Author: Carolann

Dear Friends,

Tangents:

PROVIDENCE

By Reza Mahammadi

translated by Nick Laird and Hamid Kabir

I am a rain that nobody wants.

Even the streets don’t understand me.

I am the past perfect tense

and deep down inside me are buried

the ghosts of anonymous travelers,

of infamous seadogs and all of the dead.

I am a certain word small children fear

and which the poets have forgotten.

I’m Buddha’s face in Bamiyan,

stolen, sold on from my homeland,

and I am a corpse, knocked down

in Stockwell, ignored by the binmen.

And on this day in…

1980 – Mount St. Helens Erupts 3 times in 24 hours
1974 – India becomes the sixth nation to detonate an atomic bomb
1951 – The UN moves its headquarters to New York City
1804 – Napoleon Bonaparte becomes Emperor of France

You were born an original … Don’t die a copy. – John Mason

photos of the day

May 18, 2012

In this image made available by LOCOG Britain’s David Beckham smiles during a visit to The Experimental University School of Athens a day after the ceremonial handover of the Olympic flame to the organizers of the 2012 London Olympics.

Chris Radburn//AP

Two Yorkshire Terriers pose for photographers prior to world dog show in Salzburg, Austria. More than 30,000 dogs are expected to take part at the exhibition in Salzburg.

Kerstin Joensson/AP

Market Closes for May 18, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 18 (Bloomberg) — Canadian stocks fell for the fifth time in six days, erasing an earlier gain driven by rising commodity prices, as financial shares tumbled amid increasing concerns about Europe’s debt crisis.

Royal Bank of Canada, Toronto-Dominion Bank and Bank of Nova Scotia decreased more than 0.5 percent. Industrial companies Bombardier Inc. and Canadian Pacific Railway Ltd. dropped at least 1.3 percent. Golden Star Resources Ltd., which mines for gold in Ghana, plunged 17 percent after a debenture swap raised dilution concerns.

The Standard & Poor’s/TSX Composite Index declined 50.04 points, or 0.4 percent, to 11,280.64 in Toronto, reaching its lowest level since Oct. 4. The benchmark gauge rose as much as 0.9 percent earlier in the day.

“It was holding up quite nicely until some sellers came in and flattened it out right before the market closed,” David Cockfield, a managing director at Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($200 million). “They mainly hit the banks. There’s real concern relating to any interconnections the financials may have with European problems.”

The S&P/TSX fell 3.5 percent this week for its third straight weekly decline as concerns mounted that the Greek debt crisis, European elections and a slowing Chinese economy may curb demand for commodities. Energy and raw-materials companies account for 43 percent of Canadian stocks by market value, according to data compiled by Bloomberg.

Financial companies decreased for a fifth straight day after German Finance Minister Wolfgang Schaeuble said turmoil in the financial markets caused by Europe’s debt crisis may last another two years, as Group of Eight leaders met to discuss Greece and its impact on the global economy.

Royal Bank of Canada, the nation’s biggest lender, slipped 0.5 percent to C$51.70. Toronto-Dominion Bank, Canada’s second- largest lender, decreased 0.9 percent to C$76.94. Bank of Nova Scotia, the country’s third-largest lender, sank 1.2 percent to C$51.11.

Industrial stocks in the S&P/TSX fell for a second session as Chinese home prices fell in a record number of cities last month and car dealers posted inventory levels that foreshadowed deeper price cuts, adding to signs of slowing growth in the world’s second-largest economy.

Bombardier, a maker of trains and airplanes, fell 1.3 percent to C$3.71. Canadian Pacific Railway, the country’s second-largest railroad, slipped 3.1 percent to C$74.11.

Golden Star Resources plummeted 17 percent, the biggest decline in the S&P/TSX, to C$1.16, its lowest point since December 2008. The company said today it would complete a debenture swap, which raised dilution concerns and focused attention on its debt levels.

US

By Lu Wang

May 19 (Bloomberg) — U.S. stocks tumbled for a third week, pushing the Standard & Poor’s 500 Index to its longest losing streak since August, amid concern global economic growth is slowing and Greece may leave the euro area.

All 10 industries in the S&P 500 fell. Financial and raw- material companies dropped at least 6.5 percent as shareholders sued JPMorgan Chase & Co. over the company’s $2 billion trading loss and the Dollar Index’s longest rally ever reduced the prices of commodities. J.C. Penney Co. and Abercrombie & Fitch Co. each plunged 23 percent after reporting sales that missed analysts’ estimates. Facebook Inc. climbed 0.6 percent in its trading debut, erasing most of an 18 percent rally.

The S&P 500 tumbled 4.3 percent to 1,295.22, the biggest retreat since November. The index sank 7.7 percent over three weeks, trimming its 2012 gain to 3 percent. The Dow Jones Industrial Average slipped 451.22 points, or 3.5 percent, to 12,369.38, the lowest level since Jan. 6. The Nasdaq Composite Index plunged 5.3 percent, the most since September, to 2,778.79, extending its loss from a March high to 11 percent.

“We sort of hit an air pocket in terms of positive catalysts and meanwhile Europe keeps weighing on the market,”

John Kattar, chief investment officer at Eastern Investment Advisors in Boston, which manages $1.7 billion, said in a phone interview. “It was a very good earnings season, but that catalyst is behind us.”

Global equities slumped, with the MSCI BRIC Index that tracks stocks in Brazil, Russia, India and China entering a bear market, with a drop of more than 20 percent from this year’s peak. Fitch Ratings cut Greece’s credit rating on concern the country won’t be able to stay in the euro area after inconclusive elections left the country without a stable government. U.S. reports sent mixed signals, with housing starts and industrial production topping estimates while manufacturing in the Philadelphia region unexpectedly shrank.

The S&P 500’s retreat in May is almost four times worse than 2011. More than $1.14 trillion has been erased from American equity values this month, according to data compiled by Bloomberg. That compares with about $299 billion in the 14 days after April 29, 2011, when the index reached its highest level in three years.

Faltering stocks, reports showing weaker economic growth and concern about the health of countries from Spain to Italy is reminding investors of 2011, one of the most volatile years on record as the S&P 500 dropped as much as 19 percent. Investors bracing for a retreat pulled $18 billion from U.S. equity mutual funds last month, the most since at least 1984, according to the Investment Company Institute.

The Chicago Board Options Exchange Volatility Index, known as the VIX, jumped 26 percent for the week, the most since September, to 25.10. The index, which measures the cost of using options as insurance against declines in the S&P 500, has risen for six straight trading days.

“The market is struggling,” John Praveen, chief investment strategist at Prudential International Investments Advisers, a unit of Prudential Financial Inc., which manages $943 billion in assets, said in a phone interview. “Investors are extremely nervous about what’s going on in Europe.”

JPMorgan tumbled 9.4 percent, the most in the Dow, to $33.49. Chief Executive Officer Jamie Dimon agreed to testify before a Senate committee on the bank’s loss as lawmakers debate whether to tighten rules on trading by U.S. lenders. Dimon announced the loss May 10, assailing his firm’s handling of trading in synthetic credit positions as “flawed, complex, poorly reviewed, poorly executed and poorly monitored.”

Bank of America Corp. slid 7 percent to $7.02 for an eighth consecutive weekly decline, the longest run since at least 1980.

The S&P 500 Materials Index fell for nine consecutive days, the longest losing streak since September 2000, as the Dollar Index rose for a record 14 straight sessions through May 17.

U.S. Steel Corp. plunged 17 percent to $21.56 as hedge-fund manager David Einhorn said at the Ira Sohn conference that he’s not in favor of the steelmaker. Steel prices will continue to fall because of a glut of supply, Anthony Rizzuto, an analyst with Dahlman Rose & Co., wrote in a note on May 15.

Allegheny Technologies Inc., a specialty-metals producer, declined 16 percent to $33.18.

