April 8, 2013 Newsletter

Dear Friends,

Tangents:

A Wall Street Journal Roundup, April 8^th, 2013:

Former British Prime Minister Margaret Thatcher—who died Monday from a stroke at age 87—retired from public engagements in 2002 following a series of small strokes, and was only occasionally seen in public since then.

Here are memorable quotes from her public life:

“If you want something said, ask a man; if you want something done, ask a woman.” — May 20, 1965, speech to National Union of Townswomen’s Guilds Conference.

AFP/Getty Images

Former British Prime Minister Margaret Thatcher greeting people who gathered to see her in Moscow, during her official visit to the USSR in March 1987.

“There are dangers in consensus: it could be an attempt to satisfy people holding no particular views about anything.…No great party can survive except on the basis of firm beliefs about what it wants to do.” — Oct. 10, 1968, Conservative Party conference.

“I don’t think there will be a woman Prime Minister in my lifetime.” — TV interview March 5, 1973.

“Ladies and gentlemen, I stand before you tonight in my red chiffon evening gown, my face softly made up, my fair hair gently waved…the Iron Lady of the Western World. Me? A Cold War warrior? Well, yes—if that is how they wish to interpret my defense of values of freedoms fundamental to our way of life.” — Jan. 31, 1976.

“The Russians are bent on world dominance, and they are rapidly acquiring the means to become the most powerful imperial nation the world has seen.” — From the speech that led to her being dubbed The Iron Lady, Jan. 19, 1976.

“To those waiting with bated breath for that favorite media catchphrase, the ‘U’ turn, I have only one thing to say. ‘You turn if you want to. The lady’s not for turning.’ I say that not only to you but to our friends overseas and also to those who are not our friends.” — Conservative Party Conference, Oct. 1980.

“You don’t win by just being against things, you only win by being for things and making your message perfectly clear.” — Feb. 11, 1975.

“I am extraordinarily patient, provided I get my own way in the end.” — House of Commons, March 31, 1982.

“Where there is discord, may we bring harmony. Where there is error, may we bring truth. Where there is doubt, may we bring faith. And where there is despair, may we bring hope.” — Quoting St. Francis of Assisi after winning the general election, May 1979.

‘No! No! No!’ statement in the House of Commons on European Council Summit Oct. 30, 1990

“When you’ve spent half your political life dealing with humdrum issues like the environment, it’s exciting to have a real crisis on your hands.” — May 14, 1982, commenting on the Falkland Islands war.

“We fought to show that aggression does not pay and that the robber cannot be allowed to get away with his swag. We fought with the support of so many throughout the world.…Yet we also fought alone.” — July 3, 1982, on the Falkland Islands war.

“I was asked whether I was trying to restore Victorian values. I said straight out I was. And I am.” — July 21, 1983, speech to British Jewish Community.

“That nations that have gone for equality, like Communism, have neither freedom nor justice nor equality, they’ve the greatest inequalities of all, the privileges of the politicians are far greater compared with the ordinary folk than in any other country. The nations that have gone for freedom, justice and independence of people have still freedom and justice, and they have far more equality between their people, far more respect for each individual than the other nations. Go my way. You will get freedom and justice and much less difference between people than you do in the Soviet Union.” — TV interview, January 1983

“There is no week, nor day, nor hour, when tyranny may not enter upon this country, if the people lose their supreme confidence in themselves, and lose their roughness and spirit of defiance. Tyranny may always enter—there is no charm or bar against it.” — July 19, 1984, during the coal miners’ strike.

“Economics are the method; the object is to change the heart and soul.” Sunday Times, May 1, 1981.

“We can do business together.” — Dec. 17, 1984, speaking of Mikhail Gorbachev.

“No one would remember the good Samaritan if he’d only had good intentions. He had money as well.” — Jan. 6, 1986, television interview.

“There is no such thing as society. There are individual men and women, and there are families.” — Oct. 31, 1987, magazine interview.

“We are a grandmother.” — March 3, 1989, announcing the birth of her first grandchild.

