April 15, 2013 Newsletter

Dear Friends,

Tangents:

Today marks the 117^th Boston Marathon.  I was, like you, shocked when the news flashed on my screen as the explosions occurred.  Such tragic news is heart wrenching but  I believe we must counter this tug of war between good and evil by stepping up the good we do in our daily lives through acts of kindness towards one another.  Any bad news should serve as calls to action.  I have a quote by Annie Lennox taped on my phone:  “Ask yourself:  Have you been kind today?  Make kindness  your daily modus operandi and change your world.”

April 15^th, 1452 – Leonardo da Vinci was born.

April 15^th 1726 – Sir Isaac Newton tells a  biographer that an apple falling in his garden inspired his law of universal gravitation.

April 15^th, 1912 –The Titanic sank.

April 15^th, 1955 – Ray Kroc opened the firs McDonald’s restaurant in Des Plaines, Il.

Photos of the day – April  15th, 2013

A boy is smeared with vermillion powder while celebrating ‘Sindoor Jatra’ festival at Thimi, near Kathmandu. The festival marks the Nepalese New Year and the beginning of spring season in Nepal. Navesh Chitrakar/Reuters

A visitor looks at a sculpture entitled ‘Couple Under an Umbrella, 2013’ by Australian artist Ron Mueck during the press day for his exhibition at the Fondation Cartier pour l’art contemporain in Paris. Charles Platiau/Reuters

Market Closes for April 15th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

April 15 (Bloomberg) — Canadian stocks fell the most in nine months after an unexpected slowdown in China’s economic growth spurred the biggest drop in four years for commodity shares.

Barrick Gold Corp., the largest producer of gold, tumbled 12 percent, the most since February 2009, as the metal sank below $1,400 an ounce. Canadian Natural Resources Ltd. lost 4.6 percent as crude slipped to its lowest this year. Suncor Energy Inc. fell 4.6 percent after agreeing to sell natural gas fields for C$1 billion. Raw-material producers in the Standard & Poor’s/TSX Composite Index dropped 7.6 percent, the most since December 2008.

The S&P/TSX fell 332.71 points, or 2.7 percent, to 12,004.88 at 4 p.m. in Toronto, the largest loss since June. The benchmark Canadian equity gauge is down 3.5 percent this year.

Trading volume was 54 percent higher than the 30-day average.

“China’s definitely not growing at 12 percent anymore, so that’s why you’re seeing all the commodities move off,” said Paul Harris, a fund manager with Avenue Investment Management in Toronto. He helps manage about C$300 million ($294 million).

Speculation the Federal Reserve will pull back on stimulus has “caused a huge fall in the price of gold. There are so many people in there for speculative reasons, but now they’re getting out because it’s collapsing.”

China’s economy unexpectedly lost momentum in the first quarter, expanding 7.7 percent from a year earlier, the National Bureau of Statistics said. That compares with the 8 percent median forecast in a Bloomberg News survey and 7.9 percent in the prior quarter.

Some policy makers among the U.S. Fed favor pulling back this year on $85 billion in monthly debt-buying as the U.S. economy recovers and equities reached a record.

The S&P GSCI index of 24 raw materials plunged as much as 2.6 percent to its lowest level since July 10. Shares of energy producers retreated 3.1 percent, reaching the lowest level since November.

Barrick Gold plunged 12 percent to C$20.30, its lowest close in more than 12 years. Goldcorp declined 5.6 percent to C$28.38, the lowest price since December 2008.

Gold futures for June delivery plummeted the most since 1980, falling 9.3 percent to settle at $1,361.10 an ounce. The gold price has slumped more than 20 percent since the record close in August 2011, meeting the common definition of a bear market and threatening to snap 12 straight years of gains.

Detour Gold Corp. slumped 25 percent to C$11.05 and Osisko Mining Corp. fell 21 percent to C$4.04. The S&P/TSX Gold Index dropped to a four-year low. All 30 stocks in the index declined.

