June 17, 2013 Newsletter

Dear Friends,

Tangents:

June of the iris and the rose.

The rose not English as we fondly think.

Anacreon and Bion sang the rose;

And Rhodes the isle whose very name means rose

Struck roses on her coins;

Pliny made lists and Roman libertines

Made wreaths to wear among the flutes and wines;

The young Crusaders found the Syrian rose

Springing from Saracenic quoins,

And China opened her shut gate

To let her roses through, and Persian shrines

Of poetry and painting gave the rose…

-V. Sackville-West,

-from The Garden

On June 17^th, 1928, Amelia Earhart began the first trans-Atlantic flight by a woman ; she flew from Newfoundland to Wales in approximately 21 hours.

On June 17^th, 1885, The Statue of Liberty, a gift from France to the USA, arrived in New York.

Birthdays: Igor Stravinsky, b. 1882.

M. C. Escher, b. 1882.

Venus Williams, b. 1980.

Photos of the Day –June 17^th, 2013

A view of Earth from the Cupola on the earth-facing side of the International Space Station is seen in this NASA handout photo taken June 12, 2103 and provided June 17, 2013. Visible in the top left foreground is a Russian Soyuz crew capsule. In the lower right corner, a solar array panel can be seen. NASA/Reuters

Britain’s Queen Elizabeth walks in procession with Prince Charles (center l.) and Prince William (center r.) as they attend the annual Order of the Garter Service at St George’s Chapel at Windsor Castle in Windsor, southern England. Murray Sanders/Reuters

Market Closes for June 17^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

June 17 (Bloomberg) — Canadian stocks rose, following the third weekly drop for the benchmark index, as a nine-month high in the price of crude boosted oil and gas producers and existing home sales rose in May.

Calfrac Well Services Ltd. and Bankers Petroleum Ltd. added at least 4.4 percent to pace gains among energy shares. Talisman Energy Inc. increased 1.7 percent after Lundin Petroleum AB began drilling in a field co-owned by the two companies in the North Sea. B2Gold Corp. jumped the most in six weeks, ahead of its inclusion in an index of gold mining stocks. Rogers Communications Inc. rallied 1.3 percent after an analyst with Canaccord Genuity Inc. raised his rating for the stock.

The Standard & Poor’s/TSX Composite Index rose 101.54 points, or 0.8 percent, to 12,288.90 at 4 p.m. in Toronto. The gauge slipped 1.5 percent last week and has lost 1.2 percent this year, making it the third-worst performing index among developed markets in the world, ahead of Austria and Hong Kong.

“We had a big shakeout in the market last week, so people are moving in after the weekend looking for bargains,” said Bob Decker, fund manager with Aurion Capital Management in Toronto.

The firm manages C$6 billion ($5.9 billion). “Existing home sales are stabilizing, putting to rest some of the fears of a housing burst. The Canadian economy is pretty resilient. Crude is at a high and that doesn’t hurt either.”

Canadian existing home sales rose at their fastest pace in more than two years in May, adding to evidence the nation’s housing market remains robust. Home sales increased 3.6 percent in May from the previous month, the Canadian Real Estate Association said in a statement today, the biggest gain since January 2011.

Consumer-staples companies rose 2.2 percent as a group to a two-week high. Alimentation Couche Tard Inc. gained 4.3 percent to C$61.55, a record high, and Shoppers Drug Mart Corp. rose 1.9 percent to C$45.85.

Nine of 10 industries in the S&P/TSX advanced. Trading volume was 20 percent lower than the 30-day average at this time of the day.

Calfrac Well Services jumped 6.6 percent to C$31.41, the highest in a year, to pace gains among energy stocks, which rose 1.2 percent as a group. Dan MacDonald, analyst with RBC Capital Markets, raised Calfrac Well Services to an outperform rating, equivalent to a buy, and increased his price target to C$42 from C$30 due to an expected rise in gas licensing and drilling in British Columbia, he said in a note.

Bankers Petroleum rallied 4.4 percent to C$2.87 and Whitecap Resources Inc. added 3.7 percent to C$10.58.

Oil rose as much as 0.9 percent to $98.74 on renewed speculation that unrest in Syria will spread to other parts of the Middle East and disrupt supplies.

Talisman Energy rose 1.7 percent to C$11.84. Lundin Petroleum has begun drilling a development well on the Brynhild field in the North Sea. Lundin holds a 90 percent stake in the project, while Talisman holds a 10 percent rating.

B2Gold, a Canadian explorer and producer with assets in Latin America, Africa and Asia, soared 9.8 percent to C$2.46, the most since May 8. The Vancouver-based company is slated to join the NYSE Arca Gold Miners Index on June 21, Ian MacLean, a spokesman for B2Gold, said in a telephone interview with Bloomberg today.

Brookfield Asset Management Inc. increased 2.6 percent to C$36.89 after agreeing to sell its Longview Timber and Longview Fibre Paper and Packaging units in two separate deals worth a total $3.68 billion.

Rogers Communications, Canada’s largest wireless carrier, added 1.3 percent to C$45.95 after Dvai Ghose, head of research with Canaccord Genuity, raised the stock to a buy from a hold rating. There is a buying opportunity with Rogers slumping as much as 14 percent since reaching a high on April 10, Ghose said in a note to clients.

US

By Inyoung Hwang and Katie Brennan

June 17 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from last week’s decline, as investors weighed economic data with the prospects for stimulus cuts ahead of this week’s Federal Reserve policy meeting.

