April 4, 2013 Newsletter

Dear friends,

Tangents:

Whitstable

None of it was the way we’d thought:

the shore path not even on the shore,

the oyster bar closed up, and the air s

o thick the streetlamps bled through it.

I was running a fever.  You worked

by the window, notebook in your lap,

then came to kiss me.

The king-size bed, the broad window

over the grey estuary: all ours.

We bundled up, ate chips on a bench

under a sky without a single star.

At the end, on the train, when I lay

in your lap, and you looked down

and I looked up, we saw the same future.

But we’re in that future now,

and it’s not what we imagined.

You’re in your home, I’m in mine.

That day wasn’t a promise,

it was just the day it was.

-from Archangel, by Henry Shukman

I learned that courage was not the absence of fear, but the triumph over it. The brave man is not he who does not feel afraid, but he who conquers that fear. – Nelson Mandela

On this day in 1968, Martin Luther King Jr. was assassinated.

On April 4, 1968, civil rights leader Martin Luther King Jr., 39, was shot to death in Memphis, Tenn.

Photo of the Day –April 4th, 2013

Biomedical PhD student Meghan Betts (l.) and neurotechnology PhD student Andreas Thomik pose as they demonstrate a motion capture suit at the Strictly Science exhibition at Imperial College in London. Students at the university are using the motion capture suit to gather data about how movement is affected by age and disease. Olivia Harris/Reuters

Market Closes for April 4^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Lu Wang

April 4 (Bloomberg) — Canadian stocks fell for the fourth day, the longest streak of losses since November, as commodities extended a week-long drop and more Americans than forecast filed for jobless benefits.

Energy and financial companies slid the most among 10 groups in the Standard & Poor’s/TSX Composite Index, sinking at least 1.1 percent. Petrominerales Ltd. and Cenovus Energy Inc. declined more than 2.9 percent as oil prices retreated. Toronto- Dominion Bank lost 1.7 percent after its chief executive officer said the commodity slump may slow earnings growth. Tahoe Resources Inc. rallied 11 percent as Raymond James Financial Inc. raised the stock’s rating.

The S&P/TSX fell 59.07 points, or 0.5 percent, to 12,363.05 at 4 p.m. in Toronto, the lowest close since Dec. 28. The benchmark gauge plunged 2.1 percent yesterday, erasing its gain for the year as concern over global economic growth weighed on oil and metal prices. Commodity stocks make up 40 percent of the benchmark equity index by weighting.

“You’ve got a difficult commodity environment,” Brian Huen, managing partner at Toronto-based Red Sky Capital Management Ltd., which oversees C$225 million ($222 million), said in a phone interview. “Sentiment toward the Canadian stock market, because of the exposure it has to resources, is pretty negative now.”

U.S. data showed today that jobless claims increased by 28,000 to 385,000 in the week ended March 30, the highest since Nov. 24. The median forecast of economists surveyed by Bloomberg called for a drop to 353,000.

Central banks in Japan and Europe reassured investors that they will keep economies awash in cash to bolster growth.

European Central Bank President Mario Draghi said policy will remain accommodative after the central bank kept its benchmark rate at 0.75 percent. The Bank of Japan said it will buy longer- term government bonds as part of its asset-purchase program.

Energy shares accounted for nine of the 10 worst performers in the S&P/TSX today. Oil capped the biggest two-day drop since October as the jobless data raised concern about slower U.S. growth before tomorrow’s payrolls report from the Labor Department. Crude lost 1.3 percent to $93.26, and is down $3.97 in the past two sessions.

Petrominerales, which explores oil and natural gas in Colombia and Peru, slumped 5.5 percent to C$5.69, the lowest since January 2009. Cenovus slid 2.9 percent to C$29.99. MEG Energy Corp. dropped the most in the S&P/TSX, losing 5.6 percent to C$30, its lowest close ever.

Financial shares slipped 1.1 percent as a group. Royal Bank of Canada, the country’s largest lender by assets, lost 1.6 percent to C$60.39, its lowest close of the year. Bank of Montreal erased 1.4 percent to C$62.66.

TD Bank fell 1.7 percent, the most since December, to C$82.

CEO Edmund Clark said at the company’s annual meeting that it will be “tougher” for the nation’s second-biggest lender to meet its target of 7 percent to 10 percent annual earnings growth as global demand for Canada’s commodities has softened.

Tahoe Resources rallied 11 percent to C$18.81. Chris Thompson, an analyst with Raymond James, raised the stock’s rating to outperform, an equivalent of buy, from market perform after the company received the final mining license for the Escobal silver mine in Guatemala.

First Quantum Minerals Ltd. rose 3.6 percent to C$18.61.

The Canadian copper miner completed on April 2 its C$5 billion ($5 billion) hostile takeover of Inmet Mining Corp., helping it to become the world’s fifth largest producer of the metal.

Copper futures for May delivery added 0.6 percent to settle at $3.3515 an ounce after touching the lowest price since August yesterday.

US

By Lindsey Rupp and Nikolaj Gammeltoft

April 4 (Bloomberg) — U.S. stocks rose, rebounding from the biggest selloff in more than a month for the Standard & Poor’s 500 Index, as central banks’ pledges on stimulus efforts overshadowed a rise in American jobless claims.

