Category: Newsletters

Dear Friends,

Tangents:

If you were in Victoria last night you might have noticed that we had quite the storm! A local photographer was able to snap this amazing picture of some of the lightening we were experiencing. Quite the way to start off a Friday the 13^th!

For those unfamiliar, this photo was taken at Victoria’s inner harbour at the corner of Tyee and Bay.

“Poets are always taking the weather so personally.”J. D. Salinger

Today in History July 13

1099		The Crusaders launch their final assault on Jerusalem.
1534		Ottoman armies capture Tabriz in northwestern Persia.
1754		George Washington surrenders Fort Necessity to the French, leaving them in control of the Ohio Valley.
1798		English poet William Wordsworth visits the ruins of Tintern Abbey.
1939		Frank Sinatra records his first song, “From the Bottom of my Heart,” with the Harry James Band.
1954		In Geneva, Great Britain, the Soviet Union, the People’s Republic of China and France reach an accord on Indochina, dividing Vietnam into two countries, North and South, along the 17th parallel.

photos of the day July 13, 2012

Women in traditional summer kimonos look at paper lanterns during the annual Mitama festival at the Yasukuni Shrine in Tokyo.- Issei Kato/Reuters

Alphajet planes from the Patrouille de France (France’s Patrol) fly over the Invalides in Paris on the eve of the traditional Bastille Day military parade.- Charles Platiau/Reuters

Market Closes for July 13, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12777.09	+203.82
		+1.62%
S&P 500	1356.78	+22.02
		+1.65%
NASDAQ	2908.47	+42.28
		+1.48%
TSX	11514.53	+89.06
		+0.78%

International Markets

Market  Index	Close	Change
NIKKEI	8724.12	+4.11
		+0.05%
HANG  SENG	19092.63	+67.52
		+0.35%
SENSEX	17213.70	-18.85
		-0.11%
FTSE 100	5666.13	+57.88
		+1.03%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.635	1.632
CND.   30 Year Bond	2.253	2.249
U.S.   10 Year Bond	1.4876	1.4743
U.S.   30 Year Bond	2.5727	2.5614

Currencies

BOC Close	Today	Previous
Canadian $	1.01400	1.01921
US   $	0.98619	0.98116
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24212	0.80508
US  $	1.22497	0.81635

Commodities

Gold	Close	Previous
London Gold   Fix	1589.68	1571.82
Oil	Close	Previous
WTI Crude Future	87.10	86.08
BRENT	103.47	101.45

Market Commentary:

Canada

By Katia Dmitrieva

July 13 (Bloomberg) — Canadian stocks advanced, paring a weekly decline, as oil prices rose on speculation that China’s government will boost stimulus measures and gold gained for the first time in four days.

Goldcorp Inc. and China Gold International Resources Corp. added at least 2.1 percent. Suncor Energy Inc., the nation’s largest oil company, climbed 1.9 percent. Energy, raw-materials and financial shares contributed most to the advance in the Standard & Poor’s/TSX Composite Index, with nine of 10 groups advancing.

The S&P/TSX gained 89.06 points, or 0.8 percent, to 11,514.53, with almost three stocks rising for each that fell in the gauge. For the week, the Canadian equity benchmark lost 1.3 percent, the biggest decline in six weeks.

“The China GDP number was certainly weaker than a lot of people expected,” Andrew Hamlin, who manages C$80 million for Toronto-based Aston Hill Financial Inc., said in a phone interview. “What we have is bad news that maybe is not so bad news, because it could potentially open the door to new stimulus in China.”

China’s growth slowed for a sixth quarter to the weakest pace since the global financial crisis, raising speculation that Premier Wen Jiabao will boost stimulus to secure a second-half economic rebound. Gross domestic product expanded 7.6 percent last quarter, the National Bureau of Statistics said today in Beijing. The number was in line with China’s 2012 target, which was lowered to 7.5 percent in early March.

Goldcorp gained 2.5 percent to C$34.53 as the metal rallied 1.5 percent on the Comex in New York. China Gold International rose 2.2 percent to C$2.81.

Oil advanced for a third day, its longest winning streak in a month. Suncor Energy climbed 1.9 percent to C$29.41. Cenovus Energy Inc. increased 2.1 percent to C$33.28. Canadian Natural Resources Ltd., the nation’s third-largest energy company, gained 1.2 percent to C$26.41.

Baja Mining Corp., which is building a copper mine in Mexico, fell 13 percent to 14 cents, the lowest since 2003. The company said it has not yet found new sources of funding and may not have enough cash to continue operations by next month.

US

By Lu Wang and Nikolaj Gammeltoft

July 13 (Bloomberg) — Global stocks rallied, ending the longest slump since November, as JPMorgan Chase & Co. surged after reporting earnings and speculation grew that China and Europe will boost stimulus efforts. The euro rebounded from a two-year low, while cotton and nickel led commodities higher.

The MSCI All-Country World Index added 1.5 percent at 4 p.m. in New York, snapping a seven-day retreat, and the Standard & Poor’s 500 Index gained 1.7 percent. The euro rose 0.3 percent to $1.2240 as Medley Global Advisors predicted the European Central Bank will ease monetary policy further. Cotton and nickel advanced more than 2.4 percent to lead a gains in 22 of 24 commodities tracked by the S&P GSCI Index. Ten-year Treasury yields increased two basis points to 1.49 percent.

JPMorgan rose 6 percent to lead the Dow Jones Industrial Average up 204 points, while the KBW Bank Index jumped the most since March, as Chief Executive Officer Jamie Dimon said the bank will still likely post record earnings for 2012 even after a $4.4 billion trading loss from its chief investment office in the second quarter. Warren Buffett said the firm’s reputation is intact as far as he’s concerned.

“The degree to which our banking system has come back, particularly compared to the European banks, is dramatic,”

Buffett, the billionaire chairman of Berkshire Hathaway Inc., said today on Bloomberg Television’s “In the Loop With Betty Liu” in Sun Valley, Idaho. “Our banking system is in terrific shape and that can’t be said for banks around the world and it couldn’t be said for our banks four years ago.”

Stocks and commodities also increased after China’s economy grew a less-than-estimated 7.6 percent last quarter, putting pressure on policy makers to increase monetary easing and investment.

“China’s growth is slowing, which will urge their policy makers to respond with a fiscal thrust,” said Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $115 billion of assets.

The S&P 500 rebounded following six days of losses, the longest slump in almost two months. U.S. equities maintained gains even as confidence among consumers unexpectedly slid in July to the lowest level this year as the labor market showed few signs of improvement. The Thomson Reuters/University of Michigan index of consumer sentiment dropped to 72 this month from 73.2 in June, trailing the median economist projection for a rise to 73.5.

Financial shares in the S&P 500 led gains among the 10 main industries in the index, rallying 2.8 percent as all 81 companies increased. Wells Fargo & Co., the most valuable U.S. bank and largest home lender, climbed 3.2 percent after earnings increased 17 percent on strength in mortgage banking and a drop in expenses.

Bank of America Corp., Microsoft Corp. and Caterpillar Inc. climbed more than 2.6 percent to helped lead gains in the Dow, with all 30 stocks in the gauge advancing except for Hewlett- Packard Co. Phillips 66 rallied 5.9 percent after Buffett said Berkshire Hathaway has invested in the refiner.

Procter & Gamble Co., the world’s largest consumer-products company, rose 2.2 percent. Board members are dissatisfied with Chief Executive Officer Robert McDonald’s performance and are discussing a possible leadership change, according to people familiar with the situation. P&G jumped 3.8 percent yesterday as the Federal Trade Commission cleared William Ackman’s hedge-fund company to buy a stake.

JPMorgan’s net income fell to $4.96 billion, or $1.21 a share, from $5.43 billion, or $1.27, in the same period a year earlier. The largest U.S. bank by assets also restated first- quarter earnings, reducing net income by $459 million, and used securities gains and an $800 million accounting benefit to help boost profit.

Dimon said he hopes the company can buy back stock in the fourth quarter of 2012 after it completes a review of trading losses in the chief investment office.

By capping the size of the potential loss and revamping management of the businesses responsible, Dimon may help restore investor confidence after the bank’s market value dropped $39.7 billion since April 5, when Bloomberg News first reported that the company had amassed an illiquid book of credit derivatives at the London chief investment office.

“They laid it all out,” said Tom Wirth, who helps manage $1.6 billion as senior investment officer for Chemung Canal Trust Co. in Elmira, New York. “The overall earnings report is showing the company is on the upswing. Earnings will continue to do fairly well as loans come back.”

Eight shares gained for each that declined in the Stoxx Europe 600 Index. Storebrand ASA rallied 8.2 percent as Norway’s second-largest publicly traded insurer said it plans to reduce costs and meet stricter European capital requirements without selling new shares. Basic-resource and telephone companies rallied more than 2.7 percent to lead gains in all 19 industry groups in the Stoxx 600.

European stock strategists are backing away from their most-pessimistic forecasts as policy makers agree on measures to tackle the region’s debt crisis. While sticking to predictions for losses of as much as 16 percent, Morgan Stanley’s Ronan Carr raised his recommendation on European equities to neutral on July 2 and Alain Bokobza of Societe Generale SA said he has started to reduce the underweight call he’s had for at least two years. Exane BNP Paribas said investors can find bargains among companies most reliant on economic growth.

The euro recovered after earlier slumping as much as 0.3 percent to $1.2163, the lowest since June 2010. The shared currency strengthened against nine of 16 major peers, rising at least 0.3 percent versus the Taiwanese dollar, Brazilian real and Swedish krona.

The ECB is prepared to further ease monetary policy, including lowering its deposit rate below zero percent and implementing more non-standard liquidity measures as early as September, if warranted, Medley Advisors wrote in a report.

The MSCI Emerging Markets Index added 1.4 percent, rebounding from a two-week low. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong increased 0.8 percent, the biggest one-day gain since July 3. South Korea’s Kospi Index, Russia’s Micex and the Bovespa in Brazil each rallied at least 1.5 percent.

Italy’s 10-year bond yield increased 15 basis points to 6.06 percent. The yield spread above benchmark German bunds was 14 basis points higher at 4.80 percentage points. Moody’s Investors Service reduced Italy’s bond rating by two levels and reiterated its negative outlook.

Crude oil rallied 1.2 percent to $87.10 a barrel in New York, climbing for a third straight day. Copper surged 2.6 percent. Corn climbed 1.1 percent and soybeans rose 1.5 percent as drought in the U.S. worsens crop conditions.

Have  a wonderful evening everyone!

“The real voyage of discovery consists not in seeking new landscapes but in having new eyes.”

-Marcel Proust

Regards,

Ellora Howie

Assistant to Carolann Steinhoff

 

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

 

Dear Friends,

Tangents:

I was reading The MoneyLetter (June 2012 edition) this morning and the first article, entitled The Berkshire Prescription, is a commentary on the most recent Omaha meeting, which is annually hosted by Warren Buffe and his long-time vice-chairman, Charlie Munger, two octogenarians – 82 and 88 respectively – whose record of investment wealth creation is unsurpassed.  A few choice Buffet quotes are worth remembering at this time, since the media has everyone so focused on the misperception of the negative implications for the entire world capital markets as a result of current events.

-from Mr. Buffett:

“The best thing that happens to us is when a great company gets into temporary trouble….We want to buy them when they’re on the operating table.”

“Great investment opportunities come around when excellent companies are surrounded by unusual circumstances that cause the stock to be misappraised.”

“I never attempt to make money on the stock market.  I buy on the assumption that they could close the market the next day and not reopen it for ten years.”

“I will tell you how to become rich.  Close the doors.  Be fearful when others are greedy.  Be greedy when others are fearful.”

I had the happy experience of visiting one of my long-time clients this afternoon – he is 88 years young – at his Amica retirement residence in order to review his portfolio with him.  I was able to show him  that the dividend income being generated on his portfolio is 5%/year (versus 1.6%/year on 10-year bond yields).  Moreover, his portfolio has significantly increased in value in the 23 years since he began investing with me, by following the Buffett wisdom in which I so strongly believe and base my strategy for investing – value investing.

How much wine for a cow?

“French cows are enjoying up to two bottles of high quality wine every day as farmers attempt to produce the best beef in Europe,” reports The Daily Telegraph.  “The extraordinary development has seen a ‘Vinbovin’ label of meat established which is already being championed by some of the best restaurants in Paris.  It follows an experiment in LunelViel, in the southern Herault region of France, which saw three cows fed local wine for four months.  Jean-Charles Tastavy, who came up with the idea, said the two Angus and one Camargue were initially fed the wine in a mix of barley, hay and grapes.  It soon became clear that they were ‘happy cows’ who ended up producing an exceptionally succulent meat.  Outlining how he encouraged the cows to enjoy a tipple, Mr. Tastavy said: ‘for each animal, alcohol intake should be equivalent to the amount recommended by health authorities for a man – namely two or three glasses of wine a day.  In the case of cows, this amounts to between a litre and a litre-and-a-half a day.’”

fromThe Globe & Mail, 7/12/12

And on this day in…

1817 – Henry David Thoreau was born.

1895 – Buckminster Fuller was born.

1937 – Bill Cosby was born.

1954 – President Dwight D. Eisenhower proposes a highway modernization program, with costs to be shared by federal and state governments.
1957 – The U.S. surgeon general, Leroy E. Burney, reports that there is a direct link between smoking and lung cancer.
1974 – G. Gordon Liddy, John Ehrlichman and two others are convicted of conspiracy and perjury in connection with the Watergate scandal.
1984 – Democratic presidential candidate Walter Mondale chooses Geraldine Ferraro as his running mate.

I frequently tramped eight or ten miles….to keep an appointment with a beech tree or a yellow birch or an old acquaintance among the pines.  –H. D Thoreau, 1817-1862.

photos of the day July 12, 2012

US Olympian sprinter torchbearer Michael Johnson holds the Olympic Flame at Stonehenge, England.

Danny Lawson/LOCOG/AP

Bees collect pollen from flowers in Matthews, N.C.

