April 30, 2012 Newsletter

Dear Friends,

Tangents:

Today is Beltane Day.  Beltane is the ancient Celtic festival, union of goddess and god, water and light.  All fires are extinguished at sunset on Beltane Eve, the midpoint between the spring equinox and the summer solstice.  In the blackness of night, bonfires were lit on the hill tops and cattle were driven between the flames.  At dawn, the sun dances; at the height of spring, Beltane begins, celebrating all that is powerful and sensual in nature.  The ancient Celts saw joy and life as one with suffering, death and rebirth.

On this day in,
1987 – The Meech Lake Accord reached between PM Brian Mulroney and 10 Premiers,
recognizing Québec as a distinct society –
1945 – Adolf Hitler commits suicide in his bunker. Karl Donitz becomes his successor.
1931 – George Washington Bridge opens, linking New York City and New Jersey
1972 – The North Vietnamese launch an invasion of the South
1975 – Fall of Saigon Ends the Vietnam War
1980 – Terrorists seize the Iranian Embassy in London

photos of the day

April 30, 2012

People walk on the ‘OCBC Skyway’ linking the Supertrees, ranging from 25-50 meters in height and serving as vertical gardens, in the nearly completed Gardens By The Bay just next to Singapore’s busy financial district. It is part of the city-state’s efforts to make the city ‘green’ and promote Singapore as a tropical city.

Wong Maye-E/AP

Viewed from Jersey City, N.J., two birds fly by as the sun rises over buildings in New York, including One World Trade Center, tallest building at left. One World Trade Center, the giant monolith being built to replace the twin towers destroyed in the Sept. 11 attacks, will lay claim to the title of New York City’s tallest skyscraper.

Julio Cortez/AP

Market Closes for April 30, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

April 30 (Bloomberg) — Canadian stocks rose for a fourth day as energy shares increased after Energy Transfer Partners LP’s deal to buy Sunoco Inc. spurred merger speculation in the industry.

Suncor Energy Inc. rose 3.1 percent and Canadian Natural Resources Ltd. increased 2.4 percent after Energy Transfer agreed to pay $5.3 billion to expand its ability to ship higher- margin oil and natural gas liquids. Goldcorp Inc. and New Gold Inc. decreased 1.4 percent and 8.4 percent, respectively, after the Supreme Court of Chile halted construction on the companies’

joint copper-gold project.

The Standard & Poor’s/TSX Composite Index gained 54.94 points, or 0.5 percent, to 12,292.69 in Toronto.

“There’s merger and acquisition speculation in that sector,” Danielle Park, a money manager at Venable Park Investment Counsel Inc. in Barrie, Ontario, said in a telephone interview. The firm manages at least C$1 million ($1 million) each for more than 200 clients. “Shares are already down pretty significantly across the board” among energy shares, “so there may be some relative value there that people are finding,” Park said.

The benchmark gauge had its second straight weekly gain in the five days ending April 27, marking the first time since February that the index increased in two consecutive weeks.

Canadian stocks rose on better-than-forecast corporate earnings and U.S. housing data that exceeded expectations.

A gauge of energy stocks in the S&P/TSX rose 1.4 percent today to cut its loss for the year to 0.2 percent. Suncor, the country’s biggest oil and gas producer, advanced 3.1 percent to C$32.63. Canadian Natural Resources, Canada’s third biggest energy company, increased 2.4 percent to C$34.11. Enbridge Inc., the nation’s largest pipeline company, gained 2.2 percent to C$41.39.

Raw material producers declined after Canada’s gross domestic product fell 0.2 percent in February and Spain entered a recession.

First Quantum Minerals Ltd., Canada’s second-largest publicly traded copper producer, dropped 2.9 percent to C$20.52.

Manulife Financial Corp. slipped 1 percent to C$13.51.

“It’s the economic report for GDP in February coupled with some of the nervousness around European economic performance,” Bob Decker, a money manager at Aurion Capital in Toronto, said in a telephone interview. The firm oversees about C$5.5 billion ($5.6 billion).