J.C. Penney slumped 23 percent, the most since October 2008 and the biggest decline in the S&P 500, to $26.29. The department-store chain led by Apple Inc.’s former retailing chief reported a first-quarter loss and sales that fell more than analysts projected.

Abercrombie & Fitch sank 23 percent to $35.89, the lowest level since September 2010. The operator of its namesake and Hollister stores reported first-quarter revenue that missed analysts’ estimates and said same-store sales will decline this fiscal year amid weakness in Europe.

Facebook rose 0.6 percent to $38.23 in its debut on the last day of the week. That compares with Carlyle Group LP’s 0.2 percent day-one increase on May 3, and pales in contrast with Google Inc.’s 18 percent jump in its 2004 initial public offering. Underwriters bought Facebook’s stock to keep it from falling below the IPO price, people with knowledge of the matter said.

Facebook raised $16 billion in the largest IPO on record for a technology company. The offering valued the company at 107 times trailing 12-month earnings, more than every S&P 500 member except Amazon.com Inc. and Equity Residential.

Wal-Mart Stores Inc. advanced 5.1 percent, the most in the Dow, to $62.43. The world’s largest retailer reported first- quarter profit that topped analysts’ estimates as its low prices increased customer traffic and boosted sales.

Have a wonderful weekend everyone.

Be magnificent!

Where does the soul go after death?  Where could the earth fall to/

Where can the soul go?  Where is it not already?

The great cornerstone of Vedantism is the recognition of Self.

Man, have faith in yourself.  The soul is the same in every one.

It is all purity and perfection and the more pure and perfect we [you] are

the more purity and perfection you will see.

Swami Vivekananda, 1863-1902

As ever,

Carolann

Life is full of obstacle illusions.

-Grant Frazier

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

Dear Friends,

Tangents:

My newsletter was sent to you last night not quite finished (sorry about that, so I included an extra picture today), but I had to leave here quickly to meet a friend for a date.  We went to see  Jamie Lee Curtis and listen to her wonderful talk for a couple of hours.  I knew her father was Tony Curtis, but I only learned last night that her mother was the actress Janet Leigh.  Anyway she was quite amazing.

I was reading recently about the life of another remarkable woman who passed away at the end of March – Jay Macpherson, a poet and professor at Victoria College.  Her obituary quoted the American literary critic Harold Bloom, who recognized her rarity from the moment the title poem of The Boatman caught his ear.   “She was a woman of the deepest literary sensibility and really very close to a kind of genius in poetry and in deep meditative thought upon the meaning and nature of poetry,” he said in an interview in which he redited several of her poems by heart.  When she told her friend George Johnston about a class trip (from McGill University) to visit the Toronto Public Library System, he insisted on writing a letter of introduction to his friend Northrop Frye at Victoria College.  After a brief encounter with Frye, Macpherson wrote that they parted “ with the offer ringing in my head that if I could get myself to Toronto he would ‘teach me Blake’ – by myself, as he wasn’t otherwise giving the course.”  She did get   herself to Toronto and Frye did teach her Blake.  He also supervised both he Masters (1955) and PhD (1964) degrees in Victorian literature.  The Boatman was dedicated to Frye and his wife, Helen, and contains a cycle about Noah and the ark.  The sequence ends with The Anagogic Man, a poem her muse was said to have given her as she watched Frye approach the entrance to Victoria College one day.  Knowingness and the affection are all there in its first two stanzas:

THE ANAGOGIC MAN

Noah walks with head bent down;

For between his nape and crown

He carries, balancing with care,

A golden bubble round and rare.

Its gently shimmering sides surround

All us and our worlds, and bound

Innocence and experience.

-Jay Macpherson, from The Boatman

And on this day in…

1792 – Merchants form the New York Stock Exchange at 70 Wall Street
1940 – Germany occupies Brussels and Belgium and begins the invasion of France
1954 – The U.S. Supreme Court unanimously rules for school integration in Brown v. Board of Education.
1939 – King George VI and Queen Elizabeth arrive in Québec City, to begin a month-long visit to Canada, the first by a reigning monarch.

photos of the day May 17, 2012

A man dressed as Charlie Chaplin walks on the beach in Cannes, France during the 65th Cannes Film Festival.

Eric Gaillard/Reuters

Three people walk along an avenue of trees at Lac Leman near Lausanne, Switzerland.

Jean-Christophe Bott/Keystone/AP

A H-2A rocket carrying four satellites including one from South Korea blasts off from the launching pad at Tanegashima Space Center on the Japanese southwestern island of Tanegashima, about 621 miles southwest of Tokyo.

Kyodo/Reuters

Market Closes for May 17, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 17 (Bloomberg) — Canadian stocks rose, breaking a four-day losing streak, as a rally in gold helped equities avoid declines seen in the U.S. and Europe.

Barrick Gold Corp., Goldcorp Inc. and Yamana Gold Inc. increased more than 4.5 percent. Canadian Natural Resources Ltd. climbed 1.5 percent. China Gold International Resources Corp. gained 7.1 percent after a Bloomberg News survey showed that China’s economic growth is likely to accelerate in the third quarter. Royal Bank of Canada and Toronto-Dominion Bank fell at least 1.6 percent.

The Standard & Poor’s/TSX Composite Index advanced 4.60 points, or less than 0.1 percent, to 11,330.68 Toronto time, trimming an earlier gain of as much as 0.9 percent. The index slumped 3.5 percent during the previous four days, and had declined in 10 out of the past 11 sessions.

“This is a weak bounce-back day,” Todd Johnson, a money manager at BCV Asset Management in Winnipeg, Manitoba, said in a telephone interview. The firm oversees C$340 million ($335 million). “Markets don’t do straight down forever. Maybe investors are getting a little exhausted from all the negative Spanish and European news.”

Equities fell in the U.S. and Europe as Spain’s borrowing costs rose at an auction, stoking concern that the region’s financial contagion is spreading from Greece. After the close of regular trading, Moody’s Investors Service downgraded the credit ratings of Spanish banks.

The S&P/TSX is heading for its third straight weekly decline as concerns mount that the Greek debt crisis, European elections and a slowing Chinese economy may curb demand for commodities. Energy and raw-material companies account for 44 percent of Canadian stocks by market value, according to data compiled by Bloomberg.

Materials stocks in the S&P/TSX rose for a second straight day as gold rallied for the first time in five sessions. The metal jumped the most since October as speculation that the Federal Reserve will announce more stimulus for the U.S. economy boosted demand for the precious metal.

Barrick Gold, the world’s largest producer of the metal, rose 6.9 percent to C$38.16. Goldcorp, the second-largest producer of the metal, gained 6.9 percent to C$35.48. Yamana Gold Inc., Canada’s third-largest company in the industry by market value, increased 4.6 percent to C$13.79.

China Gold, which explores and develops projects throughout Asia, gained 7.1 percent to C$3.30. China’s third-quarter economic growth will rebound to 8.3 percent from 7.9 percent this quarter, the first increase in seven periods, according to the median estimate of 21 economists surveyed by Bloomberg News.

Financial companies in the benchmark index tumbled after the Federal Reserve Bank of Philadelphia’s general economic index decreased to minus 5.8 in May, indicating an unexpected contraction in manufacturing. Economists forecast the gauge would rise to 10.

Royal Bank of Canada, the nation’s biggest lender, slipped 2 percent to C$51.96. Toronto-Dominion Bank, Canada’s second- largest lender, decreased 1.6 percent to C$77.65.

US

By Rita Nazareth

May 17 (Bloomberg) — The Standard & Poor’s 500 Index tumbled to a four-month low on disappointing economic data and concern that credit ratings for Spanish banks would be cut.

