June 20, 2012 Newsletter

Dear Friends,

Tangents: Summer begins today!

Write it on your heart that every day is the best day in the year.

– Ralph Waldo Emerson

We arrived home last night – had a great week in Amsterdam – what a fantastic city…architecture,  parks, museums, art, art, and more art!   J I have to say, there was no sign of a Euro crises; it seemed fairly prosperous everywhere we went.

And on this day in…

1837 – 18-year-old Victoria is crowned Queen of England.
1863 – President Abraham Lincoln admits West Virginia into the Union as the 35th state.

1948 – The Ed Sullivan Show premieres

1963 – The United States and the Soviet Union agree to establish a hot line between Washington and Moscow.
1967 – Boxing champion Muhammad Ali is convicted of refusing induction into the American armed services.
1999 – NATO declares an official end to its bombing campaign of Yugoslavia

photos of the day June 20, 2012

Ten-month-old Leo Erichsen is held up by his mother, Tatjana Eres of Denmark, as she joins thousands of yoga enthusiasts for a class in New York’s Times Square to mark the summer solstice.

Mark Lennihan/AP

Myanmar pro-democracy leader Aung San Suu Kyi leaves through The Great Gate after receiving her honorary degree at Oxford University, in Oxford, southern England.

Ki Price/Reuters

Market Closes for June 20, 2012:

North American Markets

International Markets

Bonds

Currencies

Commodities

Market Commentary:

Canada

By Inyoung Hwang and Katia Dmitrieva

June 20 (Bloomberg) — Canadian stocks fell, ending a three-day rally, after the U.S. Federal Reserve cut its estimates for economic growth amid a slowdown in hiring.

Technology and commodity shares led declines in the Standard & Poor’s/TSX Composite Index. Research in Motion, the struggling Waterloo-based maker of the BlackBerry mobile device, dropped 1.4 percent as the company said it’s cutting jobs as part of an effort to save $1 billion in operating expenses.

Canadian Natural Resources Ltd. and Suncor Energy Inc. slumped at least 1.6 percent as oil declined.

The S&P/TSX lost 29.02 points, or 0.3 percent, to 11,759.34 in Toronto. The benchmark index posted its second-biggest gain of the year yesterday.

“There’s this feeling that the U.S. economy is slowing down and the Fed would have to do something,” said Paul Harris, who oversees C$279 million at Avenue Investment Management in a telephone interview. “Europe is definitely an issue, he said.

In order ‘‘to have more global growth, you really need a stabilization of the European economy and fiscal issues.’’

Antonis Samaras, head of Greece’s New Democracy party, was sworn in as prime minister after Greek political leaders agreed on a coalition that will seek relief from austerity measures tied to international loans. French President Francois Hollande said European leaders are exploring ways for the rescue fund to buy debt from countries that have taken fiscal consolidation measures.

Canadian equities fell as the U.S. central bank cut its estimates for growth and said it’s seeing little progress on unemployment during the rest of the year. The Fed said it would expand its program dubbed Operation Twist to replace short-term bonds with longer-term debt by $267 billion through the end of the year in a bid to reduce unemployment and protect the expansion.

Expectations for further policy action gave Canadian stocks their first back-to-back weekly gain since April on June 15. The S&P/TSX fell as much as 11 percent last month from its Feb. 28 high this year, on concern about a global slowdown and a worsening of Europe’s crisis.

Energy companies declined 0.9 percent as crude oil fell to an eight-month low after the U.S. Energy Department reported an unexpected increase in stockpiles to the highest level in 22 years. Canadian Natural Resources fell 1.9 percent to C$28.30.

Suncor, the nation’s largest energy provider, fell 1.7 percent to C$29.65.

Research in Motion tumbled 4.3 percent to C$10.49. “RIM has committed to achieving significant efficiencies and operating cost reductions over the course of this fiscal year,” Tenille Kennedy, a spokeswoman for the Waterloo, Ontario-based company, said yesterday in an e-mail. “Headcount reductions are part of this initiative.”

US

By Rita Nazareth

June 20 (Bloomberg) — U.S. stocks dropped, following a four-day gain in the Standard & Poor’s 500 Index, as the Federal Reserve cut its estimates for growth amid a slowdown in hiring.

Adobe Systems Inc., the largest maker of graphic-design software, declined 2.7 percent after forecasting sales and profit that trailed estimates. Procter & Gamble Co. tumbled 2.9 percent as the world’s biggest consumer-goods company reduced its earnings and revenue forecasts for the second time in less than two months. JPMorgan Chase & Co. rallied 3 percent.

The S&P 500 retreated 0.2 percent to 1,355.69 at 4 p.m. New York time. The Dow Jones Industrial Average decreased 12.94 points, or 0.1 percent, to 12,824.39. Trading volume for exchange-listed stocks in the U.S. was about 6.6 billion shares, or almost in line with the three-month average.