Chuck Burton/AP

Market Closes for July 11, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12573.27	-31.26
		-0.25%
S&P 500	1334.76	-6.69
		-0.50%
NASDAQ	2866.19	-21.79
		-0.75%
TSX	11425.47	-119.17
		-1.03%

International Markets

Market  Index	Close	Change
NIKKEI	8720.01	-130.99
		-1.48%
HANG  SENG	19025.11	-394.76
		-2.03%
SENSEX	17232.55	-256.59
		-1.47%
FTSE 100	5608.25	-56.23
		-0.99%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.632	1.670
CND.   30 Year Bond	2.249	2.275
U.S.   10 Year Bond	1.4743	1.5116
U.S.   30 Year Bond	2.5614	2.6086

Currencies

BOC Close	Today	Previous
Canadian $	1.01921	1.01971
US   $	0.98116	0.98068
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24411	0.80379
US  $	1.22060	0.81927

Commodities

Gold	Close	Previous
London Gold   Fix	1571.82	1576.45
Oil	Close	Previous
WTI Crude Future	86.08	85.81
BRENT	101.45	101.28

Market Commentary:

Canada

By Katia Dmitrieva

July 12 (Bloomberg) — Canadian stocks fell as banks and commodity producers slumped amid concern the global economic recovery is slowing down.

Canadian Natural Resources Ltd. and Suncor Energy Inc., two of the nation’s largest energy providers, each declined 1.4 percent. Goldcorp Inc. lost 0.4 percent as the metal slipped on the Comex for the third day. Royal Bank of Canada, the nation’s largest lender, fell 1.2 percent. Bank and energy stocks were the biggest drag on the Standard & Poor’s/TSX Composite Index, with all 10 industries falling.

The S&P/TSX slumped 119.17 points, or 1 percent, to 11,425.47, after rising 0.3 percent yesterday. The benchmark index has dropped 4.4 percent in 2012.

“You can see how sentiment is very negative right now,”

Jason Hornett, who co-manages C$250 million for Calgary-based Bissett Investment Management, said in a phone interview.

“We’re going to feel the pain in energy and materials stocks more than the U.S. equity indexes because we have more exposure.”

Global equities fell amid further signs that the economic recovery is faltering. Bank of America Corp. strategists reduced earnings estimates for S&P 500 companies for this year and next, citing Europe’s debt crisis and slowing growth in China. Data due tonight may show China’s economic growth fell below 8 percent for the first time since 2009, according to the median estimate in a Bloomberg News survey.

Royal Bank of Canada fell 1.2 percent to C$52.18. Toronto- Dominion Bank, the second-largest, dropped 0.7 percent to C$79.25. Bank of Nova Scotia slipped 1.4 percent to C$52.32.

Goldcorp dropped 0.4 percent to C$33.68, falling for a sixth day. Barrick Gold Corp. retreated 1.4 percent to C$35.17 for a seventh straight session of declines, its longest losing streak since March. Eldorado Gold Corp., a Vancouver-based gold miner with projects in Brazil, China, Turkey and Greece, slipped 3.4 percent to C$10.94.

Semafo Inc., a Quebec-based gold mining company with projects in West Africa, plunged 22 percent to C$3.39, the most since 2002, after the company announced an increase in reserves and resources. Royal Bank of Canada analyst Jonathan Guy said the update “fails to impress,” and BMO Capital Markets analyst Andrew Breichmanas downgraded the stock from outperform to perform.

Energy stocks declined as crude swung between gains and losses, turning positive after the U.S. announced more sanctions on Iran. Suncor slipped 1.4 percent to C$28.85. Canadian Natural Resources lost 1.4 percent to C$26.10.

Calvalley Petroleum Inc., a company that explores for oil and natural gas in Ethiopia and Yemen, tumbled 17 percent to C$2.12 as DNO International ASA dropped its bid to purchase the company.

US

By Lu Wang and Nikolaj Gammeltoft

July 12 (Bloomberg) — U.S. stocks retreated, sending the Standard & Poor’s 500 Index to the longest slump since May, as concern intensified about a slowdown in the global economic recovery and American corporate earnings.

Equities pared earlier losses as Procter & Gamble Co. and Merck & Co. rallied more than 3.7 percent, while an S&P index of homebuilders jumped 2.4 percent. Bank of America Corp. and Morgan Stanley slipped at least 1.9 percent, pacing declines among banks. Supervalu Inc. sank 49 percent after the third- largest U.S. grocery chain said it will review strategic alternatives for the business and suspended its dividend.

The S&P 500 slid 0.5 percent to 1,334.76 at 4 p.m. New York time, paring a drop of as much as 1.2 percent. The benchmark index for American equities retreated for a sixth straight day, losing 2.9 percent over the period. The Dow Jones Industrial Average fell 31.26 points, or 0.3 percent, to 12,573.27, after losing more than 112 points. Volume for exchange-listed stocks in the U.S. was 6.5 billion shares, 3.3 percent below the three- month average.

“There’s a worldwide slowdown,” Nick Sargen, chief investment officer at Fort Washington Investment Advisors in Cincinnati, said in a phone interview. The firm oversees $40 billion. “Wall Street analysts have been reducing their second- quarter earnings estimates as companies have guided them lower.

Profit growth, which has been a main driver for the market, will be less supportive going forward.”

The S&P 500 closed little changed yesterday as investors sifted through minutes of last month’s Federal Reserve meeting for hints of additional stimulus. The Federal Open Market Committee’s June 19-20 meeting debated the need for further stimulus measures, the minutes showed. Two participants supported additional bond purchases, while two others said only a further deterioration in the economy would warrant them.

Equities remained lower earlier today as Labor Department figures showed applications for first-time claims declined last week more than economist forecast. The decrease reflected the volatility of claims during the annual auto-plant retooling period. In Asia, the Bank of Korea unexpectedly cut its key interest rate. Data due out tonight may show China’s economic growth fell below 8 percent for the first time since 2009, according to the median estimate in a Bloomberg News survey.

The S&P 500 pared losses in the afternoon, rebounding after dipping below its 50-day moving average for a third day.

“Technicals may be a contributing factor,” Ryan Larson, Chicago-based head of U.S. equity trading at RBC Global Asset Management (U.S.) Inc., wrote in an e-mail. His firm oversees $250 billion in assets. “It does appear that the market is somewhat backstopped from any meaningful losses on hopes of further central bank intervention, specifically from the Fed.”

Bank of America strategists lowered their earnings forecasts for S&P 500 companies by 1.4 percent for this year and next year, citing falling commodity prices and slower global growth prospects. Strategists Dan Suzuki, Savita Subramanian and Jill Carey now project earnings of $102 per share for 2012 and $109 for 2013, according to a note to clients today.

Analysts surveyed by Bloomberg project that earnings decreased 1.8 percent in the second quarter, the first drop in almost three years.

Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc., told CNBC that economic growth in the U.S. is slowing even as the housing market shows signs of rebounding.

“The general economy in the United States has been more or less flat, and so the growth has tempered down,” he said today in an interview with the television station from Sun Valley, Idaho. Buffett’s remarks contrast with his comment a year ago to Bloomberg Television’s Betty Liu in Sun Valley that the economy and jobs will “come back big time” when residential construction recovers. U.S. unemployment has exceeded 8 percent for more than three years.

An S&P index of homebuilders rose 2.4 percent. Lennar Corp. jumped 3.6 percent to $31.06. PulteGroup Inc. gained 2.9 percent to $10.84, while D.R. Horton Inc. added 2.7 percent to $18.37.

Equities also pared declines as P&G rallied 3.8 percent to $63.70. The Federal Trade Commission cleared William Ackman’s Pershing Square Capital Management LP to buy a stake in the world’s largest consumer-products company. Ackman said the stake is the firm’s “largest initial investment ever.” His interest may signal more pressure for asset sales from P&G, which sold its Pringles snacks unit to Kellogg Co. for about $2.7 billion earlier this year, according to Louis Meyer, a special- situations analyst at Oscar Gruss & Son Inc.

Merck rose 4.1 percent, the most in the Dow, to $42.91. An advisory panel recommended closing the Phase 3 clinical trial of an experimental therapy to prevent bone fractures in women with osteoporosis early “due to robust efficacy and a favorable benefit-risk profile,” Merck said.

McDonald’s Corp. advanced 2.7 percent to $91.93. Sales at the world’s largest restaurant chain probably “meaningfully” beat even the highest analyst estimate, Mark Kalinowski, an analyst with Janney Montgomery Scott LLC said, citing checks with franchisees.

Seven out of 10 groups in the S&P 500 retreated, as technology and financial companies lost more than 1 percent. The Morgan Stanley Cyclical Index of companies most-tied to the economy erased 0.9 percent.

Financial stocks dropped as European lenders fell. Bank of America lost 2 percent to $7.48. Morgan Stanley retreated 1.9 percent to $13.55.

JPMorgan Chase & Co. slid 1.6 percent to $34.04. Investors will look for Chief Executive Officer Jamie Dimon to restore confidence when the company reports second-quarter results tomorrow. The bank may say profit fell 40 percent to 76 cents a share, excluding accounting adjustments, according to the average estimate from analysts in a Bloomberg survey. JPMorgan shares have dropped 16 percent since May 10, when the company disclosed a $2 billion loss on credit derivatives.

Lexmark International Inc. slumped 7.5 percent to $24.31, leading losses among technology shares. Benjamin Reitzes, an analyst with Barclays Plc, cut the maker of laser and inkjet printers to underweight, an equivalent of sell, citing a slump in corporate spending as more workers use mobile devices. The stock was previously rated equalweight.

Supervalu tumbled 49 percent to $2.69. The company, which last month announced layoffs in its Albertsons unit in California and Nevada, plans to accelerate price reductions and cut costs by an additional $250 million over the next two years, it said in a statement yesterday. It has retained Goldman Sachs Group Inc. and Greenhill & Co. to review its options, it said.

Safeway Inc., the second-largest U.S. grocer, slumped 13 percent, the most in the S&P 500, to $15.73. Kroger Co., the biggest, sank 3.7 percent to $21.96.

Marriott International Inc. slid 6.4 percent to $35.58 as the hotel operator reduced its projections for revenue growth per available room outside North America. Starwood Hotels & Resorts Worldwide Inc., owner of the luxury St. Regis and W brands, retreated 5.3 percent to $48.66.

Airlines fell as Goldman Sachs Group Inc. said analysts’ estimates for the industry are “too optimistic.” Tom Kim, an analyst with Goldman Sachs, rated Delta Air Lines Inc. and United Continental Holdings Inc. sell in new coverage, saying the two companies are most vulnerable to earnings pressure.

Delta Air fell 3.1 percent to $10.75 while United Continental slipped 4.1 percent to $23.78.

Sears Holdings Corp., controlled by hedge-fund executive Edward Lampert, declined 5.1 percent to $53.48. The retailer’s same-store sales probably dropped 5 percent for the second quarter, accelerating from a 1 percent decrease in the previous three months, Cleveland Research said, citing channel checks.

Have  a wonderful evening everyone.

Be magnificent!

 

The human voice can never reach the distance

that is covered by the still small voice of conscience.

-Mahatma Gandhi, 1869-1948

 

As ever,

Carolann

 

The friend in my adversity I shall always cherish most.  I can better trust those who helped to relieve the gloom of my dark hours than those who are so ready to enjoy with me the sunshine of my prosperity.

-Ulysses S. Grant, 1822-1885

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

 

Tel: 778.430.5808

(C): 250.881.0801

Toll Free: 1.877.430.5895

Fax: 778.430.5838

www.carolannsteinhoff.com

 

 

Dear Friends,

Tangents:

I read this last night in the most recent edition of The Economist and thought it might be of interest to you too:

The Universe is Stitched Together by Invisible Threads

The Higgs boson is not the only curious form of matter whose nature has been probed this week.  A paper by Jörg Dietrich, of the University of Michigan, and his colleagues, just published by Nature, illuminates – if that is the appropriate word – a substance known as dark matter.

Dark matter, the theory goes, is composed of particles that cannot interact with electromagnetic force, and thus have no dealings with light.  But they do interact gravitationally.  In fact, it is the gravitational pull of dark matter that stops galaxies flying apart as they rotate.  Moreover, calculations suggest there is five times as much dark matter in the universe as there is ordinary matter.  But what is rarely observed is dark matter by itself.  Since both the dark and the visible forms of matter are affected by gravity, they tend to cluster together.

Models of the evolution of the universe suggest, though, that this clustering is secondary.  The young universe was first filled with a lattice of threads of dark matter, then the visible stuff gathered around these threads and formed the galaxies familiar today.

What Dr. Dietrich and his colleagues have done is to detect the part of a thread that runs between two groups of galaxies called Abell 222 and Abell 223.  They were able to do so by looking at the distorting effect the thread’s gravity has on light emitted by galaxies behind it.  Measuring these distortions allowed the researchers to work out both the thread’s shape and its mass (about 60 trillion times the mass of the sun).  Meanwhile, down on Earth, researchers at CERN, the particle physics laboratory near Geneva that has just found Higgs, will now turn their attention to making individual particles of dark matter.  Thus do the largest and the smallest scales of science complement each other.

And on this day in…

1656 – First Quaker colonists land at Boston
1896 – Wilfred Laurier sworn in as Canada’s 7th Prime Minister

1914 – Babe Ruth makes MLB debut
1944 – Hitler is paid a visit by his would-be assassin
1979 – Skylab crashes to Earth
1990 – Oka (Kanesetake) Quebec – Corporal Marcel Lemay, a 31 year old constable, killed during gun battle as 100 members of La Sûreté du Québec attack Mohawk barricades, put up in March to block expansion of a golf course on land they claim was never signed away.

I believe totally in a Capitalist System, I only wish that someone would try it. – Frank Lloyd Wright

photos of the day July 11, 2012

Women look at a metal structure filled with fire pots as World Heritage site Stonehenge is illuminated during an elemental Fire Garden display, which is part of the London 2012 Festival, in Salisbury, southern England, on Tuesday.

Kieran Doherty/Reuters

Visitors take photographs under bamboo wind chimes, which are part of an installation by New Zealand artist Tiffany Singh titled ‘Knock On The Sky Listen To The Sound, 2011,’ at the 18th Biennale of Sydney on Cockatoo Island in Sydney Harbour, Australia.