Nine out of 10 S&P 500 groups fell amid weaker-than- forecast data on manufacturing in the Philadelphia region and U.S. leading indicators. Caterpillar Inc. and JPMorgan Chase & Co. slid at least 4.3 percent to pace losses in the largest companies. Apple Inc. sank 2.9 percent, sending its market value below $500 billion. Facebook Inc. raised $16 billion in the biggest initial public offering by a technology company in history, pricing shares at the top end of an increased range.

The S&P 500 fell 1.5 percent to 1,304.86 at 4 p.m. New York time. The Dow Jones Industrial Average slid 156.06 points, or 1.2 percent, to 12,442.49. The Nasdaq-100 Index sank 2.1 percent to 2,509.05, falling for an eighth day in the longest slump since 2010. The Russell 2000 Index of small companies slipped 2.3 percent to 754.33. About 8.3 billion shares changed hands on U.S. exchanges, or 24 percent above the three-month average.

“Investors are de-risking,” said Tim Hoyle, the director of research at Radnor, Pennsylvania-based Haverford Trust Co., which manages about $6.5 billion. “They look at a global situation that appears to be degrading, not improving.”

Concern about a world economic slowdown drove the S&P 500 down 3.9 percent in five days. Banco Santander SA was among 16 Spanish banks whose credit ratings were cut by Moody’s Investors Service, which cited economic weakness and the government’s mounting budget strain. The announcement came after the market close, confirming investor speculation.

Both Russia’s Micex Index and Brazil’s Bovespa index fell more than 20 percent from their previous peaks, entering a bear market. The S&P 500 has fallen 8.1 percent from an almost four- year high on April 2. The Chicago Board Options Exchange Volatility Index, which measures the cost of using options as insurance against S&P 500 losses, soared 10 percent to 24.49, the highest since Dec. 19.

Consumer discretionary, financial and raw material shares had the biggest losses in the S&P 500 among 10 groups. The Morgan Stanley Cyclical Index of companies most-tied to the economy slumped 2.3 percent. The Dow Jones Transportation Average sank 3.2 percent. The KBW Bank Index fell 1.7 percent. A measure of homebuilders in S&P indexes tumbled 6 percent. The Bloomberg U.S. Airlines Index slipped 5.6 percent.

Caterpillar, the world’s largest maker of construction equipment, sank 4.4 percent to $87.80. JPMorgan retreated 4.3 percent to $33.93.

Apple lost 2.9 percent to $530.12, sending its market value to $495.7 billion. The company’s market capitalization had topped $500 billion for the first time in February, cementing its lead as the world’s most valuable business and reaching heights not seen by any company since the last recession.

SAC Capital Advisors LP and Viking Global Investors LP were among hedge funds that sold a net 6.1 million shares of Apple last quarter, taking advantage of the 48 percent jump in the iPhone maker’s stock. The stock has fallen 17 percent from its peak in April.

Hedge funds accounted for more than a third of the 15.2 million net Apple shares that were sold by endowments, banks, insurance companies and other investors during the first quarter, according to data compiled by Bloomberg, which was aggregated from regulatory filings. Even so, Apple remains hedge funds’ most valuable holding. As a group they controlled 37.8 million shares as of March 31.

“Apple has always been a hedge-fund favorite,” said Michael Binger, a senior portfolio manager at Gradient Investments LLC in Shoreview, Minnesota, which oversees about $225 million. “You’re seeing some locking in of profits.”

Facebook sold 421.2 million shares at $38 each, a statement today shows. That values the social network at $104.2 billion, making it the largest company to go public in the U.S. by market capitalization, according to data compiled by Bloomberg and Dealogic. Facebook, led by 28-year-old Mark Zuckerberg, this week expanded the IPO to meet demand, allowing investors Goldman Sachs Group Inc. and Accel Partners to reap more gains.

“My feeling is they could have gone higher, but they wanted to leave some room for upside tomorrow,” said Arvind Bhatia, an analyst with Sterne, Agee & Leach Inc. in Dallas.

“The demand was obviously quite strong so I think it’s the right move.”

American International Group Inc. retreated 6.5 percent, the biggest decline since Oct. 3, to $28.47. The Federal Reserve Bank of New York postponed the sale of assets acquired in the company’s rescue.

Limited Brands Inc. lost 4.4 percent to $45.86. The owner of the Victoria’s Secret lingerie chain forecast earnings for the second quarter and full year that trailed estimates.

Wal-Mart Stores Inc. rallied 4.2 percent, the most since 2009, to $61.68. The world’s largest retailer reported first- quarter profit that topped analysts’ estimates as its low prices increased customer traffic and boosted sales.

Sears Holdings Corp. gained 3.1 percent to $52.42. The retailer controlled by Edward Lampert reported first-quarter net income of $189 million after selling stores and said it would partially spin off its Canadian operations.

Gold producers rallied after the precious metal jumped the most since October as speculation that the Federal Reserve will announce more stimulus boosted demand. Newmont Mining Corp., the largest U.S. gold producer, added 4 percent to $45.26.

Hewlett-Packard Co. advanced 0.1 percent to $22.06, after falling as much as 1 percent. The company is considering cutting as many as 25,000 jobs, or 8 percent of its work force, to reduce costs and help the company contend with ebbing demand for computers and services, people briefed on the plans said.

A long-term peak in the S&P 500 is developing as the gauge diverges from other equity measures, meaning stocks are likely to decline next year, according to RBC Capital Markets.

While the S&P 500 surpassed its 2011 peak last month, other stock measures including the Russell 2000 Index of small U.S. companies and the MSCI Emerging Markets Index failed to reach last year’s levels, sending a warning sign, according to a May 15 report from RBC’s Robert Sluymer.

“The MSCI and Russell didn’t confirm the S&P’s new cycle highs,” Sluymer, a technical analyst at RBC in New York, said during a phone interview yesterday. “These are the types of divergences you start to get as market tops develop.”

At the same time, the index may rebound in the next few weeks after reaching its “support band” of 1,300 to 1,330, Sluymer said in the May 15 report.

Cyclical companies are showing no signs of a reversal even though they appear “oversold,” Sluymer said. Caterpillar and Joy Global Inc. are two examples of economic-sensitive companies that have shown no evidence of bottoming, he said.

“We’re working through a much bigger top here,” he said in the interview. “We’re already seeing the market rotating away from cyclical leadership towards defensive themes.”

Have a wonderful evening everyone.

Be magnificent!

As long as there is division in any form

there must be conflict.

You are responsible, not only to your children,

but to the rest of humanity.

Unless you deeply understand this, not through words or ideas or the intellect,

but feel this in your blood, in your way of looking at life, in your actions,

you are supporting organized murder which is called war.

Krishnamurti, 1895-1986

As ever,

Carolann

Many live in the ivory tower called reality; they never

venture on the open sea of thought.

-Francois Gautier, 1959-

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

Hello All,

Tangents:

As I have previously stated, we listen to a lot of National Public Radio here at Queensbury Securities. While it is mainly an American station reporting American news interspersed with smooth jazz covers of the “Mickey Mouse Song”, it is also a local Seattle station.  So aside from hearing about the American election, you also get interesting little Seattle factoids like the Space Needle turning 50.  And how does Seattle choose to celebrate this milestone? By sending a member of the general public to space!

That’s right, in what is being called the Space Race 2012 Gregory Schneider, a recent law-school grad from Tucson, Arizona, beat out over 50,000 applicants to win a trip to space.

The trip is run by the private company Space Adventures and comes with a hefty price-tag of $110,000 and offers a zero-gravity experience and stunning views of the Earth.

But don’t get it wrong, Gregory Schneider didn’t have it easy. Finalists had to first win a lottery to enter the contest, then bring in enough votes from supporters online. Finally, they had to compete against each other at tasks such as maneuvering robots and doing some climbing on the exterior of Space Needle.

