August 30, 2012 Newsletter

Dear Friends,

Tangents:

Today in History

August 29^th, 1945 – U.S. Airborne troops are landed in transport planes at Atsugi Field, southwest of Tokyo, beginning the occupation of Japan; also liberation of U.S. POWs, released.

And also on this day in…

70 – Temple of Jerusalem burns after a nine-month Roman siege.

1632 – John Locke was born.

1915 – Ingrid Bergman was born.

1920 – Charlie “Bird” Parker was born.

1949 – Soviets explode atomic bomb.
2005 -Hurricane Katrina slams into Gulf Coast.

The actions of men are the best interpreters of their thoughts.  –John Locke, 1632-1704

photos of the day August 29, 2012

Balinese women carry offering for their god during Hindu festival of Galungan, celebrating the triumph of good over evil at a temple in Denpasar, Bali, Indonesia.

Firdia Lisnawati/AP

Children play in the water fountain in Tokyo.

Shizuo Kambayashi/AP

Market Closes for August 29, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Aug. 29 (Bloomberg) — Canadian stocks erased earlier losses in the final hour of trading as a rally in financial- services companies offset declines in commodities shares.

Bonavista Energy Corp. retreated 2 percent after agreeing to acquire natural gas assets in Alberta for C$155 million ($157 million). Bankers Petroleum Ltd. fell 5.7 percent, the biggest drop in the Standard & Poor’s/TSX Composite Index. Industrial Alliance Insurance & Financial Services Inc. added 4.9 percent after Bank of Montreal analysts raised the rating on the insurer. National Bank of Canada jumped 1.7 percent.

The S&P/TSX slipped less than 1 point to 12,009.79 in Toronto. The gauge is down 0.6 percent this week. Trading of shares in the index was 18 percent below the 30-day average.

“We’re having a directionless market,” Keith McLean, managing partner with GMP Investment Management LP, said in Toronto. His firm manages about C$650 million. “It may be down 1 percent or up 1 percent over a two- or three-day period in a market with not a lot of volume and not a lot of confidence over what will happen going into September.”

Canadian home resale prices rose 4.8 percent in July from a year earlier, according to the Teranet-National Bank Composite House Price Index. The 12-month gain is down from 5.4 percent in June, according to a report today by National Bank Financial.

Oil fell as an industry report showed that U.S. crude supplies unexpectedly gained and Hurricane Isaac made landfall, reducing the threat to offshore platforms and rigs in the Gulf of Mexico. Crude for October delivery declined 84 cents to settle at $95.49 a barrel in New York. Futures have slipped 3.4 percent this year.

Bankers Petroleum lost 5.7 percent to C$2.66, its biggest loss since July 18. Canadian Natural Resources Ltd. fell 0.6 percent to C$30.34 and Encana Corp. slipped 0.9 percent to C$21.65 as energy stocks as a group contributed the most to declines in the S&P/TSX.

Bonavista Energy slipped 2 percent to C$16.56. The oil and gas producer said after the market closed yesterday it had agreed to purchase natural gas assets in the Deep Basin core area in west central Alberta. Bonavista shares tumbled due to an agreement to finance the deal by selling 18.2 million shares at C$16.50 to a syndicate of underwriters, McLean said. The company’s shares are down 36 percent this year.

Barrick Gold Inc. slumped 1.1 percent to C$36.72 and Goldcorp Inc. sank 0.5 percent to C$39.26. Gold futures slid 0.4 percent to settle at $1,663 an ounce in New York.

North American Palladium Ltd. tumbled 2.8 percent to C$1.73 after palladium prices dropped for a second day. Palladium for December delivery fell 0.7 percent to $636.50 an ounce in New York.

Industrial Alliance Insurance added 4.9 percent to C$26.67, its highest level since May. Bank of Montreal raised the insurer to outperform from market perform, increasing the price target to C$32 from C$29.

Manulife Financial Corp., Canada’s largest insurer, added 1.7 percent to C$11.27 after agreeing to buy investment adviser Wellington West Financial Services Inc. from National Bank of Canada. Terms of the deal were not disclosed. National Bank gained 1.7 percent to C$75.93.

National Bank, along with Royal Bank of Canada, Toronto- Dominion Bank and Canadian Imperial Bank of Commerce, report quarterly earnings tomorrow.

Bank of Nova Scotia, Canada’s third-largest lender, said after the markets closed today it has agreed to buy ING Bank of Canada from ING Groep NV for C$3.13 billion to add to its retail deposits. Scotiabank declined 1.2 percent to C$52.25 in regular trading.

Western Wind Energy Corp. surged 10 percent to C$2.30. The Canadian energy developer jumped to its highest level in four years after Brookfield Renewable Energy Partners LP bought 16.2 percent of its shares, becoming the second-largest shareholder.

