August 7, 2012 Newsletter

Dear Friends,

Tangents:

I’m listening to the rare roll of thunder as a summer storm begins in Victoria.…it’s rather wonderful!

A poem for you:

THE ROSE-WAY IN GIVERNY

And in the reticulate distance

the cued inertia of Lucifer

astounds.  Our feet bleed:

buoyant, the body at its task.

What you wanted was what I

wanted – slant of sun to the left,

twinkling of civilization elsewise,

and the moon (whelp of history)

to our backs, all come-hither

and dream. Motion understood

is philosophy deferred: peace,

the felt pathos of space and time.

Look, darling, at the establishing

shot. It’s downright Biblical,

this thrown-together vista,

world upon world without end.

-Virginia Konchan

photos of the day August 7, 2012

Anti-nuclear activists form a human chain in Paris as they walk under the Eiffel Tower to mark the 67th anniversary of the world’s first atomic bomb attack in Hiroshima.

Michel Euler/AP

An exile Tibetan girl in Dharmsala, India, lights a candle during a vigil to remember two Tibetans who self-immolated in Tibet.

Ashwini Bhatia/AP

And on this day in…

1861 – Lincoln imposes the first federal tax.

1882 – Hatfield-McCoy feud erupts.

1945 – August 6 – Paul Tibbets, the commander of Enola Gay, drops the first atomic bomb on Hiroshima, Japan.It was the second atomic bomb, dropped on Nagasaki, that induced the Japanese to surrender.

1959 –First photo of Earth from space.
1962 – August 5 – Marilyn Monroe found dead.
1981 – Reagan fires 11,869 air traffic controllers.

Market Closes for August 7, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Aug. 7 (Bloomberg) — Canadian stocks rose, sending the benchmark index to the highest level in one month, on speculation central banks will act to boost the economy and as oil climbed on forecasts that U.S. inventories fell to three- month lows.

Suncor Energy Inc. and Canadian Natural Resources Ltd., two of Canada’s biggest oil producers, gained at least 1.9 percent as crude climbed 1.8 percent. Barrick Gold Corp. gained 3.5 percent. Energy and mining shares contributed most to the increase in the Standard & Poor’s/TSX Composite Index among 10 industries.

The S&P/TSX advanced 185.18 points, or 1.6 percent, to 11,847.77 at 1:16 p.m. in Toronto. The index reached its highest intraday level since July 5. Markets in Toronto were closed yesterday for a civic holiday.

“We’re on the back of a strong European market just generally recovering from the sell-off,” Jennifer Stevenson, a portfolio manager with Dynamic Funds, said in a phone interview.

“The biggest sell-off was in energy and materials and those are the sectors driving the TSX today.”

The Stoxx Europe 600 Index rallied 0.7 percent today to reach a four-month high. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the European Central Bank, a spokesman said yesterday.

U.S. crude stockpiles dropped 1.6 million barrels, or 0.4 percent, as imports and production slipped and refineries operated at the highest rate in five years, according to a Bloomberg News survey of analysts before an Energy Department report tomorrow. Tropical storm Ernesto was forecast to become a hurricane as it heads for Mexico’s Bay of Campeche, home to most of the country’s crude production.

Canadian Natural Resources jumped 5.8 percent to C$29.57 and Suncor Energy gained 1.9 percent to C$32.23 as crude oil increased 1.8 percent to $93.81 a barrel on the New York Mercantile Exchange. The contract touched $93.69, the highest level since May 17.

Barrick Gold, the world’s largest gold producer, rose 3.5 percent to C$34 after the company said it is studying buying new mines as it completes a review to reduce costs at existing assets.

“Perhaps there’s more M&A opportunities today than there were a year ago and as a company we’re looking at those assets on a daily basis,” Mike Feehan, regional president of the Toronto-based company’s Australia and Pacific operations said today at the Diggers & Dealers mining conference in Kalgoorlie, Australia.

Teck Resources Ltd., Canada’s largest diversified miner, jumped 5.1 percent to C$28.78. The price of copper rose to a one-week high amid speculation that China, the world’s biggest consumer of industrial metals, will announce more stimulus measures to bolster its economy.

Tahoe Resources Inc. soared 8.1 percent to C$16 after Guatemala said it will withdraw a proposal to change the constitution to allow the state to acquire stakes of as much as 40 percent in natural resource companies. Tahoe operates the Escobal silver mine southeast of Guatemala City.