The date of the voyage has yet to be determined, but you have to admit that is a pretty awesome prize!

photos of the day May 10, 2012

Cuban-American artist Jose Parla workson a creation on a building wall in Havana, Cuba, for the upcoming 11th Havana Biennial contemporary art exhibition. The project, titled ‘Wrinkles Of The City,’ involves combining French artist J.R’s pictures of Cuban elderly people in the neighborhood with Parla’s calligraphic messages, and then pasting them on walls around the city.- Desmond Boylan/Reuters

Filipino fishermen unload fish from a boat in Masinloc, Zambales, Philippines. Masinloc is the nearest land, about 128 nautical miles away, from the disputed Scarborough Shoal. China warned its citizens in Manila to stay off the streets and take precautions during planned anti-Chinese protests on Friday, a sign of mounting tensions during a standoff in the resource-rich South China Sea.- Erik De Castro/Reuters

Market Closes for May 10, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 10 (Bloomberg) — Canadian stocks rebounded from a six- day skid, led by banks and energy producers, as Greece attempted to form a new government and the U.S. reported a decline in jobless claims.

Suncor Energy Inc., Canada’s largest oil and gas producer, climbed 0.8 percent. Canadian Natural Resources Ltd., the country’s third-biggest energy company, increased 1.5 percent. Royal Bank of Canada, the nation’s biggest lender, rose 1.1 percent. Teck Resources Ltd., the country’s biggest base-metals producer, rose 0.5 percent as copper prices increased.

The Standard & Poor’s/TSX Composite Index rose 61.16 points, or 0.5 percent, to 11,736.17 in Toronto.

“You’ve had six straight days of negativity and the market was bound to bounce back,” Irwin Michael, a portfolio manager at ABC Funds in Toronto, said in a telephone interview. Michael’s firm oversees C$1 billion ($1 billion). “It’s a bit of a relief rally. Investors are taking a pause and looking ahead.”

The benchmark gauge declined 5.3 percent during the six-day slump and is heading for a second straight weekly decline. Last week it fell as a U.S. report showed employers added fewer jobs than forecast in April and commodity prices dropped. Energy and mining shares account for 43 percent of Canadian stocks by market value.

Canadian energy companies gained today as U.S. first-time claims for jobless benefits fell last week to a one-month low. Suncor Energy climbed 0.8 percent to C$29.30. Canadian Natural Resources increased 1.5 percent to C$31.15. Crescent Point Energy Corp., a western Canadian oil and gas producer, rose 3.6 percent to C$42.38.

Financial companies in the S&P/TSX increased as former Greece Finance Minister Evangelos Venizelos attempted to form a government that will ensure the nation remains in the euro area. Global stocks slumped yesterday amid the political impasse as concern grew that Greece’s debt crisis is worsening.

Royal Bank of Canada rose 1.1 percent to C$53.95. Toronto- Dominion Bank, Canada’s second-largest lender, increased 0.7 percent to C$80.19. Bank of Nova Scotia, the country’s third- largest lender, gained 0.5 percent to C$52.80.

The S&P/TSX Diversified Metals and Mining index rose as copper advanced for the first time in three days after the news from Greece eased concerns that the country will default on loans, boosting the outlook for global economic growth and commodity demand.

Teck Resources rose 0.5 percent to C$33.42. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi Mongolian gold and copper mine, gained 1.7 percent to C$9.99.

Linamar Corp., Canada’s second-largest auto-parts maker, surged 12 percent to C$20.89 after reporting first-quarter earnings excluding some items of 59 Canadian cents, exceeding the average analyst estimate of 53 Canadian cents.

Magna International Inc. rose 2.3 percent to C$43.64. North America’s largest auto-parts supplier reported that first- quarter profit rose 6.5 percent and raised its full-year sales forecast.

US

By Rita Nazareth

May 10 (Bloomberg) — U.S. stock futures fell as investors assessed a disclosure by JPMorgan Chase & Co., the biggest U.S. bank by assets, that it had a $2 billion trading loss after positions in credit securities proved riskier than expected.

JPMorgan tumbled 6.6 percent after the close of regular trading as Chief Executive Officer Jamie Dimon said the bank made egregious mistakes and that trading losses were “self inflicted.” Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc. and Morgan Stanley lost at least 2.2 percent.

Standard & Poor’s 500 Index futures expiring in June slumped 0.7 percent to 1,348 at 6:26 p.m. New York time. Financial companies in the S&P 500 had the biggest gain among 10 groups in 2012, surging 15 percent, or almost double the benchmark measure’s advance. Dow Jones Industrial Average futures dropped 78 points, or 0.6 percent, to 12,756.

“JPMorgan has held to a higher standard among the banks,” Walter Todd, who oversees about $950 million as chief investment officer at Greenwood Capital in Greenwood, South Carolina, said in a telephone interview. “If this happens to them, it raises the question: if they have these issues, who else does?”

JPMorgan led a slump in financial shares after the close of regular trading. The group comprises 15 percent of the S&P 500 for the second-biggest weighting among 10 industries. The bank’s shares retreated 6.6 percent to $38.05. It gained 0.3 percent in regular trading, paring a rally of as much as 1.9 percent.

Bank of America shares lost 2.7 percent to $7.50. Citigroup retreated 3.7 percent to $29.52. Goldman Sachs sank 2.2 percent to $103.94. Morgan Stanley slumped 2.6 percent to $15.20. Wells Fargo & Co. lost 1.6 percent to $32.66.

The cost of protecting debt of JPMorgan from default rose to the highest level in a month. Credit-default swaps on the bank climbed to 118.5 basis points as of 5:42 p.m. in New York, according to prices from data provider CMA, which is owned by CME Group Inc. The contracts were at about 111 basis points before the announcement.

Dimon said JPMorgan lost about $2 billion after a failure in its chief investment office, which the bank says focuses on hedging. The office has been transformed in recent years under Dimon into a unit that makes bigger and riskier speculative bets with the bank’s money, according to five former employees, Bloomberg News reported April 13.

“We’re accountable, and what happened violates our own standards and principles about how we want to operate the company,” Dimon said in a conference call today. “This is not how we want to run a business.”

On April 13, JPMorgan reported a 3.1 percent drop in earnings, a smaller decline than analysts estimated as mortgage revenue surged and trading almost doubled from the fourth quarter. The bank benefited from gains in mortgage lending as low interest rates and federal incentive programs encouraged homeowners to refinance.

Earnings at financial companies in the S&P 500 grew 12 percent in the first quarter, for the second-biggest increase among 10 industries, according to data compiled by Bloomberg. That’s almost double the growth of profits of S&P 500 companies in the period. On average, 66 percent of financial companies in the benchmark gauge beat analysts’ estimates in the period.

Warren Buffett, whose Berkshire Hathaway Inc. has more than $20 billion invested in U.S. banks, said on May 5 the nation’s lenders have “liquidity coming out of their ears” and are in better shape than European rivals.

“I would put European banks and American banks in two very different categories,” Buffett, Berkshire’s chief executive officer, said at the firm’s annual meeting in Omaha, Nebraska.

“The American banking system is in fine shape. The European system was gasping for air a few months back” until getting assistance from the European Central Bank, he said.

Wall Street firms including JPMorgan and Bank of America, emboldened after raising capital levels ahead of stricter international guidelines, are contesting efforts by U.S. policy makers to limit trading and risk.

Banks had the biggest gain in the S&P 500 among 24 groups in regular trading today, adding 1.5 percent, as European lenders rallied. Federal Reserve Chairman Ben S. Bernanke said the U.S. banking system is stronger and more resilient while still facing challenges on credit quality and liquidity.

“Banks still have more to do to restore their health and adapt to the post-crisis regulatory and economic environment,” Bernanke said today in a speech at the Chicago Fed’s annual conference on banks.

The S&P 500 rebounded in regular trading, advancing 0.3 percent, as Greece attempted to form a new government and a decline in American jobless claims helped allay concern of a labor market setback.