Silver Wheaton Corp. lost 8.7 percent to C$24.48 as silver for May delivery dropped 11 percent to settle at $23.361 an ounce in New York, the lowest since September 2011.

Teck Resources Ltd., Canada’s largest diversified miner, sank 7.1 percent to $26.15. First Quantum Minerals Ltd. lost 13 percent to C$15.58 as copper for May delivery slid 2.3 percent to settle at $3.273 a pound in New York.

Canadian Natural Resources dropped 4.6 percent to C$29.85 and Cenovus Energy Inc. retreated 4.6 percent to C$29.04. Crude for May delivery slipped 2.8 percent to settle at $88.71 a barrel in New York, the lowest since December.

Suncor, Canada’s largest energy producer, dropped 4.6 percent to C$27.50. The company agreed to sell its natural gas fields in southern and central Alberta to Centrica Plc, the largest U.K. household energy company, and state-run Qatar Petroleum for C$1 billion. The assets produce about 250 million cubic feet of gas a day this year, Suncor said in a statement.

US

By Inyoung Hwang

April 15 (Bloomberg) — U.S. stocks tumbled, sending the Standard & Poor’s 500 Index to its biggest drop of the year as a gauge of market volatility jumped the most in 20 months, after China’s economy grew at a slower pace than forecast.

Energy and raw-material companies fell the most among 10 S&P 500 groups. Chevron Corp. and Exxon Mobil Corp. both lost 2.8 percent. Freeport-McMoRan Copper & Gold Inc., the largest publicly traded copper producer, and Newmont Mining Corp. tumbled more than 6.7 percent as commodities slumped to a nine- month low. Sprint Nextel Corp. surged 14 percent after Dish Network Corp. offered to buy the company for $25.5 billion.

The S&P 500 dropped 2.3 percent to 1,552.36 in New York, the biggest decline since Nov. 7. The index has lost 2.6 percent since April 11. The Dow Jones Industrial Average erased 265.86 points, or 1.8 percent, to 14,599.20. The Russell 2000 Index, which is made up of smaller companies, retreated 3.8 percent, the most in 17 months. About 8.5 billion shares traded on U.S. exchanges today, 33 percent higher than the three-month average.

“The weaker-than-expected China data threw some cold water on the global growth story,” Walter ‘Bucky’ Hellwig, who helps manage $17 billion of assets at BB&T Wealth Management in Birmingham, Alabama, said by telephone. “There’s been a lot of concern of what the growth trajectory of China would be. Most market watchers have dismissed a hard landing scenario but if the growth rate is below what the current expectations are, that’s a drag on global growth.”

Stocks extended losses as explosions rocked the finish line area of the Boston Marathon, while almost all of the decline came before the incident.

The S&P GSCI gauge of 24 commodities sank to the lowest level since July. Gold tumbled the most since 1980 and silver plunged 11 percent. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, soared 43 percent for the biggest increase since August 2011, to 17.27. The gauge, known as the VIX, pared its loss for the year to 4.2 percent after reaching its lowest level since February 2007 last month.

China’s gross domestic product rose 7.7 in the first quarter from a year earlier, the National Bureau of Statistics said in Beijing today. That compared with the 8 percent median forecast in a Bloomberg survey of economists and 7.9 percent growth in the fourth quarter. Separate reports showed March industrial production rose less than estimated while retail- sales growth matched forecasts.

Global equities also fell today as European Central Bank President Mario Draghi said monetary policy can’t address the root causes of the sovereign debt crisis and it’s up to governments to enact structural reforms.

In the U.S., data today showed manufacturing in the New York region expanded less than projected in April as orders cooled and sales stagnated. The Federal Reserve Bank of New York’s general economic index dropped to 3.1 this month from 9.2 in March. The median projection of 47 economists surveyed by Bloomberg was 7.

U.S. equities rallied last week, sending the S&P 500 up 2.3 percent, amid optimism that global stimulus efforts and corporate earnings growth will continue to power the world’s largest economy.