“It’s not all bad news, but caution is warranted,” said Eric Teal, chief investment officer at First Citizens Bancshares Inc., which manages $4.5 billion in Raleigh, North Carolina. He spoke in a telephone interview. “If the Fed saw significant deterioration, the policy response would have been on a larger scale. Yet there’s increased risk to the economic outlook.”

Stocks fell as the central bank cut its estimates for growth and said it sees little progress on unemployment during the rest of the year. The Fed lowered its central tendency estimate for U.S. 2012 gross domestic product growth to 1.9 percent to 2.4 percent from 2.4 percent to 2.9 percent in April.

The Fed will expand its program to replace short-term bonds with longer-term debt by $267 billion through the end of 2012.

That “should put downward pressure on longer-term interest rates and help to make broader financial conditions more accommodative,” the Federal Open Market Committee said.

“If we don’t see continued improvement in the labor market, we’ll be prepared to take additional steps if appropriate,” Fed Chairman Ben S. Bernanke said at a news conference after the FOMC’s two-day meeting. He said those steps might include additional asset purchases.

Expectations for further policy action gave stocks their first back-to-back weekly gain since April on June 15. The S&P 500 earlier this month was on the brink of a so-called correction, or a 10 percent drop from a recent peak, on concern about a global slowdown and a worsening of Europe’s crisis.

Investors also watched Europe’s latest attempts to tame its debt crisis today. Antonis Samaras, head of Greece’s New Democracy party, was sworn in as prime minister after Greek political leaders agreed on a coalition that will seek relief from austerity measures tied to international loans.

European policy makers are unlikely to solve the region’s problem unless they have a crisis “moment” like Lehman Brothers Holdings Inc.’s bankruptcy, said Gary D. Cohn, Goldman Sachs Group Inc.’s president and chief operating officer.

“My personal view is we’re going to need a moment” because the issues are political, Cohn, said in an interview with Erik Schatzker on Bloomberg Television’s “Market Makers.”

Eight out of 10 groups in the S&P 500 fell today as utility and consumer staples companies had the biggest losses.

Technology and financial shares advanced.

Adobe slumped 2.7 percent to $31.99. It reduced the high end of its annual sales growth forecast range to 7 percent from 8 percent, which is “anemic” for a technology company, said Barbara Coffey, an analyst with National Securities.

P&G lost 2.9 percent to $60.39. The reduced forecasts illustrate the difficulties faced by consumer-products makers as rising unemployment in Europe and North America restricts spending. Danone, the world’s biggest yogurt maker, cut its profitability forecast yesterday. Europe is “difficult for everybody,” Jean-Marc Huet, chief financial officer of Unilever, said at the Paris conference yesterday.

Walgreen Co. retreated 2.9 percent to $29.21. The biggest U.S. drugstore chain was downgraded to neutral from outperform at Macquarie Group Ltd. by equity analyst Dane Leone. The 12- month share-price estimate is $34.

JPMorgan gained 3 percent to $36.45. Trading in the credit derivatives index that contributed to the bank’s losses in its London chief investment office soared to a record yesterday in a sign that the biggest U.S. bank may be unwinding its position, according to data cited by Credit Suisse Group AG.

The lender is seeking to stem at least $2 billion in trading losses from the U.K. operation, where Bruno Iksil, known as the London Whale, managed a portfolio of credit derivatives so large it distorted the market.

A strategy by the unit to reduce risks from hedges backfired and left the bank with even bigger and harder-to- manage exposures, Chief Executive Officer Jamie Dimon said last week. JPMorgan has sold 65 to 70 percent of its losing position and is still selling the rest, CNBC reported.

The Bloomberg U.S. Airlines Index advanced 2.3 percent as oil dropped to an eight-month low after the Energy Department reported that U.S. crude inventories climbed to the highest level in 22 years.

Cisco Systems Inc. rallied 1.9 percent to $17.51. The biggest maker of computer-networking equipment was raised to outperform from market perform at BMO Capital Markets.

Applied Materials Inc. gained 3.4 percent to $11.55. The largest producer of chipmaking equipment was raised to overweight at Barclays Plc.

Tesla Motors Inc. jumped 5.3 percent to $33.78 as the electric-car maker prepares to begin deliveries of Model S sedans and Goldman Sachs raised its price target for the shares.

Have a wonderful evening everyone.

Be magnificent!

Nature’s law dictates that, in order to survive, bees must work together.

As a result, they instinctively possess a sense of social responsibility.

They have no constitution, no law, no police, no religion or moral training but,

because of their nature, the whole colony survives.

We human beings have a constitution, laws and a police force.

We have religion, remarkable intelligence, and hearts with a great capacity to love.

We have many extraordinary qualities but, in actual practice,

I think we are behind those small insects.

In some ways, I feel that we are poorer than the bees.

-The XIVth Dalai Lama

As ever,

Carolann

I swore never to be silent whenever and wherever human beings endure suffering and humiliation. We must always take sides. Neutrality helps the oppressor, never the victim. Silence encourages the tormentor, never the tormented.

-Elie Wiesel, 1928-

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