Have a wonderful evening everyone.

Kindest Regards,

Ellora Howie

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Hello All,

Tangents:

As you might have noticed from today’s Google Doodle, today would have been famous Egyptologist Howard Carter’s 138 birthday. Carter is of course best known for discovering the tomb of  the boy king Tutankhamen in 1922.  King Tut’s tomb remains the most intact  pharaoh’s tomb ever to be found in modern archaeology. Years after, the New York Times had this to say of the historical find: “The splendor of the tomb and its rich furnishings within it revealed a Golden Age of arts and crafts equal to any other period of ancient times.”

After finding King Tut’s tomb, the high point of his career, Carter retired from archeology and worked as an agent for museums and collectors.

The discovery of King Tut’s tomb has also long been shrouded in mystery. After the excavation, several members of Carter’s team died, including his benefactor Lord Carnarvon. While this spooky coincidence may have perpetuated the myth of cursed tombs and mummies, a 2002 study found that their death rate was statistically normal.

Photos of the day May 9, 2012

A couple dances in Gorky Park in Moscow.- Denis Sinyakov/Reuters

Astana’s riders cycle to third place during the team time trial 33.2-km fourth stage of the Giro d’Italia in Verona, Italy.- Alessandro Garofalo/Reuters

Market Closes for May 9, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 9 (Bloomberg) — Canadian stocks fell for a sixth day after financials and energy producers declined amid concern Europe’s debt crisis may worsen, potentially curbing demand, following an inconclusive Greek election.

Royal Bank of Canada, the nation’s biggest lender, slipped 1.3 percent. Toronto-Dominion Bank, Canada’s second-largest lender, dropped 1 percent. Barrick Gold Corp., the world’s largest producer of the metal, increased 2.6 percent. Avion Gold Corp., which explores for the metal in Mali, plunged 31 percent after suspending a project in the country.

The Standard & Poor’s/TSX Composite Index fell 29.73 points, or 0.3 percent, to 11,675.01 in Toronto.

“Europe continues to dominate the headlines,” Brian Huen, a managing partner at Red Sky Capital Management Ltd. in Toronto, said in a telephone interview. The firm oversees about C$55 million ($55 million). “The question is whether the global growth forecasts that people have are in jeopardy again because of what’s going on there.”

Canadian stocks are extending their slump following a decline last week, when a U.S. industry report showed employers added fewer jobs than forecast last month and commodity prices dropped. Energy and mining shares account for 44 percent of Canadian stocks by market value, compared with 20 percent in the U.S.

Financial companies fell as Greece’s political impasse intensified concern that the European sovereign-debt crisis is worsening. Spanish default risk climbed to a record, while Alexis Tsipras of Greece’s Syriza party squared off with political leaders before talks on forming a coalition. Greece has 436 million euros (C$566 million) of debt coming due on May 15.

Royal Bank of Canada decreased 1.3 percent to C$53.37. Toronto-Dominion Bank slipped 1 percent to C$79.61. Bank of Nova Scotia, the country’s third-largest lender, fell 0.9 percent to C$52.56.

Materials companies gained today as gold rebounded from its lowest intraday level since Jan. 3. The metal reached $1,578.50 an ounce on the Comex in New York before recovering to settle at $1,594.20.

Barrick Gold increased 2.6 percent to C$37.65. Goldcorp Inc., the second-largest producer of the metal, climbed 3.5 percent to C$35.60. Eldorado Gold Corp., a Vancouver-based mining company, rose 2.1 percent to C$11.91.

Avion Gold plunged 31 percent to 59 Canadian cents after saying in a statement that it temporarily suspended its Tabakoto mill expansion project because of disruption associated with the military coup in Mali.

US

By Stephen Kirkland and Rita Nazareth

May 9 (Bloomberg) — Stocks fell, sending the Standard & Poor’s 500 Index to a two-month low, while the euro extended its longest slump since 2008 as Greece struggled to form a government and concern grew hat Spanish banks are underfunded.

The S&P 500 slipped 0.7 percent to 1,354.58 at 4 p.m. in New York, trimming an earlier tumble of as much as 1.5 percent as developments in Europe whipsawed markets. The euro depreciated 0.5 percent to $1.2940, weakening for an eighth day and reaching the lowest level since January. Spain’s benchmark IBEX 35 Index sank 2.8 percent to an eight-year low and costs to protect the nation’s government debt rose to a record. The S&P GSCI Index of 24 commodities lost 0.1 percent as wheat and corn led declines and oil fell for a sixth consecutive day.

Concern that Greece will be forced out of the euro zone grew after weekend elections resulted in a parliament divided over whether to implement austerity measures needed to qualify for rescue funds. The nation’s political turmoil was set to enter a fourth day with coalition talks deadlocked, raising the possibility that another election will have to be held.

“There’s something to worry about here,” said James Dunigan, who helps oversee $112 billion as chief investment officer in Philadelphia for PNC Wealth Management. “We expected there would be flare-ups again in Europe. People were scratching their heads why they didn’t show up a little sooner. Certainly as a result of the elections in Greece, the odds of a default and an exit from the euro have increased.”

U.S. equities extended losses earlier as the Wall Street Journal reported that European nations were debating whether to delay Greece’s next aid payment. Stocks trimmed declines as the European Financial Stability Facility’s Board of Directors confirmed the release of a 5.2 billion euro ($6.7 billion) tranche of aid to Greece, saying 4.2 billion euros will be disbursed May 10 and the remaining 1 billion euros will be released depending on the nation’s financing needs.

The S&P 500 extended its retreat from a four-year high last month to more than 4.5 percent. Gauges of industrial and financial shares fell more than 1 percent to lead declines among all of the 10 main industry groups in the index. United Technologies Corp., Boeing Co. and JPMorgan Chase & Co. lost at least 1.8 percent for the biggest declines in the Dow Jones Industrial Average, which fell for a sixth straight day in its longest slump since August.

Macy’s Inc., the owner of its namesake and Bloomingdale’s department stores, slid 3.7 percent after keeping its forecast for profit this year lower than analysts’ estimates.

Ten-year Treasury yields were little changed at 1.83 percent as the U.S. sold $24 billion of 10-year notes at a record low yield of 1.855 percent, lingering near the lowest level since January. Pacific Investment Management Co.’s Bill Gross and Jan Hatzius at Goldman Sachs Group Inc. say investors should prepare for additional bond purchases by the Federal Reserve to combat a slowing U.S. economy.

A decision to buy more debt is “getting closer,” Gross, who runs Pimco’s Total Return Fund, the world’s largest mutual fund, wrote on Twitter yesterday. Hatzius, the chief economist at New York-based Goldman Sachs, predicted in a report the same day that the Fed will announce additional monetary easing when it meets in June.

The Stoxx Europe 600 Index lost 0.3 percent after sliding as much as 1.4 percent. Banks fell 1.7 percent as a group for the biggest decline among 19 industries.

Spain’s IBEX led losses among European national benchmarks. The nation’s seven biggest banks need 68 billion euros of additional capital as a buffer against bad loans and to meet regulatory requirements, Royal Bank of Scotland analysts said. Bankia SA slumped 5.8 percent as JPMorgan Chase & Co. cut the shares to underweight, the equivalent of sell, and said the Spanish lender risks becoming a “zombie bank” that has to rely on the European Central Bank for funding.

Mediaset SpA sank 11 percent as the broadcaster controlled by former Italian Prime Minister Silvio Berlusconi said first- quarter profit dropped 85 percent on lower advertising sales. Bekaert NV, the world’s largest maker of steel cord for tires, surged 9.9 percent in Brussels after reporting sales that beat some analysts’ estimates.

The euro weakened 0.7 percent versus the yen, falling for the fourth straight day, as the shared European currency slid against 12 of 16 major peers. The Dollar Index, which tracks the U.S. currency against those of six trading partners, rose for the eighth day, the longest run of gains since September 2008.

