July 16, 2012 Newsletter

Dear Friends,

Tangents:

This past weekend, we caught the wonderful exhibit at the Vancouver Art Gallery, Collecting Matisse and Modern Masters.  It is a fantastic show, so if you haven’t seen it yet, or if have an opportunity to do so before it ends in September, I’m sure you will have a wonderful experience.  Two sisters, Etta and Claribel Cone of Baltimore, began collecting art at the turn of the last century and became friends with many of the modern masters, including Matisse, Picasso, among others, during their many trips to Paris over several decades.

The show offers a wonderful narrative throughout and includes many objets d’art which they also collected in their travels around the world.  Interesting too, is correspondence between the sisters and artists during their lifetime, handwritten letters etc.  Their entire collection was donated to The Baltimore Museum of Art in 1949.

And on this day in…

1945 – Atomic Bomb tested.
1969 – Apollo 11 departs earth for moon.
1999- JFK Jr. killed in plane crash.
1790 – Congress declares Washington, D.C. new capital.
2002 – Bush unveils strategy for homeland security.
1940 – Marechal Petain becomes premier for occupied France.

Failure is a judgment, an opinion. It stems from your fears, which can be eliminated by love — love for yourself, love for what you do, love for others, and love for your planet. –  Wayne Dyer

photos of the day July 16, 2012

A man walks through the infinity room at the Team Great Britain Preparation Camp in Loughborough, central England.

Darren Staples/Reuters

A visitor walks through an installation entitled ‘Light Music’ by Lis Rhodes in The Tanks at Tate Modern in London.

Sang Tan/AP

Market Closes for July 16, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

July 16 (Bloomberg) — Canadian stocks rose for a second day as a rally in commodity prices offset concern over a slowing global economy.

Energy companies contributed most to the advance among 10 industries in the Standard & Poor’s/TSX Composite Index, while banks and raw-materials producers lost the most. Suncor Energy Inc., the nation’s largest oil company, advanced 1.1 percent.

Royal Bank of Canada and Bank of Nova Scotia retreated at least 0.2 percent.

The S&P/TSX added 6.65 points, or less than 0.1 percent, to 11,521.18. It fell as much as 0.4 percent and gained as much as 0.2 percent during the day.

The index has lost 3.6 percent in 2012.

The International Monetary Fund lowered its global growth estimate for 2013 to 3.9 percent from 4.1 percent, citing the debt crisis in Europe as a drag on emerging markets. Oil rose for a fourth day as manufacturing in the New York region expanded in July at a faster pace than anticipated.

“The IMF forecast plays into the whole global growth issue,” Chief Investment Officer Jeff Young at NexGen Financial Corp., who manages C$947 million, said in a phone interview.

“It may take some improvement in the leading indicators and some improvement in the economic data before the market regains confidence.”

The S&P GSCI Spot Index of commodities rallied 1.5 percent, with 15 of the 24 raw materials advancing. A U.S. drought drove grain prices higher on concern over falling harvests. Oil for August delivery rose $1.33 to settle at $88.43 a barrel on the New York Mercantile Exchange.

Suncor added 1.1 percent to C$29.72. Arc Resources Ltd., the western Canada oil and natural gas explorer, gained 3.2 percent to C$23.22. Imperial Oil Ltd., the second-largest energy provider in Canada, rose 0.4 percent to C$42.54.

MEG Energy Corp., a Calgary-based oil sands developer, jumped 7.2 percent to C$38.05, the most since April, after the company boosted output targets at its oil sands project in Alberta.

Royal Bank, the nation’s largest lender, lost 0.5 percent to C$52.18. Bank of Nova Scotia, the third-largest lender in Canada, retreated 0.2 percent to C$52.13.

Goldcorp Inc., the second-largest producer of the metal, dropped 0.6 percent to C$34.33. Kinross Gold Corp. slumped 0.7 percent to C$8.45.

First Quantum Minerals Ltd. declined 3.2 percent to C$16.97 as a strike at the company’s unit in Mauritania led to the death of an employee yesterday.

US

By Inyoung Hwang

July 16 (Bloomberg) — U.S. stocks fell, dragging the Standard & Poor’ 500 Index lower for the seventh time in eight days, after the International Monetary Fund cut its global economic forecast and retail sales unexpectedly dropped.

JPMorgan Chase & Co. lost 2.7 percent while Home Depot Inc. and Caterpillar Inc. dropped more than 1 percent to lead the Dow Jones Industrial Average lower. Equities pared losses as energy companies rose with the price of oil while Visa Inc. and MasterCard Inc., the world’s biggest payment networks, gained at least 1.7 percent after agreeing to a settlement of at least $6.05 billion in a price-fixing case.