Tim Wimborne/Reuters

Market Closes for July 11, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12604.53	-48.59
		-0.38%
S&P 500	1341.45	-0.02
		—
NASDAQ	2887.98	-14.35
		-0.49%
TSX	11544.64	+32.42
		+0.28%

International Markets

Market  Index	Close	Change
NIKKEI	8851.00	-6.73
		-0.08%
HANG  SENG	19419.87	+23.51
		+0.12%
SENSEX	17489.14	-129.21
		-0.73%
FTSE 100	5664.48	+0.41
		+0.01%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.670	1.655
CND.   30 Year Bond	2.275	2.264
U.S.   10 Year Bond	1.5116	1.5015
U.S.   30 Year Bond	2.6086	2.6022

Currencies

BOC Close	Today	Previous
Canadian $	1.01971	1.02283
US   $	0.98068	0.97768
Euro Rate  1 Euro=		Inverse
Canadian   $	1.24779	0.80142
US  $	1.22368	0.82721

Commodities

Gold	Close	Previous
London Gold   Fix	1576.45	1566.85
Oil	Close	Previous
WTI Crude Future	85.81	83.91
BRENT	101.28	99.07

Market Commentary:

Canada

By Katia Dmitrieva

July 11 (Bloomberg) — Canadian stocks rose, snapping a four-day slump, as rising crude overshadowed a decline in mining companies after Goldcorp Inc. cut its gold-production forecast.

Cenovus Energy Inc. and Suncor Energy Inc. rose more than 1.8 percent as energy stocks led gains in the Standard & Poor’s/TSX Composite Index. Mining stocks fell the most as Goldcorp, the world’s second-biggest producer of the metal, retreated 10 percent, the most in more than three years.

The S&P/TSX advanced 32.42 points, or 0.3 percent, to 11,544.64. On the index, 140 members advanced and 97 declined.

The gauge lost 3.4 percent over the previous four days and is down the same amount for 2012.

“The key driver is that oil is up,” Jeffrey Burchell at Toronto-based Aston Hill Financial Inc., which manages C$5.5 billion, said in a phone interview. “When you get a stock or commodity, and in this case oil, reacting the way you’d expect it to react to fundamental news, that means the market is working properly. It’s a good sign to see that.”

Gold futures dropped for a second day. Goldcorp slipped 10 percent to C$33.80 after reporting reduced output in Mexico and Canada. Production for the year will be 2.35 million to 2.45 million ounces, compared with a previous forecast of 2.6 million ounces, the Vancouver-based company said yesterday.

Barrick Gold Corp., the world’s largest gold miner, dropped 2 percent to C$35.66. Centerra Gold Inc. advanced 3.3 percent to C$7.46.

Crude prices rebounded from the lowest close in more than a week, rising as much as 3.1 percent as the U.S. Energy Department reported that supplies dropped and refinery use increased. Cenovus gained 3.4 percent to C$32.64. Suncor Energy, the nation’s largest oil company, climbed 1.9 percent to C$29.25. Canadian Natural Resources Ltd. advanced 2.4 percent to C$26.46.

Niko Resources Ltd., the Calgary-based oil and gas explorer, jumped 14 percent to C$14.05 after the company gave an update to an offshore exploration well in Indonesia.

The benchmark index briefly erased gains after investors weighed the release of minutes on the U.S. Federal Reserve’s latest policy meeting for evidence the central bank may be closer to additional stimulus actions. The minutes showed that a few policy makers said the central bank will probably need to take further action to boost the labor market and meet its inflation target. The U.S. is Canada’s largest trading partner.

“We’re a smaller market that follows global markets,” Wes Mills, who is part of a team that manages C$90 billion at Toronto-based Scotia Asset Management, said in a phone interview. “How the Federal Open Market Committee sees the economy going, it’ll have a big impact on sentiment in Toronto.”

US

By Lu Wang and Nikolaj Gammeltoft

July 11 (Bloomberg) — The Standard & Poor’s 500 Index erased losses in the final hour of trading as investors weighed the Federal Reserve’s latest policy minutes for evidence that the central bank may be closer to additional stimulus actions.

Bank of America Corp. and JPMorgan Chase & Co. added more than 1 percent as financial companies rallied. Exxon Mobil Corp. rose 1.5 percent as oil rebounded from the lowest close in more than a week. DuPont Co. and Google Inc. fell at least 1.1 percent after analysts said the companies may miss estimates.

Best Buy Co. sank 8.4 percent after electronics retailer Hhgregg Inc. cut its forecasts.

The S&P 500 fell less than 0.1 percent to 1,341.45 at 4 p.m. New York time, after sinking as much as 0.6 percent earlier. The benchmark gauge has retreated 2.4 percent over five days amid concern about corporate profits. The Dow Jones Industrial Average lost 48.59 points, or 0.4 percent, to 12,604.53. Volume for exchange-listed stocks in the U.S. was 6 billion shares, 9.5 percent below the three-month average.

“You didn’t see any kind of commitment one way or another from the Fed in the minutes from last time,” Robert Pavlik, who helps manage $1.4 billion as chief market strategist at Banyan Partners LLC in New York, said in a phone interview. “You have to be taking a cautious approach to this market here, especially heading into the earnings season. I’m optimistic, but I’m not fully committed to the possibility of a terrific earnings season.”

Stocks initially turned lower as minutes from the Fed’s June meeting showed two participants believed more bond purchases are appropriate, while two others said they would be warranted in the absence of “satisfactory progress” in cutting unemployment or if downside risks increase. Equities recovered as the S&P 500 briefly dipped below its average price over the past 50 days and analysts dissected the minutes, with Jefferies & Co. economist Ward McCarthy saying there’s a “reasonable probability” a third round of quantitative easing is announced in coming months.

“Between the Fed’s outlook and the technical support we should find at the moving average, there is generally going to be a lift and that’s exactly what you saw materializing,” said Peter Kenny, managing director in institutional sales at Knight Capital Group Inc. in Jersey City, New Jersey.

The Fed minutes come amid growing concern that the U.S. economy is faltering and corporate profits are shrinking.

Goldman Sachs Group Inc. cut its estimate for second-quarter gross-domestic product growth twice today, lowering it to 1.3 percent after data on wholesale inventories and the trade deficit dimmed prospects for the economy. The S&P 500 slumped yesterday amid lower sales estimates at Applied Materials Inc. and Cummins Inc.

Profits for S&P 500 companies fell 1.8 percent in the second quarter, according to analyst estimates compiled by Bloomberg. That would be the first decline since 2009, even as revenue is forecast to rise 2.5 percent. Analysts project profit growth of 3.9 percent and 15 percent, respectively, in the third and fourth quarters of 2012.

“You’re seeing a weakening demand picture, at least in the near term, starting to take root,” Matthew Kaufler, a portfolio manager at Federated Investors Inc. in Rochester, New York, said in a phone interview. His firm oversees $363.6 billion. “The key calibration is whether the market reaches the conclusion that weakness is broad-based, but it’s shallow and short in duration, or it’s going to be deeper and longer in duration.

It’s too soon to make that call. I think that’s the question upon us over the next two weeks.”

Energy companies climbed the most among 10 S&P 500 industry groups today, rallying 1.4 percent, as oil rebounded from the lowest close in more than a week. Exxon rose 1.5 percent to $84.38, while Chevron Corp. gained 0.9 percent to $104.85.

Financial companies advanced. Bank of America rallied 2 percent to $7.63. JPMorgan climbed 1 percent to $34.59.

JPMorgan, the biggest U.S. bank by assets, kicks off the industry’s second-quarter earnings season on July 13 and may report a profit of 76 cents a share, excluding accounting adjustments, according to the average estimate of analysts in a Bloomberg survey.

Abercrombie & Fitch Co. had the biggest jump in the S&P 500, climbing 4.1 percent to $34.12. The teen-clothing retailer may substantially increase its buyback authorization from the current 12.9 million shares, the New York Post reported, citing a person it didn’t identify.

Wendy’s Co. added 2.4 percent to $4.69. The hamburger chain was raised to outperform from neutral at Nick Setyan, an analyst with Wedbush Securities Inc. The 12-month price target is $5.50.

Mead Johnson Nutrition Co. gained 4 percent to $78.28. The maker of the world’s best-selling Enfamil baby formula said China’s Hunan province apologized for “erroneous” reports claiming formula sold by the company contained a banned flavor additive.

DuPont dropped 1.1 percent to $47.14. Cooley May, an analyst with Macquarie Group Ltd., cut the stock’s rating to neutral from outperform, citing concern over profit growth in the company’s chemical and industrial businesses.

Google slid 1.8 percent to $571.19. The owner of the world’s most popular search engine may miss analysts’ second- quarter sales estimates because of a fluctuation in foreign exchange rates, according to Carlos Kirjner, an analyst with Sanford C. Bernstein & Co.

Best Buy, the largest U.S. consumer-electronics retailer, declined 8.4 percent to $19.37. Hhgregg plunged 36 percent, the most since its initial public offering in 2007, to $7.34. The Indianapolis-based appliance and electronics retailer cut its full-year forecast amid sinking television sales.

Goldcorp Inc. tumbled 9.7 percent to $33.17. The second- largest producer of the precious metal by market value cut its full-year 2012 gold production forecast by as much as 9.6 percent after delays at a Canadian mine and a water shortage at a Mexican project.

Waste Management Inc. fell 4.5 percent to $31.59. The trash hauler was cut to underweight, the equivalent of sell, from equalweight at Morgan Stanley.

Blackstone Group LP’s Byron Wien said the S&P 500 may climb past 1,400 this year. Wien, vice chairman of the advisory services unit of the world’s biggest private-equity firm, recommended buying Apple Inc. shares and said the iPad maker is the “most innovative” U.S. company. He said he’s also bullish on gold because the metal will retain its value should global growth slow.

“When everybody is so negative it’s usually a good time to take the other side,” he said today in a television interview on “Bloomberg Surveillance” with Tom Keene. “I think we can do better than 1,400.”

An advance to 1,400 would require a 4.4 percent increase in the U.S. equity benchmark from yesterday’s close. The S&P 500 has gained 6.7 percent this year. Apple shares have surged almost 50 percent this year.

Have a wonderful evening everyone.

Be magnificent!

 

In Sanskrit, one calls the bird twice born.

And this name is also given to the man who submits for at least twelve years

to the discipline of mastering his self and the noble thought, who emerges from it with simple needs,

with a pure heart, and ready to take upon himself all the responsibilities of life

in a broad and disinterested spirit.  One estimates that this man is born again from the blind envelopment

of the ego to the freedom of the life of the soul,

that he has entered into lively connection with his environment,

that he has become one with the Whole.

Rabindranath Tagore,1861-1901

As ever,

Carolann

Be honest, and remember that honesty counts for nothing unless back of it lie courage and efficiency.

-Theodore Roosevelt, 1858-1919

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:

Raymond Asquith wrote this to his wife Katharine on July 10^th, 1916:

We are in the front line now and have two more days there….One gets terribly tired of one’s clothes after sixteen days without a change.   One dozes off in the daytime with a pleasant humming in one’s ears which makes one dream of woods and hayfields in England and when one wakes one finds that it is a covey of bluebottles quarreling over a bit of  bully beef that some blasé private has flung in the trenches.  Yesterday I saw a very handsome fly with a bottle-green bodice and magenta skirt.  This is the nearest I can get to a pretty woman. –from The Book of Days.

And also on this day in…

1509 – John Calvin, founder of Presbyterianism is born.

1871 – Marcel Proust is born.

1925 – John Scopes (Inherit the Wind) “Monkey Trial” begins.
1940 – Battle of Britain begins.
1962 – U.S. Patent issued for the Three Point Seatbelt.
1943 – Allies begin amphibious landing of Sicily – In Operation Husky, Canadian 1st Infantry and 1st Tank Brigade Invade Sicily with British, French and U.S. troops – Sicily is taken Aug. 17 victory, with 2434 Canadian casualties.
1962 – The Telstar satellite is launched from Cape Canaveral, beaming live television from Europe and U.S.
1985 – Rainbow Warrior sunk, Greenpeace.

CHEFS IN YOUR KITCHEN

FYI: Now you can bring your laptop or tablet right into your kitchen and enroll in classes with different chefs at TestKitchenSchool.com. Instructor-led classes are $39.95/month; the self-guided option is $19.95/month.  There are photos, video and interactive tools.

The way you get to know yourself is by the expression on other people’s faces. -Gil Scot Heron

photos of the day July 10, 2012

Visitors to the National Gallery of Art in Washington pass between the East and West Buildings via Multiverse, the largest and most complex light sculpture ever, created by American artist Leo Villareal.

Kevin Lamarque/Reuters

Children climb up a massive bonfire in the Shankill Estate in West Belfast, Northern Ireland. Thousands of bonfires have been built in Protestant areas across Northern Ireland for the annual July 11 bonfire night in which Protestants celebrate the 1690 Battle of the Boyne.

Peter Morrison/AP

Market Closes for July 10, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12653.12	-83.17
		-0.65%
S&P 500	1341.47	-10.99
		-0.81%
NASDAQ	2902.33	-29.44
		-1.00%
TSX	11512.22	-122.45
		-1.05%

International Markets

Market  Index	Close	Change
NIKKEI	8857.73	-39.15
		-0.44%
HANG  SENG	19396.36	-31.73
		-0.16%
SENSEX	17618.35	+226.37
		+1.30%
FTSE 100	5664.07	+36.74
		+0.65%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.655	1.663
CND.   30 Year Bond	2.264	2.273
U.S.   10 Year Bond	1.5015	1.5134
U.S.   30 Year Bond	2.6022	2.6224

Currencies

BOC Close	Today	Previous
Canadian $	1.2283	1.01902
US   $	0.97768	0.98134
Euro Rate  1 Euro=		Inverse
Canadian   $	1.25268	0.79817
US  $	1.22491	0.81639

Commodities

Gold	Close	Previous
London Gold   Fix	1566.85	1588.04
Oil	Close	Previous
WTI Crude Future	83.91	85.52
BRENT	99.07	100.31

Market Commentary:

Canada

By Steve Chambers

July 10 (Bloomberg) — Canadian stocks slumped for a fourth straight session as declines in commodities outweighed news that housing starts unexpectedly rose and European officials took steps to protect Spanish banks.

Mining and energy stocks contributed the most among 10 industries to the decrease in the Standard & Poor’s/TSX Composite Index. Barrick Gold Corp. and Kinross Gold Corp. dropped at least 1.4 percent as the metal fell 0.3 percent on the Comex. Research In Motion Ltd. retreated 4.7 percent after Chief Executive Officer Thorsten Heins struggled to reassure shareholders who gathered at the company’s annual meeting.

