April 25, 2013 Newsletter

Dear Friends,

Tangents:

I picked up a copy of the May edition of Food & Wine at the grocery store check out.  What caught my eye was a heading on the cover “100 restaurants worth a pilgrimage.”

I’ve only glanced through it, but it makes recommendations in North America, Europe, Asia etc.  So, if you’ve made your summer vacation plans already, you may want to pick up a copy and make some reservations.  There are only three in Canada, two in Montreal and one in Toronto.  But lots of recommendations for  the US.

On this  day in 1915, the Battle of Gallipoli took place, and…

April 25^th, 1917, Ella Fitzgerald was born.

294 years ago, on April 25^th, 1719, English merchant turned author, Daniel Defoe published his castaway tale Robinson Crusoe.

127 years ago, on April 25^th, 1886, Sigmund Freud opened his psychiatric practice in Vienna, focusing on the talking cure for patients.

75 years ago, on April 25^th, 1938, Joe DiMaggio agreed to a one year contract with the Yankees for $25,000 – an impressive amount at the time.

23 years ago, on April 25^th, 1990, Jimi Hendrix’s 1968 Fender Stratocaster, which he played at Woodstock, was sold for $334,620 at auction, the most expensive guitar sold.

15 years ago, Whitewater prosecutors questioned US First Lady Hillary Clinton about her involvement in the failed Savings & Loan at the center of the investigation.

Failure is the condiment that gives success its flavor. –Truman Capote.

Have a wonderful day!

Photos of the day – April  25th, 2013

Meg Zimbeck, US Cooking journalist, sniffs a baguette, French bread, in competition for the ‘Grand Prix de la Baguette de la Ville de Paris’ (Best Baguette of Paris 2013) annual prize at the Chambre Professionnelle des Artisans Boulangers Patissiers in Paris. The baguette is a French cultural symbol par excellence and the competition saw 203 Parisian bakers who compete for recognition as finest purveyor of one of France’s most iconic staples. Charles Platiau/Reuters

A man plays the bagpipes in a cemetery during the dawn service to mark the 98th ANZAC (Australian and New Zealand Army Corps) commemoration ceremony at the Australian National Memorial in Villers-Bretonneux, northern France. Benoit Tessier/Reuters

Market Closes for April 25th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

April 25 (Bloomberg) — Canadian stocks rose for a sixth day, the longest streak since January, as a rally in metals prices boosted raw-materials producers and Potash Corp. of Saskatchewan Inc. reported better-than-forecast earnings.

Kirkland Lake Gold Inc. and Rubicon Minerals Corp. added at least 8.6 percent as gold prices jumped. Potash, the world’s largest fertilizer producer, gained 2.7 percent after first- quarter earnings topped analyst estimates and the company scrapped a proposed takeover bid for Israel Chemicals Ltd.

Methanex Corp. surged to a record after Argentina resumed natural gas exports to the company’s plants in Chile.

The Standard & Poor’s/TSX Composite Index rose 59.08 points, or 0.5 percent, to 12,329.51 at 4 p.m. in Toronto. The gauge has gained 2.2 percent this week, paring its loss for the year to 0.8 percent. Trading volume was 13 percent higher than the 30-day average.

“Today and yesterday we’ve had a bounce-back in the commodity space, whether it’s base metals, gold or energy,” said Anil Tahiliani, a fund manager with McLean & Partners Wealth Management Ltd. in Calgary. He helps manage C$1 billion ($980 million). “The tone has changed today because it wasn’t just a one-day wonder. We’re getting follow-through today.”

Gold jumped the most since June on signs of more investor demand following last week’s biggest drop in 30 years. Copper rose for a second day in New York and silver rallied after slumping almost 11 percent last week. Oil advanced for a sixth day, the longest winning streak in nine months, after U.S. jobless claims fell more than expected, boosting investor confidence in the world’s largest economy.

Commodities stocks contributed most to gains in the benchmark Canadian equity index. The S&P/TSX Materials Index jumped 1.8 percent.

Potash Corp. rose 2.7 percent to C$41.72, the biggest gain since January, after reporting first-quarter adjusted earnings of 63 cents a share, compared with an average estimate of 60 cents according to a Bloomberg survey of 27 analysts.

