December 20, 2012 Newsletter

Dear Friends,

Tangents:

This is my last newsletter to you for 2012.  I shall be here tomorrow during market hours and then I’ll be back after the first week in January, 2013!  In my absence, my team will keep you updated on news etc.  I wish you and your families a very happy holiday season and may 2013 bring peace, prosperity and love.

On this day in…

1790 – The first successful cotton mill in the United States began operating at Pawtucket, R.I.

1803 – The Louisiana Purchase was completed as the territory was formally transferred from France to the United States during ceremonies in New Orleans.

1879 – Thomas Edison privately demonstrated his incandescent light at Menlo Park, N.J.

1963 – The Berlin Wall was opened for the first time to West Berliners, who were allowed one-day visits to relatives in the Eastern sector for the holidays.

1989 – The United States sent troops into Panama to topple the government of Manuel Noriega.

1999 – The Vermont Supreme Court ruled that homosexual couples are entitled to the same benefits and protections as wedded couples.

 
Man loves company – even if it is only that of a small, burning candle.  –Georg Christoph Lichtenberg

Photos of the day

12.20.12 »

Photos of the day 12/20

Market Closes for December 20th, 2012:

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Eric Lam

Dec. 20 (Bloomberg) — Canadian stocks fell, led by gold producers as the metal dropped to its lowest level since August after U.S. economic growth beat forecasts.

Yamana Gold Inc. and Goldcorp Inc. dropped at least 2.1 percent. Silver Wheaton Corp. of Vancouver declined 1.4 percent as the price of the metal retreated the most in almost six months. Bombardier Inc. rose 3.1 percent, the most in almost three weeks, after the aircraft maker announced its second sale agreement for the CSeries jet in two days.

The S&P/TSX fell 14.92 points, or 0.1 percent, to 12,388.71 in Toronto. The equity gauge has gained 3.6 percent this year.

“Gold the commodity has been very weak and it’s broken down here,” said John Kinsey, a fund manager with Caldwell Securities Ltd. in Toronto. His firm manages about C$1 billion ($1.01 billion). “That’s put the kibosh on gold stocks.”

The U.S. economy grew at a 3.1 percent annual rate in the third quarter, more than previously reported, and exceeding the median estimate of economists in a Bloomberg Survey, which called for a 2.8 percent advance.

Basic-materials companies contributed most to losses in the S&P/TSX as four of 10 industry groups retreated. Trading volume was 4.4 percent higher than the 30-day average.

Gold for February delivery dropped 1.3 percent to settle at $1,645.90 an ounce in New York, the lowest since August. The S&P/TSX Gold subindex dropped 1.5 percent as 28 of 32 members declined. Gold mining companies account for 8.8 percent of the S&P/TSX weighting, according to data compiled by Bloomberg.

Yamana, based in Toronto, fell 2.4 percent to C$16.39 and Vancouver-based Goldcorp declined 2.1 percent to C$35.17.

Barrick Gold Corp. lost 0.7 percent to C$33.22. Toronto-based Barrick and Goldcorp are the world’s largest producers of the metal. Yamana is Canada’s fourth-biggest.

Silver Wheaton slipped to C$34.39 and Silvercorp Metals Inc. of Vancouver declined 2.5 percent to C$5.02. Silver for March delivery slumped 4.6 percent to $29.678 an ounce in New York, the biggest loss since June.

Capstone Mining Corp. sank 7.3 percent to C$2.30 after the Vancouver-based copper miner issued 2013 production guidance yesterday of 85 million pounds of copper, plus or minus 5 percent, less than the forecast by PI Financial Corp.

“The contracted output is due to much lower-than-expected output at the Minto mine,” due to lower copper grades, said Aleem Ladak, mining analyst in Vancouver at PI Financial, in a note to clients today.

Bombardier gained to C$3.68 after saying that AirBaltic agreed to buy 10 CS300 airliners in a deal with a value of $764 million that may rise to $1.57 billion if purchase rights are exercised. The Montreal-based company said yesterday an unnamed carrier signed a letter of intent to buy 12 of the smaller CS100 models, which have a list value of about $870 million, with options to buy 18 more jets.

US

By Nikolaj Gammeltoft

Dec. 20 (Bloomberg) — U.S. stocks rose, with the Standard & Poor’s 500 Index rebounding from its biggest drop in five weeks, as House Speaker John Boehner said he expects to keep working on a budget plan with President Barack Obama.

NYSE Euronext rose a record 34 percent as IntercontinentalExchange Inc. agreed to buy the company for $8.2 billion. Accenture Plc slid 2 percent after revenue from technology consulting fell 3.6 percent from a year earlier.

Merck & Co. slipped 3.4 percent after saying it won’t seek U.S. marketing approval for a cholesterol drug. Financial stocks rose the most in the S&P 500, leading gains in all 10 groups.

The S&P 500 climbed 0.6 percent to close at 1,443.69 today.

The equity benchmark yesterday slipped from its highest level since Oct. 18 as a White House spokesman said Obama would veto a proposal presented by Boehner. The Dow Jones Industrial Average increased 59.75 points, or 0.5 percent, to 13,311.72.

“The market continues to be driven by the state of the fiscal-cliff negotiations,” said Peter Jankovskis, who helps oversee $3 billion of assets as co-chief investment officer at Lisle, Illinois-based Oakbrook Investments LLC. He spoke in a telephone interview.  “That’s what people are keeping an eye on and that’s what is causing the swings in the market.”