The S&P/TSX Index retreated 29.44 points, or 0.3 percent, to 11,605.23 at 12:44 p.m. in Toronto. The benchmark index had slumped 2.3 percent over the last three sessions and is down 2.9 percent in 2012.

“We’re in one of those information vacuums,” Jamie Robertson, chief investment officer at Calgary-based McLean & Partners Wealth Management, said in a phone interview. The firm manages C$900 million. “We’re heading into earnings season, expectations are damped for company reporting, and Europe is always going to be background noise. It just shows how nervous the markets are and the lack of conviction they’re trading with at this point.”

Canadian housing starts rose unexpectedly by 2.4 percent in June, beating estimates by all 21 economists surveyed by Bloomberg. European governments will jump-start as much as 100 billion euros ($123 billion) in emergency loans to shore up Spain’s banks and may move the costs off the Spanish government’s balance sheet to shield the euro region’s fourth- largest economy from the debt crisis.

BlackBerry maker Research in Motion fell 4.7 percent to C$7.43 as company officials told shareholders at the company’s annual meeting that it expects the next couple of quarters to be very challenging.

Barrick Gold, the world’s largest producer of the metal, lost 1.4 percent to C$36.82. Kinross Gold declined 2.5 percent to C$8.24. Jaguar Mining Inc., a gold miner with deposits in Brazil, tumbled 18 percent to 82 cents, the most since May.

Oil fell as much as 1.6 percent after Norway ended a strike that threatened to halt output by western Europe’s largest crude exporter and as China reduced purchases of the raw material.

Cenovus Energy Inc., a provider of natural gas, fell 0.5 percent to C$32.74. Imperial Oil Ltd., the second-largest energy provider, declined 0.6 percent to C$42.54.

US

By Rita Nazareth and Allison Bennett

July 10 (Bloomberg) — U.S. stocks fell for a fourth day as pessimism about the earnings season grew while commodity producers slid amid lower oil and metal prices. The euro reached a two-year low versus the dollar, while European shares rallied.

The Standard & Poor’s 500 Index dropped 0.9 percent to 1,339.68 at 2:36 p.m. in New York to extend its longest slump since May. The 10-year Treasury yield was little changed at 1.51 percent. The euro weakened as much as 0.6 percent to $1.2235 and touched a record low of 1.199 Australian dollars. Oil sank 2.5 percent to $83.84 a barrel in New York as a strike in Norway was averted and China reduced purchases. Natural gas tumbled 4.8 percent, while nickel and silver lost more than 2 percent.

Lower-than-estimated sales projections at Advanced Micro Devices Inc. and Cummins Inc. spurred concern about the groups forecast to post the strongest profit growth among 10 industries in the S&P 500. Technology and industrial company earnings increased more than 7 percent in the second quarter, according to analyst estimates compiled by Bloomberg, while profits for the entire S&P 500 are projected to have fallen 1.8 percent in the first decrease since 2009.

“I don’t expect the rest of the earnings season to surprise to the upside,” John Augustine, who helps oversee $25 billion as chief market strategist at Cincinnati-based Fifth Third Asset Management, said in a phone interview. “Earnings will be the driver of the market coming up.

Technology shares in the S&P 500 slid 1.3 percent as a group and were the biggest drag on the index among the 10 main industries. Industrial companies lost 1.8 percent for the largest decline.

AMD, the second-biggest maker of processors for personal computers, tumbled 11 percent after reporting an unexpected drop in second-quarter sales, citing weakness in China and Europe.

Micron Technology Inc. and SanDisk Corp. lost at least 4.2 percent. Cummins, a maker of truck engines, tumbled 9.5 percent after saying order trends have weakened and the company expects 2012 revenue ‘‘to be in line’’ with the 2011 level after projecting a 10 percent increase in February. Second-quarter preliminary revenue was about $4.45 billion, the company said, compared with the average analyst estimate for $5.08 billion.

Alcoa Inc. tumbled 4.6 percent after the company reported a quarterly loss of $2 million and a drop in sales to $5.96 billion from $6.59 billion. Profit excluding charges related to a proposed settlement of Aluminium Bahrain BSC’s bribery lawsuit and other items was 6 cents a share, compared with the 5-cent average of 19 estimates compiled by Bloomberg.

The euro weakened against all 16 major peers five days after the European Central Bank reduced its key interest rate to a record 0.75 percent. The shared currency depreciated even as Europe planned to jump-start as much as 100 billion euros ($123 billion) in loans to shore up Spain’s banks, Luxembourg Prime Minister Jean-Claude Juncker said after chairing a meeting of euro-area finance ministers.

‘‘The euro is now the main funding currency, and everyone wants to be short euro,” said Sebastian Galy, a senior foreign- exchange strategist at Societe Generale SA in New York. “The dollar is no longer the main funding currency.” A short position is a bet currency will decline in value.

The currencies of Mexico, Sweden and South Africa led gains against the euro, rising at least 0.8 percent. The euro extended losses as Italian Prime Minister Mario Monti said he won’t serve in another government when his term ends next year. Monti said he is confident Italy would not need a full rescue from European allies, while not ruling out a request for the permanent bailout funds to buy the nation’s bonds.

Five shares rose for every one that declined in the Stoxx 600. ASML Holding NV jumped 8.6 percent as Intel Corp., the world’s largest semiconductor maker, agreed to invest as much as $4.1 billion in Dutch chip-equipment maker. Ipsen SA sank 11 percent after U.S. regulators put clinical trials of a hemophilia drug it’s developing on hold because of potential safety concerns.

European stocks also advanced as U.K. manufacturing rose 1.2 percent from April and industrial output grew 0.8 percent in Italy, defying the median economist estimates for declines.

Spanish equities and bonds gained after finance chiefs agreed to make available 30 billion euros by the end of this month. The goal is to eventually use the euro-area bailout fund to recapitalize banks directly instead of saddling the government with the debts.

“It’s positive progress showing that the European Union is moving towards a banking union,” Norman Chan, head of investment at Calibre Asset Management Ltd., a unit of National Australia Bank Ltd., said in an interview with Bloomberg Television. “It shows the EU is being pragmatic.”

The MSCI Emerging Markets Index rose less than 0.1 percent, snapping a four-day drop. Benchmark gauges in India and Thailand climbed more than 1 percent. Russia’s Micex Index gained 0.5 percent. The Hang Seng China Enterprises Index of mainland shares slid 0.6 percent. China’s imports rose less than anticipated in June while growth in outbound shipments slowed, customs bureau data showed.

The extra yield investors demand to own Spanish 10-year debt over benchmark German bunds narrowed 25 basis points to 5.49 percent. The yield on 10-year Italian bonds fell 15 basis points to 5.95 percentage points. Germany’s 10-year yield was little changed at 1.32 percent.

The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments dropped 4 basis points. The Markit iTraxx Crossover Index of contracts tied to the debt of 50 mostly junk-rated European companies declined for a second day, falling 15 basis points.

Brent crude fell 1.4 percent to $98.95 a barrel, tumbling below $100 after the Norwegian government ordered compulsory arbitration, preventing a lockout of platform workers that had been scheduled to start yesterday at midnight.

Have a wonderful evening everyone.

Be magnificent!

The purity of life is the highest and most authentic art to follow.

Mahatma Gandhi, 1869-1948

As ever,

Carolann J

 

Anyone can hold the helm

when the sea is calm.

-Publilius Syrus, 85-43 BC

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:

Alba by Samuel Beckett

before morning you shall be here

and Dante and the Logos and all strata and mysteries

and the branded moon

beyond the white plane of music

that you shall establish here before morning

grave suave singing silk

stoop to the black firmament of areca

rain on the bamboos flower of smoke alley of willows

who though you stoop with fingers of compassion

to endorse the dust

shall not add to your bounty

whose beauty shall be a sheet before me

a statement of itself drawn across the tempest of emblems

so that there is no sun and no unveiling

and no host

only I and then the sheet

and bulk dead.

From “The Collected Poems of Samuel Beckett”, edited by Seán Lawlor and John Pilling, published by Faber, 2012.

Success means doing the best we can with what we have. Success is the doing, not the getting; in the trying, not the triumph. Success is a personal standard, reaching for the highest that is in us, becoming all that we can be.  – Zig Ziglar, 1926-

And on this day in…

1846 – U.S. Takes San Francisco.
1850 – President Zachary Taylor dies unexpectedly of Cholera.

1856 – Inventor Nikola Tesla is born.

1879 – Composer Otto Respighi is born.
1941 – Enigma code key is broken.
1942 – Anne Frank and her family go into hiding in the attic above her father’s office in Amsterdam.

1948 – Satchel Page makes debut with the Cleveland Indians.

1956 – Actor Tom Hanks is born.
1971 – U.S. turns over responsibility for Korea’s DMZ.

photos of the day July 9, 2012

A bee collects nectar from a sunflower in a field near Leibstadt, northern Switzerland.

Arnd Wiegmann/Reuters

‘Locks of love’ are displayed on top of Mt. Nam or Namsan in central Seoul, South Korea. Young couples come to the top of the mountain to hang their locks of love and throw the keys away in the hope for eternal love.

Kim Hong-Ji/Reuters

Market Closes for July 9, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12736.29	-36.18
		-0.28%
S&P 500	1352.46	-2.22
		-0.16%
NASDAQ	2931.77	-5.56
		-0.19%
TSX	11634.67	-25.29
		-0.22%

International Markets

Market  Index	Close	Change
NIKKEI	8896.88	-123.87
		-1.37%
HANG  SENG	19428.09	-372.55
		-1.88%
SENSEX	17391.98	-129.14
		-0.74%
FTSE 100	5627.33	-35.30
		-0.62%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.663	1.693
CND.   30 Year Bond	2.273	2.298
U.S.   10 Year Bond	1.5134	1.5508
U.S.   30 Year Bond	2.6224	2.6660

Currencies

BOC Close	Today	Previous
Canadian $	1.01902	1.01794
US   $	0.98134	0.98238
Euro Rate  1 Euro=		Inverse
Canadian   $	1.25538	0.79657
US  $	1.23195	0.81172

Commodities

Gold	Close	Previous
London Gold   Fix	1588.04	1583.48
Oil	Close	Previous
WTI Crude Future	85.52	84.45
BRENT	100.31	98.96

Market Commentary:

Canada

By Katia Dmitrieva

July 9 (Bloomberg) — Canadian stocks fell for a third day after rising yields on Spanish bonds increased investor concerns that the European sovereign debt crisis may slow the global economy.

Suncor Energy Inc., the nation’s largest oil provider, and Canadian Natural Resources Ltd. lost at least 0.6 percent as energy stocks and raw-material producers were the biggest drag on the Standard & Poor’s/TSX Composite Index. South American Silver Corp. lost 29 percent, the most in five years, after Bolivian President Evo Morales said he may revoke the company’s exploration license.

The S&P/TSX Index fell 25.29 points, or 0.2 percent, to 11,634.67. The index slumped 2.1 percent over the two final sessions of last week following six days of gains. The Canadian equity benchmark has retreated 2.7 percent in 2012.

Spain’s 10-year debt yield rose above 7 percent, signaling last month’s summit wasn’t enough to stem the region’s debt crisis, according to Pacific Investment Management Co.’s Mohamed El-Erian. China’s inflation eased to a 29-month low as Premier Wen Jiabao said the government would intensify its response to the economic slowdown. Analyst estimates compiled by Bloomberg show S&P 500 companies may report the first year-over-year profit decline since 2009.

“It’s general cautiousness today,” said Bruce Campbell, president of Oakville, Ontario-based Campbell & Lee Investment Management Inc. “It’s investor worry about Europe, it’s worry about China because the inflation number was the equivalent of deflation in a sense, and it’s worry about second-quarter earnings.”

Suncor Energy, the nation’s largest oil company, declined 0.7 percent to C$29.16 and Canadian Natural Resources, the nation’s third-largest energy provider, slumped 1 percent to C$26.32. Natural-gas producer Cenovus Energy Inc. lost 0.2 percent to C$32.91. Crude advanced 1.5 percent to $85.99 a barrel in New York, snapping two days of losses.

Barrick Gold Corp., the world’s largest producer of the metal, declined 0.5 percent to C$37.36. Goldcorp Inc., the second-largest producer, dropped 0.3 percent to C$38.42. Gold futures gained 0.6 percent to $1,589.10 an ounce on the Comex in New York, paring two days of losses.

South American Silver plunged 29 percent to 72 cents, the most since the stock started trading in February 2007. The Malku Khota silver project in southwestern Bolivia’s Potosi province has divided the community with protesters taking people hostage in confrontations that led to two deaths, according to the state agency known as ABI.

Analyst estimates compiled by Bloomberg project a 1.8 percent decline in profit for S&P 500 companies in the second quarter, which would be the first year-over-year decrease since 2009.

US

By Stephen Kirkland and Rita Nazareth

July 9 (Bloomberg) — U.S. stocks fell for a third day as Spain’s 10-year debt yield topped 7 percent, fueling concern the debt crisis is worsening, and investors awaited the start of the earnings season. Corn and soybeans surged on forecasts for more dry U.S. weather. Treasuries rose.

The Standard & Poor’s 500 Index slipped 0.2 percent at 4 p.m. in New York and the Stoxx Europe 600 Index fell 0.4 percent. Ten-year Spanish yields jumped 11 basis points to 7.06 percent after rising as high as 7.108 percent. The euro climbed 0.2 percent to $1.2319, rebounding from a two-year low of $1.2251. Corn rose as much as 5.8 percent and soybeans jumped to a four-year high. Oil added 1.8 percent to $85.99 a barrel and natural gas rallied as a strike threatened supplies from Norway.

European finance ministers were gathering to work out crisis measures after leaders agreed last month to ease banks’ access to bailout funds. France and Germany sold six-month debt at negative yields amid demand for assets considered safe. Alcoa Inc. began the second-quarter U.S. earnings season after markets closed in New York, with analyst estimates compiled by Bloomberg predicting the first year-over-year profit decline for S&P 500 companies since 2009.

“It’s very concerning,” Jeff Savage, regional chief investment officer for Wells Fargo Private Bank in Portland, Oregon, said in a telephone interview. His firm manages $169 billion. “Seven percent is not a sustainable level of interest rates for Spain. That’s scary stuff. We can’t have one of our best trading partners going through terrible economic times and not having an effect on U.S. corporate earnings.”

