April 11, 2013 Newsletter

Dear Friends,

Tangents:

On this day, 148 years ago, April 11^th, 1864, Abraham Lincoln made his last public speech, where he discussed the status of the Confederate states as well as his plan for restoring them to their place in the Union.

We watched the movie, Lincoln, on the weekend.  Daniel Day Lewis certainly deserved his best actor award.

Hard to believe that also on this day not so long ago,  April 11^th, 1956, white audience members attacked Nat King Cole on the stage of a Birmingham, Alabama, theatre.

Starting tonight, art show meets picture show:  Exhibition: Great Art on Screen is a behind-the-scenes tour of the Manet show now at London’s Royal Academy of Arts.  Hosted by art historian Tim Marlow, “Manet: Portraying Life” includes interviews and background information that bring this French artist and his work to life.  Later on June 27^th, the focus will be on Edvard Munch and on October 10^th, Johannes Vermeer.  To find a participating theater, go to fathomevents.com.

Photos of the day – April  11th, 2013

Archbishop Emeritus Desmond Tutu (c.) dances with the Cape Town Opera Ensemble at the Templeton Prize celebration at St. George’s Cathedral in Cape Town. South African anti-apartheid campaigner Tutu has won the 2013 Templeton Prize worth $1.7 million for helping inspire people around the world by promoting forgiveness and justice, organisers said. Ilan Godfrey/Templeton Prize/Reuters

A woman walks two dogs around Lake Harriet after more than six inches of snow fell overnight in Minneapolis, Minn. Eric Miller/Reuters

Market Closes for April 11th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

April 11 (Bloomberg) — Canadian stocks fell, snapping a three-day rally, as commodity producers slumped and BlackBerry plunged on a report of sluggish sales of its new phones.

Suncor Energy Inc. and Cenovus Energy Inc. dropped more than 1.8 percent after oil slid for the first time in four days.

Banro Corp. fell to its lowest level in more than four years.

BlackBerry tumbled 8.5 percent after a research firm said U.S. sales of the company’s Z10 smartphone “started poorly.” Corus Entertainment Inc., a Toronto-based media company, dropped 4 percent after reporting disappointing results.

The Standard & Poor’s/TSX Composite Index fell 53.54 points, or 0.4 percent, to 12,481.37 at 4 p.m. in Toronto. The benchmark Canadian equity gauge is up 1.2 percent this week, erasing a loss for the year. Trading volume was 19 percent below the 30-day average.

“The market is telling us crude isn’t staying at these levels,” Kash Pashootan, a fund manager with First Avenue Advisory of Raymond James Ltd., said from Ottawa. His firm oversees about C$125 million ($124 million). “There just isn’t the same enthusiasm for the Canadian market that there is for the U.S. market.”

U.S. stocks extended its rally to a fourth day as retailers gained after reporting improving sales and jobless claims dropped more than forecast. The S&P 500 has surged 12 percent this year. The S&P/TSX is up 0.4 percent for 2013.

Oil for May delivery fell 1.2 percent to settle at $93.51 a barrel in New York as the International Energy Agency lowered its forecasts for demand while U.S. inventories climbed to a 22- year high. Crude is Canada’s biggest export.

Suncor Energy, the nation’s largest oil producer, declined 2.9 percent to C$29.25 and Cenovus Energy fell 1.8 percent to C$30.94.

Banro, a gold miner, fell 4.3 percent to C$1.35, its lowest since March 2009. Spot prices for gold have declined 6.8 percent in 2013, on track to snap a 12-year streak of gains.

Financial stocks fell, losing 0.3 percent as a group. Bank of Nova Scotia dropped 0.8 percent to C$57.90. Manulife Financial Corp. declined 1.6 percent to C$14.42 after the nation’s biggest insurer jumped the most in two months yesterday following an agreement to pay the second-highest price on record for a whole Hong Kong office tower.

Eight of 10 groups in the S&P/TSX fell, led by a 2.1 percent drop in technology shares.

BlackBerry, formerly known as Research In Motion Ltd., slumped 8.5 percent, the biggest drop in the benchmark index, to C$13.66. Joseph Fersedi, an analyst with ITG Investment Research, said in a note today U.S. sales of the Z10 smartphone started poorly and “weakened significantly as the days passed” citing information from independent dealers.

Another research firm, Detwiler Fenton & Co., said customers are returning their Z10s because they find the interface unintuitive. BlackBerry has pinned turnaround hopes on the new phones, which it began selling in the U.S. in March.

Corus Entertainment plunged 4 percent to C$24.60, headed for its lowest close in almost three months. The Toronto-based company’s second-quarter adjusted earnings of 29 Canadian cents a share fell short of the 36 cents forecast by analysts.

US

By Lu Wang and Lindsey Rupp

April 11 (Bloomberg) — U.S. stocks advanced, extending a rally in the Standard & Poor’s 500 Index to a fourth day, as retailers climbed amid rising March sales and jobless claims dropped more than estimated.

Ross Stores Inc. advanced 5.9 percent as March sales beat forecasts. Rite Aid Corp. reached the highest closing level in more than three years after the drugstore chain reported its first annual profit since 2007. Technology shares slumped as personal-computer shipments in the first quarter plunged the most since at least 1994 and Goldman Sachs Group Inc. downgraded Microsoft Corp. shares. Microsoft and Hewlett-Packard Co. lost more than 4.4 percent.

