May 1, 2012 Newsletter

Dear Friends,

Tangents:

May Day today:

Polydor Virgil says that the Roman youths used to go into the fields and spend the calends of May in dancing and singing in honor of Flora, goddess of fruits and flowers.  The English celebrated May Day with games and sports, particularly archers and Morris Dances and the setting up of the Maypole.  In due time Robin Hood and Maid Marian came to preside as Lord and Lady of the May, and by the 16^th century May Day was Robin Hood’s day and Robin Hood plays became an integral part of the festivities. – from Brewar’s Dictionary f Phrase & Fable.

On this day in,

1961 – Fidel Castro announces there will no longer be elections in Cuba
1931 – The Empire State Building opens in New York City
1948 – North Korea is established
1970 – Kent State University riot in protest of U.S. invasion of Cambodia

Holding on to anger is like grasping a hot coal with the intent of throwing it at someone else; you are the one who gets burned. ~ Buddha
photos of the day

May 1, 2012

Marie Wieland tries to climb up a maypole during the traditional May Day celebrations in Lofer in the Austrian province of Salzburg.

Kerstin Joensson/AP

Swans glide through the flooded riverside walkways in the shadow of the cathedral in Worcester, England. Heavy rain lashed southern Britain overnight following the wettest April since records began.

David Jones/PA/AP

Market Closes for May 1, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 1 (Bloomberg) — Canadian stocks rose, driving the Standard & Poor’s/TSX Composite Index toward the longest winning streak since January, as energy shares increased with oil prices after a stronger-than-forecast U.S. manufacturing report.

Cameco Corp. the world’s largest uranium producer, gained 4 percent after reporting first-quarter profit that topped analysts’ estimates as sales of the nuclear-reactor fuel rose.

Suncor Energy Inc. increased 1.7 percent. Encana Corp., the country’s biggest natural gas producer by volume, increased 3.4 percent, as gas prices rose for a third day.

The S&P/TSX gained 60.06 points, or 0.5 percent, to 12,352.75 at 2:45 p.m. in Toronto, rallying for a fifth-straight day.

“Oil is particularly strong today,” David Cockfield, a managing director at Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($200 million). “Things have quieted down in Europe to a degree. Investors are back in picking away at individual situations.”

The benchmark gauge had its second straight weekly gain in the period ending April 27, marking the first time since February that the index increased in consecutive weeks. Canadian stocks rose on better-than-forecast corporate earnings and U.S. housing data that exceeded expectations. Energy and raw material stocks account for 44 percent of Canadian stocks by value.

Energy companies increased as oil climbed to a one-month high after U.S. manufacturing increased at the fastest pace in 10 months, signaling that economic growth will accelerate in the world’s biggest crude-consuming country. Natural gas climbed on forecasts of below-normal temperatures that may increase heating fuel demand.

Suncor rose 1.7 percent to C$33.19. Encana increased 3.4 percent to C$21.39. Oil-sands company Cenovus Energy Inc. gained 1.2 percent to C$36.28.

Materials stocks in the S&P/TSX increased as copper prices rose after reports on U.S. manufacturing and automobile sales last month brightened prospects for demand. Teck Resources Ltd., the country’s biggest base metals producer, climbed 1.3 percent to C$37.34. Lundin Mining Corp. rallied 3.5 percent to C$4.97.

Cameco surged 4 percent to C$22.73 after saying in a statement today that net income increased to C$132 million, or 33 cents a share, from C$91 million, or 23 cents, a year earlier. Excluding a loss from contracts used to lock-in commodity prices, per-share profit was 31 cents, topping the 25- cent average of 10 estimates compiled by Bloomberg.

TMX Group Inc., the exchange owner facing a C$3.73 billion takeover by a group of Canadian banks and pension funds, rose 2.6 percent to C$46.25 after the offer was extended pending regulatory approval. The shares climbed to C$46.44 intraday, the highest price since May 2008, approaching the C$50-a-share bid by Maple Group Acquisition Corp.

US

By Rita Nazareth

May 1 (Bloomberg) — U.S. stocks advanced, sending the Dow Jones Industrial Average to the highest level since December 2007, after a better-than-estimated manufacturing report bolstered investors’ optimism in the world’s largest economy.

The Standard & Poor’s 500 Index advanced 0.6 percent to 1,405.91 at 4 p.m. New York time, the highest since April 3. The index trimmed an earlier rally of as much as 1.3 percent. The Dow added 67.36 points, or 0.5 percent, to 13,280.99.

“The economy is starting to get on its own two feet,” said Wayne Lin, a money manager at Baltimore-based Legg Mason Inc. His firm oversees $643.3 billion. “Manufacturing is forward-looking. It leads what the actual economic activity tends to end up being. It tells us that firms are being a bit less conservative. Confidence is starting to reemerge.”

Stocks rallied as manufacturing unexpectedly expanded in April at the fastest pace in 10 months. The report added to optimism after data showed growth in Chinese manufacturing.

Investors also watched corporate earnings as about 74 percent of S&P 500 companies that reported results since April 10 have beaten projections, according to data compiled by Bloomberg.

Today’s gain extended this year’s advance in the S&P 500 to 12 percent. The index still trades at 14.3 times reported earnings, below the average since 1954 of 16.4. Former Federal Reserve Chairman Alan Greenspan said U.S. stocks offer good value and are likely to rise as earnings increase over time.

“Stocks are very cheap,” Greenspan, who served as Fed chairman from August 1987 to January 2006, said today at the Bloomberg Washington Summit hosted by Bloomberg Link. “There is no place for earnings to grow except into stock prices.”

Equities rebounded after the S&P 500 halted a four-month gain in April. Yet a rally of more than 10 percent in the first four months of the year has been a harbinger of gains in May, said Bespoke Investment Group. In the 19 times since 1927 that the S&P 500 has had such a start to the year, it has followed with an average gain of 2.2 percent in May, Bespoke data show.

The benchmark gauge has more than doubled since reaching a 12-year low on March 2009 amid government stimulus measures.

Better-than-estimated earnings and economic data show the Fed doesn’t need to add monetary stimulus right now, according to Kevin Rendino, a money manager at New York-based BlackRock Inc.

“We don’t need QE3 right now,” said Rendino, referring to a so-called third round of quantitative easing, or asset purchases to stimulate the economy. His firm oversees $3.68 trillion as the world’s largest asset manager. “We need to have an economy that can stand on its own.”

Stock market trend charts and investor sentiment are signaling the S&P 500 may surpass its 2012 high before the rally gives way to a 10 percent decline, according to UBS AG.

The benchmark gauge for U.S. equities is likely to exceed this year’s peak of 1,419.04 and climb to 1,460, after it held last month above its March 6 low, said Michael Riesner and Marc Mueller, Zurich-based analysts with UBS. The S&P 500 halted a five-day slump on April 10 at 1,358.59. Two weeks later, it rebounded from another drop at 1,358.79.

The level of 1,358 “represents a new pivotal support for the SPX,” the analysts wrote in a note yesterday, referring to the S&P 500’s ticker. “As long as the market trades above this level, the U.S. market remains bullish biased,” they said.

Have a wonderful evening everyone.

Be magnificent!

Adaptability is not imitation.

It means power of resistance and assimilation.

-Mahatma Gandhi,1869-1948

As ever,

Carolann

The first step in the journey is to

lose your way.

-Galway Kinnell, 1927-

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