The S&P 500 dropped for a third day, the longest streak in more than a month, and closed at its lowest level since June 28.

Alcoa, the biggest U.S. aluminum producer, rose 0.4 percent in the regular session and climbed another 0.3 percent in extended trading after the largest aluminum producer reported earnings and revenue that beat estimates following an increase in orders from the auto and aerospace industries.

Analyst estimates compiled by Bloomberg project a 1.8 percent decline in profit for S&P 500 companies in the second quarter, which would be the first year-over-year decrease since 2009. Revenue is projected to have increased 2.5 percent.

Earnings pessimism is reaching levels last seen during the global financial crisis of 2008 and 2009, based on company forecasts. Forty-four corporations issued profit projections that trailed analyst estimates during the 20 days through July 6, or 3.1 times the number of those that exceeded them. The ratio has been greater than 3 for five straight days and 17 of the last 20, the most in three years. It was at least that high the majority of the time between October 2008 and April 2009, climbing to 11.5 in December 2008, the data show.

DuPont Co., Exxon Mobil Corp., Caterpillar Inc. and Bank of America Corp. fell at least 1.3 percent to lead losses in the Dow Jones Industrial Average. Commodity and consumer- discretionary companies fell at least 0.5 percent to lead declines in eight of the 10 main industry groups in the S&P 500.

Navistar International Corp., the maker of International brand trucks, fell 3.1 percent after Bloomberg Industries said truckmakers will need to reduce production in the second half of the year.

Visa Inc. and MasterCard Inc. fell at least 1.3 percent after being downgraded at UBS AG. Apple Inc., the biggest company by market value, rose 1.3 percent amid optimism about its smaller iPad tablet’s sales. Amerigroup Corp. surged 38 percent after WellPoint Inc., the second-biggest U.S. health plan, agreed to buy the company for $92 a share.

Ten-year U.S. Treasury yields slipped four basis points to 1.51 percent. Thirty-year rates lost four basis points to 2.62 percent.

More than two shares fell for each that advanced in the Stoxx 600, which retreated for a fourth day. Metro AG, Germany’s biggest retailer, sank 6.3 percent to a three-year low as Chief Executive Officer Olaf Koch said restrained spending will have a “significant impact” on business. Michael Page International Plc lost 3.8 percent after the U.K. recruitment company reported a decline in gross profit. Hays Plc, the recruiter that finds workers for Siemens AG, sank 2.7 percent.

The euro recovered from its lows of the day after the European Commission said any future direct recapitalizations of banks by the European Stability Mechanism would not require guarantees by governments in countries that receive the aid.

The world’s most-accurate foreign-exchange strategists say the worst is over for the euro this year, putting them at odds with traders who see more pain.

Led by Wells Fargo & Co. and Westpac Banking Corp. — which correctly called the euro’s weakness last quarter — the five best firms as measured by Bloomberg expect Europe’s 17-nation common currency to end the year at about $1.26. That’s above the $1.24 median estimate in a survey of 55 strategists by Bloomberg News.

A draft document to be discussed by finance ministers today showed that Spain will get an extra year to bring its budget deficit to 3 percent of gross domestic product, according to a Europa Press report. The deficit target for 2012 will be eased to 6.3 percent, Europa Press reported, with a target of 4.5 percent for 2013 and 2.8 percent in 2014.

Germany dismissed a rapid move toward direct bank recapitalization by the European rescue fund, limiting the tools for shoring up Spain’s banks as the euro-area debt crisis simmers. Finance Minister Wolfgang Schaeuble dismissed “false expectations” raised by euro leaders last month that the economically troubled euro zone would act quickly to unify the oversight of its banking system.

“It will take time, it’s complicated, it isn’t easy to do,” Schaeuble told reporters before the finance ministers meeting.

“All eyes will be on the meeting of European finance ministers today to put a halt to the one-step-forward, two-step- backward discussions on the European sovereign debt crisis,”

Jeroen van den Broek, a credit strategist at ING Bank NV in Amsterdam, wrote today in a report. “To distract investors a bit, Alcoa will kick off the second-quarter earnings season today. It is doubtful that earnings will give positive impetus.”

The difference in yield investors demand to own Spanish 10- year bonds over benchmark German bunds climbed 11 basis points to 574 basis points, within 15 basis points of the June 18th record. Spanish 30-year bond yields increased three basis points to 7.29 percent, after rising to a euro-era record 7.327 percent.

German two-year note yields were at minus 0.003 percent from minus 0.010 percent on July 6. The government sold 3.29 billion euros ($4.04 billion) of six-month bills at a record-low yield of minus 0.0344 percent, according to a statement from the Bundesbank today.

France’s two-year rate increased five basis points to 0.25 percent. France sold 1.99 billion euros of six-month bills at a yield of minus 0.006 percent, the first time the nation agreed to a negative yield on the securities since Bloomberg began collecting the data in 1999.

The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments climbed for a fourth day, rising 1.4 basis points to 285.

Corn surged as much as the 40-cent limit on the Chicago Board of Trade, advancing 5.8 percent to $7.33 a bushel, the highest since September. Soybean futures for November delivery increased 2.8 percent to $15.4775 a bushel and reached $15.7125, the highest since July 2008, amid the worst U.S. drought since Ronald Reagan was president.

The U.S. drought is withering the world’s largest corn crop, and the speed of the damage may spur the government to make a record cut in its July estimate for domestic inventories.

Tumbling yields will combine with the greatest-ever global demand to leave U.S. stockpiles on Sept. 1, 2013, at 1.216 billion bushels (30.89 million metric tons), according to the average of 31 analyst estimates compiled by Bloomberg. That’s 35 percent below the U.S. Department of Agriculture’s June 12 forecast, implying the biggest reduction since at least 1973.

In Asia, Chinese Prime Minister Wen Jiabao said the nation’s economy faces “relatively large” downward pressure.

China’s inflation eased to a 29-month low, with the consumer price index rising 2.2 percent in June from a year earlier.

Japan’s May machinery orders fell the most since 2001, while Hong Kong and Vietnam signaled growth may fall short of official forecasts.

The MSCI Emerging Markets Index lost 1.1 percent, declining for a fourth day. The Shanghai Composite Index slipped 2.4 percent. Benchmark gauges in South Korea, the Philippines, Thailand, Indonesia and Brazil dropped more than 1 percent.

Egypt’s EGX 30 Index slumped 4.2 percent as President Mohamed Mursi reinstated parliament, reversing the military’s decision last month after a court ruling.

Have  a wonderful evening everyone.

Be magnificent!

 

True morality consists not in following

the well-beaten track,

but in finding out the true path for ourselves

and in fearlessly following it.

Mahatma Gandhi, 1869-1948

 

As ever,

Carolann

 

Success is how high you bounce

when you hit bottom.

-George S. Patton, 1885-1945

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:

British Pathé, a media company that produced newsreels between 1910 and 1970, recently posted to the Web an old newsreel that detailed the day-to-day jobs of window washers in 1938.  Try not to get vertigo as the camera pans down to the city streets hundreds of stories below and follows the window washers as they squeegee at dizzying heights.  How did the cameraman do it?  Check out the video at http://bit.ly/windowwashers.

And on this day in…

1907 – Painter Frida Kahlo is born.

1935 – Dalai Lama, leader of Tibet is born.
1957 – John Lennon and Paul McCartney meet for the first time.
1942 – Anne Frank and her family take refuge in Amsterdam.
1976 – Women inducted into US Naval Academy.
1536 – Jacques Cartier returns to France after discovering the St. Lawrence River in Canada.
1854 – The Repulican Party (US) is officially founded in Jackson, Mich.

photos of the day July 6, 2012

Tourists enjoy the beach of the Promenade des Anglais as summer holidays started with temperatures close to 30 degrees Celsius (86 Fahrenheit) in Nice, France.

Eric Gaillard/Reuters

Market Closes for July 6, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12772.47	-124.20
		-0.96%
S&P 500	1354.68	-12.90
		-0.94%
NASDAQ	2937.33	-38.79
		-1.30%
TSX	11659.65	-157.38
		-1.33%

International Markets

Market  Index	Close	Change
NIKKEI	9020.75	-59.05
		-0.65%
HANG  SENG	19800.64	-8.49
		-0.04%
SENSEX	17521.12	-17.55
		-0.10%
FTSE 100	5662.63	-30.00
		-0.53%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.693	1.722
CND.   30 Year Bond	2.298	2.309
U.S.   10 Year Bond	1.5508	1.5969
U.S.   30 Year Bond	2.6660	2.7160

Currencies

BOC Close	Today	Previous
Canadian $	1.1794	1.01432
US   $	0.98238	0.98589
Euro Rate  1 Euro=		Inverse
Canadian   $	1.25083	0.98238
US  $	1.22978	0.81316

Commodities

Gold	Close	Previous
London Gold   Fix	1583.48	1604.50
Oil	Close	Previous
WTI Crude Future	84.45	87.22
BRENT	98.96	100.53

Market Commentary:

Canada

By Katia Dmitrieva

July 6 (Bloomberg) — Canadian stocks fell for a second day after U.S. employers added fewer jobs than economists had estimated and commodity prices declined the most in two weeks.

Suncor Energy Inc., the nation’s largest oil company, retreated 3.4 percent. Pengrowth Energy Corp. lost 3.2 percent after cutting its dividend. Raw-materials producers and energy stocks contributed most to the decline in the Standard & Poor’s/TSX Composite Index as nine of 10 industries slumped.

The S&P/TSX slid 157.07 points, or 1.3 percent, to 11,659.96. The index fell 2.1 percent over the last two sessions and yesterday snapped six days of gains. The Canadian equity benchmark is up 0.6 percent this week and has fallen 2.5 percent in 2012.

U.S. payrolls rose 80,000 last month, less than the 100,000 median gain economists had projected in a Bloomberg News survey.

The unemployment rate held at 8.2 percent. The news overshadowed Canadian employment data that showed employers added jobs for a fourth consecutive month in June, led by education and health care. The nation’s jobless rate dropped to 7.2 percent from 7.3 percent in May.

“The American job numbers negate any of the slight positive that was in the Canadian numbers,” Michael Sprung, president of Toronto-based Sprung Investment Management Inc., said in a phone interview. “The U.S. is struggling, and investors are beginning to worry about that far more and its longer-term implications for Canada.”

Barrick Gold Corp. lost 2.7 percent to C$37.55 and Goldcorp Inc. fell 2 percent to C$38.52 as the metal declined in New York. Centerra Gold Inc. retreated 5.2 percent to C$7.69.

The S&P GSCI Spot Index of 24 raw materials fell 2.4 percent, the most since June 21. Crude oil and gold dropped the most in a week, and industrial metals including lead, aluminum and copper slumped.

Suncor fell 3.4 percent to C$29.36. Pengrowth lost 3.2 percent to C$6.40. The oil and gas company reduced its dividend citing continuing weakness in the commodity markets. Arcan Resources Ltd., a Calgary-based explorer and producer of natural gas, plunged 12 percent to C$1.76. Canadian Natural Resources Ltd., the nation’s third-largest energy company, declined for a third day, losing 3.5 percent to C$26.58.

US

By Lu Wang and Julia Leite

July 6 (Bloomberg) — U.S. stocks declined, erasing a weekly gain for the Standard & Poor’s 500 Index, as slower-than- forecast growth in payrolls fueled concern that the economic recovery is slowing.

All 10 industry groups in the S&P 500 retreated. Alcoa Inc., Freeport-McMoRan Copper & Gold Inc. and Schlumberger Ltd.

slid at least 1.3 percent as commodity shares declined. JPMorgan Chase & Co. and Bank of America Corp. dropped at least 1.4 percent to pace losses among financial companies. Computer and software shares slumped after Informatica Corp. and Seagate Technology Plc  said earnings missed their forecasts.

The S&P 500 slipped 0.9 percent to 1,354.68 at 4 p.m. in New York, reversing its gain for the week to a loss of 0.6 percent. The Dow Jones Industrial Average dropped 124.20 points, or 1 percent, to 12,772.47. Volume for exchange-listed stocks in the U.S. was 5.1 billion shares, 25 percent below the three- month average and the second-slowest full trading day of 2012.

“It confirms the view that the U.S. economy is slowing,” said Jack Ablin, chief investment officer of BMO Harris Private Bank in Chicago, which oversees about $60 billion of assets.

“We are creating jobs at about less than half the pace in the second quarter than we did in the first quarter, either because of influences from abroad or seasonal adjustments.”

Equities fell as Labor Department figures showed payrolls rose 80,000 last month after a 77,000 increase in May.

Economists projected a 100,000 gain, according to the median estimate in a Bloomberg News survey. The unemployment rate held at 8.2 percent. Private employment, which excludes government agencies, increased 84,000 in June, the weakest in 10 months.

“On balance it’s a mildly disappointing report,” Mark Luschini, chief investment strategist for Philadelphia-based Janney Montgomery Scott LLC, which manages about $54 billion, said in a phone interview. “It’s hard for investors to get overly enthused about it unless in this bizarre world you believe this number gives the Fed more impetus to step up with QE3,” he said, referring to another round of stimulus action by the Federal Reserve.

The Fed has already purchased $2.3 trillion of securities in two so-called quantitative-easing programs. Chairman Ben S.

Bernanke, speaking at a June 20 Washington press conference, said the Fed is focusing “primarily” on the outlook for jobs in deciding whether to ease further, and more action would be needed without “sustained improvement in the labor market.”

U.S. stocks declined yesterday, halting a three-day advance for the S&P 500, amid disappointment over Europe’s efforts to tame the region’s debt crisis. The European Central Bank reduced its benchmark rate to a record low of 0.75 percent and the People’s Bank of China cut borrowing costs for a second time in a month.

Commodity shares in the S&P 500 slumped 1.2 percent as a group today. The S&P GSCI Index of commodities lost 2.4 percent as oil and gold prices declined. Alcoa, the largest U.S. aluminum producer, tumbled 2.2 percent to $8.73. Freeport- McMoRan, a copper and gold company, fell 1.3 percent to $35.01 while oilfield services company Schlumberger slid 1.4 percent to $65.17.