The S&P 500 advanced 0.4 percent to 1,593.37 at 4 p.m. in New York, setting a high for the second straight day. The Dow Jones Industrial Average increased 62.90 points, or 0.4 percent, to 14,865.14, its third-straight record. About 6.2 billion shares changed hands on U.S. exchanges, in line with the three- month average.

“What’s going on right now is a positive confidence loop,” Cameron Hinds, regional chief investment officer for Wells Fargo Private Bank, which has about $170 billion under management, said in a phone interview. “It’s almost like the market’s going up because of a self-fulfillment circle, and it’s almost like we need a new negative to keep the market from going up. And I don’t know what that is.”

The S&P 500 surged 1.2 percent yesterday, the most since February, as China’s imports grew, Japan reiterated its stimulus plans and investors speculated earnings will beat estimates. The benchmark index has rallied 2.6 percent so far this week. It 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.

Individual investors, who pulled $307 billion out of U.S. equity mutual funds in the last four years, are not convinced the market will continue to rise. A weekly survey from the American Association of Individual Investors released today showed 54.5 percent of respondents expected the market to fall over the next six months, the largest portion since July 2010.

“The Federal Reserve and central banks around the globe are interested in boosting asset prices,” Bill Nasgovitz, founder of Milwaukee-based Heartland Advisors Inc., which oversees $5.7 billion, said in a phone interview. It is possible “individuals and pension funds more or less throw in the towel and say, ‘Gee, we’ve got to increase our equity ownership.’”

Jobless claims decreased by 42,000 to 346,000 in the week ended April 6, from a revised 388,000, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for a drop to 360,000. Holidays such as Easter that fall on different weeks from year to year make it difficult to smooth out swings in the data, leading to increased volatility, the Labor Department said.

The European Central Bank said in its monthly bulletin that it will look for signs in economic data that inflation could slow more than anticipated. President Mario Draghi said last week that officials are “looking at various instruments” to support the recovery.

JPMorgan Chase & Co. and Wells Fargo & Co. are among companies scheduled to report earnings tomorrow. Analysts project profits at S&P 500 companies fell 1.8 percent in the latest quarter, the first year-over-year drop since 2009, estimates compiled by Bloomberg show.

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, fell for a fourth day, losing 1 percent to 12.24 today. The gauge, known as the VIX, is down 32 percent this year and reached its lowest level since February 2007 in March.

Nineteen out of 24 industries in the S&P 500 gained.

Retailers jumped the second most, rallying 1.2 percent.

Ross Stores rose 5.9 percent to $63.80 The operator of apparel and home accessories stores said sales at stores open at least one year climbed 2 percent in March. Analysts forecast a drop of 1.3 percent.

L Brands Inc., the owner of the Victoria’s Secret chain, added 4.3 percent to $50.25. The company, which changed its name from Limited Brands, said March same-store sales gained 3 percent, beating estimates of a 0.4 percent advance.

J.C. Penney Co. climbed 5.5 percent to $14.86. Activist investor William Ackman said today that the company will reverse ousted-Chief Executive Officer Ron Johnson’s strategy of reducing discounts and put coupon advertising in newspapers again to try to boost sales. Johnson was replaced by Myron E.

Ullman III on April 8.

Rite Aid jumped 18 percent to $2.12, the highest level since September 2009. The company’s focus on wellness programs led to net income of 12 cents a share in the fiscal year ended March 2. About 17 percent of the chain’s 4,623 locations have been turned into wellness centers that feature expanded pharmacy services and health-focused products.

The S&P Information Technology Index dropped 0.5 percent, after the biggest rally since Jan. 2 yesterday. Personal- computer shipments plummeted in every region of the world in the first quarter as buyers opted for smartphones and tablet computers and Microsoft’s newest operating system met with weak demand. Global PC unit shipments fell 14 percent, a bigger drop than the 7.7 percent decline market research firm IDC had forecast.

Microsoft fell 4.4 percent to $28.94. Goldman Sachs cut the software maker to sell from neutral, citing worsening trends for personal computers and the company’s lack of success in tablets and smartphones.

Hewlett-Packard, the world’s largest personal-computer maker, slid 6.5 percent to $20.88. Chipmaker Intel Corp. retreated 2 percent to $21.83.

Fortinet Inc. plunged 13 percent to $18.99 after the provider of computer-network security reported preliminary first-quarter sales and profit that missed some analyst estimates. A weak economic environment in Latin America, Europe, Middle East and Africa, as well as inventory shortages contributed to the results, while demand was strong in Asia and among U.S. companies, Chief Executive Officer Ken Xie said.

Acadia Pharmaceuticals Inc. surged 64 percent to $13.10, the highest in five years, after saying U.S. regulators will review its lead drug sooner than anticipated. The Food and Drug Administration agreed Acadia won’t have to conduct a final-phase trial for its drug to treat Parkinson’s disease psychosis, clearing the way for the biotechnology company to apply for an FDA review by the end of 2014.

Have a wonderful evening everyone.

Be magnificent!

Truth is that which one wishes in its totality.  Have you reached it?

Krishnamurti, 1895-1986

As ever,

Carolann

We don’t see things as they are,

we see things as we are.

-Anaïs Nin, 1903-1977

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