“If you just set out to be liked, you would be prepared to compromise on anything at any time and you would achieve nothing.” — May 3, 1989, commenting on her 10th anniversary as prime minister.

“I am not immortal, but I’ve got a lot left in me yet.” — Sept. 9, 1990.

“I cannot imagine how any diplomat, or any dramatist, could improve on (Ronald Reagan’s) words to Mikhail Gorbachev at the Geneva summit: ‘Let me tell you why it is we distrust you.’ Those words are candid and tough and they cannot have been easy to hear. But they are also a clear invitation to a new beginning and a new relationship that would be rooted in trust.” — Eulogy at the funeral of former President Ronald Reagan, June 11, 2004.

—The Associated Press contributed to this article.

Photos of the day – April  8th, 2013

A boy stands in front of a statue of former British prime minister Margaret Thatcher by Neil Simmons, 2001, on display in the Guildhall Art Gallery in the city of London. Olivia Harris/Reuters

An installation called ‘Hooked up’ by lighting designer Dean Skira is displayed, part of the Milan’s Furniture Fair, in Milan, Italy. Luca Bruno/AP

Market Closes for April 8th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

April 8 (Bloomberg) — Canadian stocks rose for the first time in six days as gains in financials and energy shares offset a slump among gold producers.

Husky Energy Inc. and Petrobakken Energy Ltd. climbed at least 1.8 percent as crude rallied from its biggest weekly loss in six months. Sun Life Financial Inc. and Brookfield Asset Management Inc. gained more than 1.6 percent. Agrium Inc. rose 1.6 percent after an activist investor said two of its nominees likely received enough votes to sit on the board. Barrick Gold Corp. and Goldcorp Inc. slid at least 1.2 percent as the metal slumped for the fourth time in five sessions.

The Standard & Poor’s/TSX Composite Index rose 12.71 points, or 0.1 percent, to 12,344.56 at 4 p.m. in Toronto. The benchmark gauge fell 3.3 percent last week to erase its gains for the year. Trading volume was 11 percent lower than the 30- day average at this time of the day.

“We’re seeing a bit of a bounce back from last week’s correction in Canada,” Youssef Zohny, portfolio manager with Stenner Investment Partners of Richardson GMP Ltd., said from Vancouver. Richardson GMP manages about C$15 billion ($15 billion). “Energy has been generally outperforming metals this year. Financials in general are taking the aggressive moves of the Bank of Japan positively.”

Japan’s central bank last week said it will boost monthly bond purchases to 7.5 trillion yen, exceeding the 5.2 trillion yen forecast by economists surveyed by Bloomberg news.

Sun Life climbed 2.4 percent to C$27.16 while Brookfield Asset Management rose 1.6 percent to C$37.82 as the S&P/TSX Financials index increased 0.2 percent as a group to snap three days of losses.

Oil rose 0.7 percent after tumbling 4.7 percent last week, the biggest drop in six months. Futures added 66 cents to settle at $93.36 in New York, as militants and government forces clashed in Nigeria and talks between Iran and world powers failed to make progress.

Husky Energy Inc. jumped 2.4 percent to C$28.77 and Petrobakken Energy Ltd. added 1.8 percent to C$8.33.

“The Canadian market has been so far behind the U.S. that any bit of good news on the commodity side will cause the market to do better,” Ian Nakamoto, director of research with MacDougall MacDougall & MacTier Inc., said on the phone from Toronto. He helps manage about C$4 billion.

Labrador Iron Ore Royalty Corp. rose 3.1 percent to C$34.07. The company said it is considering strategic alternatives, including selling itself, in response to Rio Tinto Group’s potential sale of its controlling interest in Iron Ore Co. of Canada, the country’s largest producer of the commodity used in steelmaking.

Labrador Iron Ore owns 15 percent of Iron Ore Co. and collects a royalty of 7 cents on every dollar of revenue generated by the iron ore producer.

Agrium, the Calgary-based fertilizer producer, added 1.6 percent to C$99.33. Jana Partners LLC, the largest shareholder, has been pushing for changes since May and proposed five nominees for 12 positions on the Agrium board. Voting results are expected to be disclosed tomorrow.