Canada’s output fell to an annualized C$1.28 trillion ($1.30 trillion) in February, after a January gain of 0.1 percent, Statistics Canada said today in Ottawa. Economists surveyed by Bloomberg News had forecast a 0.2 percent increase, according to the median of 24 responses.

Mining and oil and gas extraction dropped 1.6 percent to C$57.2 billion in February, while mining fell 7 percent as weak global demand led to potash shutdowns and several Ontario nickel mines closed “for safety issues,” Statistics Canada said.

Goldcorp fell 1.4 percent to C$37.83 and New Gold declined 8.4 percent to C$9. The companies stopped work at their El Morro copper and gold project after Chile’s Supreme Court suspended approval of the mine’s environmental permit. Goldcorp owns 70 percent of the venture, while New Gold owns the remaining 30 percent.

Dundee Precious Metals Inc. plunged 11 percent, the most since November 2009, to C$7.69. The Namibian government told the company to reduce output at a copper smelter by about 50 percent until projects to capture emissions are completed.

US

By Rita Nazareth

April 30 (Bloomberg) — The Standard & Poor’s 500 Index declined, halting a four-month advance, after a report showed that business activity expanded at the slowest pace since November 2009 and Spain’s economy entered into a recession.

Bank of America Corp., Caterpillar Inc. and Monsanto Co. retreated at least 1.7 percent. Humana Inc. tumbled 8.1 percent as profit at the provider of U.S.-backed Medicare insurance missed analysts’ projections. NYSE Euronext slumped 4.9 percent amid a 44 percent decline in earnings. Barnes & Noble Inc. soared a record 52 percent after Microsoft Corp. said it plans to invest $300 million in a venture with the bookstore chain.

The S&P 500 lost 0.4 percent to 1,397.91 at 4 p.m. New York time, extending its April decline to 0.7 percent. The Dow Jones Industrial Average fell 14.68 points, or 0.1 percent, to 13,213.63 today. The gauge rose less than 0.1 percent in April, gaining for a seventh month in the longest winning streak since 2007. About 6.1 billion shares changed hands on U.S. exchanges today, or 8.9 percent below the three-month average.

“Europe is a chronic situation,” said Russ Koesterich, the San Francisco-based global chief investment strategist for the IShares unit of BlackRock Inc. His firm oversees $3.68 trillion as the largest asset manager. “Even under a best-case scenario, where there’s no banking crisis, the reality is: it’s going to be a very slow process. While you’ve got evidence that the U.S. is recovering, the rebound will be uneven.”

Equities fell as the Institute for Supply Management- Chicago Inc. said its barometer slid to 56.2 during the month, lower than the most pessimistic forecast in a Bloomberg News survey. Consumer spending in the U.S. rose in March. Spain entered its second recession since 2009.

Today’s decline came after the S&P 500 capped the biggest weekly gain in more than a month. The measure was still up 11 percent in 2012 amid better-than-estimated economic and corporate data. About 74 percent of S&P 500 companies that reported results since April 10 have beaten earnings projections, according to data compiled by Bloomberg.

“The economic doldrums in Europe are casting a shadow over any progress we’re making,” said Jack Ablin, chief investment officer of Harris Private Bank in Chicago, which oversees about $60 billion. “We may not get a negative period for the market, but it may just be a quiet one.”

Technology and industrial shares fell the most among 10 S&P 500 groups. A gauge of homebuilders in S&P indexes slid 1.6 percent after last week surging to the highest since 2008. Bank of America fell 1.7 percent to $8.11. Caterpillar slipped 1.7 percent to $102.77. Monsanto dropped 2.1 percent to $76.18.

Humana lost 8.1 percent, the most since 2009, to $80.68.

Net income dropped 21 percent to $248 million, or $1.49 a share, from $315 million, or $1.86, a year earlier. The per-share result missed by 2 cents the $1.51 average of 9 analyst estimates compiled by Bloomberg.

