March 11, 2013 Newsletter

Dear Friends,

Tangents: We were in Seattle on the weekend and saw Seattle Opera’s fabulous production of La Bohème.  If you have a chance, try to get down to see the art treasures from Kenwood House, London.  The exhibition is on until May 19^th and features major works by Gainsborough, Hals, Reynolds, Romney, Turner, and Van Dyck.  Most of the paintings are in North America for the very first time, while Kenwood House is being renovated. The most amazing painting of all is Rembrandt’s self-portrait which he completed later in his life, Portrait of the Artist.  This is a rare opportunity to see this amazing painting.  It has never traveled outside of Europe.  This is the collection assembled by Irish brewing magnate, Edward Cecil Guinness, first Earl of Iveagh.

Image: Rembrandt (Rembrandt van Rijn) (Dutch, Leiden 1606–1669 Amsterdam). Portrait of the Artist, ca. 1663–65. Oil on canvas; 45 x 37 in. English Heritage, The Iveagh Bequest (Kenwood), London

Market Closes for March 11^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

March 11 (Bloomberg) — Canadian stocks rose to a 19-month high, erasing losses from earlier in the day, as energy companies rallied and BlackBerry surged on takeover speculation.

BlackBerry jumped 14 percent, the most in five weeks, after a report said Lenovo Group Ltd. might consider buying the smartphone maker. Pengrowth Energy Corp. rallied 5.4 percent as it closed an asset sale. Nevsun Resources Ltd. plunged 10 percent ahead of the company’s removal from an exchange-traded fund of gold-mining stocks.

The Standard & Poor’s/TSX Composite Index rose 22.88 points, or 0.2 percent, to 12,858.49 at 4 p.m. in Toronto, its highest closing level since July 2011. The benchmark equity gauge fell as much as 0.2 percent earlier in the day, after Chinese production data missed estimates. Trading volume was 19 percent lower than the 30-day average.

“There’s some thinking that energy stocks in Canada were oversold, and we’re seeing a bit of that following through today,” Robert McWhirter, president of Selective Asset Management Inc., said on the phone from Toronto.

Energy shares contributed most to gains in the S&P/TSX, as six of 10 groups advanced. Petrominerales Ltd. added 4.7 percent to C$6.70. Pengrowth Energy gained 5.4 percent to C$5.50. The company said it will repay all outstanding bank debt after completing the sale of a non-core asset for C$316 million.

Oil rose 11 cents to $92.06, the highest settlement since Feb. 27. Crude fell as much as 1.2 percent earlier in the day after China industrial output and retail sales grew in the first two months of the year at slower-than-forecast rates. China is a major consumer of Canadian resources.

“We had some mildly negative numbers out of China, nothing too bad,” said David Cockfield, fund manager with Northland Wealth Management. The firm manages C$225 million ($219 million).

Technology stocks climbed 4.1 percent as a group, the biggest daily jump since Jan. 11. BlackBerry, formerly known as Research In Motion Ltd., surged 14 percent to C$15.29 for its largest advance since Feb. 4. Lenovo Chief Executive Officer Yang Yuanqing told a French financial newspaper that a deal with the smartphone maker “could possibly make sense, but first I need to analyze the market and understand what exactly the importance of this company is.”

AT&T Inc. said it will begin taking orders for BlackBerry’s new Z10 device tomorrow. The phone will go on sale in the U.S. on March 22.

Petrobank Energy & Resources Ltd. dropped 4.4 percent to 65 Canadian cents after S&P said the stock will be removed from the benchmark Canadian equity gauge starting on March 18. Colossus Minerals Inc. and Nordion Inc. will also be pulled. Colossus rose 1.2 percent to C$2.47, and Nordion slid 3.9 percent to C$6.87.

Element Financial Corp. is the only company that will be added to the measure. Its shares rose 1 percent to C$8.89.

Nevsun Resources slumped 10 percent to C$3.62 after Market Vectors said it plans to remove the stock from the Market Vectors Global Junior Gold Miners ETF. The company is transitioning to copper production this year.

US

By Sarah Pringle

March 11 (Bloomberg) — The Standard & Poor’s 500 Index climbed within nine points of its record high and a gauge of market volatility slipped to the lowest level in six years as Apple Inc. rallied and banks advanced.

Apple jumped 1.4 percent, erasing earlier losses.

BlackBerry surged 14 percent following a report that Lenovo Group Ltd. may consider buying the smartphone maker. Ford Motor Co. added 2.8 percent as deliveries in China jumped. Financial shares rose as Citigroup Inc. and Wells Fargo & Co. climbed at least 1.7 percent. Dick’s Sporting Goods Inc. fell 11 percent after forecasting profit that was less than analysts estimated.

