April 30, 2013 Newsletter

Dear Friends,

Tangents:

It is Walpurgisnacht tonight – Witch’s night in Europe.

This being the last day of April, it is also the last day of poetry month.  I recently happened upon a  beautiful book that has just been published entitled Poems to Learn by Heart by Caroline Kennedy, Hyperion, New York, 2013.  It is also beautifully illustrated with watercolor paintings by Jon J. Muth.  “There’s a poem to celebrate every moment in life – whether it’s hitting a home run, watching a sunset, or laughing with your best friend.  A poem is a gift of the heart that can inspire, reassure, or challenge us.  Memorize it – share it – it’s yours forever.”

This is one of the poems from that book:

The Dream Keeper

Langston Hughes

Bring me all of your dreams

You dreamers,

Bring me all of your

Heart melodies

That I may wrap them

In a blue cloud-cloth

Away from the too-rough fingers

Of the world

Photos of the day – April  30th, 2013

Two woman wearing inflatable caps walk along the street in Amsterdam, The Netherlands. Around a million people are expected to descend on the Dutch capital for a huge street party to celebrate the first new Dutch monarch in 33 years. Emilio Morenatti/AP

Re-enactors of the American Revolutionary War perform to commemorate the swearing-in of former President George Washington at Federal Hall on Wall Street in New York. George Washington’s inauguration as the first US president was on April 30, 1789. Brendan McDermid/Reuters

The Gods cannot help those who don’t seize opportunities. -Confucius

Market Closes for April 30th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

April 30 (Bloomberg) — Canadian stocks rose, erasing a loss for the year, as energy and technology shares gained after data showed the economy is on track for its fastest quarterly growth since 2011.

Suncor Energy Inc., the nation’s largest energy producer, climbed 6 percent after raising its dividend and announcing a share buyback program. BlackBerry jumped 4.6 percent after its chief executive officer said he sees sales of its new Q10 device to be in the “tens of millions.” CGI Group Inc. surged to a 13-year high after reporting earnings ahead of estimates.

The Standard & Poor’s/TSX Composite Index rose 143.83 points, or 1.2 percent, to 12,456.50 at 4 p.m. in Toronto after declining as much as 0.6 percent earlier. The benchmark gauge has advanced 0.2 percent this year, erasing a previous loss.

Trading volume was 17 percent higher than the 30-day average.

“The oils are doing well today,” said David Cockfield, fund manager with Northland Wealth Management in Toronto. He helps manage C$225 million ($223 million). “Suncor helped. The fact they’re willing to raise their dividend, it’s a show of confidence: ’Hey, we can pay dividends and we’re not worried about future earnings.’ The environment is so negative any bright moment is appreciated.”

Canada’s gross domestic product grew for a second month in February, led by gains at potash miners and factories. Output rose 0.3 percent, matching the revised January gain, to an annualized C$1.57 trillion, Statistics Canada said today in Ottawa. The median forecast in a Bloomberg survey of 23 economists was for a 0.2 percent expansion.

Energy, financial and raw-material stocks contributed most to gains, as all 10 industries rose.

Suncor climbed 6 percent to C$31.41 for its biggest advance since October 2011. The Calgary-based oil producer boosted its quarterly dividend 54 percent to 20 cents a share and said it will buy back as much as C$2 billion of stock after scrapping plans for the Voyageur oil-sands project.

Suncor also reported adjusted first-quarter earnings that surpassed analysts’ estimates.

The S&P/TSX Information Technology Index surged 7.7 percent, the most since December 2009.

CGI Group, the Montreal-based technology services provider, surged 18 percent to C$31.90, the highest level since January 2000. CGI reported adjusted second-quarter earnings of 56 Canadian cents a share, ahead of the average estimate of 49 cents according to a Bloomberg survey of 15 analysts.

Kris Thompson, analyst with National Bank Financial, raised his price target for CGI to C$40 from C$30 in a report to clients after the earnings release.

BlackBerry, formerly Research In Motion Ltd., added 4.6 percent to C$16.45, the highest level in more than a month. The stock has increased 40 percent this year on optimism that the new BlackBerry 10 lineup can help fuel a comeback.