The Saskatoon, Saskatchewan-based company also announced it would not pursue an offer for Israel Chemicals, the country’s second-largest publicly traded company. Israeli workers and politicians opposed the deal. The scuttled bid may clear the way for a dividend increase and share buybacks, Stifel Nicolaus & Co. analyst Paul Massoud wrote in a note.

Kirkland Lake Gold jumped 8.6 percent to C$3.52 and Rubicon Minerals gained 18 percent to C$1.93 as gold for June delivery advanced 2.7 percent to settle at $1,462 an ounce in New York.

Gold futures have rebounded 11 percent since touching a two-year low of $1,321.50 on April 16. Silvercorp Metals Inc. rallied 6.9 percent to C$3.09 as silver for July delivery soared 5.7 percent to $24.182 an ounce.

First Quantum Minerals Ltd. rose 3.8 percent to C$18 and Lundin Mining Corp. added 5.3 percent to C$4.17 as copper increased 2.4 percent to settle at $3.2425 a pound in New York.

Methanex gained 10 percent to a record C$44.09. The company’s Chile-based plants received gas from Argentina in March, the first deliveries since 2007. Natural gas is used to make methanol, a substance used in the manufacture of everything from windshield-wiper fluid to paint and transportation fuel.

The Vancouver-based company also reported adjusted earnings that topped analyst estimates and raised its quarterly dividend 8 percent to 20 cents a share.

Open Text Corp. jumped 12 percent to C$64.91, its highest close since July 2011. Canada’s second-largest software services company by market value said it will pay a dividend for the first time.

Domtar Corp. plunged 8.7 percent to C$69.61 for the biggest loss September 2009. The Montreal-based pulp and paper maker reported preliminary first-quarter adjusted earnings that fell short of analysts’ estimates. The company blamed “disappointing” results in its paper business on high costs caused by low productivity.

US

By Inyoung Hwang and Lu Wang

April 25 (Bloomberg) — U.S. stocks rose, extending a rally in the Standard & Poor’s 500 Index to a fifth day, as earnings from United Parcel Services Inc. to Cliffs Natural Resources Inc. topped estimates and jobless claims fell.

Cliffs Natural soared 15 percent and UPS climbed 2.3 percent. Akamai Technologies Inc. rose 18 percent as revenue and profit beat estimates. 3M Co. slid 2.8 percent as profit trailed forecasts and the company cut its full-year outlook amid a slowing global economy. Qualcomm Inc. lost 5.4 percent after forecasting profit that may miss some analysts’ projections.

The S&P 500 advanced 0.4 percent to 1,585.16 in New York.

The gauge has risen 2.8 percent since April 18. The Dow Jones Industrial Average climbed 24.50 points, or 0.2 percent, to 14,700.80 today. Almost 6.8 billion shares traded hands today, or 6 percent more than the three-month average.

“The majority of companies are continuing to beat expectations, so that’s a good sign,” Peter Jankovskis, who helps oversee $3 billion as co-chief investment officer of Lisle, Illinois-based Oakbrook Investments LLC, said by telephone. “The jobless claims were better-than-expected, so that’s providing some support.”

Some 59 S&P 500 companies post earnings today. Of the 237 index members that have published results so far in this reporting season, 73 percent have exceeded analysts’ earnings estimates while 56 percent missed on revenue, data compiled by Bloomberg show.

Profit at S&P 500 companies dropped 1.1 percent in the first three months of the year, according to analyst forecasts compiled by Bloomberg. That would mark the first year-over-year decrease since 2009.

Applications for jobless benefits fell by 16,000 to 339,000 in the week ended April 20, according to Labor Department data released today in Washington. Economists in a Bloomberg survey had a median estimate of 350,000 claims.

In the U.K., the economy grew 0.3 percent in the first quarter, more than economists forecast, avoiding a triple-dip recession. Twenty-four of 40 economists surveyed by Bloomberg expect the European Central Bank to cut its benchmark interest rate by a quarter percentage point to 0.5 percent next week.

The S&P 500 has surged 134 percent from a 12-year low in 2009 as corporate earnings beat analyst estimates and the Federal Reserve embarked on three rounds of bond purchases to spur economic growth. The benchmark gauge is within eight points of an all-time high of 1,593.37 reached on April 11.