US

By Rita Nazareth

Aug. 29 (Bloomberg) — U.S. stocks advanced, following a two-day decline in the Standard & Poor’s 500 Index, as the economy grew more than first estimated and investors awaited Federal Reserve Chairman Ben S. Bernanke’s speech in two days.

WellPoint Inc. increased 7.7 percent after Angela Braly resigned as chairman and chief executive officer of the insurer.

Yelp Inc. surged 23 percent as investor confidence in its growth prospects prevailed after a ban lifted on stock sales by some of the largest investors in the online review website.

The S&P 500 added 0.1 percent to 1,410.49 at 4 p.m. New York time. The Dow Jones Industrial Average rose 4.49 points, or less than 0.1 percent, to 13,107.48. Volume for exchange-listed stocks in the U.S. was 4.4 billion shares, the lowest level since at least 2008 excluding days surrounding holidays.

“You are right in that narrow little lane where nothing needs to move at this point,” said Madelynn Matlock, who helps oversee about $14.7 billion at Huntington Asset Advisors in Cincinnati. “People are actually waiting if anything comes out of Bernanke’s speech that is totally not expected. I don’t see any big initiative out of the Fed at this point. The economy is good enough that it’s not a disaster, yet it is slow enough that there’s no reason to crank up the anti-inflation machine.”

Gross domestic product climbed at a 1.7 percent annual rate from April through June, up from an initial estimate of 1.5 percent. Separate data showed Americans signed more contracts to purchase previously owned homes in July.

Bernanke may shed light on monetary policy in a speech to central bankers on Aug. 31 in Jackson Hole, Wyoming. The Fed today said the U.S. economy continued to expand “gradually” in July and early August. Most regional reserve banks reported employment was “holding steady or growing only slightly,” the Fed said in its Beige Book business survey.

The S&P 500 has risen 2.3 percent so far in August and is on pace for its third straight monthly advance. Technology, consumer discretionary and financial shares led the gains in the index, adding at least 3 percent and pacing advances among companies which are most-tied to the economy.

If history is any guide, the S&P 500 may extend gains next month, according to a Bespoke Investment Group study. Going back to 1928, the index has returned an average 0.12 percent in September when it has been up year-to-date through August, the data showed. The measure has risen 12 percent so far in 2012.

WellPoint added 7.7 percent to $61.80. Braly, 51, was ousted after investors, some publicly, expressed discontent with her management. Over the past two weeks, Jackie Ward, WellPoint’s lead independent director, and a second board member met with shareholders to hear their concerns, according to a person familiar with the discussions.

Yelp surged 23 percent to $22.37. Through yesterday, the stock had gained 22 percent since a March 1 initial public offering. Inside investors are eligible to sell about 53 million shares of the company 180 days after its IPO, a period that extended through yesterday.

Sealed Air Corp. gained 12 percent to $14.58. The maker of Bubble Wrap hired Dow Chemical Co. executive Jerome Peribere to succeed Chief Executive Officer William V. Hickey, who plans to retire next year.

Jos. A. Bank Clothiers Inc. soared 14 percent to $47.44 after reporting second-quarter profit that topped analysts’ estimates as sales in its direct-marketing business climbed.

Mako Surgical Corp. surged 11 percent to $17.27 after a supplier said stocking orders for the company’s robotic orthopedic system’s debut have been completed.

Trucking companies are failing to show the kind of growth typical of an expanding U.S. economy, according to Christian Wetherbee, a Citigroup Inc. analyst.

Shipments by truckload carriers this month are “barely positive” by comparison with a year ago and little changed from July, Wetherbee wrote yesterday in a report. The companies ship entire tractor-trailers of goods on behalf of one customer.

The findings contrasted with the performance of a tonnage index compiled by the American Trucking Association. The index climbed 4.1 percent in July from a year ago, the 32nd straight monthly increase.

More than one company attributed August’s weakness to a faltering economy and doubts about the outcome of November’s presidential election, Wetherbee wrote. They added that the industry’s results for September might not be any better, according to the report.

Rising fuel costs are hurting truckers along with the lack of shipment growth, the New York-based analyst wrote. The daily national average price of diesel fuel exceeded $4 a gallon last week for the first time in three months, according to data from the American Automobile Association.

Wetherbee reduced third-quarter earnings estimates for Knight Transportation Inc., Swift Transportation Co. and Werner Enterprises Inc. by 1 cent a share to account for the worsening outlook. He maintained buy ratings on Knight and Werner and a neutral view of J.B. Hunt Transport Services Inc. and Swift.

Have a wonderful evening everyone.

Be magnificent!

You are the product of your environment.

That is why you are not able to see beyond the habits and social conventions

that are rooted deep within you.  If you wish to see beyond them,

you must first of all free yourself from the normal way in which you interpret facts.

Swami Prajnanpad, 1891-1974

As ever,

Carolann

It is vain to say that human beings ought to be satisfied

with tranquility: they must have action; and they will

make it if they cannot find it.

-Charlotte Brontë, 1816-1855, Jane Eyre

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