering around 1,400 as investors awaited policy clues from central banks. Federal Reserve Chairman Ben S. Bernanke said in Jackson Hole, Wyoming, last week that he wouldn’t rule out more stimulus.

“There’s a lot of buying, it’s really across the board,” Laszlo Birinyi, president of Birinyi Associates Inc. in Westport, Connecticut, said in a phone interview. “When you have this much breadth, it’s a very positive sign,” he said. Birinyi, who advised clients to buy stocks before the S&P 500 hit a 12-year low in March 2009, said an advance in the index this year to “1,500 is a very achievable target.”

The index has rallied 12 percent from a June low amid optimism central banks worldwide will act to spur growth and as corporate earnings beat analysts’ estimates.

Raw-materials, financial and technology shares rose the most among the 10 S&P 500 groups today, climbing at least 2.4 percent. The Morgan Stanley Cyclical Index jumped 3.2 percent. JPMorgan rose 4.3 percent to $38.69. Cisco Systems increased 4.4 percent to $19.73. Alcoa added 2.8 percent to $8.76.

Bank of America advanced 5 percent to $8.35. The second- biggest U.S. lender by assets agreed to sell Strategic Partners Inc. to private-equity investors Partners Group Holding AG and Avista Capital Partners. Bank of America has sold more than $50 billion in assets and businesses since Brian T. Moynihan took over as CEO in 2010, as it seeks to increase capital before stricter international rules come into force.

Owens-Illinois rose 8.9 percent, the most in the S&P 500, to $18.78. The world’s biggest maker of glass bottles reaffirmed that it will generate free cash flow of at least $250 million this year.

SanDisk rallied 8.4 percent to $44.01. OCZ, a maker of solid-state disk drives, said it experienced “a significant shortage” of certain so-called Nand flash memory components in August and its stock plunged 19 percent to $4.35. Micron Technology Inc., another manufacturer of computer-memory chips, climbed 7.8 percent to $6.68.

Amazon.com Inc. added 2.1 percent to a record $251.38. The company is updating its line of Kindle e-readers and tablets in a bid to stoke consumer demand as Google Inc. and Microsoft Corp. join the crowded market of machines challenging Apple Inc.’s iPad.

Navistar International Corp. climbed 17 percent to $23.97.

The maker of International brand trucks reported third-quarter results that topped analysts’ estimates. Lewis Campbell, who became interim chief executive officer after Dan Ustian was ousted amid an inquiry from regulators, said he expects “significant improvements” in the next 12 to 18 months.

First Solar Corp. jumped 7.4 percent to $20.03. The largest maker of thin-film photovoltaic panels won a contract to supply 25 megawatts for a project that Green Infra Ltd. is developing in India.

Walgreen Co. fell 1.9 percent to $35.20. Sales in the three months ended Aug. 31 slid about 4.9 percent to $17.1 billion, the company said. That trailed the $17.2 billion average of analysts’ estimates compiled by Bloomberg. Walgreen has lost customers this year to CVS Caremark Corp. and Wal-Mart Stores Inc. after its agreement to provide prescriptions for Express Scripts Inc. customers expired.

Seagate Technology Plc dropped 2.6 percent, the most in the S&P 500, to $31.70. The world’s largest maker of computer disk drives was cut to hold from strong buy at Needham & Co.

VeriFone Systems Inc. slumped 14 percent to $30.55 after the maker of credit-card terminals said that third-quarter revenue rose to $489.1 million, missing the average analyst estimate of $498.7 million in a Bloomberg survey.

The Chicago Board Options Exchange Volatility Index, known as the VIX, tumbled 12 percent to 15.60 as stocks rallied. U.S. options trading is poised for the biggest annual drop since 1988 as easing monetary policies worldwide reduced demand for protection against stock losses. Demand for options, often used by investors to hedge against declines in equity holdings, is retreating after the S&P 500 surged 14 percent this year.

The number of option contracts changing hands fell 13 percent to 2.70 billion during the first eight months of 2012, including a 43 percent slump in August, according to data compiled by Chicago-based Options Clearing Corp. Should the pace continue, that would end nine consecutive years of rising volume and mark the second-biggest drop since OCC data began in 1973.

Charles Schwab Corp. estimates that trading will slip 9 percent for the whole year.

“There are few participants who believe downside protection in any great magnitude is needed right now,” Randy Frederick, managing director for active trading and derivatives at Charles Schwab in Austin, said in a phone interview yesterday. His firm has $1.83 trillion in client assets. “There is a good possibility that we could have a relatively calm market throughout the remainder of the year.”

 

Have a wonderful evening everyone.

Be magnificent!

 

I see these things with an intense joy,

and while I observe, there is no observer, only a beauty almost like love.

For an instant, I am absent, myself and my problems, my anxieties, my troubles: nothing but this wonder exists.

-Krishnamurti, 1895-1986

As ever,

 

Carolann

 

You can’t wait for inspiration.  You

have to go after it with a club.

-Jack London, 1876-1916

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

 

Dear Friends,

Tangents:

For you, a poem,

Coach & Horses.  Interior

-by Roger McGough

(After a photograph by Andrew Thorpe)

What we see in the photograph

taken in the afternoon

is the corner of an empty bar

and his favourite table

 

On it stand two pint glasses

and an ashtray in which a cigarette

still burns,  The beer is unfinished

as if the drinkers had left in a hurry

 

What we do not see are the regulars

silent on the pavement in funeral best

Sholto, Don, John, and Terry and the rest.