The yen strengthened against all 16 major peers, gaining 0.2 percent to 79.68 per dollar. The Japanese currency will end the year at 83 versus the dollar, according to the median of 49 estimates compiled by Bloomberg. Toyota Motor Corp., which forecast profit will more than double in the year ending March 2013, is basing the outlook on an exchange rate of 80 yen to the dollar and 105 yen to the euro.

The yield on the Spanish 10-year bond climbed 23 basis points to 6.08 percent, driving its premium to benchmark German bunds to the highest since November. The yield on the German 10- year bund, Europe’s benchmark government debt security, slid to a record 1.497 percent as the nation sold 4.03 billion euros of five-year notes.

“Until it becomes clearer that an accident in Greece can again be avoided, risk appetite is unlikely to recover,” Christoph Rieger, head of interest-rate strategy at Commerzbank AG in Frankfurt, wrote in a note today.

Evangelos Venizelos, the socialist Pasok leader and former finance minister, said he’ll try to form a new Greek government when he receives a three-day mandate from President Karolos Papoulias tomorrow. Pasok today rejected terms for a government set by Alexis Tsipras of Greece’s anti-bailout Syriza party which then gave up its bid to build a coalition.

Fifteen of 24 commodities in the S&P GSCI Index retreated, led by declines of more than 2.4 percent in wheat and corn and losses of at least 0.6 percent in silver, gold, lead, nickel and zinc.

Oil in New York dropped 20 cents to $96.81 a barrel as U.S. Energy Department data showed stockpiles climbed 3.65 million barrels to 379.5 million, the most since August 1990. Inventories were forecast to advance 2 million barrels, according to the median of 12 analyst estimates in a Bloomberg survey. The six-day decline is the longest since July 2010.

The MSCI Asia Pacific Index sank 1.3 percent to the lowest level since Jan. 19, with Japan’s Nikkei 225 Stock Average retreating 1.5 percent. The MSCI Emerging Markets Index declined 1.5 percent to the lowest level in almost four months. Benchmark gauges in China and Indonesia lost more than 1 percent and South Korea’s Kospi Index slipped 0.9 percent.

Have a wonderful evening everyone.

Kindest Regards,

Ellora Howie

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Hello All,

Tangents:

The phrase “This car practically drives itself!” has never been more apt. The Nevada Department of Motor Vehicles approved on Monday the nation’s first autonomous vehicle licence. While this might seem like an odd thing for the DMV to okay, Google has already developed its own self-driving car.

According to Google, the car navigates through video cameras, radar sensors, lasers and a database of information collected from manually driven cars. The modified Toyota Prius has already been spotted test driving officials on state highways, in Carson City neighbourhoods, and along the famous Las Vegas Strip.

You can read more about the “car of the future” here: http://life.nationalpost.com/2012/05/08/google-gets-first-self-driven-car-licence-in-nevada/

photos of the day

May 8, 2012

A man jumps into a pond from the top of a building to cool himself off on a hot afternoon in New Delhi.- Kevin Frayer/AP

A South Korean worker attaches a devotee’s name tag with their wishes on a lantern in preparation for the birthday celebration of Buddha, which falls on May 28, at Jogye temple in Seoul, South Korea. About one-third of South Korea’s 48 million people are Buddhists.- Lee Jin-man/AP

Market Closes for May 8, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 8 (Bloomberg) — Canadian stocks fell for a fifth day after material and energy producers declined as Greece’s political leaders struggled to form a government, fueling concern that austerity efforts in Europe will be derailed.

Goldcorp Inc., the world’s second-biggest producer of the metal, decreased 4.3 percent, while larger rival Barrick Gold Corp. lost 2.6 percent, as the U.S. dollar strengthened. Teck Resources Ltd., the country’s biggest base metals producer, sank 2.4 percent. Canadian Natural Resources Ltd., the country’s third-largest energy company, declined 3 percent.

The Standard & Poor’s/TSX Composite Index decreased 155.81 points, or 1.3 percent, to 11,704.85 in Toronto, its lowest closing level since Dec. 19.

“The uncertainty in Europe has reared its ugly head,” David Cockfield, a managing director at Northland Wealth Management in Toronto, said in a telephone interview. The firm oversees about C$200 million ($200 million). “It will continue to upset markets until we get a clearer picture of just what the European Union plans to do.”

Canadian stocks retreated last week after two straight weekly gains as Spain entered a recession, a U.S. industry report showed employers added fewer jobs than forecast last month and commodity prices dropped. Energy and mining shares account for 44 percent of Canadian stocks by market value, compared with 20 percent in the U.S.

Materials companies fell today with metals as gold tumbled below $1,600 an ounce for the first time since January after Alexis Tsipras, the head of the Greek Syriza party, received a mandate to form a government, boosting worries over austerity. Tsipras has said he will seek to form a coalition with other parties that favor reversing a 130 billion-euro bailout.

The U.S. dollar gained, lowering demand for gold as an alternative for investors and sending the S&P/TSX Gold Index to its lowest level since May 2009.

Barrick Gold lost 2.6 percent to C$36.71. Goldcorp decreased 4.3 percent to C$34.40. Eldorado Gold Corp., a Vancouver-based mining company, declined 8.5 percent to C$11.66.

Jaguar Mining Inc., which explores for gold in Brazil, plummeted 36 percent, the most since January 2003, to C$1.42 after saying China’s Shandong Gold Group Co. won’t proceed with a takeover of the company.

Copper fell the most in almost five weeks on concern over the elections in Greece and France. Teck Resources sank 2.4 percent to C$33.53. Ivanhoe Mines Ltd., Rio Tinto Group’s partner in the Oyu Tolgoi Mongolian gold and copper mine, dropped 4.4 percent to C$9.90.

Oil fell for a fifth day as Saudi Arabian Oil Minister Ali al-Naimi said prices are too high and the euro weakened against the dollar.

Canadian Natural Resources, the country’s third-biggest energy company, declined 3 percent to C$30.69. Suncor Energy Inc., Canada’s largest oil and gas producer, fell 1.5 percent to C$29.77. Nexen Inc. dropped 2.6 percent to C$16.82.

Avalon Rare Metals Inc., a company developing a rare-earth deposit in Canada’s Northwest Territory, plunged 23 percent to C$1.67, its lowest price since July 2009, after delaying the target date for its first production.

Second Wave Petroleum Inc., the Calgary-based oil and natural-gas producer that announced in February it was seeking a buyer, dropped 31 percent, its biggest drop since December 2006, to C$1.84 after ending the search without a satisfactory offer.

US

By Stephen Kirkland and Rita Nazareth

May 8 (Bloomberg) — Stocks and commodities slid, while the euro extended its longest slump since 2008, as concern that new Greek political leaders will back out of bailout agreements sent the nation’s benchmark equity index to an almost 20-year low.

The Standard & Poor’s 500 Index slipped 0.4 percent to close at 1,363.72 at 4 p.m. in New York. The index pared a loss of as much as 1.6 percent after holding for most of the day above 1,350, a technical level watched by traders. Greece’s ASE index plunged 3.6 percent to close at the lowest level since November 1992. Copper and oil lost at least 1 percent as the S&P GSCI Index of commodities wiped out most of its 2012 gain. The euro fell a seventh day, losing 0.3 percent to $1.3013. Ten-year Treasury yields fell to a three-month low.

Speculation that Greece’s new government will reject terms of its financial rescue grew as New Democracy leader Antonis Samaras said he failed to form a coalition following the weekend elections, passing the opportunity to Alexis Tsipras’s Syriza party. Tsipras said he plans to form a government of left-wing parties that would nationalize banks, repeal recent labor reforms and cancel the bailout accords.

