August 13, 2012 Newsletter

Dear Friends,

Tangents:

Saw a fabulous concert on the weekend with Bonnie Raitt and band.   Colin James appeared onstage for the encore.  Raitt is just an amazing musician.  Here is what one reviewer wrote about her latest CD, Slipstream:  Bonnie Raitt’s latest CD, brings us into her psychic living room for a reassuring aural hug.  After a  seven-year absence, she is back in the studio, more intimate and soulful than ever.  Her familiar offerings of rockers, country blues, and ballads are here.  But her signature slide guitar sound burrows deeper; the ballads are more plaintive.  Collaborations with producer Joe Henry offer lush textures that underscore Raitt’s musicianship and sensuous gravel-laced voice.

The Poem:

WORKER

sweat the felt screed the cement

pack the joist level the cleat

eat the piece hammer the nail

string-line the future

raise the bones

build the skeletons

whistle the windows

into our rooms

hoist your brushes

sweep the sky.

And on this day in…

1889 – The first coin-operated telephone is patented by William Gray

1899 – Alfred Hitchcock is born.

1926 – Fidel Castro is born.

1961 – Berlin is divided; Berlin wall is erected.
1963 – A 17-year-old Buddhist monk burns himself to death in Saigon, South Vietnam – it serves as a important turning point in the resolve of the Vietnamese to end foreign rule and exploitation.

photos of the day August 13, 2012

Table and chairs stand empty in Olympic Park in London, Monday, following the end of the London 2012 Olympic Games.

Tim Ireland/AP

A meteor streaks past stars in the night sky over the village of Kuklici, known for its hundreds of naturally formed stones, near Kratovo, 49 miles east from the capital Skopje. The Perseids meteor shower is observed every August when the Earth passes through a stream of space debris left by comet Swift-Tuttle.

Ognen Teofilovski/Reuters

Market Closes for August 13, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Katia Dmitrieva

Aug. 13 (Bloomberg) — Canadian stocks fell, sending the benchmark index lower for the first time in three days, as energy and raw material shares slipped after Bank of America Corp. cut its outlook for growth in China.

TMX Group Inc., the owner of the Toronto stock exchange, tumbled 5.5 percent, the most in a year. Canadian Natural Resources Ltd., the third-largest energy provider, declined 2.8 percent. Teck Resources Ltd. dropped 2.5 percent as copper retreated. Raw-materials and energy companies contributed most to the decline in the Standard & Poor’s/TSX Composite Index out of 10 industries.

The S&P/TSX fell 52.56 points, or 0.4 percent, to 11,838.33, after rising as much as 0.2 percent early in the day.

The benchmark index rose 0.9 percent in the last two sessions.

“The market is sobering up from the good news coming out of the European Central Bank, and the bulls are basically stepping to the sidelines today,” David Sherlock at Calgary- based McLean & Partners, which manages C$1 billion, said in a phone interview. “The TSX, we’re materials and energy, and the risky stuff comes off first. This is a classic sober, second- thought, risk-off day.”

Bank of America joined Deutsche Bank AG and Barclays Plc in cutting growth forecasts for China on weaker exports. Gross domestic product in China, the world’s largest consumer of base metals, rose 7.6 percent in the second quarter from a year earlier, the sixth straight quarterly slowdown. Canadian stocks are heading for their worst year since 1998 relative to global equities as a slowing economy weighs on commodities, which make up about half of the TSX.

Suncor Energy Inc., the largest energy provider in the country, dropped 0.8 percent to C$31.53. Canadian Natural Resources slipped 2.8 percent to C$30.07. Encana Corp. declined 2.7 percent to C$21.98. Cenovus Energy Inc. slid 0.4 percent to C$32.34.

Raw-materials producers in the S&P/TSX have fallen 13 percent this year, the worst performer among 10 groups.

Copper fell to a one-week low. Teck Resources, Canada’s largest diversified miner, declined 2.5 percent to C$29.58. The Vancouver-based company plunged 18 percent this year and last month reported second-quarter profit that fell more than analysts forecast because of a drop in prices for metals including copper.

Gold declined in New York, snapping three days of gains.

Goldcorp Inc., the world’s second-largest producer of the metal, fell 0.9 percent to C$36.73.

Barrick Gold Corp., the largest producer, slipped 1 percent to C$33.96. This month, Barrick touched the lowest level since 2008. The Toronto-based company in July reported profit that missed analysts’ estimates.

TMX Group tumbled 5.5 percent to C$47.00 after an analyst raised concern its new owner won’t be able to wring as much value out of its takeover as anticipated. Paul Holden, an analyst at CIBC World Markets, cited regulatory constraints. The Toronto-based company announced selling 95.4 percent of its outstanding shares to Maple Group Acquisition Corp., a consortium of Canadian banks, insurers and pension funds, after markets closed Friday.

US

By Inyoung Hwang

Aug. 13 (Bloomberg) — The Standard & Poor’s 500 Index fell for the first time in seven days, ending the longest streak of gains in 20 months, as slower-than-forecast economic growth in Japan added to investor concern of a global slowdown.

Commodity shares led declines among 10 groups in the S&P 500 as Bank of America Corp. cut its outlook for Chinese growth.

