January 9, 2013 Newsletter

Dear Friends,

Tangents:

First day back in the office since the 24^th, so lots of catching up today….Marrakech was an amazing place to visit – so many things to see and do.  There is a wonderful garden, a small paradise named the Majorelle garden at the former home of Yves Saint-Laurent and Paul Bergé.  They restored the garden after they purchased the property in the 70’s.  It is full of brightly coloured tropical flowers, yucca, bamboo, bougainvillea, laurel, geraniums, cypresses and it also contains over 400 varieties of palm trees and 1800 species of cactus.  After Yves Saint-Laurent died in 2008, Bergé converted a studio on the property into a small museum of predominantly Berber treasures.  Jacques Majorelle was a painter who came from northeastern France.  He first travelled to Morocco in 1919 and fell in love with its intense light.  In 1923, he built himself the splendid Moorish villa, which he called Bou Safsaf,  and he painstakingly cultivated the gardens over many years.  Finding fascination in the souks, Kasbahs and villages of the High Atlas mountains, he stayed in Morocco until his death in 1962.

On this day in 2007 – Apple CEO Steve Jobs unveiled the iPhone. Steve Jobs introduced the original iPhone at Macworld Expo 2007.

And also on this day in…

1788 – Connecticut became the fifth state to ratify the U.S. Constitution.

1861 – Mississippi seceded from the Union.

1908 – Simone de Beauvoir was born.

1987 – The White House released a memorandum prepared for President Ronald Reagan in January 1986 that showed a definite link between U.S. arms sales to Iran and the release of American hostages in Lebanon.

1941 – Joan Baez was born.

2001 – Apple Computer Inc. introduced its iTunes music management software at the MacWorld Expo in San Francisco.

2005 – Mahmoud Abbas was elected Palestinian Authority president by a landslide.

2006 – “The Phantom of the Opera” became the longest-running show in Broadway history, surpassing “Cats,” which ran for 7,485 performances.

2009 – The Illinois House voted to impeach Gov. Rod Blagojevich. (The Democratic governor was removed from office by the state Senate later in the month.)

I tore myself away from the safe comfort of certainties through my love for the truth, and truth rewarded me. –Simone de Beauvoir.

photo of the day

January 9, 2013

A Buddhist monk prays as he looks at paper lanterns released into the sky in Suphan Buri province, Thailand. The lanterns were released during a traditional pilgrimage to pay homage to Lord Buddha and bless Thailand as it enters the new year.

Photo: Sukree Sukplang/Reuters

Market Closes for January 9th, 2013:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Jan. 9 (Bloomberg) — Canadian stocks rose for a second day, led by gains in industrial and energy shares, as TransCanada Corp. agreed to build a C$5 billion ($5.1 billion) pipeline to a natural gas export terminal in British Columbia.

TransCanada, builder of the Keystone XL pipeline, advanced 2.4 percent. MacDonald Dettwiler & Associates Ltd. climbed 5.2 percent after winning a satellite contract. Pacific Rubiales Energy Corp. added 5.3 percent after Colombia’s largest private oil producer said output at its largest field increased faster than expected. First Quantum Minerals Ltd. fell 4.4 percent as it took its C$5.1 billion bid for Inmet Mining Corp. hostile.

The Standard & Poor’s/TSX Composite Index rose 17.43 points, or 0.1 percent, to 12,522.24 in Toronto. The benchmark gauge has gained 0.7 percent this year, trailing every developed market in the world.

“The volatility index is very low right now, and it means very low market movement unless you get something incredibly newsworthy,” said Arthur Salzer, chief executive officer with Northland Wealth Management in Toronto. His firm manages about C$225 million. “Over the next couple of weeks we’ll start talking about the debt ceiling again. While we’re not hearing that news you’ll get moderate to stronger equity prices because of the low volatility. People just aren’t worried about the risks yet.”

The Chicago Board Options Exchange Volatility Index, known as the VIX, rose 1.4 percent to 13.81, erasing earlier losses of as much as 2.9 percent.

The U.S. officially hit its debt ceiling of authorized borrowing of about $16.4 trillion on Dec. 31 and has been financing the government using extraordinary measures since. The government will exhaust that avenue as early as mid-February, the Congressional Budget Office says.

Seven of 10 industries advanced, with trading volume 3.1 perent lower than the 30-day average.

TransCanada rose 2.4 percent to C$48.39 after agreeing to design, build and own the Prince Rupert natural gas transmission project. Progress Energy Canada Ltd., purchased by Petroliam Nasional Bhd last month, selected TransCanada to build the conduit, the statement said.

Pacific Rubiales advanced 5.3 percent to C$23.15. Gross production at the Rubiales field, which accounts for 60 percent of the company’s output, rose to 210,000 barrels a day from 190,000 barrels a day in December, Chief Executive Officer Ronald Pantin said during a conference call today.

Bombardier Inc. added 1 percent to C$3.90 as it is reviving a sale of high yield, high-risk bonds that was delayed after its credit rating was cut. The maker of the Learjet and Challenger aircrafts doubled the sale to $2 billion, said a person familiar with the deal who asked not to be identified because terms aren’t set.

MacDonald Dettwiler jumped 5.2 percent to C$60.20 after the Richmond, British Columbia-based company won a contract to develop satellites for the Canadian government worth C$706 million.

The company will help build three RADARSAT satellites to be launched in 2018 that will be used to monitor the nation’s land, oceans and coastal approaches, Christian Paradis, Federal Industry Minister, said in an e-mailed statement.

First Quantum slipped 4.4 percent to C$20.59 after going directly to Inmet shareholders with its C$72-a-share offer.

Investors have until Feb. 14 to back the offer, which requires acceptance by at least 66 percent of Inmet shareholders.