Profits at S&P 500 companies are forecast to drop 1.4 percent in the first three months of the year, according to analyst estimates compiled by Bloomberg. That would mark the first year-over-year decrease since 2009.

“A lot of companies have tried to talk down expectations,” Joseph Veranth, chief investment officer at Dana Investment Advisors in Brookfield, Wisconsin, said by phone. The firm manages $3.9 billion. “The bar has been set a little lower and that’s going to help in terms of companies at least beating lowered expectations.”

Investors sold shares of corporations most tied to economic growth today. The Morgan Stanley Cyclical Index of 30 U.S. equities and the 20-stock Dow Jones Transportation Index lost at least 3.8 percent for the biggest declines since November 2011.

Lenders also declined, sending the KBW Bank Index down 2.3 percent.

Raw-material and energy companies lost more than 3.9 percent among S&P 500 groups. Caterpillar Inc., the world’s largest maker of construction equipment, tumbled 3.3 percent to $82.27 for the biggest decline in the Dow. Alcoa Inc., the largest U.S. aluminum producer, slid 2.2 percent to $8.04.

Chevron erased 2.8 percent to $116.57, while Exxon Mobil lost 2.8 percent to $86.49. The price of West Texas Intermediate crude fell to the lowest level this year amid increased concern that demand from China, the world’s second-biggest oil-consuming country, will slow.

Freeport dropped 8.3 percent to $29.27 as Citigroup downgraded the shares to sell from neutral and cut its price estimate by 29 percent to $25. Copper reached the lowest level since October 2011 in New York. Newmont Mining, the largest U.S. gold producer, retreated 6.7 percent to $33.92 as precious metals tumbled. Cliffs Natural Resources Inc., the largest U.S. iron-ore miner, also sank, losing 8.3 percent to $17.61.

All 11 stocks in the S&P Supercomposite Homebuilding Index fell today, as the gauge tumbled 6.3 percent, the most since Feb. 20. The National Association of Home Builders/Wells Fargo index of builder confidence showed an unexpected drop in April for a third month, restrained by rising costs for materials and financing restrictions.

Ryland Group Inc. decreased 6.7 percent to $37.01. M/I Homes Inc. dropped 7 percent to $21.40.

Citigroup Inc. increased 0.2 percent to $44.87, paring an earlier rally of as much as 3.4 percent. The third-biggest U.S. bank said first-quarter profit rose 30 percent as revenue from fixed-income trading and investment banking exceeded analysts’ estimates. Chief Executive Officer Michael Corbat, 52, who oversaw his first full quarter since replacing Vikram Pandit in October, is firing workers and closing branches as he seeks to make Citigroup more efficient.

Goldman Sachs Group Inc. and Bank of America Corp. are also scheduled to post results this week.

Sprint jumped 14 percent to $7.06 after Dish, Charlie Ergen’s satellite-TV company, challenged a bid by Japan’s Softbank Corp. for the third-largest U.S. wireless carrier.

Sprint shareholders would receive $7 a share, consisting of $4.76 in cash and stock representing about 32 percent of the combined company. That means the offer is $17.3 billion cash and $8.2 billion stock. Dish fell 2.3 percent to $36.77.

Life Technologies Corp. rallied 7.5 percent to $73.11.

Thermo Fisher Scientific Inc., the second-biggest maker of life- sciences equipment by market value, agreed to buy Life Technologies for about $13.6 billion in an all-cash deal. Life Technologies makes laboratory equipment that help blueprint DNA.

Thermo slipped 1.3 percent to $78.58.

Have a wonderful evening everyone.

Be magnificent!

Amidst this chaos there is harmony, throughout these discordant sounds there is a note of concord;

and he who is prepared to listen to it will catch the tone.

Swami Vivekananda, 1863-1902

As ever,

Carolann

To be successful, the first thing to do is fall in love

with your work.

-Sister Mary Lauretta

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