Waving goodbye to Andrew.  To each other.

 

–from “As Far As I Know.”

And on this day in…

1870 – Author Victor Hugo returns to Paris from the Isle of Guernsey, after 20 years of exile.
1877 – Crazy Horse killed.

1905 – Arthur Koestler is born.

1929 – Bob Newhart is born.
1944 – Germany launches first V2 rocket at Paris, France.
1972 – Massacre at the Munich Olympics.
1975 – Gerald Ford evades first assasination attempt in Sacramento, California.
It is best to act with confidence, no matter how little right you have to it. – Lillian Hellman

photos of the day September 5, 2012

Visitors adhere circular stickers in a room installation at the exhibition ‘Dot.Systems – from Pointillism to Pixel’ by Japanese artist Yayoi Kusama at the Wilhelm-Hack Museum in Ludwigshafen, Germany.

Torsten Silz/dapd/AP

A statue of Guanyin, also known as the Goddess of Mercy, is seen inside a 100-year-old pavilion, that was a former pumping station, on the grounds of the Beijing Tap Water Museum.

David Gray/Reuters

Market Closes for September 5, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13047.48	+11.54
		+0.09%
S&P 500	1403.44	-1.50
		-0.11%
NASDAQ	3069.27	-5.79
		-0.19%
TSX	11990.14	+48.44
		+0.41%

International Markets

Market  Index	Close	Change
NIKKEI	8679.82	-95.69
		-1.09%
HANG  SENG	19145.07	-284.84
		-1.47%
SENSEX	17313.34	-127.53
		-0.73%
FTSE 100	5657.86	-14.15
		-0.25%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.755	1.738
CND.   30 Year Bond	2.326	2.313
U.S.   10 Year Bond	1.5960	1.5722
U.S.   30 Year Bond	2.7071	2.6821

Currencies

BOC Close	Today	Previous
Canadian $	0.99034	0.98592
US   $	1.00975	1.01424
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24809	0.80122
US  $	1.26027	0.79348

Commodities

Gold	Close	Previous
London Gold   Fix	1693.20	1695.50
Oil	Close	Previous
WTI Crude Future	95.36	95.30
BRENT	113.97	114.59

Market Commentary:

Canada

By Eric Lam

Sept. 5 (Bloomberg) — Canadian stocks rose as details emerged on the European Central Bank’s proposed bond-buying plan aimed at stemming the region’s debt crisis.

Detour Gold Corp. added 4.4 percent as the mining company’s rating was raised at Royal Bank of Canada. First Quantum Minerals Ltd. climbed 0.3 percent as copper prices increased.

Financial and commodity shares contributed most to gains in the Standard & Poor’s/TSX Composite Index. AuRico Gold Inc. plunged20 percent after the mining company cut its production forecast.

The S&P/TSX gained 48.44 points, or 0.4 percent, to 11,990.14. The benchmark equity gauge has increased 0.3 percent this year.

“What’s driving the markets this morning is the news coming from Europe,” said Stephen Gauthier, a fund manager with Fin-XO Securities Inc. in Montreal. His firm manages about C$500 million ($504 million). “Equity markets around the world, especially the markets in Europe and North America, are highly correlated these days.”

ECB President Mario Draghi’s proposal involves unlimited purchases of government debt, two central bank officials briefed on the plan said. Under the blueprint, the ECB would refrain from setting a public cap on yields, according to the people, and a third official, who spoke on condition of anonymity. The plan will only focus on government bonds rather than a broader range of assets and will target short-dated maturities of up to about three years, two of the people said.

The Bank of Canada kept its main interest rate unchanged and reiterated that an increase may be needed as domestic spending props up an economic recovery restrained by weak global demand for exports.

Detour Gold added 4.4 percent to C$26.38 after Dan Rollins, equity analyst with RBC Capital Markets, raised the company’s rating to outperform from sector perform.

First Quantum gained 0.3 percent to C$19.18 as copper rose to a six-week high.

Royal Bank of Canada gained 1.4 percent to C$55.63 and Bank of Nova Scotia rose 0.4 percent to C$52.46. Senior executives of both Royal Bank and Scotiabank said the two lenders, Canada’s largest and third-largest lenders respectively, are exploring takeover activities.

“While acquisitions will continue to be an important part of the strategy, we will always remain opportunistic,” Richard Waugh, the chief executive officer at Scotiabank, said today at the Scotiabank Financials Summit in Toronto.

AuRico Gold plunged 20 percent to C$5.49 after the mining company cut its production forecast and raised cost forecasts at its Ocampo gold project in Mexico for 2012 and 2013.

US

By Inyoung Hwang

Sept. 5 (Bloomberg) — Most U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, amid a slump in FedEx Corp. and disappointing global economic data as investors awaited the European Central Bank’s plan to buy bonds.

FedEx, a barometer for the economy because it delivers goods from mobile phones to pharmaceuticals, slid 2 percent after projecting its first decline in quarterly earnings in almost three years. Facebook Inc. jumped 4.8 percent after Chief Executive Officer Mark Zuckerberg said he won’t start selling his holdings for at least a year. The Bloomberg U.S. Airlines Index soared 3.4 percent amid carriers’ improved performances.