The company expects to sell several tens of millions of the company’s Q10 smartphone that features a keyboard, CEO Thorsten Heins said in an interview with Bloomberg Television yesterday at the Milken Institute conference in Los Angeles.

Nevsun Resources Ltd. fell 1.6 percent to C$3.77 and Semafo Inc. declined 2.1 percent to C$1.91. The price of gold fell 7.7 percent in April for its biggest monthly drop since December 2011.

US

By Lu Wang

April 30 (Bloomberg) — U.S. stocks rose, sending the Standard & Poor’s 500 Index trading to another record, as consumer confidence gained and investors bet central banks worldwide will continue their efforts to stimulate the economy.

Apple Inc. climbed 2.9 percent as the iPhone maker is said to be selling $17 billion of bonds in the biggest U.S. corporate offering on record. Avon Products Inc. gained 4.1 percent after earnings topped analysts’ forecasts. Pfizer Inc. dropped 4.5 percent as the world’s biggest drugmaker reported earnings that fell short of analysts’ projections. Newmont Mining Corp. lost 4.6 percent as the biggest U.S. gold producer reported profit that missed estimates.

The S&P 500 added 0.3 percent to 1,597.57 as of 4 p.m. in New York, finishing April with a 1.8 percent gain. That’s the sixth monthly advance, the longest streak since September 2009.

The Dow Jones Industrial Average increased 21.05 points, or 0.1 percent, to 14,839.80 today and is up 1.8 percent for the month.

More than 6.7 billion shares changed hands on U.S. exchanges, or 5 percent higher than the three-month average.

“The market is at a high here and a lot of that seems to be driven by the faith in central bankers,” Gary Flam, who helps oversee $7 billion for Bel Air Investment Advisors LLC in Los Angeles, said in a telephone interview. “Later this week, you have central banker meetings, the Fed as well as the ECB.”

Confidence among U.S. consumers climbed more than forecast in April to a five-month high as Americans’ outlook for the economy and their incomes improved, according to a gauge from the Conference Board. Separate reports showed property values in 20 cities increased in February by the most since May 2006, while business activity in the U.S. unexpectedly shrank in April for the first time in more than three years.

The Bloomberg Economic Surprise Index, which measures the degree to which economic data exceeded or missed projections, slipped today to minus 0.083, the lowest level since October.

The measure peaked at 0.45 in February.

The Federal Reserve may consider maintaining its bond- buying program at a two-day meeting starting today, after a report last week showed the world’s largest economy grew less than forecast in the first quarter.

The central bank will probably continue its “aggressive” easing program this year, Former Fed Governor Kevin Warsh said yesterday in a Bloomberg Television interview at the Milken Institute Global Conference in Los Angeles.

The European Central Bank will cut its benchmark interest rate to a record low of 0.5 percent on May 2, according to the median estimate of economists in a Bloomberg survey.

The bull market in U.S. equities entered its fifth year last month and the gauge has surged 136 percent from a 12-year low in 2009, driven by better-than-estimated corporate earnings and three rounds of bond purchases by the Fed.

Leon Black, chief executive officer of buyout firm Apollo Global Management LLC, said prices for traditional buyouts have risen so much that it’s a good time to sell.

“We think it’s a fabulous environment to be selling,” Black said today during a panel discussion at the Milken Institute conference, adding that Apollo has sold about $13 billion in assets in the last 15 months. “We’re selling everything that’s not nailed down, and if we’re not selling, we’re refinancing.”

Invesco Ltd., Franklin Resources Inc. and 36 other S&P 500 companies report quarterly earnings today. Of the 308 that have reported so far, 73 percent exceeded analysts’ predictions, data compiled by Bloomberg show. Profit at S&P 500 companies rose 1.1 percent in the first three months of the year, according to analysts’ projections compiled by Bloomberg.