“The situation in Europe could get worse before it gets better,” said James McDonald, chief investment strategist at Northern Trust Corp. in Chicago. His firm manages $715 billion.

“The concern is about the potential that Greece does not carry through on their agreements and they default and leave the euro. While investors have known Greece is going to be challenged to handle their debt load, it’s another thing to watch unfold.”

The S&P 500 dropped for the fourth time in five days, extending its retreat from a four-year high last month to 3.9 percent. Consumer-discretionary, financial and commodity companies led losses among eight of the 10 main industry groups today.

Hewlett-Packard Co. and Bank of America Corp. dropped more than 2 percent to lead the Dow Jones Industrial Average down 76.44 points to 12,932.09, paring losses after sliding as much as 198 points. The S&P 500 dipped below 1,350, a so-called support level being watched by traders, for only about 15 minutes this morning.

“We found support for the S&P 500 at 1,350 where you would have expected it to be,” said Michael Shaoul, chairman of Marketfield Asset Management in New York, which oversees more than $1.6 billion. “Once that held you’ve seen a willingness to buy the dip in the U.S. market in names that people have become comfortable with.”

McDonald’s Corp. retreated 2.1 percent after April sales trailed analysts’ projections. Electronic Arts Inc., the second- largest U.S. video-game publisher, declined 4.3 percent as its forecasts fell short of estimates. Fossil Inc., owner of the namesake watch brand, plunged 38 percent after the company reduced its full-year earnings forecast amid weakness in Europe.

The 10-year U.S. Treasury note yield fell for the third straight day, losing three basis points to 1.84 percent after dipping as low as 1.81 percent, the lowest level since February 3. The government sold $32 billion of three-year notes to day, the first of three sales this week totaling $72 billion.

Investors in Treasuries reduced bets the securities will advance and raised neutral positions to the highest in a month, according to a weekly survey by JPMorgan Chase & Co.

The proportion of “net longs” was cut to zero from six percentage points last week as the level of outright longs dropped to equal the level of outright shorts, which was unchanged at 17 percent. A long position is a bet that an asset will increase in value, while a short is a wager it will decrease.

The Stoxx Europe 600 Index slid 1.7 percent, erasing yesterday’s gain, as six shares fell for each that gained. Automakers, mining and financial-services companies led the retreat. National Bank of Greece tumbled 8.4 percent. Bankia SA slid 4.8 percent in Madrid as El Confidencial said the Spanish government will nationalize the lender. Royal KPN NV rallied 17 percent as America Movil SAB offered 2.6 billion euros ($3.4 billion) to increase its stake.

The euro fell 0.4 percent versus the yen. The Dollar Index, which tracks the U.S. currency against those of six trading partners, climbed 0.3 percent, advancing for the seventh consecutive day in its longest rally since 2010. The so-called Aussie weakened against 12 of its 16 major peers after the nation reported a larger-than-estimated trade deficit.

Greece will probably leave the euro as soon as next month as the government runs out of cash and European institutions fail to lend more to the nation, according to John Taylor of hedge fund FX Concepts LLC.

“This summer I think is very likely,” Taylor, founder and chief executive officer of FX Concepts in New York, said today in an interview on Bloomberg Television’s “Inside Track” with Erik Schatzker. “The Europeans aren’t going to give them the money, the International Monetary Fund’s not going to give them an OK. They will be out of money in June.”

Tsipras told his pro-bailout counterparts they must renounce support for the European Union-led rescue if there is to be any chance of forging a coalition. Tsipras said he expected Antonis Samaras of New Democracy and Evangelos Venizelos, the former finance minister who leads the Pasok party, to send a letter to the EU revoking pledges to implement austerity measures by the time he meets with them tomorrow. Samaras said he would not do so, and would support a minority government if necessary.

Greece’s Parliament is split down the middle on the bailout deals negotiated with the EU and IMF.

“We’ve de-stabilized Greece politically and now we’re all surprised they can’t take the decisions to do what we want them to do,” Carl Weinberg, chief economist at High Frequency Economics, told Bloomberg Television. “If Greece falls out of compliance with the IMF program and goes into a hard default, that will raise questions about the capital base of the ECB, put a burden on the other governments of Europe, and that will trigger a series of events that I think won’t have a very happy ending.”

Oil in New York declined 1 percent to $97.01 a barrel in New York, falling for a fifth day in its longest slump in three months, after Saudi Arabian Oil Minister Ali al-Naimi said prices are too high. Copper sank 2.5 percent to $3.6775 a pound as 17 of 24 commodities tracked by the S&P GSCI declined, sending the gauge down 0.6 percent and trimming its 2012 advance to 0.6 percent.

The MSCI Emerging Markets Index sank 1 percent as benchmark indexes in Mexico, India and Brazil lost at least 1.4 percent. The Hang Seng China Enterprises Index of Chinese stocks listed in Hong Kong slid 0.5 percent as residential land sales dropped 92 percent in major Chinese cities.

Have a wonderful evening everyone.

Kindest Regards,

Ellora Howie

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tangents:

Would you set sail on a ship whose name and legacy is synonymous with tragedy and failure? Well an Australian billionaire is sure betting people will! Clive Palmer announced last Monday that he has signed a memorandum of understanding with state-owned Chinese company CSC Jinling Shipyard to build the Titanic II.

Mr. Palmer didn’t give any estimates about how much the project is going to cost, but he did state that “it will be every bit as luxurious as the original Titanic, but … will have state-of-the-art 21st-century technology and the latest navigation and safety systems.”

Titanic II’s maiden voyage is scheduled sometime in late 2016, so you too can set sail on “a tribute to the spirit of the men and women who worked on the original Titanic.”

However, I bet if you do end up going, there is going to be a huge lineup at the prow of the ship of people waiting to shout “I’m king of the world!” a la Jack and Rose from James Cameron’s 1997 film!

You can read more about it here: http://www.theglobeandmail.com/news/world/titanic-ii-australian-billionaire-says-replica-ship-will-set-sail-in-2016/article2417552/?utm_medium=Feeds%3A+RSS%2FAtom&utm_source=World&utm_content=2417552&fb_ref=homepage

photos of the day May 7, 2012

A full moon rises over the skyline of Lower Manhattan and One World Trade Center (l.) in New York.- Gary Hershorn/Reuters

A traditional dance group celebrates the Palm and Flowers Festival through the streets of Panchimalco, El Salvador.- Ulises Rodriguez/Reuters

Market Closes for May 7, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Joseph Ciolli

May 7 (Bloomberg) — Canadian stocks fell for a fourth day as energy and materials shares dropped after European elections stoked speculation that austerity efforts will be derailed, escalating the debt crisis.

Oil and gas explorer Nexen Inc. declined 2.9 percent after saying it would abandon an unsuccessful deepwater well in the Gulf of Mexico. Penn West Petroleum Ltd. dropped 3.5 percent after reporting lower-than-forecast first-quarter sales.

Goldcorp Inc., the world’s second-biggest producer of the metal, declined 1.4 percent. Potash Corp. of Saskatchewan Inc., the biggest fertilizer company, fell 1 percent.

The Standard & Poor’s/TSX Composite Index decreased 10.57 points, or 0.1 percent, to 11,860.66 in Toronto.

“People are shocked about the election results, so confidence about trying to solve the debt crisis has fallen,” Sebastian van Berkom, a money manager at Van Berkom & Associates in Montreal, said in a telephone interview. The firm oversees about C$1.8 billion ($1.8 billion).

Canadian stocks retreated last week after two straight weekly gains as Spain entered a recession, a U.S. industry report showed employers added fewer jobs than forecast last month and commodity prices dropped. Energy and mining shares account for 44 percent of Canadian stocks by market value, compared with 20 percent in the U.S.

Energy companies declined as oil fell to a three month low after France elected Francois Hollande president and Greek voters picked anti-bailout parties. Hollande, who will become the first Socialist in 17 years to control Europe’s second- biggest economy, pledged to push for less austerity and more growth.

