May 27, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be sending the newsletter on her behalf.

This weekend I attended my sisters Brazilian Batizado hosted at the Empress Hotel.  For the past 12 years my sister has been participating in a Brazilian Martial Arts called Capoeira. Capoeira is a Brazilian game that combines elements of martial arts, dance, and music. It was developed in Brazil mainly by African descendants with native Brazilian influences, probably beginning in the 16th century. It is known by quick and complex moves, using mainly power, speed, and leverage for leg sweeps. Saturday’s dance party included many traditional Brazilian dances, while the Sunday performance showcased the art of Capoeira and students receiving their next belts.  Here are a few pictures to give you an idea of the art of Capoeira!

On this day in…

1933 – Walt Disney’s “Three Little Pigs” was first released.
Disney movies, music and books

1933 – In the U.S., the Federal Securities Act was signed. The act required the registration of securities with the Federal Trade Commission.

1937 – In California, the Golden Gate Bridge was opened to pedestrian traffic. The bridge connected San Francisco and Marin County.

1969 – Construction of Walt Disney World began in Florida.

1985 – In Beijing, representatives of Britain and China exchanged instruments of ratification on the pact returning Hong Kong to the Chinese in 1997.

1986 – Mel Fisher recovered a jar that contained 2,300 emeralds from the Spanish ship Atocha. The ship sank in the 17th century. 

“The best way to find yourself is to lose yourself in the service of others.” – Mahatma Gandhi

Photos of the day – May 27^th, 2013

A woman prepares to ride a bike from the new public bike rental program launched today in New York City. Carlo Allegri/Reuters

The sun rises over the grounds of the Indianapolis Motor Speedway in Indianapolis, Sunday. AJ Mast/AP

Market Closes for May 27^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

May 27 (Bloomberg) — Canadian stocks rose for a second day as gold producers advanced and health-care companies soared to a 13-year high after Valeant Pharmaceuticals International Inc. surged to a record on a U.S. acquisition.

Valeant jumped 10 percent after adding Bausch & Lomb Holdings Inc. in an $8.7 billion deal, including debt. Wi-Lan Inc. gained 9.2 percent after signing a license agreement with Dell Inc., dismissing litigation. Kirkland Lake Gold Inc. and Premier Gold Mines Ltd. rose at least 2.7 percent as the price of gold advanced, extending gains after the best week in a month. Energold Drilling Corp. soared 12 percent after reporting first-quarter earnings that beat estimates.

The Standard & Poor’s/TSX Composite Index rose 29.15 points, or 0.2 percent, to 12,696.37 at 4 p.m. in Toronto. The benchmark equity gauge has gained 2.1 percent this year.

Markets in New York were closed for the Memorial Day holiday.

“It looks like we’ve hit the pause button, it’s pretty quiet today,” said Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc. in Toronto. He helps manage $4 billion with the firm. “What I’d watch for is gold equities and the gold price, they could get a bit of a lift if equity markets are taking a pause here.”

“Valeant is an acquisition-driven company and the shares will continue rising until they make a bad investment,” Nakamoto said.

Health-care stocks paced gains in the S&P/TSX, rising 7.4 percent as a group for the highest close since March 2000.

Trading volume for the broad index was 72 percent lower than the 30-day average.

Valeant, based in Montreal, surged 10 percent to C$95.85 for its highest close, according to data compiled by Bloomberg.

Valeant has soared 25 percent in the past two days, as reports of the deal first surfaced on May 24.

The company said in a statement today it will pay about $4.5 billion for Bausch & Lomb, which is owned by Warburg Pincus LLC. Valeant will also pay $4.2 billion to repay Bausch & Lomb debt.

Wi-Lan, a technology patent licensing company, jumped 9.2 percent to C$4.65 after agreeing to a licensing deal with Dell.

The U.S. computer retailer gains access to a subset of wireless patents for some products, the companies said in a release.

Wi-Lan, based in Ottawa, in September 2011 sued companies including Dell, Apple Inc. and Hewlett-Packard Co. for copyright infringement related to wireless technologies.

Kirkland Lake Gold jumped 6.5 percent to C$4.75 and Premier Gold Mines added 2.7 percent to C$1.89 as gold rose 0.5 percent to $1,394.70 an ounce in electronic trading in New York. Prices rose 2 percent last week, the biggest weekly gain since April 26.

Energold Drilling, which provides drilling services for mining companies, surged 12 percent to C$2.01, the biggest gain since June 2009. The Vancouver-based company reported first- quarter adjusted earnings of 15 Canadian cents a share, beating the average estimate of 10 cents according to data compiled by Bloomberg, on rising sales in its energy and manufacturing divisions.

US

By Will Hadfield and Lu Wang

May 24 (Bloomberg) — U.S. stocks recovered from early losses for a second day as investors weighed prospects of economic growth with concern the Federal Reserve will reduce stimulus efforts. Japanese shares rebounded from their largest drop since 2011, while commodities fell for a fourth day.