The S&P 500 lost 0.1 percent to 1,403.44 at 4 p.m. New York time, after rising as much as 0.3 percent earlier. The Dow Jones Industrial Average added 11.54 points, or 0.1 percent, to 13,047.48. About five shares fell for every four that advanced on U.S. exchanges, with volume at 5.7 billion shares, or 6.4 percent below the three-month average.

“We’ve had this wait-and-see going on for three weeks now,” Bruce Bittles, chief investment strategist at Milwaukee- based Robert W. Baird & Co., which oversees $85 billion, said in a telephone interview. “The sellers are being held off from the anticipation of more quantitative easing. You don’t want to short or sell in front of that. On the other hand, the economy doesn’t seem to be able to make it — either domestically or globally. It’s really a stand-off.”

The S&P 500 in August climbed to its highest level on an intraday basis in more than four years, then failed to close at that milestone. The index has fluctuated near the 1,400 level for three weeks as European leaders worked to tame the region’s debt crisis and Federal Reserve Chairman Ben S. Bernanke said in Jackson Hole, Wyoming, last week he wouldn’t rule out more stimulus.

ECB President Mario Draghi’s bond-buying proposal involves unlimited purchases of government debt that will be sterilized to assuage concerns about printing money, two central bank officials briefed on the plan said. To sterilize the bond purchases, the ECB will remove from the system elsewhere the same amount of money it spends, ensuring the program has a neutral impact on the money supply.

Draghi told the European Parliament this week that the ECB needs to intervene in bond markets to wrest back control of interest rates in the fragmented euro-area economy and ensure the survival of the common currency. Policy makers deliberated on the plan today and Draghi will announce whether it has been agreed to at a press conference tomorrow.

Stocks slumped as London-based Markit Economics said euro- area services and manufacturing contracted more than initially estimated in August. Separate data showed service industries in China expanded at a weaker pace last month as new orders slowed and Australia’s economy slowed more in the second quarter than economists expected.

Investors also awaited the U.S. government’s monthly employment report in two days. U.S. payrolls probably grew at a weaker pace in August and unemployment exceeded 8 percent for a 43rd month, economists said before the Labor Department report on Sept. 7.

“Investors are still holding that the ECB will surprise us pleasantly tomorrow,” Jack Ablin, who helps oversee about $60 billion of assets as chief investment officer of BMO Harris Private Bank in Chicago, said in a telephone interview. He said FedEx “really has tentacles in just about everything in the global economy, and to hear a disappointing report from them is disappointing to me.”

FedEx lost 2 percent to $85.80 for the biggest drop since July 20. The operator of the world’s largest cargo airline said profit for the quarter that ended Aug. 31 will range from $1.37 to $1.43 a share. That was less than its June 19 forecast of $1.45 to $1.60 a share and year-earlier earnings of $1.46. It would mark the first drop in adjusted earnings per share since the quarter that ended November 2009.

Rival United Parcel Service Inc. also fell, losing 2.4 percent to $71.94. The Dow Jones Transportation Average, a gauge of 20 shipping companies, declined 1.1 percent. The index has dropped in five of the past seven trading sessions.

Utility and industrial shares posted the biggest declines out of 10 groups in the S&P 500, falling at least 0.4 percent. Commodity, telephone and consumer discretionary companies posted the largest increases. Walt Disney Co. jumped 2.3 percent to $50.79 for the biggest gain in the Dow.

Advanced Micro Devices Inc. sank 3.6 percent for the second-biggest decline in the S&P 500, to $3.51. The second- biggest maker of processors for personal computers was reduced to neutral from buy by UBS AG.

Facebook rallied 4.8 percent to $18.58, climbing from its lowest price since going public in May. Zuckerberg, faced with a plummeting stock price and deluge of shares hitting the market, has yet to adopt a share sale plan, the Menlo Park, California- based company said yesterday in a filing with the U.S.

Securities and Exchange Commission. Typically, insiders use plans to pare their stakes over time to avoid flooding the market.

Safeway Inc. rallied 4.3 percent to $16.50. The second- largest grocery chain in the U.S. is planning an initial public offering of a minority stake in its Blackhawk Network Holdings Inc. business. Blackhawk provides prepaid products, such as restaurant gift cards, to retail and grocery stores in the U.S., Canada, Europe, Mexico and Australia.

All 10 stocks in the Bloomberg U.S. Airlines Index rose. Delta Air Lines Inc. climbed 3.7 percent to $8.88, while U.S. Airways Group Inc. advanced 7.4 percent to $11.22. Passenger revenue for each seat flown a mile, a measure of airline performance, rose 4 percent at Atlanta-based Delta in August and 1 percent at Tempe, Arizona-based US Airways. Miles traveled by paying passengers increased at both carriers, according to statements.

Sealed Air Corp. jumped 6 percent to $14.96. The Elmwood, New Jersey-based company is poised to turn into a takeover target after its biggest acquisition in more than a decade wiped out a third of its market value and left the maker of Bubble Wrap trading at a 64 percent discount to sales.

The company lost $1.4 billion in market capitalization since it said last June that it would buy Diversey Holdings Inc. for $2.9 billion to expand into cleaning and food-safety products. With the stock slumping after the Diversey deal and Sealed Air saying last month that it’s weighing options, the company could become vulnerable to a takeover, according to Stewart Capital.

 

Have a wonderful evening everyone.

Be magnificent!

 

One must become poor inwardly

for then there is no seeking, no asking,

no desire – nothing!

It is inward poverty

that can see the truth of a life in which

there is no conflict at all.