Central bank policy makers have been voicing support for extending record stimulus as inflation cools and 11.7 million Americans remain jobless. That marks a shift from last month’s meeting, when the bankers debated the timing of a possible reduction in bond buying. The Federal Open Market Committee will meet April 30-May 1.

“The market is really looking at continued easing by the Fed,” Greg Woodard, a portfolio strategist at Manning & Napier in Fairport, New York, said by phone. His firm had $45.2 billion under management at the end of 2012. “They’re looking for signals of when the Fed is going to start to reverse that. Our view is that probably it’s going to be some time away.”

The Chicago Board Options Exchange Volatility Index, or VIX, increased 0.1 percent to 13.62. The CBOE opened for trading three-and-a-half hours late today after a problem with its computer systems shut the derivatives market.

Nine out of 10 industries in the S&P 500 advanced as phone and raw-materials companies climbed the most, rising at least 1 percent. Energy companies slumped 0.2 percent as a group.

Cliffs Natural jumped the most in four years, adding 15 percent to $20.95. The largest U.S. iron-ore producer idled some mines to reduce operating costs in the first quarter and adjusted earnings beat analysts’ forecasts.

UPS climbed 2.3 percent to $85.42. The world’s largest package-delivery company posted higher first-quarter earnings than analysts estimated as deliveries of online purchases increased. The company handles more than 16 million packages and envelopes a day worldwide, making it a bellwether for the economy.

Akamai, which helps customers deliver online content faster, had the biggest gain in the S&P 500. The stock surged 18 percent to $42.48 after the company reported first-quarter revenue and profit that topped estimates as Internet traffic increased more than expected.

An index of homebuilders climbed 2.5 percent as all of its 11 members gained. PulteGroup Inc. jumped 5.6 percent to $20.79.

The largest U.S. homebuilder by revenue reported earnings that beat analyst estimates as an accelerating housing recovery fueled sales and led to higher prices.

Dow Chemical Co. advanced 5.6 percent to $33.97. The largest U.S. chemical maker by sales posted first-quarter profit that beat analysts’ estimates as lower prices for natural gas increased earnings from plastics.

Biogen Idec Inc. added 4.8 percent to $216. The fourth- largest U.S. biotechnology company by market value raised its full-year forecast as first-quarter net income increased on a tax benefit.

Regeneron Pharmaceuticals Inc. advanced 2.9 percent to $216.75. The maker of the eye medicine Eylea will replace MetroPCS Communications Inc. in the S&P 500 after the close of trading on April 30, S&P said.

3M fell 2.8 percent, the steepest decline since October, to $104.88. The maker of products ranging from Scotch tape to dental braces reduced its annual earnings forecast after quarterly profit trailed estimates for the first time in 1 1/2 years amid a slowing global economy. The company, which made 65 percent of 2012 revenue outside the U.S., gets fewer dollars when converting sales from countries with weaker currencies into its results.

Qualcomm lost 5.4 percent to $62.44. The biggest seller of semiconductors for mobile phones forecast fiscal third-quarter net income of 80 cents to 88 cents a share as average phone prices come under pressure. Analysts on average had projected earnings of 87 cents, according to data compiled by Bloomberg.

Exxon Mobil Corp. slipped 1.5 percent to $88.07, halting a five-day gain of 3.9 percent. The world’s largest company by market value said sales fell 12 percent to $108.8 billion in the first quarter. Widening chemical margins made up for lower crude production and prices, helping Exxon post an unexpected profit increase.

Intuit Inc. slid 11 percent to $57.09. The maker of tax and financial-planning software cut its full-year earnings forecast.

JPMorgan Chase & Co. downgraded the shares to neutral from overweight, the equivalent of a buy rating.

Safeway Inc. tumbled 14 percent, the most since 2003, to $24.32 after the grocer reported first-quarter same-store sales that were lower than it previously estimated.

Zynga Inc. sank 6.5 percent to $3.13. The biggest maker of online social games forecast second-quarter sales that may fall short of some analysts’ estimates as revenue from mobile titles fails to make up for a drop in users playing its games on Facebook Inc.’s website.

Have a wonderful evening everyone.

Be magnificent!

In music, I am the melody.

The Bhagavad Gita

As ever,

Carolann

Even cowards can endure hardship; only the brave

can endure suspense.

-Mignon McLaughlin, 1913-1983

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