The Standard & Poor’s 500 Index slipped less than 0.1 percent to 1,649.6 at 4 p.m. in New York, paring a 0.8 percent loss, and the Dow Jones Industrial Average recovered from a 95- point loss to close up 8.6 points at 15,303.1. Japan’s Topix Index closed 0.5 percent higher after a 6.9 percent plunge yesterday. The euro was little changed at $1.2935 after gaining 0.5 percent earlier. Coffee, soybeans and cocoa lost more than 1.5 percent to lead the S&P GSCI Index of commodities to a three-week low.

Bookings for U.S. durable goods increased 3.3 percent last month, pointing to gains in business activity that will help manufacturing rebound in the second half of the year. In Germany, the Ifo institute’s business-climate index increased for the first time in three months, exceeding forecasts. Bank of Japan Governor Haruhiko Kuroda said he has done enough to stimulate the economy and has no target for the nation’s stocks or currency.

“The markets got spooked at the thought the Fed might taper off QE sooner rather than later,” Michelle Clayman, chief investment officer at New Amsterdam Partners in New York, which manages $2.6 billion, said in a phone interview. “Yet if you look at what the Fed said, that’d happen because the state of the world will be better.”

About 11 stocks retreated for every 10 that rose in the U.S. Volume of S&P 500 stocks was 22 percent below the 30-day average before markets close on May 27 for the Memorial Day holiday. The S&P 500 capped a weekly loss of 1.1 percent, its first in more than a month, and trimmed its 2013 gain to 15.7 percent.

Energy, telephone and utility companies led losses in eight of the 10 main industry groups in the S&P 500 today. Gap Inc. retreated 1.7 percent after the retailer forecast annual profit that fell short of analysts’ estimates.

Abercrombie & Fitch Co. slumped 8 percent after reducing its profit forecast for this financial year to a range of $3.15 to $3.25. It had predicted earnings per share of $3.35 to $3.45.

Sears Holdings Corp. plunged 14 percent, the most since November, as the department-store retailer posted a quarterly loss. “Our recent financial performance has not been acceptable,” Chief Executive Officer Edward Lampert said in a statement.

The Dow closed higher as Procter & Gamble Co. rose 4 percent to lead gains after the world’s largest consumer- products maker said it will replace Chief Executive Officer Bob McDonald with his predecessor, A.G. Lafley, as it struggles to rekindle growth.

Investors trying to explain the resilience of American equities during a global selloff may want to consider the pace that companies are repurchasing shares.

About 79 percent of buyback orders at Goldman Sachs Group Inc.’s corporate trading desk were active yesterday, the most this year, according to a note to clients obtained by Bloomberg News. Companies stepped up purchases as the S&P 500 fell as much as 3 percent from an intraday record reached May 22.

The buybacks may have limited losses in American equities after shares in Japan fell the most in two years and stock markets from London to Paris and Frankfurt saw declines of more than 2 percent. The S&P 500 closed yesterday down 0.3 percent after losing as much as 1.2 percent.

“The overall buy-the-dip mentality is very, very prevalent,” Jim Welsh, who helps oversee $6 billion at Forward Management LLC in San Francisco, said in a phone interview.

“When you have corporate buybacks, it’s kind of like a support underneath the market.”

The Stoxx 600 slipped for a second day following a 2.1 percent plunge yesterday, its worst in 10 months.

Raiffeisen Bank International AG dropped 2.1 percent after Herbert Stepic offered to resign as chief executive officer. The lender, the second-largest in eastern Europe, began an internal review of Stepic’s offshore accounts yesterday. Austria’s financial-markets regulator has requested information.

The yield on Italian 10-year debt rose 11 basis points to 4.14 percent, while Spanish rates jumped 13 basis points to 4.42 percent.

The yen strengthened against all 16 major peers after Kuroda’s remarks.

Japan’s currency has slumped 11 percent this year, for the worst performance among 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The BOJ said on April 4 that it would double the country’s monetary base by the end of 2014 in an attempt to end deflation. The euro has risen 2.7 percent this year, and the dollar has strengthened 5.1 percent.

Australia’s dollar fell 1.1 percent to 96.42 U.S. cents, heading for a third weekly drop. New Zealand’s currency slid 0.7 percent to 80.81 U.S. cents after a government report showed the nation’s trade surplus for April was smaller than economists had estimated.

The MSCI Emerging Markets Index swung between gains and losses. Lenovo Group Ltd. climbed 3.8 percent in Hong Kong after saying that its cash reserves of more than $3 billion enable it to pursue acquisitions to expand into new business areas.

Hungary’s benchmark BUX Index increased 1. percent, while Brazil’s Ibovespa was little changed.

Have a great evening everyone!

Be magnificent!

“Coming together is a beginning; keeping together is progress; working together is success.” – Henry Ford

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