June 19, 2013 Newsletter

Dear Friends,

Tangents:

As Carolann is out of the office this afternoon, I will be sending the newsletter on her behalf.

Looking to improve daily meetings at the office? Check out these six ways to hold an effective meeting.

1)     First, ask yourself: is this meeting even necessary? A meeting is meant to involve only those who directly influence and are accountable for the outcome. How often have you looked around the room only to question why half of the people are even there? (Maybe you don’t even need to be there!) Make sure that all the participants are required, and that the content of the meeting isn’t one-way; otherwise an e-mail update or other group communication is sufficient.

2)    If a meeting is absolutely necessary, appoint a chair or moderator. He or she doesn’t need to be the most senior person in the room. In fact, delegating the management of a meeting can be a great way to show leadership and to give others the opportunity to shine. Furthermore, a subordinate is more likely to keep the conversation objective and on track, whereas the owner may feel at liberty to wander off in every direction while ‘chairing’ their own meeting.

3)    For meetings that involve day-to-day stuff, keep them short. This works especially well for marketing and communication teams, production, product development, etc. but not necessarily for strategic sessions or review of monthly or quarterly results.  Another way to cut down on time is to stand in a circle during meetings. Avoid laptops, but keep notes. Everyone focuses on the speaker and the materials, no checking e-mails or taking calls.

4)    Make sure the topics covered in the meeting result in action items that are assigned to the appropriate participants with defined completion dates. Your follow up meetings, if necessary, should review the status of each item.

5)    Hold meetings right before lunch or end of day so everyone is motivated to stay on topic and on schedule.

6)    Make them fun. A sense of humour is a good way to keep the spirits high. Also, be sure to give shout outs during the meeting to those who have done well or gone above and beyond. The public, positive attention will be appreciated by the receiver and motivating to others.

“A person who never made a mistake never tried anything new.” – Albert Einstein

Photos of the Day –June 19^th, 2013

Pakistanis watch as an acrobat rides his motorcycle around a circular track, at an entertainment park set up outside a shrine in Rawalpindi, Pakistan. Muhammed Muheisen/AP

An Indian villager keeps a watch as his herd of buffalo graze on the outskirts of the eastern Indian city of Bhubaneswar, India. Biswaranjan Rout/AP

Market Closes for June 19^th, 2013

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Lu Wang and Katie Brennan

June 19 (Bloomberg) — Canadian stocks fell the most in a week, ending two days of gains, after the U.S. Federal Reserve said it may reduce the pace of bond purchases later this year as economic risks subside.

Eight out 10 industry groups in the Standard & Poor’s/TSX Composite Index retreated as telephone, utility and raw-material companies plunged at least 1.5 percent. BlackBerry dropped 3.7 percent after Sanford C. Bernstein Ltd. cut the stock’s rating, citing a “weak” take-up of its BlackBerry 10 smartphones.

Premier Gold Mines Ltd. and Barrick Gold Corp. fell at least 3.6 percent.

The S&P/TSX lost 99.17 points, or 0.8 percent, to 12,268.29 at 4 p.m. in Toronto. The gauge had rallied 1.5 percent in the previous two sessions. Trading was 11 percent higher than the 30-day average.

“The expectation was the Fed’s statement would be more dovish in terms of when tapering will start,” said Brian Huen, managing partner with Red Sky Capital Management Ltd. in Toronto. He helps manage  C$220 million ($213 million).

“Unfortunately it came off hawkish and the sell-off came. We had a pretty nice rally into today, and taking money off the table after that statement is not unexpected.”

The Fed may “moderate” its pace of bond purchases later this year and may end them around mid-2014, Chairman Ben S.

Bernanke said. The Federal Open Market Committee said at the conclusion of a two-day meeting in Washington that risks to the outlook for the economy and the labor market have “diminished since the fall.”

The U.S. central bank said it will keep buying bonds at a pace of $85 billion a month, and repeated that it’s prepared to increase or reduce the pace of purchases depending on the outlook for the job market and inflation.

Canadian equities fell earlier in the day as Bank of Canada Governor Stephen Poloz said in his first public speech since taking office June 3 that a pick-up in foreign demand for Canada’s exports, particularly in the U.S., is critical to bolstering confidence. The U.S. and China are Canada’s largest trading partners.

The S&P/TSX reached a five-month low in April as concern over global growth dragged down mining stocks. The index has since climbed 2.7 percent, but remains the third-worst performer among 24 developed markets in 2013.

Utilities stocks lost the most in the benchmark index today, declining 2.3 percent, the biggest one-day slide since November. Raw-materials producers fell 1.7 percent, with declines accelerating after the Fed announcement, as the price of gold dropped to a four-week low.

The S&P/TSX Gold Index slid 2.8 percent to its lowest in a month, as 26 of 29 members slumped. Premier Gold plunged 7.2 percent to C$2.05, extending its four-day drop to 18 percent.

