June 13, 2012 Newsletter

Dear Friends,

Tangents:

Canada Day is still a while off, but it’s never too early to start feeling patriotic about the ol’ Great White North.  Huffington Post recently published a list of “25 Reasons Why Canada Rocks,” and I have to say it’s pretty entertaining. It covers the gambit of Canadian perks from ketchup chips and cleaner air to our extremely livable cities. I even learned a few things reading the article. Did you know they don’t sell Coffee Crisp chocolate bars in the United States? What a tragedy!

Check out the entire article here and get yourself in the pre-Canada Day mood!

http://www.huffingtonpost.ca/2012/06/12/25-reasons-why-canada-rocks_n_1590325.html?utm_hp_ref=canada#s=1080787

photos of the day June 13, 2012

A visitor shelters under an umbrella while standing in front of the Rhine Falls in the town of Neuhausen, Switzerland. The Rhine Falls are the largest in Europe.

Christian Hartmann/Reuters

Pakistan’s Azhar Ali runs back to the pavilion as a match is stopped due to rain during their third One Day International cricket match against Sri Lanka, in Colombo, Sri Lanka.

Dinuka Liyanawatte/Reuters

Market Closes for June 13, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Steve Chambers

June 13 (Bloomberg) — Most Canadian stocks fell as oil’s slump to an eight-month low dragged down energy companies, while rallies in banks and mining shares helped wipe out a 36-point drop in the Standard & Poor’s/TSX Composite Index in the final 40 minutes of trading.

Energy stocks in the S&P/TSX slumped 0.7 percent, while financial companies advanced 0.6 percent, the most out of 10 industries. Canadian Natural Resources Ltd. fell 1.4 percent, while Paramount Resources Ltd., Bonavista Energy Corp. and Niko Resources Ltd. posted declines of 6 percent or more. Toronto- Dominion Bank rose 1.2 percent, and Great Basin Gold Ltd. surged 11 percent.

Among S&P/TSX stocks, 157 declined and 90 gained. The index added 0.57 point, or less than 0.1 percent, to 11,497.87. It gained as much as 0.7 percent and lost 0.5 percent earlier. The benchmark gauge advanced 0.8 percent yesterday, snapping a three-day losing streak.

“I believe it’s a flight to quality given the serious potential negative of the Greek elections,” said Doug Davis, vice chairman of Davis-Rea Ltd. in Toronto. The firm manages $217 billion.

Alexis Tsipras, whose Syriza party is vying for first place in pre-election polls, said he expects the European Union will do all it can to keep Greece in the euro even if he wins elections and carries out his promise to repeal the austerity measures required to receive emergency loans.

Energy stocks slumped after oil fell to $82.62 a barrel following a report that showed U.S. retail sales weakened, while borrowing costs in Germany and Italy increased.

Dollarama Inc. rose 6.6 percent to C$60.61 after the discount retailer reported first-quarter earnings that beat analysts’ estimates.

US

By Michael P. Regan and Rita Nazareth

June 13 (Bloomberg) — Stocks fell and Treasuries rose after a drop in American retail sales and higher borrowing costs in Italy and Germany fueled concern about the global economy.

The euro gained on speculation Greece will stay in the currency bloc regardless of the results of weekend elections.

The Standard & Poor’s 500 Index decreased 0.7 percent to 1,314.88 at 4 p.m. in New York, wiping out most of yesterday’s rally. The euro appreciated 0.6 percent to $1.2573 as it strengthened against 13 of 16 major peers. Ten-year U.S. note yields lost six basis points to 1.61 percent after the Treasury auctioned debt at a record low yield. Oil slid to an eight-month low after swinging between gains and losses during the day.

U.S. stocks opened the session lower as government data showed U.S. retail sales declined 0.2 percent in May and interest rates increased at auctions in Italy and Germany.

Equities turned higher as JPMorgan Chase & Co. led gains in banks after Chief Executive Officer Jamie Dimon defended his firm’s practices before a Senate committee. The rally faded by the final two hours of trading as a U.S. official said the Group of 20 nations probably won’t announce significant progress on Europe’s debt crisis and Egan-Jones Ratings Co. cut Spain’s debt.

“In a world that still has more uncertainty than we care to count, you keep going back and forth between hope and disappointment,” said Bruce McCain, who helps oversee more than $20 billion as chief investment strategist at the private- banking unit of KeyCorp in Cleveland. “It’s a process of taking out excessive optimism.”

