March 20, 2013 Newsletter

Dear Friends,

Tangents:

Carolann is out of the office this afternoon, so I am sending the Newsletter today on her behalf.

To mark the first day of spring, I share this poem with you:

Today I Cheer

Spring is here

Light blue sky

Fluffy clouds float by

Birds whistle sweeter

Making their nests neater

Wisteria bush flowers did lack

Now flower buds bloom in lilac!

Today in History:

1903 – In Paris, paintings by Henri Matisse were shown at the “Salon des Independants”.

1911 – The National Squash Tennis Association was formed in New York City.

1914 – The first international figure skating championship was held in New Haven, CT.

1922 – The USS Langley was commissioned. It was the first aircraft carrier for the U.S. Navy.

1947 – A blue whale weighing 180-metric tons was caught in the South Atlantic.

1956 – Mount Bezymianny on Kamchatka Peninsula (USSR) exploded.

1963 – The first “Pop Art” exhibit began in New York City.

1964 – The ESRO (European Space Research Organization) was established.

“Try a thing you haven’t done three times. Once, to get over the fear of doing it. Twice, to learn how to do it. And a third time, to figure out whether you like it or not.” – Virgil Garnett Thomson

Photo of the Day – March 20^th, 2013

A honeybee approaches a snowdrop flower in Klosterneuburg, Austria, on the first day of spring. Heinz-Peter Bader/Reuters

A man cycles past a car covered with snow in Beijing. Kim Kyung-Hoon/Reuters

Market Closes for March 20^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

March 20 (Bloomberg) — Canadian stocks rose for the first time in three days as European policy makers weighed bailout options for Cyprus and the Federal Reserve maintained its stimulus efforts.

Oil producers Canadian Natural Resources Ltd. and Cenovus Energy Inc. each gained 1 percent after crude advanced the most in almost two weeks. BlackBerry climbed 7.2 percent as an analyst at Morgan Stanley raised his rating on the smartphone maker’s stock. Valeant Pharmaceuticals International Inc. added 2.5 percent after agreeing to buy Obagi Medical Products Inc. for about C$360 million ($351 million).

The Standard & Poor’s/TSX Composite Index rose 52.68 points, or 0.4 percent, to 12,826.55 at 4 p.m. in Toronto. The S&P/TSX has risen 3.2 percent this year. Trading volume was in line with the 30-day average.

“There’s a return to confidence in all markets, whether it be equity markets or commodity markets,” said Anish Chopra, managing director and fund manager with TD Asset Management Ltd., from Toronto. His firm oversees about C$204 billion.

“People are dealing with the issues in Cyprus and looking at the alternatives, and the U.S. economy is doing well under the circumstances.”

The Fed will keep up its bond buying at a pace of $85 billion a month even as the world’s largest economy and the job market pick up, the Federal Open Market Committee said today at the conclusion of a two-day meeting in Washington. The purchases will continue until “the outlook for the labor market has improved substantially in a context of price stability.”

The central bank also left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation is projected to be no more than 2.5 percent.

“The Fed is staying the course, looking for sustained economic growth before they take away stimulus,” Chopra said.

Oil climbed as much as 1.1 percent after Luxembourg’s Luc Frieden called for fellow euro-area finance ministers to assemble a new rescue package for Cyprus to avoid an implosion of its banking sector. The island nation yesterday rejected an unprecedented levy on bank deposits, causing crude futures to tumble the most in a month.

Oil for April delivery advanced 0.9 percent to settle at $92.96 a barrel, maintaining its gains after the U.S. Energy Information Administration said stockpiles unexpectedly fell last week.

Energy stocks contributed most to gains in the S&P/TSX, adding 0.4 percent as a group. All 10 industries in the benchmark index advanced. Canadian Natural Resources rose 1 percent to C$33.62 and Cenovus increased 1 percent to C$32.67.

BlackBerry, formerly Research In Motion Ltd., jumped 7.2 percent to C$16.53, the highest since Feb. 7. Ehud Gelblum, analyst with Morgan Stanley, raised his rating for the stock to the equivalent of a buy and increased his price target to $22 from $10, saying BlackBerry’s new line of phones will boost profit margins.

Valeant gained 2.5 percent to C$75.21 for its highest close in 10 years, after agreeing to pay $19.75 a share in cash for Obagi, which makes skin-care creams. Valeant expects the deal to add to its cash earnings immediately.

Franco-Nevada Corp., the mineral royalties and investment company, slumped 4.3 percent to C$45.38 after yesterday reporting fourth-quarter adjusted earnings of 32 cents a share.

That was short of the average estimate of 34 cents based on a survey of 10 analysts by Bloomberg.

US

By Lu Wang and Sarah Pringle

March 20 (Bloomberg) — U.S. stocks rose, snapping a three- day decline in the Standard & Poor’s 500 Index, as the Federal Reserve will keep up its bond buying to stimulate the economy and euro-area leaders weighed options for Cyprus.

Homebuilders rallied, as Lennar Corp. gained 4.8 percent after posting first-quarter earnings that beat projections.

Adobe Systems Inc. climbed 4.2 percent as the software maker reported sales and profit that exceeded analysts’ estimates.

FedEx Corp. slumped 6.9 percent as it lowered its 2013 earnings forecast amid a widening customer shift to cheaper overseas shipments. Oracle Corp. tumbled 7.5 percent after the close of regular trading as sales and profit missed estimates.