Barrick Gold, the world’s largest producer of the precious metal, slid 3.6 percent to C$18.55.

“Inflation remains at a low pace and the easing may end, so there are no real solid reasons to back gold,” Edward Lashinski, the Chicago-based director of global strategy for futures trading at RBC Capital Markets LLC, said in a telephone interview. The Fed’s plan to scale back asset purchases “is making gold investors nervous,” he said.

Mobile-phone service providers fell, pacing declines among telephone stocks. Verizon Communications Inc. said it has expressed interest in acquiring wireless carrier Wind Mobile, a move that would let the leading U.S. mobile-phone service expand into Canada.

Rogers Communications Inc. slipped 1.4 percent to C$46.25 while Telus Corp. declined 3.1 percent to C$34.35.

BlackBerry, formerly known as Research In Motion Ltd., declined 3.6 percent today to C$14.58. The maker of smartphones was cut to underperform, an equivalent of sell, from market perform by Bernstein analyst Pierre Ferragu. Initial enthusiasm over BlackBerry 10 models appears to be waning and the company may disappoint investors in the second half, Ferragu said in a note to clients.

BlackBerry rallied 4 percent yesterday after an analyst with RBC Capital Markets increased his shipment estimates for the new phones.

US

By Michael P. Regan and Inyoung Hwang

June 20 (Bloomberg) — U.S. stocks and Treasuries slid while the dollar rallied as Federal Reserve Chairman Ben S.

Bernanke said the central bank may reduce the pace of asset purchases later this year as economic risks subside. Japanese stock futures retreated and Australia’s currency tumbled.

The Standard & Poor’s 500 Index lost 1.4 percent to 1,628.93, erasing most of a two-day rally. Ten-year Treasury yields jumped to the highest level in 15 months and the dollar strengthened against 14 of 16 major peers. Futures on Japan’s Nikkei 225 Stock Average fell 0.4 percent to 13,160 in Chicago and traded at 13,200 by 3 a.m. in Osaka, after closing at 13,260 yesterday. Contracts on Australia’s S&P/ASX 200 Index slid 1.1 percent while Hang Seng Index futures rose. The Aussie sank to the weakest level on a closing basis since September 2010 versus the dollar. Gold futures declined.

Stocks and Treasuries dropped in New York as Bernanke said that the Fed may begin tapering bond purchases this year and end them in 2014 should the U.S. economy continue to improve. The Federal Open Market Committee said in its statement that risks to the economic outlook and the labor market have diminished, and reiterated that policy makers are prepared to reduce or increase the pace of bond purchases depending on the outlook for jobs and inflation.

“A lot has been predicated on their assessment of the economy, and the assessment is that the economy is improving,” Quincy Krosby, a market strategist for Newark, New Jersey-based Prudential Financial Inc., which oversees more than $1 trillion of assets, said by phone. “The search for yield has forced investors into esoteric parts of the market. Just the hint that the Fed is going to start scaling back puts these positions at risk.”

Yields on 10-year Treasury notes jumped 17 basis points to 2.36 percent, the highest level since March last year. The Dollar Index, a gauge of the U.S. currency against six major peers, rose 0.9 percent to 81.32 yesterday. The Aussie extended yesterday’s 2 percent plunge, losing 0.1 percent to 92.84 U.S. cents by 7:35 a.m. in Sydney, the weakest level on a closing basis since Sept. 10, 2010. The yen was little changed at 96.39 per dollar after sinking 1.2 percent yesterday.

Fifteen of 19 participants on the Federal Open Market Committee expect the first rise in the federal funds rate to occur in 2015 or later, forecasts released yesterday in the U.S. showed. That exceeds the 14 of 19 who projected in March the first rate increase would happen after 2014.

The FOMC said in its statement that policy makers also anticipate that inflation over the medium term will probably run at or below its 2 percent objective. U.S. central bankers in December linked changes in benchmark borrowing costs to the outlook for employment and prices. The FOMC said the rate will remain in a range of zero to 0.25 percent so long as unemployment remains above 6.5 percent and the outlook for inflation is no higher than 2.5 percent. The nation’s jobless rate in May was 7.6 percent.

The unemployment rate will fall to 6.5 percent to 6.8 percent by the end of 2014, Fed officials predicted, possibly reaching the central bank’s stated threshold to raise the benchmark lending rate. The pace of its bond purchases, currently at $85 billion a month, will also be influenced by economic data, Bernanke said.

“The committee currently anticipates that it would be appropriate to moderate the pace of purchases later this year” if economic data are broadly consistent with the Fed’s forecast, Bernanke said at a press conference in Washington. “And if the subsequent data remain broadly aligned with our current expectations for the economy, we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.”

Futures on Hong Kong’s Hang Seng gauge added 0.2 percent while contracts due this month on the Hang Seng China Enterprises Index of mainland Chinese stocks traded in the city climbed 0.3 percent. The MSCI Asia Pacific Index of regional equities advanced 1 percent to a two-week high yesterday, up more than 3 percent from an almost six-month low reached June 13 after the Bank of Japan added to concern over reductions in global stimulus by leaving its lending program unaltered.