Toronto-Dominion Bank rose 0.6 percent to C$79.47 and Bank of Nova Scotia added 1.5 percent to C$52.62 after John Aiken, financials analyst with Barclays Capital, maintained his overweight rating on the former and upgraded the latter to equalweight from underweight.

US

By Stephen Kirkland and Rita Nazareth

Aug. 7 (Bloomberg) — The Standard & Poor’s 500 Index rose to a three-month high, commodities gained and the yen weakened amid better-than-estimated corporate earnings and speculation central banks will boost efforts to lift growth.

The S&P 500 advanced 0.5 percent at 4 p.m. in New York in a third straight day of gains. The Stoxx Europe 600 Index added 0.8 percent to reach a four-month high. Standard Chartered Plc tumbled the most since at least 1988 after a U.S. regulator said the lender may face a suspension of business activities. The yen depreciated against all 16 major counterparts while the Dollar Index was little changed. U.S. Treasuries remained lower after a $32 billion auction. Gasoline surged more than 2 percent to lead gains commodities higher.

Chesapeake Energy Corp., Sirius XM Radio Inc. and Fossil Inc. were among U.S. stocks that rallied after reporting earnings. Federal Reserve Bank of Boston President Eric Rosengren told CNBC the central bank should pursue an “open- ended” easing program of “substantial magnitude” to boost growth and hiring amid a global slowdown. German Chancellor Angela Merkel backed a bond-buying plan announced last week by the European Central Bank, a spokesman said yesterday.

“Any shift in sentiment can result in a powerful move upward in the market,” Hank Smith, chief investment officer at Haverford Trust Co. in Radnor, Pennsylvania, said in a telephone interview. His firm manages about $6.5 billion. “Earnings have come in well above expectations. Expectations about Fed action help and there’s more confidence today that Europe is inching closer to a credit plan to avert a financial crisis.”

Commodity, consumer and industrial shares helped lead gains among the 10 main groups in the S&P 500 today while Cisco Systems Inc., JPMorgan Chase & Co. and United Technologies Corp. were among the biggest gains in the Dow Jones Industrial Average.

Fossil, the maker of jewelry and leather goods, rallied after its profit and earnings forecast topped estimates amid increasing sales of its Skagen brand. Chesapeake Energy, the second-largest U.S. natural-gas producer, jumped after reporting the highest quarterly profit in company history and boosted its asset-sales target to plug a looming funding shortfall. Sirius XM Radio gained after adding subscribers and boosting its forecast.

Earnings have topped analysts’ average estimate at about 72 percent of the S&P 500 companies which reported second-quarter results so far, according to data compiled by Bloomberg.

More than four shares rose for each that declined in the Stoxx 600. Xstrata Plc climbed 1.6 percent and Danske Bank A/S added 6.7 percent after they reported earnings that beat estimates. Standard Chartered tumbled 16 percent, the most in almost 24 years, after a U.S. regulator said the lender faces suspension of business activities because of transactions with Iranian banks. Nestle fell 1 percent.

Elan Corp. sank 8.7 percent to its lowest price this year.

The Irish drugmaker wrote down to zero the value of its venture with Johnson & Johnson to develop an Alzheimer’s treatment.

Among the 24 commodities tracked by the S&P GSCI Index, gasoline and Brent crude rallied at least 2 percent to lead gains. Oil climbed 1.6 percent to $93.67 a barrel in New York, the highest settlement since May 15.

The yield on the 10-year U.S. Treasury note rose six basis points to 1.62 percent. U.S. notes remained lower following the sale of $32 billion of three-year notes at a higher-than- forecast yield. The securities, which mature in August 2015, drew a yield of 0.370 percent, compared with the average forecast of 0.361 in a Bloomberg News survey of seven of the Federal Reserve’s 21 primary dealers.

Spain’s 10-year yield rose 12 basis points, reversing an earlier decline, while its two-year rate climbed 36 basis points. The yield on Italy’s 10-year bond fell three basis points, paring steeper declines, and similar-maturity Portuguese debt yields declined 42 basis points.

Have a wonderful evening everyone.

Be magnificent!

There will have to be rigid and iron discipline

before we achieve anything great and enduring,

and that discipline will not come by mere academic argument

and appeal to reason and logic.

Discipline is learnt in the school of adversity.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

And the day came when the risk to remain tight

in a bud was more painful than the risk it took

to blossom.

-Anaïs Nin, 1903-1977

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