Nexen fell 2.9 percent to C$17.26. The energy producer with operations on five continents said it didn’t find hydrocarbons at the deepwater exploration well, which is being plugged and abandoned.

Penn West Petroleum, a western Canadian oil and gas company, dropped 3.5 percent to C$15.06 after reporting first- quarter sales of C$728 million, falling short of the average analyst estimate of C$841 million.

Africa Oil Corp. surged 35 percent to C$7.82, its highest price in more than 15 years. The Vancouver-based exploration company found additional oil in Kenya.

Materials stocks in the S&P/TSX decreased as gold futures dropped after election results in France and Greece eroded prospects for European debt reduction, curbing demand for the metal as an alternative for investors shifting out of the euro and into dollar assets perceived as safer.

Goldcorp declined 1.4 percent to C$35.93. Yamana Gold Inc., Canada’s third-largest company in the industry by market value, dropped 2.6 percent to C$13.73.

Potash Corp. fell 1 percent to C$41.89. Agrium Inc., a fertilizer producer and farm retailer, decreased 0.7 percent to C$84.25.

Molybdenum producer Thompson Creek Metals Co. plunged 16 percent, the most since November 2008, to C$4.61. The company said it intends to offer senior notes and tangible equity units, raising money to fund the construction of its Mt. Milligan copper-gold mine.

Contract driller Ensign Energy Services Inc. climbed 1.7 percent to C$13.90 after reporting first-quarter earnings excluding some items of 69 Canadian cents per share, exceeding the average analyst estimate of 54 Canadian cents.

US

By Michael P. Regan and Rita Nazareth

May 7 (Bloomberg) — Most U.S. stocks rose, led by banks, after billionaire investor Warren Buffett said American lenders are in “fine shape.” The euro slid for a sixth day and commodities fell after French Socialist Francois Hollande was elected president and Greek voters picked anti-bailout parties.

The Standard & Poor’s 500 Index added less than 0.1 percent to 1,369.58 at 4 p.m. in New York as six stocks gained for every five that fell on U.S. exchanges. The euro lost 0.3 percent to $1.3051 as the shared currency extended its longest losing streak since September. Ten-year French yields slipped three points to 2.80 percent and the CAC-40 Index of stocks rallied 1.7 percent. The S&P GSCI Index of commodities fell for a fourth day, declining 0.2 percent. Ten-year U.S. Treasury yields were little changed at 1.88 percent.

Financial shares rose 0.7 percent as a group to lead gains among the 10 main industries in the S&P 500 after Buffett said U.S. lenders have “liquidity coming out of their ears.”

Speculation that European austerity measures will be curbed grew after Hollande’s victory made him the first Socialist to take the helm of Europe’s second-biggest economy in 17 years. The Greek parliament will have three new anti-bailout parties represented.

“Every time Buffett gives the seal of approval, it helps certain stocks or segments of stocks,” Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private-banking unit of KeyCorp in Cleveland, said in a telephone interview. “As for Europe, we’ve priced in some of what’s happened. Yet investors are not really quite sure of what to make of those trends.”

U.S. stocks rebounded from early losses, including a 1.5 percent drop in S&P 500 futures before exchanges opened in New York. The S&P 500 halted a three-day slump. The index tumbled 2.4 percent last week, its biggest drop of the year, as data on American and European labor markets boosted concern the global economy is weakening. The benchmark gauge of U.S. stocks has retreated 3.5 percent from an almost four-year high on April 2.

Walt Disney Co. rallied 2.1 percent after “Marvel’s The Avengers” set box-office records with $200.3 million in ticket sales over the weekend. Fifth Third Bancorp and Bank of America Corp. rose almost 3 percent each, pacing gains in financial shares, after Buffett said U.S. lenders have “liquidity coming out of their ears.”

“I would put European banks and American banks in two very different categories,” Buffett, Berkshire Hathaway Inc.’s chairman and chief executive officer, said May 5 at the firm’s annual meeting in Omaha, Nebraska. “The American banking system is in fine shape. The European system was gasping for air a few months back” before getting assistance from the European Central Bank.

Hewlett-Packard Co. and Caterpillar Inc. lost more than 1.2 percent to lead the Dow Jones Industrial Average down 29.74 points to 13,008.53. The Dow and S&P 500 drifted between gains and losses for much for much of the day. American International Group Inc. dropped 3 percent as the U.S. Treasury Department agreed to sell $5 billion of shares, with the bailed-out insurer buying $2 billion of the total.

Risk perceptions among U.S. equity and credit investors are diverging by the most since 2009 as signs of an economic slowdown spur bigger increases in prices to protect against losses in bonds than stocks. The VIX, the benchmark gauge of U.S. equity derivatives that usually rises when shares fall, closed last week at 0.032 times the level of the Markit CDX North America High Yield Index, which increases when confidence in debt issuers deteriorates, according to data compiled by Bloomberg. That’s near the 2 1/2-year low of 0.027 times reached in March.

European stocks rose the most in more than a week as German Chancellor Angela Merkel said she will receive French president- elect Hollande with “open arms” as they work together to tackle the debt crisis. Hollande’s platform calls for policies Merkel opposes, including increased spending and a delayed deficit-reduction effort

The Stoxx Europe 600 Index reversed early losses to climb 0.7 percent, even as Greece’s ASE Index plunged 6.7 percent in its worst drop since November. National Bank of Greece SA tumbled 8.3 percent. Roche Holding AG fell 3.5 percent, the most since November, after abandoning development of an experimental cholesterol drug. CSM NV, the world’s biggest maker of bakery ingredients, jumped 19 percent after saying it will sell its U.S. and European bakery-supply units.

Benchmark stock indexes in Italy and Spain led gains, rallying more than 2.5 percent each. Among European bond markets, Italy’s 10-year yield lost three basis points to 5.40 percent and Spain’s increased two points to 5.76 percent.

The euro weakened against 14 of 16 major peers. The shared pared losses after dipping below $1.30 for the first time since April 16, and slid 0.5 percent versus the pound. The Dollar Index, which tracks the U.S. currency against those of six trading partners, advanced 0.1 percent, rising for a sixth day in the longest streak since September “Incumbents took a beating across Europe this weekend in what has been widely interpreted as a backlash against austerity,” Michala Marcussen, global head of economics at Societe Generale SA in Paris, wrote in a report today. “Failure to secure a political majority to meet the terms of the second Greek program could see the country inch towards euro exit. This would in our opinion be seen as a negative event, even beyond Greece’s borders.”

The euro is confounding bears who predicted a meltdown as it gets an unexpected boost from the economic and political turmoil gripping Europe. The 17-nation currency has risen about 1 percent against nine peers from this year’s low on Jan. 16, while the dollar slid 2.3 percent, data compiled by Bloomberg show. Futures traders are trimming bets that it will fall against the dollar, while options show investors are less bearish.

In other European elections, Merkel’s party had its worst election result in more than half a century in the state of Schleswig-Holstein. Austerity measures aimed at stemming Europe’s turmoil have driven economies from the Netherlands to Spain back into recession, emboldening politicians campaigning for growth.

A reduction in austerity could put more pressure on the European Central Bank to act, according to David R. Kotok, Cumberland Advisors’ chairman and chief investment officer.

“Political momentum moves toward more monetary ease,” Kotok wrote in a note to clients. “We expect some form of balance sheet expansion before the end of this year. We expect credit spreads of weaker sovereigns to widen until the ECB enters the market or discusses that it may do so.”

Cotton, silver and soybeans dropped at least 0.9 percent to lead the S&P GSCI index lower. Crude oil slipped 0.6 percent to $97.94 a barrel, the lowest settlement price in three months.

Have a wonderful evening everyone.

Kindest Regards,

Ellora Howie

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7