The S&P 500 advanced 0.7 percent to 1,558.71 at 4 p.m. in New York, trading within seven points of its record reached in 2007. The Dow Jones Industrial Average rose 55.91 points, or 0.4 percent, to 14,511.73. About 5.9 billion shares traded hands on U.S. exchanges today, 6.3 percent below the three-month average.

“The Fed essentially did what’s to be expected, which is to reinforce that the economy still needs support,” Hank Herrmann, Overland Park, Kansas-based chief executive officer of Waddell & Reed Investment Management Co., said in a phone interview. His firm manages $103 billion. “Cyprus just reminds us all the fragility of the economic circumstances in Europe. As you look at the economic data, pretty much everywhere outside the U.S. has been equally unconvincing in terms of any kind of expansion.”

More than three years into the expansion, the central bank led by Chairman Ben S. Bernanke is pressing on with open-ended purchases of Treasury and mortgage securities to boost the pace of growth and heal a labor market still scarred by the deepest recession since the Great Depression.

The S&P 500 has surged 130 percent from a 12-year low in 2009 as companies reported better-than-estimated earnings and the Fed embarked on three rounds of bond purchases to stimulate the economy. The benchmark index rose to within two points of its 2007 record last week while the Dow hit an all-time high.

The Federal Open Market Committee, at the conclusion of a two-day meeting in Washington, left unchanged its statement that it plans to hold its target interest rate near zero as long as unemployment remains above 6.5 percent and inflation is projected to be no more than 2.5 percent.

Policy makers lowered their expectations for the unemployment rate at the end of the year to a range of 7.3 percent to 7.5 percent, from a previous forecast of 7.4 percent to 7.7 percent. The economy will expand 2.3 percent to 2.8 percent this year, they estimate, compared with their earlier forecast of 2.3 percent to 3 percent growth.

Stocks rallied earlier today as euro-area leaders weighed options for Cyprus. Investors speculated that the European Central Bank will continue to support the country’s banks until next week, after lawmakers in the Mediterranean nation rejected an unprecedented levy on bank deposits.

“In a lot of ways what’s happening in Cyprus only serves to reinforce the Fed’s current policy,” Richard Helm, a portfolio manager at New York-based Cohen & Steers, which oversees more than $40 billion, said in a phone interview. “It puts to bed that the Fed might raise rates sooner than later if you do have issues re-emerging in Europe.”

Nine of 10 S&P 500 groups gained as consumer companies climbed the most, rising at least 1 percent. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, slid 12 percent to 12.67, after a 27 percent jump over two days. The gauge, known as the VIX, is down 30 percent this year.

An S&P index of homebuilders climbed 3.7 percent to the highest level since July 2007. Builders are benefiting from revived demand for new homes as the inventory of existing houses for sale shrinks and buyers take advantage of mortgage rates that are close to record lows.

Lennar jumped 4.8 percent to $43.40. The third-biggest U.S. homebuilder by revenue said earnings rose in the fiscal first quarter as prices and sales increased amid the broadening national housing recovery.

Toll Brothers Inc., the largest U.S. luxury-home builder, added 5.9 percent to $36.53. Orders are up 49 percent for the spring, Chief Executive Officer Douglas Yearley said today on Bloomberg Television.

A Bloomberg gauge of U.S. airlines gained 2.3 percent to 49.90, its highest level since February 2008. The airline group IATA said global airlines are on track to post profit 40 percent higher than the previous year, due to strong passenger demand, cargo improvement and industry consolidation in domestic markets.

Alaska Air Group Inc. surged 3.4 percent to a record $63, while Delta Air Lines Inc. jumped 3.2 percent to $17.07. U.S. Airways Group added 2.7 percent to $17.23, the highest level since 2007.

Adobe gained 4.2 percent to $42.46, as the maker of Photoshop software reported sales for the quarter ended March 1 of $1.01 billion, beating the average analyst estimate of $985.8 million. Profit excluding some items was 35 cents a share, exceeding the average analyst projection of 31 cents.

BlackBerry, formerly Research In Motion Ltd., increased 6.5 percent to $16. Morgan Stanley raised its rating on the Canadian-based phone company to overweight from underweight. The BlackBerry 10 device may boost gross margins and average selling prices, Morgan Stanley analyst Ehud Gelblum said in a note.

Family Dollar Stores Inc. rallied 3.8 percent to $60.36, pacing gains among discount retailers. Dollar Tree Inc. advanced 4 percent to $46.16, while Dollar General Corp. rose 4.2 percent to $49.79.

FedEx fell 6.9 percent to $99.13. The operator of the world’s largest cargo airline said profit in the fiscal year through May will be $6 to $6.20 a share, down from an earlier forecast of as much as $6.60. Both the projection and fiscal third-quarter profit trailed analysts estimates.

The company, an economic bellwether because it moves goods as varied as medical supplies and auto parts, is in the midst of a $1.7 billion restructuring to compensate for customers moving away from the fastest, most lucrative deliveries. Starting in April, it will decrease capacity to and from Asia and put low- yielding shipments in less expensive networks, Chief Executive Officer Fred Smith said.

Oracle Corp. tumbled 7.5 percent to $33.10 as of 4:50 p.m. in New York. The company posted fiscal third-quarter sales and profit that missed analysts’ estimates as customers chose competitors’ Web-based software.

Cintas Corp. dropped 4.5 percent to $43.88 after the provider of restroom supplies and entrance mats said it expects full-year earnings per share of $2.50 to $2.54. That compares with a previous forecast of $2.50 to $2.58.

Happy first day of Spring everyone!!

Be magnificent!

“Learn from yesterday, live for today, hope for tomorrow.” – Unknown Source

As ever,

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5838