-Krishnamurti, 1895-1986

As ever,

Carolann

People of mediocre ability sometimes achieve outstanding success because they don’t know when to quit.  Most men succeed because they are determined to.

-George Allen, 1918-1990

 

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

 

Dear Friends,

Tangents:

I always feel odd on the day after Labor Day – remembering back to all those years when school began again.  Sort of feel like I should be going back to school too.  I loved school when I was a child; I loved school in college and university too… September is a sentimental time, remembering old school pals, inspiring teachers.

The old Dutch name for September was Herstmaand, “autumn month, and the Anglo Saxon name was Hoerfestmonath, “harvest month,” or after the introduction of Christianity Haligmonath, “holy month,” the nativity of the Virgin Mary being on the 8^th of September, the exaltation of the cross on the 14^th and Michaelmas, the feast of St. Michael the Archangel on the 29^th.  In the French Revolutionary calendar, the equivalent month was Fructidor or “fruit month,” corresponding to the period from August 19^th to September 22^nd.

September tries its best to have us forget summer.  –Bern Williams.

And on this day in…

1781 – City of Los Angeles founded.

1886 – Geronimo surrenders.

1931 – Mitzi Gaynor is born.
1945 – Japanese surrender on Wake Island.
1972 – Mark Spitz wins 7th Medal.
1988 – Mike Tyson crashes a silver BMW into a tree near Catskills NY.

photos of the day September 4, 2012

A worker empties her basket, containing bunches of white grapes, at the Chateau Haut Brion vineyard in Pessac, near Bordeaux, France, as the traditional harvest begins.

Regis Duvignau/Reuters

A dragonfly is reflected in water as it clings to a metal fence post hanging over a pond in Salina, Kan.

Tom Dorsey/Salina Journal/AP

Market Closes for September 4, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13035.94	-54.90
		-0.42%
S&P 500	1404.94	-1.64
		-0.12%
NASDAQ	3075.06	+8.09
		+0.26%
TSX	11941.70	-7.56
		-0.06%

International Markets

Market  Index	Close	Change
NIKKEI	8775.51	-8.38
		-0.10%
HANG  SENG	19429.91	-129.30
		-0.66%
SENSEX	17440.87	+56.47
		-0.64%
FTSE 100	5711.48	-7.97
		+0.32%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.738	1.774
CND.   30 Year Bond	2.313	2.336
U.S.   10 Year Bond	1.5722	1.5450
U.S.   30 Year Bond	2.6821	2.6678

Currencies

BOC Close	Today	Previous
Canadian $	0.98592	0.98628
US   $	1.01424	1.01391
Euro Rate  1 Euro=		Inverse
Canadian   $	1.23908	0.80705
US  $	1.25671	0.79573

Commodities

Gold	Close	Previous
London Gold   Fix	1695.50	1691.41
Oil	Close	Previous
WTI Crude Future	95.30	96.47
BRENT	114.59	115.79

Market Commentary:

Canada

By Eric Lam

Sept. 4 (Bloomberg) — Canadian stocks slumped after a private report showed U.S. manufacturing contracted for a third month in August, overshadowing a rally in gold.

Teck Resources Ltd. declined 2.4 percent to its lowest price since September 2009. Canadian Natural Resources Ltd. lost 2.6 percent as crude slipped. Valeant Pharmaceuticals International Inc. soared 14 percent, its biggest gain since January 2011, a day after the company said it had agreed to purchase Medicis Pharmaceutical Corp. for $2.6 billion. Gold and silver prices climbed.

The Standard & Poor’s/TSX Composite Index fell 7.56 points, or 0.1 percent, to 11,941.70. The benchmark Canadian gauge dropped as much as 0.4 percent earlier. North American equity markets were closed yesterday for the Labor Day holiday.

“It’s hard for Canada to fight the downward trend of what’s going on in the U.S.,” Barry Schwartz, portfolio manager with Baskin Financial Services Inc., said in a phone interview from Toronto. His firm manages about C$450 million ($456 million). “We’re down in sympathy with the lousy numbers.”

The Institute for Supply Management’s U.S. factory index fell to 49.6 in August from 49.8 a month earlier, the Tempe, Arizona-based group said today. Economists in a Bloomberg survey projected an August reading of 50, which is the dividing line between expansion and contraction.

The three-month slide is the longest since the recession ended, and the August figure is the lowest since July 2009.

Measures of orders, production and employment were the weakest since 2009.

Teck Resources slumped 2.4 percent to C$26.58. Shares in Canada’s largest diversified miner have fallen for nine days, the longest losing streak since April 2011. Shares are down 26 percent this year as prices for coal used in steelmaking extended declines.

SouthGobi Resources Ltd. plunged 19 percent to C$2.19, its lowest in five years, after Aluminum Corp. of China Ltd. dropped its C$925 million offer to buy a 60 percent stake in the coal producer. The offer stalled in May after Mongolia passed a law restricting foreign state-owned companies from controlling key assets. SouthGobi halted mining there as of June 30, citing uncertainty created by the bid.

Canadian Natural Resources lost 2.6 percent to C$29.22, and Crescent Point Energy Corp. fell 1.9 percent to C$40.23. Oil for October delivery slipped 1.2 percent to settle at $95.30 a barrel on the New York Mercantile Exchange.

Colossus Minerals Inc. surged 7.5 percent to C$4.73, and Aurizon Mines jumped 7 percent to C$4.29 as the price of the gold topped $1,700 an ounce for the first time since March. Gold futures for December delivery added 0.5 percent to settle at $1,696 in New York, after jumping to $1,701.60 earlier.