“Earnings season has been OK, but it’s not like it’s growing strongly,” Brad Thompson, director of research at Frost Investment Advisors LLC in San Antonio, Texas, said in a phone interview. His firm manages $9 billion. “We have a strong market with defensive sectors doing well. The key element here is when does it transition. I’ll get more confident when it broadens out and we get more cyclicals doing better. That’s going to be contingent on economic fundamentals.”

Companies whose earnings are least tied to economic swings led this year’s rally as gauges of health-care, utility and consumer-staples providers in the S&P 500 jumped at least 17 percent. Commodity and technology shares performed worst, rising no more than 8.6 percent.

The Chicago Board Options Exchange Volatility Index, or VIX, slid 1.4 percent to 13.52 today. The gauge for options hit a six-year low in March and is down 25 percent this year amid reduced demand for protection against losses in the S&P 500.

Technology stocks rose the most among 10 industries, rallying 1.2 percent. The group has gained every day since April 19, jumping 5.9 percent over seven trading days, the most since December 2011.

Apple climbed 2.9 percent to $442.78 The company is issuing $3 billion of floating-rate notes and $14 billion of fixed-rate securities in six parts with maturities from three to 30 years, according to a person familiar with the offering.

Proceeds may help the company avoid so-called repatriation taxes on its $102.3 billion of funds held overseas as it returns an additional $55 billion to shareholders through 2015 to compensate for a stock that’s been hammered by signs of slowing growth. Apple has fallen 37 percent from its record $702.10 closing price in September.

International Business Machines Corp. added 1.7 percent to $202.54. The biggest computer-services company boosted its dividend 12 percent and approved $5 billion in stock buybacks, rewarding investors after a disappointing earnings report.

Avon climbed 4.1 percent to $23.16. The door-to-door cosmetics seller reported first-quarter profit that topped analysts’ estimates as Chief Executive Officer Sheri McCoy’s cost-reduction plan starts to produce results.

Best Buy Co. jumped 7.4 percent to $25.99, the highest level since March 2012. The world’s largest consumer-electronics retailer said it will exit Europe by selling its 50 percent stake in a mobile-phone venture to partner Carphone Warehouse Group Plc for 500 million pounds ($775 million).

Best Buy Chief Executive Officer Hubert Joly, who took charge in September, is evaluating the retailer’s foreign units to free up cash and resources in his effort to revive U.S. stores hurt by competition from Amazon.com Inc. and Wal-Mart Stores Inc.

Invesco advanced 6.8 percent to $31.74. The owner of the Invesco, Van Kampen and PowerShares funds said first-quarter profit rose 15 percent as record client deposits lifted assets.

Pfizer retreated 4.5 percent to $29.07 as it posted first- quarter earnings excluding some items of 54 cents a share, missing the 55-cent average projection of analysts in a Bloomberg survey. Full-year earnings excluding one-time items may be $2.14 to $2.24 a share, Pfizer said. The company gave a previous 2013 forecast of $2.20 to $2.30 in January.

Newmont Mining declined 4.6 percent to $32.40 after saying late yesterday that first-quarter net income fell as gold prices declined and costs were higher than expected. Earnings excluding one-time items were 71 cents a share, trailing the 76 cent- average analyst estimate in a Bloomberg survey.

Pitney Bowes Inc. tumbled 16 percent, the most in the S&P 500, to $13.67. The maker of postal meters slashed dividends by half as first-quarter earnings trailed analyst forecasts.

Cummins Inc. dropped 6.1 percent to $106.39. The maker of diesel engines reported first-quarter earnings excluding some items of $1.44 a share, trailing the average analyst estimate of $1.86.

Have a wonderful evening everyone.

Be magnificent!

He is fire and the sun; he is the moon and the stars, he is the air and the sea.

He is this boy, and that girl.  He appears in countless different forms.

He has no beginning, and he has no end.  He is the source of all things.

Each type of living being is distinct and different.  But when we pierce the veil of difference,

we see the unity of all beings.

Svetasvatara Upanishad

As ever,

Carolann

The world is so full of a number of things,

I’m sure we should all be as happy as kings.

-Robert Louis Stevenson, 1850-1894

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