March 7, 2012 Newsletter

Dear Friends,

Tangents:

Went to listen to Clara Hughes last night in Vancouver…quite an inspiring and remarkable athlete and woman.

We are what we repeatedly do.  Excellence then, is not an act, but a habit. –Aristotle

Art installation ‘Key Frames’ by Groupe LAPS of France lights up during a media preview of the i Light Marina Bay sustainable light art festival in Singapore. Key Frame is comprised 20 stick-like figures that come to life in a display of light and sound.

Edgar Su/Reuters

The sun erupts with one of the largest solar flares of this solar cycle in this multi-colored NASA photo taken on Tuesday. This flare was categorized as an X5.4, making it the second largest flare since early 2007. The current increase in the number of X-class flares is part of the sun’s normal 11-year solar cycle, during which activity on the sun ramps up to solar maximum, which is expected to peak in late 2013.

NASA/SD0/AIA/Reuters

Market Closes for March 7, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Matt Walcoff

March 7 (Bloomberg) — Canadian stocks rose for the first time in four days, led by energy companies, as more bondholders joined a Greek debt swap.

Suncor Energy Inc., Canada’s biggest oil and gas producer, rose 1.4 percent as crude oil climbed after settling at a two- week low yesterday. Royal Bank of Canada, the country’s largest lender by assets, dropped 1 percent after Statistics Canada said building permits plunged 12 percent in January.

The S&P/TSX Composite Index rose 22.75 points, or 0.2 percent, to 12,321.38 at 2:22 p.m. Toronto time after falling as much as 0.5 percent earlier, before more investors joined the Greek debt swap.

“There’s a lot of blind optimism and hope on the part of the people that are trading this market,” Danielle Park, a money manager at Venable Park Investment Counsel Inc. in Barrie, Ontario, said in a telephone interview. The firm manages at least C$1 million ($1 million) each for more than 200 clients.

“Each leg of news that comes out of the Greek deal, they have a euphoric blast.”

The S&P/TSX slumped 3.3 percent in the previous three days, led by raw-materials and energy companies. Resources stocks fell with the euro on concern not enough owners of Greek bonds would take part in a restructuring meant to avoid a national default.

The industries make up 47 percent of Canadian stocks by market value, according to Bloomberg data.

Oil and metals rose after investors with 58 percent of Greek bonds eligible for the debt swap indicated they would participate. The country has set a minimum participation level of 75 percent for the transaction, which ends tomorrow.

Suncor gained 1.4 percent to C$33.80. Talisman Energy Inc., which produces energy in North America, the North Sea and Indonesia, climbed 1.5 percent to C$13.21. TransCanada Corp., the developer of the proposed Keystone XL pipeline, advanced 1.6 percent to C$43.67.

PetroBakken Energy Ltd., a western Canadian oil and gas producer, surged 7.4 percent to C$16.15. The company reported cash flow per share that surpassed analysts’ estimates, reports from Bank of Montreal and Canaccord Financial Inc. said.

Petrobank Energy & Resources Ltd., which owns a majority stake in PetroBakken, rose 6 percent to C$14.98.

Natural gas producer Paramount Resources Ltd. sank 6.3 percent to C$32.80 after saying that lower forecast natural gas prices and well-performance issues restrained the growth of its reserves.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, lost 2.7 percent to C$20.05 to extend its four-day tumble to 14 percent. The company disclosed fourth-quarter earnings that lagged behind the average analyst estimate in a Bloomberg survey by 21 percent, excluding certain items. First Quantum has missed analysts’ average profit forecast for eight straight quarters.

Great Basin Gold Ltd., which mines in Nevada and South Africa, soared 8.8 percent to 87 Canadian cents after reporting drilling results. The shares closed at a 10-year low yesterday.

The value of municipal building permits filed in January fell to C$6 billion, the lowest total in four months, Statistics Canada said today. The drop was almost four times the median forecast in a Bloomberg survey of economists.

Canada’s seven-largest lenders each retreated. Royal Bank decreased 1 percent to C$55.57. Bank of Nova Scotia, Canada’s third-biggest lender by assets, slipped 1 percent to C$52.44.

Laurentian Bank of Canada, the country’s seventh-largest lender, dropped 1.6 percent to C$44.31 after first-quarter earnings excluding some items missed the average estimate in a Bloomberg survey of analysts.

Technology-patent owner Wi-LAN Inc. jumped 7.4 percent to C$5.26 after increasing its quarterly dividend 20 percent to 3 Canadian cents a share. The stock declined to the lowest since December 2010 yesterday.

The shares’ surge reflected company executives’ confidence about Wi-LAN’s prospects on a conference call with analysts, including a forecast that revenue will double in five years, Dev Bhangui, an analyst at Fraser MacKenzie Ltd., said in a telephone interview.

Nordion Inc., which produces medical sterilization products and isotopes, fell 6.7 percent, the most since January 2011, to C$9.49 after reporting first-quarter earnings that trailed the average analyst estimate in a Bloomberg survey by 14 percent, excluding certain items.

Propane distributor Superior Plus Corp. surged 6.2 percent to C$7.51 after Jason Granger, an analyst at BMO, raised his 12- month price estimate on the shares to C$7 from C$6. Granger cited the company’s efforts to increase profit margin.

Aecon Group Inc., a Toronto-based construction company, jumped 6 percent to C$13.05 after analysts at Toronto-Dominion Bank, Paradigm Capital Inc. and Stonecap Securities Inc. boosted their share-price estimates. Aecon reported fourth-quarter earnings on March 5 that beat the average analyst estimate in a Bloomberg survey by 33 percent, excluding certain items.