Valeant, Canada’s largest publicly traded drugmaker, soared 14 percent to C$57.58, its highest share price since September 2003. The deal to acquire U.S.-based Medicis is the biggest for Valeant since it was created in 2010, and will help the company expand its lineup of wrinkle and skin-care products.

Fortuna Silver Mines Inc. advanced 6.7 percent to C$4.96, and Silvercorp Metals Inc. rallied 4.8 percent to C$6.08 as silver prices rose.

US

By Lu Wang

Sept. 4 (Bloomberg) — The Standard & Poor’s 500 Index fell, after trimming steeper declines, as speculation European leaders will announce new steps to tame the debt crisis tempered concern the economic recovery is slowing.

Apple Inc. climbed 1.5 percent amid speculation the company is close to introducing a new iPhone with a larger screen and thinner body. Morgan Stanley added 3.4 percent after the shares were upgraded at CLSA Ltd. Netflix Inc. slumped 6.4 percent as Amazon.com Inc. reached a deal with pay-television channel Epix.

Facebook Inc. fell 1.8 percent to a record low after Morgan Stanley cut its price forecast on the company’s shares.

The S&P 500 lost 0.1 percent to 1,404.94 at 4 p.m. New York time, trimming a drop of as much as 0.7 percent. The Dow Jones Industrial Average retreated 54.90 points, or 0.4 percent, to 13,035.94. Volume for exchange-listed stocks in the U.S. was 5.6 billion shares, or 7.3 percent below the three-month average.

The European Central Bank’s plans “to stabilize Europe takes the big-event risk off the table,” Frank Ingarra, who helps manage $1.4 billion at Greenwich, Connecticut-based NorthCoast Asset Management LLC, said in a telephone interview.

“Everyone is kind of digesting and getting back to the game today,” he said. As speculation about Europe swirls, he said, “people are happier that it’s happening now and willing to go long equities.”

ECB President Mario Draghi said the bank’s primary mandate compels it to intervene in bond markets to wrest back control of interest rates and ensure the euro’s survival. Draghi “appears willing to write two- to three-year ‘checks’” to debt-strapped euro-bloc nations in a reflationary move, Bill Gross, co-chief investment officer and founder of Pacific Investment Management Co., said in a Twitter post.

Draghi is due to distribute his bond-purchasing plan to national banks after he was said to tell officials he would be comfortable buying three-year government bonds to lower borrowing costs.

Equities fell earlier as the Institute for Supply Management’s U.S. factory index showed U.S. manufacturing shrank for a third month in August in the longest decline since the recession ended in 2009. A report over the weekend showed China’s manufacturing contracted at the fastest pace since March 2009.

“Economic data continues to be soft all over the world and that’s just the basic reality,” John Kattar, chief investment officer at Eastern Bank Wealth Management in Boston, which manages $1.7 billion, said in a telephone interview. “But more important than that is speculation on what the ECB is going to do this week and what the Fed is going to do next week,” he said, referring to policy meetings by the ECB and the Federal Reserve.

The S&P 500 rose 2 percent in August, capping its longest monthly rally since March, amid expectations global central banks would stimulate the economy. Fed Chairman Ben S. Bernanke said on Aug. 31 at an annual forum in Jackson Hole, Wyoming, that he wouldn’t rule out steps to lower a jobless rate he described as a “grave concern.” Payrolls probably grew at a slower pace in August and unemployment exceeded 8 percent for a 43rd month, economists said before a report this week. The Federal Open Market Committee meets Sept. 12-13.

Apple climbed 1.5 percent to $674.97 today. The world’s most valuable company sent out invitations to a Sept. 12 product event in San Francisco, where it’s expected to unveil a redesigned iPhone. “It’s almost here,” Apple said in the invitation, whose image includes a ‘5’ in shadow, possibly in reference to the new product’s name.

Morgan Stanley added 3.4 percent to $15.51. The stock’s rating was boosted to buy from outperform at CLSA by equity analyst Michael Mayo. The 12-month share-price estimate is $23.

GameStop Corp. advanced 7 percent, the most in the S&P 500, to $20.41. The electronic game and software company was raised to buy from neutral at Goldman Sachs Group Inc.

Valeant Pharmaceuticals International Inc. rallied 15 percent to $58.78 after agreeing to buy Medicis Pharmaceutical Corp. for $2.6 billion. Canada’s largest publicly traded drugmaker said yesterday it will pay $44 in cash for each share of Scottsdale, Arizona-based Medicis. Medicis surged 38 percent to $43.65.

ConAgra Foods Inc. rose 2.2 percent to 25.65, leading consumer staples in the S&P 500 to a 0.4 percent increase. The maker of Hebrew National hot dogs and Orville Redenbacher’s popcorn was raised to overweight, the equivalent of buy, from neutral at JPMorgan Chase & Co.

Commodities and industrial companies fell the most among the 10 S&P 500 groups. Caterpillar Inc., the world’s largest maker of construction and mining machines, dropped 3.1 percent to $82.66 for the biggest retreat in the Dow. Cliffs Natural Resources Inc., the largest U.S. iron-ore producer, slipped 6 percent to $33.68.

Alpha Natural Resources Inc. fell 6.9 percent to $5.53 while Peabody Energy Corp. dropped 3.4 percent to $20.90. The companies were cut to hold from buy at Dahlman Rose, which lowered its outlook for metallurgical coal used in steelmaking.