American Express Co., Home Depot Inc. and Caterpillar Inc. fell more than 2 percent for the biggest declines in the Dow Jones Industrial Average, which slid 77.42 points to 12,496.38.

JPMorgan rose 1.6 percent as Dimon spent much of his time at a hearing firing back at the federal regulatory system that has become “really complex” because of legislation stemming from the 2008 financial crisis. He described a $2 billion loss in the bank’s chief investment office as a hedge that “morphed into something I can’t justify,” and largely blamed subordinates for a trading strategy gone wrong.

Expedia Inc., an online travel service, and Chesapeake Energy Corp. dropped at least 2.7 percent as analysts cut their ratings.

Thirty-year bond yields lost five basis points to 2.72 percent. Treasuries extended gains as a U.S. sale of $21 billion in 10-year notes drew a record-low auction yield of 1.622 percent, compared with a forecast of 1.647 percent in a Bloomberg News survey of eight of the Federal Reserve’s 21 primary dealers.

The S&P GSCI Index of commodities slipped 0.7 percent, erasing an earlier 0.4 percent advance. Corn, cattle and natural gas fell at least 1.7 percent to lead declines in 22 of 24 materials tracked by the gauge.

Gold rose for a fourth straight day, its longest rally since January, amid speculation the Federal Reserve will take further steps to spur growth, boosting the appeal of the metal as an inflation hedge. Oil fell to an eight-month low, dropping

0.8 percent to $82.62 a barrel.

The Stoxx Europe 600 Index retreated from a two-week high.

Sweden’s SKF AB, the world’s largest maker of ball bearings, dropped 7.3 percent after it reported weakening demand for its products in the second quarter. Renault SA led a selloff by carmakers, sliding 4.2 percent. Etablissements Maurel & Prom SA surged 18 percent, the most since 2003, amid takeover speculation.

The G-20 summit next week in Los Cabos, Mexico, will give European leaders a chance to discuss economic concerns with heads of other major economies. European governments are more focused on building a consensus for a meeting of the 17-nation euro zone later in the month, the official told reporters on condition of anonymity.

President Barack Obama will meet with the rest of the G-20 leaders June 18-19. Obama is likely to repeat the message he delivered at the last G-8 summit, that Europe needs to focus on growth and solid firewalls to keep the crisis contained, the official said.

Greece’s ASE Index climbed 2.1 percent following a report in Financial Times Deutschland that said European leaders may consider relaxing Greece’s austerity program after the June 17 election. Alexis Tsipras said he expects the European Union will try to keep Greece in the currency even if his Syriza party wins elections and repeals budget-cutting measures.

The euro rallied the most against the Mexican peso, British pound and Canadian dollar.

“Talk of possible bailout amendments is perceived as positive as it makes an implosion of the euro less likely,”

said Henrik Gullberg, a currency strategist at Deutsche Bank AG in London. “The market is generally very short the euro. Some investors are unwinding those positions ahead of the election.”

Europe is in an intense and crucial phase, Italian Prime Minister Mario Monti said in Rome. Yields on the nation’s 10- year debt rose five basis points to 6.22 percent. Spain’s credit rating was reduced two steps to CCC+ from B by Egan-Jones Ratings Co., the firm said today in an e-mailed statement.

Spain’s 10-year yield, which touched a euro-era record 6.83 percent yesterday before paring gains, added five basis points to 6.75 percent.

Italy sold 6.5 billion euros ($8.1 billion) of bills and Germany issued 4.04 billion euros in the sale of 10-year bonds.

Germany’s 10-year yield increased six basis points to 1.49 percent, adding to yesterday’s 12 point increase. Denmark’s 30- year bond yield advanced 13 basis points to 2.08 percent as the government agreed to ease rules for the country’s pension firms to help reduce their liabilities as record-low bond yields inflate the value of their obligations.

Pension companies and life insurers will be allowed to raise the discount rate they use to calculate their liabilities to better reflect long-term growth and inflation prospects, the Business and Growth Ministry in Copenhagen said in a statement yesterday.

The MSCI Emerging Markets Index rose 0.6 percent, poised for its highest close this month. Russia’s Micex index added 0.6 percent as trading resumed following a two-day holiday, while Hong Kong’s Hang Seng China Enterprises Index rose 1.5 percent.

Have a wonderful evening everyone.

“I am a lover of truth, a worshipper of freedom, a celebrant at the altar of language and purity and tolerance.”

— Stephen Fry

Regards,

Ellora Howie

Assistant to Carolann Steinhoff

Queensbury Securities Inc.,

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7