November 9, 2012 Newsletter

Dear Friends,

Tangents:

REMEMBER

And on this day in…

1934 – Carl Sagan, astronomer, was born.

1938 – Kristallnacht, Germany.

1965 – Nine Northeastern states and parts of Canada go dark in the worst power failure in history, when a switch at a station near Niagara Falls fails.

1967 – NASA launches Apollo 4 into orbit with the first successful test of a Saturn V rocket.

1972 – Bones discovered by the Leakeys push human origins back 1 million years.

1983 – Alfred Heineken, beer brewer from Amsterdam, is kidnapped and held for a ransom of more than $10 million.

1989 – The Berlin Wall is opened after dividing the city for 28 years.

The question is not whether we will die, but how we will live. –Joan Borysenko.

photos of the day

November 9, 2012

Remembrance Day poppies lie on the Tomb of the Unknown Soldier at the National War memorial in Ottawa, Canada.

Adrian Wyld/The Canadian Press/AP

Thai oarsmen row a royal barge during the Royal Barge Procession on the Chao Phraya River in Bangkok, Thailand. Golden barges shaped like swans and mythical sea creatures glided down the Chao Phraya river that winds through the Thai capital of Bangkok in a 700-year-old ceremony, with more than 2,000 rowers taking part.

Sukree Sukplang/Reuters

Market Closes for November 9th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Nov. 9 (Bloomberg) — Canadian stocks rose as an advance in financial shares offset declines among raw-material companies amid better-than-estimated U.S. economic data.

Rona Inc. jumped 8.2 percent after its chief executive officer announced he was stepping down. Canadian Natural Resources Ltd. added 1.6 percent. Niko Resources Ltd., the worst performer on the Standard & Poor’s/TSX Composite Index this year, tumbled 17 percent after it reported finding no commercial reservoir in drilling at a well in Indonesia.

The S&P/TSX rose 5.75 points, or less than 0.1 percent, to 12,196.80 at 4 p.m. in Toronto. Bank and energy shares contributed the most to gains as four of 10 industries in the Canadian equity gauge advanced. Raw-material producers and utility companies fell the most.

“We’re working through the uncertainty,” Greg Eckel, a Toronto-based fund manager with Morgan Meighen & Associates, said in a phone interview. His firm manages about C$1 billion ($1 billion). “The concerns are the same that’s bothering everyone else, the outlook in Europe and the uncertainty in the U.S. where everything has been put on pause during the election.”

Equities dropped in the previous two days as investors shifted focus to Europe and the U.S. budget debate after Americans re-elected President Barack Obama. The U.S. risks entering a recession should policy makers fail to avoid the so- called fiscal cliff of automatic tax increases and spending cuts next year, Fitch Ratings said.

Obama said today he was “open to compromise” on budget negotiations and reiterated that a solution must include spending cuts and raising revenue, including raising taxes on the wealthiest.

Confidence among U.S. consumers rose more than forecast in November, reaching a five-year high as the labor market showed signs of improvement, a report today showed.

Euro-area finance chiefs won’t make the call to release 31.5 billion euros ($40.1 billion) of aid for Greece that has been frozen since June when they meet in Brussels on Nov. 12, a European Union official said yesterday on condition of anonymity because the deliberations are private.

Rona surged 8.2 percent to C$10.12, the most in three months. CEO Robert Dutton, who rebuffed a hostile bid from Lowe’s Cos., is stepping down after 35 years at the Canadian home improvement retailer. Rona didn’t give a reason for Dutton’s departure, and said Dominique Boies, the chief financial officer, will be acting CEO until a replacement is found.

Manulife Financial Corp. added 3.1 percent to C$12.18. Bank of Nova Scotia rose 0.5 percent to C$53.80.

Suncor Energy Inc., Canada’s largest oil producer, fell 0.2 percent to C$33.26 and Canadian Natural Resources Ltd. climbed 1.6 percent to C$28.48. Niko Resources plunged 17 percent to C$9.87.

TMX Group Ltd. fell 0.6 percent to C$48.38. The Toronto Stock Exchange owner bought by a group of banks and pension funds posted third-quarter profit that missed analyst estimates after a C$3.73 billion takeover combined Canada’s stock markets with securities clearing.

US

By Rita Nazareth and Sarah Jones

Nov. 9 (Bloomberg) — U.S. stocks rose, trimming the biggest weekly drop since June in the Standard & Poor’s 500 Index, as data showing consumer confidence climbed to a five- year high offset concern about fiscal cliff negotiations.