Nine of 10 industries in the S&P 500 advanced, with energy and technology stocks leading gains. Netflix Inc. jumped 7.1 percent after agreeing to a multiyear deal with DreamWorks Animation SKG Inc. to obtain original programming. Micron Technology Inc. advanced 3.8 percent after Citigroup Inc. lifted its price target on the largest U.S. maker of memory chips.

The S&P 500 rose 0.8 percent to 1,639.04 at 4 p.m. in New York, after earlier gaining as much as 1.2 percent. The Dow Jones Industrial Average added 109.67 points, or 0.7 percent, to 15,179.85. About 5.7 billion shares traded hands on U.S. exchanges today, or 9.4 percent below the three-month average.

“Although things are improving, we have a long way to go,” James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management, said by telephone. “We’re ahead of ourselves with regard to the Fed acting anytime soon in reducing the support that it’s providing for the economy.”

Investors have been watching economic reports for clues to whether the economy is strong enough to allow the Fed to scale back its $85 billion in monthly bond buying. Data today showed manufacturers in the New York region felt more optimistic in June, indicating the area’s factories are looking beyond the current slowdown in growth. Separate data showed confidence among U.S. homebuilders surged last month to the highest level in seven years.

Equities trimmed their advance after a British official said the Group of Eight leaders see downside risks to the global economy abating even as growth prospects remain weak. U.S. stocks fell last week as the International Monetary Fund cut its outlook for U.S. growth in 2014 to 2.7 percent from 3 percent.

Today’s paring accelerated after the Financial Times reported that Fed Chairman Ben Bernanke is likely to signal the central bank is close to tapering when he gives a press conference on June 19 following a two-day policy meeting.

The S&P 500 has fallen 1.8 percent since May 21, the day before Bernanke suggested the Fed could start to taper if the economy improved in a “real and sustainable way.” Stimulus from the central bank and corporate earnings that beat forecasts have propelled the bull market in U.S. stocks into a fifth year and driven the benchmark index up 142 percent from a 12-year low in 2009.

“The Fed and the Chairman have gone out of their way to say, ‘If we taper, we’re doing it for positive reasons’, which the market should view as a positive,” Mark Freeman, who oversees about $15 billion as chief investment officer at Westwood Holdings Group Inc. in Dallas, said by telephone. “If it happens, it’s for the right reasons and for reasons that are typically very supportive for the market. The problem from a market standpoint is that the market wants a specific date, but the Fed can’t give them a date because nobody knows.”

The Fed has held the target for its benchmark rate near zero since December 2008, and policy makers have promised to keep it around there as long as unemployment remains above 6.5 percent and the outlook for inflation doesn’t exceed 2.5 percent. The S&P 500 rallied an average 16 percent over two years the last four times the central bank started raising interest rates, according to data compiled by Bloomberg.

Concerns over economic growth and the pace of stimulus have led to widening swings in U.S. shares. The Chicago Board Options Exchange Volatility Index, or VIX, slid 2 percent to 16.80 today after earlier falling as much as 4.8 percent. The gauge climbed to an almost four-month high last week, jumping 13 percent in the five trading days to bring gains from a six-year low in March to 49 percent through today.

Energy companies rose the most out of 10 S&P 500 groups, gaining 1.3 percent. Technology shares had the second-biggest advance, increasing 1.1 percent. Cisco Systems Inc. jumped 2.5 percent to $24.70 to lead gains in the Dow. Phone stocks were the only group to decline, falling 0.6 percent.

Homebuilders rallied following today’s confidence report.

The S&P Supercomposite Homebuilding Index jumped 2 percent as all 11 members gained. Toll Brothers Inc. rallied 2.4 percent to $33.66, and KB Home increased 1.7 percent to $22.02.

Netflix, the biggest gainer in the S&P 500 this year, rallied 7.1 percent to $229.23. The dominant subscription video- streaming service agreed to a deal with DreamWorks to obtain original programming to lure subscribers. It is the largest contract for original content in the history of Netflix, the Los Gatos, California-based company said.

Micron advanced 3.8 percent to $13.24, the highest since July 2007. Citigroup lifted its price target on the largest U.S. maker of memory chips to $19. While shares are up 101 percent year-to-date through June 14, analyst Glen Yeung cited the acquisition of Japan’s Elpida Memory Inc., which is expected to close in the first half of the year, and continued increase in prices for memory chips.

Boeing Co. added 1.2 percent to $103.03, the highest level October 2007. The planemaker received on the first morning of the 50th Paris Air Show in France an order from General Electric Co.’s GE Capital Aviation Services leasing division for 10 of the largest 787 Dreamliners valued at about $2.9 billion.

Lockheed Martin Corp. increased 0.5 percent to $108.27. S&P upgraded its credit outlook on the maker of F-35 fighters to stable from negative after the close of markets on June 14, citing the company’s ability to generate strong free cash flow even as U.S. arms spending declines.

Lockheed expects to boost output of F-35s to more than 100 planes annually by about 2020 from 36 aircraft this year, according to Steve O’Bryan, Lockheed Martin’s vice president for the F-35 program. Higher building rates will allow for cost reductions of about 30 percent, he said in an interview at the Paris Air Show.

Have a wonderful evening everyone.

Be magnificent!

Do we still not know that the appearance of a seed is in direct contradiction to its true nature?

If you submit the seed to a chemical analysis, you would find in it perhaps some carbon, proteins,

and many other things, but never the hint of the leaf of a tree.

Rabindranath Tagore,1861-1901

As ever,

Carolann

Unhurt people are not much good in the world.

-Enid Starkie, 1897-1970

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