Alacer Gold Corp. lost 7.2 percent to C$4.38. Kinross Gold Corp. slipped 1.9 percent to C$9.21. Futures for February delivery of the metal fell 0.4 percent to settle at $1,655.50 an ounce on the Comex in New York.

US

By Stephen Kirkland and Michael P. Regan

Jan. 9 (Bloomberg) — Stocks rose, snapping a two-day slide, amid optimism that U.S. corporate earnings will extend a third straight year of growth. The yen weakened on speculation the Bank of Japan will expand stimulus.

The Standard & Poor’s 500 Index added 0.3 percent to 1,461.02 as of 4 p.m. in New York and the Stoxx Europe 600 Index closed at the highest in more than 22 months. The VIX, the benchmark gauge of U.S. stock options, rebounded after dipping beneath its lowest closing level in five years. The yen weakened against all 16 major peers. Ten-year Treasury yields decreased for a fourth straight day.

Seagate Technology Plc. and Danaher Corp. paced gains in the S&P 500 after saying quarterly results will top forecasts.

Fourth-quarter profit at companies in the S&P 500 probably increased 2.9 percent, according to analyst estimates compiled by Bloomberg, extending a three-year expansion while marking the second-slowest quarterly growth since 2009.

“This is what can happen when investors are able to focus on earnings and not politicians,” Brian Jacobsen, who helps oversee about $212 billion as chief portfolio strategist at Wells Fargo Advantage Funds, said in an interview in New York.

The S&P 500 retreated for a second day yesterday after finishing last week at a five-year high. Industrial, health-care and raw-material shares led gains in six of the 10 main industry groups in the S&P 500 today. Trading volume was about 3.5 percent higher than the 30-day average.

Seagate Technology jumped 6.6 percent, the most since July, after sales rose to at least $3.6 billion in the fiscal second quarter, exceeding an earlier forecast for $3.5 billion as the company maintained share in the computer hard-drive market.

Danaher advanced 3.7 percent to a record $59.80 after the maker of microscopes and water-treatment systems said earnings will exceed its forecast range.

Boeing Co. climbed 3.5 percent to lead the Dow Jones Industrial Average higher, rebounding from a 4.6 percent plunge over the previous two sessions after a fire aboard its 787 Dreamliner. Qatar Airways Ltd., one of the biggest customers for the new jet, said heightened scrutiny of the model won’t damp the carrier’s purchase plans. MasterCard Inc., the second- biggest U.S. payments network, rose 2.8 percent after Goldman Sachs Group Inc. raised its rating. Apollo Group Inc., the biggest U.S. for-profit college, slid 7.8 percent after net income declined amid a drop in new enrollment.

The VIX, as the Chicago Board Options Exchange Volatility is known, rose 1.4 percent to 13.81, erasing earlier losses and snapping a six-day slump. The index earlier today touched 13.22, the lowest level since 2007.

Alcoa Inc. slipped 0.2 percent after earlier gaining as much as 2.5 percent. The company reported late yesterday that fourth-quarter sales fell to $5.9 billion from $5.99 billion, beating the $5.6 billion average of 11 estimates. Profit excluding one-time items was 6 cents a share, matching the average of estimates compiled by Bloomberg. The largest U.S. aluminum producer said demand for the metal in China will gain 11 percent this year.

More than two shares advanced for every one that declined in the Stoxx 600 as telecommunications companies and banks led gains. The index climbed to the highest level since Feb. 18, 2011. The volume of trading in Stoxx 600 shares was 70 percent greater than the 30-day average, Bloomberg data show.

Delta Lloyd NV jumped 6.6 percent, the biggest gain in six months, after Aviva Plc sold its 19.4 percent stake in the Dutch insurer for 433.8 million euros ($568 million). J Sainsbury Plc dropped 2.9 percent after the U.K.’s third-largest supermarket chain reported the slowest sales growth in eight years.

Natural gas tumbled 3.3 percent to a 15-week low, leading losses in commodities, on speculation that unusually mild weather next week will curtail demand for the heating fuel.  Oil slipped 5 cents to $93.10 a barrel after a government report showed that U.S. crude and fuel inventories surged as production advanced to a 19-year high.

The yen weakened 0.8 percent to 87.78 per dollar, ending a two-day advance. It declined 0.7 percent per euro. The 17-nation shared currency dropped 0.2 percent to $1.3060.

Treasury 10-year note yields fell one basis point to 1.86 percent, declining for a fourth straight day. The U.S. auction of $21 billion in 10-year notes was met with weaker-than-average demand. The notes drew a yield of 1.863 percent, compared with a forecast of 1.849 percent in a Bloomberg News survey of eight of the Federal Reserve’s primary dealers. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.83, compared with an average of 3 for the previous 10 sales.

The yield on Portugal’s 10-year bonds rose five basis points to 6.51 percent on bets the nation will sell bonds for the first time since its international bailout after Ireland sold debt yesterday.

The MSCI Emerging Markets Index added 0.4 percent, snapping a three-day decline. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong rose 0.9 percent as automakers advanced. Credit Suisse Group AG recommended buying shares in China’s carmakers.

Egypt’s EGX 30 Index gained 1.1 percent to the highest since October. Qatar said yesterday it doubled deposits at Egypt’s central bank, helping ease a currency crisis. Benchmark gauges in Hungary and Israel rose more than 2 percent, while Brazil’s Bovespa increased 0.7 percent.

Have a wonderful evening everyone.

Be magnificent!

Nonviolence and cowardice go ill together.

I can imagine a fully armed man to be at heart a coward.

Possession of arms implies an element of fear, if not cowardice.

But true nonviolence is impossible without the possession of unadulterated fearlessness.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

It is better to be hated for what you are

than to be loved for what you are not.

-André Gide, 1869-1951

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