The Morgan Stanley Cyclical Index of companies most-tied to economic growth erased 1.3 percent. The Dow Jones Transportation Average slumped 1 percent. JPMorgan slipped 1.4 percent to $33.90 while Bank of America lost 2.1 percent to $7.66.

Technology shares dropped the most among S&P 500 groups, erasing 1.8 percent. Informatica plunged 28 percent to $31.39, the biggest loss since 2001. The provider of corporate data- integration software reported second-quarter earnings and revenue that unexpectedly dropped, missing analysts’ estimates.

Informatica said it didn’t adapt as rapidly as it should have to a downturn in demand, especially in Europe.

Other software companies tumbled. Teradata Corp. fell the most in the S&P 500, sinking 10 percent to $65.01, while Citrix Systems Inc. had the second-biggest drop, tumbling 7.6 percent to $77.45.

Seagate declined 0.5 percent to $24.96. The world’s largest maker of computer disk drives said fiscal fourth-quarter sales and profit margin would miss the company’s previous forecast, citing reduced hard-drive shipments and a “supplier quality issue” that affected some products.

Acme Packet Inc. slumped 14 percent to $15.74. The maker of devices that help transmit voice and data over Internet networks said second-quarter earnings missed its expectation because of continued weakness in the North American service provider market. F5 Networks Inc., a developer of software for Internet traffic management, dropped 6.9 percent to $94.49.

Navistar International Corp. fell 15 percent to $24.42. The maker of International brand trucks said it expects additional costs to introduce an engine that will meet U.S. emission standards after its earlier technology failed to comply.

Airlines advanced as a drop in oil spurred expectations that fuel costs will fall. Southwest Airlines Co. gained 1.3 percent to $9.27 while Delta Air Lines Inc. rose 3.5 percent to $11.

The government’s previous employment report on June 1 showed the weakest jobs growth in a year, and sent the S&P 500 down 2.5 percent for its biggest drop of 2012. Ten-year Treasury yields reached a record low of 1.4387 percent that day. The S&P 500 has rallied 6 percent since then.

The rebound in equities came after a 9.9 percent tumble from a four-year high in April dragged the S&P 500 to 12.9 times reported earnings, the cheapest level since November. Alcoa is scheduled to unofficially start the second-quarter earnings season when it releases results on July 9.

Analyst estimates compiled by Bloomberg project a 1.8 percent decline in profits for S&P 500 companies in the April- June period, which would mark the first year-over-year decrease since 2009, even as revenue increased 2.5 percent. Analysts still predict profit growth of 7.2 percent for the full year.

Slower-than-forecast growth in employment means labor costs won’t be a threat to corporate profits, according to Neel Kashkari, head of global equities at Pacific Investment Management Co.

“Corporate taxes are not going to go up, cost of labor is going to stay low,” he said in an interview on Bloomberg Television’s “Market Makers” program today. “Corporate profits can continue to stay strong in the short term.”

Pimco is being very selective when it comes to which stocks to buy and is focusing on companies that should be more resilient in the face of a global economic slowdown, Kashkari said. He cited companies such as Wal-Mart Stores Inc., the world’s largest retailer, low-fare carrier Spirit Airlines Inc. and drugmaker Merck & Co.

“There are individual names that should do well in this environment,” he said. The Newport Beach, California-based firm’s Pimco Total Return Fund is the world’s largest mutual fund.

The risk of economic shocks from Europe’s debt crisis and slowing growth in China create a flight to high-quality global companies, Kashkari said. Investors should stop holding cash and come back to the market before inflation accelerates as a result of central bank policies meant to stimulate growth, he said.

“Investors are waiting on volatility, but earnings will decay as prices around the economy rise,” he said. “Sitting in cash is not a good option.”

Have a wonderful weekend everyone.

Be magnificent!

 

My work will be finished if I succeed in carrying conviction to the human family,

that every man or woman, however weak in body,

is the guardian of his or her self-respect and liberty, and that this defence prevails,

though the world be against the individual resister.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

 

Morale is a state of mind.  It is steadfastness and courage and hope.  It is confidence and zeal and loyalty.  It is elan, ésprit de corps and determination.

-George Marshall, 1880-1959

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

 

Dear Friends,

Tangents:

I read a moving story in the Globe & Mail the other day in the column Lives Lived.  Mike Oke wrote about his brother, Robert, whose life ended on May 12, 2012 at the age of 69.  Robert, a graduate of the University of Western Ontario, was diagnosed with schizophrenia when he was 26 years old.  Before a new generation of drugs became available that were able to control his delusions without the debilitating side effects of previous drugs, he was “sometimes homeless and, almost always alone.”   When he was finally able to put down roots in a subsidized apartment in a downtown Toronto community for people who have been homeless, he began to attend the Toronto School of art and he started to write.   I was deeply touched by the profundity of Robert’s writing.

Mike tells us that, “He wrote about characters like himself, who suffer from mental illness and struggle to survive in a hostile world.  His novella A Tale of Bip and Bop and A Man Named Blog is the story of Blog, a painter suffering from multiple personality disorder who is approaching the end of his life but still looking for love.

Blog’s head is peopled by two quarrelsome alter egos, Bip and Bop, who are always giving him contradictory advice.  In the book, Robert writes about the gods and goddesses of ancient times:  ‘For we have lost touch with Pan and God alike, sylvan glens or bowers, a written literary convention, but in real time none now can recollect any as having existed in Greek Attica, for it has passed from the memory of man, save in the poems of the Romantics who maintain more than their imagery, for they swear the gods and goddesses, Apollo, Dionysius and Aphrodite, did walk in those golden and green forests simply because they were too beautiful not to have existed.’”

And on this day in…

1810 – P.T. Barnum , circus promoter was born.

1865 – Salvation Army founded.

1889 – Jean Cocteau was born.
1921 – Chicago White Sox accused of throwing the 1919 World Series.

1946 – First bikini swimsuit introduced.
1970 – Pilot error causes crash in Toronto.
1975 – Arthur Ashe becomes first black man to win at Wimbledon.

To explore what it would mean to live fully, sensually alive and passionately on purpose, I have to drop my preconceived ideas of who and what I am. – Dawna Markova

photos of the day July 5, 2012

Australian actor Barry Humphries, dressed as Dame Edna Everage, speaks to the media ahead of his farewell show ‘Eat Pray Laugh!’ in Sydney, Australia.

Rob Griffith/AP

A clown checks his mobile phone during an international clown festival in San Salvador, Bahamas, on Wednesday. Every year, clowns from Mexico, Colombia, and the US meet in San Salvador to exchange makeup tips and the latest tricks and jokes.

Ulises Rodriguez/Reuters

Market Closes for July 5, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12896.67	-47.15
		-0.36%
S&P 500	1367.58	-6.44
		-0.47%
NASDAQ	2976.12	+0.04
		—
TSX	11817.03	-96.84
		+0.55%

International Markets

Market  Index	Close	Change
NIKKEI	9079.80	-24.37
		-0.27%
HANG  SENG	19809.13	+99.38
		+0.50%
SENSEX	17538.67	+75.86
		+0.43%
FTSE 100	5692.63	+8.16
		+0.14%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.722	1.711
CND.   30 Year Bond	2.309	2.301
U.S.   10 Year Bond	1.5969	Closed for Independence Day
U.S.   30 Year Bond	2.7160	Closed for Independence Day

Currencies

BOC Close	Today	Previous
Canadian $	1.01432	1.01377
US   $	0.98589	0.98642
Euro Rate  1 Euro=		Inverse
Canadian   $	1.25693	0.79559
US  $	1.23919	0.80698

Commodities

Gold	Close	Previous
London Gold   Fix	1604.50	1615.63
Oil	Close	Previous
WTI Crude Future	87.22	Closed for Independence Day
BRENT	100.53	99.98

Market Commentary:

Canada

By Katia Dmitrieva and Steve Chambers

July 5 (Bloomberg) — Canadian stocks declined for the first time in seven days after European Central Bank President Mario Draghi warned of continuing economic risks and oil and gold prices fell.

Goldcorp Inc., the world’s second-largest producer of the metal, and Suncor Energy Inc., the nation’s biggest oil producer, retreated at least 2.3 percent. TransGlobe Energy Corp. lost 6.5 percent. Energy stocks, raw-materials producers and financial firms contributed most to the decline in the Standard & Poor’s/TSX Composite Index.

The S&P/TSX fell 96.96 points, or 0.8 percent, to 11,816.91. The benchmark index had risen 5.2 percent in the past six trading sessions, including its biggest gain of the year on July 3. The gauge is down 1.2 percent for 2012.

China cut benchmark interest rates in an attempt to reverse the slowdown in the world’s second-largest economy, and the ECB lowered interest rates to a record low, saying it won’t pay anything on overnight deposits. Economic growth in the euro area remains “weak,” Draghi said at a press conference in Frankfurt.

“You need GDP growth and that’s clearly not happening in Europe or China,” Paul Gardner at Toronto-based Avenue Investment Management, which manages C$250 million ($247 million), said in a phone interview.

The People’s Bank of China cut the one-year lending rate by 31 basis points to 6 percent and the one-year deposit rate by 25 basis points to 3 percent effective tomorrow. The ECB reduced its main rate by 25 basis points to a record low of 0.75 percent as sovereign debt turmoil threatens to drive the 17-nation euro economy into recession.

Oil prices slumped after Draghi’s comments. Crude for August delivery fell 0.5 percent to settle at $87.22 a barrel on the New York Mercantile Exchange.

Suncor declined 2.3 percent to C$30.40, and Canadian Natural Resources Ltd., the nation’s third-largest energy company, fell 2.8 percent to C$27.54. TransGlobe Energy dropped to C$9.12, after rising 19 percent in the past five sessions.

Bankers Petroleum Ltd. rose 28 percent to C$2.66 after the company said oil sales increased during the first half.

Goldcorp lost 2.6 percent to C$39.30, and Centerra Gold declined 6 percent to C$8.11, as the price of the metal fell the most in a week. Barrick Gold Corp., the world’s largest producer of the metal, fell 0.8 percent to C$38.58.

Osisko Mining Corp. advanced 5.5 percent to C$7.73 after the company reported record gold production in the second quarter from its Malartic Mine in Quebec.

Manulife Financial Corp., Canada’s largest insurer, retreated 1.8 percent to C$11.24. Brookfield Asset Management Inc., a Toronto-based investment firm, slipped 2.5 percent to C$33.36 after Credit Suisse Group AG analyst Andrew Kuske lowered his rating on the stock to neutral from outperform.

Canada’s jobless rate is forecast to stay unchanged from May at 7.3 percent, according to a Bloomberg survey of economists before the government report tomorrow. The country is projected to have added 5,000 jobs in June, compared with a gain of 7,700 the month before.

US

By Rita Nazareth and Julia Leite

July 5 (Bloomberg) — U.S. stocks declined, halting a three-day advance for the Standard & Poor’s 500 Index, amid disappointment over Europe’s efforts to tame the region’s debt crisis as investors awaited tomorrow’s American jobs report.

Financial shares had the biggest loss among 10 groups in the S&P 500 as Spanish and Italian bonds plunged. JPMorgan Chase & Co. and Bank of America Corp. retreated at least 3 percent.

Retailers in the benchmark measure rose 1 percent amid June sales data. Apple Inc., the world’s most valuable company, advanced 1.8 percent to pace gains in technology companies.

The S&P 500 decreased 0.5 percent to 1,367.58 at 4 p.m. New York time. The Dow Jones Industrial Average fell 47.15 points, or 0.4 percent, to 12,896.67. Volume for exchange-listed stocks in the U.S. was 5.3 billion shares, 21 percent below the three- month average. The market was closed yesterday for a holiday.

“There’s a bit of disappointment with the ECB,” said Mike Ryan, the New York-based chief investment strategist at UBS Wealth Management Americas. “Meantime, people are not willing to take big bets going into the jobs report tomorrow.”

Equities fell as European Central Bank President Mario Draghi said today’s cut in interest rates to a record low may have only a limited impact on the euro-area economy. China also reduced rates in a bid to spur growth. Tomorrow’s Labor Department data may show the pace of hiring in the U.S. accelerated in June while remaining at less than half the average for the first quarter of the year, economists said.

Today’s economic reports showed that fewer Americans filed jobless claims and hiring beat estimates. Service industries expanded at a slower pace, underscoring Federal Reserve concern that growth isn’t strong enough to reduce unemployment.

The last jobs report spurred a rout in stocks, erasing the 2012 gain in the Dow and putting the S&P 500 on the brink of a so-called correction, or a 10 percent decline from a recent peak. The benchmark gauge tumbled 2.5 percent on June 1 after data showed employers added the fewest workers in a year and the unemployment rate rose. Since then, the S&P 500 has risen 7 percent amid bets on global central bank action.

Eight out of 10 groups in the S&P 500 retreated today as financial and energy shares dropped at least 1.3 percent. The Morgan Stanley Cyclical Index of companies most-tied to economic growth closed almost unchanged after slumping as much as 0.9 percent and gaining 0.5 percent earlier today.

Twenty three out of 24 stocks in the KBW Bank Index declined. JPMorgan Chase & Co. slumped 4.2 percent, the most in the Dow, to $34.38. The lender was ordered by a federal judge to explain why it shouldn’t be compelled to turn over e-mails sought by U.S. regulators in a probe of potential energy-market manipulation. Bank of America slid 3 percent to $7.82.

Technology shares, which comprise 20 percent of the S&P 500, reversed an earlier decline. Apple climbed 1.8 percent to $609.94, the highest since April 25.

Consumer companies in the S&P 500 rallied. U.S. retailers’ June same-store sales about matched analysts’ estimates, with luxury chains such as Saks Inc. and discounters like TJX Cos.

topping expectations. Stores targeting middle-income consumers trailed projections.

“The high-end consumer has fared particularly well throughout this recovery,” Ken Perkins, president of Swampscott, Massachusetts-based Retail Metrics, said in an interview. “On the low end, a lot of middle-income consumers have traded down.”

TJX, which owns discount stores T.J. Maxx and Marshalls, rose 3.7 percent to $44.09. Limited Brands Inc., the parent company of Victoria’s Secret, jumped 4.5 percent to $46.12, while Saks gained 2.5 percent to $11.19. Sales at Target Corp.

rose 2.1 percent, falling short of the average projection. The shares dropped 1.1 percent to $57.15.