Alcoa Inc. and Cisco Systems Inc. fell the most in the Dow Jones Industrial Average as investors sold stocks most tied to the economy. TripAdvisor Inc. lost 4.5 percent after Google Inc. agreed to acquire all of John Wiley & Sons Inc.’s travel assets.

The S&P 500 slid 0.1 percent to 1,404.11 at 4 p.m. in New York. The Dow lost 0.3 percent to 13,169.43. Trading volume for exchange-listed stocks in the U.S. was about 4.5 billion shares, the lowest level since July 3 when the market closed at 1 p.m. and about 31 percent lower than the three-month average, according to data compiled by Bloomberg. The Chicago Board Options Exchange Volatility Index, known as the VIX, fell 7.1 percent to 13.70, the lowest level since 2007.

“There are some worries that while we’re all focused on Europe, China could actually be one of the reasons why GDP disappoints and that is a negative,” Jeffrey Kleintop, chief market strategist at LPL Financial Corp. in Boston, which oversees $350 billion, said in a telephone interview. “The GDP data from Japan reminds us of a risk of a hard landing in China.”

Japan, the world’s third-largest economy, expanded at an annualized 1.4 percent pace in the second quarter, trailing the median forecast for 2.3 percent growth from economists surveyed by Bloomberg. Wells Fargo & Co. reduced its earnings estimate for the S&P 500 this year as deteriorating economic data hurts profits at energy and raw-material producers.

Bank of America cut its 2012 economic growth forecast for China to 7.7 percent from 8 percent, according to a report today from Ting Lu, an economist based in Hong Kong.

The S&P 500 posted its fifth straight weekly rally after German Chancellor Angela Merkel backed a bond-buying proposal by the European Central Bank. In the U.S. last week, central bank officials debated whether more action is needed to stimulate growth. A worse-than-expected Chinese trade report on Aug. 10 added to signs the global economy is weakening, stoking speculation the government will step up measures to support expansion.

“Japan’s economy grew less than forecast and there was also speculation that China may cut rates, but now investors are thinking it’s not going to happen as quickly as speculated,”

Thomas Garcia, head of equity trading at Santa Fe, New Mexico- based Thornburg Investment Management Inc., said in an e-mail.

His firm oversees about $80 billion. “We have had a pretty nice run in the equity markets lately. We could see a little profit taking.”

Gina Martin Adams, Wells Fargo’s equity strategist, cut her 2012 forecast by $1 to $101 a share and reduced her projection for next year by $3 to $104, according to a note to clients dated today.

Eight out of 10 groups in the S&P 500 declined. Alcoa, the largest U.S. aluminum producer, fell 1.7 percent to $8.83. Cisco Systems lost 1.1 percent to $17.34. Exxon Mobil Corp., the world’s largest oil company by market value, slipped 0.3 percent to $88.14.

TripAdvisor, the online travel-recommendation service, lost 4.5 percent to $33.52. Google agreed to acquire all of John Wiley’s travel assets, including the Frommer’s brand, to expand local services and attract users and advertisers from sites such as TripAdvisor’s.

Google gained 2.8 percent to $660.01 after the owner of the world’s most popular search engine said it will cut about 4,000 jobs and shut down a third of the facilities at its Motorola Mobility Holdings Inc. unit.

Monster Beverage Corp. lost 1.8 percent to $53.27. Goldman Sachs Group Inc. lowered its rating on beverage stocks to neutral from attractive, citing higher valuations relative to food stocks. Dr. Pepper Snapple Group Inc. decreased 0.8 percent to $44.69. The firm also lowered its rating on Coca-Cola Co. to neutral from conviction buy. The Atlanta-based company slipped 0.2 percent to $39.30.

First Solar Inc., the world’s biggest maker of thin-film panels, slid 4.4 percent to $20.49 after German solar-panel maker Solarworld AG reported a loss and said it won’t be profitable this year.

U.S. Steel Corp. slumped 2.4 percent to $22.86 as iron ore prices slumped to a 31-month low after purchases by China, the world’s biggest buyer, fell to the smallest in three months as slowing economic growth curbed demand.

Tesoro Corp. climbed 9.5 percent to $38.87 for the biggest gain in the S&P 500. The largest independent refiner on the U.S.

West Coast agreed to buy BP Plc’s California oil refinery and 800 gasoline stations in the Southwest for $1.18 billion.

Sears Holdings Corp. jumped 5.7 percent to $54.36 after Barron’s reported that the second-biggest U.S. department store company may double to $100 a share if it sells assets and improves profitability.

Have a wonderful evening everyone.

Be magnificent!

Meditation is one of the greatest arts in life, perhaps the greatest,

and one cannot possibly learn it from anybody else,

that is the beauty of it.

It has no technique and therefore no authority.

When you learn about yourself, watch yourself, watch the way you walk,

how you eat, what you say, the gossip, the hate, the jealousy –

if you are aware of all that in yourself, without any choice,

that is part of meditation

Krishnamurti, 1895-1986

As ever,

Carolann

Life is too short to be the caretaker of the wrong details.

-Alexandra Stoddard, 1967-

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