Stocks also advanced after third-quarter economic growth was revised higher. The 3.1 percent growth in gross domestic product exceeded the highest projection in a Bloomberg survey and compared with a previously estimated 2.7 percent gain, according to Commerce Department figures. The median estimate of economists called for a 2.8 percent advance.

Republicans in Congress will vote today on Boehner’s plan to raise taxes on incomes over $1 million. The proposal is aimed at preventing more than $600 billion of automatic tax increases and spending cuts from coming into effect next year.

Boehner accused Obama of being unwilling to stand up to fellow Democrats in the fight over how to avert spending cuts and tax increases scheduled to begin in January.

“I did my part; they’ve done nothing,” Boehner, an Ohio Republican, told reporters in Washington. “I’m convinced that the president is unwilling to stand up to his own party.” Still, the speaker said “I remain hopeful” a deal can be reached.

The number of Americans filing first-time claims for unemployment insurance payments rose for the first time in five weeks, a sign further improvement in the labor market depends on faster economic growth, Labor Department figures showed today.

The S&P 500 has gained 15 percent this year, its largest annual rally since 2009. The benchmark measure has risen 1.9 percent this month.

Other reports today signaled expansion in the world’s largest economy. Sales of previously owned homes rose more than forecast in November to reach a three-year high as lower borrowing costs sustained the U.S. housing rebound, the National Association of Realtors reported today in Washington.

The Federal Reserve Bank of Philadelphia’s general economic index increased to 8.1 in December from minus 10.7 a month earlier. A reading of zero is the dividing line between expansion and contraction in the area covering eastern Pennsylvania, southern New Jersey and Delaware.

NYSE Euronext surged 34 percent to $32.25 after IntercontinentalExchange, the 12-year-old energy and commodity futures exchange, agreed to acquire the company for cash and stock worth $8.2 billion, moving to take control of the world’s biggest equities market. ICE added 1.4 percent to $130.10, while an S&P index of financial stocks gained 1.4 percent.

ICE, based in Atlanta, will pay $33.12 a share for the owner of the New York Stock Exchange, 38 percent above yesterday’s closing price, according to a statement today. Last year, the U.S. Justice Department blocked a joint hostile bid by ICE and Nasdaq OMX Group Inc. for the New York-based company on concern the combination would dominate U.S. stock listings.

Accenture, the world’s second-largest technology consultancy, slid 2 percent to $69.02. Sales from advising clients, its biggest source of revenue, declined to $3.96 billion, the company said late yesterday. Customers have opted for contracts over longer periods that don’t generate revenue as quickly, a trend that will continue into the second quarter, Chief Financial Officer Pamela Craig said.

Merck lost 3.4 percent to $42.16 for the biggest retreat in the Dow. The company won’t seek U.S. marketing approval for its good cholesterol drug Tredaptive after a key study showed it ineffective and potentially harmful.

Video-game makers and retailers fell amid growing pressure from Washington and advocacy groups concerned about possible links between violent games and tragedies like the school massacre in Newtown, Connecticut. A bill introduced yesterday by U.S. Senator Jay Rockefeller directs the National Academy of Sciences to examine whether violent games and programs lead children to act aggressively, the West Virginia Democrat said in a statement.

Electronic Arts Inc., publisher of “Medal of Honor,” fell 3.2 percent to $13.94. Take-Two Interactive Software Inc., the maker of “Grand Theft Auto,” fell 2.4 percent to $11.69.

GameStop Corp., the video-game chain, slid 5.2 percent to $26.13.

Carnival Corp. slumped 5.3 percent to $36.99. The world’s biggest cruise-line operator provided a full-year earnings forecast that fell short of analysts’ forecasts. The company said earnings will rise to as much as $2.40 a share next year, excluding some items. Analysts predicted $2.46 a share, the average of estimates compiled by Bloomberg.

Illumina Inc. jumped 7.8 percent to $56.22 after Swiss newspaper L’Agefi said Roche Holding AG may buy the U.S. genetic-sequencing company for $66 a share, a higher price than its first bid in April. The newspaper said it failed to verify the source of the information.

Bed Bath & Beyond Inc. lost 6.5 percent to $56.36. The operator of more than 1,400 home-furnishing stores projected full-year profit that trailed analysts’ estimates. Profit will be $4.48 to $4.54 a share this year, the retailer said yesterday. Analysts projected $4.62 a share, the average of 25 estimates compiled by Bloomberg.

Rite Aid Corp. soared 16 percent to $1.21. The third- largest U.S. drugstore chain gained the most in more than three years after forecasting better full-year results and returning to a profit in the third quarter.

Amicus Therapeutics Inc. slumped 47 percent to $3.06 after saying a drug it was developing with GlaxoSmithKline Plc failed to perform better than a placebo.

CarMax Inc. jumped 9 percent to $37.97. The largest U.S. seller of used cars rose to a record as increased vehicle sales drove quarterly profit that beat analysts’ estimates.

Have a wonderful evening everyone.

Be Magnificent!

The sum-total of the experience of the sages of the world is available to us

and would be for all time to come.

Moreover, there are not many fundamental truths,

but there is only one fundamental truth which is Truth itself,

otherwise known as nonviolence.

Mahatma Gandhi, 1869-1948

As ever,

Carolann

Take what you can use

and let the rest go by.

-Ken Kesey, 1935-2001

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