August 27, 2012 Newsletter

Dear Friends,

Tangents:

Neil Armstrong, First Man on the Moon (August 5, 1930 – August 25, 2012) SLIDESHOW

And on this day in…

1776 – The Americans are defeated by the British at the Battle of Brooklyn, New York.

1883 – Krakatoa volcano, West of Sumatra, Indonesia explodes – The most powerful volcanic explosion in recorded history.

1910 –  Mother Teresa was born.

1910 – Thomas Edison demonstrates the first “talking” pictures–using a phonograph–in his New Jersey laboratory.
1952 – PeeWee Herman was born.
1979 – Lord Mountbatten killed by the IRA (bombed) in his sailboat, near Sligo, Ireland.

Be yourself. Be true to that, to your heart. Patience. See what happens if you step back instead of bounding forward. –Nora Roberts, 1950-

photos of the day August 27, 2012

Marion Bartoli of France serves to Jamie Hampton of the US during their women’s singles match at the US Open tennis tournament in New York.

Jessica Rinaldi/Reuters

Ricardo Dos Santos of Brazil competes during the third round of the Billabong Pro surfing event Sunday in Teahupoo, Tahiti.

Steve Robertson/Association of Surfing Professionals/AP

Market Closes for August 27, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada:

By Eric Lam

Aug. 27 (Bloomberg) — Canadian stocks fell as metal prices tumbled and a decline in oil prices dragged down energy producers amid speculation that Tropical Storm Isaac will have limited effect on crude production.

Nexen Inc., which has operations in the Gulf of Mexico, slipped 0.4 percent. Goldcorp Inc. retreated 1.2 percent. Cameco Corp., the world’s third-largest uranium miner, slumped 1 percent after agreeing to buy a uranium project from BHP Billiton Ltd. for $430 million. Research In Motion Ltd. rose 1.9 percent on speculation its BlackBerry 10 smartphone may be more attractive as Samsung Electronics Co. products face a possible ban.

The Standard & Poor’s/TSX Composite Index lost 33.41 points, or 0.3 percent, to 12,048.82 at 4 p.m. in Toronto. The index has risen 3.3 percent this month, poised for the biggest percentage gain since January.

“Commodities have had a great run the past few weeks, but nothing moves up in a straight line,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. His firm manages about C$55 million ($55.6 million). “There was talk the U.S. would release some oil from its reserves. That’s why oil is down now, as there’s potential for more supply entering the market.”

Oil prices dropped as forecasts called for Isaac to go ashore in southeastern Louisiana Aug. 29 with winds peaking at Category 1 strength of 85 mph to 90 mph. The U.S. may lead International Energy Agency member nations in a joint release from emergency oil reserves as early as next month to curb rising prices, the industry publication Petroleum Economist reported on Aug. 24, citing sources it didn’t name.

Nexen, awaiting approval of a $15.1 billion takeover offer from China’s Cnooc Ltd., fell 0.4 percent to C$25.39. Crude fell 0.7 percent to settle at $95.47 a barrel in New York.

First Quantum Minerals Ltd., a copper and nickel producer, declined 1.1 percent to C$19 as copper prices fell amid concern that Europe’s sovereign debt crisis will erode demand. Copper futures for December delivery retreated 0.2 percent to settle at $3.48 a pound in New York.

Goldcorp sank 1.2 percent to C$39.58 and Gabriel Resources Ltd. plunged 7.4 percent to C$2.24. Gold futures for December delivery declined 0.3 percent to $1,667.20 an ounce in New York.

Cameco lost 1 percent to C$22.23 after agreeing to buy BHP’s Yeelirrie uranium project in Western Australia. The company is aiming to increase its annual uranium output to 40 million pounds by 2018 by developing new mines and extending the life of existing ones.

RIM gained 1.9 percent to C$7.01. A U.S. court ruled Samsung had infringed on several of Apple Inc.’s smartphone patents.

“Microsoft’s new surface tablet and RIM’s BlackBerry 10, along with Nokia’s Windows 8 smartphones, may be more appealing to corporations and carriers, especially in the near term, following the verdict against Samsung,” said Anand Srinivasan, a senior analyst with Bloomberg Industries, in a research note.

“Businesses and carriers may be wary of litigation threats or possible recalls of products.”

Shares of Waterloo, Ontario-based RIM have plunged 53 percent this year.

Bank of Nova Scotia added 0.9 percent to C$52.94 and Bank of Montreal rose 0.1 percent to C$57.70 ahead of their third- quarter earnings reports tomorrow.

US:

By Rita Nazareth

Aug. 27 (Bloomberg) — U.S. stocks fell, following the first weekly decline in about two months for the Standard & Poor’s 500 Index, as investors awaited indications on whether the Federal Reserve will provide further stimulus measures.

Hewlett-Packard Co., Alcoa Inc. and Bank of America Corp. dropped at least 1.1 percent to pace losses in the biggest companies. Apple Inc., the most valuable company, climbed 1.9 percent after a jury found Samsung Electronics Co. infringed six of seven patents for its mobile devices. Google Inc., which offers the Android mobile software, declined 1.4 percent.

The S&P 500 slid 0.1 percent to 1,410.44 at 4 p.m. New York time. The Dow Jones Industrial Average fell 33.30 points, or 0.3 percent, to 13,124.67. The Nasdaq-100 Index gained 0.2 percent to 2,782.55, after rising to the highest since 2000 during the day. Volume for exchange-listed stocks in the U.S. was 4.5 billion shares, the lowest level since at least 2008 excluding days surrounding holidays, data compiled by Bloomberg show.