Netflix Inc. slumped 6.4 percent to $55.93. Amazon.com reached a deal with Epix to add movies such as “The Hunger Games” to the roster of films available through Amazon Prime Instant Video, ratcheting up competition with Netflix.

Nvidia Corp. slid 6.4 percent to $13.28. The maker of graphics processors was cut to neutral from positive at Susquehanna Financial Group LLP.

Facebook Inc. fell 1.8 percent to a record low of $17.73. Morgan Stanley, a lead underwriter of the company’s initial public offering, cut its price forecast on concern that the social network is struggling to reach mobile users with ads.

Scott Devitt, an analyst at Morgan Stanley in New York, expects Facebook shares to reach $32 in the next 12 months, down from his previous projection of $38. Facebook has lost more than half its value since its May IPO.

Jonathan Golub, chief U.S. equity strategist of UBS AG, lowered his estimates for S&P 500 profits in 2012 and next year, citing a weaker outlook for the world’s largest economy, slower growth overseas, a strengthening dollar and difficult operating environment for financial companies. His projection for combined earnings by companies in the benchmark equity index this year is now $102.50 a share, down from $103.50. He cut his estimate for profit in 2013 to $107 from $110.

Profits are moving U.S. equity prices more than any time since the bull market began 3 1/2 years ago, rewarding investors for picking stocks based on company data instead of following the herd rocked by Europe’s crisis and the slowing U.S. economy.

Companies in the S&P 500 rose or fell an average of 4.4 percent the day after releasing results since July, according to data compiled by Bloomberg. The last time they moved more was in the second quarter of 2009. Daily swings in the benchmark gauge narrowed to 0.4 percent last month from 2.2 percent a year ago, as economic and policy changes battered investors. More than 475 S&P 500 stocks moved in the same direction in six of the first nine days of August 2011, with all 500 down on Aug. 8.

Bulls say lockstep moves are diminishing because investors are changing their behavior, making choices based on corporate results at a time when analysts estimate profits for companies in the S&P 500 will rise almost 10 percent a year through 2014.

Bears say the focus on earnings won’t bring back individuals who have drained more than $420 billion from U.S. equity mutual funds over the past four years even as stocks rallied 108 percent since March 2009 and net income was unchanged in the second quarter.

“I’m not saying it’s an easy job to be a stock picker in this environment, but it’s certainly easier,” Sandy Lincoln, the Chicago-based chief market strategist with BMO Global Asset Management, which oversees about $100 billion, said in an Aug. 28 interview. “Stock selection does have the opportunity here to finally show a face with a smile.”

Have a wonderful evening everyone.

Be magnificent!

We ask ourselves

is it possible to break through this heavy conditioning of centuries immediately

and not enter into another conditioning – to be free,

so that the mind can be altogether new, sensitive,

alive, aware, intense, capable?

-Krishnamurti, 1895-1986

As ever,

Carolann

As we acquire knowledge, things do not

become more comprehensible,

but more mysterious.

-Albert Schweitzer, 1875-1965

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

 

Dear Friends,

Tangents:

Syrup theft – seems like a sticky situation!

The folks at a St-Louis-de-Blandford warehouse are in shock today, as bandits in Quebec have taken off with over $30 million dollars worth of maple syrup.  The maple syrup was being temporarily stored in the warehouse, while renovations were being done at a new location.  It wasn’t until a routine inventory check when the maple syrup was discovered missing.  “The Federation always acts with caution to protect producers’ harvests. The St-Louis-de-Blandford warehouse had been secured by a fence and locks, and visited regularly,” Serge Beaulieu, president of the Federation of Quebec Maple Syrup Producers, said in a statement. “The sales agency`s maple syrup inventory is spread across several storage locations which were not subject to theft.” Quebec is responsible for 70 to 80% of the world’s maple syrup, according to the Quebec Maple Syrup Producers federation. The federation noted that several U.S. states had “a very low, indeed catastrophic, harvest during the 2012 season” while “the Quebec harvest . . . remained normal.” “The Federation wishes to underscore that all maple syrup inventories in its charge are fully insured. The marketing of the stolen maple syrup will affect the entire maple industry. It is crucial to identify those responsible for this crime.”

Maple trees are readied at the Morgan Arboretum as they prepare for the upcoming Maple syrup harvest, in Montreal.

“Don’t judge each day by the harvest you reap but by the seeds that you plant.” – Robert Louis Stevenson

And also on this day in…

• 1881 – 1st US men’s single tennis championships (Newport, RI)
• 1886 – 1st major earthquake recorded in eastern US, at Charleston SC
• 1897 – Thomas Edison patented his movie camera (Kinetograph)
• 1914 – 24.8 cm rainfall at Bloomingdale, Michigan (state record)
• 1954 – Hurricane Carol (1st major named storm) hits New England
• 1961 – Amsterdam National Ballet forms
• 1986 – Russian cargo ship crashes into cruise ship Admiral Nakhimov

photos of the day August 31, 2012

Tributes for Princess Diana are displayed on the gate of Kensington Palace in London on the 15th anniversary of her death. Princess Diana was killed in a car accident in Paris August 31, 1997.

A performer from the Fuerzabruta company of Argentina is pictured as she acts in a show entitled ‘Mylar’ on a translucent overhead water stage during the Night Festival in Singapore.