The Fed’s record low interest rates and bond purchases have helped fuel a rally in stocks that has lifted the S&P 500 as much as 147 percent from its bear-market low in 2009.

The quantitative easing program suppressed interest rates, with the yield on the 10-year Treasury note reaching a record low of 1.39 percent in July and remaining below the S&P 500’s dividend yield for most of 2012 and 2013. The benchmark note’s average rate over the past year has been 1.78 percent, compared with an average of more than 6.5 percent in data compiled by Bloomberg starting in 1962.

The S&P 500 last reached a record 1,669.16 May 21, the day before Fed Chairman Bernanke told Congress the central bank could begin to reduce the pace of asset purchases should the job market shows signs of sustainable improvement The benchmark gauge has slumped 2.4 percent since then. Ten-year Treasury yields topped 2 percent that day for the first time since March.

The lowest rate of inflation since the brink of the Kennedy-era economic boom in the 1960s bought time for the Fed to press on with the central bank’s $85 billion in monthly bond purchases.

A gauge of consumer prices excluding food and energy that is watched by the Fed rose 1.1 percent in the year through April, matching the smallest gain since records started in 1960.

With inflation below the Fed’s 2 percent long-run goal and the jobless rate at 7.6 percent, the Fed is falling short of its mandate to ensure stable prices and maximum employment.

The Fed will probably wait to taper bond buying until its Oct. 29-30 meeting, when it will cut its monthly purchases to $65 billion, according to the median estimate in a June 4-5 Bloomberg survey of 59 economists. By then, inflation will be rising toward the Fed’s target, accelerating to 1.3 percent in the third quarter and 1.5 percent in the fourth quarter, according to economists’ estimates.

“The market has been looking for clarity and the Fed simply can’t give it to them,” Malcolm Polley, who manages $1.1 billion as chief investment officer at Stewart Capital Advisors LLC in Indiana, Pennsylvania, said by phone. “As relatively more clear as Bernanke tries to be, the Fed is still somewhat opaque in what they say. They can’t come out and say ’We are going to start raising rates on this day.’ They have to be guarded in how state it.”

While the end of Fed stimulus has preceded stock gains over the past two decades, those rallies usually followed periods of market weakness. The S&P 500’s 87 percent advance since the rate on overnight loans between banks was pushed to zero in December 2008 is more than five times the average advance in periods following monetary easing, data compiled by Bloomberg show.

The S&P 500 has increased an average of 16 percent over two years the last four times the central bank started raising interest rates, according to data compiled by Bloomberg. Stock market volatility has been higher this year than during past periods when the Fed reversed policy. Daily moves for the S&P 500 have averaged almost 0.7 percent since March, compared with 0.44 percent in the month before the Fed tightened in 1994 and 2004.

U.S. stock investors may reap unusually high returns during the next five years thanks to interest rates on government bonds, according to a May 8 report from the Fed Bank of New York. Equities are inexpensive compared to government debt, according to the so-called Fed Model, which compares the earnings yield for stocks with Treasury rates. The valuation measure was derived from a July 1997 report from the central bank.

Per-share profit of $102.37 for all S&P 500 companies represents 6.2 percent of the index’s price level, or 4 percentage points more than yields on 10-year Treasury notes, according to Fed Model data compiled by Bloomberg. That compares with an average spread of 0.21 percentage points since 1990.

European markets closed before the Fed statement, with the Stoxx Europe 600 Index losing 0.2 percent.

The MSCI Emerging Markets Index fell for a second day, sliding 1.4 percent to the lowest level since September on a closing basis. Brazil’s IBovespa sank 3.2 percent to its lowest level since April 2009 on a closing basis. South Africa’s rand extended its decline into a fifth day, losing 0.1 percent versus the dollar after dropping 1.9 percent yesterday.

Gold futures lost 1.2 percent in New York hours to $1,350.20 an ounce, erasing an earlier 0.7 percent gain, while oil slipped 0.5 percent to $97.97 a barrel.

The S&P GSCI gauge of 24 raw materials added 0.5 percent yesterday, rising for a second day, as corn, wheat and soybeans jumped at least 1.6 percent to lead gains on speculation that rain and cool temperatures during April and May reduced U.S. planted acreage and cut yield potential.

Have  a wonderful evening everyone!

Be magnificent!

“To enjoy good health, to bring true happiness to one’s family, to bring peace to all, one must first discipline and control one’s own mind. If a man can control his mind he can find the way to Enlightenment, and all wisdom and virtue will naturally come to him.”
Buddha

Amanda Bourke

Assistant to Carolann Steinhoff

Queensbury Securities Inc.

St. Andrew’s Square

Suite 340A, 730 View St.,

Victoria, B.C. V8X 3Y7

Tel: 778-430-5808

Fax: 778-430-5838