April 25, 2012 Newsletter

Dear Friends,

Tangents:

Today in,

1901 – the first license plates were issued.

1915 – The Battle of Gallipoli.

1917 – Ella Fitzgerald was born.

Today is Anzac Day in Australia & New Zealand.

I was listening to the Seattle radio station, NPR, while driving to work this morning and the announcer reminded listeners that tomorrow is Poem in Your Pocket Day.  April is national  poetry month in the US and April 26^th is Poem in Your Pocket Day.   It started in New York City 10 years ago and became a national celebration of poetry in 2009.

The idea is to select a poem you love then carry it with you to share with co-workers, family, and friends.  Poems from pockets will be unfolded throughout the day with events in parks, libraries, schools, workplaces, and bookstores.  Isn’t that a wonderful idea?

photos of the day

April 25, 2012

A young boy stands among gravestones during the wreath-laying ceremonies at the Australian National Memorial in Villers-Bretonneux, northern France, on Anzac Day. The ceremony marks the 94th anniversary of the recapture of the village of Villers-Bretonneux on April 25, 1918.

Michel Spingler/AP

A pack of riders cycle during the first stage of the Tour de Romandie cycling race near Cossonay, Switzerland.

Denis Balibouse/Reuters

Market Closes for April 25, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

April 25 (Bloomberg) — Canadian stocks rose for the first time in four days as natural gas prices increased and U.S. companies reported better-than-forecast earnings.

Encana Corp., the country’s biggest natural gas producer by volume, added 4 percent. Potash Corp. of Saskatchewan Inc. rose 3.9 percent after fertilizer producer Mosaic Co. reported an increase in demand. Agrium Inc., a fertilizer producer and farm retailer, gained 3.2 percent. Rogers Communications Inc., Canada’s biggest wireless provider, fell 4.4 percent after reporting earnings that missed analysts’ estimates.

The Standard & Poor’s/TSX Composite Index increased 130.96 points, or 1.1 percent, to 12,111.06 in Toronto, its biggest gain in almost two weeks.

“What you’re generally seeing is a bit of a bounceback after a few days of selling,” Brian Huen, a managing partner at Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$55 million ($55 million).

“Earnings season seems to be in decent shape. The majority of companies are coming in better than expected, which is certainly helping sentiment today.”

Of companies in the S&P 500 and S&P/TSX, 76 percent that have reported earnings since April 10 have beaten analyst forecasts, according to data compiled by Bloomberg. Apple Inc. said second-quarter profit was $12.30 a share, exceeding predictions by 23 percent, and Caterpillar Inc. beat estimates by 11 percent.

The S&P/TSX had its first weekly gain in almost two months in the five days ending April 20, snapping its longest losing streak since 2008. Canadian stocks rallied after the International Monetary Fund and the Bank of Canada said economic growth would be faster than previously forecast. The index had its worst decline in a week on April 23, after manufacturing shrank in Europe and China.

Canadian shares extended gains today after U.S. Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate growth. Fed policy makers repeated the view that borrowing costs are likely to remain “exceptionally low” at least through 2014.

Energy companies increased as natural gas futures in New York rose for the third time in four days on speculation that decade-low prices will prompt production cuts and spur higher demand from power plants.

Encana advanced 4 percent to C$18.36. Niko Resources Ltd., which produces oil and gas in South Asia, rose 7.1 percent to C$41.39. Canadian Natural Resources Ltd., the country’s third- largest energy company, climbed 3.4 percent to C$32.37.

Materials stocks in the S&P/TSX rose, driven by potash shares. Mosaic Co., the largest North American phosphate- fertilizer supplier, said sales volumes in its fiscal quarter will be at the upper end of an earlier forecast because of a “rapid acceleration in demand.”

Potash Corp. rose 3.9 percent to C$43.65. Agrium gained 3.2 percent to C$86.85.

Rogers decreased 4.4 percent to C$36.81, its largest drop since October 2010. The company reported first-quarter profit that missed analysts’ estimates, hurt by subsidies it offers on Apple’s iPhone.

BlackBerry maker Research In Motion Ltd. rose 2.6 percent to C$13.42 after Apple reported a 94 percent surge in profit and 59 percent jump in revenue in the quarter.

US

By Rita Nazareth

April 25 (Bloomberg) — U.S. stocks advanced, giving the

Nasdaq-100 Index its biggest gain this year, as Apple Inc.’s earnings almost doubled and Federal Reserve Chairman Ben S. Bernanke said he’s prepared to do more to stimulate growth.

Apple, the most valuable company, surged 8.9 percent for the biggest gain since November 2008. Boeing Co. added 5.3 percent as earnings beat estimates after the company delivered more commercial jets while pushing production to record levels.

Caterpillar Inc., the world’s largest maker of construction equipment, slumped 4.6 percent as revenue missed projections.

The Nasdaq-100 Index jumped 2.7 percent to 2,709.62 at 4 p.m. New York time. The Standard & Poor’s 500 Index added 1.4 percent to 1,390.69. The Dow Jones Industrial Average rose 89.16 points, or 0.7 percent, to 13,090.72. Apple is not a member of the 30-stock gauge. About 6.8 billion shares changed hands on U.S. exchanges, almost in line with the three-month average.

“It’s encouraging,” James Swanson, who oversees about $250 billion as chief investment strategist at Boston-based MFS Investment Management, said in a telephone interview. “The earnings season shows that companies can have good profitability in a low growth environment. As long as these earnings hold up, I’d say that’s a bright sign for the market.”

The S&P 500 has risen 11 percent in 2012 on better-than- estimated economic and corporate data. U.S. companies are beating earnings estimates at the highest rate in two years as economic growth at home helps counter a drag from Europe.

