June 29, 2012 Newsletter

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

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

International Markets

Bonds

Currencies

Commodities

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.”

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