US

By Rita Nazareth

March 7 (Bloomberg) — U.S. stocks advanced, following the biggest decline in 2012 for the Standard & Poor’s 500 Index, after a private report showed American companies increased hiring and more investors signed on to a Greek debt swap.

Equities extended gains on a report that the Federal Reserve is discussing a new type of bond-buying program.

Financial and industrial shares rose the most among 10 groups in the S&P 500. Bank of America Corp. and Caterpillar Inc. advanced at least 2.2 percent. Apple Inc. added 0.1 percent after introducing a new version of the iPad with a sharper screen.

The S&P 500 rose 0.7 percent to 1,352.63 at 4 p.m. New York time, after slumping 1.5 percent yesterday. The Dow Jones Industrial Average added 78.18 points, or 0.6 percent, to 12,837.33. The Russell 2000 Index of small companies gained 1.1 percent to 795.95. About 6.1 billion shares changed hands on U.S. exchanges, or 9.1 percent below the three-month average.

“The market just wants to go up,” said Jack Ablin, who helps oversee $55 billion as chief investment officer at Harris Private Bank. “The ADP report was positive. The bigger participation in the Greek debt swap is encouraging. Plus, there’s a report that says that the Fed would continue to buy bonds, but they are not going to expand their balance sheet.”

Stocks rose as companies added 216,000 workers to payrolls in February, according to ADP Employer Services. The report came two days before the Labor Department’s monthly jobs data.

Consumer borrowing rose more than forecast in January. Optimism about Greece’s debt swap also helped lift stocks. Investors with 58 percent of the Greek bonds eligible for the nation’s debt swap have so far indicated they’ll participate.

Equities extended gains as the Wall Street Journal said the Fed would print new money to buy long-term mortgage or Treasury bonds, then effectively tie up that money by borrowing it back for short periods at low rates.

“The Fed ought to be saving future bullets for a situation that requires a strategic intervention,” said Philip Orlando, the New York-based chief equity strategist at Federated Investors Inc., which oversees about $370 billion. “If the Fed does something now, what happens if six months from now, Greece does default and it does throw the world into a recession? What’s the Fed going to do then?”

Before today, the S&P 500 had fallen for three straight days on concern that a rally that restored more than $3.2 trillion to U.S. equity value since October outpaced economic prospects. The benchmark gauge trades at 13.9 times reported earnings, below the average since 1954 of 16.4 times.

Financial shares, which yesterday had the biggest loss among 10 groups in the S&P 500, led the gains today. Bank of America rose 4 percent, the most in the Dow, to $8.02. JPMorgan Chase & Co. advanced 1.6 percent to $39.95.

Industrial shares had the second-biggest gain in the S&P 500. Caterpillar advanced 2.2 percent to $108.28. United Technologies Corp. climbed 1.5 percent to $82.57.

General Electric Co. increased 1.9 percent to $18.77. The world’s biggest maker of jet engines, power generation equipment, health-care imaging equipment and locomotives reiterated its forecast of earnings growth of at least 10 percent from industrial and capital units this year.

Apple rose 0.1 percent to $530.69, trimming a gain of as much as 1.4 percent. The new iPad will cost $499 to $829 and include an A5X chip that enables better graphics. It will also boast a 9.7-inch screen that has more pixels than traditional high-definition televisions and run on so-called long-term evolution, or LTE, wireless networks. The device will be available March 16, and Apple is taking orders starting today.

Chief Executive Officer Tim Cook is making the most significant upgrade yet to Apple’s tablet months before Microsoft Corp. introduces software that will run on competing devices. The new version is also aimed at helping the company fend off competition from Google Inc.’s Android operating system, as well as Amazon.com Inc., whose $199 Kindle Fire is gaining traction among budget-conscious buyers.

Microsoft gained 0.9 percent to $31.84. Google added 0.3 percent to $606.80. Amazon.com rose 1.5 percent to $183.77.

Ciena Corp. surged 4.2 percent to $14.01. The maker of network equipment for phone companies forecast fiscal second- quarter revenue that topped some analysts’ estimates. Ciena, which last month said first-quarter results would suffer from delays in recording international sales, today predicted stronger operating results in the second half of the year.

Rival JDS Uniphase Corp., the largest maker of fiber-optic testing equipment, added 2.5 percent to $12.80.

A measure of homebuilders in S&P indexes jumped 4 percent.

Lennar Corp. increased 5.6 percent to $23.62. D.R. Horton Inc. climbed 3.9 percent to $13.99.

Hovnanian Enterprises Inc. increased 2.5 percent to $2.46.

The largest homebuilder in New Jersey reported a narrower first- quarter loss as it reduced writedowns and increased sales.

Wynn Resorts Ltd. added 2.4 percent to $122.27. The hotel and casino operator asked investors to approve the removal of Japanese billionaire Kazuo Okada as a director, after accusing him of making improper payments to Philippines gambling officials.

Kraft Foods Inc. fell 1.2 percent to $37.83 for the biggest decline in the Dow. The company was cut to “hold” from “buy” by Jefferies Group Inc., which said the stock has little incentive to outperform this year.

Pandora Media Inc. plunged 24 percent, the most in the Russell 1000 Index, to $10.86. The Internet radio pioneer forecast first-quarter results that missed analysts’ projections because of a seasonal lull in advertising sales.

Solar stocks declined as Canadian Solar Inc.’s loss exceeded estimates. Canadian Solar fell 13 percent to $2.85.

First Solar Inc. dropped 6.6 percent to $25.80 for the biggest decline in the S&P 500.

Have a wonderful evening everyone.

Be magnificent!

Fear comes from the selfish idea

of cutting one’s self off form the universe.

-Swami Vivekananda, 1863-1902

As ever,

Carolann

A great deal of talent is lost to the world

for the want of a little courage.

-Sydney Smith, 1771-1845

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