The S&P 500 declined 0.2 percent to 1,353.64 at 4 p.m. New York time after earlier retreating as much as 0.6 percent. The Dow slipped 49.88 points, or 0.4 percent, to 12,727.21 today.

“The retail sales gives you another indicator that uncertainty has showed up in the consumer side,” James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management, said in a telephone interview. “We’re in a bit of the summer doldrums.”

The S&P 500 is down 4.6 percent from a four-year high in April as economic data trails forecasts and investors brace for what is projected to be the first decrease in quarterly earnings since 2009. The Citigroup Economic Surprise Index for the U.S., which measures how much data from the past three months is beating or missing the median estimates in Bloomberg surveys, is at minus 64, near the almost 11-month low of minus 64.9 reached last week.

U.S. retail sales dropped 0.5 percent in June, following a 0.2 percent decrease in May, Commerce Department figures showed today. The decline was worse than the most-pessimistic forecast in a Bloomberg News survey in which the median projection called for 0.2 percent rise.

The IMF cut its 2013 global growth forecast as Europe’s debt crisis prolongs Spain’s recession and slows expansions in emerging markets. Growth worldwide will be 3.9 percent next year, less than the 4.1 percent estimate in April, the fund predicted in an update of its World Economic Outlook.

Manufacturing in the New York region expanded in July at a faster pace than anticipated, signaling factories will keep contributing to growth. The Federal Reserve Bank of New York’s general economic index rose to 7.4 from 2.3 in June. The median forecast of 51 economists surveyed by Bloomberg News called for an increase to 4.0. Readings greater than zero signal expansion in the so-called Empire State Index that covers New York, northern New Jersey and southern Connecticut.

Earnings beat estimates at 21 of the 32 companies in the S&P 500 that have reported quarterly results so far, data compiled by Bloomberg show. Profits probably decreased 2.1 percent in the second quarter, the first drop in almost three years, according to a Bloomberg survey of analysts.

JPMorgan Chase, the largest U.S. bank by assets, fell 2.7 percent to $35.09 after rallying 6 percent on July 13 as Chief Executive Officer Jamie Dimon predicted the company will still post record earnings this year despite a $4.4 billion trading loss in the second quarter.

The bank’s assertion that traders at its London chief investment office may have intentionally mismarked trades, masking losses that total at least $5.8 billion, makes little sense, according to former executives with direct knowledge of the unit’s operation.

Home Depot, the nation’s largest home-improvement retailer, slumped 1.2 percent to $51.45. Caterpillar, the world’s biggest maker of construction equipment, declined 1.1 percent to $81.15.

General Electric Co. lost 0.9 percent to $19.59, helping send industrial shares down 0.6 percent as a group for the biggest drop among 10 industries in the S&P 500. Morgan Stanley reduced its recommendation on the world’s biggest maker of jet engines, power generation equipment and locomotives to equalweight from overweight, citing the stock’s higher valuation relative to peers with or without GE Capital Corp.

Alpha Natural Resources Inc. declined 10 percent to $6.85 as Bank of Montreal cut its rating to underperform from outperform, citing potential financing issues. Arch Coal Inc., the fourth-largest U.S. producer of the fuel, sank 3.9 percent to $5.90 after BMO cut the stock to underperform from market perform.

Energy stocks added 0.3 percent after earlier falling as much as 0.8 percent as the price of crude oil reversed earlier declines to rise 1.5 percent to $88.43 a barrel. Chevron Corp., the second-largest U.S. energy company, climbed 0.7 percent to $106.78. Denbury Resources Inc., the oil and natural-gas producer, rallied 3.8 percent to $14.77.

MasterCard advanced 1.7 percent to $436.89 and Visa rose 2.5 percent to $127.15 after they agreed to settle a price- fixing case brought by retailers over credit-card swipe fees.

Citigroup Inc., the third-biggest U.S. bank, advanced 0.6 percent to $26.81 after reporting second-quarter profit that beat analysts’ estimates on revenue from advising on mergers and underwriting stocks and bonds.

Net income declined to $2.95 billion, or 95 cents a share, from $3.34 billion, or $1.09, a year earlier. Excluding accounting adjustments and a loss from the sale of a stake in a Turkish bank, earnings were $1 a share, compared with the average estimate of 89 cents in a Bloomberg survey of 18 analysts.

Gannett Co., the owner of 82 daily newspapers including USA Today, rallied 2.7 percent to $14.69. The company reported second-quarter profit that topped analysts’ estimates, bolstered by growing Internet revenue. Excluding some items, profit was 56 cents a share in the period, beating the 53-cent average estimate by analysts, according to data compiled by Bloomberg.

Have a wonderful evening everyone.

Be magnificent!

The main purpose of life is to live rightly, think rightly, act rightly.

The soul must languish when we give all our thought to the body.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Education is a progressive discovery

of our own ignorance.

-Will Durant, 1885-1981

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