April 2, 2012 Newsletter

Hello All,

Tangents:

Canadian politics can get pretty heated but never before have our representatives come to blows! Last Saturday Liberal MP Justin Trudeau and Conservative Senator Patrick Brazeau duked it out to see which politician would reign supreme. Well sort of…. Trudeau and Brazeu actually entered into fisticuffs as part of a charity boxing event. The match aimed to raise awareness and funds for cancer research, a disease that has affected the lives and families of both men deeply (Trudeau lost his father, the late Prime Minister Pierre Trudeau, to prostate cancer and Brazeau lost his mother to lung cancer).

While some commentators have branded the event as sophomoric or plain silly, I found it to be pretty fun and for an excellent cause. Both fighters had fun with the event and handled their respective victories and defeats gracefully. Speaking of victories, was anyone else surprised that Trudeau pulled off the win? What a twist!

If you want to read more, I would recommend this excellent article from The Ottawa Citizen: http://www.ottawacitizen.com/news/Truly+honourable+members/6394435/story.html#ixzz1qqMyNIph

You can also watch the match yourself and catch all the glory and upset here (the commentary is pretty hilarious!): http://www.youtube.com/watch?feature=player_embedded&v=XuSpZ3_5pTc#!

photos of the day

April 2, 2012

A woman walks past an Orthodox church during heavy snowfall in central Minsk, Belarus.

Vasily Fedosenko/Reuters

Judges from Senegal’s top court arrive at the inauguration of newly-elected Senegalese President Macky Sall in the capital Dakar. Sall took his oath as president of the West African country under the gaze of regional leaders due to hold emergency talks later on the crisis in neighbouring Mali.

Joe Penney/Reuters

Market Closes for April 2, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli  April 2 (Bloomberg)

Canadian stocks rose the most in more than five weeks, led by materials and energy shares, after oil and copper advanced on an improving economic and manufacturing outlook in China.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, gained 1.6 percent. Teck Resources Ltd., Canada’s biggest base-metal producer, gained 3 percent. Canadian Natural Resources Ltd., the country’s second- largest energy company by market value, increased 2.1 percent.

The Standard & Poor’s/TSX Composite Index gained 114.88 points, or 0.9 percent, to 12,507.06 in Toronto, the biggest increase since Feb. 21.

“The numbers that came out today are surprisingly better than most people were thinking,” Gerry Brockelsby, a money manager at Marquest Asset Management Inc. in Toronto, said in a telephone interview. The firm oversees C$250 million ($252 million). “This is just confirmation that China is OK, and if concerns fade, people will get more and more positive about the global economy, which we think is in great shape and improving.”

The benchmark equity gauge rose 3.7 percent in the first quarter as economic data surpassed estimates and investors speculated that the euro area would contain its sovereign-debt crisis. The index fell 2 percent in March, after two straight months of increases.

Canadian materials companies increased for the second straight day, driven by gold and copper, after a measure of manufacturing in China signaled stronger demand. A Purchasing Managers’ Index touched a one-year high of 53.1 last month, China’s logistics federation and the National Bureau of Statistics said. Readings above 50 signal growth.

Barrick Gold Corp., the world’s largest gold-mining company, gained 1.2 percent to C$43.86. First Quantum Minerals Ltd. increased 1.6 percent to C$19.32. Teck Resources Ltd. climbed 3 percent to C$36.67.

Energy stocks in the S&P/TSX gained as oil rose the most in six weeks. A report showed that manufacturing in the U.S.

expanded at a faster pace than forecast, signaling economic growth in the world’s biggest crude-consuming country.

Canadian Natural Resources increased 2.1 percent to C$33.75. TransCanada Corp., the developer of the proposed Keystone XL pipeline, gained 1.1 percent to C$43.29.

Progress Energy Resources Corp., a western Canadian natural gas producer, surged 7.9 percent to C$10.79 after Petroliam Nasional Bhd. said it will make a Canadian acquisition exceeding $5 billion. Petronas agreed in June to pay Progress Energy C$1.07 billion for a 50 percent stake in three Canadian natural gas fields.

“People have made the connection that if Petronas is looking to buy Canadian gas assets, Progress would be where they would look,” Roger Serin, an analyst at TD Newcrest Inc., said in a telephone interview. “They’re likely considering a number of companies, but will look more closely at one they already have a working relationship with.”

Progress isn’t currently in discussions with Petronas regarding any business transactions outside of its joint venture relations, the Calgary-based company said in a statement today.

US

By Michael P. Regan and Lu Wang – Apr 2, 2012

U.S. stocks gained, with the Standard & Poor’s 500 Index returning to an almost four-year high, and commodities reversed early losses following a report showing stronger-than-forecast growth in American manufacturing. Oil rallied the most in six weeks.

The S&P 500 advanced 0.8 percent to close at 1,419.04 at 4 p.m. in New York, adding to its 12 percent first-quarter rally. The Dow Jones Industrial Average increased 52.45 points to 13,264.49, the highest since December 2007. The S&P GSCI (SPGSCI) Index rose 1.7 percent as heating oil, gasoline and copper led gains in 19 of 24 commodities. Ten-year Treasury yields lost two basis points to 2.19 percent after decreasing as much as five points.