“There’s no great conviction in either direction,” said Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co. He spoke in a phone interview.

“There are a couple of bright spots, such as Apple. People are looking ahead for Fed signals. I believe Bernanke’s speech will probably be more of the same. It’s more likely that it will be a continuation of what we’ve been hearing and less of an event.”

Fed Chairman Ben S. Bernanke probably won’t use his Aug. 31 speech at the Fed’s annual symposium in Jackson Hole, Wyoming, to suggest a third round of bond buying is at hand, according to economists such as Michael Feroli at JPMorgan Chase & Co. and James O’Sullivan at High Frequency Economics.

The S&P 500, which last week failed to stay above a four- year high, is still on pace for its third straight monthly gain amid bets central banks will provide further economic stimulus.

The index has risen 2.3 percent so far in August.

Commodity, phone and industrial shares had the biggest losses in the S&P 500 among 10 groups. HP dropped 2.1 percent to $17.21, the lowest since 2004. Alcoa slid 1.7 percent to $8.48.

Bank of America retreated 1.1 percent to $8.07. Technology shares in the S&P 500 rose 0.2 percent as a group.

Apple gained 1.9 percent to a record $675.68. Victories in patent disputes over phones using Google’s Android may extend, rather than end, the litigation that’s lasted more than two years and spanned four continents. The jury verdict won Aug. 24 against Samsung came shortly after a trade agency in Washington cleared Apple of some claims by Google’s Motorola Mobility unit that could have led to a U.S. ban on the iPhone and iPad.

Together, the decisions embolden Apple to continue the campaign envisioned by its late co-founder, Steve Jobs, to prove phones running on Android copied the iPhone’s features and designs. Apple won’t stop unless there’s a decisive blow against it, and Samsung, with its reputation at stake, also has little incentive to settle, said Tom Scott, a patent lawyer at Goodwin Procter LLP.

“Most commercial disputes are on the merits of the case,” said Scott, chairman of the firm’s intellectual property group in Washington. “This is different. It’s a war. It’s an economic war.”

Google dropped 1.4 percent to $669.22.

Best Buy Co. added 3.2 percent to $17.87. The world’s largest electronics retailer and founder Richard Schulze reached an agreement allowing him to conduct due diligence in his effort to acquire the company a week after earlier talks failed.

Dollar Thrifty Automotive Group Inc. rallied 7.5 percent to $87.08. Hertz Global Holdings Inc. struck a deal to buy the company for about $2.6 billion in cash and secure its place as the No. 2 player in the U.S. market. Hertz jumped 8.1 percent to $14.21.

Hudson City Bancorp soared a record 16 percent to $7.45.

M&T Bank Corp., which counts Warren Buffett’s Berkshire Hathaway Inc. among its largest investors, agreed to buy the bank to expand in New Jersey in a deal valued at about $3.7 billion.

Under terms of the agreement, each Hudson City shareholder will receive 0.08403 of an M&T share in the form of either M&T stock or cash. M&T climbed 4.6 percent to $89.82.

Kenexa Inc. jumped 41 percent to $45.79. International Business Machines Corp. will spend about $1.3 billion for the maker of Web-based human-resources and recruiting services, part of its effort to reach $16 billion in annual analytics revenue.

IBM slipped 1.1 percent to $195.69.

Tiffany & Co. climbed 7.2 percent to $62.71. The world’s second-largest luxury jewelry retailer reported a drop in worldwide comparable-store sales that was smaller than some analysts projected.

AOL Inc. gained 2.9 percent to $33.86 after announcing a $600 million accelerated stock buyback agreement and a special cash dividend of $5.15 a share, the final steps in returning about $1.1 billion to shareholders.

ImmunoGen Inc. rose 5.6 percent to $14.62. Partner Roche Holding AG said its experimental breast cancer drug significantly extended the lives of patients when compared with standard therapy.

American stocks are dominating global equities by the most in a decade, taking a majority of the spots in a ranking of the 20 biggest companies, after earnings rose faster than the rest of the world as the global economy rebounded. Apple, International Business Machines Corp., Wells Fargo & Co. and four more U.S. companies joined the top 20 since stocks peaked in 2007, bringing the total to 14.

They replaced Moscow-based Gazprom OAO, China Petroleum & Chemical Corp. in Beijing, Petroleo Brasileiro SA of Rio de Janeiro and six others from Europe and Asia. Of the nine added, only BHP Billiton Ltd. and Nestle SA are based outside the U.S.

More U.S. corporations are represented than any time since 2003 after 10 quarters of economic expansion and profit growth lifted the S&P 500 109 percent since shares bottomed in March 2009. The shift reflects volatility in emerging markets and shows how innovation builds value in the U.S.

“The U.S. is just the best place on the planet to have a great idea and turn it into a big business,” according to Michael Shaoul, chairman of New York-based Marketfield Asset Management, which oversees $2.7 billion. “There’s another reason for this list to have shifted and that is the falling of prior darlings,” said Shaoul, whose fund beat 99 percent of competitors in the past year. “A lot of the ones which have fallen are energy and emerging-market related.”

Have a wonderful evening everyone!

Be magnificent!

Have you ever tried living with yourself?

If so, you will begin to see that yourself is not a static state,

it is a fresh living thing.

And to live with a living thing your mind must also be alive.

And it cannot be alive if it is caught in opinions, judgments, and values.

Krishnamurti,1895-1986

As ever,

Carolann

A man will fight harder for his interests than his rights.

-Napoleon Bonaparte, 1769-1821

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