Profits have topped forecasts at 80 percent of S&P 500 companies reporting since April 10.

Earnings rose 11 percent on average, exceeding the 0.6 percent increase analysts projected when reporting began, according to data compiled by Bloomberg. All 10 industry groups in the S&P 500 delivered better-than-forecast results, with financial, telephone and technology companies leading with a positive rate of more than 10 percent, the data showed.

Stocks also rallied as policy makers said they expect growth to gradually accelerate, while refraining from new actions to lower borrowing costs. Central bankers today upgraded their forecasts for economic growth and unemployment while repeating their view that borrowing costs are likely to remain “exceptionally low” at least through late 2014.

“The Fed is providing an insurance policy to the economy,” said Ann Miletti, senior portfolio manager for Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin. Her firm manages $213 billion. “There’s a sense that things are improving, yet there’s some instability. The Fed is saying that it will be there to help keep things going. Earnings have been strong. The market likes it.”

All 10 groups in the S&P 500 rallied today as gains were led by technology, which comprises 20 percent of the index. The group jumped 3.2 percent, the biggest advance since November.

The Morgan Stanley Cyclical Index of companies most-tied to the economy increased 1.6 percent. The Russell 2000 Index of small companies rallied 1.8 percent to 812.12.

Apple surged 8.9 percent to $610. Demand from Chinese consumers helped Apple sell a higher-than-predicted 35.1 million iPhones last quarter and made the world’s most populous country responsible for 20 percent of sales. Chief Executive Officer Tim Cook said there will be “a lot more opportunity” in China as he introduces the iPad and expands operations there.

Before today, the company’s shares had tumbled $75.95 since a record close of $636.23 on April 9 amid reports that indicated a possible shortage in key components for Apple’s mobile devices and showed a quarter-over-quarter decline in iPhone sales at wireless carriers.

“This report should erase any doubt in investors’ minds that this company can’t continue to deliver,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago, which oversees about $60 billion, including Apple shares.

Boeing gained 5.3 percent to $77.08. It shipped 137 jetliners last quarter, compared with 131 deliveries by rival Airbus SAS. Boeing is boosting output by more than 60 percent in the four years through 2014 to pare a record order backlog from customers seeking more fuel-efficient jets.

Aflac Inc. jumped 7.8 percent to $45.26. The world’s biggest seller of supplemental health insurance said first- quarter profit doubled as investment results improved.

Coca-Cola Co. rose 1.1 percent to $74.93 after voting to recommend a 2-for-1 stock split to keep the shares available to smaller investors. Chairman Muhtar Kent, who pushed for the company’s 11th stock split, may be philosophically at odds with his biggest investor, Warren Buffett.

Buffett, who controls a Coca-Cola stake of almost $15 billion, has resisted splitting Class A shares of his Berkshire Hathaway Inc. Splits, he said in a 1984 letter, may encourage short-term investment strategies that enrich brokers at the expense of the business.

“I don’t know what he would say about this one,” said Howard Buffett, the investor’s son and a director at Atlanta- based Coca-Cola. Howard Buffett, who spoke today on the sidelines of the soft-drink maker’s annual meeting, said he voted for the 2-for-1 split.

Exxon Mobil Corp. rose 0.6 percent to $86.85, after swinging between gains and losses today. The energy company raised its quarterly dividend to 57 cents a share from 47 cents a share, according to an e-mailed statement.

Caterpillar slumped 4.6 percent, the most in the Dow, to $103.44. The company says sales in developing nations this year will be lower than anticipated, a reversal after 2011 growth in Latin America and the Asia-Pacific region outpaced North America, helping to drive record revenue and profit.

The company is the latest manufacturer to report sales in China have been curbed. United Technologies Corp. yesterday posted a drop in Chinese orders while 3M Co. forecast below- rend growth in the country.

Goldman Sachs Group Inc. Chairman and Chief Executive Officer Lloyd C. Blankfein said he’s more optimistic about markets than some economists and investors.

“I tend to be a little more positive than what I’m hearing from other people,” Blankfein, 57, told Bloomberg Television today in an interview at the investment bank’s New York headquarters. “One of the big risks that people have to contemplate is that things go right.”

U.S. stocks look reasonably priced when the value of companies is measured against the size of the country’s economy, said David R. Kotok, Cumberland Advisors Inc.’s chairman and chief investment officer. He made a comparison between the total market capitalization of companies in the S&P 500 and nominal gross domestic product, which isn’t adjusted for inflation.

Yesterday’s ratio was 83 percent, according to data compiled by Bloomberg. The gauge peaked at 101 percent in May 2007, near the end of a five-year bull market, and 131 percent in August 2000, when the Internet bubble of the 1990s had begun to burst. The earlier readings are circled in the chart.

“We are still two years away from a new high” for the S&P 500, Kotok wrote in the report. The prediction stems from the outlook for corporate profits and labor costs along with the index’s ratio to GDP, he wrote.

The S&P 500 may climb in 2014 to 1,600, which would lift the total market value of its companies to 90 percent of GDP, according to Kotok. His estimate for the index exceeds the record close of 1,565.15 on Oct. 9, 2007.

Have a wonderful evening everyone.

Be magnificent!

Man is setting out to satisfy needs that mean more to him

than simply nourishment and clothing.

He is embarking on a rediscovery of himself.

The history of man is that of his voyage toward the unknown,

in the search for the realization of his immortal Self, of his soul.

-Rabindranath Tagore, 1861-1901

As ever,

Carolann

Better than a thousand hollow words,

is one word that brings peace.

-Buddha, 563 BC-483 BC

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