Chinese stocks traded in the U.S. gained as Baidu Inc., the nation’s largest online search engine, rose to a two-week high after policy makers cut interest rates for a second time in a month to bolster growth.

The Bloomberg China-US Equity Index of the most-traded Chinese companies in the U.S. rose 0.8 percent to 92.49, the highest level since June 20. Baidu advanced 2.2 percent to $117.21. Sina Corp., operator of the Twitter-like Weibo service, rallied 1.4 percent to $51.21.

“The Chinese authorities are trying to help stem the slowdown in global growth, and that’s a good thing,” said Audrey Kaplan, who helps manage $2 billion as head of international equities at Federated Global Investment Management in New York. “We see this as a great entry point for Chinese stocks.”

Netflix Inc. soared 13 percent, the most since January, to $81.72. The largest video-subscription service also had the biggest gain in the S&P 500 after an analyst said the company’s online audience exceeds cable and TV networks.

Yelp Inc. surged 5.8 percent to $26.16 amid speculation that a smaller model of Apple’s iPad could help the business- review service add users. Apple plans to debut a smaller, cheaper iPad by the end of the year, people familiar with the matter said earlier this week.

Patriot Coal Corp. climbed 23 percent to $2.26 on speculation it may be near a deal to refinance its debt. The shares have jumped 85 percent in three days, the most since it was spun off from Peabody Energy Corp. in October 2007.

Have a wonderful evening everyone.

Be magnificent!

 

Fearlessness is the first requirement of spirituality.

Cowards can never be moral.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

 

When I give a man an office, I watch him carefully

to see whether he is swelling or growing.

-Woodrow Wilson, 1856-1924

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:

What is the meaning of life? To be happy and useful.   -14th Dalai Lama, Tenzin Gyatso.

DREAMING OF SUSHI

The “world’s greatest sushi chef” is 85 years old.  His 10-seat restaurant in the basement of a Tokyo office building has a three-month wait for reservations.  The beautiful documentary Jiro Dreams of Sushi follows Jiro Ono and his small team of sushi perfectionists from preparation (his apprentices massage octopus meat for 40 minutes before serving) to presentation (he stands over patrons as they eat).

And on this day in…

1776 – U.S. declares independence.

1804 – Nathaniel Hawthorne was born.

1826 – Thomas Jefferson and John Adams die.

1928 – Gina Lollabrigida was born.
1976 – An Israeli raid at Entebbe Airport rescues 105 hostages.
1997 – Pathfinder lands on Mars.

Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around.  -Leo Buscaglia.

photos of the day July 4, 2012

Kaitlyn Urbanek carries a flag students made at a daycare during the annual First Baptist Church’s Weekday Education Fourth of July parade in Oxford, Miss.

Bruce Newman/Oxford Eagle/AP

Mary Cohen, a British fencing champion, trains during a media event to showcase the technology systems that are used in the sport, at London 2012 Olympic games Technology Operations Centre (TOC) in London’s Canary Wharf financial district.

Lefteris Pitarakis/AP

Market Closes for July 4, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones		Closed for Independence Day
S&P 500		Closed for Independence Day
NASDAQ		Closed for Independence Day
TSX	11913.87	+65.12
		+0.55%

International Markets

Market  Index	Close	Change
NIKKEI	9104.17	+37.58
		+0.41%
HANG  SENG	19709.75	-25.78
		-0.13%
SENSEX	17462.81	+37.10
		+0.21%
FTSE 100	5684.47	-3.26
		-0.06%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.711	1.741
CND.   30 Year Bond	2.301	2.325
U.S.   10 Year Bond	Closed for Independence Day	1.6294
U.S.   30 Year Bond	Closed for Independence Day	2.7428

Currencies

BOC Close	Today	Previous
Canadian $	1.01377	1.1249
US   $	0.98642	0.98766
Euro Rate  1 Euro=		Inverse
Canadian   $	1.26917	0.78792
US  $	1.25193	0.79877

Commodities

Gold	Close	Previous
London Gold   Fix	1615.63	1617.43
Oil	Close	Previous
WTI Crude Future	Closed for Independence Day	87.66
BRENT	99.98	100.68

Market Commentary:

Canada

By Katia Dmitrieva

July 4 (Bloomberg) — Canadian stocks rose for a sixth day, the longest streak of gains in a year, led by financial shares after the Competition Bureau approved a proposed bid for the Toronto Stock Exchange by a group of Canadian banks.

TMX Group Inc., owner of Canada’s main equity and derivatives exchanges, rose 3.3 percent, the biggest jump in more than two months. Royal Bank of Canada, the largest lender in the country, rose 1.2 percent as financial stocks led advances. Magna International Inc., North America’s largest auto-parts supplier, rose 6.1 percent, its biggest gain in two months. Suncor Energy was up 1.4 percent as energy stocks rallied in the afternoon.

The Standard & Poor’s/TSX Composite Index rose 65.12 points, or 0.6 percent, to 11,913.87, paring the decline for 2012 to less than 1 percent. On the gauge, 175 members rose and 58 fell. The benchmark index rose the most yesterday since January.

“Auto news continues to show strength as consumers in the U.S. continue to spend,” said Anil Tahiliani, who helps manage about C$900 million ($888 million), including Magna shares, at Calgary-based McLean & Partners Wealth Management. “When people are buying big-ticket items such as cars and trucks, it shows they still feel confident spending.”

General Motors Co., Ford Motor Co. and Chrysler Group LLC reported better gains than analysts’ estimated from the year- earlier period in which they dominated the U.S. market because of vehicle shortages at Toyota Motor Corp. and Honda Motor Co. caused by Japan’s tsunami. Auto sales in Canada rose 2.8 percent in June from the year before, DesRosiers Automative Consultants Inc. reported today.

Royal Bank rose to C$53.72 and Toronto-Dominion continued a six-day gain, adding 0.4 percent to C$80.09. Scotiabank rose 1 percent to C$53.84. TMX Group gained to C$48.41 as the Competition Bureau approved the C$3.73 billion takeover of the company by a group of banks and pension funds, whose members include Toronto-Dominion.

“The Canadian market generally doesn’t show much independence from the U.S., so the strength today is really a follow-through on U.S. news,” said Mark Yamada of Toronto-based PUR Investing, in a phone interview. The U.S. markets are closed today for a holiday.

Magna rose 6.1 percent to C$42.43. Linamar Corp., the Guelph, Ontario-based manufacturer of automotive parts, gained for the second day, moving up 3.8 percent to C$20.86.

Suncor added 1.4 percent to C$31.13. Canadian Natural Resources Ltd., the third-largest oil company in Canada, added 0.4 percent to C$28.33.

Trican Well Service Ltd. slumped 7.1 percent to C$11.35, after falling as much as 15 percent, its biggest decline since September, as it forecast a loss in the second quarter and Brent oil futures retreated on the ICE Futures Europe exchange in London.

Barrick Gold Corp. dropped 1.6 percent to C$38.87 as the metal declined in London after a rally to a two-week high spurred investors to sell before European Central Bank policy makers meet tomorrow. Ivanhoe Mines Ltd. declined 1.4 percent to C$10.09, snapping two straight sessions of gains.

US:

Closed for Independence Day holiday.

Have a wonderful evening everyone.

Be magnificent!

 

Strength does not come from physical capacity.  It comes from an indomitable will.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

 

Those who stand for nothing fall for anything.

-Alexander Hamilton, 1755-1804

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:

We watched  the Canada Day celebrations on Sunday from a balcony at the Empress – what a spectacular event this year.  The fireworks were especially fantastic!  Gary spoke with a man in the lobby who is an American and he told him that he visits every year from Portland at this time just to watch the concert and the fireworks.  Our birthday – 145 years young this year.

The Dog Days begin today: hottest days of the year July 3 – August 11^th:  the Romans called the hottest weeks of the summer caniculares dies.  Their theory was that the Dog Star (Sirius, the brightest star in the firmament in the constellation of the Big Dog, Alpha Canis Majoris), rising with the sun, added to its heat and that the Dog Days bore the combined heat of both.

And on this day in…

1776 – Congress votes for U.S. Independence.

1881 – President Garfield is shot.

1883 – Franz Kafka is born.

1900 – Zeppelin demonstrates airship.

1937 – Amelia Earhardt disappears.

1962 – Tom Cruise is born.
1964 – President Johnson signs the Civil Rights Act

photos of the day July 3, 2012

Stuntman Nick Macomber carries the Olympic Flame through the air using a jet pack at the National Space Center on the Torch Relay leg through Leicester, England.

Yui Mok/LOCOG/AP

A boy jumps into the Arabian Sea during high tide after monsoon rains in Mumbai, India.

Rajanish Kakade/AP

Market Closes for July 3, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12943.82	+72.43
		+0.56%
S&P 500	1374.02	+8.51
		+0.62%
NASDAQ	2976.08	+24.85
		+0.84%
TSX	11848.95	+252.39
		+2.18%

International Markets

Market  Index	Close	Change
NIKKEI	9066.59	+63.11
		+0.70%
HANG  SENG	19735.53	+294.07
		+1.51%
SENSEX	17425.71	+26.73
		+0.15%
FTSE 100	5687.73	+47.09
		+0.83%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.741	1.739
CND.   30 Year Bond	2.325	2.329
U.S.   10 Year Bond	1.6294	1.6415
U.S.   30 Year Bond	2.7428	2.7525

Currencies

BOC Close	Today	Previous
Canadian $	1.1249	1.01679
US   $	0.98766	0.98349
Euro Rate  1 Euro=		Inverse
Canadian   $	1.27643	0.7843
US  $	1.26073	0.79319

Commodities

Gold	Close	Previous
London Gold   Fix	1617.43	1597.63
Oil	Close	Previous
WTI Crude Future	87.66	84.96
BRENT	100.68	97.52

Market Commentary:

Canada

By Katia Dmitrieva

July 3 (Bloomberg) — Canadian stocks rose, with the Standard & Poor’s/TSX Composite Index heading for the biggest gain in seven months, as higher commodity prices boosted raw- material producers and optimism grew that central banks will add to stimulus measures.

Suncor Energy Inc., the largest oil company in Canada, advanced 4.2 percent as crude climbed 4.3 percent in New York.

Potash Corp. of Saskatchewan Inc. rose 2.7 percent and Barrick Gold Corp. gained 2.2 percent after a measure of raw-material prices rose to a five-week high.

The S&P/TSX added 251.10 points, or 2.2 percent, to 11,847.66 at 1:20 p.m. in Toronto, poised for the biggest gain since November. In the gauge, 213 members climbed and 31 fell.

“Stocks just want to go up right now because there’s not a lot of other places to go,” Royden Richardson, vice chairman of GMP Investment Management, which manages $400 million, said in a phone interview from Toronto. “If people are going bullish, they’re looking at increasing demand for oil. I don’t see the demand for oil declining, if anything I think it’s going to go higher from this point.”

The European Central Bank is forecast by economists to cut interest rates this week to help curb the debt crisis, while a state-owned newspaper in China said the time is ripe for a reduction in the reserve requirement ratio for major banks.

Declining employment figures this week may prompt the Federal Reserve to initiate fresh stimulus, BNP Paribas SA said.

Suncor Energy gained for the fifth day, adding 4.2 percent to C$30.68. Cenovus Energy Inc. rose 5.4 percent to C$34.13, the highest price since May. Potash Corp. advanced 2.7 percent to C$45.72. Winstar Resources Ltd., a Calgary-based oil and gas company, jumped 19 percent to C$2.67.

The S&P GSCI Spot Index rallied 3.4 percent, with 23 of 24 commodities advancing. The speculation about further stimulus to spur growth boosted demand for gold as an inflation hedge.

Bullion futures for August delivery rose to a two-week high in New York.

Barrick Gold, the world’s largest producer of the metal, gained 2.2 percent to C$39.19. Goldcorp Inc. added 3.4 percent to C$39.65. Teck Resources Ltd., the nation’s largest base- metals producer, gained 4.8 percent to C$33.03.

US

By Rita Nazareth and Julia Leite

July 3 (Bloomberg) — U.S. stocks advanced, sending the Standard & Poor’s 500 Index to a two-month high, after data showed factory orders topped estimates and as speculation grew that global central banks will act to spur economic growth.

Commodity, industrial and technology shares had the biggest gains among 10 groups in the S&P 500. Alcoa Inc., Caterpillar Inc. and Apple Inc. advanced at least 1.1 percent. Ford Motor Co. rallied 2.2 percent as deliveries of cars and light trucks beat analysts’ estimates. Facebook Inc. climbed 1.4 percent as General Motors Co. is said to be talking with the largest social-networking company about resuming advertising.

The S&P 500 rose 0.6 percent to 1,374.02 at 1 p.m. New York time. The Dow Jones Industrial Average added 72.43 points, or 0.6 percent, to 12,943.82. The Russell 2000 Index rallied 1.3 percent to 818.48. The market closed at 1 p.m. today, and will be shut tomorrow for a holiday. Trading in S&P 500 companies was almost in line with the 30-day average at this time of day.

“The factory orders report was a good surprise,” Richard Sichel, who oversees $1.6 billion as chief investment officer at Philadelphia Trust Co., said in a telephone interview.

“Investors are also finding comfort in central bank action. The Fed has anticipated that they will do whatever it takes to not let the economy slip, China is doing the same and that the Europeans seem to be doing that too.”

Equities climbed as factory orders rose in May for the first time in three months. Yet declining jobs data in the U.S.

this week may prompt the Federal Reserve to initiate fresh stimulus, BNP Paribas SA said. The European Central Bank is forecast to cut interest rates this week to help curb the debt crisis, while a state-owned newspaper in China said the time is ripe for a reduction in banks’ reserve-requirement ratios.

The U.S. economy will grow by 2 percent this year and about 2.25 percent in 2013 amid a “tepid” recovery and the European debt crisis, the International Monetary Fund said, lowering its previous projections. In an April report, the IMF forecast U.S. growth of 2.1 percent this year and 2.4 percent in 2013.

“Further easing” by the Federal Reserve might be needed “if the situation was to deteriorate,” IMF Managing Director Christine Lagarde said at a press conference in Washington today. She said she welcomed previous actions by the Fed to help the U.S. economy.