Barrick Gold retreated 1.4 percent to C$26.76 and Goldcorp lost 1.2 percent to C$31.93. The metal’s price slid 0.2 percent to $1,572.50 as a stronger dollar reduced the appeal of gold as an alternative investment.

Royal Bank of Canada dropped 0.3 percent to C$59.44, its lowest level since December. The government began a probe into whether the bank hired foreign workers to replace domestic staff, the CBC television network reported on its website. One of the employees being replaced said the new workers were from India.

Diane Finley, Human Resources Minister, said it would be “unacceptable” to replace domestic employees with foreign workers.

US

By Lu Wang and Lindsey Rupp

April 8 (Bloomberg) — U.S. stocks rose as investors speculated first-quarter earnings would help equities rebound from their biggest weekly decline of the year.

Alcoa Inc. rose 1.8 percent in regular trading, before reporting first-quarter results that disappointed investors after the market close. Advanced Micro Devices Inc. rose the most in the S&P 500 after Microsoft Corp. was said to use AMD chips in its next Xbox game console. BioCryst Pharmaceuticals Inc. surged 13 percent as China expedited the approval of its anti-influenza drug Peramivir. Lufkin Industries Inc. jumped 38 percent as General Electric Co. agreed to buy the company.

The S&P 500 rose 0.6 percent to 1,563.07 at 4 p.m. in New York, after falling as much as 0.3 percent earlier. The index erased its April 5 loss sparked by the government’s monthly jobs report. The Dow Jones Industrial Average added 48.23 points, or 0.3 percent, to 14,613.48. About 5.1 billion shares changed hands on U.S. exchanges, 19 percent below the three-month average.

“Earnings clearly are going to be the driver for a lot of volatility in the next couple of weeks,” Omar Aguilar, the San Francisco-based chief investment officer of equities at Charles Schwab Investment Management said in a telephone interview. The firm had $219.3 billion in assets under management as of Dec. 31. “The consensus is that we’re going to have a pretty diverse and poor earnings season. I think we’ll probably see a lot of surprises on the positive side, which is good.”

JPMorgan Chase & Co., Wells Fargo & Co. and Bed Bath & Beyond Inc. are among nine S&P 500 companies scheduled to report earnings this week. Analysts project profits at S&P 500 companies fell 1.8 percent in the latest quarter, the first year-over-year drop since 2009, estimates compiled by Bloomberg show. Analysts had predicted a 1.2 percent increase when surveyed in January.

The S&P 500 fell 1 percent last week as U.S. payrolls had the smallest gain in nine months in March while other reports showed manufacturing and services industries expanded less than forecast. The index climbed to an all-time high of 1,570.25 on April 2. The S&P 500 has more than doubled from its 12-year low in March 2009, helped by the Federal Reserve’s unprecedented bond purchases and three straight years of profit growth.

The benchmark gauge has alternated between gains and losses for the past 13 days, the longest period ever without a winning or losing streak, according to LPL Financial Holdings Inc.

Today’s reversal “continued a pattern, which has shown for quite some time now, which is any weakness is met with buying at some point of the day,” James Gaul, a portfolio manager at Boston Advisors LLC, which oversees about $2.5 billion in assets, said in a telephone interview. “There are people who are afraid of missing out on further rallies.”

Nine of the 10 S&P 500 industry groups rose today as consumer stocks gained the most, adding at least 1.1 percent.

Phone stocks retreated 0.5 percent.

Alcoa, the first Dow member to publish results each quarter, jumped 1.8 percent to $8.39 in regular trading. After the market close, the largest U.S. aluminum producer reported first-quarter earnings that exceeded analysts’ estimates as demand from U.S. automakers increased. Sales declined to $5.83 billion from $6.01 billion, missing the $5.88 billion average of 11 estimates. Alcoa shares slid 1.4 percent to $8.27 as of 7:08 p.m. in New York.

AMD surged 13 percent, the most since July 2011, to $2.59.