Stocks and commodities recovered from earlier losses after the Institute for Supply Management’s manufacturing index increased to 53.4 last month and a gauge of factory employment climbed to the highest level since June. The data helped assuage concern about the global economy after earlier reports showed European unemployment rose to a 14-year high in February and manufacturing contracted for an eighth month in March.

“Here in the United States, things have stabilized,” Barry James, who helps oversee $3.3 billion as president of James Investment Research in Xenia, Ohio, said in a telephone interview. “The manufacturing side has been the strength of our economy and the exporting has been huge — that’s what has sustained us the past several years.”

The S&P 500 needs to rise only about 10 percent to reach its previous record high of 1,565.15 set in October 2007. Gains in U.S. stocks todaywere led by producers of raw materials and energy, with Freeport-McMoRan Copper & Gold Inc. rallying 2.8 percent and Chevron Corp. rising 1 percent to pace the advance. Avon Products Inc. surged 17 percent after Coty Inc. offered to buy the cosmetics company for $10 billion.

Apple Inc. advanced 3.2 percent after Consumer Reports said on its website that the new iPad’s high-resolution screen provides the best detail and color accuracy of all tablets it has seen.

Groupon Inc. slid 17 percent after the largest provider of daily online deals reported a “material weakness” in its financial controls and said fourth-quarter results were worse than previously stated because of higher refunds to merchants.

The S&P 500 reversed a drop of 0.3 percent in the first hour of trading after the ISM’s factory index topped the median economist forecast of 53. The group’s production gauge climbed to a three-month high and its measure of employment reached the highest level since June.

The best first-quarter gain for the S&P 500 since 1998 sent U.S. stocks above gold by the most in more than a decade, a sign of growing investor confidence in corporate profits as analysts raise earnings estimates for the first time this year.

The S&P 500 climbed 12 percent, 5.3 percentage points more than gold for the widest gap to start a year since 1999, according to data compiled by Bloomberg. The S&P GSCI Total Return Index of 24 commodities gained 5.9 percent over the three months, while Treasuries slipped 1.3 percent, trailing equities by the most since 2009. Corporate bonds increased 2.4 percent and the dollar fell 1.6 percent.

Thirty-year Treasury bonds fell today, erasing earlier gains and sending their yield one basis point higher to 3.35 percent. Two-year yields were little changed at 0.33 percent.

The worst is over for the $10 trillion U.S. Treasury market following the biggest quarterly rout since 2010, say Wall Street’s largest bond trading firms.

After rising to as high as 2.4 percent last month from 1.88 percent at the end of 2011, the yield on the benchmark 10-year note will finish 2012 at 2.49 percent, according to the average estimate in a Bloomberg News survey of the 21 primary dealers that trade with the Federal Reserve. That’s the same as a January poll, suggesting the market isn’t ready to declare a bear market in bonds after a 30-year bull run.

Signs of strength in the economy, which caused a 5.56 percent loss in bonds maturing in 10 years or more last quarter, may fade in the second half of 2012, the dealers say. Tax cuts are expiring, $1 trillion of mandatory federal budget cuts are due to kick in and $100-a-barrel oil is eating into consumer spending. With inflation in check, Fed Chairman Ben S. Bernanke said last week that the central bank will consider further stimulus, even after upgrading its economic outlook March 13.

Among commodities tracked by the S&P GSCI index, heating oil, gasoline and nickel surged more than 2.2 percent. Oil for May delivery rose $2.21, or 2.1 percent, to settle at $105.23 a barrel on the New York Mercantile Exchange. It was the biggest gain since Feb. 21.

Commodities also advanced after data showed manufacturing growth in China. A Purchasing Managers’ Index rose to a one-year high of 53.1 in March, China’s logistics federation and the National Bureau of Statistics said yesterday. The gauge has a pattern of rising each March. The data failed to end predictions for policy loosening as analysts described the gain as seasonal and a separate survey showed exporters struggling.

The Stoxx Europe 600 Index (SXXP) increased 1.5 percent as national benchmark gauges in the U.K. and Germany led gains in the region. Among European stocks, Oriflame Cosmetics SA jumped 2.6 percent after Coty’s offer for Avon. Cookson Group Plc jumped 6 percent after the Sunday Times said the company may spin off a unit.

The yield on Italian 10-year bonds dropped one basis point to 5.11 percent, leaving the difference in yield with bunds two basis points lower. The Spanish 10-year yield was little changed at 5.35 percent.

The Markit iTraxx SovX Western Europe Index of credit- default swaps tied to the debt of 15 governments dropped 3.2 basis points to 266.75.

The yen appreciated 1 percent versus the euro, while the Dollar Index, which tracks the U.S. currency against those of six trading partners, lost 0.2 percent.

The MSCI Emerging Markets Index added 0.7 percent. In South Korea, the Kospi Index advanced 0.8 percent after the country’s credit rating outlook was raised by Moody’s Investors Service to positive from stable, boosting demand for the nation’s assets.

The FTSE/JSE Africa All Shares Index advanced 1.3 percent in Johannesburg. The ISE National 100 Index added 0.9 percent in Istanbul after Turkish economic growth in the fourth quarter was 5.2 percent, exceeding economists’ estimates.

Have a wonderful evening everyone!

Kind regards,

Ellora Howie

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7