Concern about a global economic slowdown put the S&P 500 last month on the brink of a so-called correction, or a 10 percent decline from a recent peak. The index slumped 3.3 percent in the second-quarter, the biggest retreat since the period ending in September.

The Morgan Stanley Cyclical Index of companies most-tied to the economy rose 1.3 percent. Alcoa, the largest U.S. aluminum producer, added 3.2 percent to $8.90. Caterpillar, the biggest maker of construction equipment, advanced 3.3 percent to $86.46. Apple, the biggest company by market value, gained 1.2 percent to $599.41.

Car companies in the S&P 500 added 2.1 percent for the second-biggest gain among 24 groups. General Motors, Ford and Chrysler Group LLC said U.S. auto sales exceeded estimates in June. Ford rallied 2.2 percent to $9.60. GM added 5.6 percent to $20.67.

Facebook climbed 1.4 percent to $31.20. The talks were reported by two people familiar with the matter. GM said it would stop advertising on Facebook on the eve of the company’s initial public offering in May.

MModal Inc. surged 8.4 percent to $14.02. The largest provider of medical transcription services said it agreed to be bought by a JPMorgan Chase & Co. unit for about $1.1 billion.

Navistar International Corp. rose 7.2 percent to $29.04 after the truckmaker scheduled an operations update for investors this week that may include plans to drop one type of pollution-control technology.

The nation’s largest home-improvement retailers declined after Cleveland Research cited “softer” second-quarter sales.

Lowe’s Cos. retreated 3.5 percent to $27.62. Home Depot Inc. dropped 2.6 percent to $51.65.

Duke Energy Corp. lost 1.7 percent to $68.69 after unexpectedly announcing the resignation of Bill Johnson, previously named to be the chief executive officer after its takeover of Progress Energy Inc. James Rogers, the head of Duke, is CEO of the merged companies effective immediately.

Johnson, 58, is resigning “by mutual agreement,” the company said. The takeover, announced in January 2011, received its final regulatory approval yesterday. Tom Williams, a spokesman for Duke, declined to comment on the reason for the change. Johnson has been the chairman and CEO of Raleigh, North Carolina-based Progress since 2007.

Bearish sentiment in an individual investors’ survey has surpassed the historical average for the longest stretch since October, when stocks began a rally that lifted the S&P 500 24 percent.

A poll by the American Association of Individual Investors showed 44.4 percent of respondents say U.S. stocks will fall over the next six months. That’s the eighth week that pessimism stayed above the 25-year average of 30 percent.

Concern Europe’s debt crisis will deepen and the recovery weaken have erased as much as $1.8 trillion from U.S. equities since March. The last time the proportion of bears topped the average for this long was in the 14 weeks through Oct. 20, 2011, just after the S&P 500 bottomed at 1,099.23. The benchmark measure for U.S. stocks went on to surge as much as 29 percent, reaching a four-year high of 1,419.04 on April 2.

“Individual investors tend to get in when the markets are red hot and they tend to get out when the markets are at the bottom,” said Robert Carey, who helps oversee $53 billion as chief investment officer of Wheaton, Illinois-based First Trust Portfolios.

Gains that drove the S&P 500 to its biggest June advance since 1999 may falter because too few stocks are rising with enough speed, StockCharts.com Inc. said.

The gauge surged 2.5 percent on June 29, finishing the month up 4 percent, amid optimism that Europe will prevent bank losses from multiplying. While the rally drove 64 percent of shares above their average price during the past 50 days, that’s short of the 85 percent threshold that usually accompany longer rallies, said Arthur Hill, a technical analyst at the firm.

While 85 percent is where momentum becomes self-sustaining, equity declines are likely to speed up when the number of stocks above the 50-day mean slips below 15 percent, Hill said.

“A surge above 85 percent shows strong-enough buying pressure to suggest that an uptrend is emerging,” Hill wrote in a note yesterday. “It is like a rocket lifting off the launch pad. A strong up-thrust is needed to insure a sustainable advance.”

Have a wonderful evening everyone.

Be magnificent!

 

You have to stand against the whole world although you may have to stand alone.

You have to stare the world in the face although the world may look at you with a bloodshot eye.

Do not fear.

Trust that little thing in you which resides in the heart and says:

forsake friends, wife, all, but testify to that for which you have lived and for which you have to die.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

 

What convinces is conviction.  Believe in the argument

you’re advancing.  If you don’t, you’re as good as dead.

The other person will sense that something isn’t there,

and no chain of reasoning, no matter how logical or

elegant or brilliant, will win your case for you.

-Lyndon B. Johnson, 1908-1973

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:

Canada Day is this Sunday so it’s time to start feeling those patriotic vibes! But just how Canadian are you? McLean’s magazine recently released a fun, somewhat unscientific, quiz to see how you stack up to the ‘average’ Canadian. I apparently am too tall, eat too much fresh fruit, and spend too much on coffee to be a true Canadian but maybe you will fare better then I.

http://quizzes.macleans.ca/canadadayquiz2012/index.php

Today in History
June 29

1905		Russian troops intervene as riots erupt in ports all over the country, leaving many ships looted.
1917		The Ukraine proclaims independence from Russia.
1925		An earthquake ravages Santa Barbara, California.
1926		Fascists in Rome add an hour to the work day in an economic efficiency measure.
1932		Siam’s army seizes Bangkok and announces an end to the absolute monarchy.
1938		Mesa Verde National Park, Colorado, and Olympic National Park, Washington, are founded.
1950		President Harry S. Truman authorizes a sea blockade of Korea.
1951		The United States invites the Soviet Union to the Korean peace talks on a ship in Wonson Harbor.
1955		The Soviet Union sends tanks to Pozan, Poland, to put down anti-Communist demonstrations.
1966		The U.S. Air Force bombs fuel storage facilities near Hanoi, North Vietnam.
1967		Israel removes barricades, re-unifying Jerusalem.
1970		U.S. troops pull out of Cambodia.
1982		Israel invades Lebanon.

photo of the day June 29, 2012

People wave during the inaugural trip of the world’s first open-air doubledecker cable car system on Stanserhorn Mountain near Lucerne, Switzerland.

Christian Hartmann/Reuters

A man holds an umbrella on the shore of the Arabian sea during a monsoon shower in Mumbai, India.

Rafiq Maqbool/AP

Market Closes for June 29, 2012:

North American Markets

Market  Index	Close	Change
Dow  Jones	12880.09	+277.83
		+2.20%
S&P 500	1362.16	+33.12
		+2.49%
NASDAQ	2935.05	+85.56
		+3.00%
TSX	11596.56	+171.86
		+1.50%

International Markets

Market  Index	Close	Change
NIKKEI	9006.78	+132.67
		+1.50%
HANG  SENG	1941.46	+416.19
		+2.19%
SENSEX	17429.98	+439.22
		+2.59%
FTSE 100	5571.15	+78.09
		+1.42%

Bonds

Bonds	% Yield	Previous % Yield
CND.  10 Year Bond	1.739	1.680
CND.   30 Year Bond	2.329	2.293
U.S.   10 Year Bond	1.6415	1.5853
U.S.   30 Year Bond	2.7525	2.6823

Currencies

BOC Close	Today	Previous
Canadian $	1.01679	1.03337
US   $	0.98349	0.96771
Euro Rate  1 Euro=		Inverse
Canadian   $	1.28744	0.77673
US  $	1.26618	0.78977

Commodities

Gold	Close	Previous
London Gold   Fix	1597.63	1555.35
Oil	Close	Previous
WTI Crude Future	84.96	77.81
BRENT	97.52	91.77

Market Commentary:

Canada

By Katia Dmitrieva

June 29 (Bloomberg) — Canadian stocks rallied as commodity shares surged after European leaders agreed on measures to ease the debt burden on the region’s weakest economies.

Suncor, the largest oil provider in the country, advanced 3.1 percent as crude jumped from the lowest level in nine months. Barrick Gold Corp. and Goldcorp Inc. gained at least 1.9 percent as the metal climbed. Research in Motion plunged 17 percent after posting a loss and delaying the next BlackBerry operating system.

The Standard & Poor’s/TSX Composite Index jumped 162.87 points, or 1.4 percent, to 11,587.57 at 10:12 a.m. in Toronto.

The benchmark index erased its loss for the month, and pared its decline for the quarter to 6.5 percent.

“The headlines were certainly calming,” said Stephen Carlin, head of equities at Toronto-based Aegon Capital Management Inc., which manages C$8.5 billion ($8.3 billion).

“The European leaders have come up with a structure that at least starts to make some forward progress. There’s been modestly better news than originally anticipated.”

Canadian stocks rallied as European leaders agreed to relax conditions on emergency loans for Spanish banks and possible help for Italy as German Chancellor Angela Merkel gave in on expanded steps to stem the debt crisis. Canada’s gross domestic product accelerated in April, surpassing economists’ estimates and reducing odds of central bank interest-rate cuts. The world’s 10th largest economy expanded 0.3 percent.

US

By Stephen Kirkland and Rita Nazareth

June 29 (Bloomberg) — Global stocks and the euro surged the most this year, oil had its biggest gain since 2009 and Spanish bonds rallied after European leaders reached an agreement that eased concern banks will fail.

The MSCI All-Country World Index climbed 2.8 percent, the most since November, while the Standard & Poor’s 500 Index and the Stoxx Europe 600 Index advanced more than 2 percent. The euro appreciated 1.7 percent against the dollar and rallied as much as 2 percent, the most since Oct. 27. Spain’s two-year yield plunged more than a full percentage point. The S&P GSCI gauge of 24 commodities rose 5.7 percent, its biggest gain since April 2009, as oil surged 9.4 percent to $84.96 a barrel.

After talks ended at 4:30 a.m. in Brussels today, leaders of the 17 euro countries dropped requirements that taxpayers get preferred creditor status on aid to Spain’s banks and opened the way to recapitalize lenders directly, while relaxing conditions on potential help for Italy. More than $4.9 trillion has been erased from global equity values this quarter amid concern a worsening debt crisis will stifle the global recovery.

“It’s a relief rally,” said Ann Miletti, fund manager for Wells Fargo Advantage Funds in Menomonee Falls, Wisconsin. Her firm manages $201 billion. “The agreement at least brings some clarity and stabilization in the short term. More positive news out of Europe is all you need in a market that’s been depressed given all the uncertainty out there.”

The S&P 500 trimmed its retreat for the quarter to less than 4 percent. The index is up 3.5 percent in June and 1.6 percent for the week.

Constellation Brands Inc. rallied 23 percent, the most since at least 1986, after agreeing to buy the other half of its Crown Imports joint venture with Grupo Modelo SAB for about

$1.85 billion, becoming the sole U.S. importer of top-selling Corona beer. Bank of America Corp., Boeing Co. and United Technologies Corp. rallied more than 3.5 percent to lead gains in 29 of 30 stocks in the Dow Jones Industrial Average.

Research In Motion Ltd. plunged 19 after posting a loss and delaying the next BlackBerry operating system.

Stocks rallied even as Commerce Department data showed U.S. consumer spending stalled in May, with household purchases, which account for about 70 percent of the economy, unchanged after a 0.1 percent increase the previous month. The median estimate of 75 economists surveyed by Bloomberg News called for no change in so-called nominal sales.

The Institute for Supply Management-Chicago Inc.’s business barometer showed business activity in the U.S. unexpectedly expanded in June at a faster pace as production and employment rebounded. The index increased to 52.9, topping the median estimate of 52.3. The Thomson Reuters/University of Michigan final index of sentiment fell to 73.2, trailing the median estimate of 74.1.

The Stoxx 600 advanced the most since November and extended this month’s rally to 4.8 percent. The gauge still retreated 4.6 percent in the quarter. National Bank of Greece SA, Bank of Ireland Plc and UniCredit SpA surged at least 13 percent to lead gains in 45 of 46 lenders in the index.

The MSCI Asia Pacific Index rose 2 percent, reversing a 0.4 percent drop after the agreement was announced. Stocks fell earlier as a report showed Japan’s factory output dropped the most since the March 2011 earthquake last month.

The MSCI Emerging Markets Index rose 3.5 percent, the biggest gain since October and trimming this quarter’s decline to 9.9 percent. Russia’s Micex Index climbed 3.2 percent.

India’s Sensex and the Hang Seng China Enterprises Index of Hong Kong-traded Chinese shares both jumped 2.6 percent. The yield on ruble-denominated government bonds due in 2018 fell 29 basis points to 8.02 percent after Russia’s Financial Markets Service said it will give foreign depositaries including Euroclear Bank SA direct access to domestic sovereign debt markets.

The euro surged as much as 2.5 percent against the yen. Its gain versus the dollar left it 5.1 percent weaker since the end of March. The Dollar Index, which tracks the U.S. currency against those of six trading partners, tumbled 1.5 percent for its biggest drop since October. The Australian and New Zealand dollars jumped at least 1.8 percent against the greenback. The yen weakened against all 16 of its most traded peers.

Spain’s two-year yield sank 114 basis points to 4.27 percent and 10-year rates slid 61 basis points to 6.33 percent, with the extra yield investors demanding to hold the securities instead of benchmark bunds narrowing 68 basis points to 475 basis points. The yield on the equivalent maturity Italian security dropped 38 basis points to 5.82 percent.

Volatility on Irish government debt was the highest in developed markets today followed by Spain and Italy, according to measures of 10-year bonds, the spread between two-and 10-year securities and credit-default swaps.

Irish bonds rose as Prime Minister Enda Kenny said the EU accord marked a seismic shift in policy that may ease the burden on the nation’s taxpayers.

The yield on the 10-year U.S. Treasury note advanced eight basis points to 1.65 percent, leaving the rate 23 basis points lower this year.

Crude in New York surged the most in more than a year to lead gains in the S&P GSCI index before an embargo on Iran starts. The EU agreed to ban the purchase, transportation, financing and insurance of Iranian oil starting July l. All 24 commodities tracked by the S&P GSCI advanced as lead, zinc, silver and copper rallied more than 4 percent.

The GSCI has dropped 14 percent in the second quarter, the most since the final three months of 2008. New York oil has declined 18 percent this quarter, its biggest plunge since 2008.

Have a wonderful weekend everyone!

 

“Go and make interesting mistakes, make amazing mistakes, make glorious and fantastic mistakes. Break rules. Leave the world more interesting for your being here.”

—	Neil Gaiman

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