Microsoft will use an AMD processor in its next Xbox game console as it seeks to cut the cost of building machines and get developers to create more titles, people with knowledge of the matter said.

The shift means Microsoft will drop the Power PC technology designed by International Business Machines Corp., and game discs made for the current Xbox 360 won’t be compatible. IBM slid less than 0.1 percent to $209.32 and Microsoft declined 0.4 percent to $28.59.

BioCryst surged 13 percent to $1.92, adding to a 29 percent gain on April 5 to close at the highest level since November.

China’s Food and Drug Administration said it expedited the approval of Peramivir as authorities reported three more infections of the deadly H7N9 virus that has killed six people in the country since March.

Lufkin soared 38 percent, its biggest gain ever, to $87.96.

GE, the world’s largest provider of power-generation equipment and services, said it will acquire Lufkin for about $3.3 billion, or $88.50 a share. GE rose 0.8 percent to $23.12.

Johnson & Johnson fell 1.1 percent to $81.11. The world’s largest seller of health-care products may cut its earnings forecast for 2013 because of a devaluation of the Venezuelan bolivar, JPMorgan said in a note. The firm reduced the stock’s rating to neutral from overweight.

CA Inc., a maker of software for managing information technology, slipped 1.2 percent to $24.30. Abhey Lamba, an analyst with Mizuho Securities USA Inc., cut the stock’s rating to neutral from buy.

Netflix Inc. fell 1 percent to $163.06, extending its decline to eight consecutive days. The stock has lost 14 percent during the losing streak, its longest such stretch since October 2008. Competition among pay-TV vendors is increasing as Intel Corp. plans to start an online service this year, while Time Warner Inc.’s Warner Bros. has recently introduced its own subscription streaming service.

Wagers that U.S. stock volatility will increase have reached a three-year high on concern American companies are getting ready to report the first slump in profit since 2009.

There were 6.54 million calls on the Chicago Board Options Exchange Volatility Index and 2.34 million puts on April 4, according to data compiled by Bloomberg. The ratio jumped to 2.93-to-1 last month, the highest since March 2010. The VIX, tracking S&P 500 option prices, has climbed 17 percent from its six-year low in March and lost 5.2 percent to 13.19 today.

“The weaker data and earnings would encourage higher volatility after an unchallenged rally throughout the first quarter,” Andrew Greeley, a senior managing director at Stamford, Connecticut-based Acorn Derivatives Management Corp., which manages more than $450 million in volatility assets, said on April 5.

Even bulls are taking steps to protect profits after gains in U.S. stocks added $10 trillion to equity values.

Russ Koesterich of BlackRock Inc. and Valentijn Van Nieuwenhuijzen at ING Investment Management, who bought equities in 2012, say risks are rising during a period in which stocks have lost an average 5.2 percent since 2010, data compiled by Bloomberg show. Concern the U.S. economy isn’t expanding fast enough prompted Koesterich to sell smaller companies. Van Nieuwenhuijzen is holding off on new share purchases.

Investors managing more than $5 trillion say they’re looking for ways to limit losses after the S&P 500 reached a record. That got harder in the first quarter, when rallies in drugmakers and utilities pushed valuations for so-called defensive industries to the highest since 2008.

“You have an increased risk of a correction now,” Koesterich, the chief investment strategist at New York-based BlackRock, the world’s largest money manager with $3.8 trillion in assets, said in an April 4 phone interview. “The parts of the market that have done the best, the defensives, have gotten very expensive,” he said. “This is a very different rally than what people are used to.”

Have  a wonderful evening everyone.

Be magnificent!

In his essence, man is not a slave to himself, nor to the world; he is a lover.

His freedom and accomplishments are in love,

which is another name for perfect understanding.

In this ability to understand, in this impregnation of everything that is,

he is one with the Spirit that penetrates everything,

and that is also the breath of the soul.

Rabindranath Tagore, 1861-1901

As ever,

Carolann

I was never less alone than when by myself.

-Edward Gibbon, 1737-1794

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