Boeing Co., Caterpillar Inc. and AT&T Inc. advanced at least 1 percent to pace gains among the largest companies. Apple Inc., the world’s most valuable company, increased 1.7 percent after an 8 percent plunge over the previous three days. J.C. Penney Co. dropped 4.8 percent after reporting a third-quarter loss that was larger than analysts had estimated.

The S&P 500 gained 0.2 percent to 1,379.85 at 4 p.m. New York time. It fell 2.4 percent this week. The Dow Jones Industrial Average added 4.07 points, or less than 0.1 percent, to 12,815.39. Volume for exchange-listed stocks in the U.S. was 6.6 billion shares, 11 percent above the three-month average.

“The consumer sentiment data was a strong number and that has given the market some strength,” Timothy Ghriskey, the chief investment officer at Solaris Group LLC, which manages about $2 billion in Bedford Hills, New York, said in a phone interview. “Yet people are focused on news about the discussions on the fiscal cliff. There does seem to be a movement to force our politicians to come to an agreement so we don’t fall into a recession.”

The Thomson Reuters/University of Michigan’s preliminary index of consumer sentiment for November increased to 84.9 from 82.6 the prior month. Economists projected a reading of 82.9 for the gauge, according to the median forecast of 71 economists surveyed by Bloomberg.

President Barack Obama invited the top Democratic and Republican leaders in Congress to the White House next week to begin talks on a plan to avert the so-called fiscal cliff.

“The American people voted for action,” Obama said at the White House, giving his first public remarks on the budget and deficit since winning re-election Nov. 6. He again said any solution must include spending cuts and raising revenue, including raising taxes on the wealthiest.

If Congress doesn’t act by the end of the year, $607 billion in automatic spending cuts and tax increases are scheduled to take effect starting in January. Obama repeated the broad outline he’s laid out during his re-election campaign for a “balanced” approach to cutting the deficit.

“The market wants Congress to work,” said Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co., in Elmira, New York. “Hopefully we’ll see Congressmen wanting to work with each other versus just fight. Nothing has really changed in Europe. It’s still going to be an issue. We’re seeing a deceleration of earnings growth. That shows the economy continues to grow at a tepid pace.”

Investors also watched Europe’s latest attempts to tame its debt crisis. Euro-area finance ministers may not make a decision on unlocking funds for Greece until late November as they await a report on the country’s compliance with bailout terms, a European Union official said yesterday.

The S&P 500 still has risen 9.7 percent this year as central banks around the world stepped up stimulus to boost the economy. About 71 percent of companies that released quarterly results have beaten analysts’ estimates while 60 percent missed sales projections, according to data compiled by Bloomberg.

Seven out of 10 groups in the S&P 500 rose today as technology, phone and health-care companies had the biggest gains. Boeing added 3.2 percent to $73.25. Caterpillar increased 1.5 percent to $84.95. AT&T rose 1 percent to $33.54.

Apple added 1.7 percent to $547.06. The stock yesterday fell to the lowest level since May 18 amid concern the company hasn’t been able to keep up with demand for the latest version of the iPhone, which accounts for about two-thirds of the company’s profit.

Lions Gate Entertainment Corp. rose 14 percent to $16.68 after video sales of “The Hunger Games” helped quarterly profit beat analysts’ estimates and bolstered the company’s outlook for the rest of the year.

Zipcar Inc. jumped 16 percent to $7. The company that rents cars by the hour or day reported a third-quarter profit that topped analysts’ estimates and raised the lower end of its annual profit forecast.

J.C. Penney retreated 4.8 percent to $20.64. Excluding items including store restructuring and management-transition costs, the loss was 93 cents a share. The average of eight analysts’ estimates compiled by Bloomberg was for a 7-cent loss.

Groupon Inc. sank 30 percent to $2.76. The largest daily- deal website reported third-quarter revenue that missed estimates as sales of coupons overseas declined from the previous period.

Walt Disney Co. dropped 6 percent to $47.06 after reporting fiscal fourth-quarter sales that missed analysts’ estimates amid declines in film revenue and ABC network advertising.

Have a wonderful weekend everyone.

Be magnificent!

The key to an easy relationship with other people is not to impose your ego,

nor to crush the ego of others.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

Happiness is nothing more than

good health and a bad memory.

-Albert Schweitzer, 1875-1965

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