The full moon rises as riders take a spin on the Tilt-a-Whirl during the Oregon State Fair, in Salem, Ore., on Thursday, Aug. 30, 2012.

Market Closes for August 31, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	13090.84	+90.13
		+0.69%
S&P 500	1406.61	+7.13
		+0.51%
NASDAQ	3066.97	+18.25
		+0.60%
TSX	11980.85	+94.20
		+0.79%

International Markets

Market  Index	Close	Change
NIKKEI	8839.91	-143.87
		-1.60%
HANG  SENG	19482.57	-70.34
		-0.36%
SENSEX	17429.56	-122.08
		-0.64%
FTSE 100	5711.48	-7.97
		-0.14%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.774	1.771
CND.   30 Year Bond	2.336	2.341
U.S.   10 Year Bond	1.5450	1.6233
U.S.   30 Year Bond	2.6678	2.7446

Currencies

BOC Close	Today	Previous
Canadian $	0.98628	0.99294
US   $	1.01391	1.00712
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24049	0.80613
US  $	1.25775	0.79507

Commodities

Gold	Close	Previous
London Gold   Fix	1691.41	1655.85
Oil	Close	Previous
WTI Crude Future	96.47	94.62
BRENT	115.79	114.01

Market Commentary:

Canada

By Eric Lam

Aug. 31 (Bloomberg) — Canadian stocks rose for the first time this week as data showed faster-than-estimated economic growth and U.S. Federal Reserve Chairman Ben S. Bernanke said he would not rule out further bond purchases.

Athabasca Oil Corp. soared 6.8 percent after the crude producer said it signed a letter of intent to pursue a joint venture. Canadian Natural Resources Ltd. and Petrominerales Ltd. gained at least 0.9 percent as crude prices advanced for the first time in three days. Thompson Creek Metals Co. surged 9.8 percent after an analyst at Dahlman Rose & Co. recommended buying the molybdenum mining company.

The Standard & Poor’s/TSX Composite Index added 93.08 points, or 0.8 percent, to 11,979.73 at 2:37 p.m. in Toronto.

Two stocks rose for each that fell in the index. The equity benchmark has dropped 0.8 percent this week.

“Bernanke is so far keeping to a cautious mode and not signaling anything dramatic,” said Michael Smedley, executive vice president with Morgan Meighen & Associates Ltd. in Toronto.

His firm manages about C$1 billion ($1.01 billion). “It’s some comfort for the market the speech-making is moderate in its presentation. Probably more comforting than having to analyze something dramatic. The seasonal change is so vital here, you will see an acceleration in activity after the long weekend.” North American markets will be closed Monday for the Labor Day holiday.

Bernanke’s 24-page speech at the Kansas City Fed’s symposium reviewed the Fed’s policy actions through the financial crisis and use of nontraditional policy tools such as communication and outright bond purchases, concluding that they have been effective in boosting growth and improving financial conditions. He said that declines in the unemployment rate would continue only if growth picks up above its longer term trend.

The speech comes two weeks before he leads a meeting of the Federal Open Market Committee to decide whether an expansion of the Fed’s record stimulus is needed to spur growth. The Fed will likely not take any concrete action in an effort to avoid upstaging the U.S. presidential election in November, Smedley said.

Canadian gross domestic product grew at a 1.8 percent annualized pace in the second quarter, matching the revised January-March figure. The median forecast of 25 economists surveyed by Bloomberg News was for the rate to fall to 1.6 percent from an originally reported 1.9 percent first-quarter pace.

Canadian Natural Resources added 0.9 percent to C$30.13 and Petrominerales jumped 1.7 percent to C$9.41. Oil for October delivery increased 2.2 percent to $96.70 a barrel on the New York Mercantile Exchange.

Athabasca Oil jumped 6.8 percent to C$13.36 after the company said it signed a letter of intent to pursue a joint venture for its Hangingstone and Birch properties. Athabasca did not comment on the size of the potential transaction or its partner in a statement today. Its shares were halted earlier in the day after a report in the Globe and Mail that Kuwait Petroleum Corp. may invest as much as C$4 billion for a joint venture to develop Athabasca Oil’s assets in Alberta.

OceanaGold Corp. advanced 9.1 percent to C$2.64, heading for its biggest gain since December. China Gold International Resources Corp. soared 9.9 percent to C$3.44 and Dundee Precious Metals Inc. climbed 6 percent to C$8.51 as gold prices gained the most in a week. Gold futures for December delivery jumped 2 percent to $1,690.10 an ounce in New York.

Barrick Gold Corp. added 3.5 percent to C$38.10 and Goldcorp Inc. rallied 3.9 percent to C$40.68.

Thompson Creek Metals surged 9.8 percent to C$2.71 after Anthony Young, an analyst with Dahlman Rose, upgraded the company to a buy from hold. Thompson Creek shares have plunged 62 percent this year.

Royal Bank of Canada rose 1.3 percent to C$55.69 after Gabriel Dechaine, an analyst with Credit Suisse Group AG, raised the bank to an outperform. Royal Bank, Canada’s largest lender, raised its dividend yesterday after posting a 73 percent increase in profit for its third quarter.

Research In Motion Ltd. sank 1.5 percent to C$6.57, on pace for its lowest share value in almost nine years. RIM stock has plunged 56 percent this year.