The S&P 500 added 0.3 percent to 1,556.22 at 4 p.m. in New York, the highest level since October 2007. The Dow Jones Industrial Average climbed 50.22 points, or 0.4 percent, to 14,447.29, its fifth straight record close. The Chicago Board Options Exchange Volatility Index dropped to its lowest level since 2007. About 5.4 billion shares traded hands on U.S. exchanges today, 14 percent below the three-month average.

“The path of least resistance continues to be higher,” Jordan Irving, who helps oversee $175 million at Irving Magee Investment Management in Philadelphia, said in a phone interview. “The latest batch of economic data out of the U.S. was OK. If you’re lagging you might want to try to get a little juice in there to catch up.”

More than $10 trillion has been restored to U.S. equity values during the four-year bull market as the S&P 500 more than doubled from the bottom in 2009, fueled by corporate earnings that topped estimates and monetary stimulus from the Fed. The Dow recouped all its losses from the financial crisis in less than 65 months, more than a year faster than the recovery from the Internet bubble.

U.S. equity funds attracted $4.9 billion in the first week of March, the most in more than a month, according to data from EPFR Global.

The CBOE Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, dropped 8.2 percent to 11.56 today, the lowest level since February 2007. The gauge, known as the VIX, fell 18 percent last week and is down 36 percent for the year.

Stocks slumped earlier as government data showed China’s industrial production increased 9.9 percent in the first two months of the year, less than the 10.6 percent gain projected in a Bloomberg survey. Retail sales in China rose 12.3 percent, also trailing economists’ estimates, separate figures showed. In the euro area, German exports rose more than economists forecast in January, data showed.

“The fundamentals continue to support a higher stock market,” Eric Green, director of research and fund manager at Penn Capital Management, said over the phone. The Philadelphia- based firm oversees about $7 billion. “In the very short term, is a pullback a possibility? Absolutely. If we get a pullback, likely a lot of people will step in.’”

Nine of 10 groups in the S&P 500 advanced, as banks, raw- material producers and health-care shares climbed at least 0.4 percent. Citigroup added 2 percent to $47.60, while Wells Fargo climbed 1.7 percent to $37.13. Telephone shares were the only group to decline in the benchmark index.

Apple rallied 1.4 percent to $437.87. The company will announce plans for its growing pile of cash by next month, Howard Ward, chief investment officer at Gamco Investors Inc., said in an interview today on Bloomberg Radio’s “Surveillance” with Tom Keene.

The shares fell as much as 1.5 percent earlier in the day, after being downgraded to outperform from buy by Credit Agricole Securities equity analyst Avi Silver.

BlackBerry, formerly known as Research In Motion Ltd., surged 14 percent to $14.90, for the biggest advance in more than a month. Lenovo’s chief executive officer, Yang Yuanqingl, told the Les Echos paper that a deal with Waterloo, Ontario- based BlackBerry “could possibly make sense, but first I need to analyze the market and understand what exactly the importance of this company is.”

Genworth Financial Inc. soared 6.7 percent to $10.50. The provider of life insurance and mortgage guaranties gained the most in the S&P 500 on speculation the company will benefit from the rebound of the housing market. Scotia Capital upgraded the company two levels to sector outperform, the second-highest of the bank’s four ratings. Barron’s said March 9 the insurer will reward investors.

Ford Motor rallied 2.8 percent to $13.34. Ford reported deliveries in China surged more than 40 percent during the first two months of the year.

Boeing Co. rose 2.1 percent to $82.94, the highest level since May 2008. The company said it is boosting monthly airplane production rates for its 737 and 787 programs.

Dell Inc. climbed 1.5 percent to its highest level since May at $14.37. The personal computer maker, which is facing mounting shareholder resistance to a proposed $24.4 billion leveraged buyout, will let billionaire Carl Icahn review its books as he pushes alternatives to the deal. Dell’s board is seeking bids higher than the $13.65 a share offer by Chief Executive Officer Michael Dell and Silver Lake Management LLC to take the company private.

Dick’s Sporting Goods tumbled 11 percent to $45.11, the most since November 2008. The largest U.S. sporting-goods chain forecast annual profit that was less than analysts estimated on costs to remodel stores and improve its Web operations, amid competition from the online and new retail locations operated by brands like Nike Inc. and Adidas AG. Kroger Co., which operates locations under the Ralphs, Food 4 Less and Dillons names, slipped 0.7 percent to $30.95.

Hilliard Lyons cut its recommendation on the stock to long-term buy from buy, with analyst Jeffrey Thomison saying the company’s earnings this year “will face a difficult comparison” with the growth reported last year. The shares have advanced 19 percent so far this year.

Have a wonderful evening everyone.

Be magnificent!

A state of harmony with nature,

with all beings of creation,

itself leads to our harmony with humans.

If we lose our relationship with nature,

we lose inevitably

our relationship with humans.

Krishnamurti, 1895-1986

As ever,

Carolann

Act as if what you do makes a difference.

It does.

-William James, 1842-1910

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