McDonald’s Corp. and Hewlett-Packard Co. added more than 1.4 percent to pace advances in the Dow Jones Industrial Average. Best Buy Co. rose 16 percent, the most in the S&P 500, after Samsung Electronics Co. said it would staff mini-stores at the retailer’s U.S. locations. Facebook Inc. climbed 3.1 percent as it announced smartphone software with a modified version of Google Inc.’s operating system.

The S&P 500 rose 0.4 percent to 1,559.98 at 4 p.m. in New York. The Dow gained 55.76 points, or 0.4 percent, to 14,606.11.

About 6 billion shares changed hands on U.S. exchanges, 5.3 percent below the three-month average.

“Expectations were high for the Bank of Japan and they managed to exceed expectations,” Janelle Nelson, a Minneapolis- based portfolio analyst with RBC Wealth Management’s portfolio advisory group, said in a phone interview. Her firm manages about $315 billion in client assets. “The big issue for investors will be what the U.S. employment report shows tomorrow.”

Equities climbed today after the Bank of Japan strengthened a stimulus program that will see the central bank buy 7 trillion yen ($73 billion) of bonds a month. European Central Bank President Mario Draghi signaled the bank will keep monetary policy loose for an extended period and that further easing is possible if economic conditions deteriorate. ECB officials meeting in Frankfurt left interest rates on hold.

The bull market in equities entered its fifth year last month, with the S&P 500 more than doubling from its bottom in 2009, as corporate earnings topped estimates and the Federal Reserve carried out an unprecedented three rounds of bond purchases to spur the economy. The S&P 500 and Dow closed at all-time highs on April 2.

Jobless claims rose by 28,000 to 385,000 in the week ended March 30, the highest since Nov. 24, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for a drop to 353,000. The results reflected the difficulty the government has adjusting the figures around the Easter holiday and spring break at schools.

The S&P 500 slid 1.1 percent yesterday, the most in more than a month, as a report from ADP Research Institute showed companies boosted employment by 158,000 workers in March, below economists’ forecasts calling for a 200,000 gain.

The jobs data come before tomorrow’s non-farm payrolls report from the Labor Department, which may show employers hired a net 190,000 workers for the month, according to the median forecast of 87 economists surveyed by Bloomberg.

Investors will begin to focus on first-quarter earnings reports beginning next week, with Alcoa Inc. scheduled on April 8 to be the first company in the Dow to report results. Profits among S&P 500 companies are forecast to decline 1.9 percent for the period, for the first retreat since 2009, according to estimates compiled by Bloomberg. In January, analysts forecast earnings growth of 1.2 percent. Profit expanded by 8 percent in the fourth quarter of 2012.

The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against losses, fell 2.3 percent to 13.89 today, after jumping 11 percent yesterday. The gauge, known as the VIX, is down 23 percent for the year.

Phone, utility and financial companies rose the most among 10 groups in the S&P 500, increasing at least 0.9 percent.

Technology and energy shares slipped more than 0.1 percent.

McDonald’s added 1.4 percent to $100.63. AT&T Inc. jumped 1.7 percent to $37.91. Bank of America Corp. increased 1.1 percent to $11.94 and JPMorgan Chase & Co. rose 1.4 percent to $47.49.

Hewlett-Packard added 1.8 percent to $22.30. After the close of regular trading, the company said Ray Lane is stepping down as chairman, in a shakeup that underscores investors’ dismay with the botched acquisition of Autonomy Corp. The shares slipped 0.9 percent as of 5:05 p.m. New York time.

Best Buy climbed 16 percent to $25.13, the highest level since March 2012. South Korea-based electronics maker Samsung said it will open 500 Samsung Experience Shops inside Best Buy locations starting April 8. The companies plan to add smaller Samsung spaces by June at about 1,000 other Best Buy and Best Buy Mobile locations, Samsung said.

Facebook rose 3.1 percent to $27.07. The company unveiled smartphone software that puts social-networking features front and center on a handset, stepping up efforts to boost sales of advertising on small screens. The new software, which the company calls Home, makes it easier to access Facebook features on a smartphone’s home screen, Chief Executive Officer Mark Zuckerberg said at an event today in Menlo Park, California.

J.C. Penney Co. gained 4.5 percent to $15.08 after Gilford Securities Inc. analyst Bernard Sosnick raised his rating on the department-store company to neutral from sell, adding that the company is “far from out of the woods.”

Brinker International Inc. added 2.1 percent to $38.48 after Raymond James Financial Inc. raised its rating on the full-service restaurant company to the equivalent of a buy from a hold rating. Equity analyst Bryan Elliott’s 12-month target price is $42 a share.

Teradata Corp. fell 7.5 percent, the most in the S&P 500, to $51.89 after Morgan Stanley analyst Katy Huberty cut her estimates for the database management company’s 2013 revenue and earnings estimates. Huberty removed the company from her best ideas list.

Have  a wonderful evening everyone.

Be magnificent!

Where water joins with water, it is not a meeting but a unification.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

The whole of science is nothing more than a refinement

of everyday thinking.

-Albert Einstein, 1879-1955

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