US

By Rita Nazareth and Inyoung Hwang

Aug. 31 (Bloomberg) — U.S. stocks rallied with commodities and Treasuries as Federal Reserve Chairman Ben S. Bernanke said he wouldn’t rule out more stimulus to lower a jobless rate he described as a “grave concern.” The dollar weakened.

The Standard & Poor’s 500 Index added 0.5 percent to close at 1,406.58 and the Dow Jones Industrial Average climbed 90.13 points to 13,090.84 as both finished a third straight monthly gain. Oil extended its biggest monthly advance since October and gold capped its best since January. Ten-year Treasury yields slid seven basis points to 1.55 percent, an three-week low, and the Dollar Index lost 0.5 percent to 81.25, its lowest on a closing basis since May.

Bernanke’s 24-page speech at the Kansas City Fed’s symposium made the case for further monetary easing and concluded that the central bank’s non-traditional policy tools such as bond purchases have been effective in boosting growth and improving financial conditions. He said that declines in the unemployment rate would continue only if growth picks up above its longer term trend.

“It’s the strongest language on unemployment I remember Bernanke using,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private- banking unit of KeyCorp in Cleveland. “That makes the next jobs report even more critical. If it deviates significantly from muddling along, they may well be forced to act.”

The Labor Department’s employment report for August is scheduled to be released on Sept. 7. Payrolls probably climbed by 125,000 in the month and the unemployment rate remained at 8.3 percent, according to the median economist prediction in a Bloomberg survey.

Commodity, technology, financial and industrial companies helped lead gains in the 10 main industry groups in the S&P 500 today. Intel Corp., American Express Co. and Microsoft Corp.

rose more than 1.6 percent to lead the Dow’s gain.

The dollar weakened against 15 of 16 major peers, losing about 1 percent against the Swedish krona, Mexican peso and South African rand. The euro strengthened 0.6 percent to $1.2575 and rose to as much as $1.2638, the strongest level in almost two months.

Two-year Treasury yields decreased three basis points to 0.22 percent and 30-year rates tumbled seven basis points to 2.67 percent.

Bernanke left the door for a third round of quantitative easing “wide open” and the chairman’s remarks about unemployment signal the Fed is likely to act if the jobless rate increases even slightly, Alan Ruskin, Deutsche Bank AG’s global head of Group-of-10 currency strategy, said in a note to clients.

“We have seen no net improvement in the unemployment rate since January,” Bernanke told central bankers and economists in the audience, according to a text of his remarks released in Washington. “Unless the economy begins to grow more quickly than it has recently, the unemployment rate is likely to remain far above levels consistent with maximum employment for some time.”

Speaking two weeks before the next meeting of the Federal Open Market Committee, Bernanke said long periods of high unemployment produce “enormous suffering and waste of human talent” and also risk causing structural damage to the economy that could last for many years.

“He set the backdrop for them acting, saying things like ‘the labor market is a grave concern,’” said John Canally, an economist and investment strategist at LPL Financial Corp. in Boston. The firm oversees about $350 billion. “He didn’t say that the economy is seeing any sustainable or substantial improvement, so when you mix it all together, it’s still a matter of how and when they’re going to do it rather than if.”

Benchmark U.S. equity indexes marked a third straight monthly advance in August. The S&P 500 has advanced 12 percent this year as European leaders worked to tame the region’s debt crisis and the Fed pledged to act to safeguard the economic recovery if needed.

The S&P 500 last week climbed to its highest level on an intraday basis in more than four years, then failed to close at that milestone. The index has fluctuated near the 1,400 level for three weeks.

Trading has slowed toward the end of the U.S. summer as investors awaited the Fed’s gathering in Wyoming. Bernanke’s address in Jackson Hole in 2010 preceded a second round of quantitative easing, nicknamed QE2 on Wall Street.

Volume for exchange-listed stocks in the U.S. was below 4.5 billion shares for three days this week, the lowest levels excluding days surrounding holidays in Bloomberg data going back to 2008. About 5.4 billion shares changed hands today, 12 percent below the three-month average.

The Stoxx Europe 600 Index added 0.5 percent today. It declined 0.7 percent this week, trimming its third straight monthly advance to less than 1.9 percent. Hermes International SCA gained 2.3 percent today after the maker of Birkin and Kelly bags raised this year’s sales-growth target as first-half earnings beat estimates. Bankia SA climbed 6.3 percent. After markets closed in Europe, Spain’s rescue fund said it would inject capital into the lender immediately.

Spanish bonds tumbled, sending 10-year yields up 26 basis points to a two-week high of 6.86 percent, as the government bolstered the powers of the bank rescue fund to restructure troubled lenders and S&P lowered the Catalonia region’s credit rating to junk. Spain yesterday delayed making a decision on seeking European bailout funds until conditions of the aid are clear.

Oil advanced 2 percent to $96.47 a barrel in New York to cap a 9.6 percent rally for the month. Gold increased 1.8 percent to $1,687.60 an ounce as Bernanke’s remarks spurred demand for an inflation hedge. The precious metal increased 4.5 percent in August. The S&P GSCI Index of commodities jumped 1.2 percent as 18 of its 24 materials increased.

The MSCI Emerging Markets Index rose 0.4 percent, snapping a five-day slump and trimming this month’s drop to 0.4 percent. Benchmark gauges in Turkey, Poland, the Czech Republic and Thailand gained more than 1 percent. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong slipped 0.7 percent.

“Nothing is impossible, the word itself says ‘I’m possible’!” – Audrey Hepburn

Have a fabulous long weekend everyone!

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.