NYSE Euronext slumped 4.9 percent to $25.75. European regulators blocked NYSE Euronext from merging with Deutsche Boerse AG in February, frustrating plans to mitigate a slowdown in stock trading and boost earnings and sales through cooperation on derivatives. Today’s report highlights the challenges that spurred the takeover proposal, exacerbated by a decline in equity volume across American exchanges to some of the worst levels in a decade.

VeriFone Systems Inc. slipped 12 percent to $47.64. The largest maker of credit-card terminals was cut to sell from hold by Deutsche Bank AG.

Barnes & Noble soared 52 percent, the most in the Russell 2000 Index, to $20.75. The investment will give Microsoft about 18 percent of the newly formed company, which has yet to be named. The companies will develop a Nook e-reader application for Windows 8 and have also settled their patent litigation.

Merck & Co. jumped 2 percent, the biggest gain in the Dow, to $39.24. The company’s patent for the cholesterol drugs Zetia and Vytorin is valid and enforceable, a federal judge ruled April 27 in a case against Mylan Inc., which sought to sell generic versions of the drugs before the patent expires.

Takeover news helped lift some companies today, limiting the market’s losses. Sunoco Inc. climbed the most in the S&P 500, adding 20 percent to $49.29. The Philadelphia-based refiner agreed to be acquired for $5.3 billion in shares and cash by Energy Transfer Partners LP, which is adding oil transportation and distribution assets.

Gen-Probe Inc. surged 19 percent to $81.55. Hologic Inc., a maker of diagnostic medical and surgical devices, agreed to buy the company for about $3.7 billion in cash to expand its tests for sexually transmitted diseases.

Warner Chilcott Plc rallied 16 percent to $21.81. The maker of dermatology and women’s health drugs said it is exploring a sale of the company and is in talks with potential buyers.

Monster Beverage Corp. jumped as much as 28 percent after the Wall Street Journal reported Coca-Cola Co. is in talks to buy the maker of energy drinks, then erased the gain after Coca- Cola denied the report. Monster lost 0.8 percent to $65. Coca- Cola slid 0.4 percent to $76.32, trimming a loss of as much as 0.9 percent.

Harman International Industries Inc. gained 4.9 percent to $49.58. The maker of car audio systems reported third-quarter profit that exceeded analysts’ estimates and announced a record- high $2 billion contract.

Analysts predict U.S. shares will rise enough this year to boost the S&P 500 to a record, even as Wall Street strategists say the best is already over for American equities.

Individual price forecasts for stocks show the combined projection for the gauge has risen to 1,569.74, according to analyst estimates compiled by Bloomberg. That compares with the October 2007 high of 1,565.15. At the same time, strategists who base their predictions on assessments of the economy say this year’s rally represents all the gains investors will see.

Bullish forecasts are based on analysts’ expectations that S&P 500 earnings will reach records every year through 2014 as stimulus by the Federal Reserve props up the U.S. economy. Bears say Europe’s debt crisis won’t be contained and economic growth will be insufficient to maintain gains.

Analysts are signaling that 13 straight quarters of higher- than-expected earnings and record profits through 2014 will help drive the gauge back to its all-time high. Earnings will jump 14 percent to $105.12 a share in 2012, according to analysts’ estimates compiled by Bloomberg.

“The financial strength of corporate America is stronger than people believe,” Jeffrey Schwarte, a money manager who helps oversee about $258.2 billion in Des Moines, Iowa, at Principal Global Investors, said in a telephone interview on April 25. “We believe earnings ultimately matter.”

Have  a wonderful evening everyone.

Be magnificent!

To expect something is to look for something pleasant.

Searching for the pleasurable is a form of denial.

You cannot expect anything, because the expectation is within you,

and what you are waiting for is dependent on external forces.

-Swami Prajnanpad, 1891-1974

As ever,

Carolann

Nothing in this world can take the place of persistence.

Talent will not; nothing is more common than

unsuccessful people with talent.  Genius will not; un-rewarded

genius is almost a proverb.

-Calvin Coolidge, 1872-1933

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