April 9, 2013 Newsletter

Dear Friends,

Tangents: Sorry this is being sent to you late this morning.  We had a meeting with our accountant last night (as many of us are doing at this income tax time of year 🙁 ) which lasted much longer than expected and I didn’t get back to the office to send this.  Markets are behaving nicely!

Success is stumbling from failure to failure with no loss of enthusiasm. –Winston Churchill

Photos of the day – April  9th, 2013

A bird makes a nest near Diani Beach on the Indian Ocean coast of Kenya, some 19 miles south of Mombasa. Goran Tomasevic/Reuters

Will Jones and his daughter Isla head off to her school Tuesday morning after a spring snowstorm in Boulder, Colorado. Paul Aiken/The Daily Camera/AP

Market Closes for April 9th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

April 9 (Bloomberg) — Canadian stocks rose the most in more than four months as raw-materials producers advanced after weaker-than-forecast inflation in China boosted metals prices.

Barrick Gold Corp. and Goldcorp Inc. climbed at least 1.5 percent as gold advanced. Teck Resources Ltd. and First Quantum Minerals Ltd. rallied more than 1.5 percent as copper rose.

Endeavour Silver Corp. surged 8.3 percent as the metal’s price increased the most since January. Royal Bank of Canada and Toronto-Dominion Bank, the nation’s largest lenders, added more than 0.5 percent amid better-than-estimated housing data.

The Standard & Poor’s/TSX Composite Index rose 139.49 points, or 1.1 percent, to 12,484.05 at 4 p.m. in Toronto, its biggest increase since Nov. 19. The benchmark equity gauge erased its loss for the year. Trading volume was 9.8 percent lower than the 30-day average.

“The inflation data presents some support that as China’s economy is slowing there is still growth,” Anish Chopra, managing director and fund manager with TD Asset Management Ltd. in Toronto, said. His firm oversees about C$204 billion ($201 billion). “It’s positive that there’s still demand in the economy. People were concerned about a significant slowdown in commodities.”

Consumer prices in China increased 2.1 percent in March from a year earlier, the country’s statistics bureau said today.

Analysts surveyed by Bloomberg forecast a 2.5 percent gain. The reading fell from February’s increase of 3.2 percent, reducing pressure on policy makers to tighten credit. China is the world’s biggest user of industrial metals and Canada’s second- largest trading partner.

Investors also weighed first-quarter results from Alcoa Inc. The largest U.S. producer of aluminum posted earnings that surpassed analyst estimates while its sales fell short of forecasts.

Raw-materials stocks increased the most in the S&P/TSX. The group jumped 2.4 percent for its biggest gain since March 6.

Gold climbed 0.9 percent to settle at $1,586.70 an ounce, copper added 2.1 percent to $3.4415 a pound, and silver advanced 2.7 percent to $27.881 an ounce, the largest jump since Jan. 30.

Barrick Gold increased 1.5 percent to C$27.15, while Goldcorp gained 3.1 percent to C$32.93. Turquoise Hill Resources Ltd., which is developing the Oyu Tolgoi gold deposit in Mongolia, climbed 6.2 percent to C$6.54.

Teck Resources, Canada’s largest diversified miner, jumped 4.9 percent, the biggest increase since November, to C$29.37.

First Quantum Minerals, a copper miner, rose 1.5 percent to C$19.24. Endeavour Silver surged 8.3 percent to C$6.37.

Niko Resources Ltd. surged 14 percent, the biggest gain in the S&P/TSX, to C$7.14, as oil advanced for a second day. Suncor Energy Inc., Canada’s largest energy producer, jumped 3.1 percent to C$29.84.

Pacific Rubiales Energy Corp. soared 7.8 percent to C$21 after reporting daily output in the first quarter was close to the upper end of its target range. Chief Executive Officer Ronald Pantin said today in a statement that the oil and gas company will try to cut operating costs by about $8 per barrel for the rest of the year.

Royal Bank rose 1.2 percent to C$60.17 and TD Bank advanced 0.5 percent to C$81.11, as each snapped a four-day losing streak.

Canadian housing starts unexpectedly increased for a second month in March and building permits rose in February, evidence that low borrowing costs are supporting construction.

“Canada’s housing starts exceeded expectations, so that was great,” Chopra said. “People were concerned about a slowing Canadian economy, so now we have some positive data points.”

Agrium Inc. dropped 2.8 percent to C$96.55 after investors rejected a slate of dissident board nominees promoted by activist shareholder Jana Partners LLC, which has called for changes at the Calgary-based fertilizer maker.

US

By Lu Wang and Lindsey Rupp

April 9 (Bloomberg) — U.S. stocks rose, giving the Standard & Poor’s 500 Index its first back-to-back gain in more than three weeks, on optimism over earnings and as commodities gained amid a report showing China’s inflation slowed.

The Standard & Poor’s 500 Index rose 0.4 percent to 1,568.56 at 4 p.m. in New York, paring an earlier gain of as much as 0.7 percent. Raw-materials producers rose 1.1 percent amid speculation that tamed inflation would reduce pressure on Chinese policy makers to tighten credit.

“The commodity pop is basically tied to the view on China,” Ralph Shive, the South Bend, Indiana-based manager of the $1.2 billion Wasatch-Large Cap Value Fund, said by phone.

“The market is acting strongly. It doesn’t seem to want to go down. You get dips, and they seem to pop right back.”

The S&P 500 has gained 1 percent in the past two days as investors speculated first-quarter earnings would help equities rally. The benchmark index lost 1 percent last week, the biggest decline this year, amid reports showing U.S. payrolls had the smallest gain in nine months in March while manufacturing and services industries expanded less than forecast.

Income at S&P 500 companies probably fell 1.8 percent in the first quarter, the first year-over-year drop since 2009, analyst estimates compiled by Bloomberg show. JPMorgan Chase & Co., Wells Fargo & Co. and Bed Bath & Beyond Inc. are among S&P 500 companies scheduled to report earnings this week.

Alcoa Inc., the first company in the Dow to release results this season, reported earnings that exceeded analysts’ estimates while revenue trailed projections. The company cited lower metal prices and the impact of smelter curtailments in Spain and Italy for the decline in sales. The shares dropped 0.1 percent.

“Analyst estimates might be a little pessimistic at this point,” Eric Teal, chief investment officer at First Citizens BancShares Inc., which manages $4.5 billion in Raleigh, North Carolina, said in a phone interview. “Earnings will have the potential to surprise on the upside.”

A report from China showed inflation slowed last month from a 10-month high. In the U.S., inventories at U.S. wholesalers fell unexpectedly in February as uncertainty about fiscal policy kept business spending in check.

The S&P 500 has more than doubled from its 12-year low in March 2009, helped by the Federal Reserve’s unprecedented bond purchases and three straight years of profit growth.

Fed Chairman Ben S. Bernanke said in a speech yesterday that economic conditions were far from where he would like them to be. The Federal Open Market Committee releases minutes of its March 19-20 meeting tomorrow. After that meeting, Bernanke said further gains in the U.S. labor market were needed for the Fed to consider reducing its monetary easing.

Have a wonderful day everyone!

Be magnificent!

It is only a mind that looks at a tree or the stars or the sparkling waters of a river

with complete abandonment that knows what beauty is,

and when we are actually seeing we are in a state of love.

Krishnamurti, 1895-1986

As ever,

Carolann

Imagination is the highest kite